The Infrastructure Investment and Jobs Act (otherwise known as the Bipartisan Infrastructure Law, or BIL), which was signed into law by President Joe Biden on November 15, 2021, makes historic investments in America’s infrastructure. The U.S. Department of Transportation (DOT)’s various grant programs for automotive, locomotive, maritime and aviation transportation have received substantial new financial support under BIL. Below is a brief summary of the transportation components of BIL:
- $567.1 billion across all DOT modes from FY 22-26, including $350 billion for the Federal Highway Administration and $69.9 billion for the Federal Transit Administration
Roads and Bridges
- $110 billion for roads, bridges,and major infrastructure projects, including $40 billion for bridge repair, replacement and rehabilitation
- $16 billion for major projects that would be too large or complex for traditional funding programs
Transit and Rail
- $39 billion for modernizing public transit
- $66 billion for passenger and freight rail
- $12 billion in partnership grants for intercity rail service, including high speed rail airports, ports and waterways
- $17 billion for ports and $25 billion for airports’ electric vehicles
- $7.5 towards creating a network of electric vehicle charging stations across the country
BIL’s new investments in America’s Marine Highway Program, the Port Infrastructure Development Program, National Infrastructure Investments via the RAISE program, INFRA grants, Mega Grants and the Rural Surface Transportation Grant Program are particularly worth paying attention to. The application window for these programs has closed for the current funding round, but other notable programs like the Reconnecting Communities Pilot Discretionary Grant program and Bridge Investment Program are currently accepting applications. The other grants address a myriad of issues, including commercial vehicle and rail safety training and improvements, tribal transportation and transit-oriented development. A full list of outstanding notice of funding opportunities for USDOT’s grant programs can be found below.
On March 15, 2022, President Biden signed into law an omnibus package which will fund the federal government through the rest of this year. USDOT received $102.9 billion in funds under the bill, a $16.2 billion increase from fiscal year 2021. The bill also provided $57.5 billion for the Federal Highway Administration’s formula programs, which were reauthorized in the infrastructure law, as well as $16.3 billion for the Federal Transit Administration, a $3.3 billion increase. Amtrak received $2.3 billion.
U.S. Department of Transportation – Bipartisan Infrastructure Law, Grants and NOFOs
DOT – Summary of Loan Programs
The U.S. Department of Transportation (DOT), in addition to its discretionary grant funding programs, offers credit and loan programs to finance transportation projects.
Build America Bureau
The Build America Bureau within the Office of the Secretary of Transportation is the primary overseer of USDOT’s credit and loan programs. It streamlines credit opportunities and grants while providing access to these programs with speed and transparency. It also provides technical assistance and encourages innovative best practices in project planning, financing, delivery and monitoring. The Bureau combines the Bureau, TIFIA and RRIF loan programs, Private Activity Bonds (PABs), and the INFRA grant program all under one roof within the Office of the Secretary of Transportation.
The Transportation Infrastructure Finance and Innovation Act (TIFIA) program provides credit assistance for qualified projects of regional and national significance. TIFIA is designed to fill market gaps and leverage private co-investment in critical transportation projects across the country. TIFIA’s credit assistance is usually offered on more financially advantageous terms than in the financial market. The program offers low interest rates that do not accrue until proceeds are drawn, flexible amortization and no pre-payment penalties.
TIFIA Rural Project Initiative (RPI)
TIFIA’s Rural Project Initiative (RPI) provides loans in support of improving transportation in rural communities across the country. The RPI can provide large savings over traditional TIFIA loans, including:
- Loans for up to 49% of the project’s eligible costs (compared to 33% under traditional TIFIA).
- Fixed interest rates equal to half of the U.S. Treasury rate of equivalent maturity of the loan at the time of closing (traditional TIFIA loans have interest rates equal to the U.S. Treasury rate at the time of closing).
TIFIA Lite provides financial support to experienced borrowers with strong credit and small, shovel-ready projects. This is in contrast to the larger, more complex projects that TIFIA typically supports. Borrowers under the TIFIA program can enjoy the benefits of TIFIA (low interest rate, payment deferral up to five years, no pre-payment penalties, etc.) while also taking advantage of a shorter review process.
The Railroad Rehabilitation and Improvement (RRIF) program provides direct loans and loan guarantees up to $35 billion to finance development of railroads. Not less than $7 billion is reserved for projects benefiting freight railroads other than Class I carriers. Direct loans can fund up to 100% of a railroad project with repayment periods of up to 35 years and interest rates equal to the cost of borrowing from the government.
RRIF Express is similar in function to TIFIA Lite in that it reduces the time and costs associated with securing lines by providing expedited, low-cost loans for short line and regional railroads.
Private Activity Bonds
Private Activity Bonds (PABs) are debt instruments authorized by the Secretary of Transportation and issued by a conduit issuer on behalf of a private entity for highway and freight transfer projects, allowing a private project sponsor to benefit from the lower financing costs of tax-exempt municipal bonds. The Infrastructure Investment and Jobs Act doubled the total amount of funds available for PABs from $15 billion to $30 billion.
State Infrastructure Banks
A State Infrastructure Bank (SIB) is a revolving loan fund program established and administered by a state to provide low-cost loan financing to surface transportation projects within the state. SIBs can be capitalized with Federal aid surface transportation funds and matching state funds or capitalized with a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan to lend to rural infrastructure projects.
Center for Innovative Finance Support
The Federal Highway Administration’s Center for Innovative Finance Support provides financing programs, guidance and resources for applicable transportation projects.