[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