Welcome to the new way America finances their government projects. A bank solely owned by the USA and operated for the USA. This is necessary because there is no other institution in the USA to carry out this responsibility. None large enough or SOLVENT enough.
Whoever thought the USA was in this dire of circumstances. I guarantee you, President Obama before taking office had no idea he would need his own back to finance the well being of the USA. If I were he taking office in January 2009 and this was my reality, I would not only do something about it, but, I'd be plenty upset my country was left to this need. What the heck happened?
SEC. 245. ESTABLISHMENT AND GENERAL AUTHORITY OF AIFA.
(a) Establishment of AIFA- The American Infrastructure Financing Authority is established as a wholly owned Government corporation.
(b) General Authority of AIFA- AIFA shall provide direct loans and loan guarantees to facilitate infrastructure projects that are both economically viable and of regional or national significance, and shall have such other authority, as provided in this Act.
(c) Incorporation-
(1) IN GENERAL- The Board of Directors first appointed shall be deemed the incorporator of AIFA, and the incorporation shall be held to have been effected from the date of the first meeting of the Board of Directors.
(2) CORPORATE OFFICE- AIFA shall--
(A) maintain an office in Washington, DC; and
(B) for purposes of venue in civil actions, be considered to be a resident of Washington, DC.
(d) Responsibility of the Secretary- The Secretary shall take such action as may be necessary to assist in implementing AIFA, and in carrying out the purpose of this Act.
The Secretary above is the Secretary of the Treasury, Secretary Geithner. He is necessary to implement this new bank because it doesn't exist and it can't implement itself.
(e) Rule of Construction- Chapter 91 of title 31, United States Code, does not apply to AIFA, unless otherwise specifically provided in this Act.
Yes, governments can have incorporated entities. An example is that of a large university that wants to purchase real estate for renovation to accommodate offices and/or classrooms. The university, public or private, would set up a corporation and it would most likely be a non-profit corporations so donations could be made for its purpose.
So, the new bank for funding for government projects which will provide opportunity for private enterprise to contribute to the LIQUIDITY that is necessary for loans will also reward those interests with fiscal returns for their percent interest in same.
Cited Law:
31 USC CHAPTER 91 - GOVERNMENT CORPORATIONS 01/07/2011
-EXPCITE-
TITLE 31 - MONEY AND FINANCE
SUBTITLE VI - MISCELLANEOUS
CHAPTER 91 - GOVERNMENT CORPORATIONS
-HEAD-
The President is writing a new chapter in the incorporation of government entities. Interesting.
SEC. 246. VOTING MEMBERS OF THE BOARD OF DIRECTORS.
(a) Voting Membership of the Board of Directors-
(1) IN GENERAL- AIFA shall have a Board of Directors consisting of 7 voting members appointed by the President, by and with the advice and consent of the Senate, not more than 4 of whom shall be from the same political party.
The fact members of this corporation are appointed by the President may be a very interesting reason for the new rules.
(3) CONGRESSIONAL RECOMMENDATIONS- Not later than 30 days after the date of enactment of this Act, the majority leader of the Senate, the minority leader of the Senate, the Speaker of the House of Representatives, and the minority leader of the House of Representatives shall each submit a recommendation to the President for appointment of a member of the Board of Directors, after consultation with the appropriate committees of Congress.
The fact the members to the Board of Directors of this corporation will be nominated by the leaders of the legislative bodies of the USA is all the more reason why this process needs to be open and transparent while it has an active interest in its composition by the Congress. If the Board turns out to be sour to the USA economy the legislative body's leadership can be held directly responsible for poor choices.
(d) Terms-
(1) IN GENERAL- Except as otherwise provided in this Act, each voting member of the Board of Directors shall be appointed for a term of 4 years.
These are major appointments to an institution that is the only entity in the USA able to finance government projects. The nominees have to be qualified in PUBLIC POLICY, void of ideology with significant knowledge of the business of government. I see appointees to this Board of Directors to be former Governors, such as Former Governor Ed Rendell. Governor Rendell would not only be one of the best choices for a position like this, but, would also make an excellant nominee for President of the USA in future years. Governor Rendell is well vested in the best interests of this country with strongly proven track records of success. That is the type of person I see as being a nominee to this Board of Directors.
