ESTABLISHMENT OF PROGRAM.

SEC. 1503. ESTABLISHMENT OF PROGRAM. (a) In General.— Chapter 1 of title 23, United States Code, is amended by adding at the end the following: “SUBCHAPTER II— INFRASTRUCTURE FINANCE “§ 181. Definitions “In this subchapter, the following definitions apply: “(1) Eligible project costs.— The term ‘eligible project costs’ means amounts substantially all of which are paid by, or for the account of, an obligor in connection with a project, including the cost of— “(A) development phase activities, including planning, feasibility analysis, revenue forecasting, environmental review, permitting, preliminary engineering and design work, and other preconstruction activities; “(B) construction, reconstruction, rehabilitation, replacement, and acquisition of real property (including land related to the project and improvements to land),112 STAT. 242 environmental mitigation, construction contingencies, and acquisition of equipment; and “(C) capitalized interest necessary to meet market requirements, reasonably required reserve funds, capital issuance expenses, and other carrying costs during construction. “(2) Federal credit instrument.— The term ‘Federal credit instrument’ means a secured loan, loan guarantee, or line of credit authorized to be made available under this subchapter with respect to a project. “(3) Investment-grade rating.— The term ‘investment-grade rating’ means a rating category of BBB minus, Baa3, or higher assigned by a rating agency to project obligations offered into the capital markets. “(4) 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 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) 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. “(5) Line of credit.— The term ‘line of credit’ means an agreement entered into by the Secretary with an obligor under section 184 to provide a direct loan at a future date upon the occurrence of certain events. “(6) Loan guarantee.— 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. “(7) Local servicer.— The term ‘local servicer’ means— “(A) a State infrastructure bank established under this title; or “(B) a State or local government or any agency of a State or local government that is responsible for servicing a Federal credit instrument on behalf of the Secretary. “(8) Obligor.— 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. “(9) Project.— The term ‘project’ means— “(A) any surface transportation project eligible for Federal assistance under this title or chapter 53 of title 49; “(B) a project for an international bridge or tunnel for which an international entity authorized under Federal or State law is responsible. “(C) a project for intercity passenger bus or rail facilities and vehicles, including facilities and vehicles owned by the National Railroad Passenger Corporation and components of magnetic levitation transportation systems; and 112 STAT. 243 “(D) a project for publicly owned intermodal surface freight transfer facilities, other than seaports and airports, if the facilities are located on or adjacent to National Highway System routes or connections to the National Highway System. “(10) Project obligation.— The term ‘project obligation’ means any note, bond, debenture, or other debt obligation issued by an obligor in connection with the financing of a project, other than a Federal credit instrument. “(11) Rating agency.— The term ‘rating agency’ means a bond rating agency identified by the Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization. “(12) Secured loan.— 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 a project under section 183. “(13) State.— The term ‘State’ has the meaning given the term in section 101. “(14) Subsidy amount.—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.). “(15) Substantial completion.— The term ‘substantial completion’ means the opening of a project to vehicular or passenger traffic. “§ 182. Determination of eligibility and project selection “(a) Eligibility.— To be eligible to receive financial assistance under this subchapter, a project shall meet the following criteria: “(1) Inclusion in transportation plans and programs.— The project— “(A) shall be included in the State transportation plan required under section 135; and “(B) at such time as an agreement to make available a Federal credit instrument is entered into under this subchapter, shall be included in the approved State transportation improvement program required under section 134. “(2) Application.— A State, a local servicer identified under section 185(a), or the entity undertaking the project shall submit a project application to the Secretary. “(3) Eligible project costs.— “(A) In general.— Except as provided in subparagraph (B), to be eligible for assistance under this subchapter, a project shall have eligible project costs that are reasonably anticipated to equal or exceed the lesser of— “(i) $100,000,000; or “(ii) 50 percent of the amount of Federal highway assistance funds apportioned for the most recently completed fiscal year to the State in which the project is located. “(B) Intelligent transportation system projects.— In the case of a project principally involving the installation 112 STAT. 244of an intelligent transportation system, eligible project costs shall be reasonably anticipated to equal or exceed $30,000,000. “(4) Dedicated revenue sources.— Project financing shall be repayable, in whole or in part, from tolls, user fees, or other dedicated revenue sources. “(5) Public sponsorship of private entities.