Title I – Tax Relief for Workers and Businesses
Subtitle A – Payroll Tax Relief
Section 101 – Temporary Payroll Tax Cut for Employers, Employees, and the Self-Employed. This section extends and expands the existing temporary reduction in payroll taxes. For calendar year 2012, it: (a) further reduces the Old Age, Survivors and Disability Insurance (social security) portion of the payroll tax that was paid by employees during 2011 from 4.2 percent (reflecting the existing 2 percent temporary reduction from the permanent rate) to 3.1 percent; and (b) adds a new reduction in the portion of this tax that is paid by employers from 6.2 percent to 3.1 percent. The employer reduction applies to up to $5 million of wages that are paid by the employer. With limited exceptions, the reduction in amounts paid by employers is available to all employers, whether private businesses or tax-exempt organizations. The employer reduction is not available, however, to Federal, State and local government employers (other than State colleges and universities) or with respect to household workers. This section contains equivalent reductions for individuals subject to self-employment taxes. Transfers from general revenues are provided to protect the social security trust fund.
Section 102 – Temporary Tax Credit for Increased Payroll. For the last quarter of 2011 and for calendar year 2012, the proposal provides a payroll tax credit that fully offsets the employer social security tax that otherwise would apply to increases in wages from the corresponding period of the prior year. For example, if an employer paid wages subject to social security tax of $5 million in 2011 and $6 million in 2012, the credit to which the employer would be entitled would eliminate the employer’s portion of social security taxes on the $1 million of increased wages. The credit would be available on up to $50 million of an employer’s increased wages. Generally, the credit is available to all employers, whether private businesses or tax-exempt organizations, but would not be available to Federal, State and local government employers (other than State colleges and universities) or with respect to household workers. Transfers from general revenues are provided to protect the social security trust fund.
Subtitle B – Other Relief for Businesses
Section 111 – Extension of Temporary 100 Percent Bonus Depreciation for Certain Business Assets. Under current law, businesses generally are allowed to immediately deduct 100 percent of the cost of qualified property placed in service in 2011 and 50 percent of the cost of such property placed in service in 2012. To encourage additional capital investment, this section extends the ability of businesses to deduct 100 percent of the cost of qualified property through the end of 2012.
Section 112 – Surety Bonds. Subsection (a) temporarily increases the size of contract surety bond that the Small Business Administration (SBA) can guarantee from $2,000,000 to $5,000,000. This will make it easier for small businesses to take advantage of contracting opportunities generated by the American Jobs Act’s proposed infrastructure investments. Subsection (b) amends the section of the Small Business Investment Act that limits liability for surety bond guarantees in situations when the guarantee was obtained by fraud or material misrepresentation, the surety has breached a material item of the guarantee agreement, or the surety has violated SBA’s surety bond regulations, in order to make that section consistent with the higher surety bond guarantee limit. Subsection (c) provides that the increased surety loan size will sunset at the end of fiscal year 2012. Subsection (d) provides $3,000,000 in mandatory funding to the Surety Bond Guarantees Revolving Fund to cover the estimated cost of this section.
Section 113 – Delay in Application of Withholding on Government Contractors. This section would delay the effective date of the requirement that governmental entities withhold at a 3 percent rate from payments to persons providing certain property or services. Under this section, this withholding requirement would apply to payments made after December 31, 2013.
Title II – Putting Workers Back on the Job While Rebuilding and Modernizing America
Subtitle A – Veterans Hiring Preferences
Section 201 – Returning Heroes and Wounded Warriors Work Opportunity Tax Credits. Under current law, employers that hire veterans who have been unemployed for at least 6 months and have a service-connected disability are eligible for a maximum tax credit of $4,800. This section increases the amount of that credit to $9,600. This section also creates two new hiring credits for veterans. The first is a credit of $2,400 for employers that hire veterans who have been unemployed for at least 4 weeks. The second is credit of $5,600 for veterans who have been unemployed for at least 6 months. Under this section, these credits are also available to tax- exempt entities and public universities. Finally, this section authorizes the Secretary of the treasury to provide alternative methods for certifying a veteran’s unemployed status.
