House to vote on bond provisions to finance infrastructure
House Democrats on Thursday rounded out their infrastructure proposal by announcing plans for permanently reinstating Build America Bonds and tax-exempt advance refunding bonds while also expanding the issuance of private activity bonds.
The bonds would be used for spending tens of billions of dollars for new drinking and wastewater facilities, broadband, school building improvements, and housing in addition to Democrats' $494 billion plan for surface transportation.
Speaker Nancy Pelosi said the proposals would be combined into one bill known as the Moving America Forward Act that will be voted on by the House July 1 or 2.
House Ways and Means Committee Chairman Richard Neal, D-Mass., said President Trump has staked out a position that he favors financing the package with $2 trillion in borrowed money.
“We think that on the revenue side, we're open to some discussions and negotiations,” Neal said, noting that Democrats favor using direct-pay Build America Bonds, private activity bonds, and some borrowing.
“Time to have the conversation. Time to negotiate,” said Neal, who indicated he has continued to have weekly meetings with Treasury Secretary Steven Mnuchin at which infrastructure is always one of their conversation topics.
A fact-sheet released by Neal’s committee said the package includes “a robust expansion” of the federal Low-Income Tax Credit. The 4% LITC has increasingly been used as part of the financing for multifamily housing projects that use private activity bonds.
Thursday’s announcement came during the second day of a House Transportation and Infrastructure markup of its highway and transit bill through consideration of numerous amendments.
The $494 billion surface transportation bill was written by Democrats, but Transportation Committee Chairman Peter DeFazio, D-Ore., has expressed hope that the final bill will have bipartisan support.
“The bill is extraordinarily ambitious,” DeFazio said. “The Republicans have been a bit critical at points during the markup and saying this is Green New Deal 2.0. This is the application of the principles of the Green New Deal. And this proves that we can both deal with climate change, fossil fuel pollution and actually create millions of new high-paying American jobs.”
The package, for instance, would establish a national network of charging stations for electric-powered cars and trucks.
Provisions in the Moving America Forward package originating from the Commerce and Energy Committee include $70 billion for clean energy, including upgrading the electric grid by making it more resilient and energy-efficient.
Another $25 billion would be invested in the Drinking Water State Revolving Fund and related programs to help remove contaminants like PFAS from local water systems.
Separately, another $40 billion would be spent on new wastewater infrastructure.
In addition, the bill would unlock more tax-exempt bond financing for water infrastructure projects by exempting bonds that fund these projects from state volume caps for PABs.
An allocation of $100 billion would be used for improving broadband infrastructure in order to get to 100% connectivity and would include $12 billion for upgrading the 911 system.
There also would be $30 billion for healthcare infrastructure that includes $10 billion for community health centers.
In the housing area, $17 billion would be spent to address the capital needs of public housing.
Another provision would require spending down the $9.3 billion in the Harbor Maintenance Trust Fund for dredging harbors and inland waterways.