WASHINGTON Bipartisan legislation introduced in the Senate Thursday would create a new financing authority that would provide loans and loan guarantees for infrastructure projects.
The Building and Renewing Infrastructure for Development and Growth in Employment Act, or BRIDGE Act, was introduced by a group of 10 senators, including lead sponsors Mark Warner, D-Va., and Roy Blunt, R-Mo.
The infrastructure financing authority would have an initial capitalization of $10 billion, which would earn interest. To offset the cost of the initial $10 billion, Warner has reintroduced a bill that instructs the federal government to consolidate or dispose of excess or underutilized real estate. Fees for loans and loan guarantees would be instituted so that the financing authority could be self-sufficient.
Projects that would be eligible for funds from the financing authority include transportation and water infrastructure projects as well as some types of energy infrastructure projects. All of the projects to receive assistance would have to demonstrate a clear public benefit, meet economic, technical and environmental standards, and be backed by a dedicated revenue stream.
To be eligible for loans, non-rural projects would have to be at least $50 million in size and be of national or regional significance, and rural projects would have to be at least $10 million. Five percent of funding from the financing authority would be set aside for rural projects. The authority would set up an office of technical and rural assistance that would develop a project pipeline and help state and local governments in the development and financing of projects.
No more than 49% of total project costs could be financed by the authority. The loans would have long maturity terms of up to 35 years and use interest rates comparable to similar-length Treasuries.
The authority would be a government-owned entity operating independent of any federal agency, and would be led by a chief executive officer and board of directors. These officials would be presidential appointments, but no more than four of the seven voting board members could be from one political party. The CEO would review project applications and submit them to the board, who would ultimately approve or disapprove of them.
"I think this will be a very useful tool," Warner said of the financing authority at a press conference.
Warner said that state and local governments could use the loans in conjunction with investments from the private sector and other sources of funds. He added that the legislation is continuing to gain bipartisan support, so this may be something that Congress can get done.