I
105TH CONGRESS
1ST SESSION
H. R. 2330
To authorize the Secretary of Transportation to make direct loans and provide
lines of credit to finance surface transportation projects, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 31, 1997
Ms. DELAURO (for herself, Mr. GREEN, Mr. KENNEDY of Rhode Island, Mr.
FORD, Mr. BONIOR, Mr. FROST, Mr. OLVER, Ms. CHRISTIAN-GREEN,
Mr. MCGOVERN, and Ms. PELOSI) introduced the following bill; which
was referred to the Committee on Transportation and Infrastructure
A BILL
To authorize the Secretary of Transportation to make direct
loans and provide lines of credit to finance surface trans-
portation projects, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Transportation Infra-
structure Credit Act of 1997’’.
SEC. 2. FINDINGS.
Congress finds the following:
(1) The economic vitality of the Nation and the
quality of life of its citizens depend upon continued
investment in surface transportation infrastructure
for the movement of both people and goods.
(2) The Nation’s needs for additional infra-
structure investment in both rural and urban areas
exceed available resources under traditional pro-
grams.
(3) While recent Federal initiatives have
equipped States with new financing tools, large in-
frastructure projects of national significance cannot
be adequately funded through existing programs and
require new forms of assistance.
(4) A capital investment program for construct-
ing, reconstructing, and expanding infrastructure
will create both direct and indirect jobs.
(5) Improved surface access to seaports and
airports through investing in intermodal facilities
and developing trade corridors will stimulate exports
and enhance the Nation’s competitiveness in the
world economy.
(6) Fostering public-private partnerships will
attract private capital and advance necessary
projects through the development stage.
SEC. 3. DEFINITIONS.
In this Act, the following definitions apply:
(1) DIRECT
LOAN.—The term ‘‘direct loan’’
means any loan, line of credit, or other similar Fed-
eral credit assistance provided to an obligor in con-
nection with the financing of a project under section
5 or 6.
(2) ELIGIBLE PROJECT COST.—The term ‘‘eligi-
ble project cost’’ means all amounts paid by or for
the account of an obligor or insured in connection
with a project, including—
(A) development phase activities, including
planning, feasibility analysis, environmental re-
view, permitting, preliminary engineering and
design work, and other preconstruction activi-
ties;
(B) construction, reconstruction, rehabili-
tation, replacement, and acquisition of real
property, and the acquisition of equipment; and
(C) interest during construction, reason-
ably required reserve funds, and issuance ex-
penses.
(3) FEDERAL CREDIT INSTRUMENT.—The term
‘‘Federal credit instrument’’ means a direct loan,
loan guarantee, or line of credit authorized to be
made available under this Act with respect to a
project.
(4) INSURED.—The term ‘‘insured’’ means any
party that is the beneficiary of project development
cost insurance under section 7, whether a corpora-
tion, partnership, joint venture, trust, or govern-
mental entity or instrumentality, except that if such
entity is not a State or local government or any
agency thereof, the project it is undertaking shall be
publicly sponsored, as provided in paragraphs (1)
and (2) of section 4(a).
(5) LENDER.—The term ‘‘lender’’ means any
non-Federal qualified institutional buyer (as defined
in section 230.144A(a) of title 17, Code of Federal
Regulations (or any successor regulation), known as
rule 144(a) of the Securities and Exchange Commis-
sion and issued under the Securities Act of 1933 (15
U.S.C. 77a et seq.)), including—
(A) a qualified retirement plan (as defined
in section 4974(c) of the Internal Revenue Code
of 1986) that is a qualified institutional buyer;
and
(B) a governmental plan (as defined in
section 414(d) of the Internal Revenue Code of
1986) that is a qualified institutional buyer.
(6) LINE OF CREDIT.—The term ‘‘line of cred-
it’’ means a commitment by the Secretary to make
1 or more direct loans at future dates subject to the
occurrence of certain events.
(7) LOAN GUARANTEE.—The term ‘‘loan guar-
antee’’ means any guarantee or other pledge by the
Secretary to pay all or a part of the principal of and
interest on a loan or other debt obligation issued by
an obligor and funded by a lender.
