Title: Railroad Rehabilitation and Financing Innovation Act
Policy area: Transportation and Public Works

Summary:
Railroad Rehabilitation and Financing Innovation Act
This bill revises and reauthorizes through FY2026 the Railroad Rehabilitation and Improvement Financing loan program of the Department of Transportation (DOT).
For example, the bill revises the program to direct DOT to provide direct loans and loan guarantees to private entities with controlling ownership in one or more freight railroads other than Class 1 carriers.
Additionally, the bill provides DOT with flexibility in evaluating the types of collateral an applicant or infrastructure partner may propose under the program.
The bill also establishes an expedited application review process under the program for loans meeting certain financial and operational criteria. DOT must also provide applicants with regular updates on the status of their applications.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 468 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  1st Session
                                 S. 468

To expedite transportation project delivery, facilitate infrastructure 
                  improvement, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 25, 2021

 Mr. Thune (for himself and Ms. Hassan) introduced the following bill; 
    which was read twice and referred to the Committee on Commerce, 
                      Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
To expedite transportation project delivery, facilitate infrastructure 
                  improvement, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Railroad 
Rehabilitation and Financing Innovation Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Railroad Rehabilitation and Improvement Financing Program.
Sec. 3. Conforming amendments.
Sec. 4. Transitional and savings provisions.
Sec. 5. Repeals.

SEC. 2. RAILROAD REHABILITATION AND IMPROVEMENT FINANCING PROGRAM.

    (a) Amendment to Title 49, United States Code.--Part B of subtitle 
V of title 49, United States Code, is amended by inserting after 
chapter 223 the following:

   ``CHAPTER 224--RAILROAD REHABILITATION AND IMPROVEMENT FINANCING 
                                PROGRAM

``22401. Definitions.
``22402. Direct loans and loan guarantees.
``22403. Administration of direct loans and loan guarantees.
``22404. Employee protection.
``22405. Substantive criteria and standards.
``22406. Funding.
``Sec. 22401. Definitions
    ``In this chapter:
            ``(1) Cost.--
                    ``(A) In general.--The term `cost' means the 
                estimated long-term cost to the Government of a direct 
                loan or loan guarantee, or modification of the direct 
                loan or loan guarantee, calculated on a net present 
                value basis, excluding administrative costs and any 
                incidental effects on governmental receipts or outlays.
                    ``(B) Cost of direct loans.--
                            ``(i) In general.--The cost of a direct 
                        loan shall be the net present value, at the 
                        time when the direct loan is disbursed, of the 
                        following estimated cash flows:
                                    ``(I) Loan disbursements.
                                    ``(II) Repayments of principal.
                                    ``(III) Payments of interest and 
                                other payments by or to the Government 
                                over the life of the loan.
                            ``(ii) Calculation.--Calculation of the 
                        cost of a direct loan shall include the effects 
                        of changes in loan terms resulting from the 
                        exercise by the borrower of an option included 
                        in the loan contract.
                    ``(C) Cost of loan guarantee.--
                            ``(i) In general.--The cost of a loan 
                        guarantee shall be the net present value, at 
                        the time when the guaranteed loan is disbursed, 
                        of the following estimated cash flows:
                                    ``(I) Payments by the Government to 
                                cover defaults and delinquencies, 
                                interest subsidies, or other payments.
                                    ``(II) Payments to the Government, 
                                including origination and other fees, 
                                penalties, and recoveries.
                            ``(ii) Calculation.--Calculation of the 
                        cost of a loan guarantee shall include the 
                        effects of changes in loan terms resulting from 
                        the exercise by the guaranteed lender of an 
                        option included in the loan guarantee, or by 
                        the borrower of an option included in the 
                        guaranteed loan contract.
                    ``(D) Cost of modification.--The cost of a 
                modification is the difference between the current 
                estimate of the net present value of the remaining cash 
                flows under the terms of a direct loan or loan 
                guarantee contract, and the current estimate of the net 
                present value of the remaining cash flows under the 
                terms of the contract, as modified.
                    ``(E) Estimation of net present values; discount 
                rate.--In estimating net present values, the discount 
                rate shall be the average interest rate on marketable 
                Treasury securities of similar maturity to the cash 
                flows of the direct loan or loan guarantee for which 
                the estimate is being made.
                    ``(F) Estimated cost; basis.--When funds are 
                obligated for a direct loan or loan guarantee, the 
                estimated cost shall be based on the current 
                assumptions, adjusted to incorporate the terms of the 
                loan contract, for the fiscal year in which the funds 
                are obligated.
            ``(2) Current.--The term `current' has the meaning given 
        such term in section 250(c)(9) of the Balanced Budget and 
        Emergency Deficit Control Act of 1985 (2 U.S.C. 900(c)(9)).
            ``(3) Direct loan.--
                    ``(A) In general.--The term `direct loan' means a 
                disbursement of funds by the Government to a non-
                Federal borrower under a contract that requires the 
                repayment of the funds.
                    ``(B) Inclusions.--The term `direct loan' includes 
                the purchase of, or participation in, a loan made by 
                another lender and financing arrangements that defer 
                payment for more than 90 days, including the sale of a 
                Government asset on credit terms.
