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Panel approves state transportation financing authority to enable private investment without state debt
Summary
The Transportation and Safety Committee approved Senate Bill 6006 to create the Tennessee Transportation Financing Authority as a conduit issuer for private activity bonds under the Transportation Modernization Act; the measure passed 8–1 and now goes to the State and Local Committee.
Senate Bill 6006, sponsored in committee by Senator Hill, would create the Tennessee Transportation Financing Authority to act as a public conduit issuer so private developers can access tax-advantaged, tax-exempt private activity bonds for projects under the Transportation Modernization Act.
The bill’s sponsor said the authority would be attached to the Comptroller of the Treasury for administrative purposes and composed of the governor, the commissioner of Finance and Administration, the comptroller of the treasury, the secretary of state and the treasurer. “We recognized after passage of the initial act in order to effectuate it, we needed to create a public conduit issuer,” Comptroller Jason Mumpower told the committee, explaining the change resulted from IRS rules governing private activity bonds.
Committee members were told the design shields the state from debt: if a developer defaults there would be no recourse to the state’s books, and bonds would be repaid from project revenues. The sponsor cited interest in the I‑24 southeast “first choice lanes” project between Nashville and Murfreesboro as one reason to resolve the conduit issue now.
Committee discussion included a question about whether the need for a conduit issuer had been anticipated when the Transportation Modernization Act passed; Mumpower said it was not foreseen at passage and arose after work on IRS compliance. The measure passed on a roll call vote, 8 ayes and 1 no; Senator Potee recorded the lone no vote. The bill now advances to the State and Local Committee.
The committee record shows no amendment to this committee’s portion of the bill during the hearing. Fiscal details beyond the sponsor’s explanations were not specified in the committee record.
