Inside the highway and bridge industries

WISH LISTS

What our governors and others want in a reauthorization bill

Any surface transportation reauthorization bill will give state, regional and local agencies a bigger say — to what degree and with what caveats/catches is still uncertain — in using transportation infrastructure dollars from Washington. Even an underfunded, too-short bill with a pipeline attached will do that much.

But the legislation will also come from Washington. So just what is it that states themselves want in any new legislation? A letter from the National Governors’ Association to the House/Senate conference committee trying to work out a bill, gives us key clues.

Flexibility: Governors support maximum program and funding flexibility given the diversity of geography, population, and priorities in the states. They want a bill that preserves states’ authority to transfer funds between core federal-aid programs. “We urge conferees to preserve transferability at not less than 50 percent under current law, and oppose provisions that would limit transferability to less than this percentage,” they write.

Certainty: The governors are worried about the Highway Trust Fund (HTF). States, they point out, need federal funding stability and certainty to pursue long-term planning and project delivery. But while recent authorizations have kept the “funding firewalls” for HTF revenues and re-affirmed the user-pays principle, the Senate version of the bill does not preserve the HTF firewall. The governors want it in. “We also support preserving the historical 80-20 split between highway and public transportation spending.”

Financing: “Governors are concerned that proposals governing public-private partnerships would limit state flexibility to use this tool by chilling investor interest,” they write. They oppose the possible extension of the depreciation period to 45 years from 15 years for applicable highway property and related intangibles, “such as the cost of the grant to collect tolls, subject to a long-term lease held by a private entity, and the proposed prohibition against using private activity bonds to finance applicable leased highway property.” The governors also frown on the possibility that certain privatized toll lanes might be excluded from the calculation of a state’s National Highway System apportionment, but concede the need to avoid federal subsidization of private operators.

The governors also write that they support:

• the proposed expansion of and improvements to the Transportation Infrastructure Finance and Innovation (TIFIA) program. “We support extending through July 2013 the temporary increase in the ‘small issuer’ exception (from $10 million to $30 million in annual issuance) to interest-expense allocation rules for banks that purchase tax-exempt bonds.”

• excluding tax-exempt private activity bonds issued before January 1, 2013, from the Alternative Minimum Tax.

• allowing state infrastructure banks the option to issue Transportation Regional Infrastructure Project (TRIPs) tax credit bonds.

• excluding bonds issued through 2017 for sewage and water supply facilities from the cap on private activity bonds.

Reforming and restructuring federal transportation programs gets gubernatorial support, provided core federal programs are untouched and reforms avoid any requirements that could preempt state flexibility. “We support provisions to streamline project delivery that reduce approval and completion times and improve efficiencies, but also achieve the intent underlying critical environmental, planning and design, and procurement reviews.”