New Opportunities for Bicycle and Pedestrian Infrastructure Financing Act of 2014 - Authorizes the Secretary of Transportation (DOT) to establish a pilot program to make loans and loan guarantees to eligible entities to carry out bicycle and pedestrian infrastructure projects.
Prescribes project eligibility requirements.
Requires the Secretary to ensure that at least 25% of funds provided under this Act are used to support projects in low-income communities.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3978 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 3978
To authorize the Secretary of Transportation to establish a pedestrian
and bicycle infrastructure credit assistance pilot program, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 29, 2014
Mr. Sires (for himself, Mr. Carson of Indiana, Ms. Ros-Lehtinen, and
Mr. Diaz-Balart) introduced the following bill; which was referred to
the Committee on Transportation and Infrastructure
_______________________________________________________________________
A BILL
To authorize the Secretary of Transportation to establish a pedestrian
and bicycle infrastructure credit assistance pilot program, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``New Opportunities
for Bicycle and Pedestrian Infrastructure Financing Act of 2014''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Authority to provide assistance.
Sec. 4. Eligible entities.
Sec. 5. Projects eligible for assistance.
Sec. 6. Applications.
Sec. 7. Determination of eligibility and project selection.
Sec. 8. Secured loans and loan guarantees.
Sec. 9. Program administration.
Sec. 10. State and local permits.
Sec. 11. Definitions.
Sec. 12. Regulations.
Sec. 13. Funding.
Sec. 14. Report to Congress.
SEC. 2. PURPOSES.
The purposes of this Act are as follows:
(1) To promote investment in bicycling and walking
infrastructure to create and connect transportation networks.
(2) To improve access to employment, business districts,
and transit in communities traditionally underserved by
existing transportation systems by establishing additional
opportunities for financing nonmotorized infrastructure
projects.
(3) To attract new investment to business districts and
neighborhoods in low-income communities.
(4) To leverage Federal funds and private investment in
low-income communities and those traditionally underserved by
existing transportation systems.
SEC. 3. AUTHORITY TO PROVIDE ASSISTANCE.
The Secretary of Transportation may provide financial assistance
under this Act to eligible entities to carry out bicycle and pedestrian
infrastructure projects selected for such assistance under this Act.
SEC. 4. ELIGIBLE ENTITIES.
In this Act, the term ``eligible entity'' means the following:
(1) A corporation.
(2) A public/private partnership.
(3) A joint venture.
(4) A trust.
(5) A State infrastructure financing authority.
SEC. 5. PROJECTS ELIGIBLE FOR ASSISTANCE.
Financial assistance may be provided under this Act only for the
following types of projects:
(1) A project for the construction, planning, and design of
on-road and off-road pathways for pedestrians, bicyclists, and
other nonmotorized forms of transportation to create a
comprehensive and connected transportation system, including
sidewalks, bicycling infrastructure and parking, pedestrian and
bicycle signals, traffic calming techniques, lighting and other
safety-related infrastructure, and transportation projects to
achieve compliance with the American with Disabilities Act of
1990 (42 U.S.C. 12101 et seq.).
(2) A project for the construction, planning, and design of
infrastructure-related projects and systems that connect
existing infrastructure to create a network and improve safety
and access for nonmotorized users to transit, schools, and
commercial areas.
(3) Innovative infrastructure for bicycling and walking,
such as designs included in the National Association of City
Transportation Officials guide for urban street design, to
enhance the ability of communities to develop solutions to
increase nonmotorized travel.
(4) A project for the conversion and use of abandoned
railroad corridors for trails for pedestrians, bicyclists, or
other nonmotorized transportation users to connect to or expand
an existing network of bicycle and pedestrian facilities.
(5) A bike share program as a standalone project or in
conjunction with other infrastructure projects.
SEC. 6. APPLICATIONS.
(a) In General.--The Secretary shall provide for eligible entities
to submit applications for selection of eligible projects to receive
financial assistance under this Act at such time, in such manner, and
containing such information as the Secretary may require.
