than under this Act, if the project other-
wise meets the requirements of section 8. 
(2) LIMITATION ON REFINANCING OF INTERIM 
CONSTRUCTION FINANCING.—The proceeds of a se-
cured loan under this section made for an eligible 
project may not be used for the purpose under para-
graph (1)(B) after the expiration of the 12-month 
period beginning on the date of substantial comple-
tion of the project. 
(c) RISK ASSESSMENT.—Before entering into an 
agreement under this subsection for a secured loan, the 
Secretary, in consultation with the Director of the Office 
of Management and Budget and each rating agency pro-
viding a preliminary rating opinion letter under section 
8(c)(1)(B), shall determine an appropriate capital reserve 
subsidy amount for the secured loan, taking into account 
each such preliminary rating opinion letter. 
(d) INVESTMENT-GRADE RATING REQUIREMENT FOR 
SENIOR OBLIGATIONS.—The execution of a secured loan 
under this section shall be contingent on receipt by the 
senior obligations of the project of an investment-grade 
rating. 
(e) TERMS AND LIMITATIONS.— 
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(1) MAXIMUM AMOUNT.—The amount of a se-
cured loan under this section shall not exceed the 
lesser of— 
(A) an amount equal to 49 percent of the 
reasonably anticipated eligible project costs; or 
(B) if the secured loan does not receive an 
investment-grade rating, the amount of the sen-
ior project obligations of the project. 
(2) PAYMENT.—A secured loan under this sec-
tion— 
(A) shall be payable, in whole or in part, 
from State or local taxes, user fees, or other 
dedicated revenue sources that also secure the 
senior project obligations of the relevant 
project; 
(B) shall include a rate covenant, coverage 
requirement, or similar security feature sup-
porting the project obligations; and 
(C) may have a lien on revenues described 
in subparagraph (A), subject to any lien secur-
ing project obligations. 
(3) INTEREST RATE.—The interest rate on a 
secured loan under this section shall be— 
(A) equal to the yield on marketable 
United States Treasury securities of a similar 
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maturity to the maturity of the secured loan on 
the date of execution of the loan agreement; 
and 
(B) fixed for the term of the loan. 
(4) MATURITY DATE.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the final maturity date of a 
secured loan under this section for an eligible 
project shall be not later than 35 years after 
the date of substantial completion of the 
project. 
(B) SPECIAL
RULE
FOR
STATE
INFRA-
STRUCTURE
FINANCING
AUTHORITIES.—The 
final maturity date of a secured loan under this 
section made to a State infrastructure financing 
authority shall be not later than 35 years after 
the date on which loan amounts are first dis-
bursed. 
(5) 
NONSUBORDINATION.—A 
secured 
loan 
under this section shall not be subordinated to the 
claims of any holder of project obligations in the 
event of bankruptcy, insolvency, or liquidation of the 
obligor. 
(6) FEES.—The Secretary may establish fees in 
connection with a secured loan under this section, in 
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smartinez on DSK6TPTVN1PROD with BILLS
amounts sufficient to cover all or a portion of the 
costs to the Federal Government of secured loans 
under this section. 
(7) USE OF PROCEEDS FOR PAYMENT OF NON- 
FEDERAL SHARE.—The proceeds of a secured loan 
under this section may be used to pay any non-Fed-
eral share required with respect to other funding ob-
tained for project costs, but only if such secured 
loan is repaid using non-Federal funds. 
(8) MAXIMUM
FEDERAL
INVOLVEMENT.—For 
any project for which assistance is provided under 
this Act, the total amount of Federal assistance 
from all sources, including this Act, shall not exceed 
80 percent of the total project cost. 
(9) OTHER
TERMS
AND
CONDITIONS.—A se-
cured loan provided for a project under this section 
shall be subject to such other terms and conditions, 
and contain such covenants, representations, war-
ranties, and requirements (including requirements 
for audits), as the Secretary determines to be appro-
priate. 
