State Infrastructure Banks: A Mechanism to Expand Federal Transportation
Financing (Letter Report, 10/31/96, GAO/RCED-97-9).
Pursuant to a congressional request, GAO reviewed states' interest in
establishing state infrastructure banks (SIB), focusing on the: (1)
extent of states' interest in the SIB pilot program and how states might
use SIB; and (2) benefits and barriers to states using SIB.
GAO found that: (1) 15 states applied for the 10 slots in the SIB pilot
program; (2) these states generally have large and growing populations
that need additional highway construction; (3) most of the states
surveyed indicated that SIB would probably be used to help fund less
than 10 percent of their state transportation projects in the next 5
years; (4) officials from 8 states believe that the most important
benefit of using SIB over the next 5 years would be the expedited
completion of state transportation projects; (5) 8 states believe that
the absence of new federal funds to capitalize SIB diminished the
likelihood that they would participate in the SIB pilot program; (6) the
fiscal year 1997 Department of Transportation (DOT) appropriation
provided $150 million for SIB, and how the funding is allocated could
affect the number of states applying for the pilot program; (7) although
a primary SIB benefit is that financing will be repaid and can be
recycled to future transportation projects, some states are averse to
debt financing and concerned about whether there are enough
revenue-generating projects to sustain SIB; (8) some infrastructure
financing experts question SIB prospects for attracting private-sector
involvement; and (9) states expressed varying degrees of interest in
other financing mechanisms provided for primarily in the National
Highway System Designation Act of 1995.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-97-9
TITLE: State Infrastructure Banks: A Mechanism to Expand Federal
Transportation Financing
DATE: 10/31/96
SUBJECT: Revolving funds
State-administered programs
Federal aid for highways
Capital
Road construction
Bank loans
Credit
Intergovernmental fiscal relations
IDENTIFIER: DOT State Infrastructure Bank Pilot Program
FHwA Congestion Mitigation and Air Quality Improvement
Program
Arizona
Florida
Ohio
Oklahoma
Oregon
South Carolina
Texas
Virginia
California
Missouri
Highway Trust Fund
Michigan
EPA State Revolving Fund
Washington
DOT Surface Transportation Program
Minnesota
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Cover
================================================================ COVER
Report to Congressional Requesters
October 1996
STATE INFRASTRUCTURE BANKS - A
MECHANISM TO EXPAND FEDERAL
TRANSPORTATION FINANCING
GAO/RCED-97-9
State Infrastructure Banks
(342896)
Abbreviations
=============================================================== ABBREV
DOT - Department of Transportation
EPA - Environmental Protection Agency
FHWA - Federal Highway Administration
GAO - General Accounting Office
ISTEA - Intermodal Surface Transportation Efficiency Act of 1991
NHS - National Highway System
SIB - State Infrastructure Bank
Letter
=============================================================== LETTER
B-265697
October 31, 1996
The Honorable John H. Chafee
Chairman
The Honorable Max S. Baucus
Ranking Minority Member
Committee on Environment and
Public Works
United States Senate
The Honorable John W. Warner
Chairman, Subcommittee on
Transportation and Infrastructure
Committee on Environment and
Public Works
United States Senate
Total public spending on the capital needs for highways and bridges
was approximately $40 billion in 1993, the most recent year for which
data are available. However, the Department of Transportation (DOT)
believes this investment is far short of what is needed, and DOT
estimates that an additional $16 billion annually is needed just to
maintain--not improve--the condition and performance of the nation's
highways at the 1993 level. Postponing investment can increase
costs; DOT estimates that deferring $1 in highway resurfacing for
just 2 years can require spending $4 in highway reconstruction costs
to repair the damage.
In order to stretch the limited federal funds, the Congress
authorized some innovative uses of federal transportation funds. For
instance, the National Highway System Designation Act of 1995
provided a number of innovative financing mechanisms, including the
authorization of a State Infrastructure Bank (SIB) Pilot Program for
up to 10 states.\1 This legislation also directed DOT to review the
financial condition of each infrastructure bank established under the
pilot program and to report to the Congress on the results of such
review by March 1, 1997.
SIBs are intended to complement traditional transportation grant
programs and provide states with increased flexibility to offer many
types of financial assistance, such as loans and subsidized interest
rates, and provide bond or other debt-financing security tailored to
fit a project's specific needs. Before a SIB can begin operations,
however, it will need equity capital to get started. The 10 states
selected to participate in the pilot program can capitalize a SIB in
part by depositing in the SIB a maximum of 10 percent of most of
their federal highway funds for fiscal years 1996-97. In addition,
the DOT appropriation for fiscal year 1997 provided $150 million for
the pilot program and removed the 10-state limit.
To provide you with an early snapshot of states' interest in
establishing SIBs, you asked that we (1) identify the extent of
states' interest in the pilot program and how states might use SIBs
and (2) identify the benefits and barriers to states' using SIBs. At
your request, we also summarized in appendix I information on states'
interest in using other innovative financing mechanisms that are
contained principally in the National Highway System Designation Act
of 1995.
To address these questions, we used a structured questionnaire to
interview (1) transportation officials from 15 states that generally
had expressed an interest to DOT in innovative financing\2 --6 of
which had been selected to participate in the SIB Pilot Program--and
(2) various financial representatives, such as firms that rate bonds'
risk and financial condition. Also, we analyzed the development of
the federal SIB Pilot Program and the state applications submitted.
Appendix II discusses our scope and methodology in more detail.
--------------------
\1 Under the pilot program, a SIB is to maintain a separate highway
account and a separate transit account for federal funds contributed
to the bank. This report focuses on the highway account of SIBs.
\2 We contacted 16 states, but 1 did not respond to our survey.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
Fifteen states submitted applications for the 10 slots in the State
Infrastructure Bank Pilot Program. The states that applied generally
have large or growing populations that need additional highway
construction. States with large land areas and comparatively small
populations generally elected not to apply, as did most northeastern
states, for a variety of reasons that could include the states' and
regions' fiscal capacity, the public's unwillingness to incur debt to
finance highways, and the availability and cost of rights-of-way for
start-up projects. Most of the states that we surveyed indicated
that State Infrastructure Banks would probably be used to help fund
less than 10 percent of their state transportation projects in the
next 5 years.
Officials from 8 of the 15 states that responded to our survey
consider the expedited completion of projects to be the most
important benefit of State Infrastructure Banks over the next 5
years. By drawing on diverse sources for funds, more capital can be
amassed, thus enabling a project to get started and completed sooner
than otherwise possible using conventional federal grants.
Furthermore, when loans are repaid through tolls, dedicated taxes or
other forms of repayment, the funds can be reloaned to other
transportation projects in the future.
The absence of new federal money to capitalize a State Infrastructure
Bank was viewed by 8 of the 15 states surveyed as a factor that
definitely diminished the likelihood that their state would
participate in the pilot program. However, DOT's appropriation for
fiscal year 1997 provided $150 million for State Infrastructure
Banks. DOT will have to decide how the funds will be allocated.
