II 117TH CONGRESS 1ST SESSION S. 468 To expedite transportation project delivery, facilitate infrastructure improvement, and for other purposes. IN THE SENATE OF THE UNITED STATES FEBRUARY 25, 2021 Mr. THUNE (for himself and Ms. HASSAN) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation A BILL To expedite transportation project delivery, facilitate infrastructure improvement, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Railroad Rehabilitation and Financing Innovation Act’’. 5 (b) TABLE OF CONTENTS.—The table of contents for 6 this Act is as follows: 7 Sec. 1. Short title; table of contents. Sec. 2. Railroad Rehabilitation and Improvement Financing Program. Sec. 3. Conforming amendments. Sec. 4. Transitional and savings provisions. Sec. 5. Repeals. VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 468 IS SEC. 2. RAILROAD REHABILITATION AND IMPROVEMENT 1 FINANCING PROGRAM. 2 (a) AMENDMENT TO TITLE 49, UNITED STATES 3 CODE.—Part B of subtitle V of title 49, United States 4 Code, is amended by inserting after chapter 223 the fol- 5 lowing: 6 ‘‘CHAPTER 224—RAILROAD REHABILITA- 7 TION AND IMPROVEMENT FINANCING 8 PROGRAM 9 ‘‘22401. Definitions. ‘‘22402. Direct loans and loan guarantees. ‘‘22403. Administration of direct loans and loan guarantees. ‘‘22404. Employee protection. ‘‘22405. Substantive criteria and standards. ‘‘22406. Funding. ‘‘§ 22401. Definitions 10 ‘‘In this chapter: 11 ‘‘(1) COST.— 12 ‘‘(A) IN GENERAL.—The term ‘cost’ means 13 the estimated long-term cost to the Government 14 of a direct loan or loan guarantee, or modifica- 15 tion of the direct loan or loan guarantee, cal- 16 culated on a net present value basis, excluding 17 administrative costs and any incidental effects 18 on governmental receipts or outlays. 19 ‘‘(B) COST OF DIRECT LOANS.— 20 ‘‘(i) IN GENERAL.—The cost of a di- 21 rect loan shall be the net present value, at 22 VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 468 IS the time when the direct loan is disbursed, 1 of the following estimated cash flows: 2 ‘‘(I) Loan disbursements. 3 ‘‘(II) Repayments of principal. 4 ‘‘(III) Payments of interest and 5 other payments by or to the Govern- 6 ment over the life of the loan. 7 ‘‘(ii) CALCULATION.—Calculation of 8 the cost of a direct loan shall include the 9 effects of changes in loan terms resulting 10 from the exercise by the borrower of an op- 11 tion included in the loan contract. 12 ‘‘(C) COST OF LOAN GUARANTEE.— 13 ‘‘(i) IN GENERAL.—The cost of a loan 14 guarantee shall be the net present value, at 15 the time when the guaranteed loan is dis- 16 bursed, of the following estimated cash 17 flows: 18 ‘‘(I) Payments by the Govern- 19 ment to cover defaults and delin- 20 quencies, interest subsidies, or other 21 payments. 22 ‘‘(II) Payments to the Govern- 23 ment, including origination and other 24 fees, penalties, and recoveries. 25 VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 468 IS ‘‘(ii) CALCULATION.—Calculation of 1 the cost of a loan guarantee shall include 2 the effects of changes in loan terms result- 3 ing from the exercise by the guaranteed 4 lender of an option included in the loan 5 guarantee, or by the borrower of an option 6 included in the guaranteed loan contract. 7 ‘‘(D) COST OF MODIFICATION.—The cost 8 of a modification is the difference between the 9 current estimate of the net present value of the 10 remaining cash flows under the terms of a di- 11 rect loan or loan guarantee contract, and the 12 current estimate of the net present value of the 13 remaining cash flows under the terms of the 14 contract, as modified. 15 ‘‘(E) ESTIMATION OF NET PRESENT VAL- 16 UES; DISCOUNT RATE.—In estimating net 17 present values, the discount rate shall be the 18 average interest rate on marketable Treasury 19 securities of similar maturity to the cash flows 20 of the direct loan or loan guarantee for which 21 the estimate is being made. 22 ‘‘(F) ESTIMATED COST; BASIS.—When 23 funds are obligated for a direct loan or loan 24 guarantee, the estimated cost shall be based on 25 VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 468 IS the current assumptions, adjusted to incor- 1 porate the terms of the loan contract, for the 2 fiscal year in which the funds are obligated. 3 ‘‘(2) CURRENT.—The term ‘current’ has the 4 meaning given such term in section 250(c)(9) of the 5 Balanced Budget and Emergency Deficit Control 6 Act of 1985 (2 U.S.C. 900(c)(9)). 7 ‘‘(3) DIRECT LOAN.— 8 ‘‘(A) IN GENERAL.