Establishment of the SIB Pilot Program under the provisions of the NHS Act represented a major milestone in the evolution of innovative financing approaches for surface transportation. Since the program was launched in 1996, States have made notable progress in advancing projects through this tool, despite limited capitalization funds and the curtailment of the program in TEA-21. In a number of States the SIB is proving to be a highly effective funding approach, particularly where State funds have supplemented Federal capitalization.

Contemporary evidence suggests that the SIB program is serving its intended niche and demonstrates the value that this financing mechanism is bringing to States that have an active and mature program. However, the SIB program is not reaching its full potential due to several factors identified in this report. Insufficient capitalization, lack of State enabling legislation, and limited marketing activities are among the factors affecting the pace of SIB implementation.

States continue to show a strong interest in the SIB program and support for continuing the program in transportation reauthorization legislation as a standard element of the Federal-aid highway and transit programs. Several States indicated in the survey that loan demand exceeds available resources. Also, a number of States not included in the initial pilot program have expressed an interest in program participation should the program be offered to all States in future legislation.

The Federal Highway Administration hopes this report will be of value to States as they strive to enhance their SIB programs and maximize the benefits of the SIB as a tool to stretch limited transportation dollars, and accelerate the building of needed surface transportation improvements. By sharing lessons learned and enhancing communication, successful implementation strategies can be developed.

FHWA and FTA will continue to provide technical assistance to States as they look to improve or enhance their SIB programs. Both agencies will expand their SIB outreach and education efforts through the Innovative Finance Quarterly publication, the Innovative Finance website, workshops, and conferences.