This additional funding and how it will be allocated could affect the
number of states interested in applying for the pilot program.
Although a primary benefit of State Infrastructure Banks is that the
financing will be repaid and can be recycled to future projects, some
states expressed aversion to debt financing and concern about whether
there are enough revenue-generating projects to sustain a State
Infrastructure Bank. Also, some experts on infrastructure financing
question State Infrastructure Banks' prospects for attracting private
sector involvement--one of the program's primary goals.
Regarding the expected use of other financing mechanisms provided for
primarily in the National Highway System Designation Act of 1995, the
states indicated varying degrees of interest in the mechanisms. (See
app. I for details.)
BACKGROUND
------------------------------------------------------------ Letter :2
Under the pilot program, a SIB serves essentially as an umbrella
under which a variety of innovative finance techniques can be
implemented. Much like a bank, a SIB would need equity capital to
get started; and equity capital could be provided at least in part
through federal highway funds. Once capitalized, the SIB could offer
a range of loans and credit options, such as low-interest loans, loan
guarantees, or loans requiring repayment of interest-only in early
years and delayed repayment of the loan's principal. For example,
through a revolving fund, states could lend money to public or
private sponsors of transportation projects; project-based or general
revenues (such as tolls or dedicated taxes) could be used to repay
loans with interest; and the repayments would replenish the fund so
that new loans could be supported. Alternatively, states could use
federal capital as a reserve, or as collateral against which to
borrow additional funds, usually by issuing bonds.
Pilot states can capitalize a SIB in part by depositing in the bank a
maximum of 10 percent of most of their federal highway funds for
fiscal years 1996-97.\3
--------------------
\3 Federal highway funds that could not be used for capitalizing SIBs
include apportionments from demonstration projects under the
Intermodal Surface Transportation Efficiency Act of 1991 and the
Congestion Mitigation and Air Quality program. In addition, Surface
Transportation Program funds or other funds that are suballocated to
urban areas (populations over 200,000) could only be deposited into a
SIB with the approval of the area's metropolitan planning
organization.
STATES' INTEREST IN AND
EXPECTED USE OF SIBS
------------------------------------------------------------ Letter :3
States not participating in the pilot program differ in their
interest in SIBs and in their willingness and/or ability to use the
full range of SIB financing techniques.
SIB PARTICIPATION
---------------------------------------------------------- Letter :3.1
Eleven of the 15 states we surveyed indicated that they were
definitely or probably interested in participating in the SIB Pilot
Program. However, only 9 of the 15 states submitted SIB applications
to DOT. Four of the states--Arkansas, Louisiana, Montana, and New
York--indicated that they were probably or definitely not interested
in participating in the pilot program. Because we primarily targeted
states that had expressed an interest in innovative financing to DOT,
survey respondents indicated a higher interest than would be expected
nationwide. Nationwide, only 15 states submitted applications to DOT
to take part in the pilot program. While six other states expressed
interest in the program to DOT, they did not submit an application.
On April 4, 1996, DOT announced that Arizona, Florida, Ohio,
Oklahoma, Oregon, South Carolina, Texas, and Virginia had been
selected to participate in the pilot program. On June 21, 1996, DOT
added California and Missouri. Figure 1 shows the applicant states
and those selected to participate in the pilot program. DOT will
assess how state SIBs are operating under the pilot program.
Specifically, the legislation establishing the pilot program directs
DOT to report on the financial condition of each infrastructure bank
established under the pilot program. This report is to be
transmitted to the Congress by March 1, 1997.
Appendix III provides you with information on projects that the pilot
participants are considering for financial assistance from SIBs.
According to the Federal Highway Administration (FHWA) official
responsible for the pilot program, the states are in the process of
establishing and capitalizing their SIBs; thus, they have not yet
decided on the projects that the SIBs will finance.
Figure 1: States Applying and
Selected for Participation in
the SIB Pilot Program
(See figure in printed
edition.)
Source: GAO's presentation
based on FHWA's data on the SIB
Pilot Program's applicants.
(See figure in printed
edition.)
As figure 1 indicates, more than half of the SIB Pilot Program
applicants are southern and western coastal states with large and/or
growing populations that necessitate additional highway construction.
States with large land areas that have comparatively small
populations and most northeastern states generally elected not to
apply for a variety of reasons. These reasons might include the
states' and regions' fiscal capacity, the public's unwillingness to
incur debt to finance highways, and the availability and cost of
rights-of-way for start-up projects.
In connection with DOT's fiscal year 1997 appropriation, the
administration proposed expanding the SIB Pilot Program to include
additional states and to provide $250 million in highway trust fund
revenue for capitalizing the banks. The House of Representatives
rejected the administration's proposal on the grounds that the pilot
program is still in its very beginning stages and that any further
expansion of the program should be considered in the context of the
reauthorization of the Intermodal Surface Transportation Efficiency
Act of 1991 (ISTEA). The Senate provided $250 million for the SIB
Pilot Program and allowed the Secretary of Transportation to
distribute SIB funds to more than 10 states on the grounds that SIBs
are a promising way of facilitating needed infrastructure investment,
especially when all levels of government are facing constrained
resources. The conferees agreed to provide $150 million for the SIB
Pilot Program, which is to remain available until expended, out of
the general fund rather than the Highway Trust Fund. In addition, no
distribution of funds is to be made until 180 days from the date of
enactment. The conferees also agreed to permit the Secretary of
Transportation to approve SIBs for more than 10 states. The
President signed the legislation on September 30, 1996.
STATES' USE OF SIBS AND SIB
FINANCING TOOLS WILL VARY
---------------------------------------------------------- Letter :3.2
Ten surveyed states provided us with estimates of the extent that
their needs may be served by a SIB. Eight states indicated that they
would use SIBs to help fund less than 10 percent of their
transportation projects. Two of the states indicated a higher
expected use of SIBs: Ohio estimated 10 to 25 percent of its
projects could be financed through a SIB, and Michigan estimated that
25 to 50 percent of its projects could be financed through a SIB.
Seven surveyed states expressing interest in creating a SIB indicated
that they would probably use the funding for direct loans. Six
states indicated that they would probably use the funding for
reserves for bonds or loans. The states' responses are shown in
figure 2.
Figure 2: States' Views on the
Financing Tools That Their SIB
Would Likely Use
(See figure in printed
edition.)
In discussing their views, the 11 responding states seemed open to
using a variety of financing tools as part of their SIB. For
example, 6 of the 11 states that answered this question told us that
their SIB would probably use more than one financing tool, and only 2
states said that they probably would not use a particular tool.
Michigan and California, for example, said that they would probably
use some combination of all the tools. Furthermore, Michigan and
Ohio indicated that their SIBs would probably use other finance
tools, such as letters of credit, in addition to those listed in
figure 2.
