Administration announces programs to increase infrastructure investment

Washington, D.C. — The Obama Administration announced new steps that federal agencies are taking to bring private-sector capital and expertise to bear on improving our nation’s roads, bridges, and broadband networks. First, the Administration launched a new Water Finance Center at the Environmental Protection Agency and highlighting the progress of the Rural Opportunity Investment Initiative at the Department of Agriculture. The Administration also announced a new set of infrastructure tax proposals that will level the playing field for projects that combine public and private investment.

Water Finance Center

The U.S. needs at least $600 billion in investments in water infrastructure over the next 20 years to keep our taps flowing and our rivers and lakes clean. The Administration launched a interagency center at the EPA to increase innovative financing support for water systems across the country.  The Water Finance Center will:

· Stimulate private investment and make federal dollars go further — Around the country, towns, cities and states are exploring how to bring innovative financial tools such as public-private partnerships to the water sector to get more projects off the ground. The new Center will help interested local and state governments to bring private sector investment and expertise into water system construction and management. Among other roles, the center will bring together investors and project sponsors; highlight promising deals; provide peer-to-peer learning and workshops; and develop case studies and toolkits. The Center will work with states to maximize the benefits of more than $3 billion in annual federal water investments.

· Help attract investment to small communities — Many rural communities are served by small water utilities that lack the resources to explore financing alternatives, engage the private sector and attract investment. The new Water Center will work with on-the-ground partners to provide financial training and technical assistance to small communities and rural water systems.

Rural Opportunity Investment Initiative

To help rural projects attract more investment, the Administration announced the Rural Opportunity Investment (ROI) Initiative at USDA. In close collaboration with both public and private partners, the ROI Initiative will:

· Connect projects to investors — The ROI Initiative will facilitate and catalyze rural investment opportunities for the public and private sectors.  The Initiative will look to generate and facilitate rural investment through USDA field staff across the country and strengthen relationships with the private sector. Public-private collaborations launched by USDA earlier this year – like the $10 billion CoBank rural infrastructure fund between CoBank and Capital Peak Asset Management and a $150 million Rural Business Investment Company – are the type of innovative financing mechanisms that the Initiative will continue to incubate in an effort to develop and finance infrastructure projects.

· Improve access to USDA credit programs — The Initiative will also focus on opportunities to leverage private sector financing against the over $30 billion in existing USDA programs and resources to provide funding to vital rural infrastructure projects, including water and wastewater systems, energy efficiency improvements, broadband networks, and other rural infrastructure needs.

Qualified Public Infrastructure Bond

The Administration proposed creation of a municipal bond, Qualified Public Infrastructure Bond (QPIB). Today, public-private partnerships that combine public ownership with private sector management and operations expertise cannot take advantage of the benefits of municipal bonds. QPIBs will extend the benefits of municipal bonds to public-private partnerships, like partnerships that involve long-term leasing and management contracts, lowering the cost of borrowing and attracting new capital.

A similar existing program, Private Activity Bond (PABs), has already been used to support financing of over $10 billion of roads, tunnels, and bridges. QPIBs will expand the scope of PABs to include financing for airports, ports, mass transit, solid waste disposal, sewer, and water, as well as for more surface transportation projects. Unlike PABs, the QPIB bond program will have no expiration date, no issuance caps, and interest on these bonds will not be subject to the alternative minimum tax. These modifications will increase QPIB’s impact as a permanent lower-cost financing tool to increase private participation in building our nation’s public infrastructure. QPIBs would not be available for privately owned facilities or privatizations of public facilities.

More details on QPIBs will be available in the upcoming budget.

Transportation Investment Center

In July, the President announced the launch of a center at the Department of Transportation to catalyze private investments in our transportation system. Since the launch of the Center, DOT has taken important steps forward, including:

· Facilitating access to hundreds of millions of dollars in credit assistance for vital transportation projects — In Fiscal Year 2014, DOT loaned a record $7.5 billion to 13 projects through the TIFIA program, leveraging more than $25 billion in infrastructure investments. Since the launch of the Center, DOT has accelerated high-impact projects like Portsmouth Bypass, a 16-mile, four-lane highway in Scioto County, Ohio.

· Expediting project financing and delivery — To help get highway, port, bridge, tunnel and transit projects moving faster, the Center is providing hands-on technical assistance and facilitating efficient project delivery to projects, including adding additional projects to the Administration’s successful permitting dashboard.  The Center is also providing targeted technical assistance to support project planning for projects like the Essex County-Port Newark Container Terminal (PNCT) P3 Project – a recent TIGER grant recipient.

· New tools — The Center will be releasing new products, including supplemental provisions for toll concession model contracts and a new guide on incorporating Federal-aid funding into P3s. These products build on tools released over the past several months. In addition, DOT is developing model contracts that show how transportation projects can advance “high-road” labor practices that create good, middle-class jobs and benefit current and aspiring workers alike. These will be an example for other federal agencies as they work to support public private partnerships moving forward.

Breaking ground on more roads, bridges and other infrastructure projects

The President signed a Presidential Memorandum to improve the early phases of infrastructure project planning and design by aligning federal funding for planning and predevelopment at the Departments of Commerce, Transportation, Homeland Security, Housing and Urban Development and Agriculture. These agencies and others will be working closely with local and state governments and other stakeholders over the coming months to ensure that the federal government is doing all it can to support critical predevelopment activities. Private foundations are also doing their part to support innovation in planning and predevelopment activities, with The John D. and Catherine T. MacArthur Foundation, Ford Foundation, and The Rockefeller Foundation announcing support for new projects around the country.

Promoting investment in U.S. highways and ports

For the first time, the Administration is hosting a global event with a clear U.S. infrastructure track at the March 2015 SelectUSA Investment Summit. This Summit will bring together over 2,500 leading investors and executives from around the world and connect them with U.S. business opportunities.

A high-profile session focused on infrastructure will highlight the growth and diversity of the U.S. P3 market and present day opportunities in the U.S. for global companies. A roundtable will promote development of relationships between global investors and American partners to jointly explore U.S. infrastructure investments.