Subtitle B – Teacher Stabilization
Section 202 – Purpose. This section establishes the purpose of this subtitle as the prevention of teacher layoffs and creation of additional jobs in public early childhood, elementary, and secondary education.
Section 203 – Grants for the Outlying Areas and the Secretary of the Interior; Availability of Funds. This section reserves, from the amount provided in section 212, up to one-half of one percent for outlying areas and up to one-half of one percent for Bureau of Indian Education (BIE) schools, and allow the Secretary to reserve up to $2,000,000 for administration and oversight. Under subsection (b), funds provided in section 212 would be made available to the Secretary until September 30, 2012.
Section 204 – State Allocation. This section allocates the remaining funds to the States based on population, through a grant to the Governor of each State who submits an approvable application. Under subsection (c), if a Governor does not submit an approvable application, the Secretary of Education would distribute those funds to other entities in the State, provided the Governor assures maintenance of effort for fiscal years 2012 and 2013. Under subsection (d), the Secretary would reallocate funds to the remaining States if a State does not receive funding or receives only 50 percent of its allocation.
Section 205 – State Application. This section allows Governors 30 days from the enactment of the Act to submit an application for a grant.
Section 206 – State Reservation and Responsibilities. This section authorizes States to reserve 10 percent of their grants for State-funded preschool programs and to reserve 2 percent for administrative costs. Subsection (b) would require States to support early, elementary, and secondary education by distributing the remaining grant funds to local educational agencies (LEAs) no later than 100 days after receiving a grant. Subsection (c) prohibits a State from using the funds to support a rainy-day fund or reduce debt obligations.
Section 207 – Local Educational Agencies. This section limits the use of funds by local educational agencies to those necessary to retain existing employees, rehire former employees, or hire new employees to provide early, elementary, or secondary educational and related services and excludes the use of funds for general administrative expenses. It also requires the funds to be obligated by September 30, 2013.
Section 208 – Early Learning. This section limits the use of funds by State-funded preschool programs to those necessary to retain early childhood educators, recall or rehire former early childhood educators, or hire new early childhood educators to provide early learning services, and requires the funds to be obligated by September 30, 2013.
Section 209 – Maintenance of Effort. This section of the bill requires a State to provide an assurance to the Secretary that, for fiscal years 2012 and 2013, the State will maintain State support for early childhood, elementary, and secondary education and public institutions of higher education at the same level of support as the previous fiscal year or higher. Subsection (b) allows the Secretary to waive this maintenance of effort requirement in the event of exceptional or uncontrollable circumstances, or a precipitous decline in the financial resources of the State.
Section 210 – Reporting. This section requires each State that receives a grant under this part to submit, on an annual basis, a report to the Secretary that contains a description of how funds received were expended or obligated, and an estimate of the number of jobs supported by the State using funds received under this subtitle.
Section 211 – Definitions. This section defines the terms used in Subtitle B.
Section 212 – Authorization of Appropriations. This section authorizes and appropriates $30,000,000,000 to carry out this subtitle for fiscal year 2012.
Subtitle C – First Responder Stabilization
Section 213 – Purpose. This section indicates that the purpose of this subtitle is to provide funding to States and localities to prevent layoffs and support the creation of additional jobs for law enforcement officers and other first responders.
Section 214 – Grant Program. This section provides authority for the Attorney General to carry out a competitive grant program as authorized by section 1701 of title I of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd) to support hiring, rehiring, and retention of career law enforcement officers. This section further waives the requirements of subsections (g) and (i) of section 1701 and section 1704 of such Act (42 U.S.C. 3796dd–3(c)), which limit the Federal contribution for grants to 75 percent, terminate the authority to hire and rehire law enforcement officers after September 13, 2000, and limit annual salaries and benefits paid for by the grants to $75,000.
