[Federal Register Volume 65, Number 91 (Wednesday, May 10, 2000)]
[Pages 30182-30184]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11693]



Federal Highway Administration

Federal Railroad Administration

Federal Transit Administration

Office of the Secretary of Transportation

Applications for TIFIA Credit Assistance

AGENCIES: Federal Highway Administration (FHWA), Federal Railroad 
Administration (FRA), Federal Transit Administration (FTA), Office of 
the Secretary of Transportation (OST), DOT.

ACTION: Notice of availability of funds inviting applications for 
credit assistance for major surface transportation projects.


SUMMARY: The Transportation Equity Act for the 21st Century (TEA-21) 
created the Transportation Infrastructure Finance and Innovation Act of 
1998 (TIFIA). The TIFIA authorizes the Department of Transportation 
(DOT) to provide credit assistance in the form of secured (direct) 
loans, lines of credit, and loan guarantees to public and private 
sponsors of eligible surface transportation projects. The TIFIA 
regulations (49 CFR part 80, as published in the Federal Register, Vol. 
64, No. 105, on Wednesday, June 2, 1999) provide specific guidance on 
the program requirements.
    Although the DOT is currently contemplating revisions to the 
regulations, the Final Rule as published in the Federal Register on 
June 2, 1999 remains applicable to this notice.
    Funding for this program is limited, and projects requesting 
assistance will be evaluated and selected by the DOT on a competitive 
basis. Following selections, term sheets will be issued and credit 
agreements will be developed through negotiations between the project 
sponsors and the DOT. The DOT expects that approximately $81 million in 
net budget authority will be available in fiscal year 2000 to fund the 
subsidy costs of up to approximately $1.673 billion in Federal credit 

DATES: For consideration in this application cycle, letters of interest 
must be submitted by 4:30 p.m. EDT on Wednesday, May 31, 2000. The 
deadline for receipt of the completed application and the non-
refundable $5,000 application fee is 4:30 p.m. EDT on Wednesday, July 
5, 2000. Applications received in the offices of the DOT after that 
date and time will not be considered. Applications sent to the DOT 
electronically or by facsimile will not be accepted. Applicants should 
refer to the TIFIA Application for Federal Credit Assistance, which 
specifies the number of hard copies (plus original) required for each 
section of the application as well as those sections of the application 
requiring electronic versions.

ADDRESSES: Both the letters of interest and completed applications 
should be submitted to the attention of Ms. Stephanie Kaufman, Office 
of Budget and Program Performance, Department of Transportation, Room 
10105, B-10, 400 Seventh Street, SW., Washington, DC 20590.

and Finance, Federal-Aid Financial Management Division, (202) 366-0673; 
FRA: Ms. JoAnne McGowan, Office of Passenger and Freight Services, 
Freight Program Division, (202) 493-6390; FTA: Mr. Paul Marx, Office of 
Policy Development, (202) 366-1734; OST: Ms. Stephanie Kaufman, Office 
of Budget and Program Performance, (202) 366-9649; Department of 
Transportation, 400 Seventh Street, SW., Washington, DC 20590. Hearing- 
and speech-impaired persons may use TTY by calling the Federal 
Information Relay Service at 1-800-877-8339. Additional information, 
including the TIFIA program guide and application materials, can be 
obtained from the TIFIA web site at http://tifia.fhwa.dot.gov.


Types of Credit Assistance Available

    The DOT may provide credit assistance in the form of secured 
(direct) loans, loan guarantees, and lines of credit. These types of 
credit assistance are defined in 23 U.S.C. 181 and 49 CFR 80.3.

