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 The Build America Bureau is U.S. DOT's “one-stop shop” for transportation infrastructure finance with low-interest, long-term loans. We also provide technical assistance and encourage innovative best practices in project planning, financing, delivery, and operation. If you are interested in using our financing tools or have any questions, contact us at BuildAmerica@dot.gov.
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By Morteza Farajian, Ph.D., Executive Director
Before I offer greetings for the New Year, I must recognize our 2022 accomplishments, which would not have been possible without the work of our superior Bureau professional staff and support from our partners across USDOT offices and operating administrations, as well as the White House’s Office of Management and Budget. In the last year, the Bureau has been hard at work on an increasingly diverse pipeline and expanding portfolio of projects. Spanning fiscal and calendar year 2022, the Bureau managed $5.02 billion in financial transactions―closing 18 new loans and amending terms on two existing loans.
Additionally, our team has allocated nearly $3 billion in private activity bonds, thanks to the new $15 billion allocation authority we received under the Bipartisan Infrastructure Law (BIL). That is an impressive amount of transportation infrastructure underway, financed by our partners in the private sector, across the U.S.
With the success of our Regional Infrastructure Accelerator program and the new technical assistance programs for innovative finance and rural/tribal communities that will be announced soon, we anticipate seeing more partnerships between our private and public partners to advance good projects.
During the same period, we added several new staff who are already focused on advancing the Bureau's mission. The new team members bring with them a wealth of transportation, finance, and other experiences that strengthen our workforce. My top priorities for 2023 are continuing to expand and diversify the credit portfolio; building our multi-pronged technical assistance effort; and enhancing the customer experience through data analysis, process improvement, and technology.
To continue tapping our financing resources, Secretary Buttigieg announced that USDOT is allowing Transportation Infrastructure Finance and Innovation Act (TIFIA) financing of up to 49 percent of eligible costs in phase 1 for transit and transit-oriented development (TOD) projects. USDOT’s previous practice limited financing to 33 percent of project costs. In 2023, we will explore options to further expand the "TIFIA 49" percent policy to include more borrowers and project types that clearly advance the Department’s Strategic Goals. This has been received with enthusiasm in the transit and TOD fields. We’re also developing our approach to make financing available to airport projects, with our new BIL authority.
We are devoting lots of energy and hiring new staff in 2023 to build our technical assistance capacity to support communities and assure equitable access to BIL opportunities. The Bureau is quickly becoming USDOT’s point of entry for Office of the Secretary (OST) technical assistance grants, including the Thriving Communities Program (TCP, see article below). USDOT created the Navigator website to guide applicants and interested parties to grant funding. In my last message, I mentioned the Bureau grant programs and we included updates on each below.
Finally, in 2023, we will continue the work we started through our High-Impact Service Provider initiative to strengthen customer experience. We will soon release an updated and redesigned financing programs guide―a comprehensive overview of our processes and programs. We are restarting our 360° reviews―interviews of customers and staff after financial close and analysis to identify process improvement opportunities and best practices. We are investigating the use of newer technologies to streamline customer service and improve the customer experience.
As we move forward in 2023 with new programs, we note that our two major financing programs, TIFIA and Railroad Rehabilitation and Improvement Financing (RRIF), just reached their 25-year anniversary. These two programs have helped fill funding gaps for a wide range of projects, including rural, transit, and multimodal projects that might have languished otherwise. Today, as construction costs increase faster than interest rates, we encourage project sponsors to explore Bureau programs.
We wish you all a happy new year and look forward to partnering with you to advance investment in America’s transportation infrastructure. Please reach us at BuildAmerica@dot.gov and let us know how we can help.
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Click to hear Dr. Morteza Farajian's New Year's message!
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 Congratulations to I-66 Partners for Opening the I-66 Express Lanes Ahead of Schedule!
The Transform 66 Outside the Beltway project is a public-private partnership between the Commonwealth of Virginia and I-66 Express Mobility Partners (I-66 EMP). The project is partially financed with a loan from the Bureau. The Bureau’s own Executive Director Morteza Farajian worked on the project when he was at VDOT. View the project team's video by clicking the photo.
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As part of BIL, the Bureau will establish and implement the Rural and Tribal Assistance Pilot Program. The $10 million, five-year program provides states, local governments, and tribal governments with grants to support project development leading to future applications to DOT credit and grant programs. The grants can fund legal, technical, and financial advisors to help them advance infrastructure projects that are in early stages of development.