                    ``(C) Exclusion.--The term `direct loan' does not 
                include the acquisition of a federally guaranteed loan 
                in satisfaction of default claims.
            ``(4) Direct loan obligation.--The term `direct loan 
        obligation' means a binding agreement by the Secretary to make 
        a direct loan when specified conditions are fulfilled by the 
        borrower.
            ``(5) Intermodal.--The term `intermodal' means of or 
        relating to the connection between rail service and other modes 
        of transportation, including all parts of facilities at which 
        the connection is made.
            ``(6) Investment-grade rating.--The term `investment-grade 
        rating' means a rating of BBB minus, Baa3, bbb minus, BBB(low), 
        or higher assigned by a rating agency.
            ``(7) Loan guarantee.--The term `loan guarantee' means any 
        guarantee, insurance, or other pledge with respect to the 
        payment of all or a part of the principal or interest on any 
        debt obligation of a non-Federal borrower to a non-Federal 
        lender, but does not include the insurance of deposits, shares, 
        or other withdrawable accounts in financial institutions.
            ``(8) Loan guarantee commitment.--The term `loan guarantee 
        commitment' means a binding agreement by the Secretary to make 
        a loan guarantee when specified conditions are fulfilled by the 
        borrower, the lender, or any other party to the guarantee 
        agreement.
            ``(9) Master credit agreement.--The term `master credit 
        agreement' means an agreement to make 1 or more direct loans or 
        loan guarantees at future dates for a program of related 
        projects on terms acceptable to the Secretary.
            ``(10) Modification.--
                    ``(A) In general.--The term `modification' means 
                any Government action that alters the estimated cost of 
                an outstanding direct loan (or direct loan obligation) 
                or an outstanding loan guarantee (or loan guarantee 
                commitment) from the current estimate of cash flows.
                    ``(B) Inclusions.--The term `modification' 
                includes--
                            ``(i) the sale of loan assets, with or 
                        without recourse, and the purchase of 
                        guaranteed loans; and
                            ``(ii) any action resulting from new 
                        legislation, or from the exercise of 
                        administrative discretion under existing law, 
                        that directly or indirectly alters the 
                        estimated cost of outstanding direct loans (or 
                        direct loan obligations) or loan guarantee (or 
                        loan guarantee commitment), such as a change in 
                        collection procedures.
            ``(11) Project obligation.--The term `project obligation' 
        means a note, bond, debenture, or other debt obligation issued 
        by a borrower in connection with the financing of a project, 
        other than a direct loan or loan guarantee under this chapter.
            ``(12) Railroad.--The term `railroad' has the meaning given 
        the term `railroad carrier' in section 20102.
            ``(13) Rating agency.--The term `rating agency' means a 
        credit rating agency registered with the Securities and 
        Exchange Commission as a nationally recognized statistical 
        rating organization (as defined in section 3(a) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78c(a))).
            ``(14) Secretary.--The term `Secretary' means the Secretary 
        of Transportation.
            ``(15) Substantial completion.--The term `substantial 
        completion' means--
                    ``(A) the opening of a project to passenger or 
                freight traffic; or
                    ``(B) a comparable event, as determined by the 
                Secretary and specified in the terms of the direct loan 
                or loan guarantee.
``Sec. 22402. Direct loans and loan guarantees
    ``(a) General Authority.--The Secretary shall provide direct loans 
and loan guarantees--
            ``(1) to States and units of local government;
            ``(2) to interstate compacts consented to by Congress under 
        section 410(a) of the Amtrak Reform and Accountability Act of 
        1997 (Public Law 105-134; 49 U.S.C. 24101 note);
            ``(3) to government-sponsored authorities and corporations;
            ``(4) to railroads;
            ``(5) to joint ventures that include at least 1 of the 
        entities described in paragraph (1), (2), (3), (4), or (6);
            ``(6) to private entities with controlling ownership in 1 
        or more freight railraods other than Class 1 carriers; and
            ``(7) solely for the purpose of constructing a rail 
        connection between a plant or facility and a railroad, limited 
        option freight shippers that own or operate a plant or other 
        facility.
    ``(b) Eligible Purposes.--
            ``(1) In general.--Direct loans and loan guarantees 
        provided under this section shall be used--
                    ``(A)(i) to acquire, improve, or rehabilitate 
                intermodal or rail equipment or facilities, including 
                track, components of track, civil works such as cuts 
                and fills, bridges, yards, buildings, and shops; and
                    ``(ii) to finance costs related to the activities 
                described in clause (i), including preconstruction 
                costs;
                    ``(B) to develop or establish new intermodal or 
                railroad facilities;
                    ``(C) to refinance outstanding debt incurred for 
                the purposes described in subparagraph (A) or (B);
                    ``(D) to reimburse planning, permitting, and design 
                expenses relating to activities described in 
                subparagraph (A) or (B); or
                    ``(E) to finance economic development, including 
                commercial and residential development, and related 
                infrastructure and activities that--
                            ``(i) incorporates private investment;
                            ``(ii) is physically or functionally 
                        related to a passenger rail station or 
                        multimodal station that includes rail service;
                            ``(iii) has a high probability of the 
                        applicant commencing the contracting process 
                        for construction not later than 90 days after 
                        the date on which the direct loan or loan 
                        guarantee is obligated for the project under 
                        this chapter; and
                            ``(iv) has a high probability of reducing 
                        the need for financial assistance under any 
                        other Federal program for the relevant 
                        passenger rail station or service by increasing 
                        ridership, tenant lease payments, or other 
                        activities that generate revenue exceeding 
                        costs.
