News & Publications

Infrastructure Law Alert – White House's Infrastructure Plan Leaked, New Details Revealed

On January 22, 2018, several media outlets reported that they had obtained a copy of the White House’s anticipated infrastructure plan. Although the administration has not yet verified the document, reliable press sources vouch for its validity as a draft of the plan that the administration says it will release publicly late in January. The draft provides a preview of the substance and policy principles that will likely be included in the final infrastructure plan.

The document identifies several new infrastructure funding programs that would collectively account for an as-yet unquantified appropriation, for which airports, passenger rail and transit, highways, water, and other infrastructure facilities would be eligible – subject to meeting new policy based funding requirements.

Half of the proposed appropriation would be dedicated to an Infrastructure Incentives Initiative, which would provide federal funding for up to 20 percent of the costs of projects that encourage significant non-federal investment and commitment of private revenue. The Infrastructure Incentives Initiative would promote competition for additional federal funding by encouraging project sponsors to raise new sources of revenue at the state, local or project level.

A quarter of the appropriation would be designated for a Rural Infrastructure Program, comprising both formula grants to and the states and additional performance-based grants. The remaining quarter would be split between several programs, including a Department of Commerce-run Transformative Projects Program, increased investment from various federal credit programs (including expansion of the popular U.S. DOT TIFIA and RRIF programs, WIFIA and a USDA Rural Utilities Lending Program), and a Federal Capital Financing Fund. The document also proposes several reforms to expand the use of private activity bonds (PABs) for infrastructure projects, including removing existing programmatic caps, increasing flexibility and adjusting rules that might increase PABs pricing competitiveness.

The document notably concludes with a broad list of “principles for infrastructure improvements,” organized by infrastructure sector and mode, which largely focus on streamlining the federal oversight role and providing project sponsors with greater flexibility, with a clear emphasis on increasing private investment in public projects. Among the principles listed are additional authority to toll on interstate highways, higher project cost thresholds to trigger federal major project requirements, requiring value capture financing in federally funded transit projects, enabling more efficient FAA oversight of non-aviation airport activities, and revisiting many requirements of the WIFIA program to encourage lending. To the extent the document it is an accurate reflection of current White House expectations, these principles may provide a useful reference for the parameters of future legislative negotiations over the proposed programmatic elements summarized above.

Kaplan Kirsch & Rockwell continues to closely monitor the White House roll out of its infrastructure plan. While we regard this draft with some circumspection (as one should with all leaked administration documents), its content is worthy of review given that it may be an early indication of the Administration’s forthcoming priorities.