[Federal Register Volume 66, Number 97 (Friday, May 18, 2001)]
[Notices]
[Pages 27747-27749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-12546]


-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Applications for TIFIA Credit Assistance

AGENCY: Federal Highway Administration (FHWA), DOT.

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

-----------------------------------------------------------------------

SUMMARY: The DOT's Transportation Infrastructure Finance and Innovation 
Act (TIFIA) Joint Program Office (JPO) announces the availability of 
funds 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. Funding for this 
program is limited, and the TIFIA Joint Program Office will lead DOT 
multi-modal teams in evaluating applications based on project merits 
and satisfaction of the TIFIA statutory criteria. This notice announces 
the availability of funds and outlines the process that applicants must 
follow when applying for TIFIA credit assistance.

DATES: This notice institutes a ``rolling'' application process 
replacing the practice of setting fixed application dates. See a 
further discussion under the caption ``Application and Selection 
Process'' in this notice.

ADDRESSES: Both the letters of interest and completed applications 
should be submitted to the attention of Ms. Stephanie Kaufman, TIFIA 
Joint Program Office, Department of Transportation, Room 4301, HABF-50, 
400 Seventh Street, SW, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: TIFIA Joint Program Office staff: Mr. 
Duane Callender, (202) 366-9644; Mr. Bryan Grote, (202) 366-9656; Ms. 
Stephanie Kaufman, (202) 366-9649; and Mr. Mark Sullivan, (202) 366-
5785. TIFIA Joint Program Office Staff can be contacted at the above 
address. Hearing-and speech-impaired persons may use TTY by calling the 
Federal Information Relay Service at 1-800-877-8339. Additional 
information, including the current edition of the TIFIA Program Guide 
and application materials, can be obtained from the TIFIA web site at 
http://tifia.fhwa.dot.gov.

SUPPLEMENTARY INFORMATION:

Background

    The Transportation Equity Act for the 21st Century (TEA-21), Public 
Law 105-178, 112 Stat.107, 241, created the Transportation 
Infrastructure Finance and Innovation Act of 1998 (TIFIA), authorizing 
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. TIFIA regulations (49 CFR Part 80) provide 
specific guidance on the program requirements.
    On January 5, 2001, at 65 FR 2827, the Secretary of Transportation 
(Secretary) delegated to the Federal Highway Administration (FHWA) the 
authority to act as the Executive Agent for the TIFIA program (49 CFR 
1.48(nn)). The TIFIA Joint Program Office (TIFIA JPO), within the FHWA, 
has responsibility for coordinating program implementation.
    Funding for this program is limited, and a project requesting 
assistance will be evaluated and selected based on the project merits 
and satisfaction of the TIFIA statutory criteria. Upon selection, a 
term sheet will be issued and subsequently a definitive credit 
agreement will be developed through negotiations between the project 
sponsor and the DOT.

Types of Credit Assistance Available

    The Secretary 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

    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). As a 
result of prior project selections in FY 2001 and several additional 
factors, including carry-over funds from prior years and an annual 
obligation limitation, the TIFIA JPO estimates that approximately $1.3 
billion in credit amounts and $43.2 million in subsidy amounts remain 
available through September 30, 2001.
    Total Federal credit amounts authorized for the TIFIA program 
beyond FY 2001 are $2.4 billion in FY 2002 and $2.6 billion in FY 2003. 
To support these credit amounts, TIFIA provides budget authority to 
fund subsidy amounts of up to $120 million in FY 2002 and $130 million 
in FY 2003. Of these amounts, the TIFIA JPO may use up to $2 million 
each fiscal year for expenses associated with program implementation, 
including the procurement of external financial consultants and legal 
counsel. Any budget authority not obligated in the fiscal year for 
which it is initially authorized remains available for obligation in 
subsequent years. Unused credit amounts lapse at the end of the year 
for which it is authorized.
    The amount of credit assistance that may be provided to a project 
under TIFIA is limited to not more than 33 percent of eligible project 
costs.

[[Page 27748]]

Eligible Projects

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

Threshold Criteria

    Projects seeking TIFIA assistance must meet certain threshold 
criteria. 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 at least one nationally recognized credit 
rating agency, as detailed in 23 U.S.C. 182(b)(2)(B) and 49 CFR 80.11. 
The letter must be current, must address the creditworthiness of both 
the senior debt obligations funding the project (i.e., those which have 
a lien senior to that of the TIFIA credit instrument on the pledged 
security) and the TIFIA credit instrument, and must conclude that there 
is a reasonable probability for the senior debt obligations to receive 
an investment grade rating. This preliminary rating opinion letter 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 for TIFIA credit assistance.
    The TIFIA JPO will use the preliminary rating opinion letter to 
assess the default risk on the requested TIFIA instrument. Therefore, 
the letter should provide a preliminary assessment of the financial 
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 
instrument.
    Each project selected for TIFIA credit assistance must obtain an 
investment grade rating on its senior debt obligations (which may be 
the TIFIA credit facility) and a revised opinion on the default risk of 
its TIFIA credit instrument before the FHWA will execute a credit 
agreement and disburse funds. More detailed information about these 
TIFIA credit opinions and ratings may be found in the TIFIA Program 
Guide. The most current version of the TIFIA Program Guide and 
application materials can be obtained from the TIFIA web site provided 
under the caption For Further Information Contact.

