A State Infrastructure Bank (SIB) is a revolving fund that is established and operated by a State (usually a State Department of Transportation Office).† It has the capacity to offer direct loans and various types of credit enhancement products to surface transportation infrastructure projects.† Federal and State funds are used to capitalize the SIB.† A percentage of Federal funds are transferred from specific modal accounts, and these funds are matched with State money in a prescribed ratio.
On August 10, 2005, the Safe, Accountable, Flexible, Efficient Transportation Equity Act (SAFETEA-LU; P.L. 109-59) surface transportation reauthorization legislation was signed into law.† This legislation continues the existing SIB program, but expands program eligibility to all States and U.S. territories.† Since the programís inception in 1995, thirty-nine SIBs have been established and thirty-three have completed some type of financial assistance.† Kansas established a State-only SIB in 2004 and structured it to meet Federal requirements.† Twenty-one States established transit accounts dedicated to assisting public transportation projects, and eight have completed transit oriented loans.
In order to initiate a SIB, a cooperative agreement must be negotiated between the State and each Federal modal agency that the State wishes to include in its program.† Some States may need to seek the approval of their legislature in order to legally establish their SIB program.
Just like a commercial bank, SIBs require administrative and managerial resources.† The program and its financial products must be marketed to potential loan applicants, and appropriate accounting controls must be used to track loan repayments.† SIBs must design and implement their application and lending procedures and decide on lending policies and priorities.
SIBs can provide the following advantages over relying entirely on grant based financing:
More information on SIBs is available on FTA's website:
Additional information on SIBs is also available on the Federal Highway Administration's (FHWA) website.