Program Funding and Limitations on Assistance

    The TIFIA provides annual funding levels for both total credit 
amounts (i.e., the total principal amounts that may be committed in the 
form of direct loans, loan guarantees, or lines of credit) and subsidy 
amounts (i.e., the amounts of

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budget authority available to cover the estimated present value of the 
Government's expected losses associated with the provision of credit 
instruments, net of any fee income). Funding for the subsidy amounts is 
provided in the form of budget authority funded from the Highway Trust 
Fund (other than the Mass Transit Account). Total Federal credit 
amounts authorized for the TIFIA program are $1.8 billion in fiscal 
year (FY) 2000; $2.2 billion in FY 2001; $2.4 billion in FY 2002; and 
$2.6 billion in FY 2003. These amounts lapse if not awarded by the end 
of the fiscal year for which they are provided.
    To support these credit amounts, the TIFIA provides budget 
authority to fund the maximum subsidy amounts of $90 million in FY 
2000; $110 million in FY 2001; $120 million in FY 2002; and $130 
million in FY 2003. Of these amounts, the Secretary may use up to $2 
million for each of the fiscal years for administrative expenses. Any 
budget authority not obligated in the fiscal year for which it is 
authorized remains available for obligation in subsequent years.
    The TIFIA budget authority is subject to an annual obligation 
limitation that may be established in appropriations law. Like the 
funding for certain other administrative or allocated programs (not 
apportioned to the States) that are subject to the annual Federal-aid 
highway obligation limitation, the amount of TIFIA budget authority 
that is available to fund credit instruments in a given year may be 
less than the amount originally authorized for that year. The extent of 
any budget authority reduction will depend on the ratio of the 
obligation limitation, which is determined annually in the 
appropriations process, to the contract authority for the Federal-aid 
highway program, which was established in TEA-21. For FY 2000, this 
reduction is 12.9 percent, or $11.6 million. The credit amounts 
authorized in the TIFIA are not subject to this annual reduction.
    The DOT expects that approximately $81 million in net budget 
authority will be available in FY 2000 to fund the TIFIA credit 
assistance program. This approximation takes into account unused FY 
1999 budget authority, the reduction in FY 2000 budget authority due to 
the annual obligation limitation, and administrative expenses 
authorized by the TIFIA statute. The amount of net budget authority 
available for new TIFIA commitments in FY 2000 also may be affected by 
credit subsidy adjustments to obligations for prior TIFIA commitments.
    The total amount of Federal credit assistance available for new 
TIFIA commitments in FY 2000 is approximately $1.673 billion, which is 
less than the $1.8 billion authorization level as a result of 
contingent TIFIA commitments made in FY 1999.
    The amount of credit assistance that may be provided to a project 
under the TIFIA is limited to not more than 33 percent of eligible 
project costs.

Eligible Projects

    Highway, rail, transit, and intermodal projects (including 
intelligent transportation systems) may receive credit assistance under 
the TIFIA. See the definition of ``project'' in 23 U.S.C. 181(9) and 49 
CFR 80.3 for a description of eligible projects.

Threshold Criteria

    Certain threshold criteria must be met by projects seeking TIFIA 
credit assistance. These eligibility criteria are detailed in 23 U.S.C. 
182(a) and 49 CFR 80.13.

Rating Opinions

    A project sponsor must submit with its application a preliminary 
rating opinion letter from one or more of the nationally recognized 
credit rating agencies, as detailed in 23 U.S.C. 182(b)(2)(B) and 49 
CFR 80.11. The letter must indicate the reasonable potential for the 
senior obligations funding the project to receive an investment grade 
rating. This preliminary rating agency opinion will be based on the 
financing structure proposed by the project sponsor. A project that 
does not demonstrate the potential for its senior obligations to 
receive an investment grade rating will not be considered by the DOT.
    The DOT will also use the preliminary rating opinion letter to 
assess the potential default risk on the requested TIFIA instrument. 
Therefore, the letter should also provide a preliminary assessment of 
the strength of either the overall project or the requested TIFIA 
credit instrument, whichever assessment best reflects the rating 
agency's preliminary evaluation of the default risk on the requested 
TIFIA instrument.
    Each project selected for TIFIA credit assistance must obtain an 
investment grade rating on its senior debt obligations and a revised 
opinion on the default risk of its TIFIA credit instrument before the 
DOT will execute a credit agreement and disburse funds.

