[Federal Register Volume 65, Number 139 (Wednesday, July 19, 2000)]
[Notices]
[Pages 44941-44943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18315]
Federal Register / Vol. 65, No. 139 / Wednesday, July 19, 2000 /
Notices
[[Page 44941]]
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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), U.S. Department of
Transportation (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 revised TIFIA
regulations (49 CFR Part 80, as published elsewhere in this issue of
the Federal Register, provide specific guidance on the program
requirements.
These revised regulations, which will apply to applications filed
under this notice, amend the June 2, 1999 rule to: clarify that funds
will be disbursed based on the project's anticipated financing needs;
clarify that the borrower must obtain ongoing credit surveillance for
the life of the TIFIA credit instrument; assign specific weights to
each of the eight statutory selection criteria; specify that loan
servicing fees are to be paid by the borrower; modify the time period
for audited financial statements from 120 days to within no more than
180 days; and provide that administrative offsets will be employed only
in cases of fraud, misrepresentation, or criminal acts.
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 TIFIA statute provides budget authority of
$110 million for FY 2001 to fund the subsidy costs of up to $2.2
billion in credit assistance. However, as described below, the amount
of actual net budget authority available in FY 2001 depends on several
additional factors.
DATES: For consideration in this application cycle, letters of interest
must be submitted by 4:30 p.m. EDT on Thursday, August 17, 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,
September 6, 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) 366-1675; OST: Ms. Stephanie Kaufman, Office
of Budget and Program Performance, (202) 366-9649; Department of
Transportation, 400 Seventh Street, SW, Washington, D.C., 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 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 in FY 2001 and beyond are $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 $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. The credit amounts
authorized in the TIFIA are not subject to this annual reduction.
As noted above, the TIFIA statute provides budget authority of $110
million for FY 2001. The DOT will determine the amount of net budget
authority available in FY 2001 to fund the TIFIA credit assistance
program by taking into account unused FY 2000 budget authority, any
reductions necessitated by the FY 2001 obligation limitation, and
administrative expenses
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authorized by the TIFIA statute. The amount of net budget authority
available for new TIFIA commitments in FY 2001 also may be affected by
new obligations (if any) for projects that received conditional
approval in the previous fiscal year and credit subsidy adjustments to
obligations for prior TIFIA commitments.
The total amount of Federal credit assistance available for new
TIFIA commitments in FY 2001 may be less than the $2.2 billion
authorization level, as a result of contingent TIFIA commitments made
in FYs 1999 and 2000.
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
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 (those which have a lien senior
to that of the TIFIA credit instrument on the pledged security) 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
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 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
assistance must submit a brief letter of interest to the DOT by
Thursday, August 17, 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, September
6, 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 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 Secretary of Transportation intends to make final project
selections within five 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 assistance must submit this payment
by the application deadline of September 6, 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 credit
instrument for a qualified project that has been selected to receive
assistance under the TIFIA, 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
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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: July 14, 2000.
Rodney E. Slater,
Secretary, U.S. Department of Transportation.
[FR Doc. 00-18315 Filed 7-18-00; 8:45 am]
BILLING CODE 4910-62-P