THE POOR STA­TUS OF AMERICA’S

The Bond Buyer - - Front Page - By John ho­even and Ron Wy­den John Ho­even is a Repub­li­can Se­na­tor from North Dakota. Ron Wy­den is a Demo­cratic Se­na­tor from Ore­gon.

in­fra­struc­ture has been widely dis­cussed and well-doc­u­mented. To tackle this chal­lenge, it is vi­tal that Congress sup­port and pro­vide pub­lic fund­ing. .

The poor state of America’s in­fra­struc­ture has been well-doc­u­mented. The Amer­i­can So­ci­ety of Civil Engi­neers has awarded our na­tion a cu­mu­la­tive grade of D+ in its 2017 In­fra­struc­ture Re­port Card and es­ti­mates that the U.S. faces a $2 tril­lion in­fra­struc­ture fund­ing gap over the next ten years. This is a se­ri­ous pub­lic safety con­cern. More­over, it has se­vere im­pli­ca­tions for our econ­omy and our abil­ity to com­pete in the global mar­ket.

To tackle this chal­lenge, it is vi­tal that Congress pro­vide strong pub­lic fund­ing. That starts by en­sur­ing the sol­vency of our in­fra­struc­ture trust funds. But, this is a cri­sis that will re­quire all hands on deck – we must also em­power states and lo­cal gov­ern­ments to lev­er­age pri­vate in­vest­ment in pub­lic in­fra­struc­ture. Ex­pand­ing the tools avail­able to states will give lo­cal lead­ers the abil­ity to ad­dress their in­fra­struc­ture needs in which­ever way best meets the needs of their com­mu­nity. We re­cently in­tro­duced the Move America Act of 2017, which will do just this.

The Move America Act would un­lock bil­lions of dol­lars of in­vest­ment for state and lo­cal gov­ern­ments to build and re­pair America’s in­fra­struc­ture. The bill ex­pands tax-ex­empt pri­vate ac­tiv­ity bonds and cre­ates an in­fra­struc­ture tax credit, help­ing fi­nance projects through pri­vate-pub­lic part­ner­ships. This would help stretch tax­payer dol­lars by low­er­ing over­all costs while also giv­ing state and lo­cal gov­ern­ments flex­i­bil­ity to con­struct the in­fra­struc­ture they most need, such as roads, bridges, tran­sit, ports, rail, air­ports, wa­ter and sewer fa­cil­i­ties and broad­band.

Right now, ar­bi­trary tax bar­ri­ers pre­vent many ci­ties from even con­tem­plat­ing pub­lic-pri­vate part­ner­ships. Move America elim­i­nates th­ese bar­ri­ers, open­ing the door for ci­ties and states to pur­sue in­no­va­tive ar­range­ments to get the most value out of fund­ing dol­lars. The bill achieves this through an ex­pan­sion of tax-ex­empt fi­nanc­ing for pub­lic in­fra­struc­ture projects, re­gard­less of whether it is fi­nanced solely by the gov­ern­ment or through a pub­lic-pri­vate part­ner­ship. Each state re­ceives an an­nual al­lo­ca­tion of th­ese Move America Bonds, based on pop­u­la­tion, and can hold on to any un­used bond author­ity for up to five years. The bonds’ in­ter­est in­come is ex­empt from the al­ter­na­tive min­i­mum tax, pro­vid­ing full par­ity with other forms of state debt.

For states look­ing for in­no­va­tive ways to lev­er­age more pri­vate eq­uity, Move America Bonds can be traded in at a 25% rate for Move America Cred­its to at­tract eq­uity in­vestors. Modeled on the bi­par­ti­san Low In­come Hous­ing Tax Credit, Move America Cred­its can lower cap­i­tal costs, re­duc­ing or elim­i­nat­ing the need for ad­di­tional rev­enue streams like user charges or tolls. Al­ter­na­tively, states can elect to use Move America Cred­its to cap­i­tal­ize state in­fra­struc­ture banks, in­fra­struc­ture re­volv­ing funds or sim­i­lar en­ti­ties, pool­ing cap­i­tal to use for low-in­ter­est loans or grants to projects.

Th­ese tools are avail­able for use re­gard­less of who owns the project, mak­ing fi­nanc­ing, man­age­ment and leas­ing ar­range­ments sim­pler and more cost-ef­fec­tive. An up­front in­jec­tion of pri­vate cap­i­tal can speed up con­struc­tion start times and al­low gov­ern­ments to more quickly work through the back­log of in­fra­struc­ture projects. Risk-trans­fer to pri­vate par­ties can bring in­creased ef­fi­ciency to the de­sign, con­struc­tion and main­te­nance process, low­er­ing over­all project costs.

Mo­men­tum con­tin­ues to build within Congress to ad­dress this crit­i­cal need in a bi­par­ti­san way. While there is no doubt that we face many hur­dles, the Move America Act is a strong ex­am­ple of the com­mon ground we should seek. Our mea­sure will be paid for and lever­ages $8 bil­lion in fed­eral in­vest­ment into $226 bil­lion of bond author­ity or up to $56 bil­lion over 10 years in tax cred­its, ac­cord­ing to the Joint Com­mit­tee on Tax­a­tion.

In­fra­struc­ture in­vest­ment cre­ates jobs and grows the econ­omy. Move America would pro­vide a cost-ef­fec­tive com­ple­ment to in­creased pub­lic fund­ing. We are work­ing to en­sure the Move America Act is part of any in­fra­struc­ture pack­age ad­vanced by Congress.

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