The first notice of funding opportunity is planned to include funding from two fiscal years, up to $3.4 million total, available to eligible applicants for: development phase activities, including feasibility studies; project planning; revenue forecasting and funding/financing options analysis; preliminary engineering/design work; and environmental reviews; among others. Communities that are outside an urbanized area of 150,000 or more, federally designated Tribal governments, and Hawaiian Home Lands are eligible for the grants, which are expected to be awarded on a first-come, first-served basis. The Notice of Funding Opportunity (NOFO) will be posted at Rural and Tribal Assistance Pilot Program | Build America (transportation.gov).
Even with the historic investment from BIL, funding and financing projects remains challenging. With “TIFIA 49,” the Bureau can now offer low-cost and flexible financing for transit and transit-oriented development (TOD) projects at the maximum level authorized under law.
“There are countless promising transportation projects with the potential to better connect people to housing, jobs, schools, and more―but that never get off the ground because of a lack of financing,” said U.S. Transportation Secretary Pete Buttigieg. “…with TIFIA 49, we will be able to support more of them than ever, and lower costs for taxpayers.”
This new initiative authorizes borrowing up to 49 percent of eligible project costs for projects that meet certain eligibility requirements. Learn more about TIFIA 49 here.
The Bipartisan Infrastructure Law authorized a new $100 million program to award grants that support acquisition of expert services for innovative financing projects. Grants will enable recipients to develop and evaluate public-private partnerships—including asset concessions—and to explore opportunities for innovative financing and delivery. The program will provide $20 million per year for five years. Recipients will be awarded reimbursable grants for costs incurred, up to $2 million. Grants up to $1 million will be 100 percent federal share (no required local match). Grant amounts of $1 million or more require 50 percent federal share.
Two types of grants are available (applicants can seek either type of grant, but not both):
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Technical Assistance Grants or Expert Services Grants
The Bureau expects to issue the Notice of Funding Opportunity (NOFO) in the coming months, with awards to be announced later this year.
USDOT recently released Promising Practices for Meaningful Public Involvement in Transportation Decision-Making, a first-of-its-kind guide for DOT funding recipients and partners that conduct public involvement in the transportation space. It follows through on a commitment in the Department’s Equity Action Plan that supports implementation of the Department’s Justice40 initiative and helps ensure inclusion of all community voices in implementation of the Bipartisan Infrastructure Law. Be sure to check it out and learn about best practices for reaching stakeholders.
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The Thriving Communities Program (TCP), administered through the Build America Bureau, will provide technical assistance, planning, and capacity building support for rural, tribal, and other disadvantaged communities adversely or disproportionately affected by environmental, climate, and human health policy outcomes. TCP helps to build organizational capacity to compete for federal aid and deliver quality infrastructure projects that enable communities and neighborhoods to thrive.
The FY2022 TCP notice of funding opportunity to select capacity builders (expert support providers) and a call for letters of interest from communities both closed in late 2022. Communities responded in force―with TCP receiving hundreds of inquiries.
Stay tuned as the team announces results in the coming months about new funding opportunities available through an additional $25 million Congress appropriated to the program for FY2023. Sign up to receive email updates with the latest information on the Thriving Communities Program and other DOT grant technical assistance resources.
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Bureau program managers are working with project sponsors across the country to help them secure federal financing through the Bureau's programs. Before a project's loan is approved by the Secretary of Transportation, our team works with the sponsor to take it through three phases of the Bureau's project pipeline – Initial Engagement, Project Development, and Credit Worthiness. The Bureau assigns a lead person to support project sponsors and guide them through the process as well as serve as a liaison with modal administrations. Our team helps sponsors optimize the benefit of the loan for their needs and ultimate successful completion of their project. There are currently 38 active projects in the project development and credit-worthiness phases, totaling approximately $35 billion in potential loans.
Maintaining a strong project pipeline is a top priority for the Bureau, and a key element of this is increasing pipeline diversity by bringing in new borrowers and reaching new and underserved areas into the Initial Engagement phase.
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Bureau Developing New Program Guide and 360 Degree Reviews
As USDOT’s High Impact Service Provider (HISP), the Bureau is working to enhance customers' experience with our team and through our processes. We partner with project sponsors to close loans that will provide them the financial resources to deliver critical infrastructure projects. The Bureau is working on a new, comprehensive finance programs guide that will help prospective and current borrowers. We expect to release the new guide soon.
We plan to conduct "360 degree" interviews with clients and staff members after loans close to review processes and identify best practices and areas for improvements. We look forward to continued enhancements to Bureau services, especially as we reach new borrowers and diversify projects in the pipeline.
