The recent bridge collapse in Washington state is drawing some much needed attention to the United States’ aging infrastructure problem. In response to the nation’s growing concerns, a bipartisan group of U.S. Congressional delegates has co-sponsored legislation called “The Partnership to Build America Act.” The legislation would finance the rebuilding of our country’s water, transportation, energy, communications, and education infrastructure through the creation of a fund that uses overseas corporate earnings and public-private partnerships. “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,” says Rep. John Delaney (D-Maryland), who introduced the Act.
The legislation would create the American Infrastructure Fund (AIF), which would provide loans or guarantees to state and local governments to finance qualified infrastructure projects. States and local governments would be required to pay back the loan at a market rate determined by the AIF. In addition, the AIF would invest in equity securities for projects in partnership with states or local governments. The AIF would 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 one percent, and would not be guaranteed by the U.S. government. The Fund 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 must come from private capital using a public-private partnership model.
The American Society of Civil Engineers’ (ASCE) has come out as a strong supporter of The Partnership to Build America Act. The ASCE graded the nation’s infrastructure a D+ in its 2013 Report Card for America’s Infrastructure. The organization estimates a $3.6 trillion investment will be needed by 2020 to address the country’s infrastructure issues. To read more about the ASCE’s Report Card, click .
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