Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 3487 

For State Regulatory Agencies 

108. What current laws or regulations 

does your State have regarding the 

disposal of dispensed controlled 

substances and noncontrolled 

substances by ultimate users? 

109. What laws or regulations, if any, 

is your State considering regarding the 

disposal of dispensed controlled or 

noncontrolled substances by ultimate 

users? 

110. Does your State agency 

participate in any initiatives (e.g., takeback or mail-back programs) regarding 

the disposal of dispensed controlled and 

noncontrolled substances by ultimate 

users at this time? If so, please describe. 

111. Is your State agency aware of any 

cases of diversion regarding take-back 

programs? If so, did the diversion result 

in the arrest or prosecution of any 

individuals? 

112. If your State agency does not 

participate in any initiatives regarding 

the disposal of dispensed controlled or 

noncontrolled substances by ultimate 

users, why not? 

113. If your State agency participates 

in any initiatives regarding the disposal 

of dispensed controlled and 

noncontrolled substances by ultimate 

users, what would you estimate to be 

the percentage, quantity, or other 

measurable unit of controlled 

substances as compared to 

noncontrolled substances received? 

114. If your State agency participates 

in any initiatives regarding the disposal 

of dispensed controlled and 

noncontrolled substances by ultimate 

users, does your agency fund all or part 

of the initiative? If other funding is 

received, who provides the other 

funding? 

115. If your State agency participates 

in any initiatives regarding the disposal 

of dispensed controlled and 

noncontrolled substances by ultimate 

users, what successes have you seen 

regarding these initiatives? 

116. If your State agency participates 

in any initiatives regarding the disposal 

of dispensed controlled and 

noncontrolled substances by ultimate 

users, what challenges or difficulties 

have you encountered? 

For All Interested Parties 

117. DEA also seeks comment from all 

interested parties regarding the funding 

of the disposal of unwanted or outdated 

controlled substances held by DEA 

nonregistrants. 

Regulatory Certifications 

This action is an Advance Notice of 

Proposed Rulemaking (ANPRM). 

Accordingly, the requirement of 

Executive Order 12866 to assess the 

costs and benefits of this action does not 

apply. Rather, among the purposes DEA 

has in publishing this ANPRM is to seek 

information from the public on the 

costs, benefits, and other impacts 

pertaining to the disposal of controlled 

substances dispensed to ultimate users 

and long term care facilities. Similarly, 

the requirements of section 603 of the 

Regulatory Flexibility Act do not apply 

to this action since, at this stage, it is an 

ANPRM and not a ‘‘rule’’ as defined in 

section 601 of the Regulatory Flexibility 

Act. Following review of the comments 

received to this ANPRM, if DEA 

promulgates a Notice or Notices of 

Proposed Rulemaking regarding this 

issue, DEA will conduct all analyses 

required by the Regulatory Flexibility 

Act, Executive Order 12866, and any 

other statutes or Executive Orders 

relevant to those rules and in effect at 

the time of promulgation. 

Dated: January 13, 2009. 

Joseph T. Rannazzisi, 

Deputy Assistant Administrator, Office of 

Diversion Control. 

[FR Doc. E9–1056 Filed 1–16–09; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF TRANSPORTATION 

Federal Highway Administration 

23 CFR Part 180 

Office of the Secretary 

49 CFR Part 80 

Federal Railroad Administration 

49 CFR Part 261 

Federal Transit Administration 

49 CFR Part 640 

Maritime Administration 

49 CFR Part 1700 

[Docket No. DOT–OST–2009–0004] 

RIN 2105–AD70 

Credit Assistance for Surface 

Transportation Projects 

AGENCIES: Federal Highway 

Administration (FHWA), Federal 

Railroad Administration (FRA), Federal 

Transit Administration (FTA), Maritime 

Administration (MARAD), Office of the 

Secretary of Transportation (OST), 

Department of Transportation (DOT). 

ACTION: Notice of proposed rulemaking 

(NPRM); request for comments. 

SUMMARY: Recent changes to the 

Transportation Infrastructure Finance 

and Innovation Act (TIFIA) statute 

require changes in the TIFIA rule. In 

addition, the DOT has gained 

substantial administrative experience 

since the TIFIA rule was last amended 

in 2000. The DOT proposes to amend 

the TIFIA rule to implement the recent 

statutory changes and to incorporate 

certain other changes to the rule that it 

considers will improve the efficiency of 

the program and its usefulness to 

borrowers. In addition, the DOT seeks 

comment on policy issues with 

potentially significant impact on the 

TIFIA project selection process. 

