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SIB Benefits
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State Infrastructure Banks (SIBs) are intended to complement the traditional Federal-aid highway and transit programs by supporting certain projects with dedicated repayment streams that can be financed in whole or in part with loans, or that can benefit from the provision of credit enhancements. As loans are repaid, or the financial exposure implied by a credit enhancement expires, the SIB initial capital is replenished and can be used to support a new cycle of projects.
Under the provisions of the 1995 NHS Act, DOT was authorized to select up to 10 States to participate in the initial pilot program and to enter into cooperative agreements with FHWA and/or FTA for the capitalization of SIBs with a portion of their Federal-aid funds provided in Fiscal Years 1996 and 1997. The U.S. DOT Appropriations Act of 1997 opened SIB participation to all States and appropriated $150 million in Federal General Funds for SIB capitalization. In total, thirty-eight States plus the Commonwealth of Puerto Rico were selected to participate in the SIB pilot program. Of the 39 participants approved for the SIB program, 32 States (including Puerto Rico) have active SIBs. Four of the approved states have not participated due to the inability to pass state-enabling legislation and two states have de-obligated funds.
Two States in the TEA-21 pilot program (Florida and Missouri) have capitalized their SIBs with TEA-21 funds. Several important differences exist between the two pilot programs, including the percentage of Federal funds eligible for SIB capitalization, repayment provisions, the Federal outlay rate, and reporting requirements. More detailed explanations of the differences between the pilot programs are described in other FHWA publications.
SIBs have provided States significantly increased financing flexibility to meet trans-portation needs. The ability of SIBs to stretch both Federal and State dollars to increase transportation infrastructure investment has enabled projects to be built that may otherwise have been delayed or not funded due to budgetary constraints.
Although authorizing Federal legislation establishes basic requirements and the overall operating framework for a SIB, States have the flexibility to tailor the bank to meet State specific transportation needs. As of September 2001, 32 States (including Puerto Rico) have entered into 245 loan agreements with a dollar value of over $2.8 billion (See Appendix B, Table 3).
