U.S. Senators John Cornyn (R-TX) and Mark Warner (D-VA) today introduced the Building United States Infrastructure and Leveraging Development (BUILD) Act, a bill that would lead to additional investment in infrastructure projects by allowing state and local governments to enter into additional public-private partnerships to finance surface transportation projects. This bill would raise the federal statutory cap on Private Activity Bonds (PABs) issued by or on behalf of state and local governments for highway and freight improvement projects from $15 billion to $20.8 billion, increasing the amount of tax-exempt bonds the U.S. Department of Transportation (USDOT) can approve for these projects by $5.8 billion.
“This bill delivers on our collective desire to reinvest in America’s infrastructure, and expands one valuable tool in the toolbox,” said Sen. Cornyn. “It will help the Administration finance additional highway and freight improvement projects through public-private partnerships, resulting in minimal cost to taxpayers with maximum impact on U.S. highways and freight corridors.”
“Private Activity Bonds have served as an engine for leveraging private investment in Virginia’s roads and bridges, helping to finance major projects such as the I-495 HOT lanes and other key infrastructure ventures,” said Sen. Warner. “This legislation will allow for expanded use of this proven economic tool and, coupled with other programs such as a financing authority that would be created through passage of my BRIDGE Act (S. 1168), we can attract billions of dollars of additional investment that will help renew our nation’s infrastructure and keep us competitive in the global economy.”
Private Activity Bonds (PAB): PABs allow state or local governments to issue tax-exempt debt, with approval from USDOT, for qualified highway or surface freight transfer facilities. Less than $5 billion in PABs remain under the original statutory cap (set at $15 billion) and that amount is likely to be consumed in the very near future. This legislation would raise the statutory cap on PABs to $20.8 billion, thus enhancing the capacity to finance additional projects with private investment.