While details on President Trump’s $1 trillion Infrastructure plan may still be weeks away, two senators, Mark R. Warner (D-Va.) and Roy Blunt (R-Mo.), have introduced a bipartisan infrastructure funding plan.
The Building and Renewing Infrastructure for Development and Growth in Employment (BRIDGE) Act is designed to address a national investment shortfall in maintaining and improving the transportation network. The plan seeks to provide a financing tool to state and local governments and spur infrastructure projects and create new jobs.
“As we mark the fifth annual Infrastructure Week, we must think boldly and make real investments in our nation’s infrastructure rather than kick the can down the road with short-term fixes,” said Sen. Warner in a press release. “The BRIDGE Act offers a bold, bipartisan solution to help address our infrastructure needs by incentivizing private investment and pairing it with public resources.”
The bill proposes establishing a financing authority – similar to a bank – called the Infrastructure Financing Authority, which would provide loans and loan guarantees to help state and local governments fund the most economically viable projects. The government would provide the bank with initial seed funding of up to $10 billion. This $10 billion could be used to make possible $300 billion or more in total project investment, according to the authors of the bill, and is structured to be self-sustaining over time, without requiring additional federal funding.
The IFA would be a government-owned entity that would operate independently of any federal agency, according to a BRIDGE Act Summary. It would be led by a chief executive officer and board of directors consisting of seven voting members appointed by the executive and legislative branches of government.
Projects submitted to the IFA board would undergo analysis to show a clear public benefit and meet economic, technical and environmental standards. They must also prove that they are backed by a dedicated revenue stream and the project must be at least $50 million and be of national or regional significance to qualify.
In order to stay self-sufficient, the IFA would establish fees for loans and loan guarantees. These fees would be in the form of application fees or transaction fees and could include an interest rate premium associated with the load or load guarantee. The initial $10 billion in funding would also earn interest to offset the cost of loans to the federal government and to cover administrative costs.