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Title II — Transportation Infrastructure Finance and Innovation Act of 1998 Amendments

S. 2322 · 113th Congress · May 12, 2014 · Lineage

II Transportation Infrastructure Finance and Innovation Act of 1998 Amendments

Sec. 2001 Transportation Infrastructure Finance and Innovation Act of 1998 amendments

(a)
Definitions— Section 601(a) of title 23, United States Code, is amended—
(1)
by striking paragraph (10) and inserting the following:

“(10) Master credit agreement—The term master credit agreement means an agreement to extend credit assistance for a program of related projects secured by a common security pledge (which shall receive an investment grade rating from a rating agency prior to the Secretary entering into such master credit agreement), or for a single project covered under section 602(b)(2) that would—

“(A) make contingent commitments of 1 or more secured loans or other Federal credit instruments at future dates, subject to—

“(i) the availability of future funds being made available to carry out this chapter; and

“(ii) the satisfaction of all of the conditions for the provision of credit assistance under this chapter, including section 603(b)(1);

“(B) establish the maximum amounts and general terms and conditions of the secured loans or other Federal credit instruments;

“(C) identify the 1 or more dedicated non-Federal revenue sources that will secure the repayment of the secured loans or secured Federal credit instruments;

“(D) provide for the obligation of funds for the secured loans or secured Federal credit instruments after all requirements have been met for the projects subject to the master credit agreement, including—

“(i) completion of an environmental impact statement or similar analysis required under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.);

“(ii) compliance with such other requirements as are specified in this chapter, including sections 602(c) and 603(b)(1); and

“(iii) the availability of funds to carry out this chapter; and

“(E) require that contingent commitments result in a financial close and obligation of credit assistance not later than 3 years after the date of entry into the master credit agreement, or release of the commitment, unless otherwise extended by the Secretary.”

(2)
in paragraph (12)—
(A)
in subparagraph (C) by striking “and” at the end;
(B)
in subparagraph (D)(iv) by striking the period at the end and inserting a semicolon; and
(C)
by adding at the end the following:

“(E) a project to improve or construct public infrastructure that is located within walking distance of, and accessible to, a fixed guideway transit facility, passenger rail station, intercity bus station, or intermodal facility, including transportation, public utility, and capital projects described in section 5302(3)(G)(v) of title 49, and related infrastructure; and

“(F) a project for the acquisition of plant and wildlife habitat pursuant to a conservation plan that—

“(i) has been approved by the Secretary of the Interior pursuant to section 10 of the Endangered Species Act of 1973 (16 U.S.C. 1539); and

“(ii) in the judgment of the Secretary, would mitigate the environmental impacts of transportation infrastructure projects otherwise eligible for assistance under this chapter.”

(3)
by striking paragraph (15) and inserting the following:

“(15) Rural infrastructure project—The term rural infrastructure project means a surface infrastructure project located in an area that is outside of an urbanized area with a population greater than 150,000 individuals, as determined by the Bureau of the Census.”

(b)
Eligible project costs— Section 602(a)(5)(B) of title 23, United States Code, is amended—
(1)
by striking “(B) Intelligent transportation system projects.—In the case” and inserting the following:

“(B) Exceptions

“(i) Intelligent transportation systems—In the case”

(2)
by adding at the end the following:

“(ii) Transit-oriented development projects—In the case of a project described in section 601(a)(12)(E), eligible project costs shall be reasonably anticipated to be equal to or exceed $10,000,000.”

(c)
Master credit agreements— Section 602(b) of title 23, United States Code is amended by striking paragraph (2) and inserting the following:

“(2) Master credit agreements

“(A) Program of related projects—The Secretary may enter into a master credit agreement for a program of related projects secured by a common security pledge on terms acceptable to the Secretary.

“(B) Adequate funding not available—If the Secretary fully obligates funding to eligible projects in a fiscal year, and adequate funding is not available to fund a credit instrument, a project sponsor of an eligible project may elect to enter into a master credit agreement and wait to execute a credit instrument until the fiscal year during which additional funds are available to receive credit assistance.”

(d)
Program administration— Section 605 of title 23, United States Code, is amended by adding at the end the following:

“(f) Assistance to small projects—The Secretary shall use not less than $2,000,000 of administrative funding per year in lieu of fees collected under subsection (b) for projects under this chapter with a total project cost of less than $75,000,000.”

(e)
Funding— Section 608(a)(6) of title 23, United States Code, is amended by striking “0.50” and inserting “0.75”.

Sec. 2002 State infrastructure banks

Section 610 of title 23, United States Code, is amended—
(1)
in subsection (d)—
(A)
in paragraph (1) by striking subparagraph (A) and inserting the following:

“(A) 10 percent of the funds apportioned to the State for each of fiscal years 2015 through 2020 under each of sections 104(b)(1), 104(b)(2), and 104(b)(6); and”

(B)
in paragraph (2) by striking “2005 through 2009” and inserting “2015 through 2020”;
(C)
in paragraph (3), by striking “2005 through 2009” and inserting “2015 through 2020”; and
(D)
in paragraph (5), by striking “section 133(d)(3)” and inserting “section 133(d)(1)”; and
(2)
in subsection (k), by striking “2005 through 2009” and inserting “2015 through 2020”.

