Hagel, Dodd Introduce Bill to Revitalize America’s Infrastructure

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Hagel, Dodd Introduce Bill to Revitalize America’s Infrastructure
Bill Would Help Make Roads, Bridges, Transit Systems, and Water Safer and Spur Economic Growth

August 1st, 2007 - Washington, D.C. - Responding to a looming crisis that jeopardizes the prosperity and quality of life of all Americans, Senators Chuck Hagel, R-Neb., and Chris Dodd, D-Conn., Chairman of the Senate Committee on Banking, Housing and Urban Affairs, today introduced a measure to revitalize, repair, and replace America’s aging and crumbling roads, bridges, transit systems, and water treatment facilities. Two dramatic headlines in recent weeks have highlighted the escalating problem. Two weeks ago, an 83-year-old steam pipe burst in midtown Manhattan, releasing asbestos laden particles and causing widespread damage. Media reports have also recently questioned whether contaminated drinking water near Camp Lejeune in North Carolina, may have exposed families in the area to high levels of dangerous chemicals.

“The current infrastructure in our country is wholly inadequate to handle the demands of a 21st Century economy. We see our ports backed-up by expanding international trade, our rails overloaded by our increasing energy demands and our highways hopelessly clogged by traffic. We run the risk of being left behind by our international competitors if we do not begin to modernize our national infrastructure. It will require a huge financial commitment to modernize our national infrastructure. The legislation we are introducing establishes a new system through which the federal government can finance infrastructure projects by leveraging private and public capital to fund large projects that are vital to our country. This legislation provides a new model for prioritizing the building and maintenance of our national infrastructure,” Hagel said.

“The 21st century holds great promise for our nation. But you can’t journey to a brighter tomorrow by relying on yesterday’s infrastructure,” said Dodd. “This measure can help rebuild our roads, bridges, transit and water systems, improve our quality of life, and spur jobs and economic growth. By investing today, we can minimize costs down the road and provide a brighter, more secure future for all Americans.”


According to the American Society of Civil Engineers, the current condition of our nation’s major infrastructure system earns a grade point average of D. The average age of drinking water and wastewater systems range in age from 50 to 100 years in age. According to the Texas Transportation Institute, the average traveler is delayed 51.5 hours in the nation’s 20 largest metropolitan areas. The delays range from 93 hours in Los Angeles to 14 hours in Pittsburgh. Combined these delays waste 1.78 billion gallons of fuel each year and waste almost $50.3 billion in congestion costs.

The bill, the National Infrastructure Bank Act of 2007, would streamline the process by which national infrastructure projects are targeted. It would create an independent national bank that would identify, evaluate and help finance infrastructure projects of substantial regional and national significance. Infrastructure projects under the Bank’s jurisdiction would include publicly-owned mass transit systems, roads, bridges, drinking water and wastewater systems, and housing properties.

The Dodd-Hagel legislation follows two reports released by the Center for Strategic and International Studies (CSIS) in 2005 and 2006 that highlighted the urgent need for a national plan and investments to improve infrastructure needs across the nation. Felix G. Rohatyn and Senator Warren Rudman were Co-Chairmen of the CSIS Commission on Public Infrastructure.

“Senators Dodd and Hagel do a great service to our country by introducing the National Infrastructure Bank Act,” said Rohatyn and Rudman. “This bipartisan legislation can reverse decades of shortchanging our public infrastructure. By investing in our future, it will increase our national productivity and improve our standard of living.”

"Last year, Senators Dodd and Hagel signed on to a set of 'Guiding Principles for Strengthening America’s Infrastructure' developed by the Center for Strategic and International Studies (CSIS) Commission on Public Infrastructure," said CSIS President and CEO John Hamre. "These principles were established to recommend changes to rebuild America's decaying infrastructure. CSIS is proud to have helped stimulate this important initiative. The leadership of Senators Dodd and Hagel on this crucial issue will now will help the nation ensure future productivity and growth for our economy."


Possible Nebraska Projects that would qualify:


• Construction of the Heartland Expressway in South Dakota and Western Nebraska (~$664 million).

• Lincoln South Beltway (~$135 million)

• Antelope Valley (in Lincoln) Waterway relocation and revitalization (~$175 million).

