[Federal Register Volume 60, Number 249 (Thursday, December 28, 1995)]
[Notices]
[Pages 67159-67160]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31407]



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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
Federal Railroad Administration
Federal Transit Administration


Participation in the State Infrastructure Bank Pilot Program

AGENCY: Federal Highway Administration (FHWA), Federal Railroad 
Administration (FRA), and Federal Transit Administration (FTA), 
Department of Transportation.

ACTION: Notice of Request for Participation.

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SUMMARY: This notice invites States to make applications for 
participation in the State Infrastructure Bank (SIB) Pilot Program 
established by the National Highway System Designation Act of 1995 (the 
Act). Pursuant to Section 350 of the Act, USDOT is authorized to enter 
into agreements with up to ten States to establish State Infrastructure 
Banks or multistate infrastructure banks. The purpose of this notice is 
to invite interested parties to participate in the SIB Pilot Program 
and to outline the procedures that will be established for designation 
of States to be included in the Pilot Program.

DATES: Applications for participation will be accepted until Pilot SIBs 
are designated for ten (10) States. USDOT will begin processing 
applications as received but will not designate any SIBs until January 
29, 1996.

FOR FURTHER INFORMATION CONTACT: Ms. Cynthia Burbank, FHWA Office of 
Policy Development, (202) 366-9208; Mr. John Paolella, FRA Office of 
Policy and Program Development, (202) 366-0380; or Mr. Richard 
Steinmann, FTA Office of Budget and Policy, (202) 366-4060. Application 
requests and specific questions regarding the SIB Pilot Program may 
also be directed to the contact person(s) named in this notice or the 
Divisional or Regional Offices of FHWA, FRA, or FTA in your State.

SUPPLEMENTARY INFORMATION:

Purpose

    President Clinton's vision for sustained economic growth and 
prosperity and for improving international competitiveness for the 
Nation means investing in America and its infrastructure. Executive 
Order 12893 signed by the President in January 1994 reinforced the 
Administration's position that investment in transportation 
infrastructure lays the foundation for economic growth in the next 
century.
    The challenge facing USDOT, its modal administrations, States and 
local governments is finding ways to more effectively employ Federal 
funds by leveraging existing resources to encourage new investment in 
transportation infrastructure. USDOT and its modal administrations have 
accepted this challenge, and through their innovative finance 
initiatives have encouraged States, local governments and other 
affected groups to identify and develop innovative financing mechanisms 
which seek to better manage available resources and create new 
financing opportunities. States responded with an extensive list of 
projects and financing ideas. USDOT's Partnership for Investment has 
used these to develop a wide array of innovative financing mechanisms, 
including the State Infrastructure Bank proposal, which address the 
need to leverage scarce Federal and State resources. USDOT approved 
over 90 projects under the Partnership for Investment.
    In response to State requests for greater flexibility, Congress has 
made a number of changes in Federal surface transportation financing 
legislation, including the establishment of a Pilot Program for State 
Infrastructure Banks through Section 350 of the Act (Pub. L. 104-59, 
Sec. 350). That section authorizes USDOT to enter into cooperative 
agreements with up to ten States for the establishment of SIBs or 
multistate infrastructure banks for making loans and providing other 
assistance to public and private entities carrying out or proposing to 
carry out projects eligible for assistance under the section. The Act 
requires that the Secretary review the financial condition of each SIB 
established pursuant to the Act and report to Congress on the results 
of the review not later than March 1, 1997.
    This notice serves to announce the Pilot Program and provide 
information regarding the Pilot Program, participation qualifications, 
and application procedures. The Pilot Program and subsequent 
implementation by designated SIBs will help USDOT determine how to 
proceed with the SIB concept while simultaneously advancing projects. 
In addition, it will help USDOT inform Congress about the status of the 
program, as required under the Act, and how to expand program 
flexibility for State and local governments.

Definitions

State Infrastructure Bank (SIB)

    An infrastructure investment fund established to facilitate and 
encourage investment in eligible transportation infrastructure projects 
sponsored by public and/or private entities. Through a SIB, a State can 
use its initial capital, provided by its Federal-aid highway 
apportionment, Federal transit allocations, and non-Federal monies, to 
make loans, provide credit enhancement, serve as a capital reserve for 
bond or debt financing, subsidize interest rates, issue letters of 
credit, finance purchase and lease agreements, provide debt financing 
security, or provide other forms of financial assistance for 
construction of projects qualified under the Federal-aid highway 
program and transit capital projects. As the funds are repaid or 
compensation is provided, the SIB can make new financial assistance 
available to other projects, continually recycling the initial monies, 
thus leveraging the initial funds available.

