Qualified Highway or Surface Freight Transfer Facilities (142(m))

General Discussion:

Examples of qualified highway or surface freight transfer facilities are facilities such as cranes, loading docks and computer controlled equipment for the transfer of freight from truck to rail or rail to truck.  Facilities that do not qualify include lodging, retail, industrial or manufacturing facilities.

Passage of SAFETEA-LU and the private activity bond provision reflects the government’s “desire to increase private sector investment in U.S. transportation infrastructure.” (http://www.fhwa.dot.gov)

Volume Cap Matters:

The total volume cap made available for private activity bonds for qualified highway or surface freight transfer facilities is $15 billion, under I.R.C. 142(m)(2) and SAFETEA-LU, Pub. L. 109-59.  Volume cap is allocated to qualifying projects by the Secretary of Transportation.  A notice regarding availability of volume cap was published in January 2006.

As of July 2013, the Department of Transportation has approved approximately $4 billion in bonds that support a total of eight projects.  Over $3.8 billion of this allocated cap has actually been issued through July 2013 for the following projects:

  • Capital Beltway HOT Lanes
  • North Tarrant Expressway in Texas
  • IH 635 (LBJ Freeway) in Texas
  • Denver RTD Eagle Project (East Corridor and Gold Line)
  • CenterPoint Intermodal Center, Joliet Illinois (two projects)
  • Downtown Tunnel/Midtown Tunnel in Norfolk, Virginia
  • I-95 HOT/HOV Project
  • East End Crossing, Ohio River Bridges.

Approximately $11 billion in volume cap remains unallocated.

Any project that receives Title 23 assistance is qualified to benefit from private activity bonds under I.R.C. 142(m).

Applications for projects may be made at any time.  There is no fixed format for bond applications.

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