On August 10, 2005, President George W. Bush signed into law

the “Safe, Accountable, Flexible and Efficient Tr a n s p o rt a t i o n

Equity Act – A Legacy for Us e r s” ( S A F E T E A - LU), authorizing the

Federal surface transportation programs for highways, highway

s a f e t y, and transit for the five - year period from 2005-2009.

SAFETEA-LU provides a record investment for improvements

in highway, transit, and safety programs with total guaranteed

funding of $286.5 billion over the five - year period. This investment level represents more than a 30 percent increase over the

total guaranteed funding level in the Transportation Equity Act

for the 21s t C e n t u ry (T E A - 2 1 ) .

S A F E T E A - LU also offers greater opportunities to improve the

nation’s transportation system through public-private partnerships and expands innovative finance programs, making it easier and more attractive for the private sector to participate in

highway infrastructure projects.

Beginning with the Intermodal Su rface Tr a n s p o rtation Ef f i c i e n c y

Act (ISTEA), Federal surface transportation legislation has paved

the way for innovation in transportation finance. SAFETEA-LU

builds on the successful initiatives advanced in the 1990s, bringing

us the next generation of innovative finance tools. Innovative

changes such as eligibility for private activity bonds, additional

flexibility to use tolling to finance infrastru c t u re improvements,

and broader TIFIA and SIB loan policies, provide transport ation

agencies with more options for financing critical surface transportation projects and stimulating needed private investment.

State Infrastructure Banks

S A F E T E A - LU establishes a new State In f r a s t ru c t u re Bank (SIB)

p rogram under which all states, Pu e rto Rico, the District of

Columbia, American Samoa, Guam, the Virgin Islands, and the

C o m m o n wealth of the No rthern Mariana Islands are authorized

to enter into cooperative agreements with the Se c re t a ry of

Transportation to establish infrastructure revolving funds eligible to be capitalized with Federal transportation funds authorized for fiscal years 2005-2009. SIBs were initially authorized

under the National Highway System Designation (NHS) Act

of 1995. States that established SIBs authorized by the NHS

Act and TEA-21 may continue to operate those SIBs.

The new program gives states the capacity to increase the efficiency of their transportation investment and significantly

leverage Federal resources by attracting non-Federal public and

private investment.

Projects eligible under Title 23, United States Code, capital

projects as defined in Section 5302 of Title 49, United States

Code and any other projects related to surface transportation that

the Secretary determines to be appropriate are eligible for assistance from the SIBs. Both the initial credit assistance funded with

Fiscal year 2005 was a pro d u c t i ve time for

the TIFIA program with the passage of

S A F E T E A - LU, the closing of loans for two

award-winning projects, and the receipt

of one application and six Letters of

In t e rest from sponsors considering the

use of TIFIA credit assistance.

“Deals of the Year”

Two TIFIA-assisted financings we re

h o n o red as regional “deals of the ye a r” in

early December by The Bond Bu ye r, a

long-established daily newspaper cove ring

the municipal finance market. These are

the 183-A Turnpike project in Texas and

the LA-1 project in Louisiana.

In Ma rch 2005, the TIFIA program closed

on a direct loan of up to $66 million with

the Central Texas Regional Mo b i l i t y

Authority (CTRMA) for the 183-A

Turnpike Project in the Austin, Te x a s

m e t ropolitan area. The project will be an

11.6 mile tollway constructed utilizing a

f i xed-price contract. The CTRMA is the

first of the regional authorities established

under Texas law to advance a tollway project. The $331 million project includes

$168 million in senior lien tax-exe m p t

bonds and $66 million in short - t e r m

debt, which would be refinanced via the

TIFIA loan at the end of construction.

In May 2005, the TIFIA program closed

on a direct loan of up to $66 million

(coincidentally, the same amount as the

183-A project) with the Louisiana

TIFIA UPDATE

VOLUME 11, NUMBER 1 FALL 2005

Recap of TIFIA Credit Program Activity for FY 2005

Also in this issue...

Maine GARVEE . . . . . . . . . . . . . .4

National GARVEE Activity . . . . . . .5

SIB Activity . . . . . . . . . . . . . . . . . .8

Florida SIB Issues Bonds . . . . . . . .8

Kansas Transportation

Revolving Fund . . . . . . . . . . . . . . .9

Transit SIBs . . . . . . . . . . . . . . . . .10

Resources . . . . . . . . . . . . . . . . . .11

Tolling and Pricing FRNs . . . . . . .12

REAUTHORIZATION

SAFETEA-LU Expands Innovative Finance Programs

continued on page 2

continued on page 7
2

Federal capitalization grants, including the re q u i red non-Federal

match, and any assistance funded with loan repayments and

other recycled funds are subject to the requirements of Titles

23 and 49, as applicable.

States participating in the new SIB program may capitalize the

account(s) in their SIBs with Federal surface transport a t i o n

funds for each of fiscal years 2005-2009 as follows:

• Highway account – up to 10 percent of the funds apportioned

to the state for the National Highway System Program, the

Su rface Tr a n s p o rtation Program, the Highway Bridge Program,

and the Equity Bonus;

• Transit account – up to 10 percent of funds made available

for capital projects under Ur b a n i zed Area Formula Gr a n t s ,

Capital In vestment Grants, and Formula Grants for Ot h e r

Than Urbanized Areas; and

• Rail account – funds made available for capital projects u n d e r

subtitle V (Rail Programs) of Title 49, United States Code.

A state must match the Federal funds used to capitalize the SIB

on an 80-20 Fe d e r a l / n o n - Federal basis, except that for the

highway account, the sliding scale provisions apply.

Transportation Infrastructure Finance and Innovation

Act (TIFIA) Credit Program

SAFETEA-LU continues the TIFIA credit program established

under TEA-21. The TIFIA program provides Federal credit assistance to nationally or regionally significant surface transport ation

projects, including highway, transit, and rail. The program is

designed to fill market gaps and leverage substantial private coi n vestment by providing projects with supplemental or subord inate debt. A total of $610 million is authorized through 2009 to

pay the subsidy cost of supporting Federal credit underT I F I A .

While most of the TIFIA provisions established under TEA-21

remain substantially unchanged in SAFETEA-LU, there are

s e veral significant enhancements that i n c rease access to T I F I A

and provide for flexibility for borrowers:

• One of the most notable amendments to the TIFIA program

allows the use of TIFIA loan and loan guarantee proceeds to

refinance long-term project obligations or Federal cre d i t

i n s t ruments if such refinancing provides additional funding

capacity for the completion, enhancement, or expansion of

new transportation infrastructure.