            ``(2) Operating expenses not eligible.--Direct loans and 
        loan guarantees under this section may not be used for railroad 
        operating expenses.
            ``(3) Sunset.--The Secretary may provide a direct loan or 
        loan guarantee under this section for a project described in 
        paragraph (1)(E) only during the 4-year period beginning on 
        December 4, 2015.
    ``(c) Priority Projects.--In granting applications for direct loans 
or guaranteed loans under this section, the Secretary shall give 
priority to projects that--
            ``(1) enhance public safety, including projects for the 
        installation of a positive train control system (as defined in 
        section 20157(i));
            ``(2) promote economic development;
            ``(3) enhance the environment;
            ``(4) enable United States companies to be more competitive 
        in international markets;
            ``(5) are endorsed by the plans prepared under chapter 227 
        of this title or section 135 of title 23 by the State or States 
        in which the projects are located;
            ``(6) improve railroad stations and passenger facilities 
        and increase transit-oriented development;
            ``(7) preserve or enhance rail or intermodal service to 
        small communities or rural areas;
            ``(8) enhance service and capacity in the national rail 
        system; or
            ``(9)(A) would materially alleviate rail capacity problems 
        that degrade the provision of service to shippers; and
            ``(B) would fulfill a need in the national transportation 
        system.
    ``(d) Extent of Authority.--
            ``(1) Limitation on aggregate unpaid principal amounts of 
        obligations.--The aggregate unpaid principal amounts of 
        obligations under direct loans and loan guarantees made under 
        this section may not exceed $35,000,000,000 at any time.
            ``(2) Minimum amount for freight railroads.--Of the amount 
        referred to in paragraph (1), not less than $7,000,000,000 
        shall be available solely for projects primarily benefitting 
        freight railroads other than Class I carriers.
            ``(3) Proportion of unused amount.--The Secretary shall not 
        establish any limit on the proportion of the unused amount 
        authorized under this subsection that may be used for 1 loan or 
        loan guarantee.
    ``(e) Rates of Interest.--
            ``(1) Direct loans.--The interest rate on a direct loan 
        under this section shall be not less than the yield on United 
        States Treasury securities of a similar maturity to the 
        maturity of the secured loan on the date of execution of the 
        loan agreement.
            ``(2) Loan guarantees.--The Secretary shall not make a loan 
        guarantee under this section if the interest rate for the loan 
        exceeds that which the Secretary determines to be reasonable, 
        taking into consideration the prevailing interest rates and 
        customary fees incurred under similar obligations in the 
        private capital market.
    ``(f) Infrastructure Partners.--
            ``(1) Authority of secretary.--
                    ``(A) In general.--In lieu of or in combination 
                with appropriations of budget authority to cover the 
                costs of direct loans and loan guarantees as required 
                under section 504(b)(1) of the Federal Credit Reform 
                Act of 1990 (2 U.S.C. 661c(b)(1)), including the cost 
                of a modification of a direct loan or loan guarantee, 
                the Secretary may accept on behalf of an applicant for 
                assistance under this section a commitment from a non-
                Federal source, including a State or local government 
                or agency, or public benefit corporation or public 
                authority of a State or local government, to fund, in 
                whole or in part, credit risk premiums and modification 
                costs with respect to the loan that is the subject of 
                the application or modification.
                    ``(B) Limitation.--The aggregate of appropriations 
                of budget authority and credit risk premiums described 
                in this paragraph with respect to a direct loan or loan 
                guarantee shall not be less than the cost of that 
                direct loan or loan guarantee.
            ``(2) Credit risk premium amount.--The Secretary shall 
        determine the amount required for credit risk premiums under 
        this subsection on the basis of--
                    ``(A) the circumstances of the applicant, including 
                the amount of collateral offered, if any;
                    ``(B) the proposed schedule of loan disbursements;
                    ``(C) historical data on the repayment history of 
                similar borrowers;
                    ``(D) consultation with the Congressional Budget 
                Office; and
                    ``(E) any other factors the Secretary considers 
                relevant.
            ``(3) Creditworthiness.--Upon receipt of a proposal from an 
        applicant for assistance under this section, the Secretary 
        shall accept, as a basis for determining the amount of the 
        credit risk premium under paragraph (2), in addition to the 
        value of any collateral described in paragraph (5), any of the 
        following :
                    ``(A) The net present value of a future stream of 
                State or local subsidy income or other dedicated 
                revenues to secure the direct loan or loan guarantee.
                    ``(B) Adequate coverage requirements to ensure 
                repayment, on a nonrecourse basis, from cash flows 
                generated by the project or any other dedicated revenue 
                source, including--
                            ``(i) tolls;
                            ``(ii) user fees, including operating or 
                        tenant charges, facility rents, or other fees 
                        paid by transportation service providers or 
                        operators for access to, or the use of, 
                        infrastructure, including rail lines, bridges, 
                        tunnels, yards, or stations; and
                            ``(iii) payments owing to the obligor under 
                        a public-private partnership.
