Federal Grant Anticipation Revenue Vehicle (GARVEE) Bond Financing is a type of bond or similar financing method issued by a state to finance large projects that would otherwise be unaffordable with available State Highway Account funding. States must repay the bonds using federal funds expected to be received in the future. Although this financing mechanism allows strategic projects to be delivered more quickly, the resulting debt service limits future program flexibility.

To date, the Commission has approved the issuance of GARVEE bonds twice, once for a suite of State Transportation Improvement Program (STIP) projects and once for State Highway Operation and Protection Program (SHOPP) projects. On March 10, 2004, the state issued $614.8 million of GARVEE bonds (Series 2004A Bonds) for eight STIP projects. The Series 2004A Bonds were structured with serial maturities from 2005 through 2015. The Series 2004A Bonds fully matured on February 1, 2015 and all eight projects have been completed. On October 16, 2008, the state issued a second set of GARVEE Bonds (Series 2008A Bonds) totaling $97.6 million for two SHOPP projects. The Series 2008A Bonds are structured with serial maturities from 2009 through 2020. The two SHOPP projects have been completed.

On March 16, 2017, the Commission, pursuant to Government Code Section 14553.9(b), reported to the Governor and the Legislature the total amount of outstanding GARVEE notes for the 2016 calendar year. The debt service outstanding as of December 31, 2016 was $44.550 million from Series 2008A.