• Construction of the Nebraska Highway 35 project between Norfolk and Sioux City, IA (~$300 million).

• A full expansion of I-80 to six lanes from Lincoln to Kearney (~$100 million).

• Construction of the new US-34 four-lane bridge over the Missouri river between Bellevue, NE and Mills County, IA (~$80 million).





A summary of the legislation and a list of supporters is below:



NATIONAL INFRASTRUCTURE BANK ACT OF 2007
Senator Christopher J. Dodd and Senator Chuck Hagel

OVERVIEW

The Dodd-Hagel National Infrastructure Bank Act of 2007 is a bipartisan measure that addresses the critical needs of our nation’s major infrastructure systems. The legislation establishes a new method through which the Federal government can finance infrastructure projects of substantial regional or national significance more effectively with public and private capital.

THE PROBLEM

According to the American Society of Civil Engineers, the current condition of our nation’s major infrastructure systems earns a grade point average of D and jeopardizes the prosperity and quality of life of all Americans.

According to the Federal Transit Administration, $21.8 billion is needed annually over the next 20 years to maintain and improve the operational capacity of transit systems.

According to the Department of Housing and Urban Development, there are
1.2 million units of public housing with critical capital needs totaling $18 billion.

According to the Texas Transportation Institute, the average traveler is delayed 51.5 hours annually due to traffic and infrastructure-related congestion in the nation’s 20 largest metropolitan areas. The delays range from 93 hours in Los Angeles to 14 hours in Pittsburgh. Combined, these delays waste 1.78 billion gallons of fuel each year and waste almost $50.3 billion in congestion costs. Furthermore, the average delay in these metropolitan areas has increased by almost 35.3 hours since 1982.

According to the Federal Highway Administration, $131.7 billion and
$9.4 billion is needed respectively every year over the next 20 years to repair
deficient roads and bridges. The average age of bridges is 40 years.

According to the Environmental Protection Agency, $151 billion and $390 billion is needed respectively every year over the next 20 years to repair obsolete drinking water and wastewater systems. Drinking water and wastewater systems range in age from 50 to 100 years in age.

Current Federal financing methods do not adequately distribute funding
based on an infrastructure project’s size, location, cost, usage, or economic
benefit to a region or the entire nation.


THE DODD-HAGEL SOLUTION

The Dodd-Hagel legislation establishes the National Infrastructure Bank, which as an independent entity of the government is tasked with evaluating and financing capacity-building infrastructure projects of substantial regional and national significance. Infrastructure projects that come under the Bank’s consideration are publicly-owned mass transit systems, housing properties, roads, bridges, drinking water systems, and wastewater systems.

Modeled after the Federal Deposit Insurance Corporation, the Bank is led by a five member Board of Directors, each whom are appointed by the President and confirmed by the Senate.

The Bank’s Board has flexibility to develop an organization of professional civil service staff to carry out the Bank’s authorized activities. An Inspector General oversees the Bank’s daily operations and reports on those operations to Congress.

Infrastructure projects with a potential Federal investment of at least $75 million are brought to the Bank’s attention by a project sponsor (state, locality, tribe, infrastructure agency (e.g. transit agency), or a consortium of these entities.

To determine a level of Federal investment, the Bank uses a sliding scale method that incorporates conditions such as the type of infrastructure system or systems, project location, project cost, current and projected usage, non-Federal revenue, regional or national significance, promotion of economic growth and community development, reduction in traffic congestion, environmental benefits, land use policies that promote smart growth, and mobility improvements.

Once a level of investment is determined for a project, the Bank develops a financing package with full faith and credit from the government. The
financing package could include direct subsidies, direct loan guarantees, long-term tax-credit general purpose bonds, and long-term tax-credit infrastructure project specific bonds. The initial ceiling to issue bonds is $60 billion.

The Bank is tasked to report annually to Congress on the projects it reviews and finances. A public database is created to catalog what projects were funded and what financing packages were provided. The Bank is also tasked to report every three years on the economic efficacy and transparency of all current Federal infrastructure financing methods, and how those methods could be improved. After five years, the Government Accountability Office would be tasked with evaluating the Bank’s operations and efficacy.

The Bank does not displace existing formula grants and earmarks for infrastructure. It targets specifically large capacity-building projects that are not adequately served by current financing mechanisms.