                    ``(C) An investment-grade rating on the direct loan 
                or loan guarantee, as applicable, unless the total 
                amount of the direct loan or loan guarantee is greater 
                than $150,000,000, in which case the applicant shall 
                have an investment-grade rating from not fewer than 2 
                rating agencies regarding the direct loan or loan 
                guarantee.
                    ``(D) A projection of freight or passenger demand 
                for the project based on regionally developed economic 
                forecasts, including projections of any modal diversion 
                resulting from the project.
            ``(4) Payment of premiums.--Credit risk premiums under this 
        subsection shall be paid to the Secretary before the 
        disbursement of loan amounts (and in the case of a 
        modification, before the modification is executed), to the 
        extent appropriations are not available to the Secretary to 
        meet the costs of direct loans and loan guarantees, including 
        costs of modifications of direct loans and loan guarantees.
            ``(5) Collateral.--
                    ``(A) Types of collateral.--An applicant or 
                infrastructure partner may propose tangible and 
                intangible assets as collateral, exclusive of goodwill. 
                The Secretary, after evaluating each such asset--
                            ``(i) shall accept a net liquidation value 
                        of collateral; and
                            ``(ii) shall consider and may accept--
                                    ``(I) the market value of 
                                collateral; or
                                    ``(II) in the case of a blanket 
                                pledge or assignment of an entire 
                                operating asset or basket of assets as 
                                collateral, the net liquidation value, 
                                the market value of assets, or, the 
                                market value of the going concern, 
                                considering--
                                            ``(aa) inclusion in the 
                                        pledge of all the assets 
                                        necessary for independent 
                                        operational utility of the 
                                        collateral, including tangible 
                                        assets such as real property, 
                                        track and structure, equipment 
                                        and rolling stock, stations, 
                                        systems and maintenance 
                                        facilities and intangible 
                                        assets such as long-term 
                                        shipping agreements, easements, 
                                        leases and access rights such 
                                        as for trackage and haulage;
                                            ``(bb) interchange 
                                        commitments; and
                                            ``(cc) the value of the 
                                        asset as determined through the 
                                        cost or market approaches, or 
                                        the market value of the going 
                                        concern, with the latter 
                                        considering discounted cash 
                                        flows for a period not to 
                                        exceed the term of the direct 
                                        loan or loan guarantee.
                    ``(B) Appraisal standards.--In evaluating 
                appraisals of collateral under subparagraph (A), the 
                Secretary shall consider--
                            ``(i) adherence to the substance and 
                        principles of the Uniform Standards of 
                        Professional Appraisal Practice, as developed 
                        by the Appraisal Standards Board of the 
                        Appraisal Foundation;
                            ``(ii) performance of the appraisal by 
                        licensed or certified appraisers as may be 
                        required by the State of jurisdiction for the 
                        type of asset being appraised; and
                            ``(iii) the qualifications of the 
                        appraisers to value the type of collateral 
                        offered.
    ``(g) Prerequisites for Assistance.--The Secretary may not make a 
direct loan or loan guarantee under this section unless the Secretary 
has made a written finding that--
            ``(1) repayment of the obligation is required to be made 
        within a term of the lesser of--
                    ``(A) 35 years after the date of substantial 
                completion of the project; or
                    ``(B) with regard to rail equipment or facilities 
                with estimated useful lives that exceed the term 
                described in subparagraph (A)--
                            ``(i) 50 years after the date of 
                        substantial completion of the project; or
                            ``(ii) the estimated useful life of the 
                        rail equipment or facilities to be acquired, 
                        rehabilitated, improved, developed, or 
                        established, subject to an adequate 
                        determination of long-term risk;
            ``(2) the direct loan or loan guarantee is justified by the 
        present and probable future demand for rail services or 
        intermodal facilities;
            ``(3) the applicant has given reasonable assurances that 
        the facilities or equipment to be acquired, rehabilitated, 
        improved, developed, or established with the proceeds of the 
        obligation will be economically and efficiently utilized;
            ``(4) the obligation can reasonably be repaid, using an 
        appropriate combination of credit risk premiums and collateral 
        offered by the applicant to protect the Federal Government; and
            ``(5) the purposes of the direct loan or loan guarantee are 
        consistent with subsection (b).
    ``(h) Conditions of Assistance.--
            ``(1) In general.--Before granting assistance under this 
        section, the Secretary shall require the applicant to agree to 
        such terms and conditions as are sufficient, in the judgment of 
        the Secretary, to ensure that, as long as any principal or 
        interest is due and payable on the obligation, the applicant, 
        and any railroad or railroad partner for whose benefit the 
        assistance is intended--
                    ``(A) will not use any funds or assets from 
                railroad or intermodal operations for purposes not 
                related to the operations, if the use--
                            ``(i) would impair the ability of the 
                        applicant, railroad, or railroad partner to 
                        provide rail or intermodal services in an 
                        efficient and economic manner; or
                            ``(ii) would adversely affect the ability 
                        of the applicant, railroad, or railroad partner 
                        to perform any obligation entered into by the 
                        applicant under this section;
                    ``(B) will, consistent with its capital resources, 
                maintain its capital program, equipment, facilities, 
                and operations on a continuing basis; and
                    ``(C) will not make any discretionary dividend 
                payments that unreasonably conflict with the purposes 
                stated in subsection (b).
