James H. Roberts, president and chief executive officer of Granite Construction Inc., represented AGC at a hearing held on July 24 by the Senate Environment and Public Works (EPW) Committee. The hearing was held to examine how the Transportation Infrastructure Finance and Innovation Act (TIFIA) is working in light of the large budget increase it received in MAP-21. Roberts began his testimony by pointing out that, “Our transportation investment needs are great and the funds to fix the problem are running short.” He emphasized the construction industry’s very real concern about the solvency of the Highway Trust Fund and urged the committee to address this problem sooner rather than later.
He went on to say, “The solution to meeting our transportation infrastructure needs is twofold. First, Congress and the administration must work together in a bipartisan way to increase user fees and identify new revenue sources to address our transportation needs, both now and in the future. Second, there must be more private-sector involvement in the construction of transportation projects. AGC believes the TIFIA program has a proven record of accomplishing this objective.”
The TIFIA program provides states with financing assistance in the form of loans, loan guarantees and letters of credit for large transportation projects. Congress substantially increased TIFIA’s budget authority in MAP-21, going from $122 million in the previous six fiscal years (FY) to $750 million for FY 2013 and $1 billion for 2014. These funds can be leveraged to provide a potential of $17 billion in lending capacity. However, despite the clear priority given to TIFIA in MAP-21, there has been a noticeable slowdown in financing approvals since the law passed. AGC made a list of suggestions that the Department of Transportation (DOT) should implement in order to help speed up credit approvals, including:
- Redirecting more personnel to the TIFIA review team.
- Not holding all decisions on TIFIA awards until a record of decision on the project has been issued. This, in particular, seems to be contrary to the concurrent review requirement that is found elsewhere in MAP-21.
- Developing educational tools and technical advisors to help assist states that lack the experience in applying for this assistance.
- Providing full transparency in the project selection process to encourage states to continue to make applications.
- Streamlining the process for rural project approval.
- Allow TIFIA financing to help projects establish an investment grade rating if they are unable to do so on their own.