Section 215 – Appropriations. This section makes available $5,000,000,000 to carry out the program identified in section 214 for fiscal year 2012, permitting funds to remain available through September 30, 2012. This section further authorizes the transfer of $1,000,000,000 of this funding to the Department of Homeland Security to provide for competitive grants to support the hiring of first responder personnel, as authorized by 15 U.S.C. 2201 et seq., and to carry out section 34 of that Act (15 U.S.C. 2229a). This section also permits the Secretary to waive the requirements of subsections (a)(1)(A), (a)(1)(B), (a)(1)(E), (c)(1), (c)(2), and (c)(4)(A) of section 34, which, among other requirements, would limit the use of the funds as well as the duration of availability and funding amounts of grants. This section further permits that up to $8,000,000 of the amounts made available to the Department of Justice to be used for program administration, and up to $2,000,000 of amounts made available to the Department of Homeland Security may be used for program administration.
Subtitle D – School Modernization
Part I – Elementary and Secondary Schools
Section 221 – Purpose. This section states that the purpose of Subtitle D is to provide assistance for the modernization, renovation, and repair of elementary and secondary school buildings in public school districts across America, in order to support the achievement of improved educational outcomes in those schools.
Section 222 – Authorization of Appropriations. This section authorizes and appropriates $25,000,000,000, which would be available for obligation until September 30, 2012, to carry out this part.
Section 223 – Allocation of Funds. This section reserves one-half of one percent of the appropriated funds for BIE schools and outlying areas. It also permits funds to be reserved for a National Center for Education Statistics (NCES) survey on public school modernization, renovation, and repair needs. This section also allocates funds to the 100 LEAs with the largest numbers of children living in poverty, and provides for the remainder of funds to be allocated to States in proportion to their respective allocations under Part A of Title I of the Elementary and Secondary Education Act (ESEA) for fiscal year 2011.
Section 224 – State Use of Funds. This section allows a State to reserve no more than 1 percent (with a maximum of $750,000) for grant administration. It would also require States to allocate at least 50 percent of their funds to LEAs (other than those 100 LEAs described in section 1203(b)) based on their respective allocations under Part A of Title I of the ESEA for FY2011, with a minimum grant of $10,000. This section also authorizes States to use any remaining funds for grants to LEAs as needed, with priority to rural LEAs.
Section 225 – State and Local Applications. This section describes State and local application requirements.
Section 226 – Use of Funds. This section provides for the use of funds under this part.
Section 227 – Private Schools. This section allows certain private, nonprofit elementary or secondary schools to be eligible to receive program services for limited purposes, including meeting requirements of the Americans with Disabilities Act and the Rehabilitation Act.
Section 228 – Additional Provisions. This section makes funds appropriated under this Part available to LEAs for obligation for 24 months, and allows LEAs to obligate funds for 36 months from the date of enactment. It also states that section 439 of the General Education Provisions Act (GEPA) applies to this Part and clarifies that Hawaii, the District of Columbia, and the Commonwealth of Puerto Rico are not LEAs for the purpose of receiving direct grants from the Secretary under subsection 223(b)(1).
Part II – Community College Modernization
Section 229 – Federal Assistance for Community College Modernization. This section authorizes the Secretary of Education to award grants to States to modernize, renovate, or repair existing facilities at community colleges. This section also reserves up to 0.25 percent for grants to Tribally Controlled Universities and outlying areas and provides for the Secretary’s allocation to each State. It also: (1) allows the Secretary to reallocate any remaining funds proportionately; (2) allows a State to reserve 1 percent (up to $750,000) for grant administration; (3) requires that funds be used to supplement, and not supplant, other Federal, State, and local funds that would otherwise be expended to modernize, renovate, or repair existing community college facilities; (4) lists the application requirements for States; (5) prohibits the use of funds under this Part for the payment of routine maintenance costs, or for construction, modernization, renovation, or repair of stadiums or facilities used for religious instruction or worship; (6) requires States to consider "green projects" in their funding of subgrants; (7) establishes that section 439 GEPA applies to this part; (8) requires States to report on their use of funds and job creation; (9) requires the Secretary of Education to report on grants made; and (10) authorizes and appropriates $5,000,000,000 for fiscal year 2012, available for obligation only during the period that ends 36 months after the date of enactment of this Act.