Infrastructure Bank Application Instructions

    A series of questions provided by USDOT to be answered by States 
interested in participating in the SIB Pilot Program. The responses 
will be 

[[Page 67160]]
used by USDOT to evaluate which States will be included in the Pilot 
Program.

Multistate Infrastructure Bank

    Interstate compact among two (2) or more States to enter into a 
cooperative agreement with USDOT to establish a SIB.

Notice of Request for Participation

    This Notice of Request for Participation is the initial step in the 
process that will lead to cooperative agreements for up to ten States 
for the SIB Pilot Program. Interested applicants will be asked to 
respond to a series of questions posed in the Infrastructure Bank 
application instructions to be made available by USDOT as part of this 
designation process. The application responses submitted by the State 
will provide the basis for determining a State's interest in the Pilot 
Program, its ability and qualifications to implement a SIB, and the 
initial projects it expects to facilitate through financial support for 
the SIB. The application instructions are also designed to assist 
States as they seek to develop a framework for establishing a SIB.
    In the interest of providing a timely response to Congress as 
required under the Act, USDOT will begin processing applications as 
they are received but will not designate any SIBs until thirty (30) 
days following publication of this notice. USDOT anticipates 
designations to be made on an individual, rolling basis to permit 
interested States to accelerate implementation, and to facilitate a 
qualitative response to Congress regarding the program. The application 
will be available from the USDOT contact persons referenced in this 
notice, or any of USDOT's modal administrations, FHWA, FRA or FTA, and 
their Divisional or Regional offices.
    USDOT recognizes that this is a Pilot Program, and is receptive to 
nontraditional as well as traditional approaches to establishing a SIB 
and defining the types of assistance that might be offered. Subject to 
the limitations of the Act, USDOT has no preconceived concept of how 
SIBs should be implemented and seeks to work in cooperation with the 
States to define the implementation program. USDOT will not promulgate 
any regulations for the Pilot Program prior to the designation process. 
USDOT will not require that all Pilot SIBs be configured in the same 
way or that they provide the same forms of assistance. This Pilot 
Program, therefore, gives States an opportunity to determine how they 
might best structure SIBs. USDOT will be interested in information 
detailing how States propose to establish and implement SIBs, and is 
looking for evidence of well thought out proposals. In addition, 
applications can be enhanced by providing information in the following 
areas:
     The types of assistance to be provided by the SIB (e.g., 
loans, credit enhancements, capital reserves for debt financing, 
interest rates subsidies, letters of credit);
     Identification of projects to be advanced as a result of 
Pilot designation;
     Status of any enabling legislation, if required by a State 
prior to establishing a SIB;
     How the SIB relates to other innovative financing efforts 
underway or planned by States and how their experience under the 
innovative financing programs to date can reflect this;
     The relationship of the projects proposed for the SIB to 
the Statewide Transportation Plan, the approved State Transportation 
Improvement Program (STIP) and any other Federally required plans;
     How the SIB will more effectively use Federal monies;
     The sources of funds that will be used to capitalize the 
SIB (CMAQ and ISTEA demonstration funds cannot be utilized), including 
the availability of non-Federal matching funds required by Section 
350(e);
     The proposed institutional framework for the SIB;
     Proposed mechanisms and internal procedures to monitor 
and/or track the flow of Federal funds to accounts in the SIB and the 
State's preferred reporting procedures to USDOT, given that Section 350 
requires maintenance of separate accounts for highway and transit; and
     The use of a SIB to facilitate development of intermodal 
or multistate projects.
    USDOT has established a fast track schedule for this new Pilot 
Program and the opportunities that it will create for States. Responses 
provided by States in the application and subsequent implementation of 
selected SIBs will help USDOT determine how to move forward with the 
Pilot Program, while simultaneously advancing projects. States should 
indicate in their applications the type and extent of any technical 
assistance they might need to expedite implementation if designated as 
a pilot.
    Interested States should request Infrastructure Bank application 
instructions. Copies of the enabling legislation (Section 350) will be 
provided with the application instructions, which will be available 
from the USDOT contact persons referenced in this notice, or any 
Divisional or Regional Office of FHWA, FRA or FTA. Completed 
applications should be submitted to the Divisional or Regional Offices 
of FHWA, FRA or FTA. USDOT and its modal administrations may seek 
further clarification of SIB applications in writing or through an 
informal interview process with States.

    Authority: Pub. L. 104-59, Sec. 350, 109 Stat. 568, 618-622 
(1995).

    Issued on: December 21, 1995.
Rodney E. Slater,
Federal Highway Administration.

    Issued on: December 21, 1995.
Gordon J. Linton,
Federal Transit Administration.

    Issued on: December 21, 1995.
Jolene M. Molitoris,
Federal Railroad Administration.
[FR Doc. 95-31407 Filed 12-27-95; 8:45 am]
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