STATES ANTICIPATE SHORT-AND
LONG-TERM SIB BENEFITS, BUT
SOME BARRIERS EXIST
------------------------------------------------------------ Letter :4
The SIB concept is intended to complement traditional funding
programs and provide states with increased flexibility to offer many
types of financial assistance tailored to fit a project's specific
needs. As a result, projects could be completed more quickly, some
projects could be built that would otherwise be delayed or infeasible
if conventional federal grants were used, and private investment in
transportation could be increased. Furthermore, a longer-term
anticipated benefit is that repaid SIB loans can be "recycled" as a
source of funds for future transportation projects. Thus projects
with potential revenue streams will be needed to make a SIB viable.
Yet this could also serve as a drawback, and some state and industry
officials question whether a sufficient number of revenue-generating
projects can sustain a SIB and whether debt financing will prove
acceptable to state and local politicians as well as the general
public.
FLEXIBLE PROJECT FINANCING
IS A MAJOR BENEFIT
---------------------------------------------------------- Letter :4.1
Traditional federal transportation funding programs generally consist
of grants, where the federal share of a project's cost is set,
usually at 80 percent, and the state pays the remaining 20 percent.
Until recently, states have generally not been able to tailor federal
funding to a form other than a grant.
Under the pilot program, a SIB is essentially an umbrella under which
a variety of innovative financing techniques could be implemented.
Much like a bank, a SIB would need equity capital to get started.
This capital could come partially from federal funds. Once
capitalized, the SIB could offer a range of loans and credit options.
For example, through a revolving fund, states could lend money to
public or private sponsors of transportation projects. Although new
for federal transportation projects, revolving funds have been used
for other infrastructure investment, such as wastewater treatment
facilities required by the Environmental Protection Agency (EPA).
EPA's state revolving funds are structured in two different ways and
can be used to illustrate how a transportation SIB might be set up.
The first model is a basic revolving loan fund. Under this model, a
state SIB would lend capital directly to projects; project-based
revenues (such as tolls or dedicated taxes) would be used to repay
loans with interest. The repayments would replenish the fund so that
a new generation of loans could be made. The second model is a
leveraged revolving fund. In this instance, states would use federal
capital as reserves or collateral against which to borrow additional
funds, usually by issuing bonds. The SIB would pay interest on the
bonds but would in turn lend out the bond proceeds to individual
projects. With this type of model, leveraging would increase the
pool of capital available to support project loans. Furthermore,
like the basic revolving fund, repayment of project loans plus
interest would support the SIB's repayment of its bonds as well as
provide funds for the SIB to loan to future projects. For example,
Ohio plans to initially capitalize a SIB with $65.5 million,\4 and
issue $87 million in revenue bonds. As a result, the SIB could loan
out a total of $152 million to projects.\5
SIB funds could also be used to provide credit enhancements for
transportation projects. Credit enhancements, such as loan
guarantees or bond insurance, provide additional security to
commercial lenders or private investors who may be providing funds as
part of an overall financing package. Credit enhancements can also
result in lower interest costs or greater borrowing power for a
project.
Some states view SIBs as complementary to their existing innovative
financing efforts. For instance, Ohio's SIB application notes that
as a result of numerous funding requests coming from the state
transportation department's long-range multimodal transportation
program, state law was modified to allow the state's Director of
Transportation to make loans to agencies, organizations, and persons
to acquire, develop, and/or construct transportation facilities. The
law also authorized the director to deposit payments from such loans
into a revolving fund for subsequent loans. While this fund is not
identified as a SIB, Ohio's SIB application notes that essentially it
is one, because the ability to make loans and receive payments is the
basic underlying tenet of a SIB. Similarly, Arizona's SIB
application notes that one of the state's key fiscal strategies has
been to accelerate highway construction through the issuance of $3.1
billion in state transportation bonds. Arizona's SIB application
stated that the SIB will build on the state agencies' recognized
strengths in the bond-financing area, where there is a proven track
record in accessing capital markets and maintaining high credit
quality for bonds issued.
--------------------
\4 The $65.5 capitalization would represent $46 million in federal
funds and $19.5 million in state and/or local funds.
\5 The $152 million may be somewhat less if the SIB committed to
setting aside some part of the $65.5 million to guarantee repayment
of the revenue bonds.
EXPEDITED PROJECT COMPLETION
AND INCREASED STATE AND/OR
LOCAL INVESTMENT IS AN
IMPORTANT BENEFIT
---------------------------------------------------------- Letter :4.2
As shown in figure 3, officials from eight states we contacted said
that the most important benefit of SIBs over the next 5 years is the
expedited completion of the projects. By drawing on diverse sources
for funds, more capital can be amassed, thus enabling a project to
get started and completed sooner than otherwise possible. For
instance, Arizona's SIB application listed five potential projects
for SIB financing. With SIB financing, the state estimated that four
of the projects could get under way in fiscal year 1997, rather than
fiscal years 1999 through 2004 and that the fifth potential project,
although not scheduled, may be able to get under way in fiscal year
1997 with SIB assistance.
Figure 3: States' Views on the
Expected Benefits From SIBs
(See figure in printed
edition.)
Some states also told us that in addition to completing individual
projects faster, a SIB may provide the flexibility to complete a
financial package for worthwhile projects that may be lower on the
state's priority list because of their cost, demographic reasons, or
political changes in priorities. For example, a major new road may
simply be too costly to build, given that many small competing
projects could be built with the same state funding. But if the
project is financed in part from other sources, such as a local
community and private investors, less state funds are needed, which
in turn, may permit a state to fund more roads on its priority list.
As the Texas SIB application notes, over the next 5 years, the state
will be able to finance less than half of its identified
transportation needs with currently available funding. The
availability of SIB financial assistance will allow local communities
to provide assistance and help bridge the funding gap. Communities
that are willing to dedicate local revenue sources to complete
particular projects but do not have well-established credit ratings
or lack experience in capital financing will be aided by financial
assistance from SIBs and associated technical assistance. Ohio plans
to foster increased local contributions. Specifically, Ohio notes
that its SIB will be reinforced by a project-rating system that
identifies priorities for the selection of projects. Under this
rating system, local communities can receive bonus points that
upgrade the priority of their projects if they provide a significant
portion of the project's funding.
BENEFITS OF ATTRACTING
INVESTMENT FROM THE PRIVATE
SECTOR
---------------------------------------------------------- Letter :4.3
Ten of the states we surveyed viewed SIBs' ability to attract private
funds as providing some or great benefit. Private investment has not
traditionally been involved in transportation projects because of the
general lack of authority under federal law and because of some
states' legislative and constitutional restrictions on giving or
lending state funds to private entities to build and operate roads.
A SIB may increase private investment by reducing the risk to the
private investors. Credit enhancements, such as a loan guarantee,
would help to ensure that federal and/or state funds committed to the
project will be there when the bills come due. Members of the
infrastructure finance community told us that one common fear among
investors is that the political commitment and funds planned for a
given project will not materialize because of competing state
priorities. Even a relatively small government investment could
increase the private sector's confidence. For example, California
officials believe that state SIB investments of only 10 percent
equity in some projects will give private lenders and investors the
confidence to participate in funding the remaining 90 percent of the
cost.