Part III – General Provisions
Section 230 – Definitions. This section defines several applicable terms used in this subtitle.
Section 231 – Buy American. This section establishes that Section 1605 of Division A of the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) applies to funds made available under this subtitle.
Subtitle E – Immediate Transportation Infrastructure Investments
Section 241 – Immediate Transportation Infrastructure Investments.
Subsection (a) of this section makes available $2 billion for airport development grants. Grants made available under the section would have a 100 percent Federal share. Additionally, this subsection permits 0.3 percent of the available funds to be used for administrative expenses.
Subsection (b) makes $1 billion available to conduct research and development and demonstrations and to acquire, establish, and improve FAA air navigation facilities, systems, and procedures to advance NextGen.
Subsection (c) provides $27 billion for highway restoration, repair, and construction projects, as well as passenger and freight rail transportation projects, distributed via traditional formulas that were also utilized in the Recovery Act. A portion of the funds within each State would be sub-allocated by population areas. To speed project delivery, the Federal share of project costs would be 100 percent. In addition, set asides are specifically provided for: (1) Puerto Rico and territorial highways; (2) Indian reservation roads; (3) park roads and parkways; (4) forest highways; (5) refuge roads; and (6) management and oversight, including funding for State Departments of Transportation planning activities. Competitive funding is also provided for transportation training programs, particularly focused on workforce skill gaps, and disadvantaged business enterprise training assistance.
Subsection (d) makes available $4 billion for projects to improve the Nation’s existing intercity passenger rail network and develop new high speed rail corridors. Grants made available under the section would have a 100 percent Federal share. The Secretary would be required to issue interim guidance to applicants detailing the application process and eligibility criteria, and not less than 85 percent of the funds awarded shall be for projects supporting the development of intercity or high speed passenger rail corridors.
Subsection (e) makes available $2 billion to Amtrak for the repair, rehabilitation, and upgrade of Amtrak’s assets and infrastructure, including rolling stock.
Subsection (f) makes available $3 billion for transit capital projects, particularly for the purchase of new buses and for the repair and rehabilitation of existing rail and bus systems, including rolling stock. To speed project delivery, the Federal share of project costs would be 100 percent. Of the funds provided, 80 percent would be apportioned to urbanized areas with a population of at least 50,000, 10 percent shall be apportioned to “Growing States and High Density States” as provided in Section 5340 of title 49, and 10 percent shall be apportioned to non-urbanized areas with populations below 50,000. In addition, within the amount made available for apportionment to non-urbanized areas, 2.5 percent would be made available for tribal transit programs as provided in Section 5311(c)(1) of title 49. Funds apportioned to urbanized areas with a population of at least 50,000, but not more than 200,000 may are eligible for both capital and operating assistance. Funds apportioned to non-urbanized areas are also eligible for operating assistance.
Subsection (g) makes available $6 billion for capital projects to modernize existing fixed guideway systems and to replace and rehabilitate buses and bus facilities. To speed project delivery, the Federal share of project costs would be 100 percent. To target fixed guideway modernization funding to the transit systems with the highest need for state of good repair upgrades, 75 percent of the funds provided will be apportioned based on fixed guideway revenue vehicle miles and passenger miles, as provided in Section 5336(b) of Title 49. The remaining 25 percent shall be available for bus and bus facilities and shall be apportioned based on formula in Section 5336 other than subsection (b).
