HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/CS/HB 1305 Department of Transportation
SPONSOR(S): Infrastructure Strategies Committee, Infrastructure & Tourism Appropriations Subcommittee,
Transportation & Modals Subcommittee, Abbott
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Transportation & Modals Subcommittee 13 Y, 0 N, As CS Johnson Hinshelwood
2) Infrastructure & Tourism Appropriations 15 Y, 0 N, As CS Hicks Davis
Subcommittee
3) Infrastructure Strategies Committee 19 Y, 0 N, As CS Johnson Harrington
SUMMARY ANALYSIS
The bill relates to the Department of Transportation (DOT). The bill:
Increases the maximum debt service coverage level for the State Transportation Trust Fund from $350
million to $425 million.
Increases the term from 12 years to 18 years for state bonds for federal aid highway construction.
Authorizes the Florida Development Finance Corporation to finance certain DOT -related public-private
partnership projects.
Authorizes installation of automated license plate recognition systems within the rights -of-way of the State
Highway System, at DOT’s discretion, when installed at the request of a law enforcement agency for the
purpose of collecting active criminal intelligence or investigative information.
Provides that DOT may not, when granting airport site approval, require a written memorandum of
understanding or letter of agreement with other airport sites regarding air traffic pattern separation
procedures unless it is required by the Federal Aviation Administration or is deemed necessary by DOT.
Authorizes DOT to acquire promotional items and materials to promote electric vehicle use and charging
stations and autonomous vehicles.
Authorizes DOT, at its discretion, to expend funds for training, testing, and licensing for full -time DOT
employees who are required to have a valid Class A or Class B commercial driver license as a condition of
employment with DOT.
Increases from $120 million to $200 million the cap on innovative contracts that DOT may annually award.
Increases DOT’s contracting cap where it is not required to receive competitive bids in certain circumstances
from $250,000 to $500,000.
Expands the potential use of phased design-build by DOT.
Requires a public transit provider’s transportation development plan to be consistent, to the maximum extent
feasible, with the long-range transportation plan of the local metropolitan planning organization.
Removes the requirement that each public transit provider’s productivity and performance report specifically
address potential enhancements to productivity and performance that would have the effec t of increasing
the farebox recovery ratio.
Requires public transit providers to publish productivity and performance information on its website, instead
of in the local newspaper.
Transfers the Santa Rosa Bay Bridge Authority’s bridge system to DOT and au thorizes DOT to transfer it to
the Florida Turnpike Enterprise.
Repeals the Santa Rosa Bay Bridge Authority in statute.
The bill has an indeterminate fiscal impact on the state and local governments and the private sector.
The bill has an effective date of July 1, 2023, except as otherwise provided in the bill.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Right-of-Way Acquisition and Bridge Construction Bonds-Debt Service Cap
Current Situation
The Department of Transportation (DOT) is authorized to issue Right-of-Way Acquisition and Bridge
Construction bonds to finance or refinance the cost of acquiring real property for state roads or the cost
of state bridge construction. Except for bonds issued to refinance previously issued bonds, bonds must
be authorized by the Legislature and must be issued pursuant to the State Bond Act. 1,2
Section 206.46, F.S., authorizes DOT to transfer up to seven percent of the revenues deposited into
the State Transportation Trust Fund (STTF) in each fiscal year to the Right-of-Way Acquisition and
Bridge Construction Trust Fund, to meet the requirements of outstanding or proposed bond obligations.
Notwithstanding this authorized annual transfer, the annual amount transferred may not exceed an
amount necessary to provide the required debt service coverage levels for a maximum debt service of
$350 million,3 which was most recently increased from $275 million to $350 million in 2021.4
Section 339.139, F.S., requires DOT to manage all levels of debt to ensure that no more than 20
percent of total projected available state and federal revenues from the STTF, together with any local
funds committed to DOT projects, are committed to certain obligations in any year. Right-of-Way
Acquisition and Bridge Construction Bonds are included in DOT’s overall debt assessment.
Effect of the Bill
The bill increases the maximum debt service from the STTF from $350 million to $425 million.
Therefore, in effect, debt service may not exceed seven percent of the revenues deposited into the
STTF or $425 million, whichever is less. The increase of the debt service cap will provide DOT with
additional bonding capacity, offering it more flexibility in financing certain projects.
Grant Anticipation Revenue Vehicles (GARVEE)
Current Situation
Generally, a Grant Anticipation Revenue Vehicle (GARVEE) is a type of anticipation vehicle, which are
securities issued when moneys are anticipated from a specific source to advance the upfront funding of
a particular need. For transportation finance, the anticipation vehicles' revenue source is expected
federal-aid grants.5
Specific to highways, a GARVEE is a debt instrument that has a pledge of future federal-aid funding.