            ``(2) Collateral and request for assistance from another 
        source not required.--
                    ``(A) Collateral.--
                            ``(i) In general.--The Secretary may not 
                        require an applicant for a direct loan or loan 
                        guarantee under this section to provide 
                        collateral.
                            ``(ii) Valuation.--Any collateral provided 
                        or enhanced after being provided shall be 
                        valued as a going concern after giving effect 
                        to the present value of improvements 
                        contemplated by the completion and operation of 
                        the project, if applicable.
                    ``(B) Request for assistance from another source.--
                The Secretary may not require an applicant for a direct 
                loan or loan guarantee under this section to have 
                previously sought the financial assistance requested 
                from another source.
            ``(3) Required compliance.--The Secretary shall require 
        recipients of direct loans or loan guarantees under this 
        section to comply with--
                    ``(A) the standards of section 24312, as in effect 
                on September 1, 2002, with respect to the project in 
                the same manner that Amtrak is required to comply with 
                the standards for construction work financed under an 
                agreement made under section 24308(a); and
                    ``(B) the protective arrangements established under 
                section 22404, with respect to employees affected by 
                actions taken in connection with the project to be 
                financed by the direct loan or loan guarantee.
            ``(4) Matching funds.--The Secretary shall require each 
        recipient of a direct loan or loan guarantee under this 
        section, for a project described in subsection (b)(1)(E), to 
        provide a non-Federal match of not less than 25 percent of the 
        total amount expended by the recipient for the project.
    ``(i) Application Processing Procedures.--
            ``(1) Application status notices.--Not later than 30 days 
        after the date on which the Secretary receives an application 
        under this section, or additional information and material 
        under paragraph (2)(B), the Secretary shall provide the 
        applicant written notice as to whether the application is 
        complete or incomplete.
            ``(2) Incomplete applications.--If the Secretary determines 
        that an application is incomplete, the Secretary shall--
                    ``(A) provide the applicant with a description of 
                all of the specific information or material that is 
                needed to complete the application, including any 
                information required by an independent financial 
                analyst; and
                    ``(B) allow the applicant to resubmit the 
                application with the information and material described 
                under subparagraph (A) to complete the application.
            ``(3) Application approvals and disapprovals.--
                    ``(A) In general.--Not later than 45 days after the 
                date on which the Secretary notifies an applicant that 
                an application is complete under paragraph (1), the 
                Secretary shall provide the applicant written notice as 
                to whether the Secretary has approved or disapproved 
                the application.
                    ``(B) Actions by the office of management and 
                budget.--In order to enable compliance with the time 
                limit under subparagraph (A), the Office of Management 
                and Budget shall take any action required with respect 
                to the application within such 45-day period.
            ``(4) Streamlined application review process.--
                    ``(A) In general.--Consistent with section 116, and 
                not later than 180 days after date of the enactment of 
                the Railroad Rehabilitation and Financing Innovation 
                Act, the Secretary shall make available an expedited 
                application process or processes at the request of 
                applicants seeking loans or loan guarantees.
                    ``(B) Criteria.--Applicants seeking loans and loan 
                guarantees issued under this subsection shall--
                            ``(i) seek a total loan or loan guarantee 
                        value not exceeding $100,000,000;
                            ``(ii) meet eligible project purposes 
                        included in subparagraphs (A)(i), (A)(ii), and 
                        (B) of subsection (b)(1); and
                            ``(iii) meet other criteria considered 
                        appropriate by the Secretary, in consultation 
                        with the Department of Transportation Council 
                        on Credit and Finance.
                    ``(C) Expedited credit review.--The total period 
                between the submission of a draft application and the 
                approval or disapproval of a loan or loan guarantee for 
                an applicant under this paragraph may not exceed 90 
                days. If an application review conducted under this 
                paragraph exceeds 90 days, the Secretary shall--
                            ``(i) provide written notice to the 
                        applicant, including a justification for the 
                        delay and updated estimate of the time needed 
                        for approval or disapproval; and
                            ``(ii) post the notice on the dashboard 
                        described in paragraph (5).
            ``(5) Dashboard.--The Secretary shall post, on the 
        Department of Transportation's internet website, a monthly 
        report that includes, for each application--
                    ``(A) the applicant type;
                    ``(B) the location of the project;
                    ``(C) a brief description of the project, including 
                its purpose;
                    ``(D) the requested direct loan or loan guarantee 
                amount;
                    ``(E) the date on which the Secretary provided 
                application status notice under paragraph (1);
                    ``(F) the date that the Secretary provided notice 
                of approval or disapproval under paragraph (3); and
                    ``(G) whether the project utilized the expedited 
                application process under paragraph (4).
