U.S. Sen. John Hoeven (R-ND) is leading the effort to help state and local governments fund repairs to their outdated infrastructure by proposing legislation that would offer relief with a combination of a new tax credit and tax-exempt bonds to fund projects.
The Move America Act would give state and local governments more flexibility to finance road, bridge, transit, port, rail, airport, water and sewer, and broadband infrastructure projects at lower costs through public-private partnerships.
Under the bill, which Hoeven introduced with U.S. Sen. Ron Wyden (D-OR), states would be able to issue tax-exempt Move America Bonds to private entities, with bond allocations based on the population sizes of states. Move America Tax Credits, meanwhile, would allow smaller states to trade bond allocations for federal tax credits at a 25 percent rate.
The Joint Committee on Taxation estimates that Hoeven’s Move America Act could leverage $8 billion in federal investments into $226 billion in bond authority or $56 billion in tax credits over 10 years. The American Society of Civil Engineers estimates that $2 trillion in additional infrastructure investment will be needed over that period to support commerce and growth.
“Our nation’s infrastructure serves as a foundation of our economic security and competitiveness,” Hoeven said. “Congress continues working with the administration on an infrastructure package to revitalize America’s infrastructure, and Move America should be a part of this effort, providing a cost-effective complement to public funding. In fact, the administration’s budget proposal supports tax-exempt financing for infrastructure.”
Move America Bonds would be treated as exempt facility bonds. Current government ownership requirements for exempt facility bonds would be waived under the bill if facilities are generally available for public use.
“Through tax-exempt bonds and tax credits, our legislation brings a sustainable and flexible approach to help states build vital projects, like permanent flood protection, roads, bridges, airports and information networks,” Hoeven said.
Move America Tax Credits, meanwhile, could be used to provide direct investments in projects, to bring down capital costs and to grow investment pools. States could also use these tax credits to support state infrastructure banks or revolving funds, providing more opportunities for public-private partnerships on non-revenue infrastructure projects.