(b) Combined Projects.--The Secretary shall provide, only in the
case of a State infrastructure financing authority, that such an entity
may submit a single application for a combination of projects, each of
which is an eligible project under section 8(b).
SEC. 7. DETERMINATION OF ELIGIBILITY AND PROJECT SELECTION.
(a) Selection of Projects.--Using the selection criteria under
subsection (d), the Secretary shall select, from applications submitted
pursuant under this Act, eligible projects that meet the criteria under
subsections (b) and (c) for financial assistance under this Act.
(b) Activities Eligible for Assistance.--Amounts from a loan made
or guaranteed under this Act provided for an eligible project may be
used to pay the costs of carrying out such project, including costs
of--
(1) development-phase activities, including planning,
feasibility analysis, revenue forecasting, environmental
review, permitting, preliminary engineering and design work,
and other preconstruction activities;
(2) construction, reconstruction, rehabilitation, and
replacement activities;
(3) the acquisition of real property (including land
relating to the project and improvements to land),
environmental mitigation, construction contingencies, and
acquisition of equipment;
(4) capitalized interest necessary to meet market
requirements, reasonably required reserve funds, capital
issuance expenses, and other carrying costs during
construction; and
(5) refinancing interim construction funding, long-term
project obligations, or a secured loan or loan guarantee made
under this Act.
(c) Project Requirements.--An eligible project may not be selected
to receive financial assistance under this Act unless the Secretary
determines that the project meets all of the following criteria:
(1) Creditworthiness.--
(A) In general.--Subject to subparagraph (B), the
project shall be creditworthy, as determined by the
Secretary as applicable, to ensure that any financing
for the project has appropriate security features, such
as a rate covenant, to ensure repayment.
(B) Preliminary rating opinion letter.--The
Secretary shall require an applicant for each project
to provide, as part of the application for the project
under this section, a preliminary rating opinion letter
from at least one rating agency indicating that the
senior project obligations of the project (which may be
the Federal credit instrument) have the potential to
achieve an investment-grade rating.
(C) Special rule for certain combined projects.--
The Secretary shall develop a credit evaluation process
for a Federal credit instrument provided to a State
infrastructure financing authority for a project
described in subsection (b), which may include
requiring the provision of a preliminary rating opinion
letter from at least one rating agency.
(2) Eligible project costs.--The costs of an eligible
project shall be reasonably anticipated to be not less than
$2,000,000.
(3) Dedicated revenue sources.--The Federal credit
instrument for the project shall be repayable, in whole or in
part, from dedicated revenue sources that also secure the
project obligations.
(4) Public sponsorship of private entities.--In the case of
a project carried out by an entity that is not a State or local
government or an agency or instrumentality of a State or local
government, the project shall be publicly sponsored.
(5) Public involvement process.--The applicant shall show
evidence of having incorporated a public involvement process in
the application, and plans for continued public involvement
through the implementation of the process. The public
involvement processes shall be proactive and provide complete
information, timely public notice, full public access to key
decisions, and opportunities for early and continuing
involvement. The processes shall provide for--
(A) reasonable public access to technical and
policy information used in the development of the
application;
(B) adequate public notice of public involvement
activities and time for public review and comment at
key decision points;
(C) a process for demonstrating explicit
consideration and response to public input during the
planning and program development process; and
(D) a process for seeking out and considering the
needs of those traditionally underserved by existing
transportation systems, such as low-income and minority
households which may face challenges accessing
employment and other amenities.
(d) Selection Among Eligible Projects.--
(1) Establishment.--The Secretary shall establish a rolling
application process in which projects that are eligible to
receive credit assistance under subsection (a) shall receive
credit assistance on terms acceptable to the Secretary, if
adequate funds are available to cover the subsidy costs
associated with the Federal credit instrument.
(2) Adequate funding not available.--If the Secretary fully
obligates funding to eligible projects in a given 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 until the
following fiscal year or until additional funds are available
to receive credit assistance.
