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Applications for TIFIA Credit Assistance
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: May 10, 2000 (Volume 65, Number 91)]
[Notices]
[Page 30182-30184]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10my00-144]
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
Federal Railroad Administration
Federal Transit Administration
Office of the Secretary of Transportation
Applications for TIFIA Credit Assistance
AGENCIES: Federal Highway Administration (FHWA), Federal Railroad
Administration (FRA), Federal Transit Administration (FTA), Office of
the Secretary of Transportation (OST), DOT.
ACTION: Notice of availability of funds inviting applications for
credit assistance for major surface transportation projects.
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SUMMARY: The Transportation Equity Act for the 21st Century (TEA-21)
created the Transportation Infrastructure Finance and Innovation Act of
1998 (TIFIA). The TIFIA authorizes 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. The TIFIA
regulations (49 CFR part 80, as published in the Federal Register, Vol.
64, No. 105, on Wednesday, June 2, 1999) provide specific guidance on
the program requirements.
Although the DOT is currently contemplating revisions to the
regulations, the Final Rule as published in the Federal Register on
June 2, 1999 remains applicable to this notice.
Funding for this program is limited, and projects requesting
assistance will be evaluated and selected by the DOT on a competitive
basis. Following selections, term sheets will be issued and credit
agreements will be developed through negotiations between the project
sponsors and the DOT. The DOT expects that approximately $81 million in
net budget authority will be available in fiscal year 2000 to fund the
subsidy costs of up to approximately $1.673 billion in Federal credit
assistance.
DATES: For consideration in this application cycle, letters of interest
must be submitted by 4:30 p.m. EDT on Wednesday, May 31, 2000. The
deadline for receipt of the completed application and the non-
refundable $5,000 application fee is 4:30 p.m. EDT on Wednesday, July
5, 2000. Applications received in the offices of the DOT after that
date and time will not be considered. Applications sent to the DOT
electronically or by facsimile will not be accepted. Applicants should
refer to the TIFIA Application for Federal Credit Assistance, which
specifies the number of hard copies (plus original) required for each
section of the application as well as those sections of the application
requiring electronic versions.
ADDRESSES: Both the letters of interest and completed applications
should be submitted to the attention of Ms. Stephanie Kaufman, Office
of Budget and Program Performance, Department of Transportation, Room
10105, B-10, 400 Seventh Street, SW., Washington, DC 20590.
FOR FURTHER INFORMATION CONTACT: FHWA: Mr. Max Inman, Office of Budget
and Finance, Federal-Aid Financial Management Division, (202) 366-0673;
FRA: Ms. JoAnne McGowan, Office of Passenger and Freight Services,
Freight Program Division, (202) 493-6390; FTA: Mr. Paul Marx, Office of
Policy Development, (202) 366-1734; OST: Ms. Stephanie Kaufman, Office
of Budget and Program Performance, (202) 366-9649; Department of
Transportation, 400 Seventh Street, SW., Washington, DC 20590. Hearing-
and speech-impaired persons may use TTY by calling the Federal
Information Relay Service at 1-800-877-8339. Additional information,
including the TIFIA program guide and application materials, can be
obtained from the TIFIA web site at http://tifia.fhwa.dot.gov.
SUPPLEMENTARY INFORMATION:
Types of Credit Assistance Available
The DOT 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
The 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
[[Page 30183]]
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). Total Federal credit
amounts authorized for the TIFIA program are $1.8 billion in fiscal
year (FY) 2000; $2.2 billion in FY 2001; $2.4 billion in FY 2002; and
$2.6 billion in FY 2003. These amounts lapse if not awarded by the end
of the fiscal year for which they are provided.
To support these credit amounts, the TIFIA provides budget
authority to fund the maximum subsidy amounts of $90 million in FY
2000; $110 million in FY 2001; $120 million in FY 2002; and $130
million in FY 2003. Of these amounts, the Secretary may use up to $2
million for each of the fiscal years for administrative expenses. 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 the
funding for certain other administrative or allocated programs (not
apportioned to the States) that are subject to the annual Federal-aid
highway obligation limitation, the amount of TIFIA budget authority
that is available to fund credit instruments in a given year may be
less than the amount originally authorized for that year. The extent of
any budget authority reduction will depend on the ratio of the
obligation limitation, which is determined annually in the
appropriations process, to the contract authority for the Federal-aid
highway program, which was established in TEA-21. For FY 2000, this
reduction is 12.9 percent, or $11.6 million. The credit amounts
authorized in the TIFIA are not subject to this annual reduction.
The DOT expects that approximately $81 million in net budget
authority will be available in FY 2000 to fund the TIFIA credit
assistance program. This approximation takes into account unused FY
1999 budget authority, the reduction in FY 2000 budget authority due to
the annual obligation limitation, and administrative expenses
authorized by the TIFIA statute. The amount of net budget authority
available for new TIFIA commitments in FY 2000 also may be affected by
credit subsidy adjustments to obligations for prior TIFIA commitments.
