Project Finance/P3 Questions & Answers
Question 1: How does MAP 21 change GARVEE Provisions?
Answer 1: There is no change to the GARVEE provisions (23 U.S.C. 122) in MAP 21. States retain the authority to request Federal-aid participation in the payment of eligible debt instrument costs incurred by a State or political subdivision in financing Title 23 eligible projects.
Question 2: How does MAP 21 impact Federal State Infrastructure Banks (SIBs)?
Answer 2: There is no change to the SIBs provisions (23 U.S.C. 610) in MAP 21. However, it is important to note that States with existing Federal SIBs may continue to operate but cannot capitalize the SIB with FY 2013 or 2014 highway funding. MAP 21 does not include the authority for States to capitalize a SIB using Federal-aid highway funding beyond the expiration of the final SAFETEA-LU extension.
Question 3: Can States still leverage Federal-aid highway funds by making loans to projects under Section 129 of Title 23?
Answer 3: Absolutely. Other than a few minor style revisions and renumbering of the authorizing paragraph from "(7)" to "(8)" [Section 129(a)(8) Loans], the Section 129 Loan provision remains substantively unchanged in MAP 21. Under Section 129, States are authorized to make a loan of up to the Federal share to a public or private entity constructing a tolled or non-tolled facility with a dedicated revenue source for repayment of the loan. Repayment must commence within 5 years after the facility is opened to traffic and the term of such loan may not exceed 30 years from the date the funds were obligated.
Question 4: Does MAP 21 include provisions to facilitate Public-Private Partnerships?
Answer 4: Whether or not States or public transportation authorities pursue Public-Private Partnerships (P3s) as a project delivery and financing option remains entirely a State-or local-level decision. However, MAP 21 includes provisions requiring the Department to assist States and providers of public transportation that elect to use this delivery option by:
requiring the Department to publish best practices on how States and sponsors of new fixed guideway projects can work with the private sector in the development, financing, construction, and operation of transportation facilities, including policies and techniques to ensure the interests of the State and local governments as well as the traveling public are protected in any agreement entered into with the private sector for the development, financing construction and operation of transportation facilities;
authorizing the Department to provide technical assistance regarding P3s including assistance in analyzing whether the use of P3 would provide value compared to traditional public delivery models; and
requiring the Department to develop standard P3 model contracts for the most popular types of P3s, and encourage States, public transportation authorities, and other officials to use these model contracts as a base template for P3 agreements.