New legislation introduced by ten U.S. senators called the BRIDGE Act acknowledges that the likelihood that Congress will increase the gas tax or other infrastructure grants is “bleak.” BRIDGE would create a new form of government sponsored entity (GSE) called the Infrastructure Financing Authority (IFA).
The proposed legislation, led by Virginia Senator Mark Warner, would create an authority that would operate independently of the federal government to make loans and loan guarantees to projects that have sufficient cash flows to repay the loans.
The key provisions of the BRIDGE Act:
· The BRIDGE Act includes broad eligibility for funding:
Projects would have to be at least $50 million in size, and be of national or regional significance to qualify. Five percent of the Authority’s overall funding would be dedicated to projects in rural regions, and rural projects would be required to be $10 million in size.
· The BRIDGE Act addresses current gaps in infrastructure financing
The Authority would finance no more than 49 percent of the total costs of the project in order to avoid crowding out private capital. Loans and loan guarantees would be subject to modest additional fees, which will allow the Authority to quickly become self-sustaining over time.
· The BRIDGE Act establishes independent, non-partisan operations:
Having project finance experts in-house will help states and localities go toe-to-toe with private sector partners to ensure that taxpayers are getting good value for our investments through public-private partnerships. The Authority would operate independently of existing federal agencies, led by a Board of Directors with seven voting members and a CEO, all of whom would be required to demonstrate proven expertise in financial management and be confirmed by a vote of the Senate.