The strategies identified through our partnership are now part of our daily way of doing business and our staffs, highways, transit, and rail, have become far more comfortable with the language and the concepts of project finance. Another major initiative that led up to the current legislation is the creation of state infrastructure banks, or SIBs. SIBs use federal seed capital to leverage private investment through loans and credit enhancement assistance, and are meant to serve as ongoing, revolving loan funds. As projects are implemented, loans are repaid to the SIB and the proceeds are used for new projects in a continuing, virtuous cycle. 39 states were previously authorized to capitalize SIBs using dedicated funding and a portion of their regular federal funds.
States also can use federal funds to pay the debt service on highway construction bonds.
That was the state of play as we began reauthorization, and we built on these steps, continuing existing programs and creating new ones under TEA-21. TEA-21 extends our state infrastructure bank program, but limits the new program to four states, California, Florida, Missouri, and Rhode Island. These states will be able to transfer money from other programs to SIBs over the next six years. Although we were disappointed that Congress didn't extend the SIB program to all states or authorize additional, dedicated seed money, there are significant innovations which will make it even more effective for the four states, and perhaps for others we might be able to have approved in the future. In addition, the kinds of projects SIBs can support are broader and more intermodal.