— In the case of a project that is undertaken by an entity that is not a State or local government or an agency or instrumentality of a State or local government, the project that the entity is undertaking shall be publicly sponsored as provided in paragraphs (1) and (2). “(b) Selection Among Eligible Projects.— “(1) Establishment.— The Secretary shall establish criteria for selecting among projects that meet the eligibility criteria specified in subsection (a). “(2) Selection criteria.— “(A) In general.— The selection criteria shall include the following: “(i) The extent to which the project is nationally or regionally significant, in terms of generating economic benefits, supporting international commerce, or otherwise enhancing the national transportation system. “(ii) The creditworthiness of the project, including a determination by the Secretary that any financing for the project has appropriate security features, such as a rate covenant, to ensure repayment. “(iii) The extent to which assistance under this subchapter would foster innovative public-private partnerships and attract private debt or equity investment. “(iv) The likelihood that assistance under this subchapter would enable the project to proceed at an earlier date than the project would otherwise be able to proceed. “(v) The extent to which the project uses new technologies, including intelligent transportation systems, that enhance the efficiency of the project. “(vi) The amount of budget authority required to fund the Federal credit instrument made available under this subchapter. “(vii) The extent to which the project helps maintain or protect the environment. “(viii) The extent to which assistance under this chapter would reduce the contribution of Federal grant assistance to the project. “(B) Preliminary rating opinion letter.— For purposes of subparagraph (A)(ii), the Secretary shall require each project applicant to provide a preliminary rating opinion letter from at least 1 rating agency indicating that the project’s senior obligations have the potential to achieve an investment-grade rating. “(c) Federal Requirements.— In addition to the requirements of this title for highway projects, chapter 53 of title 49 for transit projects, and section 5333(a) of title 49 for rail projects, the following provisions of law shall apply to funds made available under this subchapter and projects assisted with the funds: 112 STAT. 245 “(1) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.). “(2) The National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). “(3) The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601 et seq.). “§ 183. Secured loans “(a) In General.— “(1) Agreements.— Subject to paragraphs (2) through (4), the Secretary may enter into agreements with 1 or more obligors to make secured loans, the proceeds of which shall be used— “(A) to finance eligible project costs; or “(B) to refinance interim construction financing of eligible project costs; of any project selected under section 182. “(2) Limitation on refinancing of interim construction financing.— A loan under paragraph (1) shall not refinance interim construction financing under paragraph (1)(B) later than 1 year after the date of substantial completion of the project. “(3) Risk assessment.— 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 182(b)(2)(B), shall determine an appropriate capital reserve subsidy amount for each secured loan, taking into account such letter. “(4) Investment-grade rating requirement.— The funding of a secured loan under this section shall be contingent on the project’s senior obligations receiving an investment-grade rating, except that— “(A) the Secretary may fund an amount of the secured loan not to exceed the capital reserve subsidy amount determined under paragraph (3) prior to the obligations receiving an investment-grade rating; and “(B) the Secretary may fund the remaining portion of the secured loan only after the obligations have received an investment-grade rating by at least 1 rating agency. “(b) Terms and Limitations.— “(1) In general.— A secured loan under this section with respect to a 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. “(2) Maximum amount.— The amount of the secured loan shall not exceed 33 percent of the reasonably anticipated eligible project costs. “(3) Payment.— The secured loan— “(A) shall— “(i) be payable, in whole or in part, from tolls, user fees, or other dedicated revenue sources; and “(ii) include a rate covenant, coverage requirement, or similar security feature supporting the project obligations; and 112 STAT. 246 “(B) may have a lien on revenues described in subparagraph (A) subject to any lien securing project obligations. “(4) Interest rate.— The interest rate on the secured loan shall be not less than the yield on marketable United States Treasury securities of a similar maturity to the maturity of the secured loan on the date of execution of the loan agreement. “(5) Maturity date.— The final maturity date of the secured loan shall be not later than 35 years after the date of substantial completion of the project. “(6) Nonsubordination.— 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. “(7) Fees.— 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 section. “(8) Non-federal share.— The proceeds of a secured loan under this subchapter may be used for any non-Federal share of project costs required under this title or chapter 53 of title 49, if the loan is repayable from non-Federal funds. “(c) Repayment.— “(1) Schedule.— The Secretary shall establish a repayment schedule for each secured loan under this section based on the projected cash flow from project revenues and other repayment sources. “(2) Commencement.— Scheduled loan repayments of principal or interest on a secured loan under this section shall commence not later than 5 years after the date of substantial completion of the project. “(3) Sources of repayment funds.— The sources of funds for scheduled loan repayments under this section shall include tolls, user fees, or other dedicated revenue sources. “(4) Deferred payments.— “(A) Authorization.— If, at any time during the 10 years after the date of substantial completion of the project, the 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. “(B) Interest.— Any payment deferred under subparagraph (A) shall— “(i) continue to accrue interest in accordance with subsection (b)(4) until fully repaid; and “(ii) be scheduled to be amortized over the remaining term of the loan beginning not later than 10 years after the date of substantial completion of the project in accordance with paragraph (1). “(C) Criteria.— “(i) In general.— Any payment deferral under subparagraph (A) shall be contingent on the project meeting criteria established by the Secretary. “(ii) Repayment standards.— The criteria established under clause (i) shall include standards for reasonable assurance of repayment. “(5) Prepayment.— 112 STAT. 247 “(A) 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. “(B) 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. “(d) Sale of Secured Loans.— “(1) In general.— Subject to paragraph (2), as soon as practicable after substantial completion of a project and after notifying the obligor, the Secretary may sell to another entity or reoffer into the capital markets a secured loan for the project if the Secretary determines that the sale or reoffering can be made on favorable terms. “(2) Consent of obligor.— In making a sale or reoffering under paragraph (1), the Secretary may not change the original terms and conditions of the secured loan without the written consent of the obligor. “(e) Loan Guarantees.— “(1) In general.— 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. “(2) Terms.— The terms of a guaranteed loan shall be consistent with the terms set forth in this section for a secured 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. “§ 184. Lines of credit “(a) In General.— “(1) Agreements.— Subject to paragraphs (2) through (4), the Secretary may enter into agreements to make available lines of credit to 1 or more obligors in the form of direct loans to be made by the Secretary at future dates on the occurrence of certain events for any project selected under section 182. “(2) Use of proceeds.— The proceeds of a line of credit made available under this section shall be available to pay debt service on project obligations issued to finance eligible project costs, extraordinary repair and replacement costs, operation and maintenance expenses, and costs associated with unexpected Federal or State environmental restrictions. “(3) Risk assessment.— 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 182(b)(2)(B), shall determine an appropriate capital reserve subsidy amount for each line of credit, taking into account such letter. “(4) Investment-grade rating requirement.— The funding of a line of credit under this section shall be contingent 112 STAT. 248on the project’s senior obligations receiving an investment-grade rating from at least 1 rating agency. “(b) Terms and Limitations.— “(1) In general.— A line of credit under this section with respect to a 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. “(2) Maximum amounts.— “(A) Total amount.— The total amount of the line of credit shall not exceed 33 percent of the reasonably anticipated eligible project costs. “(B) 1-year draws.— The amount drawn in any 1 year shall not exceed 20 percent of the total amount of the line of credit. “(3) Draws.— Any draw on the line of credit shall represent a direct loan and shall be made only if net revenues from the project (including capitalized interest, any debt service reserve fund, and any other available reserve) are insufficient to pay the costs specified in subsection (a)(2). “(4) Interest rate.— The interest rate on a direct loan resulting from a draw on the line of credit shall be not less than the yield on 30-year marketable United States Treasury securities as of the date on which the line of credit is obligated. “(5) Security.— The line of credit— “(A) shall— “(i) be payable, in whole or in part, from tolls, user fees, or other dedicated revenue sources; and “(ii) include a rate covenant, coverage requirement, or similar security feature supporting the project obligations; and “(B) may have a lien on revenues described in subparagraph (A) subject to any lien securing project obligations. “(6) Period of availability.— The line of credit shall be available during the period beginning on the date of substantial completion of the project and ending not later than 10 years after that date. “(7) Rights of third-party creditors.— “(A) Against federal government.— A third-party creditor of the obligor shall not have any right against the Federal Government with respect to any draw on the line of credit. “(B) Assignment.— An obligor may assign the line of credit to 1 or more lenders or to a trustee on the lenders’ behalf. “(8) Nonsubordination.— A direct loan under this section shall not be subordinated to the claims of any holder of project obligations in the event of bankruptcy, insolvency, or liquidation of the obligor. “(9) Fees.— The Secretary may establish fees at a level sufficient to cover all or a portion of the costs to the Federal Government of providing a line of credit under this section. “(10) Relationship to other credit instruments.— A project that receives a line of credit under this section also shall not receive a secured loan or loan guarantee under section 183 of an amount that, combined with the amount of the line of credit, exceeds 33 percent of eligible project costs. 112 STAT. 249 “(c) Repayment.— “(1) Terms and conditions.— The Secretary shall establish repayment terms and conditions for each direct loan under this section based on the projected cash flow from project revenues and other repayment sources. “(2) Timing.— All scheduled repayments of principal or interest on a direct loan under this section shall commence not later than 5 years after the end of the period of availability specified in subsection (b)(6) and be fully repaid, with interest, by the date that is 25 years after the end of the period of availability specified in subsection (b)(6). “(3) Sources of repayment funds.— The sources of funds for scheduled loan repayments under this section shall include tolls, user fees, or other dedicated revenue sources. “§ 185. Project servicing “(a) Requirement.— The State in which a project that receives financial assistance under this subchapter is located may identify a local servicer to assist the Secretary in servicing the Federal credit instrument made available under this subchapter. “(b) Agency; Fees.— If a State identifies a local servicer under subsection (a), the local servicer— “(1) shall act as the agent for the Secretary; and “(2) may receive a servicing fee, subject to approval by the Secretary. “(c) Liability.— A local servicer identified under subsection (a) shall not be liable for the obligations of the obligor to the Secretary or any lender. “(d) Assistance From Expert Firms.— The Secretary may retain the services of expert firms in the field of municipal and project finance to assist in the underwriting and servicing of Federal credit instruments. “§ 186. State and local permits “The provision of financial assistance under this subchapter with respect to a project shall not— “(1) relieve any recipient of the assistance of any obligation to obtain any required State or local permit or approval with respect to the project; “(2) limit the right of any unit of State or local government to approve or regulate any rate of return on private equity invested in the project; or “(3) otherwise supersede any State or local law (including any regulation) applicable to the construction or operation of the project. “§ 187. Regulations “The Secretary may issue such regulations as the Secretary determines appropriate to carry out this subchapter. “§ 188. Funding “(a) Funding.— “(1) In general.— There are authorized to be appropriated from the Highway Trust Fund (other than the Mass Transit Account) to carry out this subchapter— “(A) $80,000,000 for fiscal year 1999; “(B) $90,000,000 for fiscal year 2000; 112 STAT. 250 “(C) $110,000,000 for fiscal year 2001; “(D) $120,000,000 for fiscal year 2002; and “(E) $130,000,000 for fiscal year 2003. “(2) Administrative costs.— From funds made available under paragraph (1), the Secretary may use, for the administration of this subchapter, not more than $2,000,000 for each of fiscal years 1998 through 2003. “(3) Availability.— Amounts made available under paragraph (1) shall remain available until expended. “(b) Contract Authority.— “(1) In general.— Notwithstanding any other provision of law, approval by the Secretary of a Federal credit instrument that uses funds made available under this subchapter shall be deemed to be acceptance by the United States of a contractual obligation to fund the Federal credit instrument. “(2) Availability.— Amounts authorized under this section for a fiscal year shall be available for obligation on October 1 of the fiscal year. “(c) Limitations on Credit Amounts.— For each of fiscal years 1998 through 2003, principal amounts of Federal credit instruments made available under this subchapter shall be limited to the amounts specified in the following table: Maximum amount “Fiscal year: of credit: 1998 $1,200,000,000 1999 $1,200,000,000 2000 $1,800,000,000 2001 $1,800,000,000 2002 $2,300,000,000 2003 $2,300,000,000 “§ 189. Report to Congress “Not later than 4 years after the date of enactment of this subchapter, the Secretary shall submit to Congress a report summarizing the financial performance of the projects that are receiving, or have received, assistance under this subchapter, including a recommendation as to whether the objectives of this subchapter are best served— “(1) by continuing the program under the authority of the Secretary; “(2) by establishing a Government corporation or Government-sponsored enterprise to administer the program; or “(3) by phasing out the program and relying on the capital markets to fund the types of infrastructure investments assisted by this subchapter without Federal participation.”. (b) Conforming Amendments.— Chapter 1 of title 23, United States Code, is amended— (1) in the analysis— (A) by inserting before “Sec.” the following: “SUBCHAPTER I— GENERAL PROVISIONS” ; and (B) by adding at the end the following: “SUBCHAPTER II— INFRASTRUCTURE FINANCE “181. Definitions. “182. Determination of eligibility and project selection. “183. Secured loans. “184. Lines of credit. “185. Project servicing. 112 STAT. 251 “186. State and local permits. “187. Regulations. “188. Funding. “189. Report to Congress.”; and (2) by inserting before section 101 the following: “SUBCHAPTER I— GENERAL PROVISIONS”.