(e) Low-Income Communities.--The Secretary shall ensure that not
less that 25 percent of funds under this section are used to support
projects in low-income communities.
(f) Federal Requirements.--Nothing in this section may be construed
to alter, affect, or annul the applicability of any other Federal law.
SEC. 8. SECURED LOANS AND LOAN GUARANTEES.
(a) Authority.--The Secretary may enter into agreements with
eligible entities to make, and may make, secured loans to such entities
as provided under this section for eligible projects selected under
section 8.
(b) Use.--
(1) In general.--The proceeds of a secured loan under this
section shall be used only--
(A) to finance project costs of an eligible project
selected under section 8;
(B) subject to paragraph (2), to refinance interim
construction financing of eligible project costs of an
eligible project selected under section 8; or
(C) to refinance long-term project obligations or
Federal credit instruments, if such refinancing
provides additional funding capacity for the
completion, enhancement, or expansion of a project
that--
(i) is selected under section 8; or
(ii) was originally financed, in whole or
in part, with amounts provided other than under
this Act, if the project otherwise meets the
requirements of section 8.
(2) Limitation on refinancing of interim construction
financing.--The proceeds of a secured loan under this section
made for an eligible project may not be used for the purpose
under paragraph (1)(B) after the expiration of the 12-month
period beginning on the date of substantial completion of the
project.
(c) Risk Assessment.--Before entering into an agreement under this
subsection for a secured loan, 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 8(c)(1)(B),
shall determine an appropriate capital reserve subsidy amount for the
secured loan, taking into account each such preliminary rating opinion
letter.
(d) Investment-Grade Rating Requirement for Senior Obligations.--
The execution of a secured loan under this section shall be contingent
on receipt by the senior obligations of the project of an investment-
grade rating.
(e) Terms and Limitations.--
(1) Maximum amount.--The amount of a secured loan under
this section shall not exceed the lesser of--
(A) an amount equal to 49 percent of the reasonably
anticipated eligible project costs; or
(B) if the secured loan does not receive an
investment-grade rating, the amount of the senior
project obligations of the project.
(2) Payment.--A secured loan under this section--
(A) shall be payable, in whole or in part, from
State or local taxes, user fees, or other dedicated
revenue sources that also secure the senior project
obligations of the relevant project;
(B) shall include a rate covenant, coverage
requirement, or similar security feature supporting the
project obligations; and
(C) may have a lien on revenues described in
subparagraph (A), subject to any lien securing project
obligations.
(3) Interest rate.--The interest rate on a secured loan
under this section shall be--
(A) equal to 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; and
(B) fixed for the term of the loan.
(4) Maturity date.--
(A) In general.--Except as provided in subparagraph
(B), the final maturity date of a secured loan under
this section for an eligible project shall be not later
than 35 years after the date of substantial completion
of the project.
(B) Special rule for state infrastructure financing
authorities.--The final maturity date of a secured loan
under this section made to a State infrastructure
financing authority shall be not later than 35 years
after the date on which loan amounts are first
disbursed.
(5) Nonsubordination.--A secured 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.
(6) Fees.--The Secretary may establish fees in connection
with a secured loan under this section, in amounts sufficient
to cover all or a portion of the costs to the Federal
Government of secured loans under this section.
(7) Use of proceeds for payment of non-federal share.--The
proceeds of a secured loan under this section may be used to
pay any non-Federal share required with respect to other
funding obtained for project costs, but only if such secured
loan is repaid using non-Federal funds.
(8) Maximum federal involvement.--For any project for which
assistance is provided under this Act, the total amount of
Federal assistance from all sources, including this Act, shall
not exceed 80 percent of the total project cost.
(9) Other terms and conditions.--A secured loan provided
for a project under this section shall be subject to such other
terms and conditions, and contain such covenants,
representations, warranties, and requirements (including
requirements for audits), as the Secretary determines to be
appropriate.
