DALLAS — A bill introduced by Sen. Mark Kirk, R-Ill., would raise the special cap on private-activity bonds for qualified highway or surface freight transfer facility projects to $19 billion from the current $15 billion.
The higher $19 billion limit was proposed in President Obama's fiscal 2015 budget that was released on Tuesday and is expected to be included in draft transportation legislation he plans to submit to Congress
The tax-exempt bonds are allocated by the U.S. Department of Transportation and do not count against a state's PAB volume cap.
Kirk said the additional bonds authorized by his bill (S. 2050) would help attract private investment in surface transportation infrastructure projects through public-private partnerships.
Private investments in public infrastructure are more important than ever due to the looming insolvency of the Highway Trust Fund, he said.
"Building and maintaining a robust transportation network is critical in order to keep our nation's economy moving, and innovative financing can address a piece of our funding needs," Kirk said. "Easing restrictions on public-private partnerships across all sectors for transportation development present new opportunities for modernizing our public infrastructure, strengthening our national transportation networks, and alleviating congestion without adding to our national deficit."
Kirk's bill has been assigned to the Senate Finance Committee.
A total of $4.57 billion of the $15 billion of authorized special transportation PABs have been issued as of mid-February and another $4.8 billion have been allocated but not yet issued, according to a DOT spokesman.
Allocations of the bonds are available to highway, tunnel, and bridge projects that qualify for federal loans under the Transportation Infrastructure Finance and Innovation Act. The proceeds can also be used to fund truck-to-rail or rail-to-truck freight transfer facilities.
The authorization for the $15 billion of special transportation PABs was included in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users transportation funding bill in 2005.
The PAB program was unchanged in the current two-year transportation funding bill, Moving Ahead For Progress in the 21st Century, which will expire on Sept. 30, the end of fiscal 2014.
Kirk, with co-sponsor Sen. Mark Warner, D-Va., also introduced legislation that would expand test programs allowing tolls on interstate highways to fund road repairs and renovations, and value-priced tolls based on traffic congestion.
The Highway Innovation Act of 2014 (S. 2051) would give states more flexibility in long-term transportation funding, Kirk said.
The new proposal would increase the number of states participating in the tolling trial to 10 from three, and open the value pricing program to all 50 states.
"Congress should not stand in the way of states looking to use innovative financing to mobilize private investment to meet growing transportation needs," Kirk said.
The 15 state slots in the value pricing program are filled, he said, as are the three slots in the tolling trial.