(8) 
LOCAL
SERVICER.—The 
term 
‘‘local
servicer’’ means a State infrastructure bank estab-
lished under section 350 of the National Highway
System Designation Act of 1995 (109 Stat. 618), or
a State or local government or any agency thereof
that is responsible for servicing a direct loan on be-
half of the Secretary.
(9) OBLIGOR.—The term ‘‘obligor’’ means any
party primarily liable for payment of the principal of
or interest on any direct loan made under section 5
or 6, whether a corporation, partnership, joint ven-
ture, trust, or governmental entity or instrumental-
ity, except that if such entity is not a State or local
government or any agency thereof, the project it is
undertaking shall be publicly sponsored, as provided
in paragraphs (1) and (2) of section 4(a).
(10) PROJECT.—The term ‘‘project’’ means any
surface transportation facility eligible for Federal as-
sistance under title 23 or chapter 53 of title 49,
United States Code.
(11) 
PROJECT
OBLIGATION.—The 
term
‘‘project obligation’’ means any note, bond, deben-
ture, or other evidence of indebtedness issued by an
obligor in connection with the financing of a project
other than a direct loan provided under this Act.
(12) 
SECRETARY.—The 
term 
‘‘Secretary’’
means the Secretary of Transportation.
(13) STATE.—The term ‘‘State’’ shall have the
meaning such term has in section 101 of title 23,
United States Code.
(14) SUBSTANTIAL
COMPLETION.—The term
‘‘substantial completion’’ means the time at which a
project opens to vehicular, passenger, or freight traf-
fic.
SEC. 4. DETERMINATION OF ELIGIBILITY AND PROJECT SE-
LECTION.
(a) ELIGIBILITY.—For a project to receive financial
assistance under this Act, it must meet the following cri-
teria:
(1) The project shall satisfy the applicable
statewide planning requirements of section 135 of
title 23, United States Code, and the metropolitan
planning requirements of section 134 of title 23,
United States Code, at the time any loan or insur-
ance agreement is entered into under this Act.
(2) The project application shall be submitted
to the Secretary by a State or a local servicer.
(3) Eligible project costs must equal or exceed
the lesser of $100,000,000 or 50 percent of the most
recent annual amount of Federal-aid highway funds
apportioned under title 23, United States Code, to
the State in which the project is located.
(4) Project financing shall be payable in whole
or in part by user charges or other dedicated reve-
nue sources.
(b) SELECTION AMONG ELIGIBLE PROJECTS.—The
Secretary shall establish criteria for selecting among
projects that meet the eligibility criteria of subsection (a).
Such selection criteria shall include—
(1) the extent to which the project is nationally
significant, including the extent to which the project
will transport passengers or freight at lower costs or
higher efficiency, will advance multistate corridors,
or will otherwise promote metropolitan, regional,
interstate, or international commerce;
(2) the creditworthiness of the project;
(3) the extent to which assistance under this
Act would foster innovative public-private partner-
ships and attract private debt or equity investment;
(4) the likelihood that assistance under this Act
would enable the project to proceed at an earlier
date than would be the case otherwise; and
(5) the amount of budget authority required to
fund the direct loan or project development cost in-
surance provided under this Act.
(c) FEDERAL REQUIREMENTS.—All requirements of
titles 23 and 49, United States Code, shall apply to funds
made available under this Act and projects assisted with
such funds unless the Secretary determines that any such
requirement, other than section 113 of title 23, United
States Code, is inconsistent with any provision of this Act.
Nothing in this subsection shall affect any responsibility
or obligation of the Secretary under any other Federal
law, including the National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.), title VI of the Civil Rights
Act of 1964 (42 U.S.C. 2000d et seq.), and the Uniform
Relocation Assistance and Real Property Acquisition Poli-
cies Act of 1970 (42 U.S.C. 4601 et seq.).
SEC. 5. FLEXIBLE PAYMENT LOANS.
(a) IN GENERAL.—The Secretary is authorized to
enter into agreements with 1 or more obligors to make
direct loans pursuant to the Federal Credit Reform Act
of 1990 the proceeds of which are used either to finance
eligible project costs or refinance interim construction fi-
nancing of such costs of any project selected under section
4, except that no loan agreement shall refinance interim
construction financing later than 1 year after substantial
completion of construction.