(f) Repayment.--
(1) Schedule.--The Secretary shall establish a repayment
schedule for each secured loan provided under this section,
based on the projected cash flow from project revenues and
other repayment sources.
(2) Commencement.--
(A) In general.--Except as provided in subparagraph
(B), scheduled loan repayments of principal or interest
on a secured loan under this section for an eligible
project shall commence not later than 5 years after the
date of substantial completion of the project.
(B) Special rule for state infrastructure financing
authorities.--Scheduled loan repayments of principal or
interest on a secured loan made under this section to a
State infrastructure financing authority shall commence
not later than 5 years after the date on which amounts
are first disbursed.
(3) Deferred payments.--
(A) In general.--If, at any time after the date of
substantial completion of a project for which a secured
loan is provided under this section, the project is
unable to generate sufficient revenues to pay the
scheduled loan repayments of principal and interest on
the 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 pursuant to
subparagraph (A) shall--
(i) continue to accrue interest in
accordance with subsection (e)(3) until fully
repaid; and
(ii) be amortized over the remaining term
of the secured loan.
(C) Criteria.--Any payment deferral pursuant to
subparagraph (A) shall be contingent on the project
meeting--
(i) standards for reasonable assurance of
repayment, as the Secretary shall establish;
and
(ii) such other criteria as the Secretary
may establish.
(4) Prepayment.--
(A) Use of excess revenues.--Any excess revenues
from an eligible project 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 a secured
loan under this section without penalty.
(B) Use of proceeds of refinancing.--A secured loan
under this section may be prepaid at any time, without
penalty, from the proceeds of refinancing from non-
Federal funding sources.
(g) Sale of Secured Loans.--
(1) In general.--Subject to paragraph (2), if the Secretary
determines that the sale or reoffering of a secured loan under
this section for an eligible project can be made on favorable
terms, the Secretary may sell the loan to another entity or
reoffer the loan into the capital markets as soon as
practicable after the date of substantial completion of a
project and after providing notice to the obligor.
(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.
(h) Loan Guarantees.--
(1) In general.--In lieu of making a secured loan under
this section for an eligible project, the Secretary may provide
a loan guarantee for a project obligation for a project funded
by a qualified lender (as such term is defined in section 12),
but only if the Secretary determines that the cost as such term
is defined in section 502 of the Federal Credit Reform Act of
1990 (2 U.S.C. 661a) of the loan guarantee is substantially the
same as or less than that of making a secured loan.
(2) Terms.--The terms of a loan guarantee provided under
this subsection shall be consistent with the terms established
in this section for a secured loan, except that the interest
rate on the guaranteed loan and any prepayment features shall
be negotiated between the obligor and the qualified lender,
subject to the consent of the Secretary.
SEC. 9. PROGRAM ADMINISTRATION.
(a) Requirement.--The Secretary shall establish a uniform system to
service the Federal credit instruments made available under this Act.
(b) Servicer.--
(1) In general.--The Secretary may appoint a financial
entity to assist the Secretary in servicing Federal credit
instruments provided under this Act.
(2) Duties.--A servicer appointed under paragraph (1) shall
act as the agent for the Secretary.
(c) Assistance From Experts.--The Secretary may retain the
services, including counsel, of organizations and entities with
expertise in the field of municipal and project finance to assist in
the underwriting and servicing of Federal credit instruments provided
under this Act.
SEC. 10. STATE AND LOCAL PERMITS.
The provision of financial assistance under this Act for an
eligible project shall not--
(1) relieve any recipient of such 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 or
regulation applicable to the construction or operation of the
project.
SEC. 11. DEFINITIONS.
In this Act, the following definitions shall apply:
(1) Eligible entity.--The term ``eligible entity'' means an
entity listed in section 5 to receive financial assistance
under this Act.
(2) Eligible project.--The term ``eligible project'' means
a project described in section 6.
