Some state laws limit the ability of a state highway agency to issue bonds or notes in connection with the development, financing, or operation of a highway PPP project. These limitations frequently are in the form of annual caps on the amount of indebtedness that may be incurred by the state or the specific instrumentality of the state. The USDOT Model Legislation contains a provision that provides that any bond or note issued in connection with a transportation PPP project "does not constitute the indebtedness of the State" or a "pledge of the faith and credit of the State or any political subdivision of the State."228 Several states (including Alaska, Florida, Missouri, Oregon, Texas, and Utah) have specific legislation that authorizes certain public sector entities to issue toll revenue bonds or notes, in some cases above otherwise applicable state caps on bonding authority.229 Some states (including Colorado, Oregon, South Carolina, and Virginia)230 provide specific authority for establishing nonprofit 63-20 corporations that are authorized to issue debt on behalf of a public agency. This was the initial structure used in the Pocahontas Park-way project. In addition, the use of certain financing tools may require specific legislative authority in a given state. Several states (including Alaska, Oregon, Texas, and Virginia) explicitly provide that TIFIA loans may be used on PPP projects authorized by the state legislation. Recent legislation enacted in Florida specifically authorizes shadow toll and availability payment arrangements (such as the mechanism used on the Port of Miami Tunnel project). The new legislation in Mississippi allows borrowing against future toll revenues to develop new road and bridge projects through PPP structures.
The State of Washington enacted one of the earliest PPP statutes in 1993, but the legislature subsequently determined that the statute did not meet the expectations of the public and private sectors. The new PPP enabling legislation enacted in 2005 contains significant restrictions on the ability of the private sector to invest in PPP projects. The only source of financing for PPP projects sponsored by Washington DOT is indebtedness issued by the state treasury, and no such indebtedness may occur without prior legislative approval.
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228 USDOT Model Legislation at § 1-107, available at http://www.apta.com/about/committees/public_private/documents/legis_model.pdf.
229 See, e.g., 3 Alaska Admin. Code § 51.030.
230 See, e.g., Colo. Rev. Stat. §§ 43-1-1201-1209, 43-4-801-812, 43-3-201-43-3-416.