• The annual credit assistance limitation is re m oved and the

annual budgetary limitations which represents the cost to the

g overnment of providing TIFIA credit assistance is set at

$122 million per ye a r. Based on previous experience, the

TIFIA office estimates that these budget resources can fund

up to $2.5 billion of credit assistance annually.

• The TIFIA eligibility threshold is lowe red from $100 million

to $50 million generally, or from 50 percent to 33 percent of a

s t a t e’s annual Federal-aid apportionment, whichever is lowe r.

SAFETEA-LU, continued from page 1

SAFETEA-LU Scorecard: Key Innovative Finance Provisions

Program Purpose/Key Provisions Statutory References

State Infrastructure

Bank Program

Establishes a new SIB pilot program to provide various forms of non-grant assistance in theform of loans

or credit enhancement to public or private entities for eligible projects.

All states, the District of Columbia, and all Territories have the option to fund a SIB with Federal funds.

Three SIB accounts may be established (highway, transit, and rail).

SAFETEA-LU Section: 1602

Other: 23 USC 610

TIFIA Credit

Program

Provides Federal credit assistance in the form of secured loans, loan guarantees, and lines of credit to

nationally or regionally significant surface transportation projects.

Eligibility requirements are lowered to a project cost of $50 million, or 33 percent of state’s annual

Federal-aid apportionment, whichever is less; for ITS projects, the threshold is $15 million.

Allows use of TIFIA proceeds for refinancing of project obligations or Federal credit instruments.

Eligibility is extended to private freight rail facilities and ports providing public benefits.

SAFETEA-LU Section: 1601

Other: 23 USC 601-609

Private Activity

Bonds

Encourages additional private participation on surface transportation infrastructure projects.

Authorizes $15 billion in exempt facility bonds, not subject to the state volume caps, for qualified

highway or surface freight transfer facilities. This allows additional private activity on the pro j e c t s

while maintaining the tax exempt status of the bonds.

SAFETEA-LU Section: 11143

of Title XI

Tolling and Pricing

Programs

Interstate System Reconstruction and Rehabilitation Pilot Program continues authority to allow tolling on

up to three existing Interstate facilities in different states, in cases where the costs to fund needed

reconstruction or rehabilitation are demonstrated to exceed available resources.

Interstate System Construction Toll Pilot Program. Authorizes up to three facilities on the Interstate system to toll for the purpose of financing the construction of new Interstate highways.

Express Lanes Demonstration Program. Permits tolling on up to 15 demonstration projects to manage

congestion, reduce emissions in a nonattainment area, or finance added Interstate lanes for the purpose of reducing congestion.

Value Pricing Pilot Program (VPPP). Encourages implementation and evaluation of up to 15 value

pricing pilot projects, including areawide pricing, pricing of multiple or single facilities or corridors,

single-lane pricing, and implementation of other market-based strategies. A total of $59 million is

available to support these pilot projects.

SAFETEA-LU Section: 1604

Other: PL 102-240 (ISTEA)

1012; PL 105-578 (TEA-21)

1216

continued on page 3
3

• The threshold for Intelligent Transportation System projects

is also lowered from $30 million to $15 million.

• Eligibility for TIFIA credit assistance is extended to priva t e

f reight rail facilities providing public benefits and port

improvements necessary for intermodal access.

• The usefulness of the line of credit is improved by making the

line available to be drawn prior to tapping a project’s reserve

funds and removing the 20 percent annual draw limitation.

TIFIA is now re q u i red to submit a Re p o rt to Congress eve ry two

years beginning June 1, 2006. Fi n a l l y, subject to appro p r i ation,

TIFIA is authorized to collect and spend fees related to the

administration of the program such as loan servicing fees, cre d i t

p rocessing fees, and financial and legal advisors.

Private Activity Bonds

To encourage more private sector involvement in the finance,

design, construction, and operations of highway facilities,

S A F E T E A - LU amends Section 142 of the Internal Re ve n u e

Code to add highway and freight transfer facilities to the types

of privately developed and operated projects for which qualified

p r i vate activity bonds (PABs) may be issued. This change

a l l ows additional private activity on these types of pro j e c t s ,

while maintaining the tax-exempt status of the bonds.

SAFETEA-LU authorizes $15 billion in exempt facility bonds,

not subject to the state volume caps, for qualified highway or

surface freight transfer facilities. A qualified project means:

• Any surface transportation project which re c e i ves Fe d e r a l

assistance under Title 23, United States Code;

• Any project for an international bridge or tunnel for which

an international entity authorized under Federal or state law

is responsible and which re c e i ves Federal assistance under

Title 23, United States Code; or

• Any facility for the transfer of freight from truck to rail or

rail to truck (including any temporary storage facilities

directly related to such transfers) which receives Federal assistance under Title 23 or 49, United States Code.

S A F E T E A - LU charges the Se c re t a ry of Tr a n s p o rtation with

allocating the $15 billion in bonding authority.

Tolling and Pricing Programs

SAFETEA-LU offers states broader ability 1) to use tolling on

a pilot, or demonstration, basis; 2) to finance Interstate cons t ruction and re c o n s t ruction; 3) to promote efficiency in the

use of highways; and 4) support congestion reduction. In

addition to the expanded flexibility available under these four

tolling programs, the Value Pricing Pilot Program prov i d e s

grants for pre-implementation and implementation costs.

These programs are highlighted below.

Interstate System Re c o n s t ruction & Rehabilitation (R&R) Pi l o t

Program. SAFETEA-LU continues the program as established

under TEA-21. The R&R toll pilot program allows tolling on

up to three existing Interstate facilities (highway, bridge, or

tunnel) to fund needed re c o n s t ruction or rehabilitation on

Interstate highway corridors that could not otherwise be adequately maintained or functionally improved. Each of the

three facilities must be in a different state.

Interstate System Construction Toll Pilot Program. This new program authorizes up to three toll pilot facilities on the Interstate

system for the purpose of constructing new Interstate highways. Program requirements include the following:

• States or interstate compacts of states are eligible to apply; 

• T h e re is no re q u i rement that the facilities be in different states; 

• Tolling must be the most efficient and economical way to

finance the project; 

• A facility management plan must be submitted; 

• Automatic toll collection is required; 

• Non-compete agreements are prohibited. A state may not

enter into an agreement with a private entity that pre ve n t s

the state from improving or expanding capacity of adjacent

roads to address conditions resulting from diverted traffic; 

• Re venues may be used only for debt service, re a s o n a b l e

return on investment of private equity, and operation and

maintenance costs. Regular audits will be conducted; 

• Interstate Maintenance funds may not be used on the facility

while it is tolled; and

• Applications must be submitted within 10 years of enactment

of SAFETEA-LU.