            ``(6) Regular creditworthiness review status reports.--
                    ``(A) In general.--The Secretary shall provide to 
                the applicant a regular report containing information 
                related to the application for a loan or loan 
                guarantee, including--
                            ``(i) a summary of the proposed 
                        transaction, including--
                                    ``(I) the total value of the 
                                proposed loan or loan guarantee;
                                    ``(II) the name of the applicant or 
                                applicants submitting an application;
                                    ``(III) the proposed capital 
                                structure of the project to which the 
                                loan or loan guarantee would be 
                                applied, including the proposed Federal 
                                and non-Federal shares of the total 
                                project cost;
                                    ``(IV) the type of activity to 
                                receive credit assistance, including 
                                whether the project--
                                            ``(aa) is new construction 
                                        or rehabilitation of existing 
                                        rail equipment or facilities;
                                            ``(bb) is a refinancing an 
                                        existing loan or loan 
                                        guarantee; and
                                    ``(V) if a deferred payment is 
                                proposed, the length of such deferment;
                                    ``(VI) the credit rating or ratings 
                                provided for the applicant;
                                    ``(VII) if other credit instruments 
                                are involved, the proposed 
                                subordination relationship and a 
                                description of such other credit 
                                instruments;
                                    ``(VIII) a schedule for the 
                                readiness of proposed investments for 
                                financing;
                                    ``(IX) a description of any Federal 
                                permits required, including under the 
                                National Environmental Policy Act of 
                                1969 (42 U.S.C. 4321 et seq.) and any 
                                waivers under section 5323(j) of title 
                                49, United States Code (commonly 
                                referred to as the `Buy America Act'); 
                                and
                                    ``(X) other characteristics of the 
                                proposed activity to be financed, 
                                borrower, key agreements, or the nature 
                                of the credit that the Secretary 
                                considers to be fundamental to the 
                                creditworthiness review;
                            ``(ii) the status of the application in the 
                        pre-application review and selection process;
                            ``(iii) the cumulative amounts paid by the 
                        Secretary to outside advisors related to the 
                        application, including financial and legal 
                        advisors;
                            ``(iv) a description of the key rating 
                        factors used by the Secretary to determine 
                        credit risk, including--
                                    ``(I) the qualitative and 
                                quantitative factors used to determine 
                                risk for the proposed application;
                                    ``(II) an adjectival risk rating 
                                for each identified factor, ranked as 
                                either low, moderate, or high; and
                            ``(v) a nonbinding estimate of the credit 
                        risk premium, which may be in the form of--
                                    ``(I) a range, based on the 
                                assessment of risk factors described in 
                                clause (iv); or
                                    ``(II) a justification for why the 
                                estimate of the credit risk premium 
                                cannot be determined based on available 
                                information; and
                            ``(vi) a description of key information the 
                        Secretary needs from the applicant to complete 
                        the credit review process and make a final 
                        determination of the credit risk premium.
                    ``(B) Report.--The Secretary shall submit the 
                report described in subparagraph (A) not less 
                frequently than every 45 days after the date on which 
                the Secretary presents the first request to the 
                applicant for funding to pay fees for advisors 
                described in subparagraph (A)(iii).
                    ``(C) Exception.--The report required under this 
                paragraph may not be applied to applications processed 
                using the expedited credit review process under 
                paragraph (5)(B).
    ``(j) Repayment Schedules.--
            ``(1) In general.--The Secretary shall establish a 
        repayment schedule requiring payments to commence not later 
        than 5 years after the date of substantial completion.
            ``(2) Accrual.--Interest shall accrue as of the date of 
        disbursement, and shall be amortized over the remaining term of 
        the loan, beginning at the time the payments begin.
            ``(3) Deferred payments.--
                    ``(A) In general.--If, at any time the date of 
                substantial completion, the obligor is unable to pay 
                the scheduled loan repayments of principal and interest 
                on a direct loan provided under this section, the 
                Secretary, subject to subparagraph (B), may allow, for 
                a maximum aggregate time of 1 year over the duration of 
                the direct loan, the obligor to add unpaid principal 
                and interest to the outstanding balance of the direct 
                loan.
                    ``(B) Interest.--A payment deferred under 
                subparagraph (A) shall--
                            ``(i) continue to accrue interest under 
                        paragraph (2) until the loan is fully repaid; 
                        and
                            ``(ii) be scheduled to be amortized over 
                        the remaining term of the loan.
            ``(4) Prepayments.--
                    ``(A) Use of excess revenues.--With respect to a 
                direct loan provided by the Secretary under this 
                section, any excess revenues that remain after 
                satisfying scheduled debt service requirements on the 
                project obligations and direct loan and all deposit 
                requirements under the terms of any trust agreement, 
                bond resolution, or similar agreement securing project 
                obligations may be applied annually to prepay the 
                direct loan without penalty.
                    ``(B) Use of proceeds of refinancing.--The direct 
                loan may be prepaid at any time without penalty from 
                the proceeds of refinancing from non-Federal funding 
                sources.
    ``(k) Sale of Direct Loans.--
            ``(1) In general.--Subject to paragraph (2) and as soon as 
        practicable after substantial completion of a project, the 
        Secretary, after notifying the obligor, may sell to another 
        entity or reoffer into the capital markets a direct loan for 
        the project if the Secretary determines that the sale or 
        reoffering has a high probability of being made on favorable 
        terms.
            ``(2) Consent of obligor.--In making a sale or reoffering 
        under paragraph (1), the Secretary shall not change the 
        original terms and conditions of the secured loan without the 
        prior written consent of the obligor.