(2) INITIAL STAGGERED TERMS- Of the voting members first appointed to the Board of Directors--
(A) the initial Chairperson and 3 of the other voting members shall each be appointed for a term of 4 years; and
(B) the remaining 3 voting members shall each be appointed for a term of 2 years.
The purpose of this is obvious. There will be a longevity of members at any point of transition to provide consistency to the operation of the bank.
(3) DATE OF INITIAL NOMINATIONS- The initial nominations for the appointment of all voting members of the Board of Directors shall be made not later than 60 days after the date of enactment of this Act.
(e) Meetings-
(1) OPEN TO THE PUBLIC; NOTICE- Except as provided in paragraph (3), all meetings of the Board of Directors shall be--
(A) open to the public and
(B) preceded by reasonable public notice.
(3) EXCEPTION FOR CLOSED MEETINGS- The voting members of the Board of Directors may, by majority vote, close a meeting to the public if, during the meeting to be closed, there is likely to be disclosed proprietary or sensitive information regarding an infrastructure project under consideration for assistance under this Act. The Board of Directors shall prepare minutes of any meeting that is closed to the public, and shall make such minutes available as soon as practicable, not later than 1 year after the date of the closed meeting, with any necessary redactions to protect any proprietary or sensitive information.
(f) Compensation of Members- Each voting member of the Board of Directors shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay prescribed for level III of the Executive Schedule under section 5314 of title 5, United States Code, for each day (including travel time) during which the member is engaged in the performance of the duties of the Board of Directors.
Cited Law:
(g) Conflicts of Interest- A voting member of the Board of Directors may not participate in any review or decision affecting an infrastructure project under consideration for assistance under this Act, if the member has or is affiliated with an entity who has a financial interest in such project.
SEC. 247. CHIEF EXECUTIVE OFFICER OF AIFA.
Non-voting business manager that answers to the Board of Directors.
(b) Appointment and Tenure of the Chief Executive Officer-
(1) IN GENERAL- The President shall appoint the chief executive officer, by and with the advice and consent of the Senate.
(2) TERM- The chief executive officer shall be appointed for a term of 6 years.
(c) Qualifications- The chief executive officer--
(1) shall have significant expertise in management and administration of a financial institution, or significant expertise in the financing and development of infrastructure projects, or significant expertise in analyzing the economic benefits of infrastructure investment ; and
(2) may not--
(A) hold any other public office;
(B) have any financial interest in an infrastructure project then being considered by the Board of Directors, unless that interest is placed in a blind trust; or
(C) have any financial interest in an investment institution or its affiliates or any other entity seeking or likely to seek financial assistance for any infrastructure project from AIFA, unless any such interest is placed in a blind trust for the tenure of the service of the chief executive officer plus 2 additional years.
I really don't see any hard core business types being Executive Director. They will use the "W"rong paradyme and eliminate projects that aren't projected to have a bottom line somewhere down the road. There can be abuse of the PUBLIC TRUST in this position if the Executive Director does not have a profound understanding of the importance of infrastructure regardless of what might be viewed as a project with more cost than benefit to financial infrastructure.
Examaple: Let's say New York City were suddenly divided in half and the division were at the street where Wall Street resides. All of a sudden there is a need for bridges to the financial district with the rest of the city. But, at the same time there has to be bridges to a residential areas where schools are and the cost of the two projects were the same. How then would these projects be rated? On Safety and security of the families in the residential district or the efficiency of the Wall Street district? Which of these projects would receive a better interest rate and payment accommodation?
Anyone taking the position of Executive Director has to have an appreciation of the delicacy of the purpose of the bank without weighting the need based on what the monies are used in the way of RETURN on investment from the stand point of accommodation and enhancement of the private business sector over and above that of the citizens. It is important this position is well staffed and not just adequately staffed or used as an Icon for political hoodwinks.
(E) overseeing the involvement of AIFA in all projects, including--
(i) developing eligible projects for AIFA financial assistance;
(ii) determining the terms and conditions of all financial assistance packages;
(iii) monitoring all infrastructure projects assisted by AIFA, including responsibility for ensuring that the proceeds of any loan made, guaranteed, or participated in are used only for the purposes for which the loan or guarantee was made;
(iv) preparing and submitting for approval by the Board of Directors the documents required under paragraph (1); and
(v) ensuring the implementation of decisions of the Board of Directors; and
(F) such other activities as may be necessary or appropriate in carrying out this Act.
