Rep. DeLauro Looks to Create Issuer of 'Public Benefit Bonds'

Rep. Rosa DeLauro, D-Conn., has introduced legislation to establish a National Infrastructure Development Bank that could issue "public benefit bonds" exempt from state and local taxes to finance infrastructure projects over the next 15 years.

Modeled after the European Investment Bank, the infrastructure bank would leverage private sector dollars to invest in transportation, environmental, energy, and telecommunications infrastructure projects, according to the bill, which is called the National Infrastructure Development Bank Act of 2009 (HR 2521).

Under the legislation, the bank would be appropriated $5 billion a year for five years and would have a total of $250 billion in subscribed capital available from the Treasury Department if needed.

The legislation would permit the bank to have an aggregate amount of outstanding loans and guarantees of up to 250% of the bank's total subscribed capital, leading to up to $625 billion in infrastructure investment capability, according to a summary.

The bank would include a five-member board of directors that could, among other things, make senior and subordinated loans and purchase senior and subordinated debt securities, issue and sell debt securities, issue public benefit bonds, make loan guarantees, borrow from the global capital market, and purchase, pool, and sell infrastructure related loans and securities.

"By expanding and enhancing existing infrastructure through a National Infrastructure Development Bank, we can leverage private-sector dollars to invest in our most critical transportation, environmental, energy, and telecommunications infrastructure needs," DeLauro said in a release. "Not only will we create jobs and spur economic growth, but we will make the critical investments necessary to build state-of-the-art infrastructure systems for the 21st century - ensuring we do not again allow our nation's roads, bridges, and electrical grid to reach the deterioration we have seen in recent years."

The board would consider projects based on certain criteria. The bank would analyze projects to determine their economic, environmental and social benefits, as well as their cost. It would prioritize projects of regional or national significance.

The bill would require projects assisted by the bank to comply with the Davis-Bacon Act, which requires workers to be paid prevailing wages.

The bill has been referred to the House Transportation and Infrastructure Committee's subcommittee on water resources and environment. DeLauro sits on the House Budget and Appropriations Committees. Senate Banking Committee Chairman Christopher Dodd, D-Conn., has proposed similar bills in the past.

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