[Congressional Record Volume 142, Number 133 (Tuesday, September 24, 1996)]
[Senate]
[Page S11186]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MOYNIHAN:
  S. 2116. A bill to facilitate efficient investments and financing of 
infrastructure projects and new job creation through the establishment 
of a National Infrastructure Development Corporatoin, and for other 
purposes; to the Committee on Finance.


          THE NATIONAL INFRASTRUCTURE DEVELOPMENT ACT OF 1996

  Mr. MOYNIHAN. Mr. President, I am pleased to introduce legislation 
today that I hope, at the very least, will draw attention to the 
interesting possibilities of how private capital might be joined with 
public funding of our Nation's infrastructure. The bill is designed to 
facilitate investment in, and the financing of, infrastructure 
projects--which generate good-paying jobs--through the creation of a 
self-sustaining entity, the National Infrastructure Development 
Corporation.
  In 1991, I sponsored the Intermodal Surface Transportation Efficiency 
Act [ISTEA]. One provision called for the establishment of an 
Infrastructure Investment Commission. Public investments in 
infrastructure have been declining, and so the Commission was charged 
with looking at ways to encourage the investment of private capital. 
The Commission was chaired by Daniel V. Flanagan, Jr. Under his able 
direction, the Commission released a report early in 1993. I found it 
truly compelling, and I look forward to revisiting the Commission's 
recommendations as we prepare for ISTEA II. In short, we would do well 
to listen to Mr. Flanagan, again, as we reauthorize our vitally 
important transportation infrastructure policies in the 105th Congress. 
There will be hearings, of course, and we look forward to testimony 
from the Commission as to its recommendations. I would like to point 
out that our colleague, Senator Hutchison from Texas, served as a 
member of the Commission; and I certainly look forward to working with 
her as the Environment and Public Works Committee takes up this most 
important matter next year.
  I would like to note that significant infrastructure investment 
activity by U.S. pension funds is occurring daily overseas, 
particularly in Asia and Latin America. A good part of this has been 
prompted by the evolution of the independent power generation spawned 
by the action of our Congress in creating such entities as part of the 
Energy Policy Act of 1992. As a result, we now have a project finance 
industry in existence in this country assisting those American funds in 
such infrastructure investment overseas. Also, current policies of the 
Overseas Private Investment Corporation, the Export Import Bank, and 
the World Bank, encourage this type of overseas investment through 
credit enhancements, political risk insurance, and so forth.
  The problem in the United States is that we have never provided such 
credit enhancement disciplines in our own infrastructure network. 
Clearly, there is significant political risk for the entrepreneur, the 
architect, the engineer, and even the community group that seeks to 
develop improvements and novel and innovative ways of paying for such 
services. The Commission's report suggests a ``growing of the pie'' 
approach to leverage some of our public funds by encouraging such 
private investment, and suggests that leverage ratios of approximately 
10 to 18 times the public funds involved are attainable.

  Recommendations of the Commission and Mr. Flanagan, who has testified 
several times before Congress on this subject, are incorporated in this 
legislation. For example, it suggests various insurance initiatives, 
particularly in the area of development risk, as well as other 
innovative procedures, including the reinsurance of long term revenue 
streams that would allow new economic activity to ensure either in the 
construction of new or rehabilitation of existing facilities.
  I commend my colleagues in the House of Representatives, particularly 
the Democratic leadership there, for introducing this measure in that 
body earlier this year. To me this is a bipartisan effort and we 
welcome the support of our Republican colleagues. This legislation, the 
National Infrastructure Development Act of 1996, is by no means the 
final word on this subject. But I do recommend it to all of my 
colleagues for their examination and hope it proves sufficient to 
stimulate their interest in this ingenious approach to such an exciting 
matter.

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