(b) TERMS AND LIMITATIONS.—
(1) A loan agreement under this section shall
be on such terms and conditions and contain such
covenants, representations, warranties, and require-
ments (including requirements for audits) as the
Secretary determines.
(2) A direct loan shall have a lien on project
revenues or other dedicated revenue sources, and
may be subject to prior liens securing project obliga-
tions; however, any Federal claim on project assets
shall not be subordinated to the claims of other lend-
ers in the event of default by the obligor.
(3) The Secretary shall not make a direct loan
exceeding 33 percent of eligible project costs.
(4) The final maturity date of a direct loan
shall not exceed 30 years from the date of substan-
tial completion.
(5) The interest rate on a direct loan shall
equal the yield on marketable United States Treas-
ury securities with a similar maturity to that of such
direct loan on the date of execution of the loan
agreement.
(c) REPAYMENT.—Loan repayments on a direct loan
must commence not later than 5 years after substantial
completion of the project and shall be payable not less fre-
quently than semiannually. In the event that, in the first
10 years following substantial completion, the project
(after paying operation and maintenance costs or debt
service on any project obligations senior to the direct loan)
is unable to generate sufficient revenues to pay scheduled
principal and interest, the Secretary may allow the obligor
to add unpaid principal and interest to the outstanding
balance of the direct loan, if the obligor demonstrates that
it is using due diligence to increase revenues or decrease
costs so as to become current in its payments.
(d) LOAN GUARANTEES.—
(1) IN GENERAL.—The Secretary may provide a
loan guarantee to a lender in lieu of making a direct
loan.
(2) TERMS.—The terms of a guaranteed loan
shall be consistent with those set forth in this sec-
tion for a direct loan, except that the rate on the
guaranteed loan and any prepayment features shall
be negotiated between the obligor and the lender,
with the consent of the Secretary.
SEC. 6. STANDBY LINES OF CREDIT.
(a) IN GENERAL.—The Secretary is authorized to
enter into agreements with 1 or more obligors to make
direct loans pursuant to the Federal Credit Reform Act
of 1990 at future dates in the form of lines of credit for
any project selected under section 4. The proceeds of a
line of credit provided under this section shall be available
to pay debt service on project obligations issued to finance
eligible project costs.
(b) TERMS AND LIMITATIONS.—A line of credit pro-
vided under this section shall be subject to the following
conditions:
(1) A line of credit under this section shall be
on such terms and conditions and contain such cov-
enants, representations, warranties, and require-
ments (including requirements for audits), as the
Secretary determines.
(2) A draw on a line of credit shall only be
made if net revenues from the project (including
capitalized interest, any debt service reserve fund, or
any other available reserves) are insufficient to pay
debt service on project obligations.
(3) A line of credit shall be available during the
period beginning on the date of substantial comple-
tion and ending no later than the day that is 10
years following such date.
(4) The total amount of a line of credit shall
not exceed 33 percent of eligible project costs, and
the amount drawn in any single year shall not ex-
ceed 20 percent of the total amount of the line of
credit.
(5) Any draw on a line of credit under this sec-
tion shall represent a direct loan as defined in the
Federal Credit Reform Act of 1990 and shall be re-
paid within 30 years from the date of such draw.
(6) The interest rate on a draw shall equal the
yield on 30-year marketable United States Treasury
securities as of the date the line of credit is commit-
ted.
(7) No third party creditor of the obligor shall
have any right against the Federal Government with
respect to any draw on a line of credit.
(8) A line of credit shall not be issued for a
project that is also the recipient of a flexible pay-
ment loan under section 5.