Express Lanes Demonstration Program. This new demonstration

program permits tolling on selected demonstration projects to

manage high levels of congestion, reduce emissions in a nonattainment or maintenance area, or finance added In t e r s t a t e

lanes for the purpose of reducing congestion. The Secretary is

authorized to carry out 15 demonstration projects from 2005

through 2009 to allow states, public authorities, or public or

private entities designated by states to collect a toll from motor

vehicles at an eligible toll facility for any highway, bridge, or tunnel, including on the Interstate. An “eligible toll facility” i n c l u d e s :

SAFETEA-LU, continued from page 2

continued on page 4

For more information on SAFETEA-LU:

Max Inman,

202/366-2853,

max.inman@fhwa.dot.gov

Ma rk Su l l i van, TIFIA Credit Pro g r a m ,

202/366-5785,

mark.sullivan@fhwa.dot.gov

Wayne Berman, Tolling and Pricing Pro g r a m s ,

202/366-4069,

wayne.berman@fhwa.dot.gov

Phyllis Jones, SIBs,

202/366-2854,

phyllis.jones@fhwa.dot.gov

Jack Bennett, Private Activity Bonds,

202/366-6222,

jack.bennett@dot.gov
4

• A facility in existence on the date of enactment that collects tolls;

• A facility in existence on the date of enactment that serve s

high-occupancy vehicles (HOVs); 

• A facility modified or constructed after the date of enactment

to create additional tolled capacity (includes construction by

a private entity or using private funds); or 

• In the case of an added lane on a previously non-tolled facility,

only the new lane.

Program requirements include the following:

• Variable pricing by time-of-day or level of traffic, as appropriate

to manage congestion or improve air quality, is required if an

H OV facility is tolled; for a non-HOV facility, variable pricing

is optional; 

• Single-occupant vehicles may be permitted to use HOV lanes

as part of a variable toll pricing program;

• Automatic toll collection is required in express lanes to optimize free flow of traffic; and 

• Toll re venue may only be used for debt service, reasonable rate

of return on private financing, operation and maintenance

costs, or any eligible Title 23 or 49 project if the facility is

being adequately maintained. 

The Federal share of the cost of a facility tolled under this program, including installation of the toll collection equipment,

cannot exceed 80 percent.

A final rule on interoperability of electronic collection systems

is required within 180 days of enactment. Regular monitoring

and re p o rting on the achievement of performance goals is

re q u i red, as well as annual re p o rts to Congress starting after

one year on the use of funds, and reports on program successes

beginning three years after enactment and then eve ry thre e

years thereafter.

Value Pricing Pilot Pro g ram (VPPP). This pilot program, initially

authorized in ISTEA as the Congestion Pricing Pilot Program,

encourages implementation and evaluation of value pricing

pilot projects, offering flexibility to encompass a variety of

i n n ova t i ve applications including areawide pricing, pricing of

multiple or single facilities or corridors, single lane pricing, and

implementation of other market-based strategies. Se c t i o n

1604(a) of SAFETEA-LU authorizes the Se c re t a ry to enter into

c o o p e r a t i ve agreements with up to 15 state or local gove r nments

or other public authorities, to establish, maintain, and monitor

local value pricing pilot programs.

SAFETEA-LU provides a total of $59 million for fiscal years

2005-2009 for the V V P P. Of the total, $11 million was

a u t h o r i zed for FY 2005 and $12 million is authorized annually

in fiscal years 2006 through 2009. An annual set-aside of $3

million will be used to fund value pricing projects that do not

involve highway tolls. VVPP funds allocated by the Secretary

will remain available for obligation for a period of three years

after the last day of the fiscal year for which funds are authorized. If, on September 30 of any year, the amount of funds

made available for the program, but not allocated, exceeds $8

million, the excess amount will be apportioned to all states for

purposes of the Surface Transportation Program. Funds available for the VVPP can be used to support pre - p roject study activities and to pay for implementation costs of value pricing pro j e c t s .

S A F E T E A - LU also clarifies some aspects of the operation of HOV

facilities and authorizes states to create high-occupancy toll

(HOT) lanes. The HOT lane program allows vehicles to pay a

toll to use HOV lanes if they do not otherwise meet occupancy

re q u i rements. Programs must be established by the state to

a d d ress the selection of vehicles certified to use HOT lanes, collect

tolls electro n i c a l l y, and establish pro c e d u res for enforcing the

restrictions. HOT lane tolls can be charged on both interstate

and non-interstate facilities, and there is no limit on the number

of projects or states that can participate.

The Maine De p a rtment of Tr a n s p o rtation (Ma i n e D OT) in

December 2004 issued $48,395,000 of Series 2004A Gr a n t

Anticipation Bonds through the Maine Municipal Bond Bank

(MMBB). This is the first grant anticipation issuance by the

MaineDOT, and will help pay for a new cable-stayed, concrete

bridge across the Penobscot River to replace the vital Wa l d o -

Hancock Bridge, which was found to have deteriorating suspension

cables. The new bridge is scheduled to open in December 2006.

The Series 2004A bonds have an average life of six years with a

final maturity of September 1, 2015, and a true interest cost of

3.468 percent. The bonds are insured by Ambac and carry a

triple-A rating by Moody’s and Fitch, while the underlying ratings are Aa3 and AA-, re s p e c t i ve l y. The bonds are secure d

solely by a first lien pledge of anticipated Federal transportation

funds received, and a pledge that the annual debt payments will

be the first obligation requested each year.

To comply with the legislative authorization for debt serv i c e

payments to be made only from pledged Federal revenues, the

total debt service costs have been authorized as advance construction by the FHWA. In addition, the transaction was structured through the MMBB to ensure there was no state liability.

The total cost of the bridge replacement project is sufficient to

cover the state’s 20 percent match requirement.

GARVEE ROUNDUP

Maine Issues First GARV E E

SAFETEA-LU, continued from page 3

Contact:

Gregory Shea,

Maine DOT,

207/624-3200,

gregory.shea@maine.gov
5

G A RVEEs Issues as of November 2005

Total: $4.8 Billion

O ver the past ye a r, GARVEE activity has continued to rise. Since

1997, 14 states plus Pu e rto Rico and the Virgin Islands have issued

G A RVEE bonds, totaling $4.8 billion as shown in the map

below. The following four states issued GARVEEs in 2005.

