Transportation Infrastructure Finance and Innovation Act (TIFIA)

Introduction

The Transportation Infrastructure Finance and Innovation Act (TIFIA) program was authorized in 1998. The program was created because state and local governments that sought to finance large-scale transportation projects with tolls and other forms of user-backed revenue often had difficulty obtaining financing at reasonable rates due to the uncertainties associated with these revenue streams. TIFIA provides federal credit assistance with fixed rates that are often lower than what most borrowers can obtain in the private market. By providing greater access to capital, TIFIA can help advance qualified, large-scale projects that might otherwise be delayed because of size, complexity, or uncertainty over the timing of revenues.

Changes Under MAP-21

MAP-21 expanded TIFIA's lending capacity, when Congress authorized $1.75 billion in budget authority for the program. Each dollar of federal funds can provide up to $10 in TIFIA credit assistance; under the new MAP-21 funding level, the USDOT expects to be able to offer about $17 billion in credit assistance. That in turn could leverage $20-$30 billion in transportation infrastructure investment.

Most eligible project types and project costs retain their previous TIFIA eligibility. There are new provisions for "rural infrastructure projects", which include a reduced interest rate as well as lowering the minimum project cost from $50 million to $25 million. The maximum loan amount has been increased. Other changes include a rolling admissions process and removal of discretionary selection criteria.

Credit Assistance and Benefits

The TIFIA program offers three types of financial assistance.

• Direct Loan - Offers flexible repayment terms and provides combined construction and permanent financing of capital costs. Maximum term of 35 years from substantial completion. Repayments can start up to five years after substantial completion to allow time for facility construction and ramp-up. Up to 49% of total cost.

• Loan Guarantee - Provides full-faith-and-credit guarantees by the Federal Government and guarantees a borrower's repayments to non-Federal lender. Loan repayments to lender must commence no later than five years after substantial completion of project.

• Standby Line of Credit - Represents a secondary source of funding in the form of a contingent Federal loan to supplement project revenues, if needed, during the first 10 years of project operations, available up to 10 years after substantial completion of project. Up to 33% of total cost.

TIFIA loans are negotiated between the USDOT and the borrower and are based on the project's economics and characteristics. The amount of credit assistance cannot exceed 33% of total anticipated eligible project costs.

Program Eligibility and Requirements

Any project eligible for federal assistance through existing surface transportation programs is also eligible for the TIFIA program. Examples of eligible projects include:

• Transit
• Rail
• Highways
• International bridges and tunnels
• Freight rail facilities
• Intelligent transportation systems (ITS)
• Intermodal projects, including those that facilitate access into and out of a port
• Projects eligible for assistance under title 23 or chapter 53 of title 49

Cost requirements include a minimum capital cost of $50 million (or 33.3% of a state's annual apportionment of federal-aid funds), $25 million for "rural infrastructure projects", or $15 million for ITS. Also, the project must be supported by user charges or other non-federal funding sources.

Additional Reading

USDOT Federal Highway Administration Fact Sheet. The FHWA provides a fact sheet containing the basics of the TIFIA program.