(c) REPAYMENT.—Loan repayments shall commence
within 5 years of a draw and shall be payable not less
frequently than semi-annually. The direct loan evidencing
the draw shall have a lien on project revenues or other
dedicated revenue sources, and may be subject to prior
liens securing project obligation; however, any Federal
claim on project assets shall not be subordinated to the
claims of other lenders in the event of default by the obli-
gor. In the event that, in the first 10 years following sub-
stantial completion, the project (after paying operation
and maintenance costs or any debt service on project obli-
gations senior to the draw) is unable to generate sufficient
revenues to pay scheduled principal and interest, the Sec-
retary may allow the obligor to add unpaid principal and
interest to the outstanding balance of the draw, if the obli-
gor demonstrates that it is using due diligence to increase
revenues or decrease costs so as to become current in its
payments. Unpaid interest or principal shall continue to
accrue interest until the next payment date.
SEC. 7. PROJECT DEVELOPMENT COST INSURANCE PILOT
PROGRAM.
(a) IN GENERAL.—The Secretary may establish a
pilot program to encourage public-private partnerships
and facilitate infrastructure development by entering into
agreements with 1 or more insureds to provide insurance
for preconstruction costs associated with any project se-
lected under section 4. Such program shall be designed
to efficiently and equitably allocate risks and responsibil-
ities among governmental sponsors and private developers
of projects anticipated to be supported in whole or in part
by user charges or other dedicated revenue sources. Such
program shall provide insurance for the noncommercial
risks and other preconstruction costs, as defined in section
3(2)(A).
(b) TERMS AND SCOPE OF COVERAGE.—The insur-
ance 
provided 
under 
this 
section 
may 
cover
preconstruction costs incurred by an insured for a project
selected under section 4 that will not proceed to construc-
tion due to inability to secure governmental permits and
approvals, challenges to such permits and approvals,
events of force majeure, or other factors, as determined
by the Secretary, in accordance with the following terms:
(1) The Federal share of any insurance pro-
vided under this section shall not exceed 40 percent
of the project costs included in section 3(2)(A). Such
costs must be incurred subsequent to the date of is-
suance of the insurance. In no case may the Federal
share exceed $4,000,000.
(2) The State or local government share of any
insurance provided under this section shall equal at
least 20 percent of the project costs included in sec-
tion 3(2)(A), unless the Secretary determines other-
wise.
(3) The Secretary may impose such other con-
ditions and requirements in connection with any in-
surance provided under this section as the Secretary
deems appropriate, including requirements for au-
dits.
(c) PAYMENT OF CLAIMS AND REIMBURSEMENT.—
Upon determining that a project insured under this sec-
tion will not proceed to construction within 5 years from
the date of issuance of the insurance, the Secretary shall
pay the insured the Federal share of the insurance. The
Secretary may require the insured to reimburse the Sec-
retary for any proceeds paid under this section if the
project later proceeds to construction.
(d) INSURANCE FEES.—The Secretary may charge
such fees and obtain other compensation for providing in-
surance coverage under this section as the Secretary
deems appropriate, payable upon execution of the insur-
ance agreement. Such fees and compensation shall be de-
posited into the Highway Trust Fund (other than the
Mass Transit Account).
SEC. 8. PROJECT SERVICING.
The State in which a project receiving financial as-
sistance under this Act is located shall identify a local
servicer to assist the Secretary in servicing the direct loan
or insurance provided under this Act. Such local servicer
shall act as the agent for the Secretary, and may receive
a servicing fee, subject to approval by the Secretary. Such
local servicer shall not be liable for the obligations of the
obligor to the Secretary.
SEC. 9. OFFICE OF INFRASTRUCTURE FINANCE.
(a) DUTIES OF THE SECRETARY.—Section 301 of
title 49, United States Code, is amended—
(1) in paragraph (7), by striking ‘‘and’’ at the
end;
(2) in paragraph (8), by striking the period at
the end and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(9) develop and coordinate Federal policy on
financing transportation infrastructure, including
the provision of direct Federal credit assistance and
other techniques used to leverage Federal transpor-
tation funds.’’.
(b) OFFICE OF INFRASTRUCTURE FINANCE.—
(1) IN GENERAL.—Chapter 1 of title 49, United
States Code, is amended by adding at the end the
following:
‘‘§ 113. Office of Infrastructure Finance
‘‘(a) ESTABLISHMENT.—The Secretary of Transpor-
tation shall establish within the Office of the Secretary
an Office of Infrastructure Finance.
