California Department of Transportation
 

Transportation Infrastructure Finance and Innovation Act (TIFIA) of 1998

Program Purpose:

The Transportation Infrastructure Finance and Innovation Act (TIFIA) of 1998 established a Federal credit program for eligible transportation projects of national or regional significance under which the U.S. Department of Transportation (US DOT) may provide three forms of credit assistance – secured (direct) loans, loan guarantees, and standby lines of credit.

The program's fundamental goal is to leverage Federal funds by attracting substantial private and other non-Federal co-investment in critical improvements to the nation's surface transportation system.

The US DOT awards credit assistance to eligible applicants, which include state departments of transportation, transit operators, special authorities, local governments, and private entities.

Program Products:

The TIFIA credit program consists of three forms of financial assistance designed to address requirements throughout a project's life cycle.

Secured Direct Loans:

  • A debt obligation of the US DOT as the lender, and a non-Federal project sponsor as the borrower;
  • Must not exceed 33% of reasonably anticipated eligible project costs;
  • Interest is charged at the Treasury rate of similar maturity;
  • Maximum term for repayment is 35 years after completion, flexible with deferrals up to 10 years; and
  • Claim on revenue as security for repayment of loan.

Loan Guarantees:

  • Any guarantees or pledges by the US DOT to pay all or part of the principal and/or interest on a loan or other debt obligation of a project sponsor to a guaranteed lender;
  • Must not exceed 33% of reasonably anticipated eligible project costs;
  • Interest is charged at a taxable rate that is negotiated between guaranteed lender and borrower, subject to consent from the US DOT;
  • Maximum term for repayment is 35 years after completion, flexible with deferrals up to 10 years; and
  • Claim on revenue as security for repayment of loan.

Standby Lines of Credit:

  • Represent a secondary source of funding in the form of contingent direct loans that may be drawn upon to supplement project revenues, if needed, during the first 10 years of a project's operation;
  • Must not exceed 33% of reasonably anticipated eligible project costs (maximum of 20% may be drawn per year);
  • Available for 10 years after project completion;
  • Interest is charged at the rate of a 30-Year Treasury note;
  • Maximum term of 25 years after end of availability period; and
  • Claim on revenue as security for repayment of loan.

Eligible TIFIA Sponsors and Projects

Sponsors Projects
  • State Governments
  • Private Firms
  • Special Authorities
  • Local Governments
  • Transportation Improvement Districts
  • Highways and Bridges
  • Intelligent Transportation Systems
  • Intermodal Connectors
  • Transit Vehicles and Facilities
  • Intercity Buses and Facilities
  • Freight Transfer Facilities
  • Passenger Rail Vehicles and Facilities

Requirements:

  • Project must cost at least $50 million or 1/3 of the State's annual apportionment of Federal-aid highway funds, whichever is less. For intelligent transportation system (ITS) projects, the minimum cost is $15 million;
  • Project must be in the STIP;
  • TIFIA total contribution amount may not exceed 33% of eligible project costs;
  • Project must be backed by a dedicated revenue source;
  • Must meet applicable Federal laws (Title VI of the Civil Rights Act of 1964, National Environmental Policy Act (NEPA) of 1969, Uniform Relocation Assistance & Real Property Acquisition Policies Act of 1970, Title 23 of the U.S.C. - Highway Projects, and Title 49of the U.S.C. - Transit Projects); and
  • State/Local approvals (transportation plans and permits).

Funding

Funded by contract authority, to remain available until expended, the funds are subject to the overall Federal-aid obligation limitation. Funds cover the subsidy cost (similar to a commercial bank's loan reserve requirement) of TIFIA credit assistance. The annual amount of available credit assistance is a function of available contract authority.

Annual Authorizations for TIFIA Credit Assistance ($ in Millions)

Federal Fiscal Year (FFY) 2005 2006 2007 2008 2009
Authorization $122 $122 $122 $122 $122

The TIFIA program is governed by the Federal Credit Reform Act of 1990, which requires the US DOT to establish a capital reserve, or “subsidy amount,” to cover expected credit losses before it can provide TIFIA credit assistance. Congress places limits on the annual subsidy amount available. Through the Safe, Accountable, Flexible, Effective Transportation Equity Act: A Legacy for Users (SAFETEA-LU, Public Law 109-59), Congress authorized $122 million for each Federal fiscal year from 2005 through 2009. Based on US DOT's experience, this funding amount can support more than $2 billion of average annual credit assistance.

Statutory Selection Criteria Weighting (percentage amounts)

Private Participation 20.0%
Environmental Impact 20.0%
National or Regional Significance 20.0%
Project Acceleration 12.5%
Credit Worthiness 12.5%
Use of New Technologies 5.0%
Reduced Federal Grant Assistance 5.0%
Consumption of Budget Authority 5.0%

Federal Highway Administration (FHWA) TIFIA Program Guide

FHWA TIFIA Fact Sheet (PDF)

FHWA TIFIA Fact Sheet (Website link)

For additional information, please contact the Office of Innovative Finance.