AASHTO Journal, 26 July 2013
A critical transportation financing tool that was expanded in last year’s MAP-21 surface transportation bill – TIFIA loans – got a thorough review before the Senate Environment and Public Works Committee this week, marking the first opportunity for new Transportation Secretary Anthony Foxx to testify before Congress as Secretary.
TIFIA, which stands for Transportation Infrastructure Finance and Innovation Act, was expanded in MAP-21 from a roughly $100 million a year program, making $750 million available in 2013 and $1 billion available in 2014.
According to Senate EPW Chairman Barbara Boxer (D-CA), demand for TIFIA support – which provides direct loans, loan guarantees, and lines of credit to surface transportation projects – has far outstripped available resources.
“With the greatly increased resources that Congress provided in MAP-21, it is critical that TIFIA funds be used efficiently, effectively, and responsibly. It is vitally important that DOT works swiftly to ensure that the TIFIA program achieves the kind of transformative results we all want to see moving forward,” said Boxer.
According to Foxx, USDOT annually receives between $12 billion to $15 billion in requests for TIFIA assistance. In 2013, USDOT has received $15.8 billion in requests to finance 31 projects across the country.
Foxx said that to meet the increasing demand for TIFIA assistance, the USDOT has added 10 new staff and created four distinct teams in its TIFIA office “to cover all aspects of loan review, monitoring and budgeting.”
Other hearing witnesses included James Bass, Texas Department of Transportation Chief Financial Officer; Jeffery Yarema, a partner at Nossaman, LLP; Arthur Leahy, Los Angeles County Metropolitan Transportation Authority Chief Executive Officer; James Roberts, Granite Construction President and CEO; and D.J. Gribbin, Macquarie Capital Managing Director.
Bass said that so far, Texas has received $3.4 billion in TIFIA assistance which, combined with state, local, and private investment, yielded more than $11 billion in total project funding.
However Bass suggested that the USDOT reconsider its 33 percent ceiling on funding requests to allow TIFIA funds to account for more of a project’s overall cost; streamlining the Letter of Intent phase of the process; and “incorporate the TIFIA application process with project procurement schedules so as to maximize the competition sponsoring agencies can stimulate.”
Written testimony and an archived webcast of the hearing are available here.