WHEREAS there is bi-partisan support for a bill currently being considered at the U.S. Senate and the U.S. House of Representatives known as the Build America Act; and
WHEREAS the bill could create a large-scale fiscally-responsible fund to jump-start infrastructure projects, most notably highway and transportation projects throughout the country; and
WHEREAS the summary of this bill is as follows:
- The legislation finances transportation, energy, communication, water, and education infrastructure projects through the creation of an infrastructure fund.
- The bill would capitalize a $50 billion American Infrastructure Fund (AIF), without an appropriation of federal funds. The legislation encourages U.S. companies to capitalize the fund by allowing them to repatriate some of their foreign earnings.
- The fund would provide guarantees or low-cost loans to state or local governments, nonprofit infrastructure providers, private parties, and public-private partnerships to finance qualified infrastructure projects. A State or local government must sponsor the project.
- Loans would be required to be paid back at a reasonable rate determined by the AIF and market forces, ensuring that recipients have “skin in the game.”
- State and local municipalities would be able to choose projects in which to invest, rather than the federal government.
- The AIF would be financed through the sale of $50 billion worth of infrastructure bonds which would have a 50-year term and pay a fixed interest rate of 1%.
- The bill encourages U.S. companies to purchase the bonds by allowing them to repatriate a portion of their overseas earnings without being subject to the corporate income tax for every $1 they invest in the bonds. This multiplier will be set through a competitive auction, allowing the market to drive down the total allowable repatriated income, minimizing the revenue loss resulting from the auction.
- The $50 billion in capital from the bonds will enable the AIF to secure a high credit rating, enabling the AIF to issue its own bonds, without the backing of federal general funds.
- The AIF would leverage the billions of dollars of infrastructure bonds, which could provide up to $750 billion in loan guarantees and financing authority to improve our nation’s infrastructure and result in job growth
- At least 35% of the projects financed through the AIF must be public-private partnerships for which at least 10 percent of a project’s financing comes from private capital, through a public-private partnership model.
NOW, THEREFORE, BE IT RESOLVED that CLUB 20 supports the concept behind the Build American Act and the concept of creating an infrastructure bank to address the declining state of the country’s transportation infrastructure.