• In April, Mo n t a n a issued $122.8 million in GARVEEs to

finance re c o n s t ruction of U.S. 93 across the Fl a t h e a d

Reservation, from just north of Missoula to Poulson near the

Canadian border. The GARVEE proceeds are enabling more

rapid re c o n s t ruction of this critical road, named “T h e

People’s Way.” This issue received underlying ratings of Aa3

and A+ from Mo o d y’s and St a n d a rd & Po o r’s re s p e c t i ve l y,

and is insured by MBIA.

•In Ma y, Ke n t u c k y issued $139.6 million in GARVEE notes that

h a ve maturities ranging from 2005 through 2017. This issue was

the first tranche of a phased GARVEE program that focuses

on the widening of the Interstate 65, Interstate 75, and Interstate

74 from three to six lanes. The notes are insured by MBIA

Insurance Corporation and received underlying ratings of AAf rom Fitch Ratings and St a n d a rd & Po o r’s and Aa3 fro m

Moody’s Investors Service. The Kentucky General Assembly

has approved a total program of $400 million for these three

widening projects that will increase the state’s ability to

accommodate freight and people movement. Fu t u re bonds

will have to be individually authorized.

• In August, Ok l a h o m a issued an additional $48.9 million in

GARVEE bonds as part of the financing for the Governor’s

identified 12 corridors of “economic significance.” The first

G A RVEE issue of $50 million was sold in Ma rch 2004. These

issues are part of an anticipated $799 million program author i zed by the legislature in 2000, of which $500 million is

expected to funded with GARVEE bonds. Within these corridors, the state is expecting to issue a total of $300 million of

GARVEE bonds by October 2007, with an additional $200

million planned after that date. It is expected that improvements

within these identified corridors will enhance the business climate throughout the state. Examples of the proposed projects

include U.S. 77 Broadway Extension in Oklahoma City, I-44

in Tulsa, U.S. 183 from U.S. 70 to I-40 in So u t h we s t

Oklahoma, and U.S. 70 from the Arkansas state line to I-35

in Southeast Oklahoma.

• Also in August, No rth Da k o t a issued $51.4 million in GARVEE

bonds to finance the replacement of a bridge across the

Missouri River at Bismarck, and for continued four-lane cons t ruction on U.S. 2. The issuance, the first for the state, received

underlying ratings of Aa1/AA by Mo o d y’s and Fitch re s p e ctively, and is insured by FSA.

G A RVEE Issues on the Rise

continued on page 6

Note: State totals exclude refunding issues.
6

The Finer Points of GARVEEs

Each issue of IFQ features questions and answers on the GARVEE program. This issue focuses on whether formal agreements between a state and FHWA are required to issue GARVEEs.

Note that answers to these questions are not regulatory or legislative, but represent FHWA’s current administrative interpretations. If you have questions or want to confirm any of this information, please contact your local FHWA Division office.

GARVEE guidance also is available at:

http://www.fhwa.dot.gov/innovativefinance/garguid1.htm

Is a state required to enter into a Memorandum of Agreement (MOA) or Memorandum of Understanding

(MOU) with the FHWA in order to issue a GARVEE bond?

No MOU or MOA is re q u i red under legislation, regulations, or guidance. States are only re q u i red to notify FHWA

Divisions that they plan to seek reimbursement for debt service costs rather than construction costs, provide a pro-forma

debt service schedule, and seek approval under regular Federal-aid procedures for projects that will be financed with proceeds

from the GARVEE bond issuance. Entering into an MOU does not give a state any additional rights to reimbursement, and

the lack of an MOU does not represent a credit issue or concern. 

Some states have voluntarily entered into MOUs or MOAs with FHWA Division offices in order to describe future procedures that will be used to process GARVEE transactions. Since GARVEEs can span more than 15 years (typically longer

than the tenure of many state and local employees), such MOUs can ensure continuity in these long-term transactions.

Issues that can be discussed in MOUs include:

Documentation of roles and re s p o n s i b i l i t i e s : The MOU can specify which office(s) within a state DOT will handle GARVEE

issuances, and which contacts a Division should use for questions.

Proposed timing of reimbursements: The MOU can specify (from the bond documents) the timing of debt service (often,

Ja n u a ry and July payments). This will alert the Division office to when to expect these reimbursements, and by what timeframe

the state and/or the trustee can expect to receive reimbursements upon submission of the appropriate voucher. 

Allocating debt service costs to projects: When multiple Federal-aid projects are financed with GARVEE proceeds, the

MOU can describe the method of allocating the debt service payments to individual projects.

Special handling, if any, re q u i red for GARVEE projects within state accounting systems: For example, some state accounting

systems automatically bill FHWA for construction costs as incurred on Federal-aid projects. Since these costs will be paid

for by bond proceeds on Federal-aid projects, construction costs should not be billed to FHWA in this case. For some systems,

this may require a manual adjustment; other systems can do this with special coding.

Special provisions, if any, for satisfying the matching requirement on the GARVEE bonds: For example, some states have

satisfied part of the non-Federal share with toll credits or interest earned on bond proceeds.

Programming of pro j e c t s : G A RVEE guidance re q u i res that projects be programmed onto the St a t ewide Tr a n s p o rt a t i o n

Improvement Program (STIP) with the amount of debt service anticipated being paid during the years of the STIP. If state

or Federal planners seek additional information about the GARVEE transactions, they can specify it in the MOU.

Project closeout procedures: The MOU can specify what procedures will be followed at closeout to ensure that bond debt

service is paid and that all requirements are fulfilled.

New State GARVEE Legislation in 2005

In April, the Idaho legislature passed legislation permitting up

to $1.6 billion in GARVEE bonds for Governor Kempthorne’s

“Connecting Id a h o” p rogram. The program includes 13 corridors

across the state, and is slated to compress 30 years of construction into the next six years. The measure places an annual cap

on the amount of funds that can be used to repay the bonds,

and gives the Idaho Tr a n s p o rtation De p a rtment a greater ro l e

in project selection. The first bond issuance from the program

is anticipated in the spring of 2006.

Also in April, the Ma ryland General Assembly authorized the

issuance of up to $750 million in GARVEE bonds to finance

the InterCounty Connector (ICC), a $2.4 billion, 18-mile, limited access, toll road linking U.S. 1 in Prince George’s County

to I-270/I-370 in Montgomery County. The financing package

for this east-west multimodal highway also includes toll revenue

bonds and earmarked funding from SAFETEA-LU.

GARVEE Issues on the Rise, continued from page 5

Contact:

Jennifer Mayer,

FHWA National Resource Center,

415/744-2634,

jennifer.mayer@fhwa.dot.gov
7

Recap of TIFIA Activity for FY 2005, continued from page 1

Tr a n s p o rtation Au t h o r i t y, a subsidiary of the Louisiana

De p a rtment of Tr a n s p o rtation and De velopment (LA D OT D ) ,

for phase one of the LA-1 Project. The new road will be an

eight-mile, elevated two-lane highway from Leeville south to Po rt

Fo u rchon, including a new bridge and toll facility at Leeville.

