A bipartisan Senate 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.
With U.S. Department of Transportation (USDOT) approval, state and local governments can use PABs to issue tax-exempt debt for qualified highway or surface freight transfer facilities. Less than $5 billion in PABs are under the current statutory cap.
Increasing the cap also would increase the number of tax-exempt bonds USDOT can approve for these projects by $5.8 billion. In addition, state and local governments can enter into new public-private partnerships to finance surface transportation projects.
The bill, the Building United States Infrastructure and Leveraging Development (BUILD) Act, was introduced by Sens. John Cornyn (R-TX) and Mark Warner (D-VA).
“As more and more of our infrastructure requires critical improvements, it’s imperative we find ways to reinvest in our roads and rails without the burden falling to taxpayers,” Cornyn said. “This bipartisan bill will help finance improvement projects through public-private partnerships, resulting in minimal cost to taxpayers with maximum impact on America’s roads, bridges, and rails.”
The bill will increase the nation’s competitiveness and close the infrastructure gap, Warner said.