(3) Eligible project costs.--The term ``eligible project
costs'' means, with respect to an eligible project, any costs
of the project eligible under section 8 to be paid with amounts
from a loan made or guaranteed under this Act.
(4) Federal credit instrument.--The term ``Federal credit
instrument'' means a secured loan made, or loan guarantee
provided, under section 9.
(5) Investment-grade rating.--The term ``investment-grade
rating'' means, with respect to project obligations, a rating
of BBB minus, Baa3, bbb minus, BBB (low), or higher as assigned
by a rating agency.
(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.
(7) Obligor.--The term ``obligor'' means--
(A) with respect to a Federal credit instrument
that is a secured loan under section 9, the eligible
entity that is primarily liable for payment of the
principal of, or interest on, the loan; and
(B) with respect to a Federal credit instrument
that is a loan guarantee under section 9(h), the
eligible entity that is primarily liable for payment of
the loan or other debt obligation repayment of which is
guaranteed pursuant to such section.
(8) Project obligation.--The term ``project obligation''
means, with respect to an eligible project, any note, bond,
debenture, or other debt obligation issued by an obligor in
connection with the financing of the project. Such term does
not include a Federal credit instrument.
(9) Qualified lender.--
(A) In general.--The term ``qualified lender''
means any non-Federal qualified institutional buyer, as
such term is 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.).
(B) Inclusions.--Such term includes--
(i) a qualified retirement plan (as defined
in section 4974(c) of the Internal Revenue Code
of 1986) that is a qualified institutional
buyer; and
(ii) a governmental plan (as defined in
section 414(d) of the Internal Revenue Code of
1986) that is a qualified institutional buyer.
(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. 78c(a))).
(11) Secretary.--The term ``Secretary'' means the Secretary
of Transportation.
(12) Secured loan.--The term ``secured loan'' means a
direct loan or other debt obligation issued by an obligor and
funded by the Secretary pursuant to section 9.
(13) State.--The term ``State'' means a State, the District
of Columbia, the Commonwealth of Puerto Rico, and any other
territory or possession of the United States.
(14) State infrastructure financing authority.--The term
``State infrastructure financing authority'' means the State
entity established or designated by the Governor of a State to
receive assistance under this Act.
(15) Subsidy amount.--The term ``subsidy amount'' means,
with respect to a Federal credit instrument, the amount of
budget authority sufficient to cover the estimated long-term
cost to the Federal Government of the Federal credit
instrument, as calculated on a net present value basis,
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.).
(16) Substantial completion.--The term ``substantial
completion'' means, with respect to a project, the earliest
date on which a project is considered capable of performing the
functions for which the project is designed.
SEC. 12. REGULATIONS.
The Secretary may issue such regulations as the Secretary considers
appropriate to carry out this Act.
SEC. 13. FUNDING.
Section 608(a) of title 23, United States Code, is amended--
(1) by redesignating paragraphs (4) through (6) as
paragraphs (5) through (7), respectively; and
(2) by inserting after paragraph (3) the following:
``(4) Set asides.--Of the total amount of funds made
available to carry out this chapter for each fiscal year--
``(A) $11,000,000 shall be set aside for pedestrian
and bicycle infrastructure projects described in the
New Opportunities for Bicycle and Pedestrian
Infrastructure Financing Act of 2013 unless and until
the pilot program established by that Act is
terminated; and
``(B) $1,000,000 for shall be set aside for
administrative costs of the program.''.
SEC. 14. REPORT TO CONGRESS.
Not later than 2 years after the date of enactment of this Act, the
Secretary shall submit to Congress a report summarizing the financial
performance of the projects that are receiving, or have received,
assistance under this Act, including a recommendation as to whether the
objectives of this Act are best served--
(1) by continuing the program under the authority of the
Secretary; and
(2) by phasing out the program and relying on the capital
markets to fund the types of infrastructure investments
assisted by this Act without Federal participation.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Transportation and Infrastructure.
Referred to the Subcommittee on Highways and Transit.
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