The America Fast Forward initiative is a four-part initiative launched by Metro and advanced nationwide:
- Strengthening the Transportation Infrastructure Finance and Innovation Act (TIFIA) program – this was achieved in the America Fast Forward title of MAP-21;
- Creating the sixth class of qualified tax credit bonds for transportation projects – America Fast Forward Transportation Bonds – in the works;
- Reforming federal rules to permit local hiring for transportation projects using federal funds – achieved on March 3, 2015, with USDOT announcement of a one-year local hire pilot program; and
- Bolstering funding for the federal New Starts program for new transit capital projects – in the works
America Fast Forward Transportation Bonds are a tax policy initiative designed to stimulate greater investment in the transportation sector. They provide a substantial subsidy to the issuer by having the federal government pay all or most of the annual “interest” due on the bonds in the form of an annual tax credit against the investor’s federal tax liability. On a long-term bond, the interest component of debt service represents 65 percent or more of the financial cost of borrowing. For tax purposes, the annual credit is treated by the bondholder as taxable interest income.
America Fast Forward Transportation Bonds would be structured as a sixth class of “qualified tax credit bonds” (QTCBs) under section 54A of the Internal Revenue Code. Over the last decade, Congress has authorized over $35 billion of QTCBs to assist sectors such as public education, clean renewable energy generation, and energy and forestry conservation.
America Fast Forward Transportation Bonds would represent the first application of QTCBs to the transportation sector. The bonds, if enacted, would differ from the other QTCBs in several respects. The maximum maturity could be as long as 35 years compared to a maximum maturity for other QTCBs currently of only 25 years.
This longer maturity is necessary due to the long-lived nature of transportation projects which tend to be highly capital-intensive. The Treasury would establish a separate “interest” index for the tax credit rate on America Fast Forward Transportation Bonds, reflecting their longer maturity. Lastly, the list of taxes that the credit could be offset against would be expanded to include federal withholding tax on wages and benefits retained by employers and pension plan administrators. This is necessary because of the much larger scale of transportation projects, and would significantly broaden the market for the tax credit bonds to include pension funds.
America Fast Forward Transportation Bonds would be a $45 billion program, with eligible projects being surface transportation facilities eligible under title 23 or chapter 53 of title 49: highways, bridges and tunnels; transit and intercity passenger bus or rail; and intermodal freight transfer facilities and private freight facilities conferring a public benefit.
In September of 2011 Metro’s Board of Directors adopted a Board Report that added reforming federal-local hire rules to our agency’s successful America Fast Forward initiative. Working in close cooperation with Metro, Congresswoman Karen Bass (D-CA) introduced H.R. 3620 (The Local Hire Act) Local Hire Act in 2013 to permit establishing local hiring programs on projects using federal funding. This legislation was ultimately adopted into the Consolidated Appropriations Bill for Fiscal Year 2015 (Public Law No: 113-235) and led the Federal Transit Administration to release its Federal Fiscal Year 2015 apportionments in the Federal Register outlining how it intends to allow geographic hiring preferences in construction contracts that are advertised or awarded in Federal Fiscal Year 2015. Most recently, the U.S. Department of Transportation, in a vote of support for Metro’s local hire efforts, announced on March 3, 2015, the launching of a one-year local hire pilot program for both transit and highway projects. Please find here a fact sheet on Metro’s America Fast Forward Local Hire initiative.
Last year, the U.S. Conference of Mayors voted to back a resolution by Los Angeles Mayor Eric Garcetti that “urges Congress to create a new category of qualified tax credit bonds to fund $45 billion for transportation to stimulate infrastructure investment.” The resolution adopted by the U.S. Conference of Mayors builds upon support the America Fast Forward Transportation Bonds initiative has from over 200 mayors across America, from big cities to small municipalities in over 25 states. Please find here a map of America’s mayors backing the America Fast Forward initiative.
In March of 2015 and as a result of the leadership of the Los Angeles Area Chamber of Commerce, over 260 local, regional and state Chambers of Commerce from all 50 States have co-authored a letter to Members of Congress in support of our agency’s America Fast Forward (AFF) Transportation Bonds initiative. Los Angeles Area Chamber of Commerce President and CEO Gary Toebben has led the campaign to garner support for our agency’s AFF Transportation Bonds proposal from a diverse group of Chambers of Commerce, from Alabama to Wisconsin, Arizona to West Virginia. Strong support from both labor and the business community has been a hallmark of the America Fast Forward initiative. Please find here a link to the letter where 260 local, regional and state Chambers of Commerce, including the U.S. Chamber of Commerce, endorse the America Fast Forward Transportation Bond program.