Today in Florida President Obama will discuss the importance of infrastructure investment during his visit to PortMiami. Congressman John K. Delaney (MD-6) applauds the President's infrastructure push and calls for Congress to take action to pass bipartisan legislation that will rebuild our infrastructure and get Americans back to work. Delaney first announced his infrastructure plan in February.
"Rebuilding our infrastructure is incredibly important to our economic health and our ability to compete in the global marketplace," said Congressman Delaney. "In an era of tight budgets, we need to look at new funding mechanisms. The President's leadership on this issue is valuable, now it is time for members of Congress to come together and find a bipartisan solution. My infrastructure plan will create jobs requires zero tax dollars, and will provide local governments with the financing they desperately need to invest in our economic future. Our roads and bridges are crumbling. It's time to get to work."
The Partnership to Build America Act will provide up to $750 billion in infrastructure financing, without requiring tax dollars.
The Partnership to Build America Act
The legislation would finance the rebuilding of our country's transportation, energy, communications, water, and education infrastructure through the creation of an infrastructure fund using repatriated corporate earnings.
Office of Infrastructure Partnerships
The legislation would create the Office of Infrastructure Partnerships (OIP) in the U.S. Department of Treasury which would be a resource to local and state governments and private companies. It would be responsible for overseeing the criteria for qualified projects, standardizing processes and managing the overall infrastructure portfolio.
American Infrastructure Fund
The OIP would create the American Infrastructure Fund (AIF) which would provide loans or guarantees to state or local governments to finance qualified infrastructure projects. The states or local governments would be required to pay back the loan at a market rate determined by the OIP to ensure they have "skin in the game."
AIF will be funded by the sale of $50 billion worth of Infrastructure Bonds which would have a 50 year term, pay a fixed interest rate of 1 percent, and would not be guaranteed by the U.S. government.
U.S. corporations would be incentivized to purchase these new Infrastructure Bonds by allowing them to repatriate a certain amount of their overseas earnings tax free for every $1.00 they invest in the bonds. This multiplier will be set by a "reverse Dutch auction" so the market sets the rate.
Assuming a 1:4 ratio, meaning a company repatriates $4.00 tax-free for every $1.00 in Infrastructure Bonds purchased, a company's effective tax rate to repatriate these earnings would be approximately 8 percent and the $4.00 could then be used by the companies to invest in the U.S. economy.
AIF would leverage the $50 billion of Infrastructure Bonds at a 15:1 ratio to provide up to $750 billion in loans or guarantees.
Qualified Infrastructure Projects
Infrastructure projects financed by the AIF must meet a positive economic requirement threshold that is developed by the OIP.
OIP would implement a competitive procurement process using standardized procedures and documentation.