Application and Selection Process

    Each applicant for TIFIA credit assistance will be required to 
submit a letter of interest and subsequently an application to the DOT 
to be considered for approval. The following describes the application 
    1. Letter of Interest. Initially, any applicant seeking TIFIA 
credit assistance must submit a brief letter of interest to the DOT by 
Wednesday, May 31, 2000. The letter of interest should include a brief 
project description (including its purpose, basic design features, and 
estimated capital cost), basic information about the proposed financing 
for the project (including a preliminary summary of sources and uses of 
funds and the type and amount of credit assistance requested from the 
DOT), and a description of the proposed project participants. The 
letter also should summarize the status of the project's environmental 
review (i.e., has the project received a Categorical Exclusion, Finding 
of No Significant Impact, or Record of Decision or, at a minimum, has a 
draft Environmental Impact Statement been circulated). The letter of 
interest should not exceed five pages. A multi-modal DOT Credit Program 
Working Group will review this preliminary submission to ensure that 
the project meets the most basic requirements for participation in the 
TIFIA program. The Working Group will then designate a lead modal 
agency (FHWA, FRA, or FTA) for the project.
    2. Application. Once approved for further review, the applicant 
will be notified by a representative from the designated modal agency 
of its eligibility to submit a formal application. The applicant must 
submit all required materials (generally described in 49 CFR 80.7 and 
detailed in the TIFIA application) to the DOT by Wednesday, July 5, 
2000. The TIFIA application and additional program information may be 
obtained from the TIFIA web site at http://tifia.fhwa.dot.gov or 
through one of the program contacts listed in this notice.
    3. Sponsor Presentation. Each applicant that passes an initial 
screening of the application for completeness and satisfies the 
threshold criteria will be invited to make an oral presentation to the 
DOT on behalf of its project. The DOT plans to schedule presentations 
within two weeks of the application deadline, and will discuss the 
structure and content of the presentation with the applicant at the 
time of the invitation.
    4. Project Selection. Based on the application and oral 
presentation, the DOT will evaluate each project's distinct public 
benefits and contribution to program goals according to each of the 
selection criteria described in 23 U.S.C. 182(b) and 49 CFR 80.15. The 
Secretary of Transportation intends to make final project selections 
within six

[[Page 30184]]

to eight weeks of the application deadline.


    For this application cycle, the DOT will require each TIFIA 
applicant to pay a non-refundable application fee of $5,000. Checks 
should be made payable to the Federal Highway Administration. The 
project sponsor applying for TIFIA credit assistance must submit this 
payment by the application deadline of July 5, 2000. There will be no 
credit processing fee for this application cycle. Selected applicants 
will, however, be required to pay fees for loan servicing activities 
associated with their TIFIA credit instruments. For subsequent 
application cycles, the DOT may adjust the amount of the application 
fee and may establish a credit processing fee (to recover all or a 
portion of the costs to the DOT of evaluating applications, selecting 
projects to receive assistance, and negotiating term sheets and credit 
agreements) on the basis of its program implementation experience. The 
DOT will publish these amounts in each Federal Register solicitation 
for applications.
    Applicants shall not include application or credit processing fees 
or any other expenses associated with the application process (such as 
charges associated with obtaining the required preliminary rating 
opinion letter) among eligible project costs for the purpose of 
calculating the maximum 33 percent credit amount.
    If there is insufficient budget authority to fund the TIFIA credit 
instrument for a qualified project that has been selected to receive 
assistance, the DOT and the approved applicant may agree upon a 
supplemental fee to be paid by or on behalf of the approved applicant 
at the time of execution of a term sheet to reduce the subsidy cost of 
that project. No such fee may be included among eligible project costs 
for the purpose of calculating the maximum 33 percent credit amount.

    Dated: May 4, 2000.
Rodney E. Slater,
Secretary, Department of Transportation.
[FR Doc. 00-11693 Filed 5-9-00; 8:45 am]