Build America Bureau Overview and Process

The Fixing America’s Surface Transportation (FAST) Act established a new National Surface Transportation and Innovative Finance Bureau within the Office of the Secretary of Transportation (OST) and that aligns, coordinates, and consolidates aspects of the U.S. Department of Transportation’s (DOT or Department) existing surface transportation innovative finance programs with or within the new Bureau. In accordance with the FAST Act, an organizational structure for the Bureau was established in July 2016 and the Bureau team has developed a framework for harmonized and streamlined business practices and procedures. This memo summarizes the key elements of the Bureau’s processes and the manner in which they are coordinated to fulfill the Bureau’s mission.

Mission

The Bureau is the primary body within DOT that deals with projects seeking DOT credit; public-private partnerships (P3s);highly-complex, multimodal, or multijurisdictional projects; and FASTLANE grants. The Bureau streamlines credit and grant opportunities and provides access to the Department’s credit and grant programs with more speed and transparency, while also providing technical assistance and encouraging innovative best practices in project planning, financing, delivery, and monitoring. To achieve this vision, the Bureau draws upon the full resources of DOT to best utilize the expertise of all the modes within the Department while promoting a culture of innovation and customer service.

Structure

Structurally, the Bureau combines outreach, technical assistance, and best practices functions; the TIFIA (Transportation Infrastructure Finance and Innovation Act) and RRIF (Railroad Rehabilitation & Improvement Financing) credit programs; the PABs (Private Activity Bonds) program, and the new FASTLANE grant program all under one roof, within the Office of the Under Secretary of Transportation for Policy. There are three core components of the new Bureau:

  1. An Outreach and Project Development Office that works with project sponsors to educate them on how they can best combine DOT credit, funding programs, and innovative project delivery approaches such as P3s, and then offer project-level technical assistance, such as with permitting questions, to get them ready to pursue the relevant opportunities;
  2. A Credit Programs Office that encompasses the credit assistance that is currently provided by TIFIA, RRIF, and PABs; and
  3. The FASTLANE Grants Office, which provides guidance on the FASTLANE application process and administers the application process for FASTLANE grants.

Each of these three offices is led by a Director, all of whom report to the Bureau Executive Director and Deputy Executive Director.

Functions

The Bureau relies on this structure to provide customer-focused support to project sponsors across a range of implementation phases, including Outreach, Project Development, Underwriting, and Portfolio Management.

Outreach

At the core of the Bureau’s Outreach functions, regionally-focused Project Development Leads (PDLs) are Bureau team members that conduct proactive outreach and education activities. This includes direct engagement with project sponsors; organization of and participation in industry events; development and dissemination of educational materials; and regular communications with DOT field offices and modal regional offices. As the initial point of contact for Bureau engagement, PDLs will work with project sponsors to determine project needs and the specific ways in which the Bureau can provide assistance.

Project Development

Based on the specific questions, challenges, opportunities, and information needs related to a particular project, appropriate Bureau expertise will be assigned and brought to bear for projects. This may require the assignment of more specialized PDL assistance for projects that involve greater complexity in terms of such factors as scope, modal elements, regulatory requirements, private-sector involvement, and financing plan. A customized project development team will work closely with the project sponsor to navigate relevant federal processes and to ensure that key program requirements are satisfied.

Underwriting

Projects seeking DOT credit, including TIFIA, RRIF, and PABs, enter the Underwriting process after it is determined that the relevant Project Development requirements are met and initial risk assessments are completed. This ensures that all key project elements are in place for an efficient Underwriting process. During this time, a creditworthiness process occurs, a sponsor is invited to submit a formal application, and credit terms are developed for the loan closing.

Portfolio Management

After a loan closing occurs, ongoing Portfolio Management involves scheduled disbursements, repayments, construction monitoring, financial monitoring, risk monitoring, and ultimately, loan closeout. Many of the loans are large, complex, and involve long terms, so regular Portfolio updates for Bureau and DOT leadership are critical.

Governance

Council on Credit and Finance (CCF)

As outlined in Section 9002 of the FAST Act, the Department is required to establish a Council on Credit and Finance, which includes the following members:

  • Deputy Secretary (Chair)
  • Under Secretary of Transportation for Policy
  • Chief Financial Officer and Assistant Secretary for Budget and Programs (Vice Chair)
  • General Counsel
  • Assistant Secretary for Transportation Policy
  • Administrator of FHWA
  • Administrator of FTA
  • Administrator of FRA
  • Executive Director of the Bureau (non-voting)

Additionally, the Secretary may designate up to three additional officials of the Department to serve as at-large members of the Council.

Members of the Council on Credit and Finance are responsible for reviewing and recommending projects for Bureau assistance as part of the larger Bureau procedures. This includes reviewing PDL assignments, resolving key policy issues related to credit, and casting votes for credit decisions. Meetings of the Council on Credit and Finance occur on a monthly basis to avoid delays in the processing of project requests.

Credit Review Team

In support of the CCF is the Credit Review Team (CRT), a Bureau entity that is responsible for:

  • Recommendations for assignment of Bureau Project Development Lead
  • Recommendations for LOI transfer from project development to credit
  • Recommendation to extend formal invitation to apply for credit
  • Recommendation to the Council on Credit and Finance on extension of credit
  • Recommendation to Council on Credit and Finance on extension of initial term sheet
  • Approval of material changes to loans
  • Bureau policy considerations and decisions
  • Confirms or recommends project eligibility in FASTLANE administration
  • Confirms or recommends project eligibility in PABs administration
  • Receives updates on Outreach and Project Development activities before they go to the CCF

Given the credit and finance expertise required to fulfill these responsibilities, the voting members of the Bureau Credit Review Team will include the Bureau Executive Director, the Bureau Credit Programs Director, the Bureau Risk Management Lead, the Bureau Portfolio Management Lead, the Bureau Legal Lead, and an OST-Budget representative. To ensure strong communication of key information across key Bureau partners, there are also a group of non-voting members, including a representative of each of the Administrators that hold membership on the CCF. The non-voting Operating Administration members of the CRT will be officially responsible for informing the CRT of relevant modal considerations for each project and for briefing their Administrators on upcoming CCF issues.

The CRT meets on an established schedule, weekly or as needed, to ensure that Bureau processes occur as efficiently as possible.

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