IN THE SENATE OF THE UNITED STATES
May 10, 2011
Mrs. Murray (for herself, Ms. Collins, and Mr. Durbin) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation
To provide for improved investment in national transportation infrastructure.
This Act may be cited as the
Transportation Infrastructure Grants
and Economic Reinvestment Act.
In this Act:
The term eligible entity means—
a local government;
a transit agency; and
2 or more of the entities described in subparagraphs (A) through (C), working in collaboration.
The term eligible project means a transportation project that, as determined by the Secretary, would have a significant beneficial impact on a State, a metropolitan area, a region, or the United States.
The term eligible project includes—
a highway or bridge project eligible for funding under chapter 1 of title 23, United States Code;
a public transportation project eligible for funding under chapter 53 of title 49, United States Code;
a passenger or freight rail transportation project; and
a port infrastructure project.
Eligible project costs
The term eligible project costs means costs relating to an eligible project, such as the costs of—
development phase activities, including planning, feasibility analysis, revenue forecasting, environmental review, permitting, preliminary engineering and design work, and other preconstruction activities;
construction, reconstruction, rehabilitation, replacement, and acquisition of real property (including land related to the eligible project and improvements to land), environmental mitigation, construction contingencies, and acquisition of equipment; and
capitalized interest necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses, and other carrying costs during construction.
The term eligible project costs does not include the costs of dredging activities.
Federal credit instrument
The term Federal credit instrument means a secured loan or loan guarantee authorized to be made available under this Act with respect to an eligible project.
The term investment-grade rating means a rating of BBB minus, Baa3, bbb minus, BBB (low), or higher assigned by a rating agency to project obligations.
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 144A(a) of the Securities and Exchange Commission and issued under the Securities Act of 1933 (15 U.S.C. 77a et seq.)), including—
a qualified retirement plan (as defined in section 4974(c) of the Internal Revenue Code of 1986) that is a qualified institutional buyer; and
a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986) that is a qualified institutional buyer.
The term loan guarantee 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 issued by an obligor and funded by a lender.
The term obligor means a party primarily liable for payment of the principal of or interest on a Federal credit instrument, which party may be a corporation, partnership, joint venture, trust, or governmental entity, agency, or instrumentality.
The term project obligation means any note, bond, debenture, or other debt obligation issued by an obligor in connection with the financing of an eligible project, other than a Federal credit instrument.
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))).
The term rural area means any area not in an urbanized area (as that term is defined by the Census Bureau).
The term Secretary means the Secretary of Transportation.
The term secured loan means a direct loan or other debt obligation issued by an obligor and funded by the Secretary in connection with the financing of an eligible project.
The term State means—
any of the 50 States; or
the District of Columbia.
The term subsidy amount means the amount of budget authority sufficient to cover the estimated long-term cost to the Federal Government of a Federal credit instrument, calculated on a net present value basis, excluding administrative costs and any incidental effects on governmental receipts or outlays in accordance with the provisions of the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
The term substantial completion means the opening of an eligible project to vehicular or passenger traffic.
National infrastructure investment program
Not later than 1 year after the date of enactment of this Act, the Secretary shall by regulation establish a program under which the Secretary shall provide grants, secured loans, and loan guarantees on a competitive basis, to eligible entities for use in carrying out eligible projects.
Except as provided in paragraph (5)(B)(i), a grant or secured loan provided under this Act shall be in an amount that is not less than $10,000,000 and not greater than $500,000,000.
Geographical distribution; balance; investment
In providing grants and Federal credit instruments under this Act, the Secretary shall take such measures as are necessary to ensure, to the maximum extent practicable—
an equitable geographical distribution of funds;
an appropriate balance in addressing the needs of urban and rural areas; and
investment in a variety of transportation modes.
Maximum percentage per State
Not more than 25 percent of the amounts made available to provide grants and Federal credit instruments under this Act for a fiscal year may be provided for eligible projects in a State.
Except as provided in paragraph (5)(B)(ii), the Federal share of the cost of carrying out any eligible project funded by a grant or secured loan under this Act shall be, at the option of the eligible entity receiving the grant, up to 80 percent.