Rosalyn G. Millman, the Bureau’s senior advisor to the Executive Director, is leading this initiative. Learn more about HISP at Building trust through improved service delivery and experience |Performance.gov or contact Rosalyn at rosalyn.millman@dot.gov.
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The Bureau is always working with transportation agencies to identify projects that would benefit from a TIFIA or RRIF loan. Since its creation in 2016, the Bureau and its partners across DOT have worked to streamline the application process and expand its outreach efforts. The borrowers below received TIFIA or RRIF loans since the previous newsletter.
Bureau Provides $98 Million in Loans for Safety Improvements on Virginia’s I-81
The Virginia Department of Transportation (VDOT) is using two loans totaling $97.6 million for improvements to Interstate 81. The two TIFIA loans, one from the Bureau’s Rural Projects Initiative (RPI) for up to $15 million (49 percent of the $30.5 million cost) and one traditional TIFIA loan for up to $82.6 million (33 percent of the $250.2 million cost), enable VDOT to finance and expedite part of its $2.7 billion I-81 Capital Improvement Program.
First-Time Borrower Minnesota DOT Uses $48.2 Million Loan for Rural Highway Safety Project in Nicollet County
The Minnesota Department of Transportation (MnDOT) is using a low-interest $48.2 million loan to reconstruct 12 miles of Highway 14 to a four-lane, divided highway from the city of New Ulm to the city of Nicollet, bypassing the city of Courtland―helping to improve safety on a critical rural highway. Under the Rural Projects Initiative (RPI), this loan is for half the treasury rate and for nearly half the $98.38 million project costs instead of the customary 33 percent.
Expected to be completed in 2024, the project includes a new interchange, safer intersections in the city of New Ulm, new turn lanes, replacement of three bridges, and construction of two new bridges. More information is available on the MnDOT website for the project.
The Bureau Closed Two Loans Totaling Nearly $41 Million to Help Louisiana Rebuild Rural Bridges and Provide Ferry Service
Numerous parishes in Louisiana will benefit from a bridge rehabilitation program and ferry service, due to projects being completed by the Louisiana Department of Transportation and Development (LADOTD), and financed through loans from the Bureau:
- A $19.2 million loan is for the Cameron Parish Ferry Project to provide ferry service between the Calcasieu Ship Channel on LA 27 between Cameron and Holly Beach.
- A $21.7 million loan is for the Statewide Bridge Program, which consists of 6 projects, including replacement of 11 structurally deficient bridges in rural areas across 6 different parishes throughout central and eastern Louisiana.
HOV Lanes in Santa Barbara Open Up Access to Jobs and Ease Congestion
Ventura County California commuters will have more options to reach employment centers in South Santa Barbara County in 2025 when the 7.5-mile extension of the high-occupancy vehicle (HOV) lanes on US 101 open to traffic. The $456 million project is supported by a Bureau loan to the Santa Barbara County Local Transportation Authority totaling $75 million. The project also includes rebuilding interchanges at Sheffield Drive and Cabrillo Boulevard, which will enhance safety for automobile drivers, freight carriers, bicyclists, and pedestrians.
Rural Area of Louisiana Seeing Safety Improvements Move Forward with Bureau Loan for Interchanges
Drivers in Lafayette Parish, Louisiana, are seeing orange as they traverse the US 90 corridor as a result of a $86.6 million loan to benefit the Louisiana Department of Transportation and Development (LADOTD). The project, approximately 2.4 miles in length, includes new two-lane frontage roads and construction of interchanges at US 90 and Ambassador Caffery Boulevard and US 90 and Albertson Parkway.
Northern Indiana Commuters Gains Faster and More Reliable Access to the Chicago Area Thanks to Bureau Loans for Multimodal Project
Due to a $203.3 million Railroad Rehabilitation and Improvement Financing (RRIF) Program loan to finance a portion of the $852 million West Lake Corridor Commuter Rail Project, commuters will benefit from an 8-mile single-track extension of the Northern Indiana Commuter Transportation District’s South Shore Line between Dyer and Hammond, Indiana. Not only does the project invest in fixed track but will also expand multimodal options with new sidewalks, walking trails, and bike paths in and around station areas, including four new stations along the alignment.
The Bureau closed another loan―a $27.5 million Railroad Rehabilitation and Improvement Financing (RRIF) loan for a portion of the $649 million Double Track Project along a 26.6-mile segment of the South Shore Line between Gary and Michigan City, Indiana. The project includes nearly 18 miles of double tracking.
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The Build America Bureau is open for business! If you are interested in exploring federal financing with the Build America Bureau, please contact us at BuildAmerica@dot.gov.
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