U.S. Sen. Deb Fischer (R-NE) said the Build USA Act she introduced this week would give the nation’s transportation system a jump start by allowing states to get road and bridge projects that had been delayed by federal regulations or a lack of funding up and running again.
“Build USA allows states and localities to begin building vital infrastructure projects,” Fischer told the Ripon Advance. “It also provides more policy options for states looking for ways to finance projects and address delays caused by federal approval procedures.”
The Build USA Act would create an American Infrastructure Bank that would loan out funds to states for core infrastructure projects. States would have the option to remit federal transportation dollars not being used, apply for a transportation project loan through the bank, or both.
The legislation comes as Congress faces a May 31 deadline to reauthorize federal transportation funding. A short-term extension is likely given that the Highway Trust Fund is projected to run out of money by summer.
“The American Infrastructure Bank is not meant to serve as a solution to funding the shortfall in the highway trust fund – something Congress must address with a sustainable and long-term solution,” Fischer said. “Rather, the bill takes a long-term approach at the entire transportation system and why projects are stalled.”
States often face challenges in completing critical transportation projects in a timely manner and within budget. Procedural delays and cost increases related to federal environmental permitting, procurement and materials requirements and design approvals, even for minor changes to project designs, are commonplace.
The Build USA plan would allow states to enter into three-year agreements with the infrastructure bank. States remitting federal transportation funds would receive 90 percent of the remitted money for core infrastructure projects. In exchange for offering the bank 10 percent of their federal dollars, states would assume oversight authority to ensure their projects complied with federal regulations.
“Build USA would delegate authority to states so that they can approve environmental, construction and design aspects of infrastructure projects. This would avoid delays associated with federal approval procedures,” Fischer said.
Repatriated corporate dollars would be used to capitalize the bank and fund core infrastructure loans. The three-year repatriation is expected to generate $30 billion for the bank, which would have a bi-partisan board.
Fischer, who chairs the Senate Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety and Security, said her innovative model was successful in Nebraska and should be utilized on a national scale.
Local officials in Nebraska have been using a federal funds purchase program, where local governments returned federal transportation dollars to the state Department of Roads in return for state transportation dollars at 80 cents on the dollar. Projects built through the program include a bridge revitalization in Buffalo County and a major arterial street project in South Sioux City, Fischer said.
Fischer cited one Omaha transportation project as an example of what can happen when a project becomes entangled in federal requirements. That minor “S” curve project has been delayed almost four years, and the price tag has risen to $10 million from $7 million due to delays associated with the environmental approval process.