Transportation Infrastructure Finance and Innovation Act (TIFIA) of 1998
Program Purpose:
The Transportation Infrastructure Finance and Innovation Act (TIFIA) of 1998 established a new federal credit program under which the U.S. Department of Transportation (US DOT) may provide Federal credit assistance to major transportation investments of critical or national significance, such as: inter-modal facilities; border crossing infrastructure; highway trade corridors; and transit and passenger rail facilities with regional and national benefit. The TIFIA program is designed to fill market gaps and leverage substantial private co-investment by providing supplemental and subordinate capital and credit rather than grants.
Program Products:
There are three forms of credit assistance for surface transportation projects of national or regional significance:
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 guarnteed 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.
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 Sponsors: State/Local Government Private Firms Special Authorities Transportation Improvement Districts
Eligible Projects: Highway (Title 23) and bridges Transit Vehicles and facilities (Title 49) Intercity buses and facilities Intercity passenger rail vehicles and facilities including Amtrak Publicly-owned inter-modal freight facilities on the National Highway System
Requirements:
- Project cost must be reasonably anticipated to total at least $50 million, or, alternatively equal to 33 1/3% or more of the State's Federal-aid apportionments for the most recently completed fiscal year. For projects that principally involve the installation of an intelligent transportation system (ITS) projects, eligible project costs must be reasonably anticipated to total at least $15 million;
- Project must be in the STIP;
- TIFIA contribution is limited to 33% of the 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 of 1969 (NEPA), Uniform Relocation Assistance & Real Property Acquistion 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).
Federal Highway Administration (FHWA) TIFIA Program Guide
FHWA TIFIA Fact Sheet
Funding:
A total of $530 million of Federal funding is provided to pay the "subsidy cost" for supporting Federal credit under TIFIA to cover estimated losses. Annual caps of $10.6 billion limit the principal amount of credit instruments issued.
Annual Authorizations for TIFIA Credit Assistance ($$ in Millions)
| Fiscal Year | 1999 | 2000 | 2001 | 2002 | 2003 |
| Federal Funding | 80 | 90 | 110 | 120 | 130 |
| Maximum Principal Amount of Credit | 1,600 | 1,800 | 2,200 | 2,400 | 2,600 |
The TIFIA program is governed by the Federal Credit Reform Act of 1990 (FCRA), also known as "credit reform". The FCRA requires that, prior to providing TIFIA credit assistance, the US DOT establish a capital reserve or subsidy amount to cover expected credit losses. Loans under this program are authorized for the life of the Transportation Equity Act for the 21st Century (through 2003) with a cumulative budget authority of $530 million. Nevertheless, following are the statutory criteria for selecting projects:
Equal weightings for:
- National or regional significance, including economic benefit;
- Creditworthiness;
- Use of public-private partnerships and attraction of private capital;
- Project acceleration;
- Use of new technologies;
- Budgetary impact;
- Environmental impact; and
- Reduction of federal grant assistance.
For additional information, please contact Innovative Finance:
| Weijian Ni | Jeffrey Ingles |
| Innovative Finance Manager | Innovative Finance Manager |
| (916) 651-9539 | (916) 654-3099 |
| weijian_ni@dot.ca.gov | jeffrey_ingles@dot.ca.gov |