President Biden signed the Infrastructure Investment and Jobs Act into law on November 15, 2021. The massive bill introduces more than $550 billion in new infrastructure spending, coupled with reauthorizations of existing programs, for a total of $1.2 trillion of federal infrastructure investment over the eight years.

Background

Federal decisionmakers had long seen infrastructure investment as an area of potential bipartisan agreement. Throughout the summer of 2021, a cohort of Senators from both parties ironed out the details for the bill, which at the time was commonly referred to as the “Bipartisan Infrastructure Framework” or “BIF.” The Senate passed the package on August 10, 2021, but it stalled in the House for three months while discussions on the Build Back Better agenda continued between chambers. The House passed the Senate’s amended version of the bill on November 5, 2021.

Why We Care

The bill introduces an historic amount of federal infrastructure investment that will likely spur additional financing opportunities to leverage additional improvements. Title IV of the bill also enacted several expansions to qualified private activity bonds (PABs), including those for:

• Qualified Broadband Projects: Section 80401 adds broadband as an allowable use for private activity bonds (PABs) based on the bipartisan Rural Broadband Financing Flexibility Act (S.1676). This would allow states to issue PABs to finance broadband deployment, specifically for projects in rural areas where a majority of households do not have access to broadband. These bonds will be subject to a state volume cap with a 75 percent exemption for private projects. The cap will not apply for government owned projects. See Internal Revenue Code (IRC) section 142(n).
• Qualified Carbon Dioxide Capture Facilities: Section 80402 allows carbon capture and direct air capture (DAC) technologies to be eligible for PAB financing based on the bipartisan Carbon Capture Improvement Act (S.1829). Carbon capture removes carbon dioxide from an emissions stream at a power plant or industrial facility, reducing emissions from energy-intensive industries. See IRC section 142(o).
• Highway / Surface Freight Transfer Facilities: Section 80403 increases the current nationwide cap of tax-exempt highway or surface freight transfer facility bonds from $15 billion to $30 billion as proposed by the bipartisan BUILD Act (S.881). As of the date of enactment, $14,989,529,000 billion of the previous $15 billion cap had been issued or allocated. See IRC section 142(m).

NABL Stance

NABL never took a position on IIJA at-large but generally supports the inclusion of new financing tools made available to our communities. We continue to assist regulators in the implementation of the law and have submitted comments, which are available below, pertaining to specific provisions relating to qualified exempt facility bonds.

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