Sec. 2003 TIFIA loans for State infrastructure banks

(a)
TIFIA loans— Chapter 6 of title 23, United States Code, is amended by adding at the end the following:

“611. TIFIA loans for State infrastructure banks

“(a) Definitions—In this section, the following definitions apply:

“(1) Letter of interest—The term letter of interest means a letter submitted by a potential State infrastructure bank applicant prior to an application for credit assistance in a format prescribed by the Secretary on the website of the TIFIA program that—

“(A) outlines the proposed financial plan, including the requested credit assistance; and

“(B) provides information regarding satisfaction of other eligibility requirements of the TIFIA program.

“(2) Limited buydown—The term limited buydown means a buydown of the interest rate by the obligor if the interest rate has increased between—

“(A) the date on which an application acceptable to the Secretary is submitted; and

“(B) the date on which the Secretary executes the secured loan.

“(3) Obligor—The term obligor means a State infrastructure bank established under section 610 that is primarily liable for payment of the principal of or interest on a secured loan.

“(4) 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 capitalization or deposit into a State infrastructure bank established under section 610.

“(5) Senior obligation—Except as provided in subsection (i), the term senior obligation means any note, bond, debenture, or other debt obligation issued by an obligor, other than a secured loan, that is secured by the dedicated revenue sources that also secure the secured loan and that is senior in right of payment to the secured loan.

“(6) State infrastructure bank obligation—The term State infrastructure bank obligation means any note, bond, debenture, or other debt obligation issued by a State infrastructure bank, other than a secured loan, that is secured by the dedicated revenue sources that also secure the secured loan.

“(7) 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 secured loan—

“(A) calculated on a net present value basis; and

“(B) excluding administrative costs and any incidental effects on governmental receipts or outlays in accordance with the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).

“(b) Establishment—The Secretary may set aside up to 10 percent of the funds made available to carry out the TIFIA program under this chapter (excluding the amount set aside under section 608(a)(3)) to provide credit assistance for the capitalization of, or deposit into, a State infrastructure bank established under section 610.

“(c) Eligibility

“(1) Letter of interest—To apply for credit assistance under this section, a State infrastructure bank shall submit a letter of interest prior to submission of a formal application for a secured loan.

“(2) Creditworthiness

“(A) In general—To be eligible for a secured loan under this section, a State infrastructure bank shall satisfy applicable creditworthiness standards, which, at a minimum, shall include—

“(i) adequate coverage requirements to ensure repayment;

“(ii) an investment grade rating from at least 2 rating agencies on debt senior to the secured loan; and

“(iii) a rating from at least 2 rating agencies on the secured loan, subject to the condition that, with respect to clause (ii), if the total amount of the senior debt and the secured loan is less than $75,000,000, 1 rating agency opinion for each of the senior debt and secured loan shall be sufficient.

“(B) Senior debt—Notwithstanding subparagraph (A), in a case in which the secured loan is the senior debt of the State infrastructure bank—

“(i) if the secured loan is for an amount that equals or exceeds $75,000,000, the secured loan shall be required to receive an investment grade rating from at least 2 rating agencies; and

“(ii) if the secured loan is for an amount less than $75,000,000, the secured loan shall be required to receive an investment grade rating from at least 1 rating agency.

“(3) Dedicated revenue sources—The secured loan shall be repayable from pledged revenues not affected by the performance of any loans made by the State infrastructure bank receiving the Federal credit assistance, such as a tax-backed revenue pledge.

“(d) Preliminary rating opinion letter—After the submission of a letter of interest and prior to the submission of an application, upon request of the Secretary, each State infrastructure bank seeking a secured loan under this section shall provide a preliminary rating opinion letter from at least 1 rating agency—

“(1) indicating that the senior debt of the State infrastructure bank, which may be the secured loan, has the potential to achieve an investment-grade rating; and

“(2) including a preliminary rating opinion on the secured loan.

“(e) Application process

“(1) In general—The Secretary shall establish a rolling application process to carry out this section.

“(2) Submission—A State infrastructure bank seeking a secured loan under this section shall submit to the Secretary an application in such form, at such time, and containing such information as the Secretary determines to be necessary.

“(f) Application processing procedures

“(1) Notice of complete application—Not later than 30 days after the date of receipt of an application under this section, the Secretary shall provide to the applicant a written notice informing the applicant whether—

“(A) the application is complete; or

“(B) additional information or materials are needed to complete the application.

“(2) Approval or denial of application—Not later than 60 days after the date of issuance of the written notice under paragraph (1), the Secretary shall provide to the State infrastructure bank a written notice informing the applicant whether the Secretary has approved or disapproved the application.

