Toll advocates urge more private activity bonds, toll flexibility in next transportation bill

As the House of Representatives begins to craft the next surface transportation bill, toll advocates are urging the Trump administration and lawmakers to allow more private activity bond issuance to support public-private partnerships for transportation projects.

Congress should also give states the ability to impose tolls on interstate highways and federally funded roads, a move that would help shore up the failing Highway Trust Fund, said the International Bridge, Tunnel and Turnpike Association, which represents global owners and operators of toll facilities, in a letter to the U.S. Department of Transportation.

"Addressing the Highway Trust Fund challenge requires using every tool in the toolbox," said James Hofmann, president of IBTTA and executive director/CEO of North Texas Tollway Authority, in a statement accompanying the letter. "User-based revenue models like tolling and road pricing are proven and dependable, and when combined with existing federal and state funding streams, they can provide the investment needed to maintain and improve the backbone of America's economy."

IBTTA is one of several transportation groups that has been sending proposals to Congress and the DOT to help shape the next surface transportation bill, which must be passed by October 2026 when the Infrastructure Investment and Jobs Act expires.

The House Transportation and Infrastructure Committee has held a series of hearings on the next bill with Chair Rep. Sam Graves, R-Mo., saying he wants to unveil a draft by the end of the year. The DOT in July outlined four priorities for the next bill: enhancing safety, accelerating project delivery, increasing opportunity and partnering with states.

IBTTA joins influential lobbyists like the American Association of State Highway and Transportation Officials in pushing for a higher PABs cap. The DOT's Build America Bureau announced in April it had allocated or obligated $27.6 billion worth of tax-exempt PABs for transportation projects across the country.

The bureau has a strict $30 billion allocation cap. The ceiling was doubled, from $15 billion, as part of the IIJA.

PABs are a popular financing tool for P3s, and the push for a higher cap comes as the P3 pipeline continues to grow. Potential or planned projects are underway in Tennessee, North Carolina, Louisiana, Virginia and Illinois.

Most recently, private developer SR 400 Peach Partners sold $3.5 billion of PABs to finance new managed express lanes along the Georgia State Road 400 highway, marking the year's largest municipal bond issuance.

IBTTA said PABs reduce borrowing costs for private entities working on public infrastructure, such as managed price lanes. "Expanding the availability and flexibility of PABs would unlock more private capital for states and localities seeking to diversify infrastructure funding beyond traditional grant and public investment models," the group said.

IBTTA also urged the DOT to tweak the Transportation Infrastructure Finance and Innovation Act program by lifting the limit on loans that qualify for an expedited application process to $150 million from $100 million, and preserving an updated provision that allows TIFIA sponsors to borrow up to 49% of eligible project costs without constraints.

The TIFIA program is also often tapped as part of the financing package for public-private partnerships.