Significantly, it is authorized for federal reimbursement of debt service and related financing costs.
Therefore, states can receive federal-aid reimbursements for a wide array of debt-related costs
incurred in connection with an eligible debt financing instrument, such as a bond, note, certificate,
mortgage, or lease; the proceeds of which are used to fund a project eligible for assistance. Each of
these instruments is considered a GARVEE when backed by future federal-aid highway funding, but
most frequently, a bond is the debt instrument used. Specifically, debt financing instrument-related
costs eligible for federal-aid reimbursement include interest payments, retirement of principal, and any
1 The State Bond Act is codified in ss. 215.57-215.83, F.S.
2 S. 215.605, F.S.
3 S. 206.46(2), F.S.
4 Ch. 2021-186, Laws of Fla.
5 Federal Highway Administration, Grant Anticipation Revenue Vehicles (GARVEEs),
https://www.fhwa.dot.gov/ipd/finance/tools_programs/federal_debt_financing/garvees/ (last visited Apr . 15, 2023).
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other cost incidental to the sale of an eligible debt issue. The issuer may be a state, political
subdivision, or a public authority.6
GARVEEs enable a state to accelerate construction timelines and spread the cost of a transportation
facility over its useful life rather than just the construction period. The use of GARVEEs expands
access to capital markets as an alternative or in addition to potential general obligation or revenue
bonding capabilities. The upfront monetization benefit of these techniques needs to be weighed against
consuming a portion of future years' receivables to pay debt service. This approach is appropriate for
large, long-lived, non-revenue generating assets.7
Florida Law
Under s. 212.616, F.S., upon DOT’s request, the Division of Bond Finance 8 is authorized pursuant to
s. 11, Art. VII of the State Constitution9 and the State Bond Act10 to issue revenue bonds, for and on
behalf of DOT, for the purpose of financing or refinancing the construction, reconstruction, and
improvement of projects that are eligible to receive federal-aid highway funds. The Division of Bond
Finance is authorized to consider innovative financing technologies which may include, but are not
limited to, innovative bidding and structures of potential financings that may result in negotiated
transactions.11
Any bonds issued are payable primarily from a prior and superior claim on all federal highway aid
reimbursements received each year with respect to federal-aid projects undertaken in accordance with
federal law.12
The term of the bonds may not exceed a term of 12 years. Prior to the issuance of bonds, DOT must
determine that annual debt service on all bonds issued pursuant to s. 212.616, F.S., does not exceed
10 percent of annual apportionments to DOT for federal highway aid in accordance with federal law. 13
Effect of the Bill
The bill increases from 12 years to 18 years the maximum term for GARVEE Bonds. This will give DOT
additional flexibility in financing transportation projects. However, DOT will still be required to go
through the Division of Bond Finance in order to issue these bonds.
Florida Development Finance Corporation - Issuance of Revenue Bonds
Current Situation
Generally, a private activity bond (PAB) is a tax-exempt security issued by or on behalf of a local or
state government for the purpose of extending special financing benefits for qualified projects. PABs
finance projects for a private user, and the governmental issuer’s credit usually isn’t pledged, but PABs
provide a public benefit as well. They are used to attract private investments for projects “that have
public or common utility,” and result in increased spending on infrastructure.” 14
The federal government controls the amount of PABs that are permitted to be issued in each state.
Chapter 159, part VI, F. S., establishes statewide procedures for allocating Florida’s share of PABs.
6 Id.
7 Id.
8 The Division of Bond Finance is part of the State Board of Administration.
9 Section 11, Art. VII of the State Constitution relates to state bonds and revenue bonds. Subsection (f) requires each project , building,
or facility to be financed or refinanced with revenue bonds to be first approved by the Legislature by and act relating to appropriations or
by general law.
10 Ss. 215.57-215.83, F.S.
11 S. 215.616(1), F.S.
12 S. 212.616(2), F.S. See also Title 23 of the United States Code.
13 S. 215.616(3), F.S.
14 See MunicipalBonds.com, Understanding Private Activity Bonds, https://www.municipalbonds.com/education/understanding-private-
activity-bonds/ (last visited Mar. 22, 2023).
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Such allocation is statutorily referred to as the allocation of state volume limitation (section 159.804,
F.S.). The Division of Bond Finance is responsible for annually determining the amount of the PABs
permitted for statewide allocation under the 1986 Internal Revenue Code, as amended. Generally,
“traditional” road and bridge projects are not qualified under state private activity volume caps, but there
is a private activity volume cap available at the federal level for such transportation projects, which was
recently increased from $15 to $30 billion.