Private investment can help close the gap for transportation needs
that may otherwise go unmet or be forestalled for years. For
instance, Oklahoma's SIB application explained that there are a
number of growth industries in the state, all of which require
enhanced transportation. For example, the southeast quadrant, the
state's poorest quadrant, supports a growing food-processing industry
and is experiencing an influx of hog farms, feed plants, and
poultry-processing facilities. But further industry development
depends on substantial improvements to the rural transportation
network. State officials view a SIB as a vehicle to help facilitate
private investment from businesses that would benefit from an
improved transportation network.
SIB'S GOAL IS TO BE SELF-
SUSTAINING IN THE FUTURE
---------------------------------------------------------- Letter :4.4
Looking toward the future, states that create revolving funds want
the SIBs to be self-sustaining, and if the funds are leveraged, they
would want the pool of resources available for loans to grow.
However, this growth may take many years. Whether and when a SIB
achieves growth depends on a number of factors, including (1) the
degree to which loan interest rates are lower than market rates, (2)
loan repayment periods, (3) the reliability of forecasted revenue
streams, and (4) the amount of leverage employed. And not all SIBs
will leverage funds.
Only 18 states have leveraged funds under EPA's State Revolving Fund
Program. In the State Revolving Fund context, leveraging means that
states have the discretion to use the federal capital grants, as well
as their matching shares, as collateral to borrow in the public bond
market to increase the pool of available loan funds for projects.
According to the Council of Infrastructure Financing Authorities,\6
leveraging the State Revolving Fund has substantially increased the
funds available for lending. The Council reported in August 1994
that close to $4 billion has been added to the loan pool by the 18
states that have leveraged their funds--half as much as the nearly $8
billion provided in federal capital grants thus far. Furthermore,
when assessing the future growth for those funds that are leveraged,
the Council assumes conservatively that $1 for the State Revolving
Fund program will generate an additional $2 in investments.
Arizona's plans are an example of how a SIB could grow. The state
plans to capitalize an initial SIB at $71.5 million, representing $64
million in federal funds and $7.5 million in state and/or local
funds. The state plans to use that investment as a base for issuing
bonds and make $20 million in initial loans to transportation
projects with the bond proceeds. In approximately 20 years (by
2017), the state anticipates that loan repayments plus interest on
the loans will increase its initial $71.5 million investment to $260
million in SIB loans. This amount in turn could be the basis for
supporting an even larger bond issuance if the state decided to
leverage its funds again.
DOT estimated that $2 billion in federal capital provided through
SIBs could be expected to attract an additional $4 billion for
transportation investments, thus achieving a leverage ratio of 2 to
1. FHWA officials told us that this estimate is conservative and is
based on EPA's State Revolving Fund program. FHWA officials said
that SIBs could achieve a leverage ratio as high as 4 to 1. But as
Washington State officials point out, FHWA's assertion is too general
to prove or disprove. The return depends heavily upon individual
projects and how "leverage" is defined.
--------------------
\6 The Council of Infrastructure Financing Authorities is a national
nonprofit association representing state, regional, and local public
infrastructure financing agencies; most of its public members are
authorities issuing tax-exempt bonds to build public infrastructure.
BARRIERS THAT MAY IMPEDE
STATES FROM PARTICIPATING IN
A SIB PILOT
---------------------------------------------------------- Letter :4.5
Some state officials and industry experts remain skeptical that SIBs
will produce the expected benefits. Some of the barriers cited
include the following: (1) there are no additional federal funds to
support SIB capitalization, (2) there are not enough revenue
producing projects to sustain a SIB, and (3) there may be legal or
constitutional state problems, such as prohibitions against the
private sector's profiting from using government funds channeled
through a SIB. Figure 4 shows states' responses to possible barriers
to their participation in the pilot program.
Figure 4: Factors Diminishing
States' Interest in the SIB
Pilot Program
(See figure in printed
edition.)
As figure 4 shows, states considered the lack of additional federal
funds as the primary barrier to participating in the program.
However, very few states considered their insufficient knowledge of
SIBs or lack of expertise to start a SIB as barriers to participating
in the SIB Pilot Program.
FUNDS TO CAPITALIZE A SIB
-------------------------------------------------------- Letter :4.5.1
States selected to participate in the pilot program are permitted to
use a maximum of 10 percent of most of their federal highway grant
funds for fiscal years 1996-97 to capitalize a SIB.\7 Funding SIBs
from existing funds, however, can act as a disincentive for states
participating in the SIB Pilot Program. As figure 4 showed, 8 of the
15 states cited the absence of additional federal funds to capitalize
a SIB as a factor that definitely diminished their likelihood of
participating in the SIB Pilot Program. For instance, New York
transportation officials told us that all their available federal and
state funds are fully committed to planned highway and transit
projects; thus, no funds are available to capitalize a SIB.
Of the 11 states we surveyed that indicated interest in participating
in the SIB Pilot Program, 9 provided us with estimates of the
percentage of their available federal highway funds they expected to
use to capitalize a SIB. Six of these states indicated that for
fiscal years 1996 and 1997, they expected to use less than half of
the federal highway funds allowed to capitalize a SIB.
Some of the states' decisions reflect the fact that federal funds are
already fully committed to planned projects, often for the next 3 to
5 years. Therefore, state officials do not expect to be able to
rechannel funds for an alternative use, particularly in the early
start-up years. According to a Texas transportation official,
capitalizing a SIB within the next 5 years would mean diverting funds
from planned projects with existing constituencies. This official
was more optimistic that with the passage of time, rechanneling
federal funds to a SIB would become easier as projects that could be
supported through a SIB developed their own constituencies.
To help with capitalization for SIBs in a constrained budget
environment, some projects already planned with established financing
may be brought under the SIB financing umbrella. Thereby, the SIB
will be able to capture future project loan repayments. For
instance, one of four potential projects identified in South
Carolina's SIB application will receive financing through a planned
issue of up to $60 million in state highway bonds. The proceeds of
this bond issue will be loaned to the state turnpike authority to
complete construction of a four-lane highway that will bypass the
overcrowded main artery on Hilton Head Island. Under the terms of a
loan agreement, tolls collected by the turnpike authority from the
project will be used to repay the state DOT. It is the intention of
the state DOT to move this transaction under the SIB.
Similarly, one of the projects identified in the Texas SIB
application already has financing, but the Texas DOT indicated its
intent to bring the project under the institutional framework of the
SIB, thus allowing loan repayments to be used for future SIB-assisted
projects. If this is the only source of the SIB's capitalization,
however, the operation of the Texas SIB will be delayed because
repayment of the $135 million loan does not begin until 2004 and is
spread over 25 years.