(f) REPAYMENT.— 
(1) SCHEDULE.—The Secretary shall establish 
a repayment schedule for each secured loan provided 
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smartinez on DSK6TPTVN1PROD with BILLS
under this section, based on the projected cash flow 
from project revenues and other repayment sources. 
(2) COMMENCEMENT.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), scheduled loan repayments 
of principal or interest on a secured loan under 
this section for an eligible project shall com-
mence not later than 5 years after the date of 
substantial completion of the project. 
(B) SPECIAL
RULE
FOR
STATE
INFRA-
STRUCTURE FINANCING AUTHORITIES.—Sched-
uled loan repayments of principal or interest on 
a secured loan made under this section to a 
State infrastructure financing authority shall 
commence not later than 5 years after the date 
on which amounts are first disbursed. 
(3) DEFERRED PAYMENTS.— 
(A) IN GENERAL.—If, at any time after 
the date of substantial completion of a project 
for which a secured loan is provided under this 
section, the project is unable to generate suffi-
cient revenues to pay the scheduled loan repay-
ments of principal and interest on the loan, the 
Secretary may, subject to subparagraph (C), 
allow the obligor to add unpaid principal and 
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interest to the outstanding balance of the se-
cured loan. 
(B) INTEREST.—Any payment deferred 
pursuant to subparagraph (A) shall— 
(i) continue to accrue interest in ac-
cordance with subsection (e)(3) until fully 
repaid; and 
(ii) be amortized over the remaining 
term of the secured loan. 
(C) CRITERIA.—Any payment deferral pur-
suant to subparagraph (A) shall be contingent 
on the project meeting— 
(i) standards for reasonable assurance 
of repayment, as the Secretary shall estab-
lish; and 
(ii) such other criteria as the Sec-
retary may establish. 
(4) PREPAYMENT.— 
(A) USE OF EXCESS REVENUES.—Any ex-
cess revenues from an eligible project that re-
main after satisfying scheduled debt service re-
quirements on the project obligations and se-
cured loan and all deposit requirements under 
the terms of any trust agreement, bond resolu-
tion, or similar agreement securing project obli-
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smartinez on DSK6TPTVN1PROD with BILLS
gations may be applied annually to prepay a se-
cured loan under this section without penalty. 
(B) 
USE
OF
PROCEEDS
OF
REFI-
NANCING.—A secured loan under this section 
may be prepaid at any time, without penalty, 
from the proceeds of refinancing from non-Fed-
eral funding sources. 
(g) SALE OF SECURED LOANS.— 
(1) IN GENERAL.—Subject to paragraph (2), if 
the Secretary determines that the sale or reoffering 
of a secured loan under this section for an eligible 
project can be made on favorable terms, the Sec-
retary may sell the loan to another entity or reoffer 
the loan into the capital markets as soon as prac-
ticable after the date of substantial completion of a 
project and after providing notice to the obligor. 
(2) CONSENT OF OBLIGOR.—In making a sale 
or reoffering under paragraph (1), the Secretary 
may not change the original terms and conditions of 
the secured loan without the written consent of the 
obligor. 
(h) LOAN GUARANTEES.— 
(1) IN GENERAL.—In lieu of making a secured 
loan under this section for an eligible project, the 
Secretary may provide a loan guarantee for a project 
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smartinez on DSK6TPTVN1PROD with BILLS
obligation for a project funded by a qualified lender 
(as such term is defined in section 12), but only if 
the Secretary determines that the cost as such term 
is defined in section 502 of the Federal Credit Re-
form Act of 1990 (2 U.S.C. 661a) of the loan guar-
antee is substantially the same as or less than that 
of making a secured loan. 
(2) TERMS.—The terms of a loan guarantee 
provided under this subsection shall be consistent 
with the terms established in this section for a se-
cured loan, except that the interest rate on the guar-
anteed loan and any prepayment features shall be 
negotiated between the obligor and the qualified 
lender, subject to the consent of the Secretary. 
