[Federal Register Volume 68, Number 74 (Thursday, April 17, 2003)]
[Notices]
[Pages 19067-19069]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-9500]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration


Applications for TIFIA Credit Assistance

AGENCY: Federal Highway Administration (FHWA), U.S. Department of 
Transportation (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 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 JPO will lead U.S. DOT 
multi-modal teams in evaluating applications for 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.

[[Page 19068]]


DATES: Project sponsors may apply for TIFIA assistance at any time if 
their projects have met the program's threshold requirements. See 
further discussion under the caption ``Application and Selection 
Process'' in this notice.

ADDRESSES: Both letters of interest and completed applications should 
be submitted to the attention of Mr. Duane Callender, 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. Theresa Stoll, (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:

Electronic Access

    An electronic copy of this document may be downloaded by using a 
computer, modem and suitable communications software from the 
Government Printing Office's Electronic Bulletin Board Service at (202) 
512-1661. Internet users may also reach the Office of the Federal 
Register's Home page at: http://www.archives.gov and the Government 
Printing Office's Web page at http://www.access.gpo.gov/nara.

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 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 
well as the TIFIA Program Guide (above), provide specific guidance on 
the program requirements. 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, the U.S. DOT will negotiate a definitive 
credit agreement with each selected project sponsor.

Types of Credit Assistance Available

    The U.S. DOT may provide credit assistance in the form of secured 
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 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 authorized for the TIFIA program in 
FY 2003 is $2.6 billion. This amount will lapse on September 30, 2003, 
if unused. For FY 2003 the Congress redirected $180 million in budget 
authority originally authorized for TIFIA credit assistance to other 
programs administered by the FHWA. Accounting for these sums, the TIFIA 
program has approximately $72 million in remaining budget authority 
available to fund subsidy costs in FY 2003. The Congress also has 
directed the U.S. DOT to use a portion of the available TIFIA budget 
authority to fund an extension of FHWA's lines of credit with the 
Transportation Corridor Agencies (TCA) for the San Joaquin Hills and 
Foothill Eastern toll roads in Orange County, California. Therefore, 
the ultimate budget authority available for TIFIA in FY 2003 is subject 
to the cost of extending the TCA line of credit. Any budget authority 
not obligated in the fiscal year for which it is initially authorized 
remains available for obligation in subsequent years. In addition, the 
TIFIA JPO may obligate up to $2 million each year for expenses, such as 
the services of external financial and legal advisors, associated with 
program implementation. 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 Requirements

    Projects seeking TIFIA credit assistance must meet certain 
threshold requirements. 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.

[[Page 19069]]

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 requirements, the TIFIA JPO will invite the project sponsor 
to apply. Using this 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.
    3. Sponsor Presentation. Each applicant that passes an initial 
screening of the submitted application for 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; private participation, 
20 percent; environmental benefits, 20 percent; creditworthiness, 12.5 
percent; project acceleration, 12.5 percent; use of new technologies, 5 
percent; consumption of budget authority, 5 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 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 
assistance.
    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 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 credit assistance.
    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 executed 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 assistance.

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

    Issued on: April 2, 2003.
Mary E. Peters,
Federal Highway Administrator.
[FR Doc. 03-9500 Filed 4-16-03; 8:45 am]
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