Legislation Aims to Repair Public Buildings Needing Infrastructure Improvements

(Washington, DC) – Today, U.S. Senators Dean Heller (R-NV) and Bill Nelson (D-FL), released the following statements after introducing the “Public Buildings Renewal Act.” The bill enables communities to establish public-private partnerships (P3s) for needed public infrastructure improvements, such as in schools or public universities, by creating $5 billion in new private activity bonds for public buildings.

“The use of P3s has yielded enormous dividends across the nation in the form of transportation and infrastructure improvements. I want to see the same results closer to home, through overhauling our public buildings in the Silver State, especially those serving as pillars of education. Now is the time to use the success of P3s in the infrastructure industry as a financing model for Nevada's public buildings to repair cornerstones in our communities like public schools and libraries.  A commonsense solution like this helps move Nevada's public schools and universities‎ to the next level. By empowering the private sector to address these issues, innovation will ensure these projects are completed more cost effectively and efficiently,” said Senator Dean Heller.

“Public buildings such as schools, hospitals, courthouses and fire stations are the foundation of our local communities. This bill will make it easier for local governments to construct these buildings and better serve their communities,” said Senator Bill Nelson.

Background:

These newly created private activity bonds mentioned above would provide needed financing to cash-strapped states to construct government-owned buildings such as public schools, state colleges, post offices, libraries, prisons and courthouses. Currently, the use of P3s to deliver public buildings is extremely limited because unlike the transportation sector, public buildings are not eligible for private activity bonds. This inhibits public building P3s from combining tax exempt financing with private financing, resulting in an increased cost of financing. Nearly every U.S. transportation P3 project that has moved forward has utilized federal financing, 75% of which have accessed Private Activity Bonds.  Over $18 billion in transportation PPP projects have been undertaken since 2008 with a cost savings of nearly $5 billion. 

This bill will catalyze the use of P3s in public buildings just as PABs have for transportation.  By empowering the private sector to tackle these projects, the bill would make these projects more cost effective, stretching every public dollar further. Additionally, the bill is a fiscally conservative solution to overhauling these public projects with an estimated cost from JCT of less than $50 million over ten years.

The House companion bill is H.R. 5361.