If a state uses one category of funds to capitalize a SIB, does it have to assist only projects that qualify under that funding category? For example, if a state capitalizes its SIB with a portion of its National Highway System (NHS) apportionments, can the funds only be used to assist NHS projects?
Yes, a state may need specific state legislated authority to establish a SIB and issue SIB loans.
Applications should be submitted to the SIB within the sponsor's state and follow the established application procedures and deadlines. If no SIB has been established, contact the state DOT to discuss whether the establishment of a SIB is possible, or contact Thay Bishop at the Office of Innovative Program Delivery for more information.
Any project that is eligible for Federal-aid funding under Title 23 (highways) is eligible to receive SIB financial assistance from the highway account. Essentially, if a project qualifies for Federal-aid under this program, it also qualifies for a loan or other credit assistance under the SIB program.
The Secretary is also authorized to designate projects for assistance, if the Secretary deems them to be appropriate. If a state is interested in supporting such a project, Thay Bishop at the Office of Innovative Program Delivery should be contacted to request such a designation. Projects that may be considered in this category include emissions reduction projects that ordinarily would not qualify for CMAQ assistance, but would produce substantial emissions reductions benefits (e.g. replacement of drayage truck fleets around ports).
Some Federal requirements may be waived for loans funded solely with state funds. Some of the applicable state and Federal laws, rules, and regulations include:
National Environmental Policy Act (NEPA)
Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970
Civil Rights Act of 1964, including the Disadvantaged Business Enterprise program
Davis-Bacon Act and state prevailing wage laws
Common Rule with respect to procurement (Title 49 Code of Federal Regulations)
Brooks Act (Public Law 92-582)
Competitive bidding requirements as contained in state and Federal law
Manual of Uniform Traffic Control Devices
Americans with Disabilities Act (ADA)
No, the use of funds from a specific category to capitalize a SIB does not limit a SIB's ability to assist all types of eligible projects. Once the funds have been drawn down into the SIB account, they "lose their identity." The SIB is the project for which those funds are obligated, and SIB funds may be used to assist any eligible project under Title 23.
Federal laws and regulations permit SIBs to assist any entity that constructs an eligible project. State SIB policies may vary. A state may choose, however, to provide credit assistance only to local governments or only to certain types of borrowers.
SAFETEA-LU permits states to establish multistate SIBs. Many projects have significant effects across state borders. For example, installing Auxiliary Power Units (APU) on trucks that travel a particular corridor would have regional benefits. States can jointly capitalize a multistate SIB for a single project or purpose, or for long-term joint coordination.
A non-Federal share of 20% (or the sliding scale ratio, if the state is eligible for such) must be provided at the time that the state capitalizes a SIB account. After initial capitalization, no further non-Federal share is required as future loans are made or credit assistance is provided. A state may choose to extend a non-Federal share requirement to borrowers as a condition of assistance, or may require a borrower to provide the non-Federal share for the SIB prior to its using Federal-aid funds to capitalize a SIB account.
SIB loans can be repaid with Federal funds or dedicated revenue sources such as tax revenues, special assessments, tolls, and other fees associated with the use of the project, such as fees for parking.
Yes, Federal-aid funds, including Indian Reservation Road (IRR) funds, may be used to pay SIB loan principal and interest costs, as authorized under Section 122 of Title 23.
A leveraged SIB would issue bonds against its initial capitalization, significantly increasing the amount of funds available for loans. Rather than loaning Federal funds and state matching funds, these funds together with anticipated loan repayments can be pledged as security for the bond issue. The proceeds from this debt issuance can then be provided to project sponsors as with loans or credit enhancements.
Yes, a SIB could issue GARVEE bonds or transit GANs in the private capital markets on behalf of project sponsors.
A GARVEE is a bond or loan repaid with Federal-aid funds. A SIB can effectively serve as a GARVEE lender, making a loan that is repaid with Federal-aid funds. SIBs can provide credit assistance to a GARVEE transaction by providing lines of credit, subordinate lien loans, or loan guarantees. These forms of credit assistance can lower the interest rate on GARVEE financing.
The state will notify USDOT if it wishes to discontinue its SIB. Any Federal-aid highway funds which have not been used to assist a project must be returned to FHWA and credited to the appropriation from which the funds were transferred. Funds that have been used to assist projects and repaid to the SIB shall be used for Title 23 purposes and may be in the form of a grant.