Subsection (h) provides $5 billion to award grants on a competitive basis for projects across all surface transportation modes that will have a significant impact on the Nation, a metropolitan area or a region. Provisions require the Secretary to publish criteria on which to base competition for the grants within 90 days of enactment, with priority for distribution of funds given to projects expected to be completed within three years of the date of enactment of the Act. This subsection also provides the Secretary the flexibility to provide other forms of federal credit assistance for capital investments in surface transportation infrastructure.
Subsection (i) authorizes the Secretary to establish standards under which a contract for construction funded under subsections (a) through (h) of this section may be advertised that contains "local hiring" requirements in some limited circumstances.
Subtitle F – Building and Upgrading Infrastructure for Long-Term Development
Section 242 – Short Title; Table of Contents. The Act is entitled the Building and Upgrading Infrastructure for Long-Term Development (BUILD) Act.
Section 243 – Findings and Purpose. This section sets forth findings concerning, among other things, the importance of infrastructure and investing in infrastructure, the status of U.S. infrastructure as compared to other nations, and the issues surrounding our current funding mechanisms. It also sets forth the purpose of the Act, which is to create an institution that will mobilize significant private investment in economically viable infrastructure projects of regional or national significance in order to create jobs, reduce our infrastructure deficit, and support U.S. competitiveness.
Section 244 – Definitions. In this section-by-section, the definitions of significant terms are discussed in the sections below in which they appear.
Part I – American Infrastructure Financing Authority
Section 245– Establishment and General Authority of AIFA. This section establishes the American Infrastructure Financing Authority (AIFA) as a wholly-owned government corporation that will provide direct loans and loan guarantees to facilitate investment in economically-viable infrastructure projects of regional or national significance. As set forth in the ―Definitions section of the Act, the term ―infrastructure project includes projects from the transportation, water, and energy sectors. These sectors, in turn, include highways, roads, bridges, mass transit, inland waterways, commercial ports, airports, air traffic control systems, passenger rail, freight rail, water-waste treatment facilities, storm-water management systems, dams, solid-waste disposal facilities, levees, open-space management systems, pollution-reduced energy generation, transmission and distribution of energy, storage of energy, and energy-efficiency enhancements for buildings. The Board of Directors may make changes at its discretion to the subsectors by a vote of at least five of the voting members of the Board. This section further provides that AIFA shall be incorporated on the date of the first meeting of the Board of Directors, shall maintain and be considered a resident of Washington, D.C., and shall be exempt from the requirements set forth in chapter 91 of title 31 related to government corporations. Finally, this section requires the Secretary of the Treasury to take such action as may be necessary to assist AIFA in carrying out the purposes of this Act.
Section 246 – Voting Members of the Board of Directors. AIFA’s Board of Directors will consist of seven voting members, each of whom will have an equal vote and all of whom will be appointed by the President with the advice and consent of the Senate. The President will also designate the Chairperson of the Board. Congressional Leadership (the Majority and Minority Leaders of the Senate, and the Speaker and Minority Leader of the House) will submit recommendations to the President after consulting with the appropriate Congressional committees. No more than four of the voting members can be from the same political party. Further, to be eligible to serve on the Board, the person must be a U.S. citizen and have significant expertise either in the management and administration of a relevant financial institution or in the financing, development, or operation of infrastructure projects. Voting members will serve a term of four years, except that the initial terms will be staggered for a subset of the Board. Voting members will be compensated at the daily equivalent of the annual rate of basic pay prescribed for level III of the Executive Schedule under section 5314 of Title 5 for each day during which the member is engaged in the performance of Board duties. A board member will not participate in decisions regarding any AIFA project in which the member has a financial interest.