“(g) Agreements

“(1) Risk assessment—Before entering into an agreement under this section, the Secretary, in consultation with the Director of the Office of Management and Budget, shall determine an appropriate capital reserve subsidy amount for each secured loan, taking into account each preliminary rating opinion letter received under subsection (d).

“(2) Secured loans—Credit assistance provided under this section shall be provided through an agreement entered into between the Secretary and a State infrastructure bank for a secured loan, the proceeds of which shall be used for the capitalization of, or deposit into, the TIFIA account of a State infrastructure bank established under section 610.

“(3) Terms and limitations

“(A) In general—A secured loan under this section shall be on such terms and conditions and contain such covenants, representations, warranties, and requirements (including requirements for audits) as the Secretary determines to be appropriate.

“(B) Interest rate—Except as provided in subparagraph (C), the interest rate on a secured 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 secured loan agreement.

“(C) Limited buydowns

“(i) In general—Subject to clause (ii), an obligor shall be entitled to buy down the interest rate of a secured loan under this section through a limited buydown.

“(ii) Limitation—A limited buydown may not lower the interest rate of a secured loan by more than the lesser of—

“(I) 1½ percentage points (150 basis points); and

“(II) the amount of the increase in the interest rate.

“(4) Maturity date—The final maturity date of a secured loan under this section shall not be later than 35 years after the date on which the Secretary executes the secured loan.

“(h) Use of secured loans

“(1) In general—For each fiscal year, credit assistance provided to an obligor under this section shall be in an amount that is not less than $25,000,000, but not more than $100,000,000.

“(2) Use of funds—Subject to subparagraph (B), a State infrastructure bank receiving credit assistance under this section shall—

“(A) deposit those amounts into the TIFIA account of the State infrastructure bank; and

“(B) use such credit assistance for projects eligible under section 610.

“(i) Nonsubordination

“(1) In general—Except as provided in paragraph (2), the secured loan shall not be subordinated to the claims of any holder of senior obligations in the event of bankruptcy, insolvency, or liquidation of the obligor.

“(2) Preexisting indenture

“(A) In general—Subject to subparagraph (B), the Secretary shall waive the requirement under paragraph (1) for a State infrastructure bank that has outstanding senior obligations under a preexisting indenture if the secured loan is rated in the A category or higher.

“(B) Restriction—If the Secretary waives the nonsubordination requirement under this paragraph—

“(i) the maximum credit subsidy to be paid by the Federal Government shall be not more than 10 percent of the principal amount of the secured loan; and

“(ii) the obligor shall be responsible for paying the remainder of the subsidy cost, if any.

“(j) 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.

“(k) Repayment

“(1) Schedule—The Secretary shall establish a repayment schedule for each secured loan under this section based on the projected cash flow from the dedicated 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 on which the Secretary executes the secured loan.

“(3) Deferred payments

“(A) In general—If, at any time after the date on which the Secretary executed the secured loan, the revenues pledged to pay the scheduled loan repayments of principal and interest on the secured loan are not sufficient to make such payments, 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 (g)(3)(B) until fully repaid; and

“(ii) be scheduled to be amortized over the remaining term of the loan.

“(C) Criteria

“(i) In general—Any payment deferral under subparagraph (A) shall be contingent on the obligor meeting criteria established by the Secretary.

“(ii) Repayment standards—The criteria established pursuant to clause (i) shall include standards for reasonable assurance of repayment.

“(4) Prepayment

“(A) Use of excess revenues—Any excess revenues that remain after satisfying scheduled debt service requirements on the State infrastructure bank obligations and secured loan and all deposit requirements under the terms of any trust agreement, bond resolution, or similar agreement securing State infrastructure bank 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.

“(l) Sale of secured loans

“(1) In general—Subject to paragraph (2), the Secretary may sell to another entity or reoffer into the capital markets a secured loan 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.”

(b)
Conforming amendments— Section 610 of title 23, United States Code, is amended—
(1)
in subsection (d)—
(A)
by redesignating paragraphs (4) through (6) as paragraphs (5) through (7), respectively; and
(B)
by inserting after paragraph (3) the following:

“(4) TIFIA account

“(A) In general—Subject to subsection (j), the Secretary may permit a State entering into a cooperative agreement under this section to establish a State infrastructure bank to deposit into the TIFIA account of the bank funds received under section 611.

“(B) Treatment of account—Federal funds deposited into the TIFIA account shall constitute a capitalization secured loan for the TIFIA account of the State infrastructure bank.

“(C) Limitation—Amounts in the TIFIA account shall be used only to carry out projects eligible for assistance under chapter 1 of this title or chapter 53 of title 49.”

(2)
in subsection (f), by inserting “, except that funds in the TIFIA account of a State infrastructure bank established under this section may be used only for projects with reasonably anticipated eligible project costs of not less than $5,000,000 but not more than $50,000,000” before the period at the end.
(c)
Conforming amendment— The analysis for chapter 6 of title 23, United States Code, is amended by adding at the end the following: