SURFACE 

TRANSPORTATION

Financing Program 

Could Benefit from 

Increased 

Performance Focus 

and Better 

Communication

Report to Congressional Committees

June 2012

GAO-12-641

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-641, a report to 

congressional committees

June 2012

SURFACE TRANSPORTATION

Financing Program Could Benefit from Increased 

Performance Focus and Better Communication

Why GAO Did This Study

Created in 1998, the TIFIA program is 

designed to fill market gaps and 

leverage substantial nonfederal 

investment by providing federal credit 

assistance to help finance surface 

transportation projects including 

highway, transit, rail, and intermodal 

projects. Since 2008, demand for the 

program has surged, annually 

exceeding budget resources for the 

program by a factor of more than 10 to 

1. Given the increased demand and 

recent proposals to expand and modify 

the program, GAO was asked to 

review (1) the characteristics of TIFIA 

projects and how DOT tracks progress 

toward the program’s goals, (2) the 

process DOT used to evaluate and 

select projects that submitted LOIs to 

apply for credit assistance in fiscal 

years 2010 and 2011, (3) the factors 

that affect project sponsors’ decisions 

about whether to seek TIFIA credit 

assistance, and (4) the options 

proposed to modify the program. GAO

reviewed laws and program guidance; 

interviewed DOT officials, project 

sponsors, and advisors involved in 

procuring credit assistance; and 

surveyed all state departments of 

transportation and other recent 

applicants about the TIFIA program.

What GAO Recommends

GAO recommends that DOT develop 

and use program performance 

measures to better assess progress in 

meeting TIFIA’s goals and objectives. 

DOT should better disclose information 

on how it selects projects to apply for 

TIFIA assistance through program 

guidance or other means to help 

ensure that the program is more 

transparent to Congress, applicants, 

and the public. DOT said it would 

consider the study’s results.

What GAO Found

Projects that received credit assistance through the Transportation Infrastructure 

Finance and Innovation Act (TIFIA) program, administered by the Department of 

Transportation (DOT), tend to be large, high-cost highway projects. As of April 

2012, DOT has executed 27 TIFIA credit agreements for 26 projects with project 

sponsors such as state DOTs and transit agencies. Overall, DOT has provided

nearly $9.1 billion in credit assistance through 26 loans and one loan guarantee. 

By mode, there are 17 highway, 5 transit, and 4 intermodal projects. Most 

projects have a total cost of over $1 billion. DOT monitors individual credit 

agreements but does not systematically assess whether its TIFIA portfolio as a 

whole is achieving the program’s goals of leveraging federal funds and 

encouraging private co-investment. DOT has identified goals and objectives for 

the TIFIA program, but its limited use of performance measures makes it difficult 

to determine the degree to which the program is meeting these goals and 

objectives. Given that DOT already collects project data, it could use these data 

to better evaluate the program’s overall progress toward meeting its goals. 

In fiscal years 2010 and 2011, DOT used a competitive two-step process to 

evaluate and invite projects to apply for TIFIA credit assistance to address the 

considerable increase in demand for the program. First, a multimodal team 

scored and grouped letters of interest (LOI) using statutory criteria. Second, a 

group of senior DOT staff reviewed the LOIs based on the criteria and other 

factors, like available budget authority, and invited a subset to apply—the next 

step in securing TIFIA assistance. While recent applicants were satisfied with 

many aspects of the process, they also indicated, along with legal and financial 

advisors, that the selection process lacks transparency and creates uncertainty in 

their ability to implement projects. For example, some recent applicants told us it 

is difficult to understand what characteristics DOT uses to measure how well a 

project meets each criterion. DOT officials said the agency is taking steps to 

improve its evaluation process, but since many of the changes were initiated in 

2012, it is too soon to tell if they will address recent applicants’ concerns. 

Several factors influence whether project sponsors seek TIFIA assistance. More 

than 30 of 36 recent applicants we surveyed cited TIFIA’s repayment options

(like deferring repayments for 5 years after project completion), low interest rate, 

and flexible structure (i.e., ability to subordinate TIFIA repayment) as important in 

their decision to seek assistance. To date, sponsors from 17 states have never 

sought TIFIA assistance. State DOT respondents from these states cited various 

reasons for this, including lack of eligible projects and state-imposed borrowing 

restrictions. Many of these state DOTs indicated that regardless of options for 

modifying the program, they have no plans to seek TIFIA assistance.

Several options to change the TIFIA program have been proposed by, among 

others, Congress and DOT; these options include increasing the program’s 

funding, increasing the portion of costs that may be covered by TIFIA from 33 

percent to 49 percent of project costs, and modifying the selection process. Each 

option has advantages and disadvantages and, if adopted, some could alter the 

original goals of the program—to leverage public funds and encourage private 

co-investment. 

View GAO-12-641. For more information, 

contact Susan Fleming at (202) 512-2834 or 

flemings@gao.gov.
Page i GAO-12-641 Surface Transportation

Letter 1 

Background 4

TIFIA Projects Are Mostly Large Highway Projects; Performance 

Measures Are Needed to Better Evaluate Program Outcomes 12

DOT Used a Competitive Process to Evaluate Projects, but This 

Process Could Benefit from Increased Transparency 21

Flexible Repayment Terms and Other Factors Influence whether 

States and Other Sponsors Seek TIFIA Assistance; Future

Demand Is Difficult to Gauge 31

Options Proposed to Modify the TIFIA Program 37

Conclusions 46

Recommendations for Executive Action 47

Agency Comments 48

Appendix I Scope and Methodology 49

Appendix II Projects Receiving TIFIA Credit Assistance 55

Appendix III Responses to Questions from GAO’s Survey on TIFIA 58

Appendix IV GAO Contact and Staff Acknowledgments 69

Tables

Table 1: DOT Definitions and Clarifications of TIFIA Statutory 

Criteria 10

Table 2: Number of LOIs, by Fiscal Year and Outcome of 

Multimodal Team’s Assessment 23

Table 3: Number of LOIs Invited to Apply, by Fiscal Year and Mode 25

Table 4: Status of Projects Invited to Apply, by Fiscal Year 26

Table 5: Top Factors That Affected Recent Applicants’ Decisions to 

Seek TIFIA Assistance 32

Table 6: Other Factors That Affected Recent Applicants’ Decisions 

to Seek TIFIA Assistance 33

Table 7: Factors That Affected State DOTs’ Decisions to Not Seek 

TIFIA Assistance 34

Contents
Page ii GAO-12-641 Surface Transportation

Table 8: Summary of Proposed Changes to the TIFIA Program 38

Table 9: List of Interviewees—Sponsors, Financial and Legal 

Advisors, All Others 51

Table 10: List of Survey Recipients and Respondents, by Type of 

Organization 53

Table 11: Projects with TIFIA Credit Agreements 55

Table 12: How Important or Unimportant Were Each of the 

Following Factor(s) in Your Organization’s Decision to 

Seek TIFIA Credit Assistance for Projects in Federal Fiscal 

Year 2010 or 2011? 58

Table 13: How Satisfied or Dissatisfied Were You with Each of the 

Following Aspects of the Process for Submitting a Letter 

of Interest (LOI) for the TIFIA Program in Federal Fiscal 

Year 2010 or 2011? 59

Table 14: Thinking about the Amount of Effort Your Organization 

Spent, How Much of a Burden, if at All, Were the 

Following Aspects of Submitting an LOI? 60

Table 15: For Federal Fiscal Year 2010 or 2011, Did You Receive 

Any Feedback from DOT TIFIA Staff on Any Letters of 

Interest for TIFIA Credit Assistance? 60

Table 16: If You Received Feedback on Any of the Following 

Topics, How Useful, if at All, Was the Feedback You 

Received from DOT TIFIA Staff? 60

Table 17: How Much Do You Support or Oppose the Following 

Proposed Changes to the TIFIA Program? 61

Table 18: Do You Support Modifying the TIFIA Selection Criteria? 61

Table 19: How Much, if at All, Did Each of the Following Factors 

Impact Your State DOT’s Decision to Not Submit an LOI to 

the TIFIA Program? 62

Table 20: In Your Opinion, How Much, if at All, Does Each of the 

Following Proposed Changes Increase the Likelihood That 

Your Organization Would Seek TIFIA Credit Assistance in 

the Future? 63

Table 21: In Your Opinion, How Much, if at All, Does Each of the 

Following Proposed Changes Increase the Likelihood That 

Your Organization Would Seek TIFIA Credit Assistance in 

the Future? 64

Table 22: Do You Support Modifying the TIFIA Selection Criteria? 64

Table 23: In the Next 5 years, Approximately How Many Projects 

Do You Anticipate Will Be Undertaken in Your State That 

Have a Total Cost of ... 65
Page iii GAO-12-641 Surface Transportation

Table 24: Of the Projects Identified in Table 23, for About How 

Many Do You Anticipate That Your Organization Will Seek 

TIFIA Credit Assistance? 65

Table 25: Does Your State DOT Have the Legislative Authority to 

Use Any of the Following Tools for Transportation 

Projects? 66

Table 26: Does Your State Have Access to Any of the Following 

Revenue Sources, at Either the State or Local Level, That 

Could Be Used to Repay a TIFIA Loan? 66

Table 27: Does Your State DOT Have Either Bonding Authority OR 

Have Access to the Bond Market through Another State 

Entity? 66

Table 28: Which, if Any, of the Following Legislative Restrictions 

on Conducting Bond Issuances for Capital Projects Apply? 67

Figures

Figure 1: Requests for TIFIA Credit Assistance, Fiscal Years 1999-

2012 8

Figure 2: Four Stages of TIFIA Credit Assistance 9

Figure 3: Location of Projects with TIFIA Credit Agreements 13

Figure 4: States That Had Submitted TIFIA Letters of Interest, 

through Fiscal Year 2012 15

Figure 5: TIFIA LOI Evaluation and Selection Process for Fiscal 

Years 2010 and 2011 22
Page iv GAO-12-641 Surface Transportation

Abbreviations

AASHTO American Association of State Highway and Transportation

Officials 

ARTBA American Road and Transportation Builders Association

DOT department of transportation

FCRA Federal Credit Reform Act 

FHWA Federal Highway Administration 

FRA Federal Railroad Administration

FTA Federal Transit Authority

GAN Grant Anticipation Note

GARVEE Grant Anticipation Revenue Vehicle

ITS intelligent transportation system

LOI letter of interest

MAP-21 Moving Ahead for Progress in the 21st Century Act

NOFA Notice of Funding Availability

OMB Office of Management and Budget

OST Office of the Secretary of Transportation

RRIF Railroad Rehabilitation and Improvement Financing

SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity 

 Act: A Legacy for Users 

SANDAG San Diego Association of Governments

SEP-15 Special Experimental Project Number 15

TIFIA Transportation Infrastructure Finance and Innovation Act

TIGER Transportation Investment Generating Economic Recovery

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Page 1 GAO-12-641 Surface Transportation

United States Government Accountability Office

Washington, DC 20548

June 21, 2012

The Honorable Barbara Boxer

Chairman

The Honorable James M. Inhofe

Ranking Member

Committee on Environment and Public Works

United States Senate

The Honorable Max Baucus

Chairman

The Honorable David Vitter

Ranking Member

Subcommittee on Transportation and Infrastructure

Committee on Environment and Public Works

United States Senate

The Transportation Infrastructure Finance and Innovation Act (TIFIA) 

program provides federal credit assistance in the form of direct loans, 

loan guarantees, and lines of credit to finance surface transportation 

projects including highway, transit, rail, port access, and intermodal 

projects. Created in 1998 as part of the Transportation Equity Act for the 

21st Century (TEA-21),1

The Federal Highway Administration (FHWA) within the U.S. Department 

of Transportation (DOT) administers the TIFIA program. DOT awards 

the program is designed to fill market gaps and 

leverage substantial private and other nonfederal investment to help 

advance projects of regional and national significance. For most of its 

history, the TIFIA program was underutilized. Beginning in fiscal year 

2008, however, interest in the program increased substantially because of

several factors, including the growing demand for infrastructure 

investment relative to available transportation funding and the economic 

downturn. For the past 3 years, demand for credit assistance has 

exceeded the program’s budget resources by a factor of more than 10 to 

1. In part because of to this oversubscription, Members of Congress and 

others have offered reauthorization proposals to greatly expand and 

modify various aspects of the program.

 

1

Pub. L. No. 105-178, 112 Stat. 107 (1998) (codified as 23 U.S.C. ch.6).

 
 

Page 2 GAO-12-641 Surface Transportation

credit assistance to eligible project sponsors, such as state departments 

of transportation, transit agencies, tolling authorities, and private entities. 

To receive assistance, projects must meet several eligibility 

requirements—such as having a total cost of at least $50 million2

In response to your request, this report addresses the following 

questions: (1) What are the characteristics of TIFIA projects and how 

does DOT track progress toward the program’s stated goals? (2) How did 

DOT evaluate and select projects to apply for TIFIA credit assistance for 

fiscal years 2010 and 2011? (3) What factors affect states’ and other 

project sponsors’ decisions about whether to apply for TIFIA credit 

assistance? (4) What are the proposed options to modify the TIFIA 

program?

—and 

sponsors must submit a letter of interest (LOI) and a formal application. 

Since the program’s inception, 26 projects in 12 states, the District of 

Columbia, and Puerto Rico have received about $9.1 billion in TIFIA 

credit assistance through direct loans and one loan guarantee, and over a 

dozen more projects are working toward receiving credit assistance.

To address these objectives, we reviewed DOT program guidance for 

TIFIA, relevant legislation and regulations, and DOT’s biennial reports to 

Congress on the TIFIA program. We also reviewed documents developed 

by DOT to capture the evaluation and scoring decisions for projects 

seeking credit assistance in fiscal years 2010 and 2011. We analyzed 

data from DOT on LOIs submitted to the program since its creation and 

on projects in the TIFIA portfolio—projects with credit agreements—to 

describe the characteristics and results of the TIFIA program. We 

assessed the reliability of the data by reviewing DOT’s data 

documentation, interviewing knowledgeable officials, and conducting 

independent validation through use of our web survey of states and 

recent applicants. We found the data to be sufficiently reliable for our 

purposes. In addition, we interviewed DOT officials on TIFIA program 

goals and performance measures, the selection and evaluation of 

projects, the demand for the program, and proposed options to modify 

TIFIA. We also interviewed project sponsors, including those that 

received credit assistance in California, Colorado, Florida, Texas, and 

Virginia, the 5 states with the most TIFIA awards; the state DOTs in North 

 

2

Intelligent transportation systems (ITS) projects must have a total cost of at least $15 

million.
 

Page 3 GAO-12-641 Surface Transportation

Carolina and Iowa; private concessionaires, private sector entities that 

have entered into agreements with public agencies to allow greater 

private sector participation in the delivery and financing of transportation 

projects; and legal and financial advisors that have been involved in 

securing TIFIA credit assistance to learn about their experience with the 

TIFIA program, including the application process, oversight and 

monitoring of credit assistance, future demand for the program, and 

proposed options to change the program.

In addition, we surveyed all state departments of transportation and all 

recent applicants that submitted an LOI to the TIFIA program in fiscal 

years 2010 and 2011 using a web-based survey.3

To determine options that had been proposed to change the TIFIA 

program, we reviewed the American Energy and Infrastructure Jobs Act 

The survey recipients 

fell into four categories: (1) state DOTs from states from which no 

sponsor had ever applied to the TIFIA program, (2) state DOTs from 

states for which a sponsor had applied to the TIFIA program but not in 

recent years—that is, 2010 or 2011, (3) state DOTs who had recently 

applied to the TIFIA program, and (4) other non-state DOT organizations, 

such as transit agencies, who had recently applied to the TIFIA program. 

Survey respondents were presented with different questions in the survey 

depending on their past experience with the TIFIA program and whether 

they were state DOTs. In general, the survey topics included the factors 

contributing to organizations’ decisions about whether to seek TIFIA 

assistance, satisfaction with the process for submitting an LOI to the 

TIFIA program, opinions on proposed modifications to the TIFIA program, 

potential future demand for the TIFIA program, and characteristics of the 

state DOTs. We distributed a link for the survey to 83 organizations by email and also subsequently e-mailed and telephoned nonrespondents to 

encourage a higher response rate. We received completed surveys from 

66 respondents (80 percent). Of the 66 completed responses, 16 were 

state DOTs from states with no TIFIA experience, 14 were from state 

DOTs from states with no recent TIFIA experience, 12 were from state 

DOTs that were recent applicants, and 24 were from non-state DOT 

organizations that were recent applicants.

 

3

These two groups were not mutually exclusive, in that some state DOTs are also recent 

TIFIA applicants. For the purposes of this report, our definition of state DOTs includes 

those from the 50 states, the District of Columbia, and Puerto Rico.
 

Page 4 GAO-12-641 Surface Transportation

of 2012,4 as reported out by the House Committee on Transportation and 

Infrastructure, and the Moving Ahead for Progress in the 21st Century Act 

(MAP-21),5

We conducted this performance audit from July 2011 to June 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. For more information on our 

scope and methodology, see appendix I.

as passed by the Senate. We also reviewed other 

reauthorization proposals and documents prepared by, among others, 

DOT and the American Association of State Highway and Transportation 

Officials (AASHTO). In interviews, we discussed these and other options 

with DOT, select project sponsors, legal and financial advisors, and 

private concessionaires with investments in transportation infrastructure, 

all familiar with or recipients of TIFIA assistance.

Most federal highway transportation funds are distributed as grants to 

states as part of the federal aid highway program through a set of 

complex formulas that take into account a number of factors, including the 

estimated share of taxes highway users in each state contributes. The 

Highway Trust Fund is the principal source of funding for federal aid 

highway programs and is funded through motor fuel and other highway 

use taxes.6 Grants for transit projects are distributed as part of the federal 

transit program through a collection of formula-based and discretionary 

programs and are funded primarily by the Mass Transit Account of the 

Highway Trust Fund.7

 

4

H.R. 7, 112th Cong. (Feb. 13, 2012).

Supplementing these federal programs is a 

collection of financing methods that allow project sponsors—such as state 

DOTs and transit agencies—to borrow money through bonds, loans, or 

other mechanisms. State DOTs and other project sponsors can raise 

money in the bond market through, for example, revenue bonds backed 

5

S. 1813, 112th Cong. (Feb. 6, 2012).

6

23 U.S.C. §§ 104, 105.

7

49 U.S.C. ch. 53.

Background 
 

Page 5 GAO-12-641 Surface Transportation

by anticipated project revenues like tolls; bonds backed by future federal 

transportation funds, such as Grant Anticipation Revenue Vehicles 

(GARVEE) or Grant Anticipation Notes (GAN); or general obligation 

bonds backed by the full faith and credit of a state or municipality. Project 

sponsors may also seek private investment through bank debt, private 

equity, or private activity bonds. Through TIFIA, DOT provides loans or 

other credit assistance to sponsors of surface transportation projects. 

Declining Highway Trust Fund revenues and states’ budget constraints, 

as well as the high cost and size of major transportation projects, have 

prompted project sponsors to seek alternative methods of funding 

transportation infrastructure.

The TIFIA program’s primary goal is to leverage limited federal resources 

and stimulate private capital investment in transportation infrastructure by 

providing credit assistance to projects of national or regional significance. 

Underlying the TIFIA program is the notion that the federal government 

can perform a constructive role in financing large transportation

infrastructure projects by supplementing, but not supplanting, existing 

capital finance markets. In this role, DOT identifies five key objectives for 

the TIFIA program:

• facilitate projects with significant public benefits;

• encourage new revenue streams and private participation;

• fill capital market gaps for secondary (subordinate) capital;

• be a flexible, “patient” investor willing to take on investor concerns 

about investment horizon, liquidity, predictability, and risk; and

• limit federal exposure by relying on market discipline.

DOT provides TIFIA credit assistance in three forms: direct loans, loan 

guarantees, and standby lines of credit. The maximum maturity for all 

types of TIFIA credit assistance is 35 years after substantial completion of 

a project. Lines of credit can supplement project revenues during the first 

10 years of project operations. In addition, DOT can defer the first TIFIA 

repayment until 5 years after substantial completion of a project, and 

most project sponsors avail themselves of this option. Other credit 

assistance terms include that (1) TIFIA assistance may provide no more 

TIFIA Goals

TIFIA Credit Assistance 

Terms and Eligibility 

Requirements
 

Page 6 GAO-12-641 Surface Transportation

than 33 percent of total project costs,8 (2) senior debt has an investmentgrade credit rating (Baa3/BBB- or higher),9 and (3) TIFIA assistance can 

be subordinate to the project’s senior debt, meaning that senior creditors 

may receive project revenues ahead of DOT. According to DOT officials, 

the TIFIA program is one of the few federal credit programs in which 

federal assistance routinely takes a subordinate position to other, 

nonfederal lenders with respect to cash flows. However, to protect 

taxpayers, TIFIA loans may not be subordinated to the claims of other 

creditors with respect to the loan recipients’ bankruptcy, insolvency, or 

liquidation.10

Both public and private entities are eligible to receive TIFIA assistance for 

a range of surface transportation-related projects including highway, 

transit, railroad, intermodal freight, and port access. Borrowers can 

include entities like state DOTs, toll authorities, transit agencies, and 

private concessionaires.11

• must have total costs of at least $50 million (or $15 million for 

intelligent transportation systems projects);

Other eligibility requirements include that a 

project

12

• must be included in state and local transportation plans; and

• must have dedicated revenues, like tolls, user fees, or pledged taxes, 

for repayment.

Through the Safe, Accountable, Flexible, Efficient Transportation Equity 

Act: A Legacy for Users (SAFETEA-LU), Congress amended and 

 

8

23 U.S.C. §§ 603(b)(2), 604(b)(2).

9

23 U.S.C. §§ 601(a)(3), 603(a)(4), 604(a)(4). In order to receive TIFIA assistance, the 

senior debt obligations funding the project (i.e., those obligations having a lien senior to 

that of the TIFIA credit instrument on the pledged security) must achieve an investment 

grade rating. 

1023 U.S.C. §§ 603(b)(6), 604(b)(8).

11Private concessionaires are private sector entities that have entered into agreements 

with public agencies to allow greater private sector participation in the delivery and 

financing of transportation projects.

12ITS encompasses a broad range of electronics and communication technologies to 

enhance the capacity and efficiency of surface transportation systems, including traveler 

information, public transportation, and commercial vehicle operations.
 

Page 7 GAO-12-641 Surface Transportation

reauthorized the TIFIA program, authorizing budget authority of $122 

million for each of fiscal years 2005-2009 from the Highway Trust Fund 

for the program’s credit subsidy cost and administrative expenses.13 The 

credit subsidy is the estimated long-term cost to the government of 

providing assistance.14 Extensions of SAFETEA-LU have authorized 

budget authority of $122 million for the TIFIA program for each 

subsequent fiscal year. Any uncommitted budget authority remains 

available for obligation in subsequent years, unless Congress chooses to 

reprogram or rescind these amounts. According to DOT, $10 million in 

TIFIA budget authority can generally be leveraged to provide $100 million 

in credit assistance.15

In fiscal year 2008, total requests for TIFIA assistance exceeded DOT’s 

available budgetary resources for the first time. Prior to this, when there 

was lower demand for the program, DOT allowed project sponsors to 

seek TIFIA assistance on a “first come, first served” basis defined by the 

sponsor’s schedule.16

 

13Pub. L. No. 109-59, § 5309(j), 119 Stat. 1144, 1584 (2005).

Figure 1 shows the number and amount of credit 

assistance requested each fiscal year.

14Budgeting for the cost of credit programs, including the TIFIA program, is governed by 

the Federal Credit Reform Act (FCRA) of 1990, Pub. L. 93-344, Title V, as amended 

(codified at 2 U.S.C. §§ 661-661f), which requires federal agencies to receive budget 

authorities to cover the estimated long-term cost to the government (which includes 

defaults, delinquencies, and interest subsidies) of providing credit assistance, calculated 

on a net present value basis and excluding administration costs. The amount of budget 

authority DOT may use is subject to annual obligation limitations in annual appropriations 

acts. Of the $122 million in budget authority that has been authorized per year, DOT has 

the authority to use up to $2.2 million annually to administer the program, and to collect 

and spend fees, subject to authority being provided in appropriations acts, to cover 

expenses related to reviewing, negotiating, and servicing credit agreements.

15Actual TIFIA lending capacity is subject to the calculation of the estimated subsidy cost 

for each credit assistance transaction. The amount varies based on the risk profile of the 

project and the repayment stream. According to DOT, actual original subsidy rates have 

ranged from less than 1 percent to over 15 percent of the TIFIA credit assistance 

received.

16For fiscal years 1999, 2000, and 2001, DOT used a fixed-date solicitation process for 

the TIFIA program but used the open, first-come first-served process after these initial 

years.

TIFIA Program History
 

Page 8 GAO-12-641 Surface Transportation

Figure 1: Requests for TIFIA Credit Assistance, Fiscal Years 1999-2012

Note: Not all letters of interest included a total project cost or TIFIA assistance request. To calculate a 

dollar estimate of the total TIFIA request for each fiscal year, we multiplied the number of letters of 

interest in a year by the average TIFIA request that year. We refer to this estimate as the inferred 

total TIFIA assistance request. Of the 182 letters of interest submitted to the program, 16 did not 

include an estimate of TIFIA assistance.

In its 2010 report to Congress on TIFIA, DOT attributed the increased 

demand for TIFIA assistance to several factors, including the growing 

demand for infrastructure investment relative to other sources of funding 

(like declining fuel tax receipts), the economic downturn and difficulty 

accessing capital markets, and the increasing use of innovative 

approaches, like public-private partnerships, to finance and deliver 

projects. After demand exceeded available budget resources, DOT 

terminated the open application process and instituted an annual, fixeddate solicitation process for sponsors to submit LOIs for credit assistance. 

In fiscal year 2010, DOT began evaluating and competitively selecting 
 

Page 9 GAO-12-641 Surface Transportation

projects based on how well they align with the TIFIA selection criteria and 

the availability of budget resources.17

As shown in figure 2, there are four primary stages for securing TIFIA 

credit assistance. For each project, the amount of time needed to 

complete each stage varies. For instance, in its 2002 report to Congress, 

DOT stated that the length of credit agreement negotiations is affected by 

the complexities and uncertainties of large infrastructure projects as well 

as the learning curve of both project sponsors and DOT as they 

encounter unique legal and financial issues with projects.

Figure 2: Four Stages of TIFIA Credit Assistance

Notes: Sponsors of highway projects may seek waivers from the usual TIFIA application process 

through FHWA’s Special Experimental Project Number 15 (SEP-15). SEP-15 allows for the 

modification of FHWA policy and procedure to facilitate public-private partnerships and other types of 

innovation in the federal aid highway process. Specifically, sponsors can seek waivers from FHWA 

procedures and policy, including those that apply to TIFIA.

 

17Though the program was oversubscribed in fiscal year 2008, DOT did not institute the 

fixed-date process until fiscal year 2010 because it reserved most of its anticipated fiscal 

year 2009 and fiscal year 2010 appropriations for existing applicants. 

Primary Stages for 

Securing a TIFIA Credit 

Agreement
 

Page 10 GAO-12-641 Surface Transportation

a

The Credit Council provides policy direction to the TIFIA program and recommends projects to 

receive credit assistance. The DOT Credit Council is composed of the following DOT officials: the 

Deputy Secretary of Transportation, who serves as chair; Assistant Secretary for Budget and 

Programs, who serves as vice-chair; Under Secretary of Transportation for Policy; General Counsel; 

Assistant Secretary for Transportation Policy; and the Director of the Office of Small and 

Disadvantaged Business Utilization. The Federal Highway Administrator, Federal Transit 

Administrator, Federal Railroad Administrator, and Maritime Administrator also sit on the Credit 

Council. Finally, there can be up to three at-large members.

b

For loan guarantees, DOT disburses funds to the guaranteed lender only when there is a payment 

default by the borrower. Any funds that the guaranteed lender draws from the loan guarantee initiate 

a loan between DOT and the borrower.

After determining that a project meets the eligibility requirements, DOT 

uses eight statutory criteria18 weighted by regulation19

Table 1: DOT Definitions and Clarifications of TIFIA Statutory Criteria 

to select projects to 

receive credit assistance. Beginning in fiscal year 2010, DOT defined the 

statutory criteria in the notice of funding availability (funding notice), which 

included clarification of the national or regional significance and 

environment criteria. (See table 1.)

Criterion (weight) Definition

2010 and 2011 

clarifications

National or regional 

significance (20%)

Extent to which project is nationally or regionally significant in terms of generating 

economic benefits, supporting international commerce, or otherwise enhancing 

national transportation system. It includes

• livability—providing transportation options linked with housing and commercial 

development to improve the economic opportunities and quality of life for 

people in communities across the United States,

• economic competitiveness—contributing to the economic competitiveness of 

the United States by improving 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 affect. 

Livability 

Economic 

competitiveness

Safety

Environment (20%) Extent to which the project helps maintain or protect the environment. It includes

• sustainability—improving energy efficiency, reducing dependence on oil, 

reducing greenhouse gas emissions and other transportation-related impacts 

on ecosystems through use of tolling or pricing structures to reduce congestion 

and encourage the use of alternative transportation options, and

• state of good repair—improving the condition of existing transportation 

infrastructure with particular emphasis on projects that minimize life cycle costs 

and use environmentally sustainable practices and materials.

Sustainability

State of good 

repair

 

1823 U.S.C. § 602(b)(2)(A).

1947 C.F.R. § 80.15(a).
 

Page 11 GAO-12-641 Surface Transportation

Criterion (weight) Definition

2010 and 2011 

clarifications

Private participation (20%) Extent to which TIFIA assistance would foster innovative public-private partnerships 

and attract private debt or equity investment. 

Project acceleration 

(12.5%)

Likelihood that TIFIA assistance would enable a project to proceed at an earlier 

date than the project would otherwise be able to proceed.

Creditworthiness (12.5%) 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, such as rate covenants.

Use of new technologies 

(5%)

Extent to which project uses new technologies, including intelligent transportation 

systems, to enhance project efficiency.

Reduced federal grant 

assistance (5%)

Extent to which TIFIA assistance would reduce the contribution of federal grant 

assistance to the project.

Consumption of budget 

authority (5%)

Amount of budget authority required to fund the federal credit instrument made 

available under TIFIA.

Source: GAO analysis of DOT documents.

Note: On the basis of both the funding notices for fiscal years 2010 and 2011, DOT did not consider 

two criteria—creditworthiness and consumption of budget authority—when evaluating LOIs as DOT 

did not believe project sponsors would have sufficient details regarding these criteria at the time of 

the LOI submission. Per the funding notice issued on November 3, 2011, DOT considered all eight 

criteria in its evaluation of LOIs beginning in fiscal year 2012.

In addition, projects that received funding through DOT’s Transportation 

Investment Generating Economic Recovery (TIGER) grant program were 

eligible for TIFIA credit assistance. Specifically, project sponsors could 

use TIGER grant funds for TIFIA credit assistance, known as a TIGER 

TIFIA payment. In each of the four rounds through which DOT TIGER 

grants have been available, a portion of the funds could be used to 

support the credit subsidy and administrative costs of projects eligible for 

federal credit assistance. When a project sponsor is offered a TIFIA 

award through the TIGER program, the project goes through the regular 

TIFIA process, including the TIFIA credit evaluation, credit agreement 

negotiation, and oversight and monitoring.20

DOT implements and manages the program using internal staff and a 

pool of external financial and legal advisors. There are nine internal TIFIA 

office staff who are responsible for assisting with reviewing LOIs, 

selecting projects to apply for credit assistance, negotiating credit 

 

20To date, six projects have been selected to receive TIGER grants to support TIFIA credit 

assistance. The sponsors for two of these projects have executed credit agreements and 

the sponsors for the remaining four projects are working with DOT to apply for and 

negotiate a credit agreement.
 

Page 12 GAO-12-641 Surface Transportation

agreements, monitoring loan disbursements and the financial 

performance of executed credit agreements, and tracking credit subsidy 

calculations. Currently, DOT supplements its internal staff with a pool of 

five financial and legal advisors, contracted for 5-year periods, who assist 

in the review of applications and negotiation of credit agreements.21

Since the TIFIA program was created in 1998, DOT has executed 27 

credit agreements for 26 projects.22

 

21To avoid conflicts of interest, DOT prohibits key external personnel (financial and legal 

advisors) from also representing TIFIA applicants. The TIFIA office is currently conducting 

a new solicitation for its advisors.

To date, assistance has been 

provided through 26 loans and one loan guarantee. Of the 26 projects, 17 

are located in 5 states—California, Colorado, Florida, Texas, and Virginia 

(see fig. 3).

22The number of TIFIA credit agreements and projects differs because one project, the 

Miami Intermodal Center, has three credit agreements for two loans, one of which was 

amended. See appendix II for a full list of the TIFIA credit agreements and projects. 

TIFIA Projects Are 

Mostly Large Highway 

Projects; Performance 

Measures Are Needed 

to Better Evaluate 

Program Outcomes

TIFIA Projects Are 

Concentrated in Five 

States and Tend to Be 

Large Highway Projects
 

Page 13 GAO-12-641 Surface Transportation

Figure 3: Location of Projects with TIFIA Credit Agreements

Note: Dollar values indicate the amount of TIFIA assistance each project received, in millions of 

dollars.

Overall, sponsors from 33 states, the District of Columbia, and Puerto 

Rico have submitted LOIs for projects that vary by mode and purpose, but 

most have high total costs. Highway projects account for a majority of all 

LOIs submitted to TIFIA program. According to DOT data, highway 

projects—such as building new roads and replacing bridges—accounted 

for about 60 percent of the 182 LOIs submitted to the TIFIA program from 

1999 to 2012. Transit and intermodal projects—such as building new 

transit systems and constructing parking garages and facilities linking 

various transport modes near airports—account for 18 percent and 10 
 

Page 14 GAO-12-641 Surface Transportation

percent of all LOIs, respectively. In addition, rail, ferry, and ITS projects 

account for 4 percent, 2 percent, and 1 percent of LOIs during this time, 

respectively.23 However, no projects in these three modes have received 

TIFIA assistance to date. Over the history of the program, the average 

total cost of projects seeking TIFIA assistance has been $1.2 billion. 

Through fiscal year 2012, no sponsor in the other 17 states has submitted 

an LOI to the TIFIA program.24 (See fig. 4.)

 

23Other projects, such as construction of visitors’ centers and truck technology systems, 

account for 7 percent of all LOIs. 

24Though no sponsor from Mississippi has submitted an LOI, the Mississippi DOT 

submitted an application for TIFIA in September 2008. The Mississippi DOT met the LOI 

requirement through FHWA’s SEP-15 program.
 

Page 15 GAO-12-641 Surface Transportation

Figure 4: States That Had Submitted TIFIA Letters of Interest, through Fiscal Year 2012

Note: Counts include duplicate LOIs submitted for the same project in different years.

According to DOT data, TIFIA credit agreements have been used mostly 

for large, high-cost highway projects. Overall, DOT has provided TIFIA 

assistance to 17 highway projects. Some of these projects—like the 

President George Bush Turnpike-Western Extension (SH 161) in Texas—

were to construct new roads, and others—like the I-595 Corridor 

Roadway Improvements project in Florida—to reconstruct and expand 

existing roads. Projects receiving credit assistance also tend to have high 
 

Page 16 GAO-12-641 Surface Transportation

total costs. Of the 25 projects, 20 projects cost more than $500 million 

and 16 projects cost more than $1 billion. The average total cost of 

projects receiving TIFIA credit assistance is $1.4 billion.25

To a lesser extent, TIFIA has also been used for transit and intermodal 

projects. Four intermodal projects have received credit assistance, 

including the Reno ReTRAC project in Nevada, which includes rail and 

roadway improvements to improve freight capacity and address 

environmental and safety concerns. Five transit projects have received 

TIFIA assistance. The Tren Urbano project in Puerto Rico, for example, 

constructed a new, fixed-guideway transit system to relieve congestion in 

the San Juan area. DOT officials told us that the balance of projects is 

becoming more diverse in terms of mode. They noted that sponsors of 

transit projects have been slower to use TIFIA assistance in the past, 

primarily because transit projects have access to low-cost municipal debt 

and do not generate revenue in excess of their operating costs to repay 

assistance. Moreover, it can be difficult to integrate TIFIA assistance with 

federal funding for transit provided through the New Starts program.

According to 

DOT, TIFIA assistance can help advance large-scale projects that 

otherwise might be delayed or deferred because of size or complexity, 

and as such, TIFIA projects to date have mainly been large-scale 

projects. On average, TIFIA assistance accounts for 24 percent of total 

project costs, about 9 percent less than the 33 percent currently permitted 

by law.

26

However, in fiscal years 2010 and 2011, DOT invited the sponsors of 12 

projects to apply for TIFIA assistance, which is the next stage in securing 

TIFIA assistance, 4 of which were transit projects.27

Projects financed with TIFIA credit agreements also have other attributes. 

According to DOT data, roughly one-third of projects are public-private 

partnerships that include private equity investments. For these projects, 

 

25To date, the smallest TIFIA project cost $267 million and received a loan for $42 million 

(Interlink). The largest TIFIA project cost $3.3 billion and received a loan for $900 million 

(Central Texas Turnpike System).

26The Federal Transit Administration’s (FTA) New Starts program, part of the Capital 

Investment Grant program, is the federal government’s primary financial resource for 

supporting new major transit capital projects that are locally planned, implemented, and 

operated, such as light rail and bus rapid transit.

27During this time, transit projects composed about 18 percent of submitted LOIs, while 

highway projects composed about 73 percent of submitted LOIs. 
 

Page 17 GAO-12-641 Surface Transportation

the private equity accounts for about 17 percent of total project costs. 

Defining private participation more broadly, 17 projects with active credit 

agreements include either private equity or debt. The average private 

investment for projects with active credit agreements, including equity and 

debt, is 37 percent of total project costs.28 The North Tarrant Express, for 

example, is a public-private partnership between the Texas Department 

of Transportation and a private concessionaire—NTE Mobility Partners—

to design, build, finance, operate, and maintain a 13-mile section of 

highway in the Dallas-Fort Worth area. Project funds include $426 million 

in equity from NTE Mobility Partners and $398 million from private activity 

bonds. These two sources of private investment account for about 40 

percent of the project’s total cost. Projects with credit agreements 

typically pledge user fees or dedicated tax revenue to repay TIFIA 

assistance. For 16 credit agreements, user fees like tolls are pledged to 

repay assistance, while for 8 credit agreements, tax-backed revenue 

streams like local sales taxes are pledged to repay assistance. The 

remaining 3 credit agreements use other dedicated revenues, like 

availability payments,29 to repay assistance.30

As of April 2012, DOT reported that it has provided nearly $9.1 billion—

$8.5 billion through direct loans and $600 million in loan guarantees—to 

projects at a budgetary cost of about $654 million. The budgetary cost of 

TIFIA assistance is the total credit subsidy for all projects, with the credit 

subsidy, as noted earlier, being the estimated long-term cost to the 

government of providing assistance calculated on a net present value 

 

28In calculating this figure, we used DOT’s convention from its 2002 report to Congress on 

TIFIA. Namely, (1) the project must feature investor-held debt or equity and (2) the 

investment return must be derived from project-generated revenues or other revenues 

levied specifically to support the project. We only included active credit agreements—

those for which sponsors had not repaid or refinanced their credit agreements—as we did 

not have complete information on the funding sources for all the retired credit agreements.

29An availability payment is a payment made by the public sponsor of a project to the 

private concessionaire for its responsibility to design, construct, operate, or maintain a 

project. The payment is based on particular project milestones or facility performance 

standards, irrespective of usage of the asset, such as ridership or toll revenue. Typically, 

the private sector concessionaire is the TIFIA borrower when availability payments are 

pledged to repay assistance.

30One project—the Miami Intermodal Center—received two loans. The sponsor pledged 

different forms of revenue to repay each loan—user fees from rental car users and fuel tax 

revenues. See appendix II for a full list of the revenues pledged to repay assistance for all 

projects with TIFIA credit agreements.
 

Page 18 GAO-12-641 Surface Transportation

basis, excluding administrative costs. As such, the credit subsidy reflects 

the estimated risk of the loan or assistance. According to DOT, the 

original credit subsidy cost for credit agreements ranges from less than 1 

percent to over 15 percent of the amount of TIFIA assistance. Projects 

that pledge user fees tend to have higher subsidy costs and, thus, 

generally entail greater risk to the federal government because actual 

usage and fees for a project (such as traffic and toll revenue on a new 

road) may not meet projections, particularly early in its operation. In such 

cases, where repayment of TIFIA assistance relies solely on revenues 

from user fees, poor performance—such as less than projected use of a 

facility—could result in nonpayment.

Project sponsors are actively drawing funds from DOT for about half of 

the projects with TIFIA credit agreements.31

The sponsor of one TIFIA project—the South Bay Expressway in San 

Diego County, California—declared bankruptcy in 2010 but has not 

defaulted on any TIFIA payments. At the time of the bankruptcy filing, the 

outstanding balance of the TIFIA loan was $172 million, including interest. 

The Plan of Reorganization ordered by the U.S. bankruptcy court reduced 

the value of the loan’s principal. DOT’s unsecured claim was $73 million, 

or 42 percent of the outstanding loan balance. Following the sale of the 

project to and the assumption of the TIFIA loan by the San Diego 

Association of Governments (SANDAG) in December 2011, DOT expects 

Many of these projects—14 

of 26 projects—are currently under construction. As a result, many 

sponsors are drawing and not yet repaying TIFIA loans. Six project 

sponsors have retired their TIFIA credit agreements through early 

repayment, by refinancing the loan, or because of expiration of the credit 

agreement in the case of a loan guarantee. For example, the Puerto Rico 

Highway and Transportation Authority refinanced its TIFIA loan for the 

Tren Urbano project with tax-exempt debt about 3 years after DOT fully 

disbursed the loan. The sponsor paid back the TIFIA loan 32 years ahead 

of schedule and anticipated saving about $31.7 million in interest 

payments to DOT by refinancing the TIFIA loan.

 

31All but one of the TIFIA credit agreements are for loans. Each credit agreement includes 

an annual disbursement schedule and outlines the conditions and forms for drawing 

funds. For loans, DOT will disburse funds as often as monthly on a reimbursement basis 

as costs are incurred for eligible project purposes. For the one loan guarantee made to 

date, no funds were drawn for the project before the credit agreement expired.

Most Sponsors Are 

Drawing Funds for 

Projects
 

Page 19 GAO-12-641 Surface Transportation

to recover the original loan value through higher interest rates charged on 

the restructured loan.

While DOT tracks certain aspects of a project, such as monitoring 

whether the project is meeting its construction timeline and comparing 

actual and projected receipts of the revenue pledged to repay TIFIA 

assistance, the agency does not systematically assess whether its 

portfolio as a whole is achieving the program’s goals of leveraging federal 

funds and encouraging private co-investment. The Secretary of 

Transportation is required to report biennially to Congress on the financial 

performance of projects that are receiving or have received TIFIA 

assistance and whether the goals of the TIFIA program are best served 

by continuing the program under the authority of the Secretary, 

establishing another entity to administer to program, or phasing out the 

program.32

As DOT administers a growing portfolio of TIFIA credit agreements, 

decision making and program implementation could be aided by 

additional use of performance measures to assess how well the agency is 

meeting its goals. Moreover, knowing the degree to which the agency is 

meeting its goals could augment the information DOT uses to fulfill the 

above stated requirement to make recommendations to Congress. 

According to our work on leading performance management practices,

agencies should have plans for managing their programs that identify 

goals, strategies, time frames, resources, and stakeholder involvement in 

decision making.33

 

3223 U.S.C. § 609.

Though DOT has identified goals and objectives for 

the TIFIA program, its limited use of performance measures makes it 

difficult to determine the degree to which the TIFIA program is meeting 

these goals and objectives. Other programs administered by DOT do 

have performance measures. Programs administered by the Federal 

Railroad Administration (FRA) and the Federal Motor Carrier Safety 

Administration, for example, have created a set of performance goals and 

33In the past, we also recommended that a Department of Energy credit assistance 

program develop performance measures to evaluate program progress. See GAO, 

Department of Energy: New Loan Guarantee Program Should Complete Activities 

Necessary for Effective and Accountable Program Management, GAO-08-750 

(Washington, D.C.: July 7, 2008).

TIFIA Program Could 

Benefit from Use of 

Performance Measures to 

Evaluate Progress toward 

Goals
 

Page 20 GAO-12-641 Surface Transportation

measures to address program performance.34 For example, FRA set 

goals to reduce the rate of train accidents in its proposed fiscal year 2013 

budget, and FRA tracks these goals and actual accident rates over time 

to measure whether or not it is meeting its safety goals. Also, for FHWA’s 

Express Lanes Demonstration program, DOT developed performance 

measures to evaluate projects’ performance along four program goals—

such as travel, traffic, and air quality—and uses information collected 

annually from project sponsors to report to Congress on the projects’ 

performance.35

In its first report to Congress in 2002, DOT examined the extent to which 

projects approved to receive assistance collectively met key TIFIA goals 

and objectives. For instance, DOT calculated that the amount of private 

co-investment in projects totaled $3.1 billion, or about 20 percent of the 

projects’ total costs.36

 

34GAO, Rail Transit: FTA Programs Are Helping Address Transit Agencies’ Safety 

Challenges, but Improved Performance Goals and Measures Could Better Focus Efforts, 

DOT also calculated that TIFIA had a federal 

leverage ratio of 4.8, meaning that every dollar of federal investment in 

projects approved to receive assistance—including TIFIA as well as other 

federal funds—represented nearly $5 in total infrastructure investment. 

However, DOT has not presented similar data on its progress in meeting 

the program’s goals in any of the subsequent reports to Congress. In 

these reports, DOT provides only broad descriptive information on the 

financial status of the projects and highlights project innovations, such as 

reporting on the use of new revenue sources like availability payments to 

repay assistance. DOT provides information on each project with a TIFIA 

credit agreement that describes each project and lists funding sources, 

but DOT does not aggregate this information for the portfolio of projects 

on its website or in other program documents. Given that the agency 

collects such data on projects that received TIFIA assistance, it could use 

these data—in particular, the amount of federal and nonfederal funding 

and financing, as well as the amount of private equity and debt—to better 

evaluate the progress toward meeting program goals and objectives, like 

GAO-11-199 (Washington, D.C.: Jan. 14, 2011).

35GAO, Traffic Congestion: Road Pricing Can Help Reduce Congestion, but Equity 

Concerns May Grow, GAO-12-119 (Washington, D.C.: Jan. 12, 2012).

36The projects selected to receive TIFIA assistance as of 2002 had a total cost of $15.4 

billion. The private co-investment in these projects consisted of about $3 billion in debt 

and $100 million in equity. 
 

Page 21 GAO-12-641 Surface Transportation

leveraging limited federal resources and stimulating private capital 

investment in transportation infrastructure.

In response to increased program demand and the uncertain budget 

environment, DOT used a competitive, two-step process to assess LOIs 

and select projects to apply for credit assistance in fiscal years 2010 and 

2011.37

DOT’s process for competitively selecting amongst LOIs involved two 

steps; first, DOT convened a multimodal team to assess, score, and 

group projects using statutory criteria, and second, DOT used a team of 

senior-level staff—called the executive leadership team—to review the 

multimodal team’s assessments and invite select project sponsors to 

submit an application for credit assistance (see fig. 5).

DOT officials told us that they began using the current evaluation 

process—focusing on the LOIs to pre-assess a project’s alignment with 

TIFIA’s statutory criteria—to address the significant increase in demand 

for the program coupled with the current uncertain and limited budgetary 

environment due in part to a lack of a long-term surface transportation 

reauthorization bill. These circumstances, according to DOT, required the 

agency to establish a process that allows the agency to choose amongst 

best-qualified projects in each fiscal year instead of accepting eligible 

projects on a first-come, first-served basis as was the case when the 

program was undersubscribed.

 

37DOT officials told us that they also used a competitive, two-step process in fiscal year 

2012.

DOT Used a 

Competitive Process 

to Evaluate Projects, 

but This Process 

Could Benefit from 

Increased 

Transparency 

DOT Developed a 

Competitive, Two-Step 

Process to Evaluate and 

Select Projects Using the 

Statutory Criteria
 

Page 22 GAO-12-641 Surface Transportation

Figure 5: TIFIA LOI Evaluation and Selection Process for Fiscal Years 2010 and 2011

The multimodal team—composed of staff from different DOT modal 

administrations38—individually assessed each LOI against the statutory 

criteria to assign preliminary scores. Multimodal team members read and 

assigned each LOI a numeric score of 0 to 4 for each of the six criteria, 

with 0 indicating that a project was not consistent with a criterion and 4 

indicating that a project was most consistent with a statutory criterion.39

 

38The multimodal team comprised five members representing the Federal Transit 

Administration, Federal Highway Administration, and the Office of the Secretary of 

Transportation (OST). This team design meant that LOIs were reviewed by members with 

subject matter expertise from several transportation modes.

While the funding notices defined each of the statutory criteria, they did 

not describe specific project qualifications or benefits that would merit a 

higher or lower score. Additionally, multimodal team members did not use 

any guidance beyond the funding notices to delineate what the possible 

range of scores signified in terms of project qualifications and benefits. 

DOT officials said that evaluators relied primarily on content in the 

39As noted earlier, the eight statutory criteria are National or Regional Significance, 

Creditworthiness, Private Participation, Project Acceleration, Use of New Technologies, 

Consumption of Budget Authority, Environment, and Reduced Federal Grant Assistance; 

however, DOT did not consider the Creditworthiness and Budget Authority criteria when 

evaluating LOIs in fiscal years 2010 and 2011, since it did not believe project sponsors 

would have sufficient information regarding these two criteria at the time of the LOI 

submission. Further, for these two fiscal years, DOT provided additional clarification on 

two of the criteria through funding notices; specifically, livability, safety, and economic 

competitiveness for National or Regional Significance and sustainability and state of good 

repair for Environment. 

Multimodal Team
 

Page 23 GAO-12-641 Surface Transportation

submitted LOIs, as well as their own modal expertise as necessary, to 

evaluate projects. Each LOI contained information to describe the project 

and its proposed financial plan, identify the proposed borrower, explain 

how the TIFIA statutory selection criteria are met, and describe the 

benefits of the proposed project and its use of TIFIA assistance.

To finalize their individual scores for each LOI, multimodal team members 

compared LOIs with one another to determine the relative merits of each 

project when assigning scores. For example, if an LOI received a

preliminary score of 3.5 for the private participation criterion, but when 

compared with other projects in its cohort appeared less well aligned with 

the private participation criterion, its score would be lowered to reflect its 

relative rank among the LOIs. Also, multimodal team members met over 

several weeks to discuss and compare LOIs in an effort to help ensure 

reliability in scoring across team members. To arrive at a final score for 

each LOI, individual team members’ final scores were combined for each 

criterion and a cumulative weighted total score based on assigned 

weights in regulation was calculated for each project.

Last, the multimodal team rank ordered the LOIs by the total score and 

grouped them into three categories—A, B, and C. DOT officials said that 

the multimodal team grouped LOIs based on natural breaks in the 

numerical scores. LOIs placed in category A were those that scored the 

highest numerically, and thus were considered to be the most consistent 

with the statutory criteria. Table 2 details the category grouping for LOIs 

by fiscal year.

Table 2: Number of LOIs, by Fiscal Year and Outcome of Multimodal Team’s 

Assessment

Fiscal year

Number of LOIs in 

category A

Number of LOIs in 

category B

Number of LOIs in 

category C Total

2010 7 17 15 39

2011 21 6 5 32a

Source: GAO analysis of DOT data.

a

DOT did not assign a category for two additional LOIs in 2011, as these projects had received 

TIGER grants to cover the subsidy cost of a TIFIA loan.

As shown in table 2, there was a threefold increase in the number of 

category A LOIs from fiscal year 2010 to fiscal year 2011. DOT officials 

attributed this increase to higher-quality LOI submissions as well as 

improved project readiness of resubmitted projects. For projects that 

submitted an LOI in fiscal year 2011, 10 of the 34 had previously 
 

Page 24 GAO-12-641 Surface Transportation

submitted an LOI in 2010. For projects that submitted an LOI in fiscal year 

2012, 16 of 26 had applied in either fiscal year 2010 or 2011.

After the multimodal team grouped LOIs and provided a briefing about its 

assessment of all projects to the executive leadership team,40 this second 

team reviewed the projects and selected a subset of the category A 

projects to advance. According to DOT officials, in its review of projects, 

the executive leadership team was not aware of the scoring or ranking 

distinctions amongst LOIs in the category because numerical scores 

assigned by the multimodal team were removed. Instead, only basic 

project information, including high-level project summaries and category 

groupings (A, B, or C), were provided to the executive leadership team.41

The executive leadership team reviewed the LOIs to determine the extent 

to which they met statutory criteria and, to choose projects to advance 

from among category A LOIs, considered other factors including available 

budget authority and geographic diversity.

Similar to the multimodal team evaluation, the executive leadership team 

did not use any guidance beyond the funding notice in its review of LOIs 

and relied primarily on content in the LOIs to score projects. However, in 

some cases, the team sought clarification from DOT staff, including 

FHWA division offices in various states, to gather additional information 

on a project’s readiness, like its status in the environmental review 

process.

42

 

40The executive leadership team is composed of the Deputy Secretary, Under Secretary 

for Policy, Assistant Secretary for Budget and Program and Chief Financial Officer, and 

the General Counsel (in 2010 only), all of whom sit on the DOT Credit Council. 

In making final selections, the 

executive leadership team had to consider projects that could be funded 

within TIFIA’s limited budget authority. Further, with limited budget 

authority, DOT officials said that project acceleration—which 

41In 2010, the executive leadership team invited all seven sponsors with LOIs in category 

A to give an oral presentation on their projects. In 2011, DOT officials said sponsors were 

not invited to give presentations because (1) the number of projects in category A 

increased and (2) the executive leadership team developed familiarity with several 

projects that had submitted in successive solicitation rounds. According to DOT officials, 

the executive leadership team relied more heavily on the modal administrations, in 

particular FHWA division offices and FTA regional offices, to collect additional information 

on projects in 2011.

42In the fiscal year 2012 funding notice DOT further clarified that it would use factors like 

budget authority and geographic dispersion to select from amongst highly rated projects.

Executive Leadership Team
 

Page 25 GAO-12-641 Surface Transportation

encompasses factors like the project’s progress in completing 

environmental review requirements—was an important consideration in 

picking among projects that were consistent with the statutory criteria, 

particularly in 2011, when there were a higher number of category A 

LOIs. As a result of its review, the executive leadership team invited 4 

projects in fiscal year 2010 and 8 projects in fiscal year 2011 to submit a 

full TIFIA application.43

Table 3: Number of LOIs Invited to Apply, by Fiscal Year and Mode

(See table 3.)

Fiscal year

Total number of 

projects Highway Transit Intermodal Other

2010

Invited to apply 4 2 1 0 1 

Total 39 29 5 3 2 

2011

Invited to apply 8 4 3 1 0 

Total 34 24 8 1 1 

Source: GAO analysis of DOT data. 

Note: Other includes projects like those for truck technology systems and multimodal transportation 

improvements.

Overall, this two-step process ensured that projects invited to apply were 

from among the highest-scoring LOIs overall—that is, from category A—

but did not ensure that the projects selected were those that scored the 

highest numerically by the multimodal team. According to DOT officials, 

relying on numerical scores alone could provide a false sense of precision 

in selecting projects to advance. To date, because only category A 

projects are forwarded, no category B or C projects from the multimodal 

team evaluation have advanced over category A projects in the executive 

leadership team evaluation. DOT officials said that while there are no 

specific requirements to do so, the executive leadership team has only 

considered advancing LOIs in category A.

 

43The fiscal year 2010 funding notice stated that the TIFIA program had a limited amount 

of credit assistance for new applicants that year. According to the Transportation 

Infrastructure Finance and Innovation Act 2010 Report to Congress, DOT reserved part of 

its fiscal year 2010 appropriation to cover the 2008 oversubscription to the program. As a 

result of DOT’s invitations, the TIFIA program’s fiscal years 2010 and 2011 budget 

authority is fully committed. 
 

Page 26 GAO-12-641 Surface Transportation

After the executive leadership team has invited the sponsors of projects 

to apply for credit assistance, project sponsors must submit a full TIFIA 

application, after which DOT conducts a full evaluation of the application 

and makes a recommendation to the Credit Council. Then, the Secretary 

of Transportation makes the final decision on whether to approve a 

project to receive TIFIA credit assistance. Six of the 12 of the project 

sponsors that were invited to apply in fiscal years 2010 and 2011 have 

not yet submitted an application to DOT but all are still pursuing TIFIA 

loans. (See table 4.) 

Table 4: Status of Projects Invited to Apply, by Fiscal Year

Fiscal 

year

Total number 

invited to submit a 

full application

Number with an 

executed credit 

agreement

Number with 

an application 

under review

Number for which 

DOT is awaiting 

an application

2010 4 1 2 1 

2011 8 1 2 5 

Source: DOT, as of April 2012.

DOT officials and project sponsors that had executed TIFIA credit 

agreements said that the amount of time it takes for sponsors to complete 

the application and negotiation process varies by project. Several 

factors—such as the status of a project’s environmental review, the 

complexity of the project’s finance and delivery approach, and changes to 

the project—can influence the length of these processes. According to 

DOT, sponsors of four invited projects that have not yet submitted an 

application are completing work to comply with federal environmental 

requirements. Also, some project sponsors we spoke with said that the 

TIFIA application and negotiation processes can be longer for projects 

that have more complex financial plans, such as having a less frequently 

used revenue stream or relying on future state appropriations. For 

example, after being invited to apply, one sponsor we interviewed had to 

complete the process to select a private concessionaire for the project; 

then, since submitting the TIFIA application, the sponsor has been 

working with the TIFIA office regarding uncertainty around appropriations 

from the state legislature before beginning the negotiation process.

For projects not invited to apply, staff from the TIFIA office provided 

feedback to sponsors on their LOIs upon request. According to DOT 

officials, the primary aim of feedback is to explain how the LOI performed 

against each criterion. In addition, feedback included information on how 

a project sponsor could improve an LOI for resubmission, such as 

explaining that it needs to provide more details on specific project 
 

Page 27 GAO-12-641 Surface Transportation

benefits. However, through this feedback, a project sponsor is not 

informed about the numeric scoring or ranking of its LOI relative to other 

LOIs. In some cases, DOT officials said that the feedback provided 

indicated that there was nothing “wrong” with a project’s LOI but that it 

was not invited to apply given the strength of the pool of LOIs submitted 

in that round.

While project sponsors and other stakeholders we interviewed were 

satisfied with many aspects of DOT’s selection process, they cited two 

areas of the TIFIA selection process that they found to be less 

satisfactory—DOT’s application of selection criteria and the uncertainty of 

the timing of the process. Twenty-seven of the 36 recent TIFIA applicants 

that responded to our survey indicated that they were satisfied with DOT’s 

explanation of the application process in funding notices, and 28 of the 

recent applicants reported that the LOI format allowed them to provide 

sufficient detail about their project.44

Recent applicants we surveyed and interviewed, however, expressed two 

primary concerns about the process: the lack of transparency with which 

DOT applies statutory criteria to select LOIs to advance, and the 

uncertainty of the timing of the process. Only 7 of the recent applicants 

that responded to our survey were satisfied with the transparency of 

DOT’s project selection decisions. In addition, some recent applicants we 

interviewed and surveyed indicated that clarifications made to two 

criteria—national or regional significance and environment

In addition, several applicants told us 

that the TIFIA selection process was fairly simple to understand and not 

overly burdensome, and many applicants and advisors we interviewed 

told us that they found the TIFIA staff to be very cooperative and helpful. 

Moreover, many recent applicants told us that they appreciated that DOT 

gave feedback to the sponsors of unsuccessful LOIs.

45

 

44We received completed surveys from 36 of 46 recent applicants (78 percent).

—are highly 

subjective, and that it is difficult to understand what characteristics DOT is 

using to determine the extent to which a project does or does not meet 

these criteria. For example, one survey respondent indicated that it is 

45DOT provided these clarifications beginning in fiscal year 2010 in the annual TIFIA 

funding notices. The livability, economic competitiveness, and safety clarifications are part 

of the National or Regional Significance criterion and sustainability and state of good 

repair clarifications are part of the Environment criterion. 

TIFIA Selection Process 

Could Benefit from 

Greater Transparency
 

Page 28 GAO-12-641 Surface Transportation

unclear how one qualified project is selected over another in the 

competitive process. In addition, one recent applicant we interviewed said 

that it does not know what characteristics DOT looks for or uses to 

determine if a project does or does not meet a criterion, particularly for 

the livability clarification in national or regional significance. Some recent 

applicants also indicated that the LOI evaluation and selection process 

remained unclear, even after receiving feedback from DOT. Of the 21 

recent applicants that indicated they received feedback, 8 reported that it 

was slightly or not at all useful in understanding the scoring of their 

LOIs—the primary aim of feedback.

Several financial and legal advisors as well as private concessionaires we 

interviewed also said that there is a lack of transparency in the application 

of the criteria. These advisors indicated that DOT could be more 

transparent about the selection criteria and scoring process it uses to 

select projects. As we reported previously regarding competitively 

selected funding programs, were DOT to make additional information on 

its selection decisions publicly available, potential applicants would have 

better information on how to create and submit well-developed projects.46

In addition, recent applicants and financial and legal advisors we 

interviewed said the timing of the LOI evaluation and selection process is 

inconsistent from year to year and therefore creates uncertainty. 

Specifically, several applicants and advisors we interviewed told us that 

the inconsistent timing in both the dates of the release of DOT’s funding 

notice and LOI submission deadline, as well as the announcement of the 

outcome of the selection process, contributes to this uncertainty.

When such information is not made available, DOT may invite speculation 

that projects were selected for reasons other than merit.

47

 

46GAO, Surface Transportation: Competitive Grant Programs Could Benefit from 

Increased Performance Focus and Better Documentation of Key Decisions,

Because TIFIA projects are typically high-cost projects with multiple 

funding and financing streams, the uncertainty about when a project can 

GAO-11-234 

(Washington, D.C.: Mar. 30, 2011), and Intercity Passenger Rail: Recording Clearer 

Reasons for Awards Decisions Would Improve Otherwise Good Grantmaking Practices,

GAO-11-283 (Washington, D.C.: Mar. 10, 2011).

47In fiscal year 2010, the funding notice was released on December 3, 2009, and in fiscal 

year 2011, the funding notice was released January 19, 2011; for both these fiscal years, 

LOIs were due in March after an extension. For fiscal year 2012, the funding notice was 

released on November 3, 2011, with a December 30, 2011, deadline. 
 

Page 29 GAO-12-641 Surface Transportation

submit an LOI and more importantly, when a project can count on a TIFIA 

credit agreement to fill a funding gap, can affect the financial feasibility of 

these projects. For example, one financial advisor said that because the 

current LOI process occurs only once per year, it makes it difficult to plan 

and to coordinate with other vital project planning pieces, like state 

budget cycles, environmental reviews, and private investors’ timelines. If 

a project sponsor misses the solicitation for a particular year, it has to wait 

another year to submit an LOI. The uncertainty as to when the outcome of 

the selection process will be announced can also affect projects. 

According to one financial advisor, project delays can affect construction 

costs or public support for the project, among other things. DOT officials 

said that the timing of the annual solicitation is due, in part, to receiving 

budget authority for the TIFIA program on a year-to-year rather than a 

multiyear basis. On the basis of feedback from fiscal year 2010 

applicants, DOT has also tried to shorten the LOI evaluation and selection 

process in subsequent years so that applicants learn outcomes sooner. 

For fiscal year 2010, this process, measured from the date LOIs were due 

to the announcement of which LOIs were invited to apply, took about 6 

months, but for fiscal years 2011 and 2012, the process took 5 months 

and 4 months, respectively.

DOT has made changes to try to improve the LOI evaluation process 

since returning to a competitive fixed-date selection process. In particular, 

DOT officials said that they are applying best practices from other DOT 

discretionary programs such as the TIGER program and learning from 

past rounds of TIFIA solicitations. The changes include the following:

• In fiscal year 2011, DOT increased its documentation of key decisions 

for the LOI evaluation and selection process. For each LOI, the 

multimodal team summarized its deliberations on the extent to which 

a project met each statutory criterion in a standard form. In addition, to 

aid in providing feedback to unsuccessful applicants, TIFIA office staff 

produced an internal memo to document the multimodal team’s 

rationale for LOI scores and grouping as well as the executive 

leadership team’s concurrence with these evaluations. 

DOT Is Taking Steps to 

Improve the LOI 

Evaluation Process
 

Page 30 GAO-12-641 Surface Transportation

• In fiscal year 2012, DOT made changes to the LOI evaluation process 

at the multimodal team level.48

• In fiscal year 2012, DOT further clarified the TIFIA funding notice. In 

particular, DOT included the two statutory selection criteria that had 

not been considered as part of the LOI selection process for fiscal 

year 2010 or 2011—creditworthiness and consumption of budget 

authority. It also stated that in selecting LOIs to advance, it may give 

priority to projects that enhance the geographic diversity of the TIFIA 

portfolio and may consider the project’s readiness and timeline to 

proceed to financial close. DOT officials said it did so as part of its 

efforts to improve its communication of the criteria and selection 

process to applicants through the funding notices over time.

Specifically, the team assigned 

qualitative scores—”not aligned,” “somewhat aligned,” “well aligned,” 

and “very well aligned”—rather than numeric scores to LOIs for each 

criterion. According to DOT officials, these changes facilitate 

discussion within the team and accelerate progress to consensus on 

project scores and impressions. In addition, DOT officials said the 

qualitative scores are more reflective of the actual evaluation process 

than the numeric scoring system used in past rounds of solicitation 

and prevent the team from focusing too heavily on the numeric 

scores.

• For fiscal year 2012, DOT invited the sponsors of five projects to 

apply for TIFIA credit assistance. In addition, in response to concerns 

raised by project sponsors as well as the lack of certainty about future 

funding levels associated with the TIFIA program because of the 

absence of a long-term surface reauthorization, DOT officials said that 

an expedited review process would be created for additional highlyrated projects if TIFIA budgetary resources are significantly increased 

based on the President’s Budget Request for fiscal year 2013.49

Since many of DOT’s changes to the selection process occurred in the 

fiscal year 2012 TIFIA solicitation, it is too soon to know whether these 

 

 

48In fiscal year 2012, DOT considered all eight statutory criteria in its evaluations. On the 

basis of its experience in 2010 and 2011, DOT officials believe applicants can provide 

sufficient information on the creditworthiness and consumption of budget authority criteria 

that will enable them to be scored in the LOI evaluation process. 

49The President’s Budget Request for fiscal year 2013 and the current reauthorization 

proposals include significant increases in the amount of authorized budget authority for 

the TIFIA program. 
 

Page 31 GAO-12-641 Surface Transportation

changes will address the transparency and uncertainty concerns raised 

by recent applicants and financial and legal advisors. DOT officials said 

that they will continue to explore other changes to the process, such as 

creating additional internal guidance on scoring projects or changing 

feedback. Additionally, DOT officials said that the variety of TIFIA projects 

by size and mode could make it difficult for DOT to specify how particular 

benefits translate to a score for an LOI. For instance, in 2010 sponsors 

submitted LOIs for projects that varied greatly in terms of benefits, size, 

and mode, as exemplified by the $360 million Southeast Waterfront 

project—a 5-mile bus, auto, bicycle, and pedestrian corridor that is part of 

a redevelopment project in San Francisco—and the $1.5 billion Goethals 

Bridge project—the replacement of a existing bridge connecting New 

York and New Jersey. DOT officials said that the current LOI selection 

process was developed in response to the combination of high demand 

and uncertain budgetary environment, and indicated that it would likely 

modify the evaluation and selection process in response to an increase in 

TIFIA’s budget authority.

The TIFIA program’s flexibility and low interest rates are the predominant 

reasons why sponsors seek TIFIA assistance. TIFIA’s flexibility extends 

to both repayment terms and debt structuring. For states that have not 

sought TIFIA assistance, state DOTs indicated that a variety of factors 

contributed to their decision not to use TIFIA, such as a lack of projects 

that met the eligibility requirements or the availability of other financing 

options. Looking ahead, future demand for TIFIA is difficult to gauge 

because it is influenced by a number of factors such as changes to 

interest rates or state fiscal conditions.

Flexible Repayment 

Terms and Other 

Factors Influence 

whether States and 

Other Sponsors Seek 

TIFIA Assistance; 

Future Demand Is 

Difficult to Gauge
 

Page 32 GAO-12-641 Surface Transportation

As shown in table 5, most recent applicants we surveyed cited TIFIA’s 

repayment terms and options, low interest rate, and ability to serve as 

subordinate debt as very or somewhat important in their decision to seek 

assistance in fiscal years 2010 and 2011.50

Table 5: Top Factors That Affected Recent Applicants’ Decisions to Seek TIFIA Assistance

Very or 

somewhat 

important

Neither 

important nor 

unimportant

Very or 

somewhat 

unimportant

Don’t know/not 

applicable/

missing Total

Repayment terms and options offered by TIFIA credit 

assistance 34 0 0 2 36

Low interest rate of TIFIA relative to other financing 

options 34 0 1 1 36

Ability of TIFIA credit assistance to serve as 

subordinate debt in a project finance plana 32 0 3 1 36

Source: GAO survey of recent TIFIA applicants.

a

TIFIA assistance can be subordinate to a project’s senior debt in a project finance plan, meaning that 

senior creditors may receive project revenue ahead of DOT, except in the event of a borrower’s 

bankruptcy, insolvency, or liquidation.

In addition to recent applicants we surveyed, other project sponsors, 

financial and legal advisors, and private concessionaires we interviewed 

consistently cited TIFIA’s flexible terms as a major benefit of the program. 

According to DOT officials, the major benefits of TIFIA are that it can be a 

patient, flexible lender and can help a sponsor secure a portion of the 

project’s lending to attract other financing. For example, one project 

sponsor said that deferring payment for 5 years after substantial 

completion is very important for new toll road projects to allow time for 

usage to grow and thus revenues to ramp up after opening. Beyond 

favorable repayment terms, TIFIA assistance can be subordinate to other 

debt, meaning that this other debt may receive project revenue ahead of 

DOT except in the case of bankruptcy, insolvency, or liquidation.51

 

50As noted previously, we received completed surveys from 36 of 46 recent applicants (78 

percent). Recent applicants include both state DOTs and other non-state DOT 

organizations, such as transit agencies, that submitted LOIs to the TIFIA program in fiscal 

year 2010 or 2011. See appendix III for a complete list of responses to this and other 

survey questions.

All six 

of the private concessionaires we interviewed said that this structure is a 

51In the event of bankruptcy, insolvency, or liquidation, DOT’s claim would be on parity 

with senior creditors.

A Number of Factors 

Influence whether States 

and Sponsors Seek TIFIA 

Assistance 
 

Page 33 GAO-12-641 Surface Transportation

key benefit of the program, as it can help improve their ability to raise 

senior debt. Many project sponsors we spoke to also cited TIFIA’s 

relatively low interest rate as a main benefit of the program. The interest 

rate of TIFIA assistance is based on U.S. Treasury securities of a similar 

maturity and, since 2008, these Treasury rates have been lower than 

municipal bond interest rates.

To a lesser extent, recent applicants we surveyed cited several other 

factors as important in their decision to seek TIFIA assistance in fiscal 

years 2010 and 2011. (See table 6.)

Table 6: Other Factors That Affected Recent Applicants’ Decisions to Seek TIFIA Assistance

Very or 

somewhat 

important

Neither 

important nor 

unimportant

Very or 

somewhat 

unimportant

Don’t know/not 

applicable/missing Total

Availability of user fees to repay TIFIA credit 

assistance 27 2 4 3 36

Ability to accelerate delivery of project through 

use of TIFIA credit assistance 27 4 3 2 36

Lack of other funding options 26 5 4 1 36

Source: GAO survey of recent TIFIA applicants.

For instance, survey responses indicate that the TIFIA program can 

provide financing to projects that is unavailable in the financial markets, 

particularly for projects with unproven revenue streams. For example, one 

project sponsor we interviewed that received a TIFIA loan said that 

obtaining subordinate debt in the financial markets would have been 

prohibitively expensive, since the project was a new toll road. In addition, 

the ability of TIFIA to help accelerate the delivery of projects was also 

important among recent applicants. Officials from the Florida Department 

of Transportation estimated that its TIFIA loan helped accelerate 

completion of the Miami Intermodal Center by 10 years. Two other project 

sponsors we interviewed said TIFIA plays an important role in 

accelerating not only the projects for which they received assistance but 

other major capital projects too, as TIFIA assistance helps free up funds 

for other projects.

However, our survey also indicated that some states have neither sought 

nor plan to seek TIFIA assistance. In states where sponsors have never 

sought TIFIA assistance, the extent to which certain factors affected state 

DOTs’ decisions to not seek credit assistance varied, but many of these 

state DOTs indicated that they have not submitted LOIs because they (1) 
 

Page 34 GAO-12-641 Surface Transportation

do not have projects that meet the eligibility requirements including the 

required cost threshold, (2) get financing from other source(s), or (3) have 

state restrictions on borrowing funds for transportation projects.52

Table 7: Factors That Affected State DOTs’ Decisions to Not Seek TIFIA Assistance

(See 

table 7.)

Very great 

or great 

impact

Moderate 

impact

Some or 

little to no 

impact

Don’t know/not 

applicable/missing Total

A lack of either user fees or dedicated revenues to repay 

assistance 8 1 6 1 16

No projects in the state met the required cost threshold 

($50 million) 6 1 7 2 16

Other financing options were available 8 2 5 1 16

State is subjected to restrictions on borrowinga 6 0 9 1 16

Source: GAO survey of recent TIFIA applicants.

Notes: For the remaining factors on the survey, at least 9 of 16 state DOTs indicated that the factor 

had some or little to no impact on its decision not to submit an LOI. See appendix III for a table of the 

survey results for this question.

a

These restrictions include, among others, that states do not have authorizing legislation to allow its 

governments or public agencies to borrow funds, or that states require legislative approval to borrow 

funds through bonds and other financing tools.

Regarding lack of eligible projects, one state DOT indicated in the survey 

that a lack of dedicated revenues or private investment prevents TIFIA 

from being a viable option for rural states now and in the future. Several 

financial and legal advisors we interviewed also said that some states 

lack projects that are large enough to benefit from the TIFIA program. For 

the TIFIA program, a sponsor must pay a $50,000 application fee if 

invited to apply after the LOI stage. Then, if selected to receive 

assistance, the TIFIA borrower must pay a transaction fee, typically 

between $300,000 and $400,000, to cover the costs incurred by DOT to 

negotiate and execute the credit agreement, like costs for external 

advisors. Borrowers can also incur additional costs from hiring their own 

advisors and obtaining a credit rating for the project. Therefore, the cost 

of applying for TIFIA may outweigh the benefits of TIFIA for lower-cost 

projects.

 

52We received completed surveys from 16 of 18 state DOTs from states where a sponsor 

has never submitted an LOI (89 percent). 
 

Page 35 GAO-12-641 Surface Transportation

Moreover, DOT officials as well as several financial advisors, a private 

concessionaire, and an industry association we spoke to said that the 

TIFIA program may be better suited to states with more urban populations 

and a greater need for large-scale projects. States with sponsors that 

have never sought TIFIA assistance tend to have a smaller portion of 

their population living in urban areas—that is, areas with a total 

population of 50,000 or more—than states with sponsors that have 

sought TIFIA assistance.53

Based on our survey, it is unlikely that many of the states that have not 

sought TIFIA assistance will seek such assistance in the future. Of the 16 

state DOTs from states that have never sought assistance that responded 

to our survey, only 1 indicated that it anticipated seeking TIFIA assistance 

in the next 5 years. In addition, most of these state DOTs indicated that 

changes to the program—such as making more funds available for the 

program or increasing the portion of project costs that TIFIA assistance 

could cover—would have somewhat or little to no increase on the 

likelihood that they would seek TIFIA assistance.

DOT officials said that to date, TIFIA projects 

have been located in states with large urban areas that have major 

transportation needs and can more easily charge tolls or generate other 

project revenues.

54

According to our interviews with DOT, project sponsors, advisors, and 

private concessionaires, overall demand for the TIFIA program is likely to 

continue. However, the magnitude of this demand is difficult to estimate 

because it is influenced by a variety of external factors like changes to 

interest rates, use of public-private partnerships, and state fiscal 

conditions.

 

53A metropolitan statistical area (metro area) is a geographic entity defined by the Office 

of Management and Budget (OMB) for use by federal statistical agencies in collecting, 

tabulating, and publishing federal statistics. A metro area contains a core urban area of 

50,000 or more population, and it includes the counties containing the core urban area, as 

well as any adjacent counties that have a high degree of social and economic integration 

(as measured by commuting to work) with the urban core.

54For all but the option to add separate eligibility requirements and terms to encourage 

rural infrastructure projects, half or more of the 16 state DOTs indicated the changes 

would have somewhat or little to no increase on the likelihood that they would seek TIFIA 

credit assistance. For this one other option, five state DOTs indicated that the change 

would significantly or greatly increase the likelihood that that they would seek TIFIA credit 

assistance in the future. See appendix III for survey results for this and other questions.

Future TIFIA Demand 

Exists, but Its Magnitude Is 

Difficult to Gauge
 

Page 36 GAO-12-641 Surface Transportation

Changes to the TIFIA interest rate relative to municipal debt interest rates 

could considerably affect the demand for TIFIA credit assistance. For the 

last 3 fiscal years, sponsors submitted LOIs for credit assistance totaling 

more than 10 times what the program’s current budget authority can 

support. Several legal and financial advisors we interviewed said that 

many project sponsors sought TIFIA in recent years because of 

depressed market conditions and attractive TIFIA interest rates, relative 

to interest rates on municipal debt, and a few of these advisors and one 

industry association said that demand for TIFIA will likely decrease if 

TIFIA interest rates become less attractive relative to municipal debt 

interest rates. The relatively low TIFIA interest rates made the program 

attractive to a greater number of sponsors, even those with access to 

other financing options. For example, one recent applicant we interviewed 

said that in the past, TIFIA was a more expensive finance option than 

issuing its own debt, and its interest in TIFIA during the last few years is 

primarily driven by the program’s relatively low interest rates. The 

applicant noted that should interest rates on TIFIA loans increase in the 

future, it will likely seek financing in the private capital markets.

Two other factors will influence the demand for TIFIA assistance.

• Greater use of public-private partnerships and other alternative project 

delivery approaches could result in a greater demand for TIFIA credit 

assistance. Many private concessionaires we interviewed said that 

TIFIA is an important financing tool for public-private partnerships. 

According to DOT officials, TIFIA credit assistance has been part of 

the financing package for most large-scale public-private partnership 

projects in the United States in recent years. In addition, some states, 

like Colorado and Virginia, have set up offices to facilitate publicprivate partnerships, so sponsors in such states may be more likely to 

use this approach given this support.

• State-specific conditions will also influence the demand for TIFIA 

assistance. As federal and state fuel taxes may not be a sustainable 

long-term source of transportation funding, state DOTs may make 

greater use of finance tools like TIFIA to deliver projects. We have 

previously reported that state and local governments face persistent 

and long-term fiscal pressures.55

 

55GAO, State and Local Governments’ Fiscal Outlook April 2011 Update, 

At the same time, estimates to 

GAO-11-495SP 

(Washington, D.C.: Apr. 6, 2011).
 

Page 37 GAO-12-641 Surface Transportation

repair, replace, or upgrade aging transportation infrastructure—as well 

as expand capacity to meet increased demand—top hundreds of 

billions of dollars. As a result, DOT anticipates more demand for the 

TIFIA program as states and localities look to leverage limited funds. 

One state we interviewed, for example, said that pay-as-you-go 

funding—a more traditional means of funding transportation 

infrastructure whereby a sponsor builds projects in phases or 

increments as funds are available—no longer keeps pace with 

infrastructure needs. Therefore, the state DOT has turned to TIFIA to 

help finance big, high-cost projects that need federal assistance to 

advance. Looking ahead, 15 of the 42 state DOTs that responded to 

our survey indicated that they have projects for which they will likely 

seek TIFIA in the next 5 years. Most of these state DOTs (13) have 

sought TIFIA assistance in the past and indicated that they are likely 

to seek TIFIA for 1-5 projects, while a few indicated they are likely to 

seek TIFIA for 6-10 projects.56

With the pending reauthorization of the surface transportation programs, 

the tight budgetary environment, and the increase in demand for TIFIA, 

government and industry officials have proffered options to modify the 

program. We reviewed surface transportation reauthorization bills—H.R. 

7, the American Energy and Infrastructure Jobs Act as reported by the 

House Committee on Transportation and Infrastructure, and S. 1813, 

Moving Ahead for Progress in the 21st Century Act (MAP-21) as adopted 

by the Senate, respectively—to identify proposed changes to the 

program. Based on our interviews with select project sponsors, financial 

and legal advisors, and others, as well as our survey of state DOTs and 

recent applicants, we identified several recurring options that have been 

proposed to modify the TIFA program. Some options require 

congressional action to implement, while others would require DOT to 

change program-level policies. Each option has advantages and 

disadvantages, and thus implementing any of these options would require 

policy trade-offs. Moreover, some options could affect the overall demand 

for the program and the sphere of projects that could apply for or benefit 

from TIFIA.

 

56Of the remaining 27 state DOTs, 21 state DOTs indicated that they have no projects for 

which they will likely seek TIFIA in the next 5 years, 5 state DOTs did not know, and 1 did 

not respond to that item.

Options Proposed to 

Modify the TIFIA 

Program 
 

Page 38 GAO-12-641 Surface Transportation

Table 8 provides a list of proposed options to modify the TIFIA program in 

the surface transportation reauthorization bills and the President’s fiscal 

year 2013 budget.

Table 8: Summary of Proposed Changes to the TIFIA Program 

Proposed change

Fiscal year 2013 

President’s 

budget

American Energy and 

Infrastructure Jobs Act of 

2012a MAP-21a

Increase authorized budget authority   

Increase funding for program administration   

Explicitly allow any project sponsor to pay subsidy cost 

Increase the portion of costs covered by TIFIA (from 33% to 49%)b  

Allow exceptions to the nonsubordination clause  

Remove all selection criteria  

Return to a rolling application process  

Allow program of projects to applyc  

Decrease the required total project costs required for rural 

infrastructure projects

 

Expand eligible costs (e.g., development phase and preconstruction 

costs)



Offer lower interest rates to rural infrastructure projects 

Require two credit ratings agencies to rate senior debt  

Require DOT to notify applicants on the status of their applications 

within mandated timeframes



Source: GAO analysis of proposals and legislation.

a

This analysis is based on H.R.7 The American Energy and Infrastructure Jobs Act of 2012 as 

reported to the House of Representatives by the House Committee on Transportation and 

Infrastructure (H.R. 7, 112th Cong. (Feb. 13, 2012)) and S. 1813 the Moving Ahead for Progress in 

the 21st Century Act (MAP-21) as adopted by the Senate (S.1813, 112th Cong. (Feb. 6, 2012)).

b

In MAP-21, TIFIA lines of credit may not exceed 33 percent of the anticipated eligible project costs. 

c

Currently only individual projects with dedicated revenues may apply for credit assistance through 

the TIFIA program. This proposed change would allow a set of related projects that will be phased in 

over a period of several years to apply and be approved under a single master credit agreement. As 

with individual projects, a program of projects would have to meet other statutory requirements before 

entering into a master credit agreement.

Two proposed changes, increasing the amount of authorized budget 

authority and allowing project sponsors to pay fees to contribute to the 

credit subsidy cost, could potentially allow the TIFIA program to provide 

more assistance to projects.

Increase the Number of 

Projects the TIFIA 

Program Can Support
 

Page 39 GAO-12-641 Surface Transportation

Increase amount of authorized budget authority. Members of Congress, 

DOT, and others have proposed increasing the amount of authorized 

budget authority to cover the subsidy costs for the TIFIA program. 

Proposals vary from increasing this amount to $1 billion, as in the 

reauthorization bills, to a smaller increase of $500 million proposed in 

DOT’s fiscal year 2013 budget. Congressional support for an increase in 

authorized budget authority for TIFIA is rooted in the program’s ability to 

leverage funds and stretch federal dollars further than a traditional grant 

program. These proposals represent significant increases to TIFIA’s 

current annual authorized budget authority of $122 million. Proposals to 

increase the amount of authorized budget authority for the TIFIA program 

occur during an austere federal budget environment. The Budget Control 

Act of 2011 places limits on discretionary spending for the next 10 fiscal 

years.57

Increasing the amount of authorized budget authority is strongly 

supported by recent applicants we surveyed as well as legal and financial 

advisors we interviewed. For example, 32 out of 36 recent applicants that 

responded to our survey strongly support expanding funding for the TIFIA 

program. An increase in funding would likely allow the program to provide 

more credit assistance, in terms of the number of projects receiving credit 

assistance or the amount of credit assistance provided to each project. 

An increase in funding could also allow the program to come closer to 

meeting the current demand for the program, which is more than 10 times 

what the current budget authority could support. However, DOT officials 

and other stakeholders told us that an increase in funding would need to 

be accompanied by an increase in administrative resources. According to 

project sponsors and other stakeholders, the TIFIA office has been very 

responsive and helpful, but a few said that response time has slowed in 

recent years. With increased funding, DOT would likely see an increase in 

the number of applications to review, credit agreements to negotiate, and 

credit agreements to monitor. DOT officials said they are prepared to 

adjust staffing levels in the event that Congress provides the TIFIA 

program with an increase in authorized budget authority as is proposed in 

the surface transportation reauthorization bills. Further, DOT officials said 

that an increase in TIFIA funding may require DOT to reexamine how it 

As a result, an increase in one area of discretionary spending, 

like the TIFIA program, requires a decrease in another area of 

discretionary spending.

 

57Pub. L. No. 112-25, 125 Stat. 240 (2011).
 

Page 40 GAO-12-641 Surface Transportation

manages the program—such as how it selects projects and negotiates 

credit agreements—and issue new regulations.

Allow sponsors to pay fees to contribute to the credit subsidy cost of 

assistance. H.R. 7 would mandate that DOT allow project sponsors to pay 

fees to reduce the credit subsidy cost of assistance if DOT funds run 

out.58

Among recent applicants we surveyed and project sponsors we 

interviewed, many supported this program change.

According to DOT, current law allows but does not require DOT to 

let the approved sponsor pay a fee to reduce the credit subsidy cost of 

the project in the event that there is insufficient budget authority to fund 

credit assistance for a selected TIFIA project. Over the life of the TIFIA 

program, three project sponsors have paid fees to reduce the credit 

subsidy cost of their TIFIA assistance; all three cases occurred after the 

program became oversubscribed in fiscal year 2008.

59 Supporters of this 

option said that given the high demand for TIFIA credit assistance and 

limited budget authority, allowing project sponsors to pay fees to cover 

the credit subsidy cost when DOT’s budget authority runs out would allow 

more eligible projects to be built and reduce the oversubscription of the 

program. However, DOT previously decided against instituting this option 

more broadly through a pilot program in 2010. DOT officials told us that 

while allowing project sponsors to pay fees to cover the credit subsidy 

cost provides flexibility, especially when demand outpaces budget 

authority, it complicates the negotiation of credit agreements. While DOT 

would have to follow its subsidy estimation methodology to determine a 

project sponsor’s fee, the project sponsor may want to negotiate the fee. 

Project sponsors we interviewed said that for this option to work, DOT 

would need to provide them with more information on how the credit 

subsidy cost is calculated. Under FCRA, OMB is responsible for subsidy 

cost estimates. OMB may delegate this authority to the agency providing 

credit assistance, but the delegation should be based on the written 

guidelines or criteria developed by OMB.60

 

58As noted earlier, budget authority is used to pay the credit subsidy cost and 

administrative expenses of TIFIA credit assistance. The credit subsidy cost, as required by 

the FCRA, is based on the estimated long-term cost to the government calculated on a net 

present value basis, excluding administrative costs. 

OMB retains the responsibility 

59Nineteen of the 36 recent applicants that responded to our survey supported allowing 

project sponsors to contribute to the subsidy costs of assistance.

602 U.S.C. § 661b.
 

Page 41 GAO-12-641 Surface Transportation

and final approval of subsidy cost estimates. Given these complexities, 

this option may be difficult to implement, though it could be done relatively 

quickly. In addition, to the extent that DOT underestimates the initial 

subsidy costs and does not collect enough fees from borrowers, 

taxpayers will ultimately have to pay for any shortfalls.61

Allowing project sponsors to pay fees to cover the credit subsidy cost 

could remove the congressional limit on the size of the TIFIA program 

and thus increase the federal government’s exposure. According to DOT, 

SAFETEA-LU removed the cap on the amount of credit assistance the 

TIFIA program could provide each year, so the only limit on the TIFIA 

program’s size currently is the budget authority provided by Congress. 

DOT officials said that allowing project sponsors to pay the subsidy cost 

could allow the program to grow larger than Congress authorized through 

budget authority. DOT officials told us that for other DOT credit programs, 

such as the Railroad Rehabilitation and Improvement Financing (RRIF) 

program, project sponsors are required to pay fees towards the credit 

subsidies for loans because they do not have budget authority for this 

purpose, but the RRIF program has a statutory limit on total outstanding 

credit assistance.62 When Congress imposes such a limit, it can control 

the government’s exposure to financial losses. Moreover, if this proposed 

change were adopted in combination with other proposed changes to the 

program—requiring the Secretary to approve all qualifying applications—

the total size and exposure of the TIFIA program could expand 

dramatically.

Another option in the reauthorization bills would increase the portion of 

eligible project costs TIFIA assistance could cover from 33 percent to 49 

percent.63

 

61Under FCRA, DOT is required to update, or reestimate, the subsidy costs to reflect 

actual loan performance and changes in expected future loan performance. Shortfalls 

identified in annual reestimates are funded through a permanent indefinite appropriation 

and are not subject to the annual appropriations process.

Among think tank and industry group proposals, project 

sponsors, and other stakeholders we interviewed, support for this option 

6245 U.S.C. § 822(d).

63S. 1813 raises the portion of project costs TIFIA loans and loan guarantees may cover 

but retains the 33 percent limit for lines of credit. H.R. 7 increases the portion of project 

costs that may be covered by loans, loan guarantees, and lines of credit to 49 percent. 

Increase the Portion of 

Costs Covered by TIFIA
 

Page 42 GAO-12-641 Surface Transportation

varied. Those that support increasing the TIFIA share said it would 

reduce the burden on sponsors to find nonfederal sources of debt and 

allow them to borrow more funds on favorable terms. For example, 

several project sponsors said that for very large infrastructure projects, 

finding a combination of federal, state, and private financing can be 

difficult. Those that do not support this option expressed concern that it 

would reduce the incentive to find private and other nonfederal financing 

and potentially reduce market discipline that comes from other lenders to 

projects. For example, several stakeholders we interviewed said that 

increasing the percentage of total project costs that TIFIA can finance 

could result in project sponsors substituting TIFIA credit assistance for 

private debt or private equity investments. Others expressed concern that 

increasing the share of costs TIFIA covers would potentially reduce the 

availability of TIFIA assistance, especially if Congress does not increase 

budget authority for the TIFIA program.

Moreover, increasing the portion of costs covered by TIFIA could 

decrease the program’s ability to achieve one of its key goals—leveraging 

federal funds. DOT officials told us that changing the statute to increase 

the TIFIA share could reduce the number of projects supported (for a 

given amount of budget authority) and reduce the leveraging of federal 

funds as project sponsors seek more financing through TIFIA rather than 

other sources. Currently, DOT estimates that each $10 million in budget 

authority can provide up to $100 million in TIFIA credit assistance and 

leverage $300 million in transportation infrastructure investment. If the 

limit on TIFIA assistance were increased to 49 percent, this same amount 

of budget authority could leverage about $200 million in transportation 

infrastructure investment.64 This change could also increase the exposure 

of the federal government to the risk of loan defaults if the size of the 

credit assistance for each project increases.

The reauthorization bills propose exceptions to the nonsubordination 

clause. For example, the Senate reauthorization bill, S. 1813, allows 

exceptions to the nonsubordination clause for certain types of 

 

64This estimate assumes that projects receive the maximum amount of credit assistance 

(either 33 or 49 percent of total project costs) and uses DOT’s general rule of thumb that 

$1 in budget authority can be leveraged to provide $10 in credit assistance. 

Eliminate or Waive the 

Nonsubordination Clause
 

Page 43 GAO-12-641 Surface Transportation

borrowers.65

While there is general support for allowing waivers to or eliminating the 

nonsubordination clause, many of those we interviewed indicated that the 

clause does not pose an insurmountable challenge to negotiating a credit 

agreement, and that it provides needed protection for the federal 

government. Eliminating or waiving the nonsubordination clause could 

address some issues identified by financial advisors and credit ratings 

agencies we interviewed. For example, the TIFIA nonsubordination 

clause can be difficult to integrate with existing terms for outstanding 

bonds secured by the same revenue stream. If the nonsubordination 

clause is triggered due to project bankruptcy or insolvency, project 

sponsors must make special arrangements to ensure this bond covenant 

is not violated. However, despite these issues, many project sponsors 

and legal and financial advisors said that the nonsubordination clause 

provides an important protection to taxpayers. Moreover, few if any could 

point to instances where it prevented the closing of a credit agreement.

Specifically, public agencies that are financing ongoing 

capital programs and have senior bonds outstanding could be exempt 

from the nonsubordination clause if (1) the outstanding bonds are rated A 

or higher, (2) the TIFIA assistance and outstanding bonds are secured by 

revenues not affected by project performance (e.g., sales tax), and (3) the 

TIFIA assistance is 33 percent or less of the total project costs. Among 

recent applicants we surveyed, 22 out of 36 strongly or moderately 

support allowing waivers to the nonsubordination clause. Several legal 

and financial advisors and other project sponsors we interviewed support 

removing the nonsubordination clause altogether.

DOT officials said that the nonsubordination clause helps protect the 

federal government and taxpayers. For the TIFIA program, the 

nonsubordination clause is used to lessen the risk to the federal 

government.66

 

65TIFIA credit assistance is designed with patient repayment terms to encourage private 

debt as part of the total financing package. To do this, TIFIA assistance can be 

subordinate to other debt, meaning that this other (senior) debt may receive project 

revenue ahead of DOT. However, TIFIA credit agreements include, pursuant to the TIFIA 

statute, a nonsubordination clause (also known as the springing lien), which states that in 

the event of a borrower’s bankruptcy, insolvency, or liquidation, DOT’s claims on project 

revenues will not be subordinate to the claims of other creditors. 

While the nonsubordination clause can cause issues for 

66OMB Circular A-129, Appendix B, II.3.c. (2) says that to protect the government’s 

interest, the government’s claims on assets should not be subordinated to the claim of 

other lenders in the case of a borrower’s default.
 

Page 44 GAO-12-641 Surface Transportation

borrowers, DOT officials said that they can work with borrowers to try to 

address financial difficulties before they must legally invoke the clause. 

For example, DOT can defer invoking the nonsubordination clause for up 

to a year after a missed payment, but to date no sponsor has missed a 

payment. In addition, DOT officials told us that removing the 

nonsubordination clause would increase the federal government’s risk 

because it would lower the likelihood of recovering funds. According to 

DOT officials, the nonsubordination clause facilitated its involvement in 

bankruptcy discussions for the South Bay Expressway and, as a result, 

DOT expects to recover, through the restructuring of the project’s debt 

and assumption of the loan by SANDAG, up to 100 percent of the original 

loan value. Further, DOT officials said that without the nonsubordination 

clause, the credit subsidy cost required for a project would increase 

significantly, because of the increased risk to the federal government, and 

thus reduce the amount of assistance the TIFIA program could provide.

Modify selection criteria. Both the reauthorization bills propose eliminating 

TIFIA’s selection criteria and adding to the current eligibility 

requirements.67 H.R. 7 would expand eligibility requirements to include 

creditworthiness, regional significance, beneficial effects, and project 

readiness.68

Twenty-three of 36 recent applicants that responded to our survey 

support modifying the TIFIA selection criteria, but when asked how the 

criteria should be modified, these respondents most often indicated that 

they want more transparency in how selection criteria are applied.

S. 1813 adds creditworthiness to the program’s current 

eligibility requirements.

69

 

67The TIFIA program has five statutory eligibility requirements for projects: (1) inclusion in 

transportation plans and programs; (2) application submitted by state or local government, 

public authority, or public-private partnership; (3) project costs of equal to or greater than 

$50 million or $15 million for intelligent transportation system projects; (4) dedicated 

revenue sources; and (5) public sponsorship of private entities.

68In H.R. 7, the proposed regional significance eligibility requirement states that the 

project shall be regionally significant or otherwise significantly enhance the national 

transportation system. Currently, one of the statutory selection criteria is national or 

regional significance, which is 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. 

69Sixteen respondents provided an open-ended response elaborating on that question, 

with 6 indicating that they wanted more transparency.

Modify the Selection 

Process
 

Page 45 GAO-12-641 Surface Transportation

Project sponsors and advisors we interviewed said they would prefer 

more transparency in the evaluation of LOIs and a better explanation of 

how selection criteria are applied. Several project sponsors and advisors 

expressed concern about the definitions of some criteria—in particular, 

the livability and sustainability clarifications—as well as how the criteria 

are applied to LOIs.

However, altering or eliminating the selection criteria could modify the 

nature of the TIFIA program, changing it from a discretionary program 

where select projects receive assistance to more of an eligibility-based 

program where all eligible, creditworthy projects can receive assistance. 

DOT supports retaining the statutory criteria to use in selecting projects to 

receive credit assistance. In this way, the TIFIA program would continue 

to provide assistance to projects that meet DOT’s national transportation 

goals. DOT officials added that just because a project is creditworthy 

does not ensure that it will have positive transportation benefits. Further, 

modifying or eliminating the selection criteria could be implemented in 

several ways, each entailing different trade-offs. For example, one of the 

new eligibility requirements in H.R. 7 is “beneficial effects,” which 

collapses some existing statutory criteria and program goals—specifically, 

fostering public-private partnerships, attracting private debt or equity 

investment, enabling a project to proceed faster than without the credit 

assistance, and reducing federal grant assistance—into one category. 

While fostering public-private partnerships, for example, is one of the 

selection criteria for the current TIFIA program, projects without a publicprivate component are still eligible to apply. Depending on how the 

beneficial effects eligibility requirement, if enacted, is defined and 

implemented, it could render some projects—including some that recently 

received credit assistance—ineligible.

Return to an open application cycle. The reauthorization bills propose 

returning to an open application process and prohibiting a fixed-date 

solicitation. Several project sponsors as well as financial and legal 

advisors we interviewed support a return to an open application cycle. 

Some project sponsors said this would allow sponsors to seek TIFIA 

credit assistance according to a project’s schedule, rather than trying to 

alter this schedule to fit the annual TIFIA solicitation. One state DOT said 

that the projects applying for TIFIA credit assistance are very complex 

and must manage multiple timelines for various financing stakeholders, 

which is further complicated by TIFIA’s once-a-year solicitation. A few 

financial advisors and one project sponsor we spoke with also indicated 

that increasing the number of solicitations per year would be an 

improvement if DOT did not return to an open application cycle. 
 

Page 46 GAO-12-641 Surface Transportation

Moreover, due to the fixed-date solicitation process, some project 

sponsors may be submitting LOIs for projects not yet ready to use TIFIA 

assistance. DOT previously reported that based on its use of an annual, 

fixed-date application process from 1999 to 2001, project sponsors may 

have been applying for assistance prematurely in response to the limited 

application window. DOT switched to an open application process to 

allow sponsors to apply based on a project’s schedule. For example, one 

recent applicant told us it submitted an LOI early, as it planned and 

obtained permits for the project, to familiarize DOT with the project and 

improve its chances of obtaining TIFIA credit assistance in the next few 

years. DOT officials told us the fixed-date application cycle is currently a 

necessity because of limited resources; however, if they had more funds 

to pay the credit subsidy costs for credit assistance, they would prefer to 

use an open application system that allows a sponsor to seek TIFIA when 

it best fits a project’s schedule.

Importantly, returning to an open application cycle removes the 

competitive nature of the TIFIA program. If the TIFIA program’s 

authorized budget authority remains at current levels or does not meet 

total demand, a project’s order in line would determine whether it receives 

assistance, not its relative merit. Further, if this option were adopted, DOT 

would have to reconsider its current two-step selection process and 

determine the extent to which it has the discretion to distribute assistance 

based on geographic location, project readiness, or other factors not 

included in the statutory eligibility requirements.

Until recently, the innovative credit assistance offered by the TIFIA 

program to finance the construction of large-scale surface transportation 

projects was underutilized. However, demand for the program surged, in 

part because of the tightening of commercial credit markets and low 

federal treasury interest rates. TIFIA is increasingly becoming a more 

recognized approach for filling funding and financing gaps for complex 

transportation projects that can help to mitigate mobility and other 

transportation issues in many congested urban areas in the United 

States. DOT, project sponsors, legal and financial advisors, and other 

stakeholders in the transportation industry have expressed strong support 

for the program, and Members of Congress have recently developed 

several reauthorization proposals aimed at greatly increasing the 

authorized budget authority for the program and modifying other aspects 

of the program to make it more accessible. DOT has taken some steps to 

monitor and assess the program through its project oversight and credit 

monitoring of individual TIFIA credit agreements and, early in the 

Conclusions 
 

Page 47 GAO-12-641 Surface Transportation

program’s tenure, by tracking and reporting on the private investment and 

leveraging effect of TIFIA to gauge its progress in meeting program goals. 

However, since that time, DOT has not publicly reported on these or other 

measures to assess the program as a whole. Without other measures in 

place going forward, Congress will not have the complete and aggregated 

data needed to make informed decisions about the program’s size and 

structure.

Additionally, in response to increased demand for the program and 

multiple extensions of the surface transportation reauthorization over the 

last 3 years, DOT has had to adapt its process for selecting projects, 

focusing its review of projects on applicants’ LOIs and selecting projects 

based on their relative merits. The new process, whereby DOT balances 

a limited program budget authority with selecting projects that are most 

consistent with the statutory selection criteria, is a work in progress. In 

response to feedback from applicants and lessons from this and other 

discretionary programs, DOT has taken steps to make the TIFIA selection 

process transparent by publicizing the selection criteria and other factors 

that contribute to project selection and providing feedback to 

unsuccessful applicants, and many think these steps have been useful. 

However, many recent applicants and financial and legal advisors that 

assist applicants in developing projects still feel that the process lacks 

transparency, making it difficult for them to advance well-developed LOIs. 

While federal agencies rarely publicly disclose the reasons for their 

selection decisions in a competitive review process, the considerable 

demand for TIFIA and changes to the selection process suggest that 

publicly disclosing additional information about how selection decisions 

are made would better enable potential applicants to identify how DOT is 

using the statutory criteria to select projects and develop effective LOIs.

To improve the implementation of the TIFIA program and enable 

Congress and DOT to better assess program performance, we 

recommend that the Secretary of Transportation further develop and 

define performance measures to monitor and evaluate progress toward 

meeting the program’s goals and objectives.

To ensure that future project selections in the TIFIA program are 

transparent to Congress, applicants, and the public, we recommend that 

the Secretary of Transportation better disclose information, through 

notices of funding availability or other program guidance, regarding how 

DOT evaluates and selects projects.

Recommendations for 

Executive Action
 

Page 48 GAO-12-641 Surface Transportation

We provided a draft of this report to DOT for review and comment. In 

response, DOT said it would carefully consider the results of our review

but did not take a position on whether it agreed with our 

recommendations. DOT told us that it objectively evaluates applications 

for TIFIA participation using comprehensive, data-driven processes to 

identify the most highly qualified projects, and that DOT encourages 

strong communication with applicants and offers transparent discussion 

of applicants’ submittals to ensure they are fully informed of the basis for 

program participation decisions. Further, the agency stated that it is 

continuously reevaluating its processes to ensure they are as effective as 

possible. The agency also provided technical comments, which we 

incorporated, as appropriate.

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Secretary of 

Transportation, the Administrator of the Federal Highway Administration, 

and appropriate congressional committees. In addition, the report will be 

available at no charge on the GAO website at http://www.gao.gov. 

If you have any questions about this report, please contact me at (202) 

512-2834 or flemings@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. Major contributors to this report are listed in appendix IV.

Susan Fleming

Director, Physical Infrastructure Issues

Agency Comments
Appendix I: Scope and Methodology

Page 49 GAO-12-641 Surface Transportation

To address our objectives, we reviewed Department of Transportation 

(DOT) program guidance for the Transportation Infrastructure Finance 

and Innovation Act (TIFIA) program, relevant legislation and regulations, 

and DOT’s biennial reports to Congress on the TIFIA program. To 

describe the characteristics and results of the TIFIA program, we 

analyzed DOT data on past letters of interest (LOI) and applications for 

assistance to describe the projects that sought credit assistance. We also 

analyzed data on the projects receiving TIFIA credit agreements through 

April 2012 to describe these projects, including mode of transport, total 

cost, amount of TIFIA assistance, amount of private investment, and 

geographic location. For mode of transport, we used DOT’s available 

characterizations for all projects with credit agreements and for LOIs for 

fiscal year 2011, while for the remaining LOIs we determined the mode 

for projects by applying DOT’s characterization scheme. When 

considering the amount of private investment, we followed DOT’s 

convention established in its 2002 report to Congress on TIFIA. Namely, 

(1) the project must feature investor-held debt or equity and (2) the 

investment return must be derived from project-generated revenues or 

other revenues levied specifically to support the project. We only included 

active credit agreements—those for which sponsors had not repaid or 

refinanced their credit agreements—as we did not have complete 

information on the funding sources for all the retired credit agreements. 

We assessed the reliability of the data by reviewing DOT’s data 

documentation, interviewing knowledgeable officials, and conducting 

independent validation through use of our web survey. We found the data 

to be sufficiently reliable for our purposes. In addition, we interviewed 

DOT officials to learn about the program’s goals and the tools DOT uses 

or plans to use to track and evaluate the performance of credit 

agreements and the program.

To describe and assess DOT’s process for evaluating and selecting 

projects to invite to apply in fiscal years 2010 and 2011, we examined 

legislation, regulations, and agency guidance, including notices of funding 

availability, to describe the statutory and regulatory criteria DOT uses to 

select projects for credit assistance. We also analyzed and summarized 

data and documents provided by DOT—including scores assigned and 

reviewers’ assessments of project letters of interest—and interviewed 

DOT officials to describe the decision-making processes used by the 

agency to select projects for credit assistance. We focused on federal 

fiscal years 2010 and 2011, the years for which DOT used a fixed-date 

competitive solicitation for projects after demand for credit assistance 

exceeded the program’s budget authority and for which the evaluation 

and selection processes were complete. To assess DOT’s process for 

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 50 GAO-12-641 Surface Transportation

selecting projects, we compared DOT’s process with statute, regulations, 

and guidance; GAO’s Standards for Internal Control in the Federal 

Government; and, as appropriate, past GAO work on federal credit 

assistance and grant programs.

In addition, we gathered and analyzed data on state-level characteristics, 

such as federal highway apportionments and whether states have 

legislative restrictions on borrowing, to determine whether such 

characteristics were correlated to past demand for the TIFIA program. To 

explore the potential future demand for TIFIA credit assistance, we 

analyzed data from DOT on interest in the program in the last 2 fiscal 

years. To identify the options proposed to modify the TIFIA program, we 

reviewed reauthorization proposals for surface transportation programs 

from congressional committees, DOT, and industry and research 

organizations.

We also interviewed a variety of stakeholders to inform our objectives. 

We interviewed select current and potential project sponsors (such as 

state DOTs and transit agencies) to learn about their experiences with the 

TIFIA selection process and the factors that influenced whether they 

sought TIFIA assistance. In particular, we interviewed project sponsors in 

the 5 states—California, Colorado, Florida, Virginia, and Texas—that 

constitute the majority of TIFIA awards to date, as well as a few states 

that have had little or no experience with the program—North Carolina 

and Iowa—that varied in terms of geographic location and legislative 

authority to borrow and use public-private partnerships. In each of these 

states, we interviewed the state DOT and all project sponsors that 

received TIFIA credit assistance as of April 1, 2012. In addition, we 

interviewed legal and financial advisors that help sponsors apply for TIFIA 

credit assistance and private concessionaires that invest in large 

infrastructure projects to learn about their experiences with the TIFIA 

program, including the selection process. We also interviewed credit 

rating agencies and industry associations such as the American 

Association of State Highway and Transportation Officials (AASHTO) and 

the American Road and Transportation Builders Association (ARTBA), to 

learn about their experiences with the TIFIA program and to gain 

additional information about the types of projects that have sought or 

received TIFIA credit assistance. In our interviews, we also asked about 

the factors that would influence future demand for the program as well as 

options to modify the program and the potential trade-offs of 

implementing such changes to the TIFIA program. Table 9 lists the 

organizations we interviewed.
Appendix I: Scope and Methodology

Page 51 GAO-12-641 Surface Transportation

Table 9: List of Interviewees—Sponsors, Financial and Legal Advisors, All Others 

AASHTO 

ARTBA 

Nossaman LLP

White and Case LLP 

Jeffrey Parker and Associates

KPMG

Mercator Advisors

Public Financial Management

Cintra

Macquarie

Meridiam

Transurban

Miami Access Tunnel LLC

ACS Infrastructure

Fitch Ratings

Moody’s 

Standard and Poor’s

California DOT

Central Texas Regional Mobility Authority

Colorado DOT

Denver Union Station

Florida DOT

Iowa DOT

Los Angeles County Metropolitan Transportation Authority

North Carolina DOT

North Texas Tollway Authority

Denver Regional Transportation District

Riverside County Transportation Commission

San Diego Association of Governments

Southern California Association of Governments

Texas DOT

Transbay Joint Powers Authority

Virginia DOT

Source: GAO.

In order to gather opinions of the TIFIA program from the users’ 

standpoint, we designed and administered a web-based survey. The 
Appendix I: Scope and Methodology

Page 52 GAO-12-641 Surface Transportation

survey was administered to the state DOTs in all 50 states, the District of 

Columbia, and Puerto Rico, as well as to all recent applicants that 

submitted an LOI to the TIFIA program in fiscal years 2010 and 2011.1

• factors contributing to organizations’ decision to seek, or not to seek, 

TIFIA assistance;

The survey population consisted of four unique groups of respondents: 

state DOTs from states from which no sponsor had ever applied to the 

TIFIA program; state DOTs from states from which a sponsor had applied 

to the TIFIA program but not in recent years—that is, 2010 and 2011; 

state DOTs who had recently applied to the TIFIA program; and other, 

non-state DOT organizations who had recently applied to the TIFIA 

program. Survey respondents were presented with different questions in 

the survey depending on their past experience with the TIFIA program, 

and whether or not they were from a state DOT. In general, the survey 

topics included the following:

• satisfaction with the process for submitting an LOI to the TIFIA 

program;

• opinions on proposed modifications to the TIFIA program;

• potential future demand for the TIFIA program; and

• characteristics of the state DOTs.

In developing the survey, we took steps to ensure the accuracy and 

reliability of responses. We cognitively tested the survey with 

representatives from 5 state DOTs and one other organization included in 

the respondent population to ensure that questions were clear, 

comprehensive, and unbiased, and to minimize the burden the survey 

placed on respondents. On the basis of feedback from the six pretests we 

conducted, we made changes to the content and format of some survey 

questions. We obtained contact information for the survey recipients from 

two sources. First, we obtained contact information for the state DOTs 

from AASHTO, specifically, from its Standing Committee on Finance and 

Administration. Second, we obtained contact information for recent 

 

1

These two groups were not mutually exclusive, in that some state DOTs are also recent 

TIFIA applicants. For the purposes of this report, our definition of state DOTs includes 

those from the 50 states, the District of Columbia, and Puerto Rico.
Appendix I: Scope and Methodology 

Page 53 GAO-12-641 Surface Transportation 

applicants from DOT. We also contacted all of the survey recipients in 

advance, by e-mail, to ensure that we had identified the correct 

respondents and to request their completion of the questionnaire. 

The survey was administered between January 25, 2012, and April 4, 

2012. We distributed a link for the survey to the 83 organizations by email and also subsequently e-mailed and telephoned nonrespondents to 

encourage a higher response rate. Because this was not a sample 

survey, there are no sampling errors. However, the practical difficulties of 

conducting any survey may introduce errors, commonly referred to as 

nonsampling errors. For example, difficulties in how a particular question 

is interpreted, in the sources of information that are available to 

respondents, or in how the data were analyzed can introduce unwanted 

variability into the survey results. We took steps in the development of the 

questionnaire, the data collection, and the data analysis to minimize these 

nonsampling errors. Most of the survey questions included close-ended 

response categories; however, a few survey questions asked 

respondents to provide a written response to an open-ended question. 

When analyzing written responses, one analyst read the responses and 

assigned them to different categories, while a second analyst reviewed 

this categorization. We received completed surveys from 66 respondents 

for an overall response rate of 80 percent. The survey response rates for 

the four groups of respondents are presented in table 10 below: 

Table 10: List of Survey Recipients and Respondents, by Type of Organization 

Type of recipient 

Number of 

responses 

Total number 

of recipients

Response 

rate

State departments of transportation 42 52 81%

 No TIFIA experience 16 18 89

 No recent TIFIA experience 14 19 74

 Recent applicant/TIFIA experience 12 15 80

Other organizations with recent 

TIFIA experience 24 31 77

All respondents 66 83 80

Source: GAO. 

We conducted this performance audit from July 2011 to June 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 
Appendix I: Scope and Methodology

Page 54 GAO-12-641 Surface Transportation

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Projects Receiving TIFIA Credit 

Assistance

Page 55 GAO-12-641 Surface Transportation

DOT has awarded 27 TIFIA credit agreements to projects through 26 

loans and one loan guarantee. Table 11 provides information on each 

credit agreement, including the name and location of the project receiving 

assistance, the amount of credit assistance, and the status of the credit 

agreement.

Table 11: Projects with TIFIA Credit Agreements

Dollars in millions

Active credit agreements 

Project (location) Mode

Total project 

cost

Type of 

assistance

Amount of 

assistance

Primary 

revenue pledge

Status of 

assistance

Miami Intermodal Center 

(Miami, FL)a Intermodal $1,664 Direct loan $270 User chargesb Drawing funds

Central Texas Turnpike System 

(Austin, TX)

Highway 3,278 Direct loan 900 User charges Repaying partial 

interest

South Bay Expressway-formerly 

SR 125 South (San Diego 

County, CA)c

Highway 658 Direct loan 140 User charges Repaying 

principal and 

interest

183-A Turnpike (Austin, TX) Highway 305 Direct loan 66 User charges Repaying 

principal and 

interest

LA 1 Improvements (Leeville, 

LA) 

Highway 372 Direct loan 66 User charges Deferring interest

Interlink-formerly Warwick 

Intermodal Station (Warwick, RI)

Intermodal 267 Direct loan 42 User charges Repaying interest

Pocahontas Parkway/Richmond 

Airport Connector (Richmond, 

VA) 

Highway 597 Direct loan 150 User charges Deferring interest

I-495 Capital Beltway HOT 

Lanes (Fairfax County, VA)

Highway 1,938 Direct loan 589 User charges Drawing funds

SH 130 Segments 5-6 (Austin, 

TX)

Highway 1,328 Direct loan 430 User charges Drawing funds

Intercounty Connector 

(Montgomery and Prince 

George’s County, MD)

Highway 2,566 Direct loan 516 User charges Drawing funds

I-595 Corridor Roadway 

Improvements (Broward County, 

FL)

Highway 1,834 Direct loan 603 Availability 

paymentsd Drawing funds

Triangle Expressway (RaleighDurham, NC)Highway 1,172 Direct loan 386.662 User charges Drawing funds

Port of Miami Tunnel (Miami, 

FL)

Highway 1,073 Direct loan 341.037 Availability 

payments

Drawing funds

North Tarrant Express (DallasFort Worth, TX)Highway 2,047 Direct loan 650 User charges Drawing funds

Appendix II: Projects Receiving TIFIA Credit 

Assistance
Appendix II: Projects Receiving TIFIA Credit 

Assistance

Page 56 GAO-12-641 Surface Transportation

Dollars in millions

Active credit agreements 

Project (location) Mode

Total project 

cost

Type of 

assistance

Amount of 

assistance

Primary 

revenue pledge

Status of 

assistance

Transbay Transit Center (San 

Francisco, CA)

Transit 1,189 Direct loan 171 Real estate tax 

increment

Not yet drawing 

funds

IH 635 Managed Lanes (DallasFort Worth, TX)Highway 2,615 Direct loan 850 User charges Disbursing

Denver Union Station Project 

(Denver, CO)

Intermodal 519 Direct loan 145.6 Sales tax/real 

estate tax 

increment

Drawing funds 

and repaying 

partial interest

President George Bush 

Turnpike Western Extension-SH 

161 (Dallas, TX)

Highway 1,268 Direct loan 418.4 User charges Not yet drawing 

funds

U.S. 36 Managed Lanes/Bus 

Rapid Transit Project: Segments 

1 and 2 (Denver, CO)

Highway 307 Direct loan 54 User charges Not yet drawing 

funds

Eagle Project (Denver, CO) Transit 2,047 Direct loan 280 Tax revenues Not yet drawing 

funds

Downtown Tunnel/Midtown 

Tunnel/MLK Extension 

(Hampton Roads, VA

Highway 2,089 Direct loan 422 User charges Drawing funds

Total $29,524 $7,490.70 

Retired credit agreements 

Washington Metro Capital 

Improvement Program 

(Washington, DC)

Transit 2,324 Guarantee 600 Interjurisdictional 

funding 

agreements

Retired

Tren Urbano (San Juan, PR) Transit 2,250 Direct loan 300 Tax revenues Retired

Cooper River Bridge 

Replacement (Charleston, SC)

Highway 675 Direct loan 215 Infrastructure 

bank loan 

repayments

Retired

Staten Island Ferries and 

Terminals (New York City, NY)

Transit 482 Direct loan 159.225 Tobacco 

settlement 

revenues

Retired

Reno Transportation Rail 

Access Corridor-ReTRAC 

(Reno, NV)

Intermodal 280 Direct loan 50.5 Room and sales 

tax

Retired

Miami Intermodal Center 

(Miami, FL)

Intermodal e Direct loan 269.076 Tax revenues Retired

Total $6,011 $1,593.80 

Total all agreements $35,535 $9,084.50 

Source: GAO analysis of DOT data as of April 16, 2012.

a

This loan, originally for $170 million in credit assistance, was closed on April 25, 2005. An additional 

$100 million was requested and approved, and the loan was amended on August 1, 2007.
Appendix II: Projects Receiving TIFIA Credit 

Assistance

Page 57 GAO-12-641 Surface Transportation

b

User charges include tolls and rental car customer facility charges.

c

Under the plan of reorganization approved by the bankruptcy court in April 2011, the restructured 

principal amount of the loan is $93 million; see project fact sheet for details

d

An availability payment is a payment made by the public sponsor of a project to the private 

concessionaire for its responsibility to design, construct, operate, or maintain a project. The payment 

is based on particular project milestones or facility performance standards, irrespective of usage of 

the asset, such as ridership or toll revenue.

e

Project cost included in first listing of the Miami Intermodal Center.
Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Page 58 GAO-12-641 Surface Transportation

We distributed a survey to all state departments of transportation,1 as well 

as the organizations who have submitted a letter of interest for TIFIA 

assistance during federal fiscal years 2010-2011, to gain insight into their 

experience with and opinions regarding the TIFIA program. In total the 

survey went to 83 recipients, and we received completed surveys from 66 

of 83 recipients for a response rate of 80 percent. Tables 12-28 below 

show responses to questions from the survey related to the TIFIA 

program and project finance. We also provided examples and definitions 

for certain terms used in the questions, which are reprinted below. Survey 

respondents were presented with different questions in the survey 

depending on their past experience with the TIFIA program, and whether 

or not they were from a state DOT. For example, we only asked 

organizations that submitted an LOI in 2010 or 2011 (recent applicants) 

about their experience with the TIFIA evaluation and selection process. 

For more information about our methodology for designing and 

distributing the survey, see appendix I.

Table 12: How Important or Unimportant Were Each of the Following Factor(s) in Your Organization’s Decision to Seek TIFIA 

Credit Assistance for Projects in Federal Fiscal Year 2010 or 2011?

Very 

important

Somewhat 

important

Neither 

important nor

unimportant

Somewhat 

unimportant

Very 

unimportant

Don’t 

know/not 

applicable Total

Availability of user fees to repay TIFIA 

credit assistance 20 7 2 - 4 3 36

Availability of other dedicated revenue 

stream(s) to repay TIFIA credit 

assistance 12 7 5 - 7 5 36

Use of TIFIA to attract private equity 12 3 5 1 10 5 36

Low interest rate of TIFIA credit 

assistance relative to other financing 

options 28 6 - 1 - 1 36

 

1

For the purposes of this report, our definition of state DOTs includes those from 

the 50 states, the District of Columbia, and Puerto Rico. 

Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Responses to Questions 

for Recent Applicants to 

the TIFIA program
Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Page 59 GAO-12-641 Surface Transportation

Very 

important

Somewhat 

important

Neither 

important nor

unimportant

Somewhat 

unimportant

Very 

unimportant

Don’t 

know/not 

applicable Total

Ability of TIFIA credit assistance to serve 

as subordinate debt in project finance 

plan 26 6 - 1 2 1 36

Repayment terms and options offered by 

TIFIA credit assistance 30 4 - - - 2 36

Political support given to use of 

alternative project delivery and financing 

tools 10 13 9 2 2 - 36

Prior experience using alternative 

financing and delivery tools to implement 

projects 4 10 13 - 6 3 36

Lack of other funding options 13 13 5 2 2 1 36

Ability to accelerate delivery of project 

through use of TIFIA credit assistance 12 15 4 1 2 1 35

Source: GAO.

Note: We received completed surveys from 36 of 46 recent applicants (78 percent). Totals may not 

add to 36 because respondents did not all answer every question.

Table 13: How Satisfied or Dissatisfied Were You with Each of the Following Aspects of the Process for Submitting a Letter of

Interest (LOI) for the TIFIA Program in Federal Fiscal Year 2010 or 2011?

Very 

satisfied

Somewhat 

satisfied

Neither 

satisfied nor 

dissatisfied

Somewhat 

dissatisfied

Very 

dissatisfied

Don’t 

know/not 

applicable Total

Explanation of the application process in 

DOT’s Notice of Funding Availability 

(NOFA) 15 12 4 3 1 1 36

Clarity of DOT’s selection criteria in the 

NOFA 6 15 3 9 2 1 36

Ability to provide sufficient project details 

in LOI format 12 16 5 1 - 1 35

Length of time it took from submission of 

LOI to announcement of projects invited to 

apply 3 15 4 7 5 2 36

Transparency of DOT’s project selection 

decisions 4 3 13 5 8 3 36

Technical assistance on LOI provided by 

TIFIA office 8 8 10 2 1 7 36

Source: GAO.

Note: We received completed surveys from 36 of 46 recent applicants (78 percent). Totals may not 

add to 36 because respondents did not all answer every question.
Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Page 60 GAO-12-641 Surface Transportation

Table 14: Thinking about the Amount of Effort Your Organization Spent, How Much of a Burden, if at All, Were the Following 

Aspects of Submitting an LOI?

Great 

burden

Moderate 

burden

Some 

burden

Little to no 

burden

Don’t know/not 

Applicable Total

Cost associated with submitting an LOI - 15 11 9 1 36

Time associated with submitting an LOI 4 15 12 4 1 36

Source: GAO.

Note: We received completed surveys from 36 of 46 recent applicants (78 percent).

Table 15: For Federal Fiscal Year 2010 or 2011, Did You Receive Any Feedback from 

DOT TIFIA Staff on Any Letters of Interest for TIFIA Credit Assistance?

Frequency

Yes 21

No 10

Don’t know 5 

Total 36

Source: GAO.

Note: We received completed surveys from 36 of 46 recent applicants (78 percent).

Table 16: If You Received Feedback on Any of the Following Topics, How Useful, if at All, Was the Feedback You Received 

from DOT TIFIA Staff?

Highly useful

Moderately 

useful

Slightly 

useful

Not at all 

useful

Don’t 

know/not 

applicable Total

Clarification of selection criteria 4 5 4 4 4 21

Scoring of your LOI 3 6 6 2 4 21

Areas for improvement on future 

submissions 6 6 1 2 6 21

Source: GAO.
Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Page 61 GAO-12-641 Surface Transportation

Table 17: How Much Do You Support or Oppose the Following Proposed Changes to the TIFIA Program?

Strongly 

support

Moderately 

support

Neither 

support 

nor 

oppose

Moderately 

oppose

Strongly 

oppose

Don’t 

know/not 

applicable Total

Expand funding for the TIFIA program 32 - - 1 2 - 35

Change eligibility requirements to decrease 

total project cost to below $50 million 3 5 9 9 9 1 36

Change eligibility requirements to decrease 

total ITS project cost to below $15 million - 7 15 3 9 2 36

Increase the portion of costs that TIFIA can 

cover from 33 percent 19 7 4 2 3 1 36

Allow waivers for the nonsubordination clause 13 9 8 1 1 3 35

Eliminate the nonsubordination clause 9 6 12 1 3 4 35

Allow project sponsors to contribute to the 

subsidy costs of assistance 10 9 10 - 1 5 35

Add separate eligibility requirements and 

terms to encourage rural infrastructure 

projects to seek credit assistance 3 7 11 4 7 3 35

Source: GAO.

Note: We received completed surveys from 36 of 46 recent applicants (78 percent). Totals may not 

add to 36 because respondents did not all answer every question.

Table 18: Do You Support Modifying the TIFIA Selection Criteria?

Frequency

Yes 23

No 2 

Don’t know 10

Total 35

Source: GAO.

Note: We received completed surveys from 36 of 46 recent applicants (78 percent). Totals may not 

add to 36 because respondents did not all answer every question.
Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Page 62 GAO-12-641 Surface Transportation

Table 19: How Much, if at All, Did Each of the Following Factors Impact Your State DOT’s Decision to Not Submit an LOI to the 

TIFIA Program?

Very 

great 

impact

Great 

impact

Moderate 

impact

Some 

impact

Little to 

no impact

Don’t 

know/not 

applicable Total

No projects within the state that met the required cost 

thresholds for the TIFIA program 4 2 1 2 5 2 16

Lack of either user fees or dedicated revenues to repay 

assistance 6 2 1 3 3 1 16

State has no legal authority to use alternative finance and 

delivery approaches 3 1 1 2 8 1 16

State is subjected to restrictions on borrowing 4 2 - 2 7 - 15 

Other financing options were available 5 3 2 1 4 1 16

State does not use debt financing for transportation 

projects 2 1 1 1 9 2 16

Inclusion of nonsubordination clause in TIFIA credit 

agreements 1 - - - 9 6 16

Cost associated with federalizing projects 1 - 1 - 12 2 16

Unfamiliarity with the TIFIA program - - 2 4 9 1 16

Resources needed to apply for and negotiate a TIFIA 

credit agreement 1 1 2 2 9 1 16

Resources needed to maintain an executed TIFIA credit 

agreement 1 1 1 3 8 1 15

Source: GAO.

Note: We received completed surveys from 16 of 18 state DOTs from states from which no sponsor 

had ever submitted a letter of interest (89 percent). Totals may not add to 16 because respondents 

did not all answer every question.

Responses to Questions 

for State DOTs from States 

That Were Not Recent 

Applicants 
Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Page 63 GAO-12-641 Surface Transportation

Table 20: In Your Opinion, How Much, if at All, Does Each of the Following Proposed Changes Increase the Likelihood That 

Your Organization Would Seek TIFIA Credit Assistance in the Future?

Significantly 

increase

Greatly 

increase

Moderately 

increase

Somewhat 

increase

Little to 

no 

increase

Don’t 

know/not 

applicable Total

Expand funding for the TIFIA program 2 2 3 5 17 1 30

Change eligibility requirements to decrease total 

project cost to below $50 million 2 3 5 3 16 1 30

Change eligibility requirements to decrease total 

ITS project cost to below $15 million 2 2 3 6 16 1 30

Increase the portion of costs that TIFIA can cover 

from 33 percent 4 4 4 5 12 1 30

Allow waivers for the nonsubordination clause 2 2 2 4 12 8 30

Eliminate the nonsubordination clause 3 2 - 3 14 8 30

Allow project sponsors to contribute to the subsidy 

costs of assistance 2 2 4 6 11 5 30

Add separate eligibility requirements and terms to 

encourage rural infrastructure projects to seek 

credit assistance 2 4 5 7 9 3 30

Source: GAO.

Note: Of the 37 state DOTs from states from which no sponsor had either not submitted a letter of 

interest during fiscal years 2010 and 2011 or not ever submitted a letter of interest, we received 

completed surveys from 30 state DOTs (81 percent).
Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Page 64 GAO-12-641 Surface Transportation

Table 21: In Your Opinion, How Much, if at All, Does Each of the Following Proposed Changes Increase the Likelihood That 

Your Organization Would Seek TIFIA Credit Assistance in the Future?

(Only with Responses from State DOTs from Which No Sponsor Had Ever Sought Credit Assistance.)

Significantly 

increase

Greatly 

increase

Moderately 

increase

Somewhat 

increase

Little to 

no 

increase

Don’t 

know/not 

applicable Total

Expand funding for the TIFIA program 1 - 1 3 10 1 16

Change eligibility requirements to decrease total 

project cost to below $50 million 2 1 2 2 8 1 16

Change eligibility requirements to decrease total 

ITS project cost to below $15 million 2 1 1 2 9 1 16

Increase the portion of costs that TIFIA can cover 

from 33 percent 3 1 2 4 5 1 16

Allow waivers for the nonsubordination clause 2 - - 3 6 5 16

Eliminate the nonsubordination clause 2 - - 2 7 5 16

Allow project sponsors to contribute to the subsidy 

costs of assistance 2 - 2 3 6 3 16

Add separate eligibility requirements and terms to 

encourage rural infrastructure projects to seek 

credit assistance 2 3 2 4 3 2 16

Source: GAO.

Note: We received completed surveys from 16 of 18 state DOTs from states from which no sponsor 

had ever submitted a letter of interest (89 percent).

Table 22: Do You Support Modifying the TIFIA Selection Criteria?

Responses

Yes 11

No 3 

Don’t know 15

Total 29

Source: GAO.

Note: Of the 37 state DOTs from states from which no sponsor had either not submitted a letter of 

interest during fiscal years 2010 and 2011 or not ever submitted a letter of interest, we received 

completed surveys from 30 state DOTs (81 percent). The totals may not add to 30 because 

respondents did not all answer every question.
Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Page 65 GAO-12-641 Surface Transportation

Table 23: In the Next 5 years, Approximately How Many Projects Do You Anticipate Will Be Undertaken in Your State That 

Have a Total Cost of ...

None 1 to 2 3 to 5 6 to 10 More than 10 Total

Less than $10 million? - - - - 39 39

$10 to less than $25 million? - - 1 5 33 39

$25 to less than $50 million? - 3 6 8 21 38

$50 to less than $100 million? 6 8 5 7 12 38

$100 to less than $150 million? 13 10 5 7 5 40

$150 to less than $200 million? 16 7 7 7 2 39

$200 million or more? 17 8 8 4 2 39

Source: GAO.

Note: We received completed surveys from 42 of 52 state DOTs (81 percent). Totals may not add to 

42 because respondents did not all answer every question.

Table 24: Of the Projects Identified in Table 23, for About How Many Do You 

Anticipate That Your Organization Will Seek TIFIA Credit Assistance?

Recent TIFIA 

experience

No recent TIFIA 

experience

No TIFIA 

experience Total

None 2 7 12 21

1 to 2 3 2 1 6 

3 to 5 4 3 - 7 

6 to 10 2 - - 2 

Don’t know 1 1 3 5 

Total 12 13 16 41

Source: GAO.

Note: We received completed surveys from 42 of 52 state DOTs (81 percent). Totals may not add to 

42 because respondents did not all answer every question.

Responses to Questions 

for All State DOTs
Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Page 66 GAO-12-641 Surface Transportation

Table 25: Does Your State DOT Have the Legislative Authority to Use Any of the Following Tools for Transportation Projects?

Yes No Don’t know Total

Design-build Legislative authority? 35 6 1 42

If yes, has this authority been used? 32 3 - 35

Public-private partnerships Legislative authority? 28 11 2 41

If yes, has this authority been used? 17 11 - 28

Levy tolls for roads, bridges and 

tunnels

Legislative authority? 24 17 - 41

If yes, has this authority been used? 16 8 - 24

Source: GAO.

Note: We received completed surveys from 42 of 52 state DOTs (81 percent). Totals may not add to 

42 because respondents did not all answer every question. 

Table 26: Does Your State Have Access to Any of the Following Revenue Sources, 

at Either the State or Local Level, That Could Be Used to Repay a TIFIA Loan?

Yes No Don’t know Total

Tolling 20 19 3 42

Sales tax 11 24 5 40

Source: GAO.

Note: We received completed surveys from 42 of 52 state DOTs (81 percent). Totals may not add to 

42 because respondents did not all answer every question.

Table 27: Does Your State DOT Have Either Bonding Authority OR Have Access to 

the Bond Market through Another State Entity?

Frequency

Response

Yes 41

Don’t know 1 

Total 42

Source: GAO.

Note: We received completed surveys from 42 of 52 state DOTs (81 percent). Totals may not add to 

42 because respondents did not all answer every question.
Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Page 67 GAO-12-641 Surface Transportation

Table 28: Which, if Any, of the Following Legislative Restrictions on Conducting 

Bond Issuances for Capital Projects Apply?

Yes No

Don’t 

know Total

Limitations on the amount that can be issued 31 8 2 41

Limitations on the frequency with which bonds can be 

issued 7 31 3 41 

Bond issuances require legislative approval 23 15 2 40

Source: GAO.

Note: We received completed surveys from 42 of 52 state DOTs (81 percent). Totals may not add to 

42 because respondents did not all answer every question.

ITS stands for intelligent transportation system.

The nonsubordination clause (also known in the context of the TIFIA 

program as the springing lien) means that the TIFIA lien on project 

revenues can be subordinated to those of senior lenders except in the 

event of bankruptcy, insolvency, or liquidation of the obligor. In such an 

instance, the TIFIA lien would rise to parity with senior creditors. This 

provision can be effected through a master trust agreement, an 

intercreditor agreement, or other agreement entered into at the time of 

execution of the credit agreement.

Examples of other dedicated revenue stream(s) to repay TIFIA credit 

assistance may include pledged sales taxes, tax increment financing, and 

availability payments.

The TIFIA eligibility requirements are (1) the project shall be consistent 

with the state transportation plan, if located in a metropolitan area shall be 

included in that area’s metropolitan transportation plan, and shall appear 

in an approved state transportation improvement program before the DOT 

and the project sponsor execute a term sheet or credit agreement that 

results in the obligation of funds; (2) the state, local servicer, or other 

entity undertaking the project shall submit a project application to the 

Secretary of Transportation; (3) a project shall have eligible project costs 

that are reasonably anticipated to equal or exceed the lesser of $50 

million or 33 1/3 percent of the amount of federal aid highway funds 

apportioned for the most recently completed fiscal year to the state in

which the project is located (in the case of a project principally involving 

the installation of intelligent transportation systems (ITS), eligible project 

costs shall be reasonably anticipated to equal or exceed $15 million); (4) 

Glossary/Examples
Appendix III: Responses to Questions from 

GAO’s Survey on TIFIA

Page 68 GAO-12-641 Surface Transportation

project financing shall be repayable, in whole or in part, from tolls, user 

fees or other dedicated revenue sources; and (5) in the case of a project 

that is undertaken by an entity that is not a state or local government or 

an agency or instrumentality of a state or local government, the project 

that the entity is undertaking shall be included in the state transportation 

plan and an approved State Transportation Improvement Program.

The TIFIA selection criteria are (1) national or regional significance 

(including consideration of livability, economic competitiveness, and 

safety), (2) private participation, (3) environment (including consideration 

of sustainability and state of good repair), (4) project acceleration, (5) 

credit worthiness, (6) use of new technology, (7) consumption of budget 

authority, and (8) reduced federal grant assistance.

Examples of user fees to repay TIFIA credit assistance may include tolls 

and rental car customer facility charges.
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 69 GAO-12-641 Surface Transportation

Susan Fleming, (202) 512-2834 or flemings@gao.gov

In addition to the contact named above, Susan Zimmerman, Assistant 

Director; Sarah Arnett; Carl Barden; Marcia Carlsen; Carol Henn; Bert 

Japikse; David Lin; Joanie Lofgren; Ruben Montes de Oca; Josh Ormond; 

Amy Rosewarne; Andrew Von Ah; and Elizabeth Wood made key 

contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(546056)
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