Application and Selection Process

    With this notice, the FHWA is instituting a change to the 
application process of previous years. Previously, DOT accepted letters 
of interest and applications on a fixed date each year. Experience with 
the program suggests that project sponsors may be applying for TIFIA 
assistance prematurely, perhaps in response to the limited time during 
which the application window has been open.
    Beginning immediately, the TIFIA JPO will accept, at any time, 
letters of interest from potential applicants. Subsequently, for 
projects that meet all threshold criteria, applications will be 
accepted. Under a rolling application process, potential applicants can 
better time their TIFIA submissions with their project development 
activities. Potential TIFIA applicants must follow the process outlined 
below to be considered by the TIFIA JPO for credit assistance:
    1. Letter of Interest. Initially, any potential applicant for TIFIA 
credit assistance should first submit a detailed letter of interest to 
the TIFIA JPO. The letter of interest should include a brief project 
description (including the project's purpose, design features, and 
estimated capital cost), 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), a 
description of the proposed project participants, and an assessment of 
the benefit the project sponsor seeks to achieve through use of a TIFIA 
credit instrument. The letter also should summarize the status of the 
project's environmental review (i.e., whether the project has received 
a Categorical Exclusion, Finding of No Significant Impact, or Record of 
Decision, or, at a minimum, whether a draft Environmental Impact 
Statement has been circulated). The letter of interest should not 
exceed ten pages. The TIFIA JPO will lead a review of this preliminary 
submission to ensure that the project meets the basic requirements for 
participation in the TIFIA program. The TIFIA JPO will then designate 
an evaluation team for the project (drawing from the DOT's various 
offices and operating administrations, as necessary). The DOT 
evaluation team will contact the project sponsor within approximately 
two to four weeks to review the readiness of the project.
    2. Application. The project sponsor may not submit an application 
until it has received preliminary confirmation of eligibility from the 
TIFIA JPO. The project sponsor applicant may then submit its formal 
application including all required materials (generally described in 49 
CFR 80.7 and detailed in the TIFIA application form) to the TIFIA JPO. 
The TIFIA JPO and the DOT evaluation teams will not review incomplete 
applications or applications for projects that do not fully satisfy the 
TIFIA program requirements.
    The most current version of the application form can be obtained 
from the TIFIA web site provided under the caption FOR FURTHER 
INFORMATION CONTACT.
    3. Sponsor Presentation. Each applicant that passes an initial 
screening of the submitted application for completeness and compliance 
with the TIFIA program requirements will be invited to make an oral 
presentation to the TIFIA JPO and the DOT evaluation team on behalf of 
its project. The TIFIA JPO will discuss the structure and content of 
the presentation with the applicant at the time of the invitation.
    4. Project Selection. Based upon the application, the oral 
presentation, and any supplemental submission of information, the TIFIA 
JPO and the DOT evaluation teams will score 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 DOT will not select any project before a record of decision 
(ROD) (if required, or the equivalent final agency decision) has been 
issued for that project.
    5. Fees. Unless otherwise notified in a subsequent NOFA published 
in the Federal Register, the TIFIA JPO will require each TIFIA 
applicant to pay a non-refundable application fee of $30,000. This fee 
is based upon historical costs associated with the DOT's evaluation of 
TIFIA applications. Checks should be made payable to the Federal 
Highway Administration. The project sponsor must submit this payment 
with the application. Applicants may not include application 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.
    In addition, consistent with 23 U.S.C. 183(b)(7), 183(e)(2), 
184(b)(9) and with

[[Page 27749]]

49 CFR 80.17, the TIFIA JPO will charge each borrower a credit 
processing fee equal to a portion of the costs incurred by the TIFIA 
JPO in negotiating the credit agreement. The term sheet for each 
selected will require the borrower to pay at closing, or, in the event 
no credit agreement is consummated, upon invoicing by the TIFIA JPO, an 
amount equal to the actual costs incurred by the TIFIA JPO in procuring 
the assistance of financial advisors and outside legal counsel through 
execution of the credit agreement(s) and satisfaction of all funding 
requirements of those agreements. The TIFIA JPO anticipates that the 
amount of this fee will typically range from $100,000 to $300,000 
depending on the complexity of the financial structure and the length 
of negotiations. The borrower may not include the credit processing fee 
among eligible project costs for the purpose of calculating the maximum 
33 percent.
    Finally, the TIFIA JPO will continue to charge borrowers a fee of 
not less than $10,000 per year, which may be adjusted annually, for 
loan servicing activities associated with each of their TIFIA credit 
instruments. The borrower may not include the loan servicing fee among 
eligible project costs for the purpose of calculating the maximum 33 
percent credit amount.
    The FHWA will publish in the Federal Register, at least once each 
fiscal year through FY 2003, a NOFA inviting applications for credit 
assistance for major surface transportation projects through the TIFIA 
program. Such notices will advise potential applicants of the estimated 
amount of funding available for TIFIA credit instruments as well as any 
changes to the application process, including the nature and amount of 
any required fees.

(Authority: 23 U.S.C. 181-189; 49 CFR 1.48(nn))

    Issued on: May 9, 2001.
Vincent F. Schimmoller,
Deputy Executive Director, Federal Highway Administration.
[FR Doc. 01-12546 Filed 5-17-01; 8:45 am]
BILLING CODE 4910-22-P