DATES: Comments must be received on 

or before March 23, 2009. 

ADDRESSES: Mail or hand deliver 

comments to the U.S. Department of 

Transportation, Dockets Management 

Facility, Room W12–140, 1200 New 

Jersey Avenue, SE., Washington, DC 

20590, or submit comments 

electronically at http:// 

www.regulations.gov, or fax comments 

to (202) 493–2251. Alternatively, 

comments may be submitted via the 

Federal eRulemaking Portal at http:// 

www.regulations.gov (follow the on-line 

instructions for submitting comments). 

All comments should include the 

docket number that appears in the 

heading of this document. All 

comments received will be available for 

examination and copying at the above 

address from 9 a.m. to 5 p.m., e.t., 

Monday through Friday, except Federal 

holidays. Those desiring notification of 

receipt of comments must include a selfaddressed, stamped postcard or you 

may print the acknowledgment page 

that appears after submitting comments 

electronically. All comments received 

into any docket may be searched in 

electronic format by the name of the 

individual submitting the comment (or 

signing the comment, if submitted on 

behalf of an association, business, labor 

union, etc.). Persons making comments 

may review DOT’s complete Privacy Act 

Statement in the Federal Register 

published on April 11, 2000 (Volume 

65, Number 70, Pages 19477–78), or you 

may view the statement at http:// 

dms.dot.gov. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Mark Sullivan, TIFIA Joint Program 

Office (202) 366–5785, or Mr. Steven 

Rochlis, Office of the Chief Counsel 

(202) 366–1395, Federal Highway 

Administration; Mr. Michael Bouril, 

Office of Budget (202) 366–4587, Mr. 

Jacob Falk, Office of Policy (202) 366– 

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3488 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 

8165, or Mr. Terence Carlson, Office of 

the General Counsel (202) 366–9152, 

Office of the Secretary, 1200 New Jersey 

Avenue, SE., Washington, DC 20590. 

Office hours for the FHWA are from 

7:45 a.m. to 4:15 p.m., e.t., Monday 

through Friday, except Federal holidays. 

SUPPLEMENTARY INFORMATION: 

Electronic Access and Filing 

You may submit or retrieve comments 

online through the Federal eRulemaking 

portal at: http://www.regulations.gov. 

The Web site is available 24 hours each 

day, 365 days each year. Electronic 

submission and retrieval help and 

guidelines are available under the help 

section of the Web site. 

An electronic copy of this document 

may also be downloaded from Office of 

the Federal Register’s home page at: 

http://www.archives.gov/federal_register 

and the Government Printing Office’s 

Web page at: http://www.gpoaccess.gov. 

Background 

TIFIA was enacted in 1998 as part of 

the Transportation Equity Act for the 

21st Century (TEA–21) (Pub. L. 105– 

178, June 1998). TIFIA established a 

new Federal credit program under 

which the DOT may provide credit 

assistance to surface transportation 

investments of regional or national 

significance. To be selected for TIFIA 

assistance, projects must meet a number 

of statutorily specified criteria. As 

funding for this program is limited, 

projects obtaining assistance under the 

TIFIA program may be selected on a 

competitive basis. In 1999, the DOT 

promulgated a rule implementing TIFIA 

(64 FR 29742, June 2, 1999), and in 2000 

amended the rule (65 FR 44936, July 19, 

2000). In 2005, Congress enacted the 

Safe, Accountable, Flexible, Efficient 

Transportation Equity Act: A Legacy for 

Users (SAFETEA–LU) (Pub. L. 109–59, 

Aug. 10, 2005), which made a number 

of amendments to TIFIA. The DOT 

proposes to amend the TIFIA rule to 

implement the changes required by the 

SAFETEA–LU amendments and to 

incorporate a number of programmatic 

features that the DOT considers, based 

on its experience gained administering 

the program since the rule was last 

amended, would improve TIFIA. 

In enacting the original TIFIA 

legislation, Congress found that ‘‘a welldeveloped system of transportation 

infrastructure is critical’’ to the nation’s 

economy, and it sought to ‘‘attract new 

investment capital’’ to transportation 

infrastructure projects. Congress further 

found that TIFIA could fill ‘‘market 

gaps,’’ thereby leveraging additional 

capital from the private markets: ‘‘a 

Federal credit program for projects of 

national significance can complement 

existing funding resources by filling 

market gaps, thereby leveraging 

substantial private co-investment.’’ 

Based on this initial guidance from 

Congress, the DOT has viewed TIFIA as 

a means for the Federal Government to 

attract more private investment capital, 

to accelerate investment, to encourage a 

greater cost-beneficial approach to 

transportation infrastructure 

investments, and to more efficiently 

utilize infrastructure once constructed. 

This NPRM proposes to amend and 

partially restate the existing rule; it 

includes both proposed substantive 

changes and proposed changes of an 

editorial, clarifying, or organizational 

nature. Proposed substantive changes 

include both those mandated by 

SAFETEA–LU and those determined by 

the DOT, based upon several years of 

administrative experience with the 

TIFIA program, to improve the program. 

The DOT seeks comments particularly 

on proposed changes in the latter 

category. 

The proposed rule would amend the 

current TIFIA rule to incorporate 

changes made by SAFETEA–LU to the 

TIFIA statute. Major changes of this 

nature include a reduction in the 

minimum project size eligible for TIFIA 

assistance and a broadening of the 

categories of projects eligible to permit 

TIFIA assistance for private rail 

facilities providing public benefit to 

highway users, and surface 

transportation infrastructure 

modifications necessary to facilitate 

direct intermodal transfer and access 

into and out of a port terminal. Further 

changes to conform the rule to the 

statute would limit the amount of TIFIA 

assistance in certain instances to the 

amount of the senior project obligations, 

conform the interest rate setting 

mechanism for the line of credit to that 

for secured loans, and eliminate the 

annual 20 percent cap on line of credit 

draws. 

In the nature of non-statutory 

administrative improvements, we 

propose changing the way the DOT will 

use the term sheet in TIFIA transactions 

and in how we will apply the TIFIA 

statute’s eight selection criteria. For 

example, with regard to the selection 

criteria, the DOT proposes to change 

‘‘creditworthiness’’ to pass/fail and then 

reallocate weights for the other seven 

statutory criteria. 

In addition, we propose to reorganize 

the existing rule to make it more 

understandable to users. The 

reorganized rule would generally follow 

the steps a potential TIFIA user might 

follow in evaluating the program and 

applying for assistance. 

While the request for comments 

applies to the entire NPRM, the DOT 

seeks specific feedback on several key 

issues noted below. 

In order to accommodate emerging 

financing scenarios using TIFIA’s 

refinancing authority, DOT is seeking 

comments on the proposed definitions 

of ‘‘refinance,’’ the ‘‘maturity date’’ 

(both defined in section 80.3) associated 

with a refinancing, and DOT’s proposed 

refinancing procedures (section 80.23), 

which would require the participation 

of a guaranteed lender receiving a TIFIA 

loan guarantee. 

To facilitate the financing of projects 

that may result in significant lease 

payments or concession fees to a public 

entity, the proposed rule would clarify 

that such payments can be considered 

eligible project costs for the purpose of 

establishing the maximum amount of 

TIFIA credit assistance. Several 

provisons would apply: (1) Such 

payments must represent a fair market 

value of the asset acquired, (2) the 

proceeds of such payments must be 

dedicated to transportation projects 

eligible under title 23 or chapter 53 of 

title 49, United States Code, and (3) 

such payments must be part of a project 

in which new capital costs constitute a 

significant portion of project costs. In 

other words, the concession fee cannot 

comprise the only eligible project cost, 

as in a transaction seeking only to 

monetize an existing asset. To 

implement this policy, the DOT 

proposes to limit its consideration of 

such payments to no more than 25 

percent of total eligible project costs. 

To improve its internal credit analysis 

and capital allocation process, the 

proposed rule would require (see 

section 80.11) each applicant and 

borrower to provide a preliminary rating 

opinion letter and final investmentgrade rating from at least two rating 

agencies. 

Finally, the DOT seeks comment on 

two additional policy issues with 

potentially significant impact on the 

TIFIA project selection process. These 

two issues are described immediately 

below. 

Use of Benefit-Cost Analysis in 

Selecting Projects for TIFIA Assistance 

In the years since TIFIA was enacted, 

borrowers have made use of the 

legislation’s inherent flexibility to 

accelerate creditworthy, public-private 

projects of regional or national 

significance. The DOT believes that 

TIFIA should be targeted to projects 

where the present value of benefits to 

the public that result from project 

completion exceed the costs of 

delivering the project, and that TIFIA be 

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Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 3489 

1http;//www.whitehouse.gov/omb/circulars/a094/ 

a094.html. 

