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TxDOT Approved for $1.8 Billion in Private Activity Bonds
05/16/2007
The bonds will be available for private investors who partner with TxDOT to build transportation infrastructure quickly with the goal of reducing congestion. Private activity bonds allow investors to issue tax-exempt bonds for projects that improve public infrastructure.
Toll revenue will be used to retire the bonds, not state funds.
Congressman Sam Johnson, member of the House Ways and Means Committee, said: "This is a very cost-effective way to build roads. As we evaluate all spending priorities, we should turn to private sector resources, expertise and efficiencies in constructing highways. Private activity bonds are a step in the right direction."
TxDOT was allowed to apply for the funding on behalf of prospective private investors under the provison that the private companies become the ultimate borrowers and arrange to repay the bonds with toll revenues.
"One of our key goals is to reduce congestion and to do that we have made the strategic decision to use all available financial tools," said Ric Williamson, chairman of the Texas Transportation Commission. "We’re laying the funding foundation to permit the private sector to invest in our mobility projects to accomplish that goal."