(e) Compensation-
(1) IN GENERAL- Any compensation assessment or recommendation by the chief executive officer under this section shall be without regard to the provisions of chapter 51 or subchapter III of chapter 53 of title 5, United States Code.
Cited Law:
5 USC CHAPTER 51 - CLASSIFICATION 01/07/2011
-EXPCITE-
PART III - EMPLOYEES
Subpart D - Pay and Allowances
CHAPTER 51 - CLASSIFICATION
(2) CONSIDERATIONS- The compensation assessment or recommendation required under this subsection shall take into account merit principles, where applicable, as well as the education, experience, level of responsibility, geographic differences, and retention and recruitment needs in determining compensation of personnel.
SEC. 248. POWERS AND DUTIES OF THE BOARD OF DIRECTORS.
As soon as is practical they are suppose to appoint a Chief Executive Officer / Executive Director.
The rest is fairly standard for a corporation.
(2) not later than 180 days after the date on which all members are appointed--
(A) develop and approve the bylaws of AIFA, including bylaws for the regulation of the affairs and conduct of the business of AIFA, consistent with the purpose, goals, objectives, and policies set forth in this Act;
(B) establish subcommittees, including an audit committee that is composed solely of members of the Board of Directors who are independent of the senior management of AIFA;
(C) develop and approve, in consultation with senior management, a conflict-of-interest policy for the Board of Directors and for senior management;
(D) approve or disapprove internal policies that the chief executive officer shall submit to the Board of Directors, including--
Procedures, guidelines and criteria for project eligibility.
(E) approve or disapprove a multi-year or 1-year business plan and budget for AIFA;
There needs to be an ethics standard and evaluation process.
(E) engaging one or more external auditors, as set forth in this Act; and
(A) consult with, and seek to maintain comparability with, other comparable Federal personnel;
Compatibility, but, no power sharing!
(6) serve as the primary liaison for AIFA in interactions with Congress, the Executive Branch, and State and local governments, and to represent the interests of AIFA in such interactions and others;
There cannot be too much wiggle room in the provision below. While it is important to oversee the process of the bank, there is an 'end point' whereby the oversight of the project then falls to other authorities of the state or local government. There can't be oversight by the bank of the projects, there will be legal jurisdictional issues that will fall to federal courts and may very well be a burden to the borrowers. This as to allow 'ease of need' in favor of 'undo burden.' It could be the oversight of the bank could become a fiscal burden to the borrowing entity and result in failure. So, the process needs oversight, but, the oversight of the project falls to the federal agency, state or local governing body. The bank will become ungainly to contain if there is too much expansion of its authority. It is not to replace governments, but, simply provide the funding and a process.
(A) to oversee entering into and carry out such contracts, leases, cooperative agreements, or other transactions as are necessary to carry out this Act with--
(i) any Federal department or agency;
(ii) any State, territory, or possession (or any political subdivision thereof, including State infrastructure banks) of the United States; and
(iii) any individual, public-private partnership, firm, association, or corporation;
A consultation by the DOJ in both the provision above and the one below may be necessary to insure constitutionality of all the banks activities.
(C) to determine the character of, and the necessity for, the obligations and expenditures of AIFA, and the manner in which the obligations and expenditures will be incurred, allowed, and paid, subject to this Act and other Federal law specifically applicable to wholly owned Federal corporations;
There are going to be problems with the provision below if the policies of the bank circumvent any federal legislation regarding 'good practice' of credit. I don't see the bank be an entity that will be exempt by existing law, so much as an example of it.
(E) to approve other forms of credit enhancement that AIFA may provide to eligible projects, as long as the forms of credit enhancements are consistent with the purposes of this Act and terms set forth in title II;
I like this one. The bank is to be constrained by 'market share.' That is a good thing. It will know its size and scope almost immediately if there is a healthy response by the federal, state and local government. Well done.
(10) to approve a maximum aggregate amount of outstanding obligations of AIFA at any given time, taking into consideration funding, and the size of AIFA’s addressable market for infrastructure projects.
That is the end of page 46. I will end here and pick up tomorrow with the next provision.
SEC. 249. SENIOR MANAGEMENT.
OCCUPY WALL STREET, GO, GO, GO, GO, GO.......