LA-1 is the only access route to Grand Isle and Port Fourchon,

the leading supply hub to Gulf of Mexico oil and gas platforms.

A critical hurricane evacuation route with no highway alternative,

the existing road suffers from subsidence and periodic flooding,

and the existing bridge has low structural and sufficiency ratings.

Project funding includes $94 million in senior lien tax-exempt

bonds and $66 million of short-term debt, which would be

refinanced via the TIFIA loan at the end of construction.

Application, Letters of Interest Received

The Po rt of Anchorage submitted a Letter of In t e rest in FY 2004,

f o l l owed by an application in FY 2005 for its Marine Terminal

Re d e velopment Project. The completed Marine Te r m i n a l

Re d e velopment project will include new ship berths, new rail

access, and more efficient intermodal freight transfer facilities.

The total eligible costs of the project are estimated at $366 million, and the Port is seeking a direct loan of $50 million from

the TIFIA program.

Demonstrating the truly multimodal nature of the TIFIA program, the six FY 2005 Letters of In t e rest re c e i ved include transit,

bridges, and toll roads. The TIFIA credit program re c e i ve d

Letters of Interest for the Florida High-Speed Rail Project, the

Dulles Me t rorail Project, the Trans Texas Corridor (SH 130

Segments 5 and 6), I-95 Hi g h - Occupancy Toll (HOT) Lanes

Project, the Knik Arm Crossing Project, and most recently, the

Intercounty Connector Project.

Contact:

Duane Callender,

TIFIA JPO,

202/366-9644,

duane.callender@fhwa.dot.gov

The Finer Points of TIFIA

The “Finer Points of TIFIA” box provides responses to questions posed by our readers and other observers. We hope you

find this section useful and that you will submit questions to Mark Sullivan, Chief, TIFIA Credit Program, (202) 366-5785

or mark.sullivan@fhwa.dot.gov.

Question

Will TIFIA applicants also be eligible for the U.S. DOT’s private activity bonds?

Answer

Yes. The U.S. DOT anticipates that applicants for an allocation of exempt facility bond (also known as “private activity

bond”) authority will, in many cases, also apply for TIFIA credit assistance. TIFIA applicants who previously might have

had to consider senior-lien taxable financing now will be able to combine the benefits of senior-lien tax-exempt financing

with subordinate TIFIA debt.

Under the U.S. DOT’s new private activity bond authority, as provided in Section 11143 of Title XI of SAFETEA-LU (see

page 3), any surface transportation project which receives U.S. Title 23 assistance is a qualified facility. Because projects that

receive TIFIA credit assistance are Title 23 projects, this means that TIFIA projects are also eligible to receive this tax-exempt

bonding authority. This provision therefore extends eligibility to TIFIA-assisted public transportation, intercity bus or rail

facilities and vehicles, including vehicles and facilities owned by Amtrak, public freight rail facilities or private facilities providing public benefit for highway users, and intermodal freight transfer facilities.

Passage of the private activity bond legislation reflects the Federal Government’s desire to increase private sector investment

in U.S. transportation infrastructure. Providing private developers and operators with access to tax-exempt interest rates

lowers the cost of capital s i g n i f i c a n t l y, enhancing investment prospects. In c reasing the invo l vement of private investors in

highway and freight projects generates new sources of money, ideas, and efficiency.

U.S. DOT is developing a process for distribution of the $15 billion in exempt facility authority that will be closely coord inated with the existing TIFIA loan process. Working t o g e t h e r, these financing tools should provide substantial incentives for

p r i vate equity investment in highway and freight pro j e c t s .
8

Continuing to expand the re s o u rces available for lending has

been a hallmark of the Florida SIB. To that end, the Florida

Department of Transportation (FDOT) issued $62.3 million in

re venue bonds secured solely by the repayment stream of the

existing loan portfolio in June 2005.

This first issue was a new and unique leveraging opportunity in

several ways:

• Florida’s SIB had not previously been leveraged;

• The leveraging would not pledge the full faith and credit of

the state;

• The leveraging approach would be pooled financing using

existing loan repayments for debt service;

• The pool of loans available for the pledge was re l a t i vely young;

• The pool of loans was not diversified with respect to numbers

of borrowers;

• FDOT had long-term relationships with the borrowers;

• The majority of the borrowers was rated and familiar to the

bonding industry; and

• The issue would be presented as uninsured to maintain the

lending flexibility within the program.

L e verage of Fl o r i d a’s SIB has been enabled through the establishment of strong relationships between FDOT and the pool

members, the credit quality of the borrowers and projects, and the

commitment by FDOT and leadership in the state to make this

p rogram grow and prosper through planned annual capitalization

of the bank. This expanded SIB program created by the legislat u re in 2004 is authorized to issue $300 million of re ve n u e -

backed debt with maturities up to 35 years.

The first issue was rated AA- by Fitch Ratings, A1 by Mo o d y’s ,

and A+ by St a n d a rd and Po o r’s, with all three noting the close

w o rking relationships with borrowers and program management

approach as strong points for the ratings.

Program Approach Is Critical

Florida has adopted a flexible approach to its SIB. FDOT’s

mission is to provide transportation services to the public, not

to serve as a private bank that will charge market rate interest

on loans. Below market rate loans are a subsidy the FDOT has

been willing to provide to further develop transportation projects

that can be delivered earlier, or that may not otherwise be built

to better serve the traveling public. Other flexible options

allow SIB loans to be subordinated to senior debt, disbursed as

a lump sum payment, or cash flowed over the production cycle

Florida SIB Issues $62.3 Million in Bonds

SIB HIGHLIGHTS

As of June 2005, SIBs reached a major milestone in helping

fund needed transportation investments throughout the

nation. Over $5 billion in loan agreements have been made

by 33 states, as shown in the table to the right. Building

on this success, SAFETEA-LU establishes a new SIB program,

which gives states the capacity to increase the efficiency of

their transportation investment and significantly leve r a g e

Federal resources by attracting non-Federal public and private investment.

This issue ofI F Q f e a t u res one of the most active and innovative

of the infrastructure banks. Florida’s SIB ranks second in

terms of the value of loan agreements and has re c e n t l y

leveraged its loan portfolio through the issuance of revenue

bonds. Also featured is the Kansas Tr a n s p o rt a t i o n

Re volving Fund, which has been capitalized with state

highway funds. The Fund, patterned after the existing

state water revolving fund, is providing needed support to

city and county transportation improvements.

