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Reprinted from January 2013

Volume 278

The journal of record for public-private partnerships and infrastructure finance, since 1988.

IN THIS ISSUE
TIFIA Troubles

TIFIA HASNT SIDELINED NATIONAL


INFRASTRUCTURE BANK LEGISLATION
by Scott Thomasson, President, NewBuild Strategies

1. TIFIA strained by MAP-21 2. Tappan Zees big loan bet 3. East End: DOTs black eye? 4. Goethals term-sheet signed

5. Industry tells all to FHWA 7. Sen. Warner leads on I-Bank 8. Rep. DeLauro still likes EIB 9. VA legislature attacks P3s 9. Hampton Roads troubles 11.Texas restarts P3s 12. TIFIAs 28 new projects PWFs 25th Anniversary Celebration 12. Come see our editorial

In September, 2011, President Obama stood before a joint session of Congress to make the case for his new American Jobs Act proposals to strengthen the economy, which included $10 billion in one-time seed money for a national infrastructure bank. The president borrowed his proposal from the bipartisan BUILD Act, sponsored by Senators John Kerry, Kay Bailey Hutchison, and Mark Warner, and modeled largely after the politically popular TIFIA loan program. It was the first time a sitting president had sent an infrastructure bank bill to Congress. With bipartisan support from two Republican Senators and the U.S. Chamber of Commerce, it was a high-water mark of sorts for the infrastructure bank.

cartoons and a reproduction of our January 1988 cover.


Transportation Policy Review

18. Plan B for Virginia highway fundiingmileage-based user fees on I-95


by Robert W. Poole Jr.

20. A practical plan for rolling out a limited VMT demonstration as a value-pricing pilot
25. NEPA details bedevil by Rob Thornton, Nossaman Redistribution in any form is prohibited. All rights reserved. Copyright Public Works Financing 2013.

Having succeeded where the bank legislation failed in the last Congress, is TIFIA now poised to keep new infrastructure bank bills at bay in 2013? The near-term answer is likely yes, but the long-term answer depends on how TIFIAs performance is perceived over the next two years. It will also depend on the politics of other fed-

As Public Works Financing readers are well aware, Yaremas argument won the day when MAP-21 boosted TIFIAs loan authority closer to infrastructure-bank scale, while the several infrastructure bank bills pending before Congress now sit on the shelf as the session comes to a close.

Micas eulogy echoed the sentiments of many in the P3 community, who saw an easier route to federal financing for transportation projects by expanding the oversubscribed TIFIA loan program. Geoffrey Yarema, a partner with Nossaman LLP in Los Angeles and a member of the 2009 National Surface Transportation Infrastructure Financing Commission, acknowledged Obama was on the right track in calling for the bank, but concluded, We already have a national infrastructure bank its called the TIFIA program.

But the sixteen months since that speech have brought little forward progress. The Presidents jobs bill stalled in Congress in a series of piecemeal votes, with the infrastructure bank garnering 51 votes on the Senate floor, but short of breaking a Republican filibuster. Former House Transportation and Infrastructure Committee Chairman John Mica quickly held a hearing to declare bank legislation dead on arrival and to make the case that MAP-21s massive expansion of TIFIA would render the new lending-only bank legislation redundant and unnecessary.

eral credit programs for energy and water projects that would potentially be served by an infrastructure bank, including the Department of Energy loan guarantee programs and the new Senate proposal to create a WIFIA loan authority for water treatment projects (to be administered by the U.S. Environmental Protection Agency and the Army Corps of Engineers).

announcements to hire new staff, but it remains to be seen if DOT will ultimately attract and hire the kind of finance professionals it needs to create a professional credit platform and reduce the influence of political agendas in project selection.

TIFIAs overhaul in MAP-21 stole some of the fire from infrastructure bank legislation in the last Congress, and the implementation of its new approval process and loan authority may continue to distract the energy and attention of bank advocates during the next Congress as well. Governors and mayors who held out large projects like the Tappan Zee Bridge as poster-children for a national infrastructure bank are now busy jockeying for billions in available TIFIA financing. Even White House advisors privately acknowledge that while the presidents bank proposal continues to be an aspirational goal for infrastructure financing, the more immediate priority for now is ensuring that TIFIA projects are moving forward. As TIFIA lunges into the new year with new mandates, more money, and a now hiring sign on the door, its growing pains could provide a steady stream of distractions for bank advocates hoping to accomplish some of the policy goals slated for a national infrastructure bank. TIFIAs staffing decisions will be critical in evaluating its role as an alternative to the bank. DOT has an urgent need to beef up its skeletal staff with a team of project-finance experts. Public Works Financing reports in this issue on DOTs

As bank and transportation advocates watch this debate closely and gear up for a new round of TIFIA reform in the next surface authorization bill, it is unclear who in Congress is gearing up for a new push for the infrastructure bank. Senator Kerry led the most recent I-Bank charge with his BUILD Act legislation, but he is headed to the State Department soon. The bills chief Republican co-sponsor, Kay Bailey Hutchison, retired from the Senate at the end of 2012.

BUILD Act cosponsor Senator Mark Warner has signaled that he is eager to take the lead on successor legislation in 2013. With Warner's track record encouraging smart project finance approaches as Governor of Virginia and as a pragmatist in the Senate who has built a reputation for being able to work closely with Republicans on credible proposals, his taking up the mantle holds enormous promise for fresh thinking and constructive dialog with the P3 and investor communities. Warner will likely start with the BUILD Act's TIFIA-style bank structure as a baseline, but he remains open to reworking the KerryHutchison model as he woos Republican cosponsors. I also wouldnt be surprised to see Warner add new provisions to the bill to enhance public resources for P3s, or encouraging better state and local project finance resources to increase the P3 deal flow from the bottom up. I

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PWFinancing /January 2013

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