In providing grants and secured loans under this Act, the Secretary shall give priority to eligible projects that require a contribution of Federal funds in order to complete an overall financing package for the eligible projects.
Eligible projects in rural areas
Not less than 20 percent of the amounts made available to provide grants under this Act for a fiscal year shall be provided for eligible projects located in rural areas.
Minimum grant amount; Federal share
With respect to an eligible project located in a rural area—
the minimum amount of a grant or secured loan provided under this Act shall be $1,000,000; and
the Secretary may increase the Federal share of the cost of carrying out the eligible project up to 100 percent.
Set-asides for certain costs, projects, and transfers
Of the amounts made available under this Act for a fiscal year, the Secretary may—
use not more than 25 percent to pay the subsidy and administrative costs of secured loans and loan guarantees for eligible projects;
use an amount not to exceed $20,000,000 for grants that pay for the planning, preparation, or design of eligible projects; and
use an amount not to exceed $35,000,000 to fund the provision and oversight of grants under this Act, including transfers of funds from that amount to the Administrators of the Federal Highway Administration, the Federal Transit Administration, the Federal Railroad Administration, and the Federal Maritime Administration to fund the provision and oversight of grants under this Act for eligible projects under the administrative jurisdiction of those agencies.
Selection among eligible projects
The Secretary shall establish criteria for use in selecting among eligible projects to receive funding under this Act.
Primary selection criteria
The Secretary shall select among eligible projects by evaluating the extent to which an eligible project provides significant benefits to a State, a metropolitan area, a region, or the United States, including the extent to which an eligible project—
improves the safety of transportation facilities and systems;
improves the condition of existing transportation facilities and systems;
contributes to economic competitiveness over the medium- to long-term;
improves the environment, improves energy efficiency, reduces dependence on oil, or reduces greenhouse gas emissions; and
improves access to transportation facilities and systems.
Secondary selection criteria
In addition to considering the primary selection criteria described in subparagraph (A), the Secretary shall consider the extent to which a project—
uses innovative strategies or technologies to pursue any of those primary selection criteria; and
demonstrates strong collaboration among a broad range of participants, or the integration of transportation with other public service efforts.
Federal credit instruments
In selecting among eligible projects to receive Federal credit instruments, the Secretary shall consider the creditworthiness of each eligible project, including a determination by the Secretary that any financing for the eligible project has appropriate security features, such as a rate covenant, to ensure repayment.
The Secretary shall require that each application for a grant or Federal credit instrument under this Act include an analysis of project benefits and costs.
Federal credit instruments
For purposes of subsection (c)(2)(C), the Secretary shall require each eligible project applicant to provide a preliminary rating opinion letter from at least 1 rating agency indicating that the senior project obligations, which may be the Federal credit instrument, have the potential to achieve an investment-grade rating.
The following provisions of law shall apply to funds made available under this Act and eligible projects carried out using those funds:
Subchapter IV of chapter 31 of title 40, United States Code.
Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.).
The National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et seq.).
The Secretary shall include in any notice of funding availability a full description of how applications will be evaluated against all selection criteria.
Consultations on decisions
After provision of grants and credit assistance under this Act for a fiscal year, the Secretary (or a designee) shall be available to meet with any applicant, at a time and place that is mutually acceptable to the Secretary and the applicant, to review the application of the applicant.
Secured loans and loan guarantees
Subject to paragraphs (2) and (3), the Secretary may enter into arrangements with 1 or more obligors to make secured loans, the proceeds of which shall be used to finance eligible project costs of any eligible project selected to receive funding under this Act.
Before entering into an agreement under this subsection, the Secretary, in consultation with the Director of the Office of Management and Budget and each rating agency providing a preliminary rating opinion letter under section 3(d)(2), shall determine an appropriate capital reserve subsidy amount for each secured loan, taking into account the letter.
Investment-grade rating requirement
The execution of a secured loan under this Act shall be contingent on the senior project obligations receiving an investment-grade rating.
Terms and limitations
A secured loan under this Act with respect to an eligible project shall be on such terms and conditions and contain such covenants, representations, warranties, and requirements (including requirements for audits) as the Secretary determines appropriate.
If a secured loan under this Act does not receive an investment grade rating, the amount of the secured loan shall not exceed the lesser of—
80 percent of the reasonably anticipated eligible project costs; and
the amount of the senior project obligations.
