[Federal Register Volume 65, Number 139 (Wednesday, July 19, 2000)]
[Pages 44941-44943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18315]

Federal Register / Vol. 65, No. 139 / Wednesday, July 19, 2000 / 

[[Page 44941]]



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), U.S. Department of 
Transportation (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 revised TIFIA 
regulations (49 CFR Part 80, as published elsewhere in this issue of 
the Federal Register, provide specific guidance on the program 
    These revised regulations, which will apply to applications filed 
under this notice, amend the June 2, 1999 rule to: clarify that funds 
will be disbursed based on the project's anticipated financing needs; 
clarify that the borrower must obtain ongoing credit surveillance for 
the life of the TIFIA credit instrument; assign specific weights to 
each of the eight statutory selection criteria; specify that loan 
servicing fees are to be paid by the borrower; modify the time period 
for audited financial statements from 120 days to within no more than 
180 days; and provide that administrative offsets will be employed only 
in cases of fraud, misrepresentation, or criminal acts.
    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 TIFIA statute provides budget authority of 
$110 million for FY 2001 to fund the subsidy costs of up to $2.2 
billion in credit assistance. However, as described below, the amount 
of actual net budget authority available in FY 2001 depends on several 
additional factors.

DATES: For consideration in this application cycle, letters of interest 
must be submitted by 4:30 p.m. EDT on Thursday, August 17, 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, 
September 6, 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) 366-1675; OST: Ms. Stephanie Kaufman, Office 
of Budget and Program Performance, (202) 366-9649; Department of 
Transportation, 400 Seventh Street, SW, Washington, D.C., 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 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 in FY 2001 and beyond are $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 $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. The credit amounts 
authorized in the TIFIA are not subject to this annual reduction.
    As noted above, the TIFIA statute provides budget authority of $110 
million for FY 2001. The DOT will determine the amount of net budget 
authority available in FY 2001 to fund the TIFIA credit assistance 
program by taking into account unused FY 2000 budget authority, any 
reductions necessitated by the FY 2001 obligation limitation, and 
administrative expenses

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authorized by the TIFIA statute. The amount of net budget authority 
available for new TIFIA commitments in FY 2001 also may be affected by 
new obligations (if any) for projects that received conditional 
approval in the previous fiscal year and credit subsidy adjustments to 
obligations for prior TIFIA commitments.
    The total amount of Federal credit assistance available for new 
TIFIA commitments in FY 2001 may be less than the $2.2 billion 
authorization level, as a result of contingent TIFIA commitments made 
in FYs 1999 and 2000.
    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 
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 (those which have a lien senior 
to that of the TIFIA credit instrument on the pledged security) 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 
instrument, whichever assessment best reflects the rating agency's 
preliminary evaluation of the default risk on the requested TIFIA 
    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 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 
assistance must submit a brief letter of interest to the DOT by 
Thursday, August 17, 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 
    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, September 
6, 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 according to specific 
weights assigned to each of the eight statutory selection criteria 
described in 23 U.S.C. 182(b) and 49 CFR 80.15 as follows: National or 
regional significance, 20 percent; creditworthiness, 12.5 percent; 
private participation, 20 percent; project acceleration, 12.5 percent; 
use of new technologies, 5 percent; consumption of budget authority, 5 
percent; environmental benefits, 20 percent; and reduced Federal grant 
assistance, 5 percent.
    The Secretary of Transportation intends to make final project 
selections within five 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 assistance must submit this payment 
by the application deadline of September 6, 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 credit 
instrument for a qualified project that has been selected to receive 
assistance under the TIFIA, 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

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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: July 14, 2000.
Rodney E. Slater,
Secretary, U.S. Department of Transportation.
[FR Doc. 00-18315 Filed 7-18-00; 8:45 am]