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Transportation Funding & Financing

GARVEE Bonds

The NHS Act of 1995 amended Section 122 of Title 23 of the US Code to make bond-related costs eligible for Federal reimbursement on any Federal-aid project eligible under title 23, U.S.C. The definition of construction was also revised in 23 U.S.C. 101 to include a reference to bond-related costs. These are the Federal legislative actions that established GARVEE bonds as a new tool available to states.

More about GARVEEs in the Financing section of the Clearinghouse website

Examples of State GARVEE Legislation

Before issuing GARVEE bonds states must first enact enabling legislation allowing them to collateralize transportation funds received from the Federal government. The discussions below provide summaries of and links to GARVEE enabling legislation passed in a number of different states. The GARVEE section of the Clearinghouse website provides additional information on the different issues that state GARVEE legislation can be expected to address.

Maryland GARVEE Legislation

http://mlis.state.md.us/2005rs/billfile/hb1352.htm

http://mlis.state.md.us/2005rs/bills/hb/hb1352e.pdf

Passed on April 8, 2005, Maryland H.B. 1352 Expanding a definition of tax-supported debt to require the Capital Debt Affordability Committee to review and make recommendations regarding specified debt issued by the Department of Transportation and the Maryland Transportation Authority; repealing a specified requirement that the Capital Debt Affordability Committee make specified recommendations; repealing a requirement that the Governor make a specified appropriation; providing for additional notice and comment before the Authority takes a specified action; etc.

Idaho GARVEE Legislation

The State Legislature approved S.B. 1183 in April 2005, enabling the state to issue GARVEE bonds. The links below provide the sections of the Idaho Code pertaining to the use of GARVEE bonds. Idaho has used GARVEEs to support the Connecting Idaho Vision providing a 2,076 mile network of high performance roadways in the state. Arizona was one of the first states to issue GARVEE bonds.

Section 40-315
Establishes the duties and powers of the Idaho Transportation Board and list of eligible projects. Also provides joint authority for the Idaho Housing and Finance Association and the Idaho Transportation Department to issue bonds.

Section 40-702
Defines procedures for the deposit of Federal transportation funds into Idaho State Highway Account

Section 40-707
Enables the use of State Highway Account fund to pay Garvee debt service.

Section 40-718
Establishes GARVEE debt service and capital project Funds

Section 67-6206

Section 67-6210
Define the Roles and authority of the Idaho Housing and finance Association and the Idaho Transportation Board in issuing GARVEE debt.

Arizona GARVEE Legislation

The links below provide the sections of the Arizona Code pertaining to the use of GARVEE bonds in the state. Arizona was one of the first states to issue GARVEE bonds.

Article 3 - Grant Anticipation Notes

28-7611 - Definitions
28-7612 - Grant anticipation notes
28-7613 - Refund
28-7614 - Limitations
28-7615 - Application of grant revenues; grant anticipation notes fund; payment of notes
28-7616 - Use of proceeds
28-7617 - Nature of grant anticipation notes; limited obligation

Louisiana GARVEE Legislation

Grant Anticipation Revenue Vehicle Act of 2002
Enables the state to collateralize up to 10% of future proceeds from U.S. DOT using GARVEE bonds.

Florida GARVEE Legislation

The link below provides the text of the General Florida GARVEE Bill Statute, which describes the way in which the GARVEE program would be administered in Florida. It was first passed in 1999. When Senate Bill 862 was passed in 2000 allocating transport funds, Article 7 of the GARVEE legislation was amended to reflect the provisions of Senate Bill 862. Florida's GARVEE legislation is program-based and limits the percentage of apportionments.

Florida Governor Jeb Bush signed Florida Senate Bill 862 into law, making this legislation the largest transportation funding increase in the state's history. The initiative, dubbed "Mobility 2000," was sponsored by Senator Daniel Webster of Orlando and other legislators and local leaders. The new law provides more than $2.5 billion of additional funds for transportation over a 10-year period by returning state road funds previously diverted to general state needs back to transportation, issuing GARVEE bonds, using one-time surplus General Revenue funds from the state's economy, and increasing in Federal-aid.

Access to the Florida GARVEE legislation

Colorado GARVEE Legislation

Colorado has enacted legislation enabling GARVEE transactions in the state.

Colorado GARVEE legislation.pdf (33 KB)

Arkansas GARVEE Legislation

The 82nd Arkansas General Assembly passed HB 1500 and 1548 (Acts 1027 and 1028). This legislation was developed with broad-based support. Act 1027, which was approved by voters by a nearly 4 to 1 margin in a statewide election June 15, 1999, enables the state to take advantage of the GARVEE provision passed in 1998 by Congress as part of a new Federal highway bill. The $575 million bond issue allowed the state to create a $785 million construction program. The act authorized that the repayment of the bonds shall be guaranteed by the full-faith-and-credit of the state and prescribes the terms and conditions of the issuance of such bonds. It also and provides for a statewide election on the question of issuing such bonds.

Repayment of the bond issue will comes from three sources: 1) $58 million a year allocated by the Federal government to the interstate maintenance fund (which must be spent on interstates); 2) money from Act 1028's four-cent diesel fuel tax increase; and 3) the state matching money that already is required to match the Federal turn-back funds. The bond issue funds allowed the state to reconstruct more than 300 miles of an interstate highway system that is rated one of the worst in the country. The work was to be completed within five years. Without the bond funds, construction would have taken over 10 years using traditional pay-as-you-go financing.

Text of Arkansas Act 1027
Text of Arkansas Act 1028

California GARVEE Legislation

Chapter 862 of the California Statutes of 1999 (SB 928) proposed by Senate President Pro Tem John Burton (D-San Francisco) authorized the State Treasurer, in cooperation with the California Transportation Commission (CTC), the state DOT and regional transportation agencies, to issue Federal highway GARVEE bonds to accelerate funding for eligible and designated transportation projects. This statute established guidelines for project eligibility and the implementation of GARVEE bond funding allocations and enacted related technical provisions.

California GARVEE legislation