The total amount of Federal credit assistance available for new
TIFIA commitments in FY 2000 is approximately $1.673 billion, which is
less than the $1.8 billion authorization level as a result of
contingent TIFIA commitments made in FY 1999.
The amount of credit assistance that may be provided to a project
under the TIFIA is limited to not more than 33 percent of eligible
project costs.
Eligible Projects
Highway, rail, transit, and intermodal projects (including
intelligent transportation systems) may receive credit assistance under
the TIFIA. See the definition of ``project'' in 23 U.S.C. 181(9) and 49
CFR 80.3 for a description of eligible projects.
Threshold Criteria
Certain threshold criteria must be met by projects seeking TIFIA
credit assistance. 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 one or more of the nationally recognized
credit rating agencies, as detailed in 23 U.S.C. 182(b)(2)(B) and 49
CFR 80.11. The letter must indicate the reasonable potential for the
senior obligations funding the project to receive an investment grade
rating. This preliminary rating agency opinion 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 by the DOT.
The DOT will also use the preliminary rating opinion letter to
assess the potential default risk on the requested TIFIA instrument.
Therefore, the letter should also provide a preliminary assessment of
the strength of either the overall project or the requested TIFIA
credit 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 and a revised
opinion on the default risk of its TIFIA credit instrument before the
DOT will execute a credit agreement and disburse funds.
Application and Selection Process
Each applicant for TIFIA credit assistance will be required to
submit a letter of interest and subsequently an application to the DOT
to be considered for approval. The following describes the application
process:
1. Letter of Interest. Initially, any applicant seeking TIFIA
credit assistance must submit a brief letter of interest to the DOT by
Wednesday, May 31, 2000. The letter of interest should include a brief
project description (including its purpose, basic design features, and
estimated capital cost), basic 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 from the
DOT), and a description of the proposed project participants. The
letter also should summarize the status of the project's environmental
review (i.e., has the project received a Categorical Exclusion, Finding
of No Significant Impact, or Record of Decision or, at a minimum, has a
draft Environmental Impact Statement been circulated). The letter of
interest should not exceed five pages. A multi-modal DOT Credit Program
Working Group will review this preliminary submission to ensure that
the project meets the most basic requirements for participation in the
TIFIA program. The Working Group will then designate a lead modal
agency (FHWA, FRA, or FTA) for the project.
2. Application. Once approved for further review, the applicant
will be notified by a representative from the designated modal agency
of its eligibility to submit a formal application. The applicant must
submit all required materials (generally described in 49 CFR 80.7 and
detailed in the TIFIA application) to the DOT by Wednesday, July 5,
2000. The TIFIA application and additional program information may be
obtained from the TIFIA web site at http://tifia.fhwa.dot.gov or
through one of the program contacts listed in this notice.
3. Sponsor Presentation. Each applicant that passes an initial
screening of the application for completeness and satisfies the
threshold criteria will be invited to make an oral presentation to the
DOT on behalf of its project. The DOT plans to schedule presentations
within two weeks of the application deadline, and will discuss the
structure and content of the presentation with the applicant at the
time of the invitation.
4. Project Selection. Based on the application and oral
presentation, the DOT will evaluate each project's distinct public
benefits and contribution to program goals according to each of the
selection criteria described in 23 U.S.C. 182(b) and 49 CFR 80.15. The
Secretary of Transportation intends to make final project selections
within six
[[Page 30184]]
to eight weeks of the application deadline.
Fees
For this application cycle, the DOT will require each TIFIA
applicant to pay a non-refundable application fee of $5,000. Checks
should be made payable to the Federal Highway Administration. The
project sponsor applying for TIFIA credit assistance must submit this
payment by the application deadline of July 5, 2000. There will be no
credit processing fee for this application cycle. Selected applicants
will, however, be required to pay fees for loan servicing activities
associated with their TIFIA credit instruments. For subsequent
application cycles, the DOT may adjust the amount of the application
fee and may establish a credit processing fee (to recover all or a
portion of the costs to the DOT of evaluating applications, selecting
projects to receive assistance, and negotiating term sheets and credit
agreements) on the basis of its program implementation experience. The
DOT will publish these amounts in each Federal Register solicitation
for applications.
Applicants shall not include application or credit processing 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.
If there is insufficient budget authority to fund the TIFIA credit
instrument for a qualified project that has been selected to receive
assistance, the DOT and the approved applicant may agree upon a
supplemental fee to be paid by or on behalf of the approved applicant
at the time of execution of a term sheet to reduce the subsidy cost of
that project. No such fee may be included among eligible project costs
for the purpose of calculating the maximum 33 percent credit amount.
Dated: May 4, 2000.
Rodney E. Slater,
Secretary, Department of Transportation.
[FR Doc. 00-11693 Filed 5-9-00; 8:45 am]
BILLING CODE 4910-62-P