SIB Loans Top $5 Billion

Contact:

Phyllis Jones,

FHWA,

202/366-2854,

phyllis.jones@fhwa.dot.gov

Loan 

Number of Agreement Disbursements

State Agreements Amount ($000) to Date ($000)

Alaska 1 $2,737 $2,737

Arizona 49 564,000 474,000

Arkansas 1 31 31

California 2 1,120 1,120

Colorado 4 4,400 1,900

Delaware 1 6,000 6,000

Florida 50 867,000 281,000

Indiana 2 5,715 5,715

Iowa 2 2,879 2,879

Maine 23 1,635 1,635

Michigan 33 22,207 22,207

Minnesota 17 102,776 96,447

Missouri 15 92,557 82,770

Nebraska 2 6,792 6,792

New Mexico 4 25,216 17,815

New York 10 27,700 27,700

North Carolina 2 1,713 1,713

North Dakota 2 3,891 3,891

Ohio 70 221,739 177,379

Oregon 19 34,394 25,052

Pennsylvania 62 39,000 24,000

Puerto Rico 1 15,000 15,000

Rhode Island 1 1,311 1,311

South Carolina 8 2,605,000 2,092,000

South Dakota 3 28,776 28,776

Tennessee 1 1,875 1,875

Texas 54 277,237 260,358

Utah 1 2,888 2,888

Vermont 2 1,975 1,300

Virginia 1 18,000 17,985

Washington 3 2,376 487

Wisconsin 3 1,813 1,813

Wyoming 8 77,977 42,441

TOTAL 457 $5,067,730 $3,729,017

State Infrastructure Bank Loan Agreements by State

As of June 30, 2005

continued on page 9
9

continued on page 10

The Kansas Tr a n s p o rtation Re volving Fund (the Fund) is making

e x p e n s i ve roads and bridges affordable for the state’s many

local governments.

The Fund provides important assistance in a state whose population ranks only 32nd in the United States, but has the nation’s

f o u rth highest number of public road miles (134,000) and the third

highest number of bridges (25,900). The Kansas Department

of Tr a n s p o rtation (KDOT) is responsible for 10,000 miles of

roads designated as the State Highway System, leaving 124,000

miles for local governments to construct and maintain.

T h rough the Fund, local governmental units can apply for

financing to help pay for transportation projects on or off the

State Highway System. This is a new source of project financing

for the local governmental units and it is a new program for

K D OT. Eligible participants are Kansas cities, counties, and private enterprises in partnership with a city or county. State legislation in 1999 authorized the Kansas Se c re t a ry of Transportation

to establish the Fund and develop the administrative re g u l a t i o n s .

K D OT began accepting applications in December 2003. During

the first year of operation, the Se c re t a ry of Tr a n s p o rtation approved

24 applications with a total value of $31.6 million. T h o s e

applications represent 31 road and bridge projects spread across

the state, ranging from a low-water crossing on a county road to

29,000 linear feet of curb and guttering for a small city, to s t re e t s

in new subdivisions. In addition, the Fund has loaned the local

match portion on 11 KDOT projects. Most of these projects are

for the re c o n s t ruction of local roads. The projects va ry in size from

$64,420 to $6 million, and most loans are less than $2 million.

Key features of the Fund include the following:

• While the projects must be a road or bridge, any phase of a

p roject such as design, right-of-way acquisition, and constru ction

are eligible for funding;

• In order to maximize participation, each applicant is limited to

$6 million per ye a r ;

• All projects financed by the Fund must be designed by a licensed

p rofessional engineer and inspected by a certified inspector

under the supervision of a licensed professional engineer; and

• The loans are limited to the lesser of 20 years or the design

life of the project.

Applications are accepted at any time throughout the ye a r. T h e

re v i ew process takes about 60 days from receipt of the application

until the governing body has a draft loan agreement to consider.

Much of the Fu n d’s success is a direct result of an ongoing marketing campaign by KDOT’s Secretary and KDOT staff. This

campaign promotes alternative funding sources for local needs.

Kansas Fund Meets Local Needs

of the project; and repayments can be deferred to allow for project revenue streams to mature or for funds to be accumulated

before repaying the debt. The continued annual replenishment

of capital to the SIB helps the bank maintain a coverage ratio

that is attractive to the bond market.

The approach to leveraging the SIB program was driven by

researching previous leveraging models, such as those used for

waste water re volving loans, and the current demands on the state’s

economy. Florida is not unique in these challenging economic

times, with needs far outweighing the sources of funds for transportation projects. The sole revenue stream for debt service on

the bond will be the existing and future SIB repayments. The

existing loan portfolio is maturing and is of sufficient cre d i t

quality to support a leveraging program of $70 million per year

for an extended period.

The basic principle behind this program is the revolving of current repayments into debt service and the use of leve r a g e d

funds to support new projects, which, in turn, create future

repayments for the program. This type of approach will also

allow the program the flexibility to leverage as needed, and to

time the leverage to maximize the market. There is no requirement to leverage in any year other than to meet the program

needs as defined by applicant projects.

Key to this approach is the continued use of the SIB as a gapfunding program. SIB loans serve as a final piece to pro j e c t

funding, not the primary source of project funding. The ave rage

loan amount of the existing portfolio is $13.6 million, with a

repayment profile averaging 15 years. This approach enables

SIB funds to be revolved readily to meet more project needs.

Fl o r i d a’s existing SIB portfolio leverages $6.00 of transport ation investment for each $1.00 lent, and has assisted in advancing projects by as much as 10 years. Re volving the funds is

critical to the long-term viability of the leveraging model.

Where Do We Go from Here?

Florida is a growth state with an average growth rate of 800 per

day! There continues to be a strong market for the SIB with

the expansion of program eligibility to include all modes of

t r a n s p o rtation. The demand for the program is expected to

continue with a broader application of loans to many new modes

of transportation during future award cycles.

As part of growth management legislation passed in 2005,

Florida’s SIB received a one time capitalization of $100 million

to be applied to projects of regional impact. This additional

SIB capitalization will enable more lending and prov i d e

enhanced repayment streams for future leveraging options.

With the additional lending capacity, the size and duration of

the loan portfolio will likely shift to borrowers with larger projects

and more diverse repayment sources. The key will be to manage the lending to quality borrowers with marketable re p a yment streams to ensure that Florida’s SIB continues to support

needed transportation investments in the future.

