Washington Waves: December 25, 2017
Washington, D.C.—Opponents of a provision they warned could kill waterways projects and other infrastructure work across the nation welcomed news that it failed to make it into the version of a sweeping tax bill now headed to President Donald Trump’s desk.
“We’re extremely pleased that the final legislation keeps the tax-exempt status for PABs,” said Kurt Nagle, president and CEO of the American Association of Port Authorities, using the acronym for private activity bonds.
Working with its member ports, AAPA helped lead an effort to point out the negative impact of the provision to both policymakers and the public.
“Public port authorities throughout the country are investing billions of dollars in needed infrastructure improvements,” Nagle said, describing PABs as a significant source of financing for those projects.
“It was estimated that ports would have had to pay approximately $19 million in extra debt service costs for every $100 million borrowed had the PAB tax exemption been lost.”
Projects would have been delayed and even killed, he said.
U.S. Rep. Sam Graves (R-Mo.), chairman of the House Subcommittee on Highways and Transit, also touted the success in retaining the tax-exempt status of PABs in the White House-bound Tax Cuts and Jobs Act.
“Private activity bonds are important financing tools in a wide range of projects from hospitals and schools to airports and local water facilities,” Graves said.
“There are currently well over $10 billion in PABs issued for a variety of projects across the country. The demand for them is there.”
Graves authored a letter to House and Senate leaders emphasizing the significance of PABs that was co-signed by 38 lawmakers from across the nation.
AAPA also singled out another “win” in the continuation of the existing level of wind energy production tax credits for ports on the East, Gulf and West coasts as well as the Great Lakes that handle wind energy components.
It also had urged keeping the tax exemption on advance refunding of municipal bonds but conceded the final version of the bill eliminates that exemption, which, AAPA said, could boost the costs of public infrastructure investments.
Trump is expected to sign the bill, viewed as the first major legislative victory of his presidency, in the coming days.
Senate Freight Hearing
Inland waterways infrastructure needs of the nation drew major attention during a Senate hearing on “Freight Movement: Assessing Where We Are Now And Where We Need To Go.”
Tim Parker, chairman of Parker Towing Company of Tuscaloosa, Ala., who also serves as chairman of the board of directors of Waterways Council Inc., spoke to the Senate Subcommittee on Transportation and Infrastructure about recent emergencies involving locks and dams built in the 1920s that are in critical need of modernization to maintain American competitiveness.
“Currently, the inland waterways have a portfolio of 25 high-priority inland projects either under or awaiting construction,” Parker said.
“At the current rate, many of these projects will not even begin construction in the next 20 years.”
He urged lawmakers to use an infrastructure package that is expected to be introduced early next year by the Trump administration or the Water Resources Development Act of 2018 to change the cost-share for construction of inland waterways projects as Congress did for funding construction of certain deep-draft ports.
“This important change would not only maintain, but advance the nation’s competitiveness and keep America leading at the top,” Parker said.