2http://www.whitehouse.gov/omb/circulars/a129/ 

a129rev.html. 

targeted to advance user-financed 

projects instead of projects that rely 

solely or predominantly on grant 

assistance. Supporting large-scale 

projects that eliminate or reduce 

reliance on Federal grant assistance 

allows the States to target grant 

assistance on projects that cannot 

otherwise be financed. 

The National Surface Transportation 

Policy and Revenue Study Commission 

(Transportation for Tomorrow, 2008), 

the Government Accountability Office 

(GAO–04–744, 2004; GAO–05–172, 

2005; GAO–08–744T, 2008), the U.S. 

Department of Transportation (Refocus. 

Reform. Renew. A New Transportation 

Approach in America, 2008), the 

Brookings Institution (A Bridge to 

Somewhere, 2008) and other 

organizations have recommended 

greater use of benefit-cost analysis 

(BCA) to maximize the rate of return on 

Federal funds invested in transportation 

projects. These recommendations are 

primarily directed at State and 

municipal project selection, where 

application of BCA is currently limited. 

The Federal Transit Administration and 

the Federal Aviation Administration 

already require the use of BCA or 

similar economic analysis for projects 

with large capital costs that are subject 

to Federal funding discretion. 

Benefit-cost analysis is conducted by 

assigning monetary values to benefits 

(e.g., travel time saving) and costs, 

discounting future benefits and costs 

using an appropriate discount rate, and 

then comparing the sum total of 

discounted benefits to the sum total of 

discounted costs. Discounting benefits 

and costs transforms gains and losses 

occurring in different time periods to a 

common unit of measurement in the 

form of present day dollars. The 

organizations cited above recognize that 

BCA is a useful tool to help decisionmakers identify projects with the 

greatest net benefits relative to invested 

public resources. In particular, the 

systematic process of BCA helps 

decision-makers organize information 

about, and determine trade-offs 

between, alternative transportation 

investments. 

The DOT has responsibility under 

Executive Order 12893, Principles for 

Federal Infrastructure Investments, 59 

FR 4233, to evaluate its programs using 

BCA. This requirement has not been 

construed to apply to individual 

investments made by States of formula 

funds, but is deemed to apply to overall 

programs and to discretionary Federal 

commitments of budget authority to 

individual projects. The DOT is 

considering a requirement that TIFIA 

applicants conduct BCA on their 

projects. These analyses would inform 

Federal decisions to provide TIFIA 

support to individual projects and 

would also enable the DOT to establish 

the cost-beneficial status of the overall 

TIFIA program, thereby providing a 

basis for future funding requests. The 

application of BCA to support TIFIA 

decisions would be subject to guidance 

in the Office of Management and 

Budget’s Circular A–94, Revised, 

SUBJECT: Guidelines and Discount 

Rates for Benefit-Cost Analysis of 

Federal Programs 1, and would follow 

other guidelines incorporated into the 

TIFIA application process. 

Æ The DOT therefore requests 

comment on the following options for 

applying BCA to TIFIA applications: 

Æ Require BCA as a threshold 

condition for TIFIA consideration. 

Under this option, projects must have 

public benefits that exceed their costs 

by a sufficient threshold level. The DOT 

seeks comment on the application of a 

threshold in general as well as the 

appropriate minimum sufficient ratio of 

benefits divided by costs that projects 

should be expected to demonstrate; or 

Æ Use BCA results to help prioritize 

projects for TIFIA selection by 

translating the existing TIFIA selection 

criteria into monetary values for 

purposes of project comparison, while 

eliminating criteria weights. For 

instance, BCA results could be used to 

assess the costs and benefits related to 

the project’s ‘‘regional or national 

significance’’, proposed in this rule as 

the highest weighted criteria. Comments 

are also requested on how this approach 

might best be applied to other criteria 

that do not readily lend themselves to 

such monetization. 

Interest Rate Policy 

OMB Circular A–129, Policies for 

Federal Credit Programs and Non-tax 

Receivables 2, states that Federal 

agencies with credit programs should 

establish interest and fee structures for 

direct loans and loan guarantees and 

should review these structures at least 

annually. In administering the TIFIA 

program, the DOT has set the rate, in all 

transactions to date, regardless of the 

perceived credit quality of the loan, at 

the minimum level allowed by the 

TIFIA statute: The rate on United States 

Treasury securities of a similar maturity 

as the loan. 

OMB Circular A–129 states that 

interest and fees should be set at levels 

that minimize default and other subsidy 

costs of the direct loan or loan 

guarantee, while supporting 

achievement of the program’s policy 

objectives. The OMB guidance goes on 

to state that, unless inconsistent with 

program purposes, riskier borrowers 

should be charged more than those who 

pose less risk. 

