[Federal Register Volume 76, Number 12 (Wednesday, January 19, 2011)]
[Notices]
[Pages 3190-3192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-933]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

Office of the Secretary

Federal Railroad Administration

Federal Transit Administration

Maritime Administration

[Docket No. FHWA-2010-0154]


Notice of Funding Availability for Applications for Credit 
Assistance Under the Transportation Infrastructure Finance and 
Innovation Act (TIFIA) Program

AGENCY: Federal Highway Administration (FHWA), Federal Railroad 
Administration (FRA), Federal Transit Administration (FTA), Maritime 
Administration (MARAD), Office of the Secretary of Transportation 
(OST), U.S. Department of Transportation (DOT).

ACTION: Notice of funding availability.

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SUMMARY: The DOT's TIFIA Joint Program Office (JPO) announces the 
availability of funding to support new applications for credit 
assistance. Under TIFIA, the DOT provides secured (direct) loans, lines 
of credit, and loan guarantees to public and private applicants for 
eligible surface transportation projects of regional or national 
significance. Projects must meet statutorily specified criteria to be 
selected for credit assistance.
    Because demand for the TIFIA program can exceed budgetary 
resources, the DOT is utilizing periodic fixed-date solicitations that 
will establish a competitive group of projects to be evaluated against 
the program objectives. This notice outlines the process that 
applicants must follow.

DATES: For consideration, Letters of Interest must be submitted 
electronically via e-mail by 4:30 p.m. EST on February 18, 2011, using 
the revised form on the TIFIA Web site: http://www.fhwa.dot.gov/ipd/tifia/guidance_applications/index.htm. Applicants that have previously 
submitted Letters of Interest must resubmit an updated letter as 
outlined below.
    The application due date will be established after consultation 
between the TIFIA JPO and the applicant.

ADDRESSES: Submit all Letters of Interest to the attention of Mr. Duane 
Callender at: [email protected]. Submitters should receive a 
confirmation e-mail, but are advised to request a return receipt to 
confirm transmission. Only Letters of Interest received via e-mail, as 
provided above, shall be deemed properly filed.

FOR FURTHER INFORMATION CONTACT: For further information regarding this 
notice please contact Duane Callender via e-mail at [email protected] 
or via telephone at 202-366-9644. A TDD is available at 202-366-7687. 
Substantial information, including the TIFIA Program Guide and 
application materials, can be obtained from the TIFIA Web site: http://www.fhwa.dot.gov/ipd/tifia/.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Eligible Projects
III. Types of Credit Assistance
IV. Threshold Requirements
V. Rating Opinions
VI. Letters of Interest and Applications
VII. Fees
VIII. Selection Criteria
IX. Program Funding

I. Background

    The Transportation Equity Act for the 21st Century (TEA-21), Public 
Law 105-178, 112 Stat. 107, 241, (as amended by sections 1601-02 of 
Pub. L. 109-59) established the Transportation Infrastructure Finance 
and Innovation Act of 1998 (TIFIA), authorizing the DOT to provide 
credit assistance in the form of secured (direct) loans, lines of 
credit, and loan guarantees to public and private applicants for 
eligible surface transportation projects. The TIFIA regulations (49 CFR 
part 80) provide specific guidance on the program requirements.\1\ On 
January 5, 2001, at 65 FR 2827, the Secretary of Transportation 
(Secretary) delegated to the FHWA the authority to act as the Executive 
Agent for the TIFIA program (49 CFR 1.48(b)(6)). The TIFIA JPO, an 
organizational unit in the FHWA Office of Innovative Program Delivery, 
has responsibility for coordinating program implementation.
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    \1\ The TIFIA regulations have not been updated to reflect 
changes enacted in Public Law 109-59, SAFETEA-LU. Where the statute 
and the regulation conflict, the statute takes precedence. See the 
TIFIA Program Guide for updated program information.
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II. Eligible Projects

    Highway, passenger rail, transit, bridge, intermodal projects, and 
intelligent transportation systems may receive credit assistance under 
TIFIA. Additionally, the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 
109-59, 119 Stat. 1144) enacted in 2005 expanded eligibility to private 
rail facilities providing public benefit to

[[Page 3191]]

highway users and surface transportation infrastructure modifications 
necessary to facilitate direct intermodal transfer and access into and 
out of a port terminal. See the revised definition of ``project'' in 23 
U.S.C. 601(a)(8) and Chapter 3 of the TIFIA Program Guide for a 
description of eligible projects (http://www.fhwa.dot.gov/ipd/tifia/guidance_applications/index.htm).

III. Types of Credit Assistance

    The DOT may provide credit assistance in the form of secured 
(direct) loans, lines of credit, and loan guarantees. These types of 
credit assistance are defined in 23 U.S.C. 601 and 49 CFR 80.3. Subject 
to certain conditions, the TIFIA credit facility can hold a subordinate 
lien on pledged revenues. The maximum amount of TIFIA credit assistance 
to a project is 33 percent of eligible project costs.

