Bipartisan infrastructure bill expected to leverage $750 billion

WASHINGTON, D.C. — With 13 Republican and 13 Democratic co-sponsors, Congressman John K. Delaney (MD-6) introduced The Partnership to Build America Act (H.R. 2084). The Partnership to Build America Act creates a $50 billion infrastructure fund that can be leveraged to $750 billion. This fund will be capitalized by the sale of 50-year bonds that are not guaranteed by the federal government and pay 1 percent interest rate. The fund will provide loans or loan guarantees to states and municipalities to finance transportation, energy, communications, water, and education infrastructure projects.

To encourage U.S. corporations to purchase these bonds, they will be allowed to repatriate a certain dollar amount — determined by auction — in overseas earnings tax-free for every $1 they invest in the bonds. 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 spent by the companies however they chose.

“We can’t compete in the global economy of the 21st century without a significant investment in our infrastructure. At no cost to the taxpayer, this legislation will finance a massive investment in U. S. infrastructure, get Americans back to work now, and position our businesses to grow for decades to come,” said Delaney. “I’m proud to introduce this legislation with such strong bipartisan support, and feedback from my co-sponsors made this a better bill.”

The Partnership to Build America Act 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 AIF to ensure they have “skin in the game.” In addition, the AIF would invest in equity securities for projects in partnership with states or local governments.

The AIF would leverage the $50 billion of Infrastructure Bonds at a 15:1 ratio to provide up to $750 billion in loans or guarantees. At least 25 percent of the projects financed through the AIF must be public-private partnerships for which at least 20 percent of a project’s financing comes from private capital using a public-private partnership model.

According to Delaney, the Partnership to Build America Act would:
• create a large-scale infrastructure financing capability with zero federal appropriations;
• create significant jobs in the short-term and helps U.S. competitiveness in the long-term;
• allow for repatriation while ensuring U.S. corporations’ tax savings are truly invested in the U.S. economy to grow quality jobs;
• push project-selection decisions down to state and local governments who have to have “skin in the game;” and
• encourage and create a framework for growth in public-private partnerships.