Various infrastructure funding bills rolled out by House members

While the talk about the White House plan to roll out a $1 trillion infrastructure investment plan has not turned into action yet, that is not holding back some members of Congress from getting the ball rolling by any stretch.

That was made clear in various forms of legislation introduced in recent weeks, with each having an objective of upping the national infrastructure ante, albeit with varying approaches.

The busiest member of Congress on that front was Rep. John Delaney (D-MD), whom introduced two bipartisan, infrastructure-related bills.

The first one, which he co-authored with Rep. Rodney Davis (R-Ill.), is entitled the “Partnership to Build America Act,” whose key component is to create a new American Infrastructure Fund (AIF) that would finance state and local infrastructure projects, which would be funded through a one-time bond sale to United States corporations interested in repatriating a portion of their international earnings.

According to the representatives, various projects, including transportation, energy, communications, water, and education, are eligible to receive funding through the AIF. And to encourage public-private partnerships, 35 percent of AIF-supported projects need to have at least 10 percent of their financing be private debt or equity, with the AIF to be capitalized by $50 billion in infrastructure bond sales and leveraged at a 15:1 ratio to provide up to $750 billion in loans or guarantees.

The concept of dedicating funds from corporate tax reform to pay for surface transportation (also known as repatriation) has been floated around for Congress in various forms of infrastructure-based legislative proposals in recent years so it does not come as a major surprise to see it bandied about once again.   

The second piece of legislation Delaney is directly involved in is the Infrastructure 2.0 Act with Rep. Ted Yoho (R-Fl.). This bill aims to create the AIF, as well as provide additional revenues to expand the Highway Trust Fund (HTF) through “more comprehensive international tax reform,” which is an approach Rep. Delaney initially rolled out in 2013.

Under this bill, existing overseas profits accumulated by U.S. multinational corporations would be subject to a mandatory, one-time 8.75 percent tax, replacing deferral option and current rate of 35 percent, while also: allocating $120 billion to the HTF to meet its funding gap at increased levels for six years; $50 billion to capitalize the AIF; $25 million for a pilot program to create regional infrastructure accelerators; and free up an estimated $2 trillion in overseas funding to return to the U.S. to spur private sector reinvestment and growth.      

The bill also pushes for the establishment of a bipartisan and bicameral commission charged with finding and developing a solution for the permanent solvency of the HTF. Taxes for the HTF have remained at current levels, 23.4 cents for diesel and 18.4 cents per gallon of gasoline since October 1993. What’s more, diesel taxes represent about 90 percent of Highway Trust Fund (HTF) net revenues.

“Our infrastructure solution delivers a triple bottom-line: it creates good-paying jobs, boosts our long-term economic competitiveness and improves the quality of life of millions of people,” said Rep. Delaney in a statement. “There is a lot of interest on both sides of the aisle in infrastructure and our solution bridges the partisan gap. Our broken tax code and our crumbling infrastructure are two problems that are dragging down productivity and economic growth and tackling these two problems at once would be completely transformative for our long-term trajectory. I’m proud to work with Congressman Davis and Congressman Yoho to rebuild America and build support on both sides of the aisle to get a smart bipartisan deal done.”

A separate piece of infrastructure-related legislation introduced last week by Rep. Peter DeFazio (D-OR), ranking member of the House Committee on Transportation and Infrastructure, entitled “Investing in America: A Penny for Progress Act,” looks to provide around $500 billion in infrastructure investment.

As for how this bill would be funded, it would authorize Invest in America 30-year Treasury bonds on an annual basis through 2030, which would mark a 30 percent increase over current funding levels, with an additional $630 million provided for formula and discretionary grant programs in its first year, as well as $3.2 billion for the Surface Transportation Block Grant Program and $85 million for Transportation Infrastructure Finance and Innovation Act (TIFIA), which provides Federal credit assistance in the form of direct loans, loan guarantees, and standby lines of credit to finance surface transportation projects of national and regional significance.

DeFazio’s office explained that this bill is estimated to increase the gas and diesel user fees, or taxes, by roughly 1 cent per year, coupled with a hard cap of 1.5 cents per share. Going back to 2013, DeFazio said that 17 states have enacted legislation geared to increase state fuel taxes to be invested into infrastructure.

Katie Thomson, head of the Transportation Industry Group at Washington, D.C.-based law firm Morrison & Foerster. Thomson is the only person to serve as both general counsel at the U.S. Department of Transportation and chief counsel at the Federal Aviation Administration, said that it is encouraging to see various bipartisan infrastructure funding proposals, while adding more work needs to be done.

“In general, they are proposing a concept – repatriation of corporate overseas earnings -- that was first floated several years ago,” she told LM. “Because numerous members of Congress have expressed support for the concept, I anticipate that this latest bipartisan proposal will be well received.  Having said that, the proposed bills do not grapple with or attempt to resolve the long-term funding needs of the system.  So, the proposals are only part of the solution.  Congressman DeFazio’s transportation funding bill purports to address transportation funding needs on a longer-term basis by allowing state and local governments to sell bonds to fund surface transportation projects and indexing the gas tax to inflation subject to certain limits.  It would be ideal if the concepts of international tax reform and additional funding measures could be considered on the same track as part of a comprehensive, long-term solution.”