Contact:

Gene Branagan,

FDOT, 850/414-4421,

gene.branagan@dot.state.fl.us

Florida SIB, continued from page 8
10

The passage of SAFETEA-LU offers the possibility of expanding

the existing SIB program for road, public transportation, and

rail projects. The new legislation permits more states and territories to join the program, facilitates the formation of regional

SIBs, and enables Federal money to be transferred to existing and

new SIBs for capitalization purposes.

To date, 21 states have signed SIB cooperative agreements with the

Federal Transit Administration (FTA), and eight have executed

at least one public transportation loan. The total public transportation loan activity amounts to $94.5 million out of a total

SIB loan portfolio as of June 2005 of over $5.0 billion dollars.

This re p resents 20 percent of all SIB loans nationwide supporting

investment in public transportation.

Types of Projects and Financing

SIB transit funds may be used to assist a variety of transit capital

p rojects, such as facility construction, asset purchase and re h abilitation, or asset leasing. Each SIB (subject to the negotiated term

of their cooperative agreement with FTA), has the ability to offer

d i verse forms of credit assistance for these projects, such as direct

loans, loan guarantees, subsidized interest rates, loan subord i n ation,

or bond insurance. The eight states that have executed public

t r a n s p o rtation SIB loans are assisting $318.7 million in projects,

as summarized below:

• Loans made through Fl o ri d a’s SIB are helping purchase tro lleys,

buses, and other equipment, expand LYNX service in metropolitan Orlando, and build Ta m p a’s Ybor Station, a multimodal

hub for streetcars, buses, taxis, parking, and pedestrians. T h e

loans totaling $39.3 million will be repaid primarily with FTA

funds, as well as other state and local funds.

• Mi c h i g a n’s SIB has made a $5.3 million loan to purchase buses

and a ferry boat, and to construct new transit facilities.

Repayment sources will include FTA funds as well as state and

local funds.

• Mi n n e s o t a has loaned $4.1 million to support 53 transit capital

projects in the state. Property taxes will be used to repay the

loan, which has leveraged $21 million in assistance to public

transportation projects.

• The Missouri Transportation Finance Corporation has loaned

$11.1 million in funds to serve as local match for bus acquisition

for the Bi - State De velopment Agency, and another $2.1 million

for an intermodal ground transportation demonstration project

in Springfield.

• North Carolina has used $2.0 million from its SIB to support

rehabilitation of a dow n t own Gre e n s b o ro rail depot and as local

match for bus acquisition.

• Transit projects supported by $7.4 million in Ohio SIB loans

include structural rehabilitation of a viaduct owned by the

Greater Cleveland Regional Transit Authority (GCRTA) and

rehabilitation of commuter rail between Akron and Canton.

G C RTA repayment sources include rentals, fees, rates, and other

charges of operating fees.

• The Ore g o n Tr a n s p o rtation In f r a s t ru c t u re bank has made $2.5

million in public transportation loans, $1.0 million of which

was flexed from the bank’s highway account. Projects supported

range from transit facility expansion to service expansion.

• The Pe n n s y l va n i a In f r a s t ru c t u re Bank has made two public

transportation loans valued at $3.2 million, one to refurbish

the Harrisburg Transportation Center, an intermodal terminal

serving regional transit services and intercity bus and rail, and

the second to construct a new maintenance and administrative

facility for the Berks Area Reading Transportation Authority.

Future Loans

While loans for public transportation currently represent only

one-fifth of all SIB loan activity nationwide, increasing this

share is a challenge due in large part to the difficulties transit

agencies face in identifying revenue streams to service debt for

capital projects. However, SIBs can still play a key role in plans

of finance for projects that can identify these repayment streams,

enabling quicker delive ry of transit facilities, equipment, and

services than might otherwise be possible.

FTA plans to assist the SAFETEA-LU SIB program by offering

guidance in the future. In t e rested program participants may learn

m o re about the program by contacting the FTA Office of

Policy and Pe rformance Management at 202/366-4050 or by

visiting the innova t i ve finance web site at h t t p : / / w w w. f h w a . d o t . g ov /

i n n ova t i ve f i n a n c e.

SIBs Assist Public Transportation Projects

Contact:

Robena Reid, FTA,

202/366-1973,

robena.reid@fta.dot.gov

The Fund was capitalized with a transfer of $25 million from the

state highway fund. Leveraging was built into the program from

the beginning. Fund uses the initial capitalization to disburse

loan proceeds and for a re s e rve fund for bonding purposes.

The Fund will issue bonds to replenish the Fund, and KDOT

estimates that the Fund can loan approximately $120 million

without additional capitalization. Currently, the Fund is using

all state funds, but it is designed to use Federal funds now made

available under the new SAFETEA-LU SIB program.

The Fund plans to issue about $30 million in bonds to re p l e nish

the re s e rve this summer. This will enable the Fund to loan approximately $30 million each year for fiscal years 2006 and 2007.

The Fund is actively seeking applications. Application forms, a

p rogram guide, and rules and regulations are available on

KDOT’s web site at www.ksdot.org. Contact:

Evelyn Fitzpatrick,

KDOT,

785/296-4782,

evelynf@ksdot.org

Kansas Fund, continued from page 9
11

TRB 2006 Annual Meeting

Innovations in Project Delivery and Financing for

Surface Transportation Infrastructure, Workshop 134

A workshop on In n ovations in Project De l i ve ry and Financing

for Surface Transportation Infrastructure will be held during

the 2006 85th TRB Annual Meeting. Sp o n s o red by the

Taxation and Finance Committee and the De s i g n - Bu i l d

Task Fo rce, in collaboration with the FHWA, PI A RC, and the

Organization for Economic Cooperation and Development/

Eu ropean Conference of Ministers of Tr a n s p o rt Jo i n t

Transport Research Centre, the workshop provides a forum

to explore the latest developments in innova t i ve pro j e c t

delivery and financing approaches.

With the growing trend to advance transportation infras t ru c t u re investment through public-private part n e r s h i p s

( P P Ps), the work s h o p’s emphasis is on sharing experiences of

successful domestic and international strategies, bringing

together national and international experts from both the public

and private sectors as well as project sponsors to provide their

p e r s p e c t i ves on how more innova t i ve techniques and tools can

be used to complement conventional transportation delivery

and funding approaches. In addition, U.S. DOT re p re s e ntatives will share their insights on the innovative finance provisions of SAFETEA-LU.

The workshop has a three-part structure:

• The first part features international experts who will discuss

the application of innovative funding mechanisms in transp o rtation infrastru c t u re investment. Key questions for

consideration include which innova t i ve funding mechanisms

should be employed, and under what circumstances, and what

the determinants of success are. Specific issues related to project design and execution, such as risk allocation, will also

be addressed.

