Senators Ron Wyden (D-Ore.), John Hoeven (R-N.D.) and Mark Begich (D-Alaska) introduced legislation on July 29 to create a tax credit bond program dedicated to transportation infrastructure. Transportation and Regional Infrastructure Project bonds, or TRIPs, will be a financing tool to fund the transportation projects throughout the country.
TRIPs are tax credit bonds designed exclusively to fund transportation infrastructure projects. Bondholders will receive a tax credit instead of the tax exemption found in municipal bonds – making the bonds fairer for the tax payers and ensuring that the bonds do not become tax havens. Under the plan put forward by the senators, $50 billion in tax credit bonds would be issued over a six-year period with the principal cost of the bonds being covered by a trust fund composed of Customs User Fees.
TRIPs will originate with each individual state’s infrastructure bank. Each state infrastructure bank will be allocated 2% of the total amount of bonds to issue to projects of their discretion – a total of $1 billion per state. States are also able to pool their funds for larger projects, including those that affect multiple states. Most states have already created infrastructure banks, but those who have not can do so at any time to receive their portion of the TRIP bond funding.