On November 14, a bipartisan group of ten U.S. Senators, led by Mark Warner (D-VA) and Roy Blunt (R-MO), introduced legislation to create a new independent Infrastructure Financing Authority (IFA) to issue loans and loan guarantees for transportation, water, and energy transmission, storage and distribution infrastructure. S. 1716, titled the “Building and Renewing Infrastructure for Development and Growth in Employment” or “BRIDGE” Act, has been referred to the Senate Committee on Commerce, Science and Transportation for review. Other cosponsors are Lindsey Graham (R-SC), Kirsten Gillibrand (D-NY), Dean Heller (R-NV), Chris Coons (D-DE), Amy Klobuchar (D-MN), Roger Wicker (R-MS), Claire McCaskill (D-MO), and Mark Kirk (R-IL). The bill has attracted the support of many organizations, including the Transportation Construction Coalition, the American Trucking Association, the American Association of Port Authorities, and the Bipartisan Policy Center.
The Senators note that decreasing federal funding for infrastructure, combined with increasing demand, means that in the next five years alone the U.S. will fall $1.1 trillion short of necessary funding for our nation’s needs. The BRIDGE Act would initially seed the newly-created IFA with federal funding for loans and loan guarantees, but like the structure of the U.S. Export-Import Bank, the ultimate goal is a self-sustaining IFA “bank,” financing infrastructure projects with repayments and modest interest received. The loans themselves would have long maturity terms (up to 35 years) and use interest rates similar to U.S. Treasury securities. IFA and the Office of Management and Budget would work together to set additional fees or premiums to address any costs to the government. The IFA would generally focus on large projects (greater than $50 million in anticipated costs and of national or regional significance), but the bill does not exclude rural infrastructure projects, affording applicants a lower project-size threshold through a 5% budgeting set aside). Importantly, IFA would finance no more than 49% of the total cost of the project, as the Senators want to incent private investment in the ultimate project financing.
Senator Warner is the Chair of the Senate Commerce Committee’s Subcommittee on Surface Transportation and held a hearing about innovative financing in September to inform this legislation. While Congress is scheduled to depart for the year in mid-December, he is actively looking to move the legislation forward. He has said he is open to attaching this bill to any other legislative vehicle that is moving.