• The second part focuses on the innovative financing programs under SAFETEA-LU, covering new tools and

improvements to current programs. Panelists will provide

insights on how SAFETEA-LU makes it easier and more

a t t r a c t i ve for the private sector to participate in highway

infrastructure projects.

•The third part features project sponsors discussing their firsthand experiences in implementing innova t i ve financing

and delive ry approaches and sharing lessons learned and

successful strategies to facilitate PPPs. Potential new financial models for PPPs will also be explored. The format will

be interactive so workshop participants will be able to ask questions and engage in dialogue with the transportation expert s .

The workshop will be held on Su n d a y, Ja n u a ry 22, 2006, from

8:30 a.m. to 5:00 p.m. at the Hilton Washington Hotel.

RESOURCES

In response to the growing interest of the transportation community in public-private partnerships (PPPs), FHWA has

launched an important new internet re s o u rce available at

http://www.fhwa.dot.gov/ppp/. This web site provides comprehensive information on the use of PPPs to support the nation’s

surface transportation needs.

The web site identifies a spectrum of PPP arrangements through

which private sector responsibilities can be expanded by the

use of partnerships. These PPP options range from transferring

tasks normally done in-house to the private sector, to combining typically separate services into a single pro c u rement, or having

p r i vate sector partners assume owner-like roles for planning,

financing, implementing and operating transportation facilities.

The FHWA PPP web site provides profiles of projects that have

benefited from one or more forms of PPPs, as well as definitions,

resource documents, and links to other web sites with information on the different PPP options. The site also provides comp re h e n s i ve information on PPP legislation, including links to state

PPP legislation, legal analysis of state PPP statutes and a review

of 28 key elements of PPP legislation for highway projects.

The PPP site is the primary location for all of FHWA’s In t e r n e t -

based information for the Special Experimental Project (SEP-15)

p rogram, the new experimental process FHWA has developed to

identify and evaluate new public-private partnership appro a c h e s

(see the Fall 2004 issue of I F Q for an ove rv i ew of SEP-15). T h e

SEP materials on the site include guidance and procedural documents, frequently asked questions, and links to actual SEP-15

applications, approval letters, and early development agre e m e n t s .

In addition to establishing a new office for PPPs, FHWA also has

recently completed a number of important re s o u rce documents

on PPPs which are available on the PPP web site. The most

recent is the F H WA Manual for Using PPPs on Hi g h w a y

Pro j e c t s which was issued in November 2005 and prov i d e s

information on the Federal re q u i rements that apply when

states pursue PPP projects.

Users of the FHWA PPP web site will see that the site has been

designed to complement In n ova t i ve Fi n a n c e . o r g. Both sites feature

updated events calendars and technical information. Users will

see other additions and enhancements in coming months,

including new project profiles.

Public-Private Partnership Web Site

Contacts:

Jim March,

FHWA,

202/366-9737,

jim.march@fhwa.dot.gov

Benjamin G. Perez, AICP,

PB Consult,

212/613-8804,

perez@pbworld.com

or
12

A REMINDER TO READERS

F H WA D O E S N OT M A I N TA I N A M A I LING

LIST AND DOES NOT DISTRIBUTE IFQ

D I R E C T LY. I F Q I S AVA I LA B L E A S A N

INSERT TO THE AASHTO JOURNAL,

A N D I S AVA I LA B L E E L E C T RO N I C A L LY

T H RO U G H F H WA’s www HO M E PAG E:

http://www.fhwa.dot.gov/

innovativefinance/

I F Q I S A L S O P ROV I D E D TO T H E F O LLOWING ORGANIZATIONS FOR REDISTRIBUTION AND/OR AS INFORMATION FOR

THEIR MEMBERSHIP:

❖ American Public Works

Association (APWA)

❖ Surface Transportation Policy

Project (STPP)

❖ National Governor’s Association

(NGA)

❖ National Association of State

Treasurers (NAST)

❖ National Association of State

Auditors, Controllers, and

Treasurers (NASACT)

❖ National Association of Regional

Council’s (NARC’s) Association

of MPOs (AMPO)

SUZANNE H. SALE, FHWA

CO-MANAGING EDITOR

602/379-4014

FAX: 602/379-3608

SUZANNE.SALE@FHWA.DOT.GOV

MAX INMAN, FHWA

CO-MANAGING EDITOR

202/366-2853

FAX: 202/366-7493

LAURIE L. HUSSEY, CS MANAGING EDITOR

CAMBRIDGE SYSTEMATICS, INC.

617/354-0167

FAX: 617/354-1542

LHUSSEY@CAMSYS.COM

Reproduction (in whole or in part)

and broad distribution of IFQ is

strongly encouraged. Permission

from FHWA, the editor, or any

other party is not necessary.

Contributors to Vol. 11, No. 1 of IFQ include:

Roger Berg, Cambridge Systematics, Inc.

Duane Callender, TIFIA Credit Program

Dale Gray, FHWA

Max Inman, FHWA

Phyllis Jones, FHWA

Jim March, FHWA

Jennifer Mayer, FHWA National Resource Center

Benjamin G. Perez, PB Consult

Robena Reid, Federal Transit Administration

Suzanne H. Sale, TIFIA Credit Program

Gregory Shea, Maine Department of Transportation

Mark Sullivan, TIFIA Credit Program

Federal Register Notice on Tolling and Pricing

With the passage of SAFETEA-LU, states and/or other public entities now have

an enhanced variety of opportunities for tolling motor vehicles to finance

Interstate construction and re c o n s t ruction, promote efficiency in the use of highways, reduce traffic congestion, and improve air quality. FHWA will issue two

Federal Register Notices (FRNs) in early 2006 addressing the new tolling and

pricing provisions of SAFETEA-LU. One FRN will provide detailed information

on application pro c e d u res for slots, grants and tolling authority under the

Value Pricing Pilot Program. The second will describe the non-grant programs

that give states and other entities the authority to toll motor vehicles. The two

notices will be published in the Federal Register on the same day and will invite

expressions of interest from states and other qualified applicants.

The Office of Operations within FHWA is the designated lead for all tolling and

pricing programs. The office has created the FHWA Tolling and Pricing Team

to coordinate the different tolling and pricing programs and provisions within

F H WA and direct public authorities to the most appropriate program or prov ision

among the many options available to meet their goals. The team will thus serve

as a clearinghouse for all tolling and pricing requests, including helping to match

requests to the most appropriate program. All approvals and program ove rsight

will continue to rest with the respective responsible program offices.

For more information on FHWA’s tolling and pricing programs, please contact

Wayne Berman at 202-366-4069 or wayne.berman@fhwa.dot.gov.