A provision in DOT's fiscal year 1997 appropriation should also help
with capitalization for SIBs. As previously mentioned, the
appropriation provides $150 million for the SIB Pilot Program. The
funding is to be made available until expended. DOT will need to
decide how the funds will be allocated. DOT will have various
options for allocating the funds, including (1) a proportional
distribution based on states' historical share of federal highway
funds for those states participating in the pilot program, (2) an
equal distribution of the funds to all participating states, (3) an
incentive to induce states to participate in the SIB pilot, or (4) a
performance award to encourage certain actions or projects, such as
fund leverage or particularly innovative project financing. While
these are just some of the various ways that funds could be
distributed, information on how the funds will be distributed will
likely prove to be a critical factor in the number of additional
states that choose to participate in the pilot program.
--------------------
\7 Federal highway funds that could not be used for SIB
capitalization include apportionments from ISTEA demonstration
projects and the Congestion Mitigation and Air Quality program. In
addition, Surface Transportation Program funds or other funds that
are suballocated to urban areas (over 200,000 population) could only
be deposited into a SIB with the approval of the area's metropolitan
planning organization.
LACK OF CANDIDATE
PROJECTS AND DEBT
REPAYMENT OBSTACLES
-------------------------------------------------------- Letter :4.5.2
According to an official in FHWA's Office of Policy, a significant
barrier to viable, thriving SIBs is the low number of projects that
could generate revenue and thus repay loans made by SIBs. In turn,
the states' and regions' population density and fiscal capacity, the
acceptance of tolls by the public and legislators, and the
availability and cost of the rights-of-way for start-up projects are
factors in how much demand there will be for SIB-financed projects.
Six of the states that we surveyed told us that an insufficient
number of projects with a potential revenue stream would diminish the
prospects that their state would participate in the SIB Pilot
Program.
Repayments for highway projects' debt could be derived through a
number of ways; principal ones would include (1) vehicle tolls; (2)
other project revenues, such as air or other rights of way, and
revenues from commercial rest stops; (3) dedicated public revenues
linked to the project, such as revenue districts or special benefit
taxes, and general public revenues, such as development or sales
taxes. Figure 5 shows the types of revenues that states indicated
they would likely use to repay SIB loans.
Figure 5: States' Views on
Likely Revenue Sources
(See figure in printed
edition.)
Ten of 11 states said they are considering tolls. However, state
officials commented that they expected tolls would generate
considerable negative reaction from political officials and the
general public. This concern has been highlighted by a recent
experience in Washington State, where four of five planned toll
projects have been indefinitely suspended because of public and
political opposition.
In addition, of the four states we surveyed that were not interested
in participating in the SIB Pilot Program, three states cited the
need to repay SIB debt, specifically, an aversion to tolls, as a
reason for not wanting to participate. As Arkansas officials noted,
the public aversion to debt financing for highways was recently
expressed when a state bond referendum lost heavily; 87 percent voted
against it.
LEGAL BARRIERS
-------------------------------------------------------- Letter :4.5.3
Some states also expressed uncertainties regarding their legal or
constitutional authority to establish a SIB in their state or use
some financing options that would involve the private sector.
Michigan, for instance, said that it does not currently have the
constitutional authority to lend money to the private sector. While
Minnesota does have the authority to lend money to the private
sector, state officials noted that they would need legislative
changes, because their authority is currently restricted to lending
funds interest-free to private firms to build toll roads. Thus, the
state would need the legislative authority to charge interest on
loans to the private sector. In addition, Minnesota officials stated
that the SIB would need authority to reloan the money because any
repayment of a transportation loan must currently be deposited into
the state's general fund.
Texas officials noted that participation in the SIB Pilot Program
would be based on a two-phased approach. In the first phase of
implementation (1996-97), the Texas SIB would use existing statutory
and constitutional authority to provide financial assistance for
highway toll projects. In January 1997, legislative changes would be
sought to enable the Texas SIB to begin the second phase of the
program's implementation and expand the types of recipients and
projects eligible for assistance.
Another impediment can arise if the SIB exposes the state to debt.
Backing SIB financial assistance with the full faith and credit of
the state is not legally permitted in some states. Without the
guarantee of the full faith and credit of the state, the SIBs will
have to rely on the strength of their project portfolio and initial
capitalization as the basis for borrowing.
For instance, South Carolina officials noted that the state
constitution prohibits the outright guarantee of the full faith and
credit of the state for the indebtedness of a private party. In
addition, South Carolina officials note that any security or debt
financing instrument or guarantee issued by their state SIB is not
and should not be construed to be backed by the full faith and credit
of the state of South Carolina or its agencies and does not
constitute a commitment, guarantee, or obligation of the state.
However, these officials do not believe that this prohibition will
significantly affect the operations of a SIB because proposed
legislation will limit the SIB's obligations to exclude the full
faith and credit of the state. Similarly, Oregon's Department of
Justice advised that Oregon's constitution prohibits lending the
credit of the state. Therefore, SIB agreements will be structured to
protect the state from assuming any prohibited obligations.
Finally, some infrastructure finance experts question SIBs' prospects
for attracting private sector involvement--one of the program's
primary goals. One principal barrier to attracting private capital
is the fact that the Internal Revenue Code restricts private
involvement in tax-exempt debt. In the case of state and local
bonds, bondholders' interest earnings are exempt from federal taxes.
However, the tax exemption does not apply to a bond issue if (1) the
private sector uses more than 10 percent of the proceeds and finances
more than 10 percent of the debt or (2) more than 5 percent of the
proceeds or $5 million (whichever is less) is used to make loans to
the private sector. Exempt facility bonds that meet volume and other
statutory requirements are not subject to this rule. Exempt facility
bonds are bonds for which 95 percent or more of the issue's net
proceeds are to be used to provide specified facilities, including
airports, docks and wharves, and mass-transit facilities.
A number of infrastructure finance experts told us that states that
choose to leverage their infrastructure banks will likely do so with
tax-exempt debt because bondholders are willing to accept lower
interest rates in exchange for the bonds' tax-exempt status.
Restrictions on private involvement in tax-exempt debt are not unique
to infrastructure banks. However, as a result of the restrictions,
private participation in projects financed by leveraged banks could
be inhibited under the terms of existing tax law.
CONCLUSION
------------------------------------------------------------ Letter :5
SIBs offer the promise of helping to close the gap between
transportation needs and available resources by helping to attract
other revenue sources. However, some state officials expressed an
aversion to debt financing and concern about whether there are enough
revenue-generating projects to sustain a SIB. Because of its
newness, the pilot program will need time to develop and mature, and
a comprehensive assessment of SIBs' impact on meeting transportation
needs can probably only be assessed over the long term. The
legislation authorizing the SIB Pilot Program provides that DOT
submit a report to the Congress on the financial condition of each
infrastructure bank established under the pilot program. This report
is to be submitted to the Congress by March 1, 1997. However,
because of the start-up time involved in establishing and funding
SIBs, the information available on the financial condition of SIBs
may be limited at that time. Furthermore, because the Congress only
recently approved expanding the SIB Pilot Program to more than 10
states, along with an additional $150 million, it may be too early to
comprehensively evaluate the results of the program.
Once SIBs begin operating, disseminating information on states'
successes and failures with various financing options as the pilot
program progresses could help other states use their SIB more
effectively and educate other states on the benefits and uses of a
SIB. One of the early benefits in certain pilot states is planned
action to remove legislative barriers to private financial
involvement in transportation projects.