—The term ‘direct loan’ 9 means a disbursement of funds by the Govern- 10 ment to a non-Federal borrower under a con- 11 tract that requires the repayment of the funds. 12 ‘‘(B) INCLUSIONS.—The term ‘direct loan’ 13 includes the purchase of, or participation in, a 14 loan made by another lender and financing ar- 15 rangements that defer payment for more than 16 90 days, including the sale of a Government 17 asset on credit terms. 18 ‘‘(C) EXCLUSION.—The term ‘direct loan’ 19 does not include the acquisition of a federally 20 guaranteed loan in satisfaction of default 21 claims. 22 ‘‘(4) DIRECT LOAN OBLIGATION.—The term ‘di- 23 rect loan obligation’ means a binding agreement by 24 VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 468 IS the Secretary to make a direct loan when specified 1 conditions are fulfilled by the borrower. 2 ‘‘(5) INTERMODAL.—The term ‘intermodal’ 3 means of or relating to the connection between rail 4 service and other modes of transportation, including 5 all parts of facilities at which the connection is 6 made. 7 ‘‘(6) INVESTMENT-GRADE RATING.—The term 8 ‘investment-grade rating’ means a rating of BBB 9 minus, Baa3, bbb minus, BBB(low), or higher as- 10 signed by a rating agency. 11 ‘‘(7) LOAN GUARANTEE.—The term ‘loan guar- 12 antee’ means any guarantee, insurance, or other 13 pledge with respect to the payment of all or a part 14 of the principal or interest on any debt obligation of 15 a non-Federal borrower to a non-Federal lender, but 16 does not include the insurance of deposits, shares, or 17 other withdrawable accounts in financial institutions. 18 ‘‘(8) LOAN GUARANTEE COMMITMENT.—The 19 term ‘loan guarantee commitment’ means a binding 20 agreement by the Secretary to make a loan guar- 21 antee when specified conditions are fulfilled by the 22 borrower, the lender, or any other party to the guar- 23 antee agreement. 24 VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 468 IS ‘‘(9) MASTER CREDIT AGREEMENT.—The term 1 ‘master credit agreement’ means an agreement to 2 make 1 or more direct loans or loan guarantees at 3 future dates for a program of related projects on 4 terms acceptable to the Secretary. 5 ‘‘(10) MODIFICATION.— 6 ‘‘(A) IN GENERAL.—The term ‘modifica- 7 tion’ means any Government action that alters 8 the estimated cost of an outstanding direct loan 9 (or direct loan obligation) or an outstanding 10 loan guarantee (or loan guarantee commitment) 11 from the current estimate of cash flows. 12 ‘‘(B) INCLUSIONS.—The term ‘modifica- 13 tion’ includes— 14 ‘‘(i) the sale of loan assets, with or 15 without recourse, and the purchase of 16 guaranteed loans; and 17 ‘‘(ii) any action resulting from new 18 legislation, or from the exercise of adminis- 19 trative discretion under existing law, that 20 directly or indirectly alters the estimated 21 cost of outstanding direct loans (or direct 22 loan obligations) or loan guarantee (or 23 loan guarantee commitment), such as a 24 change in collection procedures. 25 VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 468 IS ‘‘(11) PROJECT OBLIGATION.—The term 1 ‘project obligation’ means a note, bond, debenture, 2 or other debt obligation issued by a borrower in con- 3 nection with the financing of a project, other than 4 a direct loan or loan guarantee under this chapter. 5 ‘‘(12) RAILROAD.—The term ‘railroad’ has the 6 meaning given the term ‘railroad carrier’ in section 7 20102. 8 ‘‘(13) RATING AGENCY.—The term ‘rating 9 agency’ means a credit rating agency registered with 10 the Securities and Exchange Commission as a na- 11 tionally recognized statistical rating organization (as 12 defined in section 3(a) of the Securities Exchange 13 Act of 1934 (15 U.S.C. 78c(a))). 14 ‘‘(14) SECRETARY.—The term ‘Secretary’ 15 means the Secretary of Transportation. 16 ‘‘(15) SUBSTANTIAL COMPLETION.—The term 17 ‘substantial completion’ means— 18 ‘‘(A) the opening of a project to passenger 19 or freight traffic; or 20 ‘‘(B) a comparable event, as determined by 21 the Secretary and specified in the terms of the 22 direct loan or loan guarantee. 23 VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 468 IS ‘‘§ 22402. Direct loans and loan guarantees 1 ‘‘(a) GENERAL AUTHORITY.