Delaney and Fitzpatrick Reintroduce Partnership to Build America Act for New Congress
WASHINGTON – Congressman John K. Delaney (MD-6) and Congressman Mike Fitzpatrick (PA-8) will reintroduce today the Partnership to Build America Act, bipartisan legislation to rebuild America’s infrastructure in a fiscally-responsible way.
The Partnership to Build America Act upgrades America’s crumbling infrastructure, which has received a D+ grade from the American Society of Civil Engineers by using a portion of the trillions of dollars trapped overseas. Instead of using appropriated funds, the Delaney infrastructure bill creates a $50 billion dollar infrastructure fund that is capitalized by selling bonds to private companies. In exchange for purchasing these bonds, the companies will be able to bring back a portion of their overseas earnings, one-time, tax free. The bill has secured some of the deepest bipartisan support in Congress.
“Rebooting America’s infrastructure will create good jobs, help our businesses grow for decades to come, improve our quality of life and make our communities safer. We can’t compete in a high-tech global economy with a 1960s infrastructure. Although Washington remains divided, combining infrastructure investment with corporate tax reform is a bipartisan solution that can bring both sides together,” said Rep. John Delaney (MD-6). “I thank Congressman Fitzpatrick for partnering with me on reintroducing this bill. The Partnership to Build America Act combines progressive and conservative economic principles to create an innovative framework that breaks the legislative gridlock. We filed the bill ahead of the President’s State of the Union to make it clear that new policy answers that bring both sides together are possible.”
“A 21st century economy requires a 21st century infrastructure. It’s time for leaders on both sides of the aisle to get creative. The Partnership to Build America Act is that opportunity. This bill provides an innovative way to finance hundreds of billions of dollars in infrastructure projects with no, new appropriated costs. I’m proud to work with Congressman Delaney on bipartisan legislation that strengthens our nation, rebuilds our roads, bridges, and waterways, and gets Americans back to work,” said Rep. Mike Fitzpatrick (PA-8).
The Partnership to Build America Act
The American Infrastructure Fund
- The Partnership to Build America Act creates the American Infrastructure Fund (AIF), a new entity to provide financing to state and local governments for new infrastructure projects.
- Transportation, energy, communications, water and education projects are eligible to receive AIF financing. Local governments would apply directly to the AIF for support.
- To encourage public-private partnerships 35% of AIF supported projects must have at least 10% of their financing be private debt or equity.
- The AIF will 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.
Infrastructure Bond Sale
- Rather than using appropriated funds out of the federal budget to establish the American Infrastructure Fund, the Partnership to Build America Act uses a bond sale.
- AIF bonds would have a 50 year term, pay a 1% fixed rate return and would not be guaranteed by the U.S. government. These bonds are not intended to be a good investment on their own and are transferable after purchase.
- To incentivize companies to purchase these bonds, U.S. companies would be allowed to repatriate a certain amount of their overseas earnings tax free for every $1.00 they invest in the bonds. This multiplier will be set by a “reverse Dutch auction” – which allows the market to set the rate, ensuring that enough funds are raised to capitalize the fund.
- Assuming a 1:4 ratio is set by the auction; a company will be able to repatriate $4.00 tax-free for every $1 in AIF bonds they purchase.
- Creates a new large-scale infrastructure solution with zero appropriations.
- New infrastructure projects will create significant middle-class jobs in the short-term and make the national economy more competitive in the long-term.
- Allows for profits held overseas to be brought back to the United States, encouraging domestic investment and economic growth.
- Encourages and creates a framework for growth in public-private partnerships.