Through the creation of a state-funded SIB, Florida has added to the flexibility of its already active SIB program. Florida’s SIB is a revolving loan and credit enhancement program consisting of a Federal-funded SIB account and a state-funded SIB account. The Federal-funded SIB is capitalized with Federal money matched with state money as authorized under Section 1511 of TEA-21, while the state-funded SIB is capitalized with state money only. In June of 2000, Governor Jeb Bush signed a bill into law to create Section 339.55, Florida Statutes, which authorized and funded a state-funded SIB. This SIB will be capitalized with $50 million per year from state funds for state fiscal years 2001 through 2003.

The Florida SIB can leverage funds through loans and credit enhancement assistance to improve project feasibility. The amount of any loan or other assistance may be subordinated to other debt financing for a project with an investment grade rating of "BBB" or higher. Loans from the SIB may bear interest at or below market interest rates, as determined by the Florida Department of Transportation (FDOT). In order to receive financial assistance from the SIB, a public or private entity must submit an application to FDOT. Awards are made based on project priority, project feasibility, ability to repay the loan, and the amount of funds remaining in the balanced SIB finance plans. Applications for SIB loans may be accepted at any time during a fiscal year and evaluation and awards for SIB loans will be processed up to twice each year.

Since inception of the state-funded SIB in June 2000, Florida has completed two application cycles with set timeframes for applications and awards. During the first award cycle ending October 2000, FDOT received 15 applications and awarded eight projects. During the second award cycle ending April 2001, FDOT received 16 applications and awarded five projects.

Since FDOT provides transportation services to the public and does not serve as a private bank, below market rate loans are a subsidy FDOT has been willing to provide to further develop transportation projects that can be delivered earlier, or that may not otherwise be built to better serve the traveling public. FDOT requires that the project sponsor propose an interest rate pertaining to the loan and repayment stream. The net present value of the repayment stream is a key component of the evaluation of the loan when awards are made.

Florida is currently developing a web-based SIB application process and project sponsor progress reporting features to better serve loan applicants and recipients. These program enhancements will be operational later in 2001.

Two examples of successful projects awarded loans through the Florida SIB are:

Regional Intermodal Center in Downtown Orlando. The Regional Intermodal Center will function as the focal point for the Central Florida Regional Transportation Authority’s LYNX three-county service area. The new center will replace the existing regional bus terminal and facilitate connectivity between existing and proposed transportation modes such as rail. Project costs total $29.2 million with state-funded SIB loan assistance of $7.96 million at an interest rate of five percent. LYNX currently does not have senior debt, but may issue debt senior to the SIB loan with the concurrence of FDOT. LYNX representatives affirm that "the State Loan program ... provides transit agencies the opportunity to leverage funding and generate additional funding sources for buses and other capital improvements. The ability to secure a loan at below market rates, to match a grant and to advance a major intermodal facility project several years ahead of schedule is significant for the region."

Lee Roy Selmon Reversible Express Lanes. This project for the Tampa Hillsborough County Expressway Authority (THCEA) will increase urban traffic mobility in a highly congested area of Tampa to the Port of Tampa by improving access and adding needed capacity to the expressway during peak travel periods. The project will utilize reversible auto-only lanes and electronic tolling and lane management without the need for any additional right-of-way. The total project cost is $290.8 million with state-funded SIB loan assistance of $35 million at an interest rate of 3.5 percent subordinated to senior debt rated "A" by the international bond rating agencies. THCEA may issue additional debt senior to the SIB loan with the concurrence of FDOT. THCEA officials state that "the subordinate loan program ... permits ‘gap’ funding until project revenues ramp-up and reliable (bondable) toll revenue streams are established. Also, projects are completed many years earlier, thus generating new transportation funding (toll revenues) and most importantly delivering needed facilities to the customer."

In total, the Florida SIB has awarded loans to 32 projects. As shown in the table below, Florida has leveraged $3,034 million in transportation projects with $465 million in SIB funding. This is a significant return on investment (6.5 times) that is providing valuable transportation assets and options to the traveling public in Florida.

The FHWA Innovative Finance Quarterly (IFQ) is published four times per year. FHWA does not maintain a mailing list for the IFQ nor does it distribute the publication direcly. The IFQ is available as an insert to the AASHTO Journal and is also available electronically through FHWA's Home Page: http://www.fhwa.dot.gov/innovativefinance/