IV. Threshold Requirements

    Projects seeking TIFIA assistance must meet certain statutory 
threshold requirements. Generally, the minimum size for TIFIA projects 
is $50 million of eligible project costs; however, the minimum size for 
TIFIA projects principally involving the installation of an intelligent 
transportation system is $15 million. Each project seeking TIFIA 
assistance must apply to the DOT, and must satisfy the applicable State 
and local transportation planning requirements. Each application must 
identify a dedicated revenue source to repay the TIFIA loan, and each 
private applicant must receive public approval for its project as 
demonstrated by satisfaction of the applicable planning and programming 
requirements. These eligibility requirements are detailed in 23 U.S.C. 
602(a) and Chapter 3 of the TIFIA Program Guide (http://www.fhwa.dot.gov/ipd/tifia/guidance_applications/index.htm).

V. Rating Opinions

    The senior debt obligations for each project receiving TIFIA credit 
assistance must obtain an investment grade rating from at least one 
nationally recognized credit rating agency, as defined in 23 U.S.C. 
601(a)(10) and 49 CFR 80.3. If the TIFIA credit instrument is proposed 
as the senior debt, then it must receive the investment grade rating.
    To demonstrate this potential, each application must include a 
preliminary rating opinion letter from a credit rating agency that 
addresses the creditworthiness of the senior debt obligations funding 
the project (i.e., debt obligations which have a lien senior to that of 
the TIFIA credit instrument on the pledged security) and the default 
risk of the TIFIA credit instrument. The preliminary rating opinion 
letter must be based on the financing structure proposed by the 
applicant and must also conclude that there is a reasonable probability 
for the senior debt obligations to receive an investment grade rating. 
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.
    Letters of Interest submitted pursuant to this notice do not need 
to include the preliminary rating opinion letter. Only those invited to 
submit applications will be required to obtain the preliminary rating 
opinion letter.
    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 
the 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 Program Guide on 
the TIFIA Web site at http://www.fhwa.dot.gov/ipd/tifia/guidance_applications/index.htm.

VI. Letters of Interest and Applications

    Because the demand for credit assistance can exceed budgetary 
resources, the DOT is utilizing periodic fixed-date solicitations that 
will establish a competitive group of projects to be evaluated against 
the TIFIA program objectives.
    Applicants seeking TIFIA credit assistance must submit a Letter of 
Interest describing the project fundamentals and addressing the TIFIA 
selection criteria. For consideration in this funding cycle, Letters of 
Interest must be submitted by 4:30 p.m. EST via e-mail at: 
[email protected] on February 18, 2011, using the revised form on the 
TIFIA Web site: http://www.fhwa.dot.gov/ipd/tifia/guidance_applications/index.htm. Applicants that have previously submitted 
Letters of Interest must resubmit an updated letter using the revised 
form. For the purpose of completing its evaluation, the TIFIA JPO staff 
may contact an applicant regarding specific information in the Letter 
of Interest.
    A public agency that seeks access to TIFIA on behalf of multiple 
competitors for a project concession must submit the project's Letter 
of Interest. Although the public agency would not become the TIFIA 
borrower, nor even have yet identified the TIFIA applicant, it must 
provide information sufficient for the DOT to evaluate the project 
against the TIFIA program objectives. The DOT will not consider Letters 
of Interest from entities that have not obtained rights to develop the 
project.
    After concluding its review of the Letters of Interest, the DOT 
will invite complete applications (including the preliminary rating 
opinion letter and detailed plan of finance) for the highest-rated 
projects according to the selection criteria detailed in Section VIII 
below. The application due date will be established after consultation 
between the TIFIA JPO and the applicant.
    An invitation to apply for credit assistance does not guarantee the 
DOT's approval, which will remain subject to evaluation based on 
TIFIA's statutory credit requirements and established standards in 
addition to the successful negotiation of all terms and conditions.

VII. Fees

    There is no fee to submit a Letter of Interest. Unless otherwise 
indicated in a subsequent notice published in the Federal Register, 
each invited applicant must submit, concurrent with its application, a 
non-refundable fee of $50,000, an amount based on historical costs 
incurred by the TIFIA JPO for financial advisory services to help 
evaluate TIFIA applications. The FHWA no longer accepts paper checks. 
Payments should be made via Automated Clearing House, at https://www.pay.gov/paygov/forms/formInstance.html?agencyFormId=18446839. For 
successful applicants, this fee will be credited toward final payment 
of a credit processing fee (also referred to as a transaction fee), to 
be assessed at financial close, to reimburse the TIFIA JPO for actual 
financial and legal costs.
    For projects that enter credit negotiations, the DOT will require 
the borrower to pay at closing or within a specified period following 
closing, upon invoicing by the TIFIA JPO, an amount equal to the actual 
costs incurred by the TIFIA JPO in procuring the assistance of outside 
financial advisors and legal counsel through execution of the credit 
agreement(s) and satisfaction of all funding requirements of those 
agreements. In the event a final credit agreement is not executed, the 
borrower is still required to reimburse the DOT for the costs incurred. 
Typically, the amount of this credit processing fee has ranged from 
$200,000 to $300,000, although it has been greater for projects that 
require complex financial structures and extended negotiations.
    The TIFIA JPO charges each borrower an annual fee for loan 
servicing

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activities associated with each TIFIA credit instrument. The current 
fee, adjusted annually per the Consumer Price Index, is $11,500 per 
year.
    Finally, the TIFIA credit agreements will allow the TIFIA JPO to 
charge, as incurred, a monitoring fee equal to its costs of outside 
advisory services required to assist the TIFIA JPO in modifying or 
enforcing the agreement.
    Applicants may not include any of the fees described above--or any 
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.

