Office of Planning, Environment, & Realty (HEP)
A Grant Anticipation Revenue Vehicle or GARVEE is a debt financing instrument authorized to receive Federal reimbursement of debt service and related financing costs under Section 122 of Title 23, United States Code. GARVEEs can be issued by a state, a political subdivision of a state or a public authority. States can receive federal-aid reimbursement for a wide array of debt-related costs incurred in connection with an eligible debt financing instrument, such as a bond, note certificate, mortgage or lease. Reimbursable debt-related costs include interest payments, retirement of principal and any other cost incidental to the sale of an eligible debt instrument.
In general, projects funded with the proceeds of a GARVEE debt instrument are subject to the same requirements as other federal-aid projects with the exception of the reimbursement process. Instead of reimbursing construction costs as they are incurred, the reimbursement of GARVEE project costs occurs when debt service is due. For a GARVEE, a state may request partial conversion of AC project(s) to coincide with debt service payments, allowing for effective use of obligation authority.
Public-private partnerships are contractual agreements formed between a public agency and private sector entity that allow for greater private sector participation in the delivery of transportation projects.
Traditionally, private sector participation has been limited to separate planning, design or construction contracts on a fee for service basis - based on the public agency's specifications. Expanding the private sector role allows the public agencies to tap private sector technical, management and financial resources in new ways to achieve certain public agency objectives such as greater cost and schedule certainty, supplementing in-house staff, innovative technology applications, specialized expertise or access to private capital. The private partner can expand its business opportunities in return for assuming the new or expanded responsibilities and risks.
For more information: http://www.fhwa.dot.gov/ipd/p3/default.aspx
A State Infrastructure Bank or SIB functions as a revolving fund. Much like a bank, it enables loans and other credit products to public and private sponsors of Title 23 highway construction projects or Title 49 transit capital projects. Federally capitalized SIBs were first authorized under the provisions of the NHS Act. The pilot program was originally available to only 10 states and was later expanded to include 38 states and Puerto Rico. TEA-21 established a new pilot program for the states of California, Florida, Missouri and Rhode Island. The initial infusion of federal and state matching funds was critical to the start-up of a SIB, but states have the opportunity to contribute additional state or local funds to enhance capitalization.
SIB assistance may include loans (at or below market rates), loan guarantees, standby lines of credit, letters of credit, certificates of participation, debt service reserve funds, bond insurance and other forms of non-grant assistance. As loans are repaid, a SIB's capital is replenished and can be used to support a new cycle of projects.
SIBs may also be structured to leverage additional resources. A "leveraged" SIB would issue bonds against its capitalization, increasing the amount of funds available for loans.