[Federal Register Volume 66, Number 225 (Wednesday, November 21, 2001)]
[Notices]
[Pages 58549-58551]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29059]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
Applications for TIFIA Credit Assistance
AGENCY: Federal Highway Administration (FHWA), U.S. DOT.
ACTION: Notice of availability of funds (NOFA) inviting applications
for credit assistance for major surface transportation projects.
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SUMMARY: The U.S. 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 U.S. DOT multi-modal teams in evaluating applications for
TIFIA credit assistance 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 continues the ``rolling'' application process
instituted in May 2001. 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, U.S. 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; 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 U.S. 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.
Since funding for this program is limited, the U.S. DOT will
evaluate and select projects based on their merits and satisfaction of
the TIFIA statutory criteria. For each selected project the U.S. DOT
will issue a term sheet outlining the basic conditions of the credit
assistance. Subsequently, U.S. DOT will negotiate a definitive credit
agreement with each of those project sponsors.
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 establishes annual funding ceilings for both total credit
assistance (i.e., the total principal amount that may be committed in
the form of direct loans, loan guarantees, or lines of credit) and
subsidy costs (i.e., the amount 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 costs is provided in the form of
budget authority from the Highway Trust Fund (other than the Mass
Transit Account).
Total Federal credit assistance currently authorized for the TIFIA
program is $2.4 billion in FY 2002 and $2.6 billion in FY 2003. Unused
credit amounts lapse at the end of the year for which it is authorized.
To support this assistance, TIFIA provides budget authority to fund
subsidy costs of $120 million in FY 2002 and $130 million in FY 2003.
Any budget authority not obligated in the fiscal year for which it is
initially authorized remains available
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for obligation in subsequent years. As a result, approximately $140
million in budget authority, including carry over funds from prior
years, will be available in FY 2002. The precise amount of budget
authority available each fiscal year is affected by the annual
obligation limitation on FHWA Federal-aid funds. Furthermore, any
Continuing Resolutions (temporary appropriations) may affect the amount
of budget authority initially available. In addition, the TIFIA JPO may
use up to $2 million each fiscal year for expenses, such as the
services of external financial and legal advisors, associated with
program implementation.
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.
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 credit 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.
Once selected for TIFIA credit assistance, each project 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 under the
caption For Further Information Contact.
Application and Selection Process
The TIFIA JPO will accept, at any time, letters of interest from
potential applicants. Subsequently, for projects that meet all
threshold criteria, the TIFIA JPO will invite the project sponsor to
apply. Under the rolling application process, potential applicants can
match their TIFIA submissions with their project development timetable.
Potential TIFIA applicants must follow the process outlined below to be
considered for credit assistance:
1. Letter of Interest. A potential applicant for TIFIA credit
assistance must first submit a detailed letter of interest to the TIFIA
JPO. This letter 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 program requirements. The TIFIA JPO
will then designate an evaluation team for the project (drawing from
the U.S. DOT's various offices and operating administrations, as
necessary). The U.S. 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 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 U.S. 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 a project
presentation to the TIFIA JPO and the U.S. DOT evaluation team. 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 project
presentation, and any supplemental submission of information, the TIFIA
JPO and the U.S. 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 U.S. DOT will not select any project before an environmental
Record of Decision (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 applicant to
pay a non-refundable application fee of $30,000. This fee is based upon
historical costs associated with the U.S. DOT's evaluation of TIFIA
applications. Checks should be made payable to the Federal Highway
Administration. The project sponsor must submit this
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payment with the application. No fee is required for a letter of
interest. 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 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. Each
project term sheet 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 this fee will typically amount to $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 TIFIA credit instrument.
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 TIFIA
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: October 30, 2001.
Mary E. Peters,
Federal Highway Administrator.
[FR Doc. 01-29059 Filed 11-20-01; 8:45 am]
BILLING CODE 4910-22-P