Section 247 – Chief Executive Officer of AIFA. This section provides that the President will appoint, with the advice and consent of the Senate, a Chief Executive Officer of AIFA for a term of six years. The CEO will be a nonvoting member of the Board of Directors. To be eligible to serve as CEO, the person must be a U.S. citizen and have significant expertise in the management or administration of a financial institution or the financing and development of infrastructure projects. Additionally, to be eligible, the candidate must not hold any other public office or have any interest in an infrastructure project that is being considered by the Board (unless that interest is placed in a blind trust). The CEO will be responsible for all activities of AIFA, including responsibility for the development of AIFA’s internal policies and responsibility for managing and overseeing AIFA’s daily activities and personnel. More specifically, the CEO will be responsible for appointing senior management (subject to Board approval), hiring and terminating all other AIFA personnel, overseeing AIFA’s involvement in the funded projects, and assessing and recommending in the first instance (subject to ultimate approval or disapproval by the Board) the compensation of all AIFA personnel. Although the Board is responsible for ultimately approving or disapproving loans and loan guarantees for applying projects, the CEO is responsible, in consultation with his or her staff, for developing eligible projects for AIFA support, for preparing the financial assistance packages for Board approval, and for monitoring any projects that receive funding. The CEO’s compensation recommendations will be without regard to chapter 51 or subchapter III of chapter 53 of title 5.
Section 248 – Powers and Duties of the Board of Directors. This section lays out the powers and duties of the Board. It provides that the Board will be responsible for the ultimate review and approval of the eligible project applications and financial packages that are submitted by the CEO and senior management. The Board will also be responsible for, among other things, approving or disapproving any senior management appointed by the CEO, approving CEO-submitted documents concerning application and lending procedures, approving the compensation of AIFA personnel, approving business plans, strategies, and budgets, developing bylaws and conflict of interest policies, establishing subcommittees of the Board (including an audit committee), and ensuring that AIFA is operated in compliance with the Act. In setting and approving the compensation for the CEO and other AIFA personnel, the Board will consult with the Office of Personnel Management and seek to maintain comparability with other comparable federal personnel. The Board will also have the general authority to execute and oversee AIFA’s contractual agreements, to determine appropriate expenses and obligations of AIFA, to approve other forms of credit enhancement that AIFA may provide to eligible projects consistent with the Act, to sue and be sued in AIFA’s corporate capacity, and to exercise all other lawful powers that are necessary to carry out AIFA’s purposes.
Section 249 – Senior Management. Senior management will be appointed by the CEO, subject to approval by the Board of Directors, and will serve at the pleasure of the CEO and the Board. Members of senior management include the Chief Financial Officer, Chief Risk Officer, Chief Compliance Officer, General Counsel, Chief Operations Officer, and Chief Lending Officer – each of whom will report directly to the CEO except for the Chief Risk Officer, who will report directly to the Board. The primary function of senior management will be to provide professional support to the CEO in the discharge of his or her duties. The section provides that: (1) the Chief Financial Officer will be responsible for all financial functions of AIFA except those functions that the Board delegates externally; (2) the Chief Risk Officer will be responsible for the creation of financial, credit, and operational risk management guidelines, the establishment of guidelines to ensure diversification of lending activities, the monitoring of the financial, credit, and operational exposure of AIFA, and the development of risk-management actions; (3) the Chief Compliance Officer will be responsible for AIFA functions relating to audits and accounting safeguards; that the General Counsel will be responsible for legal matters; (4) the Chief Operations Officer will be responsible for all AIFA operational functions, including those related to operations generally and human resources; and (5) the Chief Lending Officer will be responsible for all functions relating to the development of project pipelines, the financial structuring of projects, the selection of infrastructure projects to be reviewed by the Board, and related functions. The Chief Lending Officer will also be responsible for creating and managing both a Center for Excellence to provide technical assistance to public-sector borrowers and an Office of Rural Assistance to provide technical assistance for rural infrastructure projects. Finally, this section prevents members of senior management from holding any other public office and from having a financial interest in projects being considered (unless that interest is placed in a blind trust).
