The U.S. Department of Transportation recently issued a policy update for its Build America Bureau that oversees the Transportation Infrastructure Finance and Innovation Act or TIFIA credit program.
[Above photo by AASHTO]
The TIFIA credit program provides flexible, long-term, low-interest loans that enable public and private project sponsors to accelerate the delivery of infrastructure at a lower financing cost and must be repaid using non-federal funding.
USDOT said that its policy update will now allow all types of transportation infrastructure projects to finance up to 49 percent of eligible costs as authorized by TIFIA legislation. Previously, only limited kinds of projects could finance up to 49 percent, with most capped at up to 33 percent – presenting a roadblock for many project sponsors seeking to build critical infrastructure, noted USDOT Secretary Sean Duffy.
“Unleashing the full value of the TIFIA program represents another step forward in getting America building again,” he said in a statement. “It’s common sense to allow all eligible projects the same access to our low-interest financing opportunities. We are building infrastructure easier, quicker, and cheaper. This update is the result of extensive analysis, successful pilot programs, and listening to feedback from our partners.”
[Editor’s note: The American Association of State Highway and Transportation Officials has advocated for years to this increase TIFIA eligibility, most recently in as part of the six surface transportation reauthorization policies adopted by AASHTO’s board of directors at its Spring Meeting this May as well as in a white paper where, on page 12, the organization expressly called on USDOT “to follow current law in considering TIFIA’s cost share of highway projects up to 49 percent instead of 33 percent.”]
In 2018, the Bureau began identifying categorical eligibilities in addition to the project-by-project request approach. Analysis of program data showed that taxpayer exposure from TIFIA loans is minimal, USDOT said. As a result, the Bureau established several successful pilot programs to allow sponsors access to the higher financing maximum, including the TIFIA Rural Projects Initiative, and for certain transit and Transit-Oriented Development projects.
Further expansion of the option to finance up to 49 percent provides more projects with opportunities to expedite delivery and save significantly on financing costs, reducing the need for federal grants or freeing up those grants to be used for other projects, noted Morteza Farajian, executive director of the Build America Bureau.
“The TIFIA loan program has proven to be a highly effective tool, supporting the delivery of more than $150 billion in infrastructure investment through over $52 billion in flexible, low-cost loans,” he said.
“This policy update will ensure the program remains available at full capacity to support our private and local partners,” Farajian added. “By removing unnecessary barriers after careful analysis, we’re helping to open the door for every type of project to receive the same benefits and level of support from this administration.”
Nation
