FAST Act Changed TIFIA Rules, DOT Says
Rules governing the U.S. Department of Transportation’s main financing mechanism, Transportation Infrastructure Finance and Innovation Act loans, were changed by the implementation of the FAST Act in December 2015.
Dimitri Kombolias, a credit and budget analyst for DOT, led a webinar Aug. 3 explaining how the FAST Act has affected TIFIA, which he said “leverages limited federal resources to stimulate capital market investment with very low interest rate financing [2.35% for a 35-year loan as of July 22].”
Since TIFIA was created in 1998, the program has given 65 loans worth nearly $24 billion for infrastructure projects in 21 states and in Washington, D.C., and Puerto Rico. Nearly two-thirds of the loans have gone to highway projects, with an additional 11% devoted to intermodal infrastructure, including freight transfer facilities.
The FAST Act allocated $1.435 billion over five years for TIFIA, which Kombolias said could be leveraged into $20 billion by the program’s typical 14-1 ratio. The application process was streamlined with TIFIA being brought last month under the aegis of DOT’s new Build America Bureau, which Secretary Anthony Foxx called “a one-stop shop for government and private sector entities looking for innovative ways to fund infrastructure projects.”
Foxx looked for the latter by touring public-private partnerships in Australia this week.
“I’m excited about this new chapter in our efforts to create the best, safest and most reliable infrastructure possible,” Foxx said about the Build America Bureau. “Meeting the transportation demands of the 21st century will require new and innovative approaches to conceiving, financing, and building our infrastructure. By harnessing the best ideas from home and abroad, we can build on our successful P3 efforts and meet the challenge of financing the transportation system our country needs.”
To be eligible for TIFIA’s long-term, fixed-cost financing, projects must be valued between $10 million and $100 million — with no more than a third of that coming from the federal loan — and be included in the jurisdiction’s transportation improvement program. The FAST Act mandated an emphasis on local projects as well as those in rural areas, which were redefined as those with fewer than 150,000 residents.