Section 250 – Special Inspector General for AIFA. This section provides that an Inspector General will oversee AIFA’s operations. For the first five years of AIFA’s existence, oversight responsibility will fall to the Inspector General of the Department of the Treasury. Beginning five years after enactment of the Act, an Office of the Special Inspector General for AIFA will be created. The Special IG for AIFA will be appointed by the President, with the advice and consent of the Senate. The primary duties of this office will be to conduct, supervise, and coordinate audits and investigations of AIFA’s business activities. The Inspector General Act of 1978 will apply to the Special IG of AIFA, and the Special IG may appoint and employ personnel in accordance with Title 5. Other federal entities, departments, and agencies are obliged to comply with requests for information from the Special IG of AIFA. Not later than one year after the confirmation of the Special IG of AIFA, and every calendar year thereafter, the Special IG will submit to the President a report of his or her activities during the previous year.
Section 251 – Other Personnel. Except as otherwise provided in the bylaws of AIFA, the CEO (in consultation with the Board) shall appoint, remove, and define the duties of such qualified personnel as are necessary to carry out the duties and purposes of AIFA. Members of senior management are excluded from this section, as they are addressed in section 295.
Section 252 – Compliance. This section provides that the provision of financial assistance to projects under this Act shall not be construed as superseding any provision of State law or any regulation that is otherwise applicable to an infrastructure project.
Part II—Terms and Limitations on Direct Loans and Loan Guarantees
Section 253 – Eligibility Criteria for Assistance from AIFA and Terms and Limitations of Loans. Financial assistance under this Act shall not be provided for any project whose purpose is private and for which no public benefit is created. Nor will financial assistance be provided for the refinancing of an existing project. Applicants are required to demonstrate to the satisfaction of the Board of Directors that the non-Federal project meets any pertinent requirements of this Act, any criteria established by the Board of Directors or CEO of AIFA, and the definition of a transportation and transportation-related infrastructure project, water infrastructure project, or energy infrastructure project as defined by this Act. The criteria established by the Board of Directors shall provide adequate consideration of the economic, financial, technical, environmental, and public costs of each infrastructure project under consideration for financial assistance under this Act. The criteria established by the Board of Directors shall also provide adequate consideration of: (1) the means by which an infrastructure project is being financed; (2) the likelihood that assistance from AIFA will accelerate the development of the project and lower the overall costs; (3) the extent to which assistance from AIFA maximizes private investment or supports a public-private partnership; (4) the extent to which the support mobilizes other financing; (5) the technical and operational viability of the infrastructure project; (6) the proportions of financial assistance from AIFA; (7) the geographic location of the project (in an effort to have geographic diversity); (8) the size of the project and its impact on the resources of AIFA; and (9) the infrastructure sector of the project (in an effort to have projects from more than one sector financed by AIFA). Entities seeking assistance from AIFA for an eligible infrastructure project shall submit an application to AIFA. The CEO, working with the senior management of AIFA, will prepare eligible infrastructure projects for review and approval by the Board of Directors. Applications are reviewed on an ongoing basis. An eligible project has a cost that is reasonably anticipated to equal or exceed $100 million, with the exception of rural projects. An eligible rural project has a cost that is reasonably anticipated to equal or exceed $25 million. Once selected for financing, the amount of any direct loan or loan guarantee shall not exceed the lesser of 50 percent of the reasonably anticipated eligible infrastructure project costs or – if the direct loan or loan guarantee does not receive an investment grade rating – the amount of the senior project obligations. The maximum amount of new direct loans and loan guarantees in AIFA’s first two fiscal years is limited to $10 billion each year. This increases to $20 billion per year after the second year of operations and through the ninth year, and increases to $50 billion per year after the ninth year of operations.