—The Secretary shall 2 provide direct loans and loan guarantees— 3 ‘‘(1) to States and units of local government; 4 ‘‘(2) to interstate compacts consented to by 5 Congress under section 410(a) of the Amtrak Re- 6 form and Accountability Act of 1997 (Public Law 7 105–134; 49 U.S.C. 24101 note); 8 ‘‘(3) to government-sponsored authorities and 9 corporations; 10 ‘‘(4) to railroads; 11 ‘‘(5) to joint ventures that include at least 1 of 12 the entities described in paragraph (1), (2), (3), (4), 13 or (6); 14 ‘‘(6) to private entities with controlling owner- 15 ship in 1 or more freight railraods other than Class 16 1 carriers; and 17 ‘‘(7) solely for the purpose of constructing a 18 rail connection between a plant or facility and a rail- 19 road, limited option freight shippers that own or op- 20 erate a plant or other facility. 21 ‘‘(b) ELIGIBLE PURPOSES.— 22 ‘‘(1) IN GENERAL.—Direct loans and loan guar- 23 antees provided under this section shall be used— 24 ‘‘(A)(i) to acquire, improve, or rehabilitate 25 intermodal or rail equipment or facilities, in- 26 VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 468 IS cluding track, components of track, civil works 1 such as cuts and fills, bridges, yards, buildings, 2 and shops; and 3 ‘‘(ii) to finance costs related to the activi- 4 ties described in clause (i), including 5 preconstruction costs; 6 ‘‘(B) to develop or establish new inter- 7 modal or railroad facilities; 8 ‘‘(C) to refinance outstanding debt in- 9 curred for the purposes described in subpara- 10 graph (A) or (B); 11 ‘‘(D) to reimburse planning, permitting, 12 and design expenses relating to activities de- 13 scribed in subparagraph (A) or (B); or 14 ‘‘(E) to finance economic development, in- 15 cluding commercial and residential development, 16 and related infrastructure and activities that— 17 ‘‘(i) incorporates private investment; 18 ‘‘(ii) is physically or functionally re- 19 lated to a passenger rail station or 20 multimodal station that includes rail serv- 21 ice; 22 ‘‘(iii) has a high probability of the ap- 23 plicant commencing the contracting proc- 24 ess for construction not later than 90 days 25 VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 468 IS after the date on which the direct loan or 1 loan guarantee is obligated for the project 2 under this chapter; and 3 ‘‘(iv) has a high probability of reduc- 4 ing the need for financial assistance under 5 any other Federal program for the relevant 6 passenger rail station or service by increas- 7 ing ridership, tenant lease payments, or 8 other activities that generate revenue ex- 9 ceeding costs. 10 ‘‘(2) OPERATING EXPENSES NOT ELIGIBLE.— 11 Direct loans and loan guarantees under this section 12 may not be used for railroad operating expenses. 13 ‘‘(3) SUNSET.—The Secretary may provide a 14 direct loan or loan guarantee under this section for 15 a project described in paragraph (1)(E) only during 16 the 4-year period beginning on December 4, 2015. 17 ‘‘(c) PRIORITY PROJECTS.—In granting applications 18 for direct loans or guaranteed loans under this section, 19 the Secretary shall give priority to projects that— 20 ‘‘(1) enhance public safety, including projects 21 for the installation of a positive train control system 22 (as defined in section 20157(i)); 23 ‘‘(2) promote economic development; 24 ‘‘(3) enhance the environment; 25 VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 468 IS ‘‘(4) enable United States companies to be more 1 competitive in international markets; 2 ‘‘(5) are endorsed by the plans prepared under 3 chapter 227 of this title or section 135 of title 23 4 by the State or States in which the projects are lo- 5 cated; 6 ‘‘(6) improve railroad stations and passenger 7 facilities and increase transit-oriented development; 8 ‘‘(7) preserve or enhance rail or intermodal 9 service to small communities or rural areas; 10 ‘‘(8) enhance service and capacity in the na- 11 tional rail system; or 12 ‘‘(9)(A) would materially alleviate rail capacity 13 problems that degrade the provision of service to 14 shippers; and 15 ‘‘(B) would fulfill a need in the national trans- 16 portation system. 17 ‘‘(d) EXTENT OF AUTHORITY.— 18 ‘‘(1) LIMITATION ON AGGREGATE UNPAID PRIN- 19 CIPAL AMOUNTS OF OBLIGATIONS.—The aggregate 20 unpaid principal amounts of obligations under direct 21 loans and loan guarantees made under this section 22 may not exceed $35,000,000,000 at any time. 23 ‘‘(2) MINIMUM AMOUNT FOR FREIGHT RAIL- 24 ROADS.—Of the amount referred to in paragraph 25 VerDate Sep 11 2014 02:33 Mar 19, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S468.IS S468 pbinns on DSKJLVW7X2PROD with BILLS 13 •S 468 IS [Text truncated for display. Full text available on Congress.gov.]