Dueling bills on transportation privatization introduced in U.S. Senate

Illinois senators offer differing approaches to public-private funding of construction projects

News AGC of America June 30, 2011
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Illinois’ two senators are pushing opposing agendas regarding public-private partnerships to finance construction of highways, bridges, airports, railroads and other transportation facilities.

Sen. Dick Durbin (D-Ill.) has introduced “The Protecting Taxpayers in Transportation Asset Transfers Act,” that would require public involvement before major transportation projects could be leased or sold. The legislation would make it difficult for states and cities to lease public transportation assets to private investors, a practice that has been used successfully in some states to entice private investment. In this scenario, the federal government would be reimbursed for any funds used to build a facility before a deal to lease it could be made. Additionally, the disclosure of any depreciation or other tax benefits to private investors and estimates of savings would be required. It would only apply to existing transportation assets and is not meant to affect new privatization proposals.

Sen. Mark Kirk (R-Ill.) introduced “The Lincoln Legacy Development Act,” legislation that would remove federal restrictions on public-private partnerships while requiring that sale or lease proceeds be reinvested in infrastructure. Some of the bill’s features include:

  • Increased annual funding for the Transportation Infrastructure Finance and Innovation Act (TIFIA) program from $122 million to $750 million;
  • Creation of a Private-Public Partnership Challenge Grant Program encouraging states to pass legislation enabling private-public partnerships;
  • Additional resources for the Highway Trust Fund to pay for expansion via a half-percentage point decrease in federal civilian pay growth and a surcharge on safety rest area development;
  • Removed caps on interstate tolling pilot programs, encouraging greater local control of highway financing;
  • Allowance of commercialization of safety rest areas, providing additional resources to states with budget shortfalls;
  • Ensuring taxpayer accountability by requiring proceeds of leases, concessions or sales of highways to be reinvested in infrastructure; and
  • Lifted caps on highway private activity bonds to provide additional financing options for projects.
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