DALLAS — State infrastructure banks would be revived as a funding option for local transportation projects under bills filed in both the U.S. House and Senate.
The State Transportation and Infrastructure Innovation Act (STIFIA), H.R.3872, introduced on Jan. 14 by Rep. Richard Hanna, R-N.Y., and Rep. Janice Hahn, D-Calif., would renew a state bank program first authorized under a 2005 federal highway funding bill that expired in 2009.
Hanna and Hahn are members of the House Transportation and Infrastructure Committee, which is working on a reauthorization of a two-year federal highway funding law — Moving Ahead for Progress in the 21st Century (MAP-21) — that is set to expire on Sept. 30, the end of fiscal 2014.
The infrastructure bank bill is identical to a Senate measure, S. 1553, introduced on Sept. 26, 2013 by Sen. Kelly Ayotte, R-N.H., who said she sponsored the legislation after New Hampshire legislative leaders tried to create a state infrastructure bank only to learn they could not use federal funds to do so.
"Federal rules shouldn't prevent New Hampshire and other states from maximizing the effectiveness of federal transportation dollars," Ayotte said.
Once the initial capitalization is repaid, she said, the bill would give states more control over subsequent rounds of lending. "This legislation will give states the flexibility to use a portion of their federal highway money to help capitalize state infrastructure banks, which pool public and private resources to finance local transportation priorities," she said.
The newly reauthorized infrastructure banks would be capitalized with 15% of federal transportation funds received by a state in fiscal 2013 and 2014.
The increase to 15% is the only change to the original legislation, which had capped the capitalization at 10% of a state's federal transportation funds from fiscal 2005 to 2009. The new measures simply change the effective dates.
The bill would allow states to establish transportation infrastructure banks but would not mandate them, according to Hanna, who said the banks were inadvertently left out of MAP-21.
The assistance provided by the infrastructure banks to state and local highway and mass transit projects could include short- or long-term debt financing, loans, and lines of credit. Ten states, including New York, California, Arizona, Delaware, Arkansas, Oklahoma, Tennessee, Indiana, Rhode Island, and Iowa, had state infrastructure banks that worked well under the earlier funding law but are now inactive, Hanna said, adding, "We've seen state infrastructure banks work in red and blue states alike."
The infrastructure banks can help states develop public-private partnerships and other forms of private funding for transportation infrastructure, he said.
"During difficult budgetary times, these banks seeded with federal dollars can help leverage private investment in local projects across the nation," he said.
The infrastructure banks are an important step in ensuring local and state transportation projects are properly funded, Hahn said.
"We as a nation are facing an infrastructure crisis," she said. "For years, we have allowed our roads, bridges, and ports to deteriorate without regard to its effect on our recovery."
