The Division Office in each State with a SIB pilot program carries out certain stewardship and oversight functions related to the SIB pilot programs to ensure the State is complying with the statutorily required cooperative agreement and the policies and procedures relating to the SIB pilot program. It is considered a best practice to address any material changes to a SIB pilot program via an addendum to the cooperative agreement jointly approved by the FHWA Division Office and the State. Provided below is a summary of stewardship and oversight practices for NHS Act SIB pilot programs and TEA-21 SIB pilot programs.
Section 350 of the NHS Act requires all projects receiving assistance from an NHS Act SIB pilot program to comply with the Federal requirements that apply to projects under title 23 or title 49 (as appropriate) when the assistance is derived from: (1) the Federal funds deposited into the SIB; (2) the non-Federal matching funds; (3) all repayment amounts from Federal sources; and (4) any investment income generated from these funds. Under Section 350, repayments to an NHS Act SIB pilot program not derived from Federal funds may be treated as State funds. Projects receiving assistance from non-Federal repayments must be eligible for assistance under title 23 or title 49 but may be administered as State or local funded projects. Such projects are not subject to Federal requirements.
Section 1511 of TEA-21 requires all projects receiving assistance from a TEA-21 SIB pilot program Federal account to comply with the Federal requirements that apply to projects under title 23 or title 49 as appropriate. Therefore, Federal requirements apply to all rounds of lending by a TEA-21 SIB. States will sometimes create separate SIB accounts wholly funded with State monies. These accounts are not subject to Federal requirements.
In accordance with the SIB Guidance, each SIB pilot program submits an Annual Report to the FHWA Division Office no later than 90 days after the end of each Federal fiscal year. This report provides a history of the SIB activity as well as a more detailed update regarding the activity of the immediately preceding year. To aid in the conformity of these annual reports, the Center for Innovative Finance Support has prepared an electronic spreadsheet that States may use as an alternative and streamlined means of satisfying the annual reporting requirement. The Annual Report should be reviewed by the Division Office before being submitted to the Center for Innovative Finance Support.
The FHWA Division Office oversight of a SIB pilot program includes a variety of items related to Federal regulations and requirements. Additional detail on the SIB pilot program requirements can be found in the SIB Guidance, Section 350 of the NHS Act, and Section 1511 of TEA-21. The FHWA Division Office should monitor compliance with the following requirements of Section 350 of the NHS Act and Section 1511 of TEA-21 as a best practice:
If, at any time, FHWA or FTA, as applicable, determines that the State has not complied with the terms of its cooperative agreement, the requirements of the NHS Act or TEA-21, as applicable, or other Federal requirements, in accordance with existing guidance, the appropriate agency will notify the State of the non-compliance and request the State to take appropriate corrective action or submit a compliance plan to FHWA and FTA, as applicable, within 60 days.