The vast majority of transportation projects are still being funded from traditional sources, including State gas and vehicle taxes and federal highway trust fund appropriations. But today State and local transportation agencies are increasingly looking to supplement these sources with private investment. While PPPs are but one "tool in the tool box," their increased use is due to a number of factors: the growing gap between needs and traditional resources; the reluctance at both the State and federal levels to increase or index transportation taxes; the enactment of several important federal policy initiatives; and the completion of a number of landmark PPP transactions that have demonstrated the hearty appetite of the private capital markets for US transportation projects.
The modern use of public-private partnerships in the transportation arena originated over 15 years ago with California's enactment of AB 680 and adoption by the Commonwealth of Virginia of its Public-Private Transportation Act of 1995. Today over 21 States have adopted legislation authorizing the use of public-private agreements for the design, construction, financing and operation of transportation facilities. (See Exhibit A to this Statement).
The number of States with PPP legislation grows each year. Recent enactments include Indiana's new law authorizing a PPP approach to finance, build and operate the I-69 extension from Indianapolis to Evansville. Utah has adopted legislation authorizing public-private tollway development agreements. This month, the Alaska legislature passed a bill authorizing the use of a PPP to finance the long-sought Knik Arm Bridge near Anchorage. Last week, California's Legislature sent to the Governor a new statute permitting PPP development of 8 projects, including several directed to benefit goods movement.
In addition, PPP bills recently have been introduced or proposed in several other jurisdictions, including New York, Ohio, New Jersey and Missouri.