According to the United State Department of Transportation:
Section 11143 of Title XI of SAFETEA-LU amended Section 142 of the Internal Revenue Code
to add highway and freight transfer facilities to the types of privately developed and operated
projects for which PABs may be issued. This change allowed private activity on these types of
projects, while maintaining the tax-exempt status of the bonds. The law limited the total amount
of the bonds to $15 billion and directed the Secretary of Transportation to allocate this amount
among qualified facilities. The Infrastructure Investment and Jobs Act signed into law on
November 15, 2021, increased the available PAB authority from $15 billion to $30 billion.
Passage of the PAB legislation reflects the federal government's desire to increase private
sector investment in U.S. transportation infrastructure. Providing private developers and
operators with access to tax-exempt interest rates lowers the cost of capital significantly,
enhancing investment prospects. Increasing the involvement of private investors in highway and
freight projects generates new sources of money, ideas, and efficiency. The $30 billion in
exempt facility bonds is not subject to the state volume caps.15
Florida Development Finance Corporation
In Florida, access to PABs is provided by the Florida Development Finance Corporation (FDFC), 16 the
“conduit issuer” of PABs, with the power to function within the corporate limits of any public agency with
which it has entered into an interlocal agreement. The FDFC issues the bonds, which are purchased by
a bank or investor(s). The proceeds from the sale are then loaned to finance capital projects. The
interest received by the investor, if specific criteria are met, is exempt from federal income tax. 17
The proceeds of any FDFC bonds may not be used to acquire any building or facility that will be, during
the pendency of the financing, used by, occupied by, leased to, or paid for by any state, county, or
municipal agency or entity.18
However, s. 288.9606(6), F.S., authorizes the FDFC in its corporate capacity may, without
authorization from a public agency, issue revenue bonds or other evidence of indebtedness to:
Finance the undertaking of any project within the state that promotes renewable energy;
Finance the undertaking of any project within the state that is a project contemplated or allowed
under section 406 of the American Recovery and Reinvestment Act of 2009; 19 or
If permitted by federal law, finance qualifying improvement projects under s. 163.08, F.S.20
DOT Public-Private Partnerships
Section 334.30, F.S., authorizes DOT to enter into public-private partnership agreements for the
building, operation, ownership, or financing of transportation facilities. Legislative approval of such
projects is evidenced by approval of the project in DOT’s work program.21 According to DOT:
15 See transportation.gov, Private Activity Bonds, https://www.transportation.gov/buildamerica/financing/private-activity-bonds (last
visited Mar. 22, 2023).
16 The Florida Development Finance Corporation is created in s ection 288.9604, F.S.
17 See Municipalbonds.com Understanding Private Activity Bonds, https://www.municipalbonds.com/education/understanding-private-
activity-bonds/ (last visited Mar., 22, 2023).
18 S. 288.9606(6), F.S.
19 Pub. L. 111-5
20 See section 163.08(2)(b), F.S., for a listing of such improvements.
21 Section 334.30(1), F.S.
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A Public-Private Partnership (P3) is a contractual agreement between a public agency (federal,
state, or local) and a private sector entity. Through this agreement, the skills and assets of the
public agency and the private sector entity are shared in delivering a service or facility for the
use of the general public. In addition to the sharing of resources, each party shares in the risk
and reward potential in the delivery of the service or facility. 22
Examples of DOT’s P3 projects include the I-4 Ultimate and the Port Miami Tunnel.23
Effect of the Bill
The bill amends s. 288.9606, F.S., relating to the issuance of revenue bonds by FDFC, providing that s.
288.9606(6), F.S., does not prohibit the use of proceeds of FDFC revenue bonds for purposes of
financing the acquisition or construction of a transportation facility under a P3 agreement authorized for
DOT.
The bill also authorizes FDFC to finance the costs of acquisition or construction of a transportation
facility by a private entity or consortium of private entities under a P3 agreement authorized for DOT.
Automated License Plate Recognition Systems/State Highway System
Present Situation
An automated license plate recognition system (ALPRS) is a system of mobile or fixed high-speed
cameras combined with computer algorithms to convert images of license plates into computer-
readable data.24 Data obtained from an ALPRS is generally used to check license plates against law
enforcement hot lists. Hot lists contain a list of stolen plates and vehicles entered into the National
Crime Information Center database, the Florida Crime Information Center database, Driver and Vehicle
Information Database, and any information entered manually by the operating member. Examples of
manual entries include, but a