MATTER FOR CONGRESSIONAL
CONSIDERATION
------------------------------------------------------------ Letter :6
The Congress may wish to consider postponing the due date for DOT's
report on the financial condition of the SIBs in the pilot program to
a date later than March 1, 1997.
AGENCY COMMENTS
------------------------------------------------------------ Letter :7
We provided DOT with draft copies of this report for DOT's review and
comment. We met with DOT officials--including representatives from
FHWA's Office of Chief Counsel and Office of Fiscal Services, the
Federal Transit Administration's Office of Budget and Policy, and the
Office of the Secretary Office of Economics--who agreed with the
information presented throughout the report and considered it a
well-prepared, balanced report. DOT agreed with our matter for
congressional consideration and thought that a postponement of DOT's
due date for reporting on the financial condition of SIBs to a date
later than March 1, 1997, would allow the program time to develop and
enable DOT to provide a more useful, substantive report. Regarding
legal barriers to SIBs, officials from FHWA observed that states may
be able to create SIBs under existing law. However, some states may
have to overcome specific legal restrictions for their SIBs to engage
in the full array of financing activities that can be used to address
transportation needs.
---------------------------------------------------------- Letter :7.1
We performed our review from August 1995 through September 1996 in
accordance with generally accepted government auditing standards.
Please call me at (202) 512-2834 if you or your staff have any
questions. Major contributors to this report are listed in appendix
IV.
John H. Anderson, Jr.
Director, Transportation and
Telecommunication Issues
SUMMARY OF SELECTED FINANCE TOOLS
=========================================================== Appendix I
The National Highway System Designation Act of 1995, which includes
the authorization for a State Infrastructure Bank (SIB) Pilot
Program, also gives states additional flexibility to use innovative
finance tools for highways outside the SIB Pilot Program. This
legislation as well as other statutes contain provisions related to
the following:
-- Advance Construction: Allows a state to begin a federal-aid
eligible project in its transportation plan with its own funds
before accumulating the full federal funds.
-- Use of Federal Funds to Finance Bond and Other Debt Instruments:
The Secretary of Transportation may reimburse a state for
expenses and costs incurred for interest payments, the
retirement of principal, the cost of issuance, or other costs of
issuing bonds to finance highways.
-- Loans of Federal Highway Funds to a Public or Private Entity
With a Dedicated Revenue Source: The federal share of a
project's grant funds may be loaned to construct a toll project
or other project with a dedicated revenue source.
-- Federal Share Increased for Toll Roads: The federal share
payable for construction of a toll road is increased from 50 to
80 percent.
-- Increased Flexibility Provided for State Match: States may
apply the value of donated funds, materials, or services to
eligible projects against the state match.
In a survey, we asked 15 states how much use, if any, their state
would likely make of the above financing tools in the next 5 years.
As figure I.1 shows, advance construction was the finance tool that
most states (8 of 15) believed they would make great use of in the
next 5 years. The second favored tool was the flexibility to meet
state matching requirements by applying the value of donated funds,
materials, or services to eligible projects.
Figure I.1: Surveyed States
Expected Use of Certain
Innovative Finance Tools in the
Next 5 Years
(See figure in printed
edition.)
SCOPE AND METHODOLOGY
========================================================== Appendix II
In considering what role SIBs may play in helping states to expand
their ability to finance highways, the objectives of our review were
to (1) identify the extent of states' interest in the pilot program
and how states might use SIBs and (2) identify the benefits and
barriers to states' using SIBs. At the request of the Senate
Committee on Environment and Public Works and the Chairman of that
Committee's Subcommittee on Transportation and Infrastructure, we
also briefly summarize information on states' interest in using other
innovative financing mechanisms that are contained primarily in the
National Highway System Designation Act of 1995 in appendix I.
To attain these objectives, we reviewed relevant sections of the
Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), the
National Highway System (NHS) Designation Act of 1995, and the
Department of Transportation's (DOT) Test and Evaluation Pilot
Project. We reviewed the notice inviting states to apply for the
pilot program, the application instructions, and application material
submitted by individual states.
We selected states for interviews prior to learning whether they
applied and were selected to participate in the program. We were
interested in obtaining the views of states that wanted to apply for
participation in the pilot program as well as states that were not
interested. We contacted transportation officials from 16 states and
were able to obtain information from 15 states on their views,
expectations, and plans (if any) to use SIBs, as well as their
expectations on using certain other innovative finance tools. We
conducted a telephone survey with the selected states and collected
documentation from the surveyed states and from the Federal Highway
Administration (FHWA) about states' SIB plans. The 15 states that
provided us with information were Arkansas, California, Florida,
Louisiana, Maryland, Michigan, Minnesota, Montana, New Jersey, New
York, Ohio, South Carolina, Texas, Virginia, and Washington. These
states were judgmentally selected to include states with interest in
innovative finance tools and geographical balance. Of the 15 states,
6 applied and were selected, 6 did not apply, and 3 applied for but
were not selected to participate in the SIB Pilot Program.
We reviewed states' SIB documents and analyzed the results of surveys
and interviews with state DOTs to identify common problems with
current loan provisions, potential problems with the SIB concept, and
states' interest in and uses for SIBs. Furthermore, we identified
major barriers that may prevent SIB benefits from being realized.
We also conducted telephone interviews and follow-up interviews with
state DOTs' planning, policy, and finance officials; FHWA officials
responsible for innovative finance initiatives; representatives from
finance and construction firms; experts from academia, consulting
firms, and debt-rating services; and representatives of national
policy and labor organizations.
We conducted our review from August 1995 through September 1996 in
accordance with generally accepted government auditing standards.
PROPOSED SIB PILOT PROGRAM
PROJECTS
========================================================= Appendix III
Estimated Estimated
Project constructi
Project descriptio construction Expected Revenue Project on
location n cost SIB help source status start date
----------- ---------- ------------ ---------- ------------ ------------ ----------
Arizona
-----------------------------------------------------------------------------------------
Maricopa Construct $ 2.2 Loan Alternatives Design and Mid-1997
County a 0.25- million amount to are under right-of- (without
(Red mile be consideratio way SIB
Mountain/ bridge determined n. acquisition assistance
SR 87 connector . are under 2004).
Bridge) way, and
environmenta
l impact
statement is
approved.
Cochise Reconstruc $16.0 Loan Alternatives Environmenta Mid-1997
County t and million amount to are under l assessment (without
(SR90/I-10 widen a be consideratio and SIB
to 9.4-mile determined n. preliminary assistance
Kartchner segment of . design under 1998).
Caverns) SR 90. way.
U.S. 93, Reconstruc $21.9 Loan Alternatives Environmenta Late 1997
Santa t and million amount to are under l assessment (without
Marie widen a be consideratio is under SIB
River 4.8-mile determined n. way; design assistance
to Wikieup segment. . 30-percent ).
complete.
