State Infrastructure Banks


SAFETEA-LU established a new State Infrastructure Bank (SIB) program under which all states, Puerto Rico, the District of Columbia, American Samoa, Guam, the Virgin Islands, and the Commonwealth of the Northern Mariana Islands are authorized to enter into cooperative agreements with the Secretary of Transportation to establish infrastructure revolving funds eligible to be capitalized with Federal transportation funds authorized for fiscal years 2005-2009. The SIB program gives states the capacity to increase the efficiency of their transportation investment and significantly leverage Federal resources by attracting non-Federal public and private investment. A SIB, much like a private bank, can offer a range of loans and credit assistance enhancement products to public and private sponsors of Title 23 highway construction projects or Title 49 transit capital projects.

SIBs were initially authorized under the 1995 NHS Act. Under the initial pilot program, 10 states were selected for participation to use a portion of their Federal-aid funds as “seed” money, matched with non-Federal funds. The 1997 USDOT appropriations act provided $150 million in Federal general revenue funds for SIB capitalization, and the SIB pilot program was expanded to 39 states (including Puerto Rico), 33 of which were actually established.

In 1998, TEA-21 established a new SIB pilot program, continuing to fund four of the 39 states’ SIBs through FY 2003. The remaining 35 states were allowed to continue their SIBs with funds capitalized with FY 1996 and FY 1997 appropriations. States that established SIBs authorized by the NHS Act and TEA-21 are allowed to continue to operate those SIBs under SAFETEA-LU.


States participating in the current SIB program may capitalize the account(s) in their SIBs with Federal surface transportation funds for each of fiscal years 2005-2009 as follows:

  • Highway account – up to 10 percent of the funds apportioned to the state for the National Highway System Program, the Surface Transportation Program, the Highway Bridge Program, and the Equity Bonus
  • Transit account – up to 10 percent of funds made available for capital projects under Urbanized Area Formula Grants, Capital Investment Grants, and Formula Grants for Other Than Urbanized Areas
  • Rail account – funds made available for capital projects under subtitle V (Rail Programs) of Title 49

A state must match the Federal funds used to capitalize the SIB on an 80-20 Federal/non-Federal basis, except for the highway account where the sliding scale provisions apply. States also have the opportunity to contribute additional state or local funds beyond the required nonfederal match.


SIBs may provide the following forms of assistance:


  • Loans at subsidized rates and/or with flexible repayment provisions
  • Grant Anticipation Notes (GANs)
  • Short-term construction or long-term debt financing
  • Certificates of Participation

Credit Enhancement

  • Capital reserves and other security for bond or debt instrument financing
  • Letters of credit (direct pay or stand by)
  • Lines of credit
  • Bond insurance and loan guarantees

Other forms of proposed non-grant assistance may also be sought. As loans or other credit assistance forms are repaid, a SIB’s initial capital is replenished and can be used to support a new cycle of projects.

SIBs serve as a flexible and useful tool to meet a state’s project financing demands, stretching both Federal and state dollars. Through the SIB financing mechanism, states can leverage additional transportation resources, accelerate construction timelines for projects with dedicated revenue sources, and recycle assistance for future transportation projects. SIBs can be used in conjunction with traditional finance approaches and other innovative tools to maximize transportation infrastructure investment. By offering SIB support for a project, the sponsor may be able to attract private, local, and additional state financial resources, leveraging a small amount of SIB assistance into a larger dollar investment. Alternatively, SIB capital can be used as collateral to borrow in the bond market or to establish a guaranteed reserve fund. Loan demand, timing of needs, and debt financing considerations are factors to be weighed by states in evaluating a leveraged SIB approach.


Several states-Kansas, Ohio, Georgia, and Florida-have established SIBs (or a SIB account) capitalized solely with state funds. In this way, these states have not funded their SIBs with Federal-aid money and did not enter into cooperative agreements with USDOT. Projects funded by these state SIBs are not bound by the Federal regulations that govern the particular grant program from which the initial Federal capitalization is derived. These states’ SIB activity is described under Current Projects, and further information is available under Resources.

Qualified Projects

Projects eligible under Title 23, capital projects as defined in Section 5302 of Title 49, and any other projects related to surface transportation that the Secretary determines to be appropriate are eligible for assistance from SIBs. Both the initial credit assistance funded with Federal capitalization grants, including the required non-Federal match, and any assistance funded with loan repayments and other recycled funds are subject to the requirements of Titles 23 and 49, as applicable.

