Deemed to be a “once-in-a-generation investment in our infrastructure,”[1] the Infrastructure Investment and Jobs Act (H.R. 3684) is expected to be signed into law by President Biden in the coming days, ending a nearly three month wait since the legislation was advanced by bipartisan effort of the U.S. Senate. Commonly referred to as the “Bipartisan Infrastructure Framework,” or BIF, the framework will introduce more than $550 billion in new infrastructure spending over the next five years while expanding eligible qualified private activity bonds. Most significantly, these qualified private activity bond expansions include: (1) broadband projects; (2) carbon capture technology; and (3) highway and surface freight transfer facilities.
States will soon have access to more than $600 million to finance broadband deployment. Based on the Rural Broadband Financing Flexibility Act (S. 1676), a bipartisan bill introduced by U.S. Senators Maggie Hassan (D-NH) and Shelley Moore Capito (R-WV), states will soon be able to issue these private activity bonds to specifically target the more than 30 million Americans that either do not have access to internet or who live in areas where the broadband infrastructure is incapable of providing minimally acceptable internet speed. While these bonds will be subject to a state volume cap with a 75% exemption for private projects, the cap will not apply for government owned projects.[2]
Based on the bipartisan Carbon Capture Improvement Act (S. 1829), private activity bond financing will be available through the Bipartisan Infrastructure Framework to encourage the commercial deployment of carbon capture and direct air capture technologies. For the sake of the curious reader, carbon capture technologies reduce emissions from energy-intensive industries by capturing carbon dioxide at its source – usually at a power plant or industrial facility – while direct air capture technologies remove carbon directly from the atmosphere.[3] Private activity bond financing is essential for encouraging commercial deployment, reducing costs and further developing these technologies while promoting the continued sustainable use of key natural resources.
Further, as first proposed by the BUILD Act (S. 881), the Bipartisan Infrastructure Framework increases the current cap of tax-exempt highway or surface transfer facility bonds from $15 billion to $30 billion. Most significantly, the cap increase will allow state and local governments to pursue additional, mutually beneficial public-private partnerships to supplement future surface transportation projects – partnerships that likely would not have been possible considering $14,989,520,000 of the $15 billion had been issued or previously allocated.
The Infrastructure Investment and Jobs Act may be a “once-in-a-generation investment,” but its true value will come from expanding eligible qualified private activity bonds to leverage private sector investment in U.S. infrastructure programs. These qualified private activity bond expansions – specifically in the areas of broadband deployment projects, carbon capture technology, and highway and surface freight transfer facilities will allow states to address economic, social, and environmental challenges equitably and efficiently.
Authored by: John England and Jackson O’Brien (Law Clerk)
[1] UPDATED FACT SHEET: Bipartisan Infrastructure Investment and Jobs Act, (Aug. 2, 2021), available at https://www.whitehouse.gov/briefing-room/statements-releases/2021/08/02/updated-fact-sheet-bipartisan-infrastructure-investment-and-jobs-act/
[2] See H.R. 3684, § 80401, available at https://www.congress.gov/117/bills/hr3684/BILLS-117hr3684enr.pdf#page=902
[3] See S. 1829, available at https://www.congress.gov/bill/117th-congress/senate-bill/1829
