A bill that would raise the federal cap on private activity bonds for surface-transportation and freight-improvement projects by $5.8 billion has been rolled out to the House of Representatives by a bipartisan group of lawmakers, includers members of the powerful Committee on Ways and Means, which makes recommendations to the full House on all bills pertaining to raising revenue.
The Building United States Infrastructure and Leveraging Development (BUILD) Act was introduced on May 7 by Representatives Earl Blumenauer (D-OR), Mike Kelly (R-PA), Terri Sewell (D-AL), and Rodney Davis (R-IL).
Blumenauer, well-known as an advocate of fully funding transportation infrastructure, serves on Ways and Means; Sewell is Vice Chair of Ways and Means, and Kelly is the Ranking Member of its Subcommittee on Oversight. Davis serves as the Ranking Member of the Committee on Transportation and Infrastructure’s Subcommittee on Highways and Transit.
Private Activity Bonds (PABs) allow state or local governments the ability to issue tax-exempt debt, with approval from the Department of Transportation, for qualified improvements to highways or surface freight facilities that are privately developed and operated, per a joint statement released by the lawmakers.
The BUILD Act would increase the federal cap for state and local government PABs by $5.8 billion, bringing it from $15 billion to $20.8 billion. This will allow state and local governments to enter into additional public-private partnerships to supplement future surface transportation projects with private investment, according to the four Members of Congress sponsoring the bill.
“We have to get serious about investing in our future. Our nation’s roads and bridges are crumbling while our global competitors are making significant infrastructure investments,” said Rep. Blumenauer. “Public-private partnerships are one of a myriad of tools the nation needs to bridge the $2 trillion infrastructure investment gap. I am hopeful that this bipartisan legislation will be part of any upcoming effort to rebuild and renew America.”
Rep. Kelly stated that, “The U.S. used to have the best infrastructure in the world, but now, foreign countries like India and China far outpace us in making robust investments. Our bipartisan, bicameral bill will fix this by helping to finance improvement projects through public-private partnerships. We must make these desperately needed investments in our nation’s highways and roads without raising taxes.”
“Congress must take a comprehensive approach to address America’s crumbling infrastructure,” said Rep. Sewell. “The BUILD Act will help spur additional investments into these critical projects and help ensure the United States can maintain its competitiveness in the 21st century.”
Rep. Davis said that, “Public-private partnerships are critical for the future of infrastructure in this country. We need to diversify funding and financing options if we are ever going to fix our nation’s outdated infrastructure. The BUILD Act will allow for greater public-private investments in local projects.”
The House bill is companion legislation to an identical BUILD Act introduced in the Senate in February, also in bipartisan fashion. The upper chamber’s act was introduced by two key leaders: Senators John Cornyn (R-TX) and Mark Warner (D-VA). Both serve on the influential Finance Committee, which has jurisdiction over such policy areas as taxation, ports of entry, trade, tariffs, and infrastructure.
“As more and more of our infrastructure requires critical improvements, it’s imperative we find ways to reinvest in our roads and rails without the burden falling to taxpayers,” Cornyn said of the bill.
“Not only will this legislation help boost U.S. competitiveness, it will also help close our nation’s infrastructure gap in a responsible way by facilitating proven methods of partnering private investment with public funds to help make desperately needed infrastructure improvements,” stated Warner.
It should be noted that no sponsor of this legislation in either chamber has indicated that allowing more money to flow into public-private infrastructure partnerships is the sole solution to funding the massive amount of work that needs to be done to repair and upgrade the nation’s highways and bridges.