Current Projects


As shown in the table below, as of December 2008, 32 states and one territory had entered into 579 SIB loan agreements with a total dollar value of $5.56 billion.

State Number of Agreements Loan Agreement Amount (thousands) Disbursements to Date (thousands)
Alaska 1 $2,737 $2,737
Arizona 63 $655,000 $542,095
Arkansas 1 $31 $31
California 2 $1,120 $1,120
Colorado 4 $4,400 $1,900
Delaware 1 $6,000 $6,000
Florida (federal) 29 $303,920 $286,923
Indiana 2 $6,000 $6,000
Iowa 2 $2,879 $2,879
Maine 23 $1,635 $1,635
Michigan 44 $33,635 $29,307
Minnesota 17 $122,476 $112,295
Missouri 28 $164,399 $87,959
Nebraska 2 $6,792 $6,792
New Mexico 4 $25,216 $17,815
New York 10 $27,700 $27,700
North Carolina 6 $1,279 $1,279
North Dakota 3 $5,796 $5,796
(fed. and state)
96 $286,839 $199,382
Oregon 20 $34,773 $33,577
Pennsylvania 104 $61,973 $50,354
Rhode Island 1 $1,311 $1,311
South Carolina 13 $3,311,000 $2,430,000
South Dakota 3 $28,776 $28,776
Tennessee 1 $1,875 $1,875
Texas 68 $310,888 $290,642
Utah 1 $2,888 $2,888
Vermont 4 $1,805 $1,427
Virginia 1 $18,000 $17,989
Washington 3 $2,376 $487
Wisconsin 7 $3,051 $3,051
Wyoming 14 $112,332 $112,332
Puerto Rico 1 $15,000 $15,000
Total 579 $5,563,902 $4,329,354

States with SIBs established through the NHS Act, TEA-21, and since statewide authorization from SAFETEA-LU are also shown on the Project Finance State by State Map.

While the use of SIBs is widespread across the United States, over 87 percent of the dollar amount of all SIB loans is concentrated in five states, with nearly 95 percent of activity in eight states. South Carolina leads the nation in the value of SIB loan agreements, with a total of over $3.3 billion committed in 13 agreements. Much of that money has been made available to the SIB through the South Carolina Department of Transportation. Other states with significant SIB activity include: Arizona, Florida, Texas, and Ohio.


Three state funded SIBs have been established:

  • Kansas established a SIB known as the Transportation Revolving Fund (TRF) in 1999.
  • Ohio’s SIB funds projects through its Federal, State Motor Fuel, Title 23 (“Washed”), and General Revenue Fund (GRF) Accounts. Federal/state highway and transit projects are funded using at least one of the first three of these accounts. Other projects, including rail, airports, and local roads are funded solely through the state GRF Account.
  • Florida has two accounts within its SIB, a federally-funded account and a state-funded account capitalized solely with bond proceeds and state funds.
  • Georgia passed legislation in 2008 establishing a State Transportation Infrastructure Bank (STIB), which it capitalized with $34 million in state funds in FY 2009. The statute allows for future federal capitalization.

The following table shows these state-funded SIBs’ activity.

State Number of Agreements Loan Agreement Amount (thousands) Disbursements to Date (thousands)
Florida (state) 35 $762,445 $493,001
Georgia (STIB) 0
Kansas (TRF) 79 $99,660 $78,008
(State GRF)
Data included in federal table above


The most recent FHWA guidance on establishing, operating, and providing assistance from a SIB was issued for the TEA-21 SIB pilot program. This guidance still pertains equally to the expanded SAFETEA-LU SIB program.


State Infrastructure Banks are codified in United States legal code Title 23 Highways, Chapter 6 Infrastructure Finance, Section 610.1 State Infrastructure Bank Program.


FHWA’s Innovative Finance Website provides extensive information on SIBs prior to SAFETEA-LU. It includes a 2002 USDOT comprehensive review of the SIB program as a national financial management improvement project (FMIP), an element of FHWA’s quality initiative. The review addressed a range of SIB operational elements, including organizational structure, financial policies and outreach efforts.

Chapter 4 of FHWA’s Project Finance Primer
This comprehensive document was issued by FHWA in 2010 and provides good coverage of SIBs.

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