Bill expands PABs usage, provides funding for P3 projects.
- The Move America Act of 2019 would expand the use of tax-exempt private activity bonds,
- The bill would also create a new infrastructure tax credit to help fund infrastructure projects through private-public partnerships (P3s).
- A prior bill sponsored by both senators in 2017 died in Congress
Sens John Hoeven (R-ND) and Ron Wyden (D-OR) recently introduced the bipartisan Move America Act of 2019, S. 146 in the upper chamber. The bill, if passed, would expand the use of tax-exempt private activity bonds, as well as create a new infrastructure tax credit to help fund infrastructure projects through private-public partnerships (P3s).
The senators, in a statement noted that the bill is designed to leverage additional private investment in public infrastructure. They added that the use of private capital through P3s could supplement federal infrastructure spending since the investment can provide upfront capital financing, and the risk-transfer to the private sector can bring increased efficiency to the design, construction, and maintenance process.
Projects covered under the legislation include: airports; ports; transit; freight and passenger rail; roads; bridges; flood projects; inland and costal waterway improvements; wastewater and sewage facilities; and broadband infrastructure. According to the USDOT, $8.99 billion in PABs have been issued to date for P3 projects such as Transform 66 in Virginia, Maryland’s Purple Line and I-77 Managed Lanes in North Carolina.
States wishing to expand a variety of infrastructure projects would be provided with the option to use Move America Bonds. Each state would receive a bond allocation, based on population size. In addition to providing states and local governments with a new financing tool, Move America Bonds offers: flexible ownership and management arrangements; favorable tax treatment, including exemption from the Alternative Minimum Tax. Moreover, any unused volume cap can be carried over for up to five years.
According to the congressional Joint Committee on Taxation, the bill would provide $226 billion worth of bond authority over the next 10 years, or up to $56 billion in tax credits over 10 years.
Second time around
Organizations such as the Association for the Improvement of American Infrastructure (AIAI), American Association of State Highway Transportation Officials (AASHTO), American Road and Transportation Builders Association (ARTBA), and the US Chamber of Commerce have publicly supported the measure. But, it is unclear whether the bill will make it onto the floor.
Hoeven and Wyden in May of 2017 first introduced the Move America Act in the Senate. The bill, which came on the heels of President Donald Trump’s infrastructure plan, but the GOP-led chamber referred it to the Committee on Finance where it languished.
Congressional Democrats, following the November midterm elections, were poised to make infrastructure delivery a key component of their legislative agenda. Moreover, Trump earlier this year said that infrastructure was one area in which both parties could collaborate. The current shutdown however, makes it unlikely that any measure will advance to the Oval Office in the near term since neither the GOP nor the Democrats have been able to successfully negotiate its end.