WASHINGTON – U.S. Senators Roger Wicker, R-Miss., and Michael Bennet, D-Colo., today reintroduced the “American Infrastructure Bonds Act.” This legislation would create a new class of “direct-pay” taxable municipal bonds, which are expected to boost investment in infrastructure and other public projects by providing affordable access to the large taxable bond market.
“Letting local leaders make decisions for their own communities is a great way to support economic growth,” Wicker said. “The American Infrastructure Bonds Act would improve upon previous efforts to expand options for public financing and provide support for vital projects.”
“The Bipartisan Infrastructure Law was an important step to rebuild America’s roads and bridges, but there’s a lot more we need to do. We have to continue to invest in 21st century American infrastructure to build an economy that grows for everyone. The American Infrastructure Bonds Act is a bipartisan proposal to attract greater support for infrastructure projects across the country – especially in rural and underserved communities,” Bennet said.
This legislation would allow state and local governments to issue taxable bonds for any public expenditure that would be eligible to be financed by tax-exempt bonds. These bonds could be used to support a wide range of infrastructure projects, including roads, bridges, water systems, and broadband internet.
The bonds would be modeled as a “direct-pay” taxable bond, with the U.S. Treasury paying a percentage of the bond’s interest to the issuing entity to reduce costs for state and local governments. These payments would be issued for projects at 28 percent of the bond’s interest.
The senators’ proposed “American Infrastructure Bonds (AIBs)” would improve upon the model of “Build America Bonds (BABs)” that were issued after the 2008 financial crisis to attract more investment in public infrastructure.
In addition to Wicker and Bennet, this legislation is cosponsored by U.S. Senators Katie Britt, R-Ala., Chris Coons, D-Del., Catherine Cortez Masto, D-Nev., Tim Kaine, D-Va., Mark Kelly, D-Ariz., and Debbie Stabenow, D-Mich.
The full text of the legislation can be found here.