    ``(l) Nonsubordination.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        direct loan provided by the Secretary 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.
            ``(2) Preexisting indentures.--
                    ``(A) In general.--The Secretary may waive the 
                requirement under paragraph (1) for a public agency 
                borrower that is financing ongoing capital programs and 
                has outstanding senior bonds under a preexisting 
                indenture if--
                            ``(i) the direct loan is rated in the A 
                        category or higher;
                            ``(ii) the direct loan is secured and 
                        payable from pledged revenues not affected by 
                        project performance, such as a tax-based 
                        revenue pledge or a system-backed pledge of 
                        project revenues; and
                            ``(iii) the program share, under this 
                        chapter, of eligible project costs is 50 
                        percent or less.
                    ``(B) Limitation.--The Secretary may impose 
                limitations for the waiver of the nonsubordination 
                requirement under this paragraph if the Secretary 
                determines that the limitations would be in the 
                financial interest of the Federal Government.
    ``(m) Master Credit Agreements.--
            ``(1) In general.--Subject to paragraph (2) and to 
        subsection (d), the Secretary may enter into a master credit 
        agreement that is contingent on all of the conditions for the 
        provision of a direct loan or loan guarantee, as applicable, 
        under this chapter and other applicable requirements being 
        satisfied prior to the issuance of the direct loan or loan 
        guarantee.
            ``(2) Conditions.--Each master credit agreement shall--
                    ``(A) establish the maximum amount and general 
                terms and conditions of each applicable direct loan or 
                loan guarantee;
                    ``(B) identify 1 or more dedicated non-Federal 
                revenue sources that will secure the repayment of each 
                applicable direct loan or loan guarantee;
                    ``(C) provide for the obligation of funds--
                            ``(i) for the direct loans or loan 
                        guarantees contingent on the meeting of all 
                        applicable requirements and after all 
                        requirements have been met, for the projects 
                        subject to the master credit agreement; and
                    ``(D) provide 1 or more dates, as determined by the 
                Secretary, before which the master credit agreement 
                results in the disbursement issuance of each of the 
                direct loans or loan guarantees or in the release of 
                the master credit agreement.
``Sec. 22403. Administration of direct loans and loan guarantees
    ``(a) Applications.--
            ``(1) In general.--The Secretary shall prescribe the form 
        and contents required of applications for assistance under 
        section 22402, to enable the Secretary to determine the 
        eligibility of the applicant's proposal, and shall establish 
        terms and conditions for direct loans and loan guarantees made 
        under that section, including a program guide, a standard term 
        sheet, and specific timetables.
            ``(2) Documentation.--An applicant meeting the size 
        standard for small business concerns established under section 
        3(a)(2) of the Small Business Act (15 U.S.C. 632(a)(2)) may 
        provide unaudited financial statements as documentation of 
        historical financial information if such statements are 
        accompanied by the applicant's Federal tax returns and Internal 
        Revenue Service tax verifications for the corresponding years.
    ``(b) Full Faith and Credit.--All guarantees entered into by the 
Secretary under section 22402 shall constitute general obligations of 
the United States of America and shall be backed by the full faith and 
credit of the United States of America.
    ``(c) Assignment of Loan Guarantees.--The holder of a loan 
guarantee made under section 22402 may assign the loan guarantee in 
whole or in part, subject to such requirements as the Secretary may 
prescribe.
    ``(d) Modifications.--The Secretary may approve the modification of 
any term or condition of a direct loan, loan guarantee, direct loan 
obligation, or loan guarantee commitment, including the rate of 
interest, time of payment of interest or principal, or security 
requirements, if the Secretary finds in writing that--
            ``(1) the modification is equitable and is in the overall 
        best interests of the United States;
            ``(2) consent has been obtained from the applicant and in 
        the case of a loan guarantee or loan guarantee commitment, the 
        holder of the obligation; and
            ``(3) the modification cost has been covered under section 
        22402(f).
    ``(e) Compliance.--The Secretary shall ensure compliance by an 
applicant, any other party to the loan, and any railroad or railroad 
partner for whose benefit assistance is intended, with the provisions 
of this chapter, regulations issued under this chapter, and the terms 
and conditions of the direct loan or loan guarantee, including through 
regular periodic inspections.
    ``(f) Commercial Validity.--
            ``(1) In general.--For purposes of claims by any party 
        other than the Secretary, a loan guarantee or loan guarantee 
        commitment shall be conclusive evidence that the underlying 
        obligation is in compliance with the provisions of this 
        chapter, and that the obligation has been approved and is legal 
        as to principal, interest, and other terms.
            ``(2) Valid and incontestable.--A guarantee or commitment 
        under paragraph (1) shall be valid and incontestable in the 
        hands of a holder of the guarantee or commitment, including the 
        original lender or any other holder, as of the date when the 
        Secretary granted the application for the guarantee or 
        commitment, except as to fraud or material misrepresentation by 
        the holder.
    ``(g) Default.--
            ``(1) In general.--The Secretary shall prescribe 
        regulations setting forth procedures in the event of default on 
        a loan made or guaranteed under section 22402.
