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 B – Teacher Stabilization
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.
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).
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).