INNOVATIVE FINANCING IN TEA-21

This column addresses innovative finance provisions in the Transportation Equity Act for the 21st Century (TEA-21). Section 1216(b), Interstate System Reconstruction and Rehabilitation Pilot Program, authorizes the secretary to permit the states to collect tolls on any three sections of the interstate system, of which must be in a different state. The purpose of the program is to provide funding for the reconstruction and rehabilitation of the interstate highway corridors that cannot otherwise be adequately maintained or functionally improved. TEA-21 includes a substantial subchapter titled The Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA). This subchapter establishes a program of financial assistance for transportation infrastructure projects, intended to support projects that can attract private investment and facilitate better leveraging of that private investment. Under this act, authorization is provided for secured loans, loan guarantees, and lines of credit. Section 1511 allows the secretary to enter new cooperative agreements with the states of California, Florida, Missouri, and Rhode Island to establish state infrastructure banks (SIBs) and multi SIBs.