For more information on the P3 Panel, click here. http://transport.house.gov/news/documentsingle. aspx? Delaney's infrastructure bill, the Partnership to Build America Act is one of the largest pieces of bipartisan legislation in Congress and encourages the expansion of public-private partnerships in the United States. The American Infrastructure...
Rep. John Delany, D-Md., news release, April 8, 2014
Congressman John K. Delaney (MD-6) spoke at Tuesday's House Committee on Transportation & Infrastructure Special Panel
on Public-Private Partnerships. The hearing, titled "The International
Experience with Public-Private Partnerships" included testimony by
Delaney, along with experts on global trends in public-private
partnerships in infrastructure. For more information on the P3 Panel, click here.http://transport.house.gov/news/documentsingle.aspx?DocumentID=367010
infrastructure bill, the Partnership to Build America Act (H.R. 2084)
is one of the largest pieces of bipartisan legislation in Congress and encourages the expansion of public-private partnerships in the United States. The bill currently has 31 Republican and 30 Democratic cosponsors in the House. The American Infrastructure Fund, created by Delaney's bill, is effectively a public-private partnership with private capital providing the initial $50 billion
by purchasing infrastructure bonds. Delaney's bill requires 25% of
projects be public private partnerships, for which at least 20% of the
financing is private debt or equity.
For more information on the Partnership to Build America Act, click here.
Congressman Delaney submitted the following statement to the panel:
Chairman Duncan, Ranking Member Capuano, and esteemed colleagues on the P3 Panel:
you for inviting me today to speak about public-private partnerships,
the international experience, and my legislation to create a large-scale
infrastructure finance entity to finance infrastructure projects here
in the United States.
today's subsequent panelists will no doubt explain in great detail,
other countries have taken the lead in using public-private partnerships
to build their infrastructure, and we in the U.S. are just starting to
Public-private partnerships can be used to provide a much needed
capital boost to fund our infrastructure projects in certain
circumstances. But in looking at the international experience around
P3s and private capital held overseas alongside our infrastructure needs
here at home, I thought it might be productive to highlight my
legislation which uses a public-private model to provide up to $750 billion of infrastructure financing for our infrastructure projects.
My bill, H.R. 2084: the Partnership to Build America Act, creates a $50 billion
infrastructure financing entity that isn't capitalized in the
traditional way, by the government putting in the money. Instead this
entity, called the American Infrastructure Fund, is effectively created as a public private partnership, with the $50 billion of capital being put in by the private sector in exchange for a one-time tax break. Specifically, the American Infrastructure Fund
would sell 50-year bonds that pay a fixed interest rate of only one
percent. The bonds in and of themselves would be a bad investment, but
U.S. based multinational corporations will be incentivized to buy them
because for every dollar of bond they purchase, they will be able to
repatriate a certain amount of their overseas earnings tax free. That
multiplier of how much they repatriate compared to bonds purchased will
be determined by auction, but we expect that ratio to be around 4:1.
The company can then sell the bonds--which you'll remember are a bad
investment on their own--at a huge loss. If they sell them for around 20 cents
on the dollar, then the "effective tax rate" of their loss on the bonds
over the tax free repatriation will be in the 10%-15% range. This
brings about $200 billion back from overseas into the U.S. economy in addition to the capitalizing the American Infrastructure Fund.
The $50 billion of capital in the American Infrastructure Fund can be safely leveraged at a 15:1 ratio to provide $750 billion
of infrastructure financing, mostly in terms of low-cost bond insurance
for muni-bonds, but also for low-cost loans. Access to low cost
capital is important for states and municipalities to build their
infrastructure, and expanding this access will pave the way for the
increased infrastructure investment we desperately need. Additionally,
the Partnership leverages private capital by encouraging public private
partnerships by requiring a certain percentage of the projects to be
The legislation is very bipartisan. In the House, we have 31 Republicans and 31 Democrats on the bill. In the Senate,
they have 6 Democrats and 7 Republicans. The bill is also supported by
a bipartisan group of think tanks and other stakeholders. As we look
for ways to move the Surface Transportation Reauthorization forward and
ensure solvency for the Highway Trust Fund, we should do so
from the starting point that we need to INCREASE our infrastructure
investment, not merely maintain the status quo which has left our
infrastructure in its current deficient state. The bipartisan
Partnership to Build America Act is teed up to do just that.
I know that two cosponsors of the bill are on this panel, Congressman Sean Patrick Maloney and Congressman Scott Perry. I'd like to end by thanking them for their support on this legislation, and thanking the panel for allowing me to testify.
TNS 30TacordaCheng-140409-4697012 30Ta