VIII. Selection Criteria

    The eight TIFIA selection criteria are described in statute at 23 
U.S.C. 602(b) and assigned relative weights via regulation at 49 CFR 
80.15. The criteria are restated below with (where appropriate) 
language indicating how the DOT will interpret them. The DOT will give 
priority to projects that have a significant impact on desirable long-
term outcomes for the Nation, a metropolitan area, or a region.
    Listed in order of relative weight, the TIFIA selection criteria 
are as follows:
    (i) The extent to which the project is nationally or regionally 
significant, in terms of generating economic benefits, supporting 
international commerce, or otherwise enhancing the national 
transportation system. This includes consideration of livability: 
Providing transportation options that are linked with housing and 
commercial development to improve the economic opportunities and 
quality of life for people in communities across the U.S.; economic 
competitiveness: Contributing to the economic competitiveness of the 
U.S. by improving the long-term efficiency and reliability in the 
movement of people and goods; and safety: Improving the safety of U.S. 
transportation facilities and systems and the communities and 
populations they impact. Relative weight: 20 percent.
    (ii) The extent to which TIFIA assistance would foster innovative 
public-private partnerships and attract private debt or equity 
investment. Relative weight: 20 percent.
    (iii) The extent to which the project helps maintain or protect the 
environment. This includes sustainability: Improving energy efficiency, 
reducing dependence on oil, reducing greenhouse gas emissions, and 
reducing other transportation-related impacts on ecosystems; and the 
state of good repair: Improving the condition of existing 
transportation facilities and systems, with particular emphasis on 
projects that minimize lifecycle costs and use environmentally 
sustainable practices and materials. Relative weight: 20 Percent.
    (iv) The creditworthiness of the project, including a determination 
by the Secretary of Transportation that any financing for the project 
has appropriate security features to ensure repayment. Relative weight: 
12.5 Percent.
    (v) The likelihood that TIFIA assistance would enable the project 
to proceed at an earlier date than the project would otherwise be able 
to proceed. Relative weight: 12.5 Percent.
    (vi) The extent to which the project uses new technologies, 
including intelligent transportation systems, to enhance the efficiency 
of the project. Relative weight: 5 Percent.
    (vii) The amount of budget authority required to fund the Federal 
credit instrument made available under TIFIA. Relative weight: 5 
Percent.
    (viii) The extent to which TIFIA assistance would reduce the 
contribution of Federal grant assistance to the project. Relative 
weight: 5 Percent.
    Note that, when evaluating the Letters of Interest, the information 
needed to address criterion (iv), creditworthiness, and criterion 
(vii), budget authority, is unlikely to be available in sufficient 
detail. Therefore, the DOT will not employ these two criteria when 
reviewing the Letters of Interest. However, DOT will consider these 
criteria when reviewing project applications.

IX. Program Funding

    The SAFETEA-LU authorized $122 million annually from the Highway 
Trust Fund for fiscal years 2005-2009 in TIFIA budget authority to pay 
the subsidy cost of credit assistance. As of the publication date of 
this notice, extensions of the surface transportation reauthorization 
act have been enacted continuing highway programs that were authorized 
through fiscal year 2009, and the expectation is that Congress will 
reauthorize an equivalent amount of budget authority for the TIFIA 
program in the future 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 all funds subject to the annual Federal-aid obligation ceiling, 
the amount of TIFIA budget authority available in a given year may be 
less than the amount authorized for that fiscal year.
    Consistent with the Federal Credit Reform Act of 1990 and the 
requirements of the Office of Management and Budget, the subsidy cost 
of a loan is affected by recovery assumptions, allowance for defaults, 
the borrower's interest rate, and fees. The factors that most heavily 
influence the subsidy cost of a TIFIA loan fall into the recoveries 
category (for example, the repayment pledge and whether the debt is 
senior or subordinate) and the allowance for defaults category 
(including the credit rating on the debt and the degree of back-
loading). The borrower's interest rate will also affect the subsidy 
cost of the TIFIA loan. The final subsidy cost estimate is expressed as 
a percentage of the principal amount of the credit assistance.

    Authority: 23 U.S.C. 601-609; 49 CFR 1.48(b)(6); 23 CFR Part 
180; 49 CFR Part 80; 49 CFR Part 261; 49 CFR Part 640.

    Issued on: January 12, 2011.
Victor M. Mendez,
Federal Highway Administrator.
[FR Doc. 2011-933 Filed 1-18-11; 8:45 am]
BILLING CODE 4910-9X-P