‘‘(b) DIRECTOR.—The Office shall be headed by a Di-
rector who shall be appointed by the Secretary not later
than 180 days after the date of enactment of this section.
‘‘(c) FUNCTIONS.—The Director shall be responsible
for—
‘‘(1) carrying out the responsibilities of the Sec-
retary described in section 301(9);
‘‘(2) carrying out research on financing trans-
portation infrastructure, including educational pro-
grams at a designated academic center and other
initiatives to support Federal, State, and local gov-
ernment efforts; and
‘‘(3) providing technical assistance to Federal,
State, and local government agencies and officials to
facilitate the development and use of alternative
techniques for financing transportation infrastruc-
ture.’’.
(2) CONFORMING AMENDMENT.—The analysis
for chapter 1 of title 49, United States Code, is
amended by adding at the end the following:
‘‘113. Office of Infrastructure Finance.’’.
SEC. 10. RULES AND REGULATIONS.
The Secretary is authorized to make such rules and
regulations as deemed necessary or appropriate to carry
out the purposes and provisions of this Act.
SEC. 11. STATE AND LOCAL PERMITS.
The provision of financial assistance under this Act
shall not—
(1) relieve any recipient of such assistance of
any obligation to obtain any required State or local
permits and approvals;
(2) limit the right of any State or local govern-
mental unit to approve or regulate rates of return on
private equity invested in a project; or
(3) otherwise supersede any State or local law
or regulation applicable to the construction or oper-
ation of such project.
SEC. 12. FUNDING.
(a) DETERMINATION OF BUDGET AUTHORITY.—The
Secretary shall estimate the budget authority associated
with providing financial assistance to projects under this
Act utilizing credit models of 1 or more independent, na-
tionally-recognized rating agencies.
(b) USE
OF UNOBLIGATED BALANCES.—Notwith-
standing any limitation on obligations for Federal-aid
highways and highway safety construction programs, a
State may obligate in a fiscal year the unobligated bal-
ances of funds apportioned to the State in the preceding
3 fiscal years under section 104(b)(1), 104(b)(2),
104(b)(3), 104(b)(5)(B), 144, or 160 of title 23, United
States Code, or funds allocated to the State in the preced-
ing 3 fiscal years under section 157 of such title or section
1013(c) or 1015 of the Intermodal Surface Transportation
Efficiency Act of 1991, for the budget costs of providing
financial assistance under this Act, as estimated by the
Secretary under subsection (a).
(c) REESTIMATES OF BUDGET COSTS.—Any reesti-
mates of costs resulting in increases in budget authority
necessary to fund the financial assistance provided under
this Act shall be funded from the General Fund of the
Treasury.
(d) LIMITATIONS ON OBLIGATIONS.—
(1) 
IN
GENERAL.—Obligations 
authorized
under subsection (b) of this section to fund esti-
mated budget costs shall be limited to $100,000,000
for each of fiscal years 1998 through 2003.
(2) BUDGET COSTS OF INSURANCE.—Not more
than 10 percent of the obligational authority made
available annually under this section shall be used to
fund the budget costs of insurance under section 7
of this Act.
(e) LIMITATIONS ON CREDIT AMOUNTS.—Principal
amounts of Federal credit instruments and the Federal
share of insurance coverage provided under this Act shall
not exceed $2,000,000,000 for each of fiscal years 1998
through 2003.
(f) SPECIAL RULE FOR URBANIZED AREAS.—Funds
apportioned or allocated under section 104(b)(2),
104(b)(3), or 160 of title 23, United States Code, or under
section 1013(c) or 1015 of the Intermodal Surface Trans-
portation Efficiency Act of 1991, and attributed to an ur-
banized area with a population of over 200,000 under sec-
tion 133(d)(2) of such title, may be obligated for the budg-
et costs of projects receiving financial assistance under
this title only if the metropolitan planning organization
designated for such urbanized area concurs, in writing,
with such obligation.
SEC. 13. REPORT TO CONGRESS.
Not later than 5 years after the date of the enact-
ment of this Act, the Secretary shall transmit to Congress
a report on the benefits, if any, of transferring the oper-
ation of the programs established by this Act to a Govern-
ment corporation or other Government-sponsored enter-
prise.
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