To provide for improved investment in national transportation
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
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Transportation Infrastructure Grants and
Economic Reinvestment Act'.
SEC. 2. DEFINITIONS.
(1) ELIGIBLE ENTITY- The term `eligible entity' means--
(C) a transit agency; and
(D) 2 or more of the entities described in subparagraphs (A) through
(C), working in collaboration.
(A) IN GENERAL- 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.
(B) INCLUSIONS- The term `eligible project' includes--
(i) a highway or bridge project eligible for funding under chapter
1 of title 23, United States Code;
(ii) a public transportation project eligible for funding under
chapter 53 of title 49, United States Code;
(iii) a passenger or freight rail transportation project; and
(iv) a port infrastructure project.
(3) ELIGIBLE PROJECT COSTS-
(A) IN GENERAL- The term `eligible project costs' means costs relating
to an eligible project, such as the costs of--
(i) development phase activities, including planning, feasibility
analysis, revenue forecasting, environmental review, permitting,
preliminary engineering and design work, and other preconstruction
(ii) 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
(iii) capitalized interest necessary to meet market requirements,
reasonably required reserve funds, capital issuance expenses,
and other carrying costs during construction.
(B) EXCLUSION- The term `eligible project costs' does not include
the costs of dredging activities.
(4) 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.
(5) INVESTMENT-GRADE RATING- The term `investment-grade rating' means
a rating of BBB minus, Baa3, bbb minus, BBB (low), or higher assigned
by a rating agency to project obligations.
(6) 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
(B) a governmental plan (as defined in section 414(d) of the Internal
Revenue Code of 1986) that is a qualified institutional buyer.
(7) 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.
(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 OBLIGATION- 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.
(10) RATING AGENCY- The term `rating agency' means a credit rating
agency registered with the Securities and Exchange Commission as a
nationally recognized statistical rating organization (as defined
in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
(11) RURAL AREA- The term `rural area' means any area not in an urbanized
area (as that term is defined by the Census Bureau).
(12) SECRETARY- The term `Secretary' means the Secretary of Transportation.
(13) 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 an eligible project.
(14) STATE- The term `State' means--
(A) any of the 50 States; or
(B) the District of Columbia.
(15) 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.).
(16) SUBSTANTIAL COMPLETION- The term `substantial completion' means
the opening of an eligible project to vehicular or passenger traffic.
SEC. 3. NATIONAL INFRASTRUCTURE INVESTMENT PROGRAM.
(a) 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
(1) AMOUNT- 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.
(2) 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
(A) an equitable geographical distribution of funds;
(B) an appropriate balance in addressing the needs of urban and
rural areas; and
(C) investment in a variety of transportation modes.
(3) 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.
(A) IN GENERAL- 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.
(B) PRIORITY- 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.
(5) ELIGIBLE PROJECTS IN RURAL AREAS-
(A) IN GENERAL- 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.
(B) MINIMUM GRANT AMOUNT; FEDERAL SHARE- With respect to an eligible
project located in a rural area--
(i) the minimum amount of a grant or secured loan provided under
this Act shall be $1,000,000; and
(ii) the Secretary may increase the Federal share of the cost
of carrying out the eligible project up to 100 percent.
(6) SET-ASIDES FOR CERTAIN COSTS, PROJECTS, AND TRANSFERS- Of the
amounts made available under this Act for a fiscal year, the Secretary
(A) use not more than 25 percent to pay the subsidy and administrative
costs of secured loans and loan guarantees for eligible projects;
(B) use an amount not to exceed $20,000,000 for grants that pay
for the planning, preparation, or design of eligible projects; and
(C) 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.
(c) Selection Among Eligible Projects-
(1) ESTABLISHMENT- The Secretary shall establish criteria for use
in selecting among eligible projects to receive funding under this
(A) 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--
(i) improves the safety of transportation facilities and systems;
(ii) improves the condition of existing transportation facilities
(iii) contributes to economic competitiveness over the medium-
(iv) improves the environment, improves energy efficiency, reduces
dependence on oil, or reduces greenhouse gas emissions; and
(v) improves access to transportation facilities and systems.
(B) 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--
(i) uses innovative strategies or technologies to pursue any of
those primary selection criteria; and
(ii) demonstrates strong collaboration among a broad range of
participants, or the integration of transportation with other
public service efforts.
(C) 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
(d) Application Requirement-
(1) IN GENERAL- 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.
(2) 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
(e) Federal Requirements- The following provisions of law shall apply
to funds made available under this Act and eligible projects carried
out using those funds:
(1) Subchapter IV of chapter 31 of title 40, United States Code.
(2) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.).
(3) The National Environmental Policy Act of 1969 (42 U.S.C. 4321
(4) The Uniform Relocation Assistance and Real Property Acquisition
Policies Act of 1970 (42 U.S.C. 4601 et seq.).
(1) IN GENERAL- The Secretary shall include in any notice of funding
availability a full description of how applications will be evaluated
against all selection criteria.
(2) 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.
SEC. 4. SECURED LOANS AND LOAN GUARANTEES.
(1) AGREEMENTS- 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.
(2) 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 3(d)(2), shall determine
an appropriate capital reserve subsidy amount for each secured loan,
taking into account the letter.
(3) 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.
(b) Terms and Limitations-
(1) IN GENERAL- 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.
(2) MAXIMUM AMOUNT- 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--
(A) 80 percent of the reasonably anticipated eligible project costs;
(B) the amount of the senior project obligations.
(3) PAYMENT- The secured loan--
(i) be payable, in whole or in part, from tolls, user fees, or
other dedicated revenue sources that also secure the senior project
(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 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 eligible 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 Act.
(8) NON-FEDERAL SHARE- 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.
(1) SCHEDULE- 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.
(2) COMMENCEMENT- 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.
(A) AUTHORIZATION- 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.
(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
(i) IN GENERAL- Any payment deferral under subparagraph (A) shall
be contingent on the eligible project meeting criteria established
by the Secretary.
(ii) REPAYMENT STANDARDS- The criteria established under clause
(i) shall include standards for reasonable assurance of repayment.
(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 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
(2) 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
(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 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.
(f) Administration of Federal Credit Instruments-
(1) IN GENERAL- The Secretary shall establish a uniform system to
service the Federal credit instruments made available under this Act.
(2) FEES- The Secretary may collect and spend fees, contingent upon
authority being provided in appropriations Acts, at a level that is
sufficient to cover--
(A) the costs of services of expert firms retained pursuant to paragraph
(B) all or a portion of the costs to the Federal Government of servicing
the Federal credit instruments under this Act.
(A) IN GENERAL- The Secretary may appoint a financial entity to
assist the Secretary in servicing Federal credit instruments under
(B) DUTIES- The servicer shall act as the agent for the Secretary.
(C) FEE- The servicer shall receive a servicing fee, subject to
approval by the Secretary.
(4) 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
SEC. 5. STATE AND LOCAL PERMITS.
Financial assistance under this Act with respect to an eligible project
(1) relieve any recipient of the assistance of any obligation to obtain
any required State or local permit or approval with respect to the
(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 eligible
(3) otherwise supersede any State or local law (including any regulation)
applicable to the construction or operation of the eligible project.
SEC. 6. 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.