BACK

SEC. 1501. SHORT TITLE.

    This chapter may be cited as the ``Transportation Infrastructure
Finance and Innovation Act of 1998''.

SEC. 1502. FINDINGS.

    Congress finds that--
        (1) a well-developed system of transportation infrastructure is
    critical to the economic well-being, health, and welfare of the
    people of the United States;
        (2) traditional public funding techniques such as grant
    programs are unable to keep pace with the infrastructure investment
    needs of the United States because of budgetary constraints at the
    Federal, State, and local levels of government;
        (3) major transportation infrastructure facilities that address
    critical national needs, such as intermodal facilities, border
    crossings, and multistate trade corridors, are of a scale that
    exceeds the capacity of Federal and State assistance programs in
    effect on the date of enactment of this Act;
        (4) new investment capital can be attracted to infrastructure
    projects that are capable of generating their own revenue streams
    through user charges or other dedicated funding sources; and
        (5) a Federal credit program for projects of national
    significance can complement existing funding resources by filling
    market gaps, thereby leveraging substantial private co-investment.

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

``Sec. 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), 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
            ``(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.

``Sec. 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 of 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:
        ``(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.).

``Sec. 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
            ``(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.--
            ``(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.

``Sec. 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 on 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.
    ``(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.

``Sec. 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.

``Sec. 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.

``Sec. 187. Regulations

    ``The Secretary may issue such regulations as the Secretary
determines appropriate to carry out this subchapter.

``Sec. 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;
            ``(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.

``Sec. 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.
``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''.

SEC. 1504. DUTIES OF THE SECRETARY.

    Section 301 of title 49, United States Code, is amended--
        (1) in paragraph (7) by striking ``and'' at the end;
        (2) in paragraph (8) by striking the period at the end and
    inserting ``; and''; and
        (3) by adding at the end the following:
        ``(9) develop and coordinate Federal policy on financing
    transportation infrastructure, including the provision of direct
    Federal credit assistance and other techniques used to leverage
    Federal transportation funds.''.

           CHAPTER 2--STATE INFRASTRUCTURE BANK PILOT PROGRAM

SEC. 1511. STATE INFRASTRUCTURE BANK PILOT PROGRAM.

    (a) Definitions.--In this section:
        (1) Other assistance.--The term ``other assistance'' includes
    any use of funds in an infrastructure bank--
            (A) to provide credit enhancements;
            (B) to serve as a capital reserve for bond or debt
        instrument financing;
            (C) to subsidize interest rates;
            (D) to ensure the issuance of letters of credit and credit
        instruments;
            (E) to finance purchase and lease agreements with respect
        to transit projects;
            (F) to provide bond or debt financing instrument security;
        and
            (G) to provide other forms of debt financing and methods of
        leveraging funds that are approved by the Secretary and that
        relate to the project with respect to which the assistance is
        being provided.
        (2) State.--The term ``State'' has the meaning given the term
    under section 401 of title 23, United States Code.
    (b) Cooperative Agreements.--
        (1) In general.--
            (A) Purpose of agreements.--Subject to this section, the
        Secretary may enter into cooperative agreements with the States
        of California, Florida, Missouri, and Rhode Island for the
        establishment of State infrastructure banks and multistate
        infrastructure banks for making loans and providing other
        assistance to public and private entities carrying out or
        proposing to carry out projects eligible for assistance under
        this section.
            (B) Contents of agreements.--Each cooperative agreement
        shall specify procedures and guidelines for establishing,
        operating, and providing assistance from the infrastructure
        bank.
        (2) Interstate compacts.--If 2 or more States enter into a
    cooperative agreement under paragraph (1) with the Secretary for
    the establishment of a multistate infrastructure bank, Congress
    grants consent to those States to enter into an interstate compact
    establishing the bank in accordance with this section.
    (c) Funding.--
        (1) Contribution.--Notwithstanding any other provision of law,
    the Secretary may allow, subject to subsection (h)(1), a State that
    enters into a cooperative agreement under this section to
    contribute to the infrastructure bank established by the State not
    to exceed--
            (A)(i) the total amount of funds apportioned to the State
        under each of paragraphs (1), (3), and (4) of section 104(b)
        and section 144 of title 23, United States Code, excluding
        funds set aside under paragraphs (1) and (2) of section 133(d)
        of such title; and
            (ii) the total amount of funds allocated to the State under
        section 105 of such title;
            (B) the total amount of funds made available to the State
        or other Federal transit grant recipient for capital projects
        (as defined in section 5302 of title 49, United States Code)
        under sections 5307, 5309, and 5311 of such title; and
            (C) the total amount of funds made available to the State
        under subtitle V of title 49, United States Code.
        (2) Capitalization grant.--For the purposes of this section,
    Federal funds contributed to the infrastructure bank under this
    subsection shall constitute a capitalization grant for the
    infrastructure bank.
        (3) Special rule for urbanized areas of over 200,000.--Funds
    that are apportioned or allocated to a State under section
    104(b)(3) of title 23, United States Code, and attributed to
    urbanized areas of a State with a population of over 200,000
    individuals under section 133(d)(2) of such title may be used to
    provide assistance from an infrastructure bank under this section
    with respect to a project only if the metropolitan planning
    organization designated for the area concurs, in writing, with the
    provision of the assistance.
    (d) Forms of Assistance From Infrastructure Banks.--
        (1) In general.--An infrastructure bank established under this
    section may make loans or provide other assistance to a public or
    private entity in an amount equal to all or part of the cost of
    carrying out a project eligible for assistance under this section.
        (2) Subordination of loans.--The amount of any loan or other
    assistance provided for the project may be subordinated to any
    other debt financing for the project.
        (3) Initial assistance.--Initial assistance provided with
    respect to a project from Federal funds contributed to an
    infrastructure bank under this section shall not be made in the
    form of a grant.
    (e) Qualifying Projects.--
        (1) In general.--Subject to paragraph (2), funds in an
    infrastructure bank established under this section may be used only
    to provide assistance with respect to projects eligible for
    assistance under title 23, United States Code, for capital projects
    (as defined in section 5302 of title 49, United States Code), or
    for any other project related to surface transportation that the
    Secretary determines to be appropriate.
        (2) Interstate funds.--Funds contributed to an infrastructure
    bank from funds apportioned to a State under section 104(b)(4) of
    title 23, United States Code, may be used only to provide
    assistance with respect to projects eligible for assistance under
    such paragraph.
        (3) Rail program funds.--Funds contributed to an infrastructure
    bank from funds made available to a State under subtitle V of title
    49, United States Code, shall be used in a manner consistent with
    any project description specified under the law making the funds
    available to the State.
    (f) Infrastructure Bank Requirements.--
        (1) In general.--Subject to paragraph (2), in order to
    establish an infrastructure bank under this section, each State
    establishing such a bank shall--
            (A) contribute, at a minimum, to the bank from non-Federal
        sources an amount equal to 25 percent of the amount of each
        capitalization grant made to the State and contributed to the
        bank under subsection (c), except that if the State has a
        higher Federal share payable under section 120(b) of title 23,
        United States Code, the State shall be required to contribute
        only an amount commensurate with the higher Federal share;
            (B) ensure that the bank maintains on a continuing basis an
        investment grade rating on its debt issuances and its ability
        to pay claims under credit enhancement programs of the bank;
            (C) ensure that investment income generated by funds
        contributed to the bank will be--
                (i) credited to the bank;
                (ii) available for use in providing loans and other
            assistance to projects eligible for assistance from the
            bank; and
                (iii) invested in United States Treasury securities,
            bank deposits, or such other financing instruments as the
            Secretary may approve to earn interest to enhance the
            leveraging of projects assisted by the bank;
            (D) ensure that any loan from the bank will bear interest
        at or below market rates, as determined by the State, to make
        the project that is the subject of the loan feasible;
            (E) ensure that repayment of the loan from the bank will
        commence not later than 5 years after the project has been
        completed or, in the case of a highway project, the facility
        has opened to traffic, whichever is later;
            (F) ensure that the term for repaying any loan will not
        exceed the lesser of--
                (i) 35 years after the date of the first payment on the
            loan under subparagraph (E); or
                (ii) the useful life of the investment; and
            (G) require the bank to make a biennial report to the
        Secretary and to make such other reports as the Secretary may
        require in guidelines.
        (2) Waivers by the secretary.--The Secretary may waive a
    requirement of any of subparagraphs (C) through (G) of paragraph
    (1) with respect to an infrastructure bank if the Secretary
    determines that the waiver is consistent with the objectives of
    this section.
    (g) Limitation on Repayments.--Notwithstanding any other provision
of law, the repayment of a loan or other assistance provided from an
infrastructure bank under this section may not be credited toward the
non-Federal share of the cost of any project.
    (h) Secretarial Requirements.--In administering this section, the
Secretary shall--
        (1) ensure that Federal disbursements shall be at an annual
    rate of not more than 20 percent of the amount designated by the
    State for State infrastructure bank capitalization under subsection
    (c)(1), except that the Secretary may disburse funds to a State in
    an amount needed to finance a specific project; and
        (2) revise cooperative agreements entered into with States
    under section 350 of the National Highway System Designation Act of
    1995 (Public Law 104-59) to comply with this section.
    (i) Applicability of Federal Law.--
        (1) In general.--The requirements of titles 23 and 49, United
    States Code, that would otherwise apply to funds made available
    under such title and projects assisted with those funds shall apply
    to--
            (A) funds made available under such title and contributed
        to an infrastructure bank established under this section,
        including the non-Federal contribution required under
        subsection (f); and
            (B) projects assisted by the bank through the use of the
        funds;
    except to the extent that the Secretary determines that any
    requirement of such title (other than sections 113 and 114 of title
    23 and section 5333 of title 49), is not consistent with the
    objectives of this section.
        (2) Repayments.--The requirements of titles 23 and 49, United
    States Code, shall apply to repayments from non-Federal sources to
    an infrastructure bank from projects assisted by the bank. Such a
    repayment shall be considered to be Federal funds.
    (j) United States Not Obligated.--
        (1) In general.--The contribution of Federal funds to an
    infrastructure bank established under this section shall not be
    construed as a commitment, guarantee, or obligation on the part of
    the United States to any third party. No third party shall have any
    right against the United States for payment solely by virtue of the
    contribution.
        (2) Statement.--Any security or debt financing instrument
    issued by the infrastructure bank shall expressly state that the
    security or instrument does not constitute a commitment, guarantee,
    or obligation of the United States.
    (k) Management of Federal Funds.--Sections 3335 and 6503 of title
31, United States Code, shall not apply to funds contributed under this
section.
    (l) Program Administration.--
        (1) In general.--A State may expend not to exceed 2 percent of
    the Federal funds contributed to an infrastructure bank established
    by the State under this section to pay the reasonable costs of
    administering the bank.
        (2) Non-federal funds.--The limitation described in paragraph
    (1) shall not apply to non-Federal funds.

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