Section 254 – Loan Terms and Repayment. A direct loan or loan guarantee under this Act shall be on such terms and subject to such conditions as the CEO of AIFA determines appropriate, but there are certain threshold terms that will apply. First, a direct loan or loan guarantee under this Act shall be payable (in whole or part) from tolls, user fees, or other dedicated revenue sources that secure the senior payment obligations and shall include a rate covenant, coverage requirement, or similar security feature supporting the project obligations. Second, the base interest rate on a direct loan shall not be less than the yield on United States Treasury obligations of a similar maturity to the maturity of the direct loan. Third, the CEO of AIFA (in consultation with the Director of the Office of Management and Budget) shall estimate an appropriate federal credit subsidy amount for each direct loan and loan guarantee before entering an agreement for assistance. The final credit subsidy cost will be determined consistent with the Federal Credit Reform Act. The CEO of AIFA may charge a credit fee to the borrower to pay for all or a portion of the Federal credit subsidy. Fourth, the final maturity date of a direct loan or loan guarantee by AIFA shall be no later than 35 years after the date of substantial completion of the project (as determined by the CEO of AIFA). The CEO of AIFA will also require each applicant to provide an opinion letter from at least one rating agency. An opinion letter is not required for rural projects, as these projects will receive an internal rating score. The execution of loan and loan guarantees under this Act will be contingent on the senior obligations of the infrastructure project receiving an investment grade rating. The CEO of AIFA will establish a repayment schedule for each direct loan, with the repayment commencing no later than five years after the date of substantial completion. After the first five years of AIFA operations, the average rating of AIFA’s overall portfolio must be investment grade. The terms for loan guarantees are consistent with the terms set forth in this section for direct loans, except that a rate on the guaranteed loan and any payment, pre-payment, or refinancing features will be negotiated between the obligor and the lenders with the consent of the CEO of AIFA. Direct loans and loan guarantees under this Act are subject to the Federal Credit Reform Act.
Section 255 – Compliance and Enforcement. Entities that receive assistance from AIFA are required to enter into a credit agreement promising compliance with all policies and procedures of AIFA. The Board of Directors may take action to cancel utilized loan amounts or to accelerate the repayment terms of any outstanding obligations if a recipient of assistance is materially out of compliance with the loan agreement or any applicable procedure of AIFA.
Section 256 – Audits; reports to the President and Congress. The books of AIFA shall be maintained with generally accepted accounting principles and shall be subject to an annual audit by public accountants appointed by the Board of Directors. Ninety days after the last day of each fiscal year, the Board of Directors will be required to submit to the President and Congress an annual report that provides a detailed assessment of the preceding fiscal year. The Government Accountability Office (GAO) is required to conduct an evaluation and to submit a report to Congress on the activities of AIFA no later than five years after the date of enactment. AIFA is required to maintain appropriate records to support AIFA’s financial transactions. The AIFA records are at all times open to inspection by the Secretary of the Treasury, the Special Inspector General, and the Comptroller General of the United States.
Part III—Funding of AIFA
Section 257 – Administrative Fees. The CEO of AIFA shall establish fees that are sufficient to cover all or a portion of the administrative costs of AIFA.
Section 258 – Efficiency of AIFA. The CEO of AIFA shall make efforts to minimize the risk and cost to the taxpayer of AIFA activities while supporting the program’s objectives, in establishing fees and risk premiums on loans and loan guarantees.
Section 259 – Funding. This section authorizes and appropriates $10 billion, which is to remain available until expended. Portions of these funds are set aside in the early years for administrative costs. No more than five percent will be used to offset subsidy costs associated with rural infrastructure projects.
Part IV—Extension of Exemption from Alternative Minimum Tax Treatment for Certain Tax-Exempt Bonds
Section 260 – Extension of Exemption from Alternative Minimum Tax Treatment for Certain Tax-Exempt Bonds. This section excludes from the alternative minimum tax (AMT) interest on tax-exempt private activity bonds for bonds issued in 2011 or 2012.
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