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Yesterday, Sens. John Kerry (D-Mass.), Kay Bailey Hutchison (R-Texas) and Mark Warner (D-Va.) introduced a bill that would establish an infrastructure bank to help repair, modernize and expand the nation’s transportation, water and energy infrastructure.

The Building and Upgrading Infrastructure for Long-Term Development (BUILD) Act would create an American Infrastructure Financing Authority (AIFA) to complement existing infrastructure funding. The AIFA would provide loans and loan guarantees for infrastructure projects. It would be independent of the political process and fund the “most important and economically viable” projects in the country, according to the legislation.

The federal government would provide the authority a $10 billion upfront investment, but then the AIFA would need to become self-sustaining. In addition, the authority would rely heavily on the private sector; AIFA could not provide more than 50 percent of a project’s cost and, in many cases, would provide less — just enough to bring in private investment, according to a press release.

Among the BUILD Act’s provisions:

• The AIFA board and chief executive officer would be appointed by the president, and all candidates would have to be confirmed by the Senate;
• An inspector general would oversee AIFA’s operations, an independent auditor would review the authority’s books and AIFA would submit an assessment of the risks of its portfolio, prepared by an independent source;
• Projects would have to cost at least $100 million and be deemed of national or regional significance;
• Projects would have to have a public benefit, meet economic, technical and environmental standards, and be backed by a dedicated revenue stream; and
• The AIFA board would be responsible for the ultimate approval of eligible projects.

The U.S. Chamber of Commerce and AFL-CIO both support the bill. The national infrastructure bank could leverage up to $600 billion in private investments, said chamber President and CEO Thomas Donohue in a prepared statement.

“While private capital is badly needed, we must also recognize our public financing mechanism is broken. Receipts to the Highway Trust Fund have fallen dramatically, funds are being diverted to non-infrastructure projects and the gas tax has not been increased in 17 years,” he said. “We need a multi-year highway bill to meet immediate needs, but we have to figure out a way to ensure we have adequate public investments for years to come.”