            ``(2) Loan guarantees.--The Secretary shall ensure that 
        each loan guarantee made under section 22402 contains terms and 
        conditions that provide that--
                    ``(A) if a payment of principal or interest under 
                the loan is in default for more than 30 days, the 
                Secretary shall pay to the holder of the obligation, or 
                the holder's agent, the amount of unpaid guaranteed 
                interest;
                    ``(B) if the default has continued for more than 90 
                days, the Secretary shall pay to the holder of the 
                obligation, or the holder's agent, 90 percent of the 
                unpaid guaranteed principal;
                    ``(C) after final resolution of the default, 
                through liquidation or otherwise, the Secretary shall 
                pay to the holder of the obligation, or the holder's 
                agent, any remaining amounts guaranteed but that were 
                not recovered through the default's resolution;
                    ``(D) the Secretary shall not be required to make 
                any payment under subparagraphs (A) through (C) if the 
                Secretary finds, before the expiration of the periods 
                described in such subparagraphs, that the default has 
                been remedied; and
                    ``(E) the holder of the obligation shall not 
                receive payment or be entitled to retain payment in a 
                total amount that, together with all other recoveries 
                (including any recovery based upon a security interest 
                in equipment or facilities) exceeds the actual loss of 
                the holder.
    ``(h) Rights of the Secretary.--
            ``(1) Subrogation.--If the Secretary makes payment to a 
        holder, or a holder's agent, under subsection (g) in connection 
        with a loan guarantee made under section 22402, the Secretary 
        shall be subrogated to all of the rights of the holder with 
        respect to the obligor under the loan.
            ``(2) Disposition of property.--The Secretary may complete, 
        recondition, reconstruct, renovate, repair, maintain, operate, 
        charter, rent, sell, or otherwise dispose of any property or 
        other interests obtained pursuant to this section. The 
        Secretary shall not be subject to any Federal or State 
        regulatory requirements when carrying out this paragraph.
    ``(i) Action Against Obligor.--
            ``(1) In general.--The Secretary may bring a civil action 
        in an appropriate Federal court in the name of the United 
        States in the event of a default on a direct loan made under 
        section 22402 or in the name of the United States or of the 
        holder of the obligation in the event of a default on a loan 
        guaranteed under section 22402.
            ``(2) Records and evidence.--The holder of a guarantee 
        shall make available to the Secretary all records and evidence 
        necessary to prosecute the civil action.
            ``(3) Property as satisfaction of sums owed.--The Secretary 
        may accept property in full or partial satisfaction of any sums 
        owed as a result of a default.
            ``(4) Excess amount.--
                    ``(A) Payment to obligor.--If the Secretary 
                receives, through the sale or other disposition of the 
                property described in paragraph (3), an excess amount 
                described in subparagraph (B), the Secretary shall pay 
                to the obligor the excess amount.
                    ``(B) Amount.--An excess amount under this 
                subparagraph is an amount the exceeds the aggregate 
                of--
                            ``(i) the amount paid to the holder of a 
                        guarantee under subsection (g); and
                            ``(ii) any other cost to the United States 
                        of remedying the default.
    ``(j) Breach of Conditions.--The Attorney General shall commence a 
civil action in an appropriate Federal court to enjoin any activity 
that the Secretary finds is in violation of this chapter, regulations 
issued under this chapter, or any conditions that were agreed to, and 
to secure any other appropriate relief.
    ``(k) Attachment.--No attachment or execution may be issued against 
the Secretary, or any property in the control of the Secretary, prior 
to the entry of final judgment to that effect in any Federal, State, or 
other court.
    ``(l) Charges and Loan Servicing.--
            ``(1) Purposes.--The Secretary may collect from each 
        applicant, obligor, or loan party a reasonable charge for--
                    ``(A) the cost of evaluating the application, 
                amendments, modifications, and waivers, including for 
                evaluating project viability, applicant 
                creditworthiness, and the appraisal of the value of the 
                equipment or facilities for which the direct loan or 
                loan guarantee is sought, and for making necessary 
                determinations and findings;
                    ``(B) to cost of award management and project 
                management oversight;
                    ``(C) the cost of services from expert firms, 
                including counsel, and independent financial advisors 
                to assist in the underwriting, auditing, servicing, and 
                exercise of rights with respect to direct loans and 
                loan guarantees; and
                    ``(D) the cost of all other expenses incurred as a 
                result of a breach of any term or condition or any 
                event of default on a direct loan or loan guarantee.
            ``(2) Charge different amounts.--The Secretary may charge 
        different amounts under this subsection based on the different 
        costs incurred under paragraph (1).
            ``(3) Servicer.--
                    ``(A) In general.--The Secretary may appoint a 
                financial entity to assist the Secretary in servicing a 
                direct loan or loan guarantee under this chapter.
                    ``(B) Duties.--A servicer appointed under 
                subparagraph (A) shall act as the agent of the 
                Secretary in servicing a direct loan or loan guarantee 
                under this chapter.
                    ``(C) Fees.--A servicer appointed under 
                subparagraph (A) shall receive a servicing fee from the 
                obligor or other loan party, subject to approval by the 
                Secretary.
            ``(4) National surface transportation and innovative 
        finance bureau account.--Amounts collected under this 
        subsection shall--
                    ``(A) be credited directly to the National Surface 
                Transportation and Innovative Finance Bureau Account; 
                and