SEC. 9. PROGRAM ADMINISTRATION. 
(a) REQUIREMENT.—The Secretary shall establish a 
uniform system to service the Federal credit instruments 
made available under this Act. 
(b) SERVICER.— 
(1) IN GENERAL.—The Secretary may appoint 
a financial entity to assist the Secretary in servicing 
Federal credit instruments provided under this Act. 
(2) DUTIES.—A servicer appointed under para-
graph (1) shall act as the agent for the Secretary. 
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(c) ASSISTANCE FROM EXPERTS.—The Secretary 
may retain the services, including counsel, of organizations 
and entities with expertise in the field of municipal and 
project finance to assist in the underwriting and servicing 
of Federal credit instruments provided under this Act. 
SEC. 10. STATE AND LOCAL PERMITS. 
The provision of financial assistance under this Act 
for an eligible project shall not— 
(1) relieve any recipient of such assistance of 
any obligation to obtain any required State or local 
permit or approval with respect to the project; 
(2) limit the right of any unit of State or local 
government to approve or regulate any rate of re-
turn on private equity invested in the project; or 
(3) otherwise supersede any State or local law 
or regulation applicable to the construction or oper-
ation of the project. 
SEC. 11. DEFINITIONS. 
In this Act, the following definitions shall apply: 
(1) ELIGIBLE ENTITY.—The term ‘‘eligible enti-
ty’’ means an entity listed in section 5 to receive fi-
nancial assistance under this Act. 
(2) ELIGIBLE
PROJECT.—The term ‘‘eligible 
project’’ means a project described in section 6. 
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(3) ELIGIBLE PROJECT COSTS.—The term ‘‘eli-
gible project costs’’ means, with respect to an eligi-
ble project, any costs of the project eligible under 
section 8 to be paid with amounts from a loan made 
or guaranteed under this Act. 
(4) FEDERAL CREDIT INSTRUMENT.—The term 
‘‘Federal credit instrument’’ means a secured loan 
made, or loan guarantee provided, under section 9. 
(5) INVESTMENT-GRADE
RATING.—The term 
‘‘investment-grade rating’’ means, with respect to 
project obligations, a rating of BBB minus, Baa3, 
bbb minus, BBB (low), or higher as assigned by a 
rating agency. 
(6) LOAN GUARANTEE.—The term ‘‘loan guar-
antee’’ means any guarantee or other pledge by the 
Secretary to pay all or part of the principal of, and 
interest on, a loan or other debt obligation. 
(7) OBLIGOR.—The term ‘‘obligor’’ means— 
(A) with respect to a Federal credit instru-
ment that is a secured loan under section 9, the 
eligible entity that is primarily liable for pay-
ment of the principal of, or interest on, the 
loan; and 
(B) with respect to a Federal credit instru-
ment that is a loan guarantee under section 
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9(h), the eligible entity that is primarily liable 
for payment of the loan or other debt obligation 
repayment of which is guaranteed pursuant to 
such section. 
(8) PROJECT OBLIGATION.—The term ‘‘project 
obligation’’ means, with respect to an eligible 
project, any note, bond, debenture, or other debt ob-
ligation issued by an obligor in connection with the 
financing of the project. Such term does not include 
a Federal credit instrument. 
(9) QUALIFIED LENDER.— 
(A) IN
GENERAL.—The term ‘‘qualified 
lender’’ means any non-Federal qualified insti-
tutional buyer, as such term is defined in sec-
tion 230.144A(a) of title 17, Code of Federal 
Regulations (or any successor regulation), 
known as Rule 144A(a) of the Securities and 
Exchange Commission and issued under the Se-
curities Act of 1933 (15 U.S.C. 77a et seq.). 
(B) INCLUSIONS.—Such term includes— 
(i) a qualified retirement plan (as de-
fined in section 4974(c) of the Internal 
Revenue Code of 1986) that is a qualified 
institutional buyer; and 
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