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NAT IONAL COOPERAT IVE H IGHWAY RESEARCH PROGRAM NCHRP SYNTHESIS 513 SubScriber categorieS Administration and Management â¢ Finance â¢ Highways Evolving Debt Finance Practices for Surface Transportation A Synthesis of Highway Practice conSultantS Tamar Henkin High Street Consulting Group LLC Chevy Chase, Maryland and Karin Janel DeMoors High Street Consulting Group LLC Summit, New Jersey 2017 Research Sponsored by the American Association of State Highway and Transportation Officials in Cooperation with the Federal Highway Administration
NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM Systematic, well-designed research is the most effective way to solve many problems facing highway administrators and engineers. Often, highway problems are of local interest and can best be stud- ied by highway departments individually or in cooperation with their state universities and others. However, the accelerating growth of highway transportation results in increasingly complex problems of wide interest to highway authorities. These problems are best studied through a coordinated program of cooperative research. Recognizing this need, the leadership of the American Associa- tion of State Highway and Transportation Officials (AASHTO) in 1962 initiated an objective national highway research program using modern scientific techniquesâthe National Cooperative Highway Research Program (NCHRP). NCHRP is supported on a continuing basis by funds from participating member states of AASHTO and receives the full cooperation and support of the Federal Highway Administration, United States Department of Transportation. The Transportation Research Board (TRB) of the National Acad- emies of Sciences, Engineering, and Medicine was requested by AASHTO to administer the research program because of TRBâs recognized objectivity and understanding of modern research practices. TRB is uniquely suited for this purpose for many rea- sons: TRB maintains an extensive committee structure from which authorities on any highway transportation subject may be drawn; TRB possesses avenues of communications and cooperation with federal, state, and local governmental agencies, universities, and industry; TRBâs relationship to the National Academies is an insur- ance of objectivity; and TRB maintains a full-time staff of spe- cialists in highway transportation matters to bring the findings of research directly to those in a position to use them. The program is developed on the basis of research needs iden- tified by chief administrators and other staff of the highway and transportation departments and by committees of AASHTO. Topics of the highest merit are selected by the AASHTO Standing Commit- tee on Research (SCOR), and each year SCORâs recommendations are proposed to the AASHTO Board of Directors and the National Academies. Research projects to address these topics are defined by NCHRP, and qualified research agencies are selected from submit- ted proposals. Administration and surveillance of research contracts are the responsibilities of the National Academies and TRB. The needs for highway research are many, and NCHRP can make significant contributions to solving highway transportation prob- lems of mutual concern to many responsible groups. The program, however, is intended to complement, rather than to substitute for or duplicate, other highway research programs. Published reports of the NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM are available from Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to http://www.national-academies.org and then searching for TRB Printed in the United States of America NCHRP SYNTHESIS 513 Project 20-05, Topic 47-07 ISSN 0547-5570 ISBN 978-0-309-39007-1 Library of Congress Control No. 2017939192 Â© 2017 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FRA, FTA, Office of the Assistant Secretary for Research and Technology, PHMSA, or TDC endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessari- ly those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturersâ names appear herein solely because they are con- sidered essential to the object of the report.
The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. C. D. Mote, Jr., is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.national-academies.org. The Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to increase the benefits that transportation contributes to society by providing leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Boardâs varied committees, task forces, and panels annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.
TOPIC PANEL 47-07 BENJAMIN ASHER, Texas Department of Transportation, Austin LISA DANKA, Arizona Department of Transportation, Phoenix MERL HACKBART, University of Kentucky, Lexington CALVIN LEGGETT, North Carolina Department of Transportation, Raleigh MONICA STARNES, Transportation Research Board RICH STRUNA, Washington State Department of Transportation, Olympia RICH WINNING, Ohio Department of Transportation, Columbus MAX AZIZI, Federal Highway Administration (Liaison) MARK SULLIVAN, Federal Highway Administration (Liaison) SYNTHESIS STudIES STAFF STEPHEN R. GODWIN, Director for Studies and Special Programs JON M. WILLIAMS, Program Director, IDEA and Synthesis Studies MARIELA GARCIA-COLBERG, Senior Program Officer JO ALLEN GAUSE, Senior Program Officer TOM HELMS, Consultant GAIL R. STABA, Senior Program Officer TANYA M. ZWAHLEN, Consultant DON TIPPMAN, Senior Editor CHERYL KEITH, Senior Program Assistant DEMISHA WILLIAMS, Senior Program Assistant DEBBIE IRVIN, Program Associate COOPERATIVE RESEARCH PROGRAMS STAFF CHRISTOPHER