Would help states and localities leverage private funds to build and repair outdated transportation, water, and energy infrastructure
(Washington, DC) – U.S. Senator Richard Blumenthal (D-Conn.) joined a bipartisan coalition of eleven Senators in introducing legislation to establish a new infrastructure financing authority to help states and localities better leverage private funds to build and maintain the nation’s outdated infrastructure. The Building and Renewing Infrastructure for Development and Growth in Employment (BRIDGE) Act helps to address the nation’s alarming investment shortfall in maintaining and improving our transportation network, water and wastewater systems and energy infrastructure. The legislation would provide an additional financing tool for states and localities to create new jobs here at home while also increasing our nation’s economic competitiveness.
“We can no longer patch and pray when it comes to our country’s roads and rails, failing to invest as we watch our infrastructure crumble and decay,” said Sen. Blumenthal. “This bipartisan bill will give states and cities a new, innovative financing tool that will pull billions in capital off the sidelines and put it to use where it’s needed most: rebuilding our infrastructure and putting construction workers back on the job. I urge my colleagues to consider this measure without delay so we can build the smart, safe and sufficient transportation network our economy demands.”
“The BRIDGE Act is not a ‘silver bullet’ to magically close America’s infrastructure gap, but this bipartisan proposal creates smart new tools to help our states and localities unlock billions of dollars in additional private investments at a time of very favorable interest rates,” said Sen. Warner. “The BRIDGE Act will create jobs, keep American businesses competitive, and expand U.S. commerce and trade. At a time when Congress has once again kicked the can down the road – passing 33 short-term patches instead of a long-term surface transportation bill – this legislation demonstrates that there is a real willingness to work together in a responsible, bipartisan way to get moving on important investment priorities."
The BRIDGE Act, introduced by lead sponsors Sens. Warner and Roy Blunt (R-MO), is cosponsored by Sens. Richard Blumenthal (D-CT ), Kirsten Gillibrand (D-NY), Lindsey Graham (R-SC), Amy Klobuchar (D-MN), Mark Kirk (R-IL), Claire McCaskill (D-MO), Roger Wicker (R-MS), Chris Coons (D-DE), Thom Tillis (R-NC). The legislation has the support of a wide variety of stakeholders and industry groups, including the Transportation Construction Coalition, American Association of Port Authorities, American Trucking Association, American Society of Civil Engineers, and the Bipartisan Policy Center.
America currently spends only two percent of its GDP on infrastructure – about half what it did 50 years ago. By comparison, Europe spends around 5 percent, and China spends 9 percent of GDP on infrastructure. According to the World Economic Forum’s Global Competitiveness Report, the United States currently ranks 12th among 144 developed countries in overall infrastructure compared to our global competitors.
The American Society of Civil Engineers (ASCE) estimates that we need to invest an additional $1.6 trillion in our nation’s infrastructure to bring it to a good state of repair. For example, as of 2012, of the more than 600,000 bridges in the U.S., 24.9 percent were either functionally obsolete or structurally deficient. Nationally, our bridges are, on average, 42 years old, and need an estimated $76 billion to repair and replace. Similarly, the average age of the 84,000 dams in the country is 52 years old, and the Association of State Dam Safety Officials estimates that aging and high-hazard dams require an investment of $21 billion to repair.
Likewise, the Federal Highway Administration reported in 2012 that approximately one-fifth of our nation’s major highways – 182,872 miles’ worth of road – were in poor or mediocre condition and in need of repaving or even more substantive repairs. According to ASCE, 42 percent of our major urban highways are congested, which costs the economy an estimated $101 billion in wasted time and fuel annually. Currently, the Federal Highway Administration estimates that $170 billion in capital investment would be needed on an annual basis to significantly improve conditions and performance.
To help address this funding shortfall for our nation’s transportation, water and energy infrastructure, the BRIDGE Act will establish an independent, nonpartisan financing authority to complement existing U.S. infrastructure funding. The authority would provide loans and loan guarantees to help states and localities fund the most economically viable road, bridge, rail, port, water, sewer, and other significant infrastructure projects. The authority would receive initial seed funding of up to $10 billion, which could incentivize private sector investment and make possible $300 billion or more in total project investment. The authority is structured in a way to make it self-sustaining over time without requiring additional federal appropriations.
The BRIDGE Act establishes independent, non-partisan operations:
Having project finance experts in-house will help states and localities go toe-to-toe with private sector partners to ensure that taxpayers are getting good value for our investments through public-private partnerships. The Authority would operate independently of existing federal agencies, led by a Board of Directors with seven voting members and a CEO, all of whom would be required to demonstrate proven expertise in financial management and be confirmed by a vote of the Senate.
The BRIDGE Act addresses current gaps in infrastructure financing:
The infrastructure financing authority would finance no more than 49 percent of the total costs of the project in order to avoid crowding out private capital. It would offer low-interest loans and loan guarantees, subject to modest additional fees that would allow the Authority to quickly become self-sustaining over time.
The BRIDGE Act includes broad eligibility for funding:
All modes of transportation infrastructure would be eligible to apply for financing, as well as projects in the water/sewer and energy transmission sectors. Projects would have to be at least $50 million in size, and be of national or regional significance to qualify.
The BRIDGE Act would include strong rural protections:
Five percent of the financing authority’s overall funding would be dedicated to projects in rural regions, and rural projects would only be required to be $10 million in size. In addition, this legislation would create an Office of Technical and Rural Assistance (OTRA) as well as regional infrastructure accelerator programs to help identify potential projects that could receive financing and build out a pipeline of viable projects. OTRA would also serve as a resource to localities seeking assistance in how to maximize public benefit of innovative financing tools.
The BRIDGE Act would streamline the permitting process for approved projects:
The legislation would direct the President to establish and update a permitting timetable for projects receiving financing through the infrastructure financing authority, and to coordinate all relevant agencies to conduct permitting reviews in concurrent fashion, thereby accelerating the approval process.