Mohave Construct $14.9 Loan Alternatives Environmenta 1997
County SR a new million amount to are under l assessment (without
95 11.5-mile be consideratio is almost SIB
highway. determined n. complete; assistance
. final plans , 1998).
expected
before 1997.
Maricopa Construct $12.0 Loan: $6 Most likely Environmenta 1997
County, a new million million. revenue l assessment (without
Gila bridge. stream: and design SIB,
River surcharge on are currently
Crossing raceway complete. not
for 116th admission. scheduled)
Ave. .
Bridge
California
-----------------------------------------------------------------------------------------
Los Widen and $1.8 billion Credit Debt service Resolution Target
Angeles improve enhancemen on SIB- of the final completion
County the t to supported environmenta date: 2001
Alameda support bonds to be l impact
Corridor. privately paid through statement
issued cargo fees expected in
revenue to shippers. 1996.
bonds.
San Construct $1.1 billion Guarantee Not Preferred Target
Francisco four new of short- determined. alternative completion
& San stations term selected in date: 2000
Mateo and commercial 1995.
Counties parking loan.
facilities
.
Orange Construct $713.0 $25 If accessed, Portions of Target
County a 24-mile million million the line of project are completion
tollway line of credit would now under date of
and 2- credit to be repaid construction some
mile replace through . parts:
segment of existing excess toll 1999.
the contingenc revenues.
Foothill y fund.
Corridor.
San Renovate $63.0 Credit Operating Conceptual 1997
Francisco ferry million enhancemen income to design and
County terminal. ts to repay SIB- engineering
assist supported are in
private loans. Fees progress.
developer on loans and
secure a guarantee to
$25 be repaid by
million to ground lease
$35 and parking
million revenues.
commercial
loan.
Orange Construct $746.0 Loan: $15 SIB loan to Segments are Partial
County segments million million. be repaid under completion
of the from bond construction dates:
Foothill issue. ; 1999 and
Corridor, environmenta beyond.
SR 241. l impact
statement in
progress for
remainder of
project.
Throughout Develop Costs to Credit Profits Initiative Not
state privatized vary by enhancemen earned by is in determined
roadside site. ts and private conceptual .
rest loan developers. stages.
areas. guarantees
to assist
private
developers
to secure
financing.
San Diego Repair and $100.0 Guarantees Not Not Not
County modernize million plus to support determined. determined; determined
San Diego financing economic .
and are the feasibility
Arizona most study
Eastern likely completed in
Railroad forms of March 1996.
and make assistance
other .
improvemen
ts.
Orange Construct $30.0 Credit Debt service Construction Target
County 15-mile million for enhancemen on new bond began in completion
San new project ts to issue to be 1993. date, 1997
Joaquin (total support an repaid with
Corridor project additional excess toll
Interchang costs of bond revenues or
e. $817.0 issue. other funds.
million).
San Diego Construct $210.0 If pursued If pursued Initial Not
County a new million as public- as a public- feasibility determined
freeway or private private study has .
widen partnershi partnership, been
existing p, credit tolls could completed;
road to enhancemen be used to further
freeway t to repay loans progress
standards. assist and fees for dependent on
private loan funding.
consortium guarantees.
in
obtaining
financing.
San Diego Construct $300.0 Credit Tolls are Draft 1996 or
County 10-mile million to enhancemen the most environmenta 1997
toll road. $400.0 t to likely l impact
million support revenue statement
privately source. submitted in
issued 1996.
debt.
Florida
-----------------------------------------------------------------------------------------
Palm Beach Construct $22.0 Loan: $7 Revenue from Preliminary October
County, SR interchang million million. a mix of design and 1998.
80 e and toll project and environmenta
facilities systemwide l study
and toll complete.
reconstruc receipts and
t existing state
bridge. transportati
on funds.
Orlando Construct $240.0 Loan: $20 Revenue from Final Mid-1998.
a new 6- million million. a mix of engineering
mile project and is nearly
section to systemwide complete.
complete toll
56-mile receipts and
beltway. state
transportati
on funds.
Orlando Construct $210.0 Not Not Not Not
Western million determined determined. determined. determined
Beltway plus. . .
Missouri
-----------------------------------------------------------------------------------------
St. Louis Construct $40.0 Loan: $7 Most likely Preliminary Not
a Gateway million million to source of design and determined
Multimodal public revenue: feasibility .
Center for agency; Local tax analysis
bus, rail, loan to revenues and completed.
and private parking
airport sector fees.
access. partner
not
determined
.
St. Louis Construct $11.2 Not Options Feasibility Not
an 1,800- million determined include study is determined
space . airport under way; .
parking parking state plans
facility fees, to solicit
and concession proposals in
commercial fees, and 1996 for
space at public- private
North private equity
Hanley joint partners.
Metrolink development
Station. projects.
Jefferson Construct $20.8 Credit Not Final Not
City connecting million enhancemen determined. environmenta determined
highway t to l impact .
from support statement
Highway bonds completed in
179 to issued by 1996.
Highway the city
50, Route or county.
B.
St. Louis Purchase $25.0 Loan: $15 Local Purchase Not
10 light million million. transportati commitment determined
rail cars on sales tax to follow .
for revenues. financial
transit. plan.
St. Louis Construct $9.0 million Credit Sales taxes First $1 Not
a park and enhancemen and parking million determined
ride t to fees would phase of .
facility; support support the project is
purchase bonds bond issue. under way;
and issued by second $8
rehabilita Bi-State million
te Developmen phase is
existing t awaiting SIB
station. Authority. funding.
Springfield Grade, $23.3 Support Most likely Progress Not
widen, million for pooled revenue depends on determined
resurface, bond source: identifying .
and issuance Local tax funding
relocate for all revenues. source.
five five
highway projects.
segments.
Kansas City Route 210 $38.6 Not Most likely Project is Not
upgrade: million plus determined revenue in determined
Remove and . source: preliminary .
rebuild Taxes from a stages.
interchang new
e, transportati
relocate on
road, and development
new district.
constructi
on.
Ohio
-----------------------------------------------------------------------------------------
Wilmington Realign a $12.0 Loan: $6 Revenues Not Not
5.8-mile million million. from taxes determined. determined
bypass. paid to the .
tax
increment
financing
district.
Erie County Widen a $19.5 Loan: $7.5 Revenues Environmenta 1998
4.6-mile million million. from fees l impact
highway collected at statement is
connecting an amusement nearly
SR 2 to park parking complete.
Ohio lot and a 1-
Turnpike. percent
hotel/motel
tax.
Butler Realign, $118.9 Loan: $30 Loan to be Environmenta Not
County widen, and million million. paid by l and design determined
interchang revenue bond work to be .
e projects issue backed done from
on SR 129. by toll 1996 to
receipts. 1998.
Sandusky Construct $156.2 Loan: $7 Loan to be Design 1996
I-670 and million million. paid by engineering
Spring/ revenue bond is nearly
Sandusky issue in complete.
interchang 2003 and
e. backed by
the city's
income tax.