J. HEDGES, Director, Cooperative Research Programs LORI L. SUNDSTROM, Deputy Director, Cooperative Research Programs EILEEN P. DELANEY, Director of Publications NCHRP COMMITTEE FOR PROjECT 20-05 CHAIR BRIAN A. BLANCHARD, Florida Department of Transportation MEMbERS STUART D. ANDERSON, Texas A&M University SOCORRO âCOCOâ BRISENO, California Department of Transportation DAVID M. JARED, Georgia Department of Transportation CYNTHIA L. JONES, Ohio Department of Transportation MALCOLM T. KERLEY, NXL, Richmond, VA JOHN M. MASON, JR., Auburn University ROGER C. OLSON, Minnesota Department of Transportation (retired) BENJAMIN T. ORSBON, South Dakota Department of Transportation RANDALL R. PARK, Utah Department of Transportation ROBERT L. SACK, New York State Department of Transportation FRANCINE SHAW WHITSON, Federal Highway Administration JOYCE N. TAYLOR, Maine Department of Transportation FHWA LIAISON JACK JERNIGAN TRb LIAISON STEPHEN F. MAHER
FOREWORD Most states issue debt to help meet transportation infrastructure investment needs. States use debt to leverage available resources and accelerate investments when compared with funding projects on a pay-as-you-go basis. Debt does not provide states with new or addi- tional revenues, but uses existing revenues to advance projects. This study found that states use a variety of debt mechanisms and tools to finance trans- portation infrastructure investment. However, the amount of debt and frequency of issuance vary substantially across states. In most states, provisions included in constitutions or stat- utes (or combinations of the two) govern the level and form of debt issuance. As well, many states have formal policies that govern debt issuance and management. The study found that the advent of increasingly flexible finance tools, including those offered or facilitated by the federal government, is an important development. Tamar Henkin, High Street Consulting Group LLC, Chevy Chase, Maryland, and Karin Janel DeMoors, High Street Consulting Group LLC, Summit, New Jersey, collected and syn- thesized the information and wrote the report. The members of the topic panel are acknowl- edged on the preceding page. This synthesis is an immediately useful document that records the practices that were acceptable within the limitations of the knowledge available at the time of its preparation. As progress in research and practice continues, new knowledge will be added to that now at hand. Highway administrators, engineers, and researchers often face problems for which infor- mation already exists, either in documented form or as undocumented experience and practice. This information may be fragmented, scattered, and unevaluated. As a consequence, full knowledge of what has been learned about a problem may not be brought to bear on its solution. Costly research findings may go unused, valuable experience may be overlooked, and due consideration may not be given to recommended practices for solving or alleviat- ing the problem. There is information on nearly every subject of concern to highway administrators and engineers. Much of it derives from research or from the work of practitioners faced with problems in their day-to-day work. To provide a systematic means for assembling and evaluating such useful information and to make it available to the entire highway commu- nity, the American Association of State Highway and Transportation Officialsâthrough the mechanism of the National Cooperative Highway Research Programâauthorized the Transportation Research Board to undertake a continuing study. This study, NCHRP Proj- ect 20-5, âSynthesis of Information Related to Highway Problems,â searches out and syn- thesizes useful knowledge from all available sources and prepares concise, documented reports on specific topics. Reports from this endeavor constitute an NCHRP report series, Synthesis of Highway Practice. This synthesis series reports on current knowledge and practice, in a compact format, without the detailed directions usually found in handbooks or design manuals. Each report in the series provides a compendium of the best knowledge available on those measures found to be the most successful in resolving specific problems. PREFACE By Jon M. Williams Program Director Transportation Research Board
CONTENTS 1 SUMMARY 5 CHAPTER ONE INTRODUCTION Background, 5 Debt Issuance for Surface Transportation, 6 Study Purpose and Objectives, 7 Study Approach, 7 Synthesis Report Organization, 7 9 CHAPTER TWO USE OF DEBT FINANCE FOR SURFACE TRANSPORTATION Introduction, 9 Authority to Issue Debt, 9 Current and Planned Debt Capacity, 13 16 CHAPTER THREE SPECIAL DEBT ISSUANCE AND MANAGEMENT TOPICS Introduction, 16 Special Debt Issuance, 16 Grant Anticipation Revenue Vehicle Debt, 16 21 CHAPTER FOUR HIGHLIGHTED STATE DEBT PRACTICES AND POLICIES Introduction, 21 Highlighted State Debt Practices and Policies, 22 24 CHAPTER FIVE IDENTIFIED RESEARCH NEEDS Introduction, 24 Research Needs, 24 26 CHAPTER SIX CONCLUSIONS Introduction, 26 Key Findings, 26 Concluding CommentsâHighlighted Practices and Future Research Needs, 26 28 GLOSSARY OF KEY TERMS 46 ADDITIONAL RESOURCES, REFERENCES, AND LINKS FOR STATE DEBT MANAGEMENT POLICIES Annotated References, 46 References, 50 Links to State Debt Management Policies, 50
51 APPENDIX A SURVEY QUESTIONNAIRE 59 APPENDIX B LIST OF SURVEY RESPONDENTS BY STATE 60 APPENDIX C DETAILED STATE RESPONSES TO QUALITATIVE SURVEY QUESTIONS 76 APPENDIX D PROPOSED RESEARCH NEEDS STATEMENT Note: Photographs, figures, and tables in this report may have been converted from color to grayscale for printing. The electronic version of the report (posted on the web at www.trb.org) retains the color versions.