The secured loan—
be payable, in whole or in part, from tolls, user fees, or other dedicated revenue sources that also secure the senior project obligations; and
include a rate covenant, coverage requirement, or similar security feature supporting the project obligations; and
may have a lien on revenues described in subparagraph (A) subject to any lien securing project obligations.
The interest rate on the secured loan 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.
The final maturity date of the secured loan shall be not later than 35 years after the date of substantial completion of the eligible project.
The secured loan shall not be subordinated to the claims of any holder of project obligations in the event of bankruptcy, insolvency, or liquidation of the obligor.
The Secretary may establish fees at a level sufficient to cover all or a portion of the costs to the Federal Government of making a secured loan under this Act.
The proceeds of a secured loan under this Act may be used to provide any non-Federal share of eligible project costs required under chapter 1 of title 23, or chapter 53 of title 49, United States Code, if the loan is repayable using non-Federal funds.
The Secretary shall establish a repayment schedule for each secured loan under this Act based on the projected cash flow from eligible project revenues and other repayment sources.
Scheduled loan repayments of principal or interest on a secured loan under this Act shall commence not later than 5 years after the date of substantial completion of the eligible project.
If, at any time after the date of substantial completion of the eligible project, the eligible project is unable to generate sufficient revenues to pay the scheduled loan repayments of principal and interest on the secured loan, the Secretary may, subject to subparagraph (C), allow the obligor to add unpaid principal and interest to the outstanding balance of the secured loan.
Any payment deferred under subparagraph (A) shall—
continue to accrue interest in accordance with subsection (b)(4) until fully repaid; and
be scheduled to be amortized over the remaining term of the loan.
Any payment deferral under subparagraph (A) shall be contingent on the eligible project meeting criteria established by the Secretary.
The criteria established under clause (i) shall include standards for reasonable assurance of repayment.
Use of excess revenues
Any excess revenues that remain after satisfying scheduled debt service requirements on the project obligations and secured 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 secured loan without penalty.
Use of proceeds of refinancing
The secured loan may be prepaid at any time without penalty from the proceeds of refinancing from non-Federal funding sources.
Sale of secured loans
Subject to paragraph (2), as soon as practicable after substantial completion of an eligible project and after notifying the obligor, the Secretary may sell to another entity or reoffer into the capital markets a secured loan for the eligible project if the Secretary determines that the sale or reoffering can be made on favorable terms.
Consent of obligor
In making a sale or reoffering a secured loan under paragraph (1), the Secretary may not change the original terms and conditions of the secured loan without the written consent of the obligor.
The Secretary may provide a loan guarantee to a lender in lieu of making a secured loan if the Secretary determines that the budgetary cost of the loan guarantee is substantially the same as that of a secured loan.
The terms of a guaranteed loan shall be consistent with the terms that apply to a secured loan under this Act, 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.
Administration of Federal credit instruments
The Secretary shall establish a uniform system to service the Federal credit instruments made available under this Act.
The Secretary may collect and spend fees, contingent upon authority being provided in appropriations Acts, at a level that is sufficient to cover—
the costs of services of expert firms retained pursuant to paragraph (4); and
all or a portion of the costs to the Federal Government of servicing the Federal credit instruments under this Act.
The Secretary may appoint a financial entity to assist the Secretary in servicing Federal credit instruments under this Act.
The servicer shall act as the agent for the Secretary.
The servicer shall receive a servicing fee, subject to approval by the Secretary.
Assistance from expert firms
The Secretary may retain the services of expert firms, including counsel, in the field of municipal and project finance, to assist in the underwriting and servicing of Federal credit instruments.
State and local permits
Financial assistance under this Act with respect to an eligible project shall not—
relieve any recipient of the assistance of any obligation to obtain any required State or local permit or approval with respect to the eligible project;
limit the right of any unit of State or local government to approve or regulate any rate of return on private equity invested in the eligible project; or
otherwise supersede any State or local law (including any regulation) applicable to the construction or operation of the eligible project.
Authorization of appropriations
There are authorized to be appropriated to carry out this Act such sums as are necessary for each of fiscal years 2012 through 2018.