The Northeast relies heavily on transportation for its day-to-day functions. Increasingly unpredictable climate changes, dense population, and rapidly aging infrastructure have made the ability to secure financial resources for transportation improvements, expansion, and repair critical. Pending legislation in the New Jersey General Assembly to establish a state Transportation Infrastructure Bank (the Bank) could provide a solution not only for New Jersey, but also for other states across the region.
Bill A3177 would provide capital to the Bank by pairing public funds with private capital available in pension funds, private equity, and other resources. The Bank would exist within New Jersey’s already existing Environmental Infrastructure Trust Fund (the Trust). By leveraging public money with private funds, the Bank is intended to provide the stimulus needed to begin critical infrastructure projects across the state. The types of projects funded would include:
Energy or water system plants
Natural gas pipelines
Under the legislation, the Bank would make and contract to make loans as well as provide other assistance to any public or private entity to finance the cost of a proposed transportation project. The Bank must function in accordance with the provisions of the federal infrastructure bank program, and the projects must be included on the Department of Transportation’s project priority list for the ensuing fiscal year.
The Bank would be able to receive funds from any source, or issue bonds, notes, or other obligations in the principal amounts necessary to finance or refinance short-term or temporary loans to either local government units or private individuals. In the event that a private entity receiving a loan from the Bank is unable to pay its obligations, the Bank would have the authority to recover any money it is owed.
A slightly different bill has been introduced in the state Senate, so before Bill A3177 becomes law, the differences between the two bills must be reconciled.
The attorneys in Ballard Spahr’s P3/Infrastructure Group and Public Finance Department routinely monitor federal and state transportation financing legislation and advise clients on its potential impact. If you have questions about the Transportation Infrastructure Bank legislation in New Jersey, please contact P3/Infrastructure Practice Leader Brian Walsh at 215.864.8510 or firstname.lastname@example.org, Steve T. Park at 215.864.8533 or email@example.com, or Kimberly D. Magrini at 215.864.8365 or firstname.lastname@example.org.