WASHINGTON — A bipartisan, bicameral foursome reintroduced legislation that would authorize $50 billion of tax-credit bonds over six years.
Sens. Ron Wyden, D-Ore., and John Hoeven, R-N.D., and Reps. Ed Whitfield, R-Ky., and Allison Y. Schwartz, D-Pa., announced Thursday that they are sponsoring a bill allowing issuance of Transportation and Regional Infrastructure Project, or TRIP bonds. The principal cost of the bonds would be covered by a trust fund fed by customs user fees, and would offer the bondholders federal tax credits that could be applied against federal income tax liabilities.
The authorization would be split evenly throughout the U.S. with each state allotted $1 billion over the six years. While the TRIP bonds bill introduced by Hoeven and Wyden last year would have restricted bond authority to state infrastructure banks, the newest iteration would allow other state agencies to issue them, a Wyden spokesman said. Not every state has an infrastructure bank.
The 30-year bonds could be used to fund a wide range of transportation and infrastructure projects including roads, bridges, transit, rail, and waterways. States would also able to pool their funds for larger or multi-state projects.
“America’s economic future depends on expanding, maintaining and repairing its infrastructure,” Wyden said. “TRIP bonds provide an innovative, effective and low-cost way to create jobs and help strengthen our infrastructure by leveraging private funding.”
Wyden has said previously that TRIP bonds would represent the next-best alternative to Build America bonds, the authorization for which expired in 2010. Hoeven praised the legislation as a bipartisan way to leverage private dollars and fund American infrastructure., though investors have not historically hungered for tax-credit bonds.
“TRIP bonds are an effective way to attract and leverage private sector investments to build and repair roads, bridges and other much-needed infrastructure in this country,” Hoeven said. “We’re working in a bipartisan and bicameral way to pass this legislation because TRIP bonds are about making our nation economically stronger and more dynamic in a highly competitive world market.”
The House members echoed the sentiments.
“By leveraging private sector dollars, we can create jobs and make the infrastructure investments needed to stay economically competitive now and in the future,” Whitfield said.
“This bipartisan legislation provides an efficient way to finance much-needed infrastructure investments that will sustain millions of jobs and maintain our nation’s strength in the global marketplace,” said Schwartz.
The proposal has garnered support from transportation leaders, many of whom supported the initiative in the past. Wyden inserted a TRIP bonds provision into the comprehensive highway bill last year that was stripped out before the bill became law.
“Given the tremendous transportation investment needs facing our country, TRIP bonds provide supplemental project financing capacity directly to those who construct and manage transportation facilities—the states and their transportation agencies,” said Bud Wright , executive director of the American Association of State Highway and Transportation Officials. “We applaud Sen. Wyden, Sen. Hoeven, Rep. Whitfield, and Rep. Schwartz for their bipartisan, bicameral support for transportation infrastructure improvements that underpin economic growth and quality of life for all Americans.”
David Seltzer, principal at infrastructure finance advisory firm Mercator Advisors, said the bill could provide a vehicle for more infrastructure investment in a fiscally-constrained environment.
“The proposal demonstrates that a tax incentive to attract investment into transportation infrastructure can receive bipartisan support,” Seltzer said. “This bill could serve as the basis for a major federal commitment to transportation projects without putting greater pressure on the discretionary budget.”