Stuebenvill Widen 0.8- $3.2 million Loan: $3.2 Loan to be Preliminary 1997
e mile million. paid from a engineering
boulevard. future and design
federal fund are in
allocation. progress.
Cleveland Construct $7.3 million Loan: $7.3 $4 million Environmenta 1996
500-space construction million. of $7.3 l clearance
parking loan. million loan granted;
facility repaid design
at the through engineering
Great Lake private complete.
Science loan; $3.3
Center. million
balance
converted to
permanent
financing,
subordinate
to a private
loan.
Muskingum Construct $7.2 million Loan: $7.2 Loan repaid Environmenta 1997
County a truck- million. from fees l analysis
to-rail charged to has begun.
transfer users of
facility. intermodal
facility.
Columbus Construct $12.0 Loan: $12 $9 million Feasibility 1998
a million million. of loan analysis has
pedestrian construction repaid begun.
walkway loan. through
over private
interstate loan; $3
. million
balance
converted to
permanent
financing,
subordinate
to private
mortgages on
platform and
facilities.
Lima Acquire $10.0 Loan: $10 Likely Environmenta 1997
and million million. revenue l analysis
rehabilita permanent source: to be
te 64- loan. Lease conducted in
mile rail payments mid-1996.
line. from short
line
railroad.
Franklin Construct $10.0 Loan: $10 Loan repaid Project 1997
County parking million million. from design is
ramps and permanent building under way.
taxiways loan. rents and
and state
renovate general
maintenanc funds.
e
facility.
Oklahoma
-----------------------------------------------------------------------------------------
Oklahoma Widen 7.5- $196.0 Loan: $30 Preconstruct Environmenta 1997
City mile million million ion loan l analysis
Broadway for repayment complete;
extension preconstru with project
road and ction proceeds awaits final
construct costs. from revenue financing
new bonds, with plan.
interchang debt service
e. from federal
and state
funded lease
payments.
Fallback
revenue:
State fuel
tax or
tolls.
Tulsa Widen No data. Not Not Not Not
existing determined determined. determined. determined
Broken . .
Arrow
Expressway
(SH51).
Oregon
-----------------------------------------------------------------------------------------
Throughout Construct $120.0 Loan: $1.1 Bond issue Preliminary Spring
state a 6-to 11- million million will repay engineering, 1998
mile developmen short-term environmenta
Newburg- t loan; a loan. Likely l studies,
Dundee second source to and final
Bypass. long-term repay SIB design by
SIB loan assistance: end of 1997.
will Tolls.
follow.
Tualatin Construct $120.0 Loan: $1 Bond issue Preliminary 1998
a 6-mile million million will repay engineering,
bypass on developmen short-term environmenta
Tualatin- t loan; a loan. Likely l studies,
Sherwood second source to and final
Expressway long-term repay SIB design by
. SIB loan assistance: end of 1997.
will Tolls.
follow.
Wilsonville Rebuild $12.4 Loan: $1 SIB loan to Project has 1996
Stafford million million. be repaid been
Interchang from local designed and
e and improvement is ready to
Commerce district start.
Circle; funds.
construct
new ramps.
Linn County Widen and $15.1 Loan: $2.4 SIB loan to Most parts 1997
improve million million. be repaid by of the
Highway city's share project have
34, I-5, of state completed
to Transportati final
Lebanon. on Equity design.
Account or
other local
funds.
Tillamook Reconstruc $600,000 Loan: SIB loan to Project 1996
County t Tone $60,000 be repaid by ready for
Bridge county road final
access and funds. design.
repave of
flood-
damaged
road.
Washington Construct $11.1 Credit Principal Financing is 1996
County the 7,100- million enhancemen and interest dependent on
foot Cedar t for on the bonds vote for
Hills issuance to be paid local tax to
Boulevard. of $3.6 from county support bond
Extension million in gas tax and issue.
revenue the county's
bonds. share of
state motor
vehicle fund
revenues.
South Carolina
-----------------------------------------------------------------------------------------
Greenville Construct $160.0 Loan: Not Loan to be Request for 1997
a 16- million determined repaid with proposals
mile, . letter of issued in
four- credit August 1995;
lane, backed by agreement
limited toll expected in
access receipts. 1996.
highway.
Johns Construct $120.0 Loan: Not Loan to be Request for 1997
Island 15-mile million determined repaid with proposals
Sea Island . project toll issued in
Expressway receipts. August 1995.
Myrtle Construct $15.0 Loan: Not Potential Negotiate a 1996
Beach new bridge million determined revenue design/
crossing . source: build
for Admission contract in
Fantasy tax at fall 1996.
Harbor. Fantasy
Harbor
entertainmen
t complex.
Hilton Head Construct $81.0 Loan: Not Loan to be Construction 1996
Cross million determined repaid from under way.
Island . toll
Connector, receipts.
a four-
lane
limited,
access
toll
highway.
Texas
-----------------------------------------------------------------------------------------
Dallas Construct $696.0 Loan: $135 Likely In final 1998
a 26-mile million million revenue stages of
beltway loan has source: Toll preconstruct
(SH 190) already receipts. ion.
north of been made.
Dallas.
Dallas Construct $59.0 Loans: Not Feasibility 2004
western million unspecifie determined. study is
extension d amount under way.
of SH 190 for
segment of feasibilit
beltway. y study;
future
amounts
not
determined
.
Dallas Construct $129.0 Loans: Not Feasibility Not
eastern million unspecifie determined. and determined
extension d amount investment .
of SH 190 for study to
segment of feasibilit begin soon.
beltway. y study;
future
amounts
not
determined
.
Virginia
-----------------------------------------------------------------------------------------
Richmond Construct $225.0 Loans: Not Original Not
I-895 million amount not determined. environmenta determined
connector. determined l impact .
. statement
completed in
1984; design
is under
way.
Richmond Construct $255.0 Loans: Likely Original Not
Route 288 million amount not revenue environmenta determined
link. determined source: Toll l impact .
. receipts. statement
completed in
1989.
City of Expand a $115.0 Loan: Not City is Not
Chesapeake 10.2-mile million amount not determined. evaluating determined
street. determined private .
. proposals to
build,
operate, and
finance the
project.
Vienna Construct $10.0 Loan: Not Request for Not
1,000- million Amount not determined. proposal is determined
space determined being .
parking . drafted for
deck. private
entities to
design,
construct,
operate, and
maintain.
Richmond Improve $32.0 Loan: Not Project is Not
downtown million amount not determined. receiving $2 determined
Multimodal determined million in .
Transporta . Federal
tion Transit
Center; Administrati
construct on grants;
bus future
terminal. funding is
uncertain.
-----------------------------------------------------------------------------------------
Source: State applications submitted for FHWA's SIB Pilot Program.
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV
Jonathan T. Bachman
Matthew W. Byer
Helen T. Desaulniers
David G. Ehrlich
Gary L. Jones
Yvonne C. Pufahl
Miriam A. Roskin
Phyllis F. Scheinberg
*** End of document. ***