DOT 99-06
Thursday, October 19, 2006
Contact: Brian Turmail
Tel.: (202) 366-1621
Texas Becomes First State to Receive Federal Approval to Seek to Raise More than
$1.8 Billion in Private Activity Bonds for Highway Work
WASHINGTON, DC – Texas can move forward with plans to raise more than $1.8
billion for work on State Highway 121 outside Dallas now that the federal
government has approved its request to seek private-sector funds, U.S. Secretary
of Transportation Mary E. Peters announced today.
Peters said Texas officials were the first to request and receive authorization
to pursue plans to pay for a highway project using Private Activity Bonds. Under
the terms of the application, the state will hold a competition
to select, by early next year, a single private company with the authority to design the project and
build the highway. The state would then go back to the Department for final
approval to issue up to $1.866 billion in Private Activity Bonds by the fall of
2007 and transfer the proceeds to the company, she added.
“The best way to get commuters moving again is to give states more options to
pay for and build vital transportation projects,” Secretary Peters said. “This
decision allows planners to tap into the billions of dollars in private capital
available to invest in highway projects.”
Peters noted the Department also is considering a request from the Texas
Department of Transportation for a Transportation Infrastructure Finance and
Innovation Act (TIFIA) loan of up to $700 million to help pay for the project.
TIFIA loans provide states the opportunity to borrow money and repay the loan
using revenue generated from the new project. For example, Texas officials are
proposing to repay the loan for SH 121 using toll money collected on the new
road.
As part of new surface transportation legislation signed by President Bush last
year, states can issue and transfer to private companies up to $15 billion in
tax-exempt bonds, known as Private Activity Bonds, to finance a range of
highway, freight and transit projects.
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Briefing Room