The DOT seeks comment regarding 

the use of its authority to offer different 

rates to different borrowers. For 

instance, the DOT could use the 

selection criteria, including benefit cost 

analysis, to weight applications by the 

social return to the public, consistent 

with Federal credit policies and TIFIA 

programmatic goals. Those projects with 

higher scores would receive the lower 

interest rates. Credit risk should also be 

factored into final interest rate 

determinations. Alternatively, some 

form of competitive loan pricing such as 

a reverse auction could be used to 

allocate TIFIA’s subsidized credit 

assistance in a manner that maximizes 

social returns while protecting the 

government’s interests. 

Section-by-Section Discussion of the 

Proposed Changes 

Section 80.1 Purpose 

The purpose of the proposed rule is 

to implement the TIFIA statute. Readers 

should refer to the statute as well as the 

rule for a complete understanding of the 

TIFIA program. 

Section 80.3 Definitions 

Definitions in the proposed rule 

generally follow the statutory 

definitions. Two exceptions are the 

proposed definitions for ‘‘guaranteed 

lender,’’ which would replace the 

statutory ‘‘lender,’’ and ‘‘borrower,’’ 

which would replace the statutory 

‘‘obligor’’; the DOT believes both of 

these proposed changes would enhance 

the rule’s clarity and more closely 

conform the regulatory language to 

industry convention. 

Other proposed changes to the 

definitions in the current rule and 

matters on which the DOT seeks 

comment include: 

‘‘Borrower’’: For the definition of the 

newly defined term ‘‘borrower,’’ we 

propose to use the current rule’s 

definition of ‘‘obligor,’’ which definition 

closely follows the language in the 

TIFIA statute’s definition of ‘‘obligor.’’ 

Additionally, we clarify that only nonFederal entities are eligible borrowers. 

‘‘Conditional term sheet’’: We propose 

to eliminate this definition in light of 

our proposed change in the use of the 

defined term ‘‘term sheet,’’ which 

proposed change is discussed in detail 

below in this section under the heading 

‘‘Term sheet.’’ 

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3490 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 

3Public Law 109–291 (Sept. 29, 2006). 

4The Credit Rating Agency Reform Act of 2006 

mandated that firms desiring to be NRSROs register 

with the SEC and become subject to certain recordkeeping and financial reporting requirements. The 

SEC’s Final Rule implementing the Credit Agency 

Reform Act of 2006 is found at 72 FR 33564 (June 

8, 2007). See 17 CFR 240.17g–1 through 240.17g– 

6. 

5House of Representatives Report 109–203 

(2005), p. 874. 

‘‘Current credit evaluation’’: We 

propose to add a definition of current 

credit evaluation and provide 

clarification related to project 

monitoring requirements. 

‘‘Eligible project costs’’: We propose 

to add to the definition of ‘‘eligible 

project costs’’ explicit language 

implementing current Federal law 

excluding from eligibility certain project 

costs incurred prior to environmental 

clearance. (See 23 CFR 771.113). The 

proposed definition clarifies the 

eligibility of costs during construction 

associated with the operations of a 

special purpose entity formed solely to 

construct and operate the facility, in an 

amount not to exceed 5 percent of total 

eligible project costs (see 80.25, 

Limitations of Federal credit assistance). 

The proposed definition clarifies the 

eligibility of concession payments made 

to a government agency by a nongovernmental concessionaire for the 

lease acquisition and right to operate a 

transportation facility, provided that the 

concessionaire and the State ensure that 

payments associated with lease 

acquisition represent fair market value 

and are dedicated to transportation 

projects eligible under title 23 or 

chapter 53 of title 49, United States 

Code (see 80.25, Limitations on Federal 

credit assistance). In addition, lease 

acquisition payments must be part of a 

project in which new capital costs 

constitute a significant portion of 

project costs. In other words, the 

concession payment, in and of itself, 

does not comprise an eligible project 

cost. In order to implement this policy, 

the DOT proposes to limit such 

payments to 25 percent of total eligible 

project costs and seeks public comment 

on this proposal. Further, the definition 

is expanded to include specifically the 

costs associated with refinancing longterm project obligations under 23 U.S.C. 

603(a)(1)(C). In the case of a refinancing, 

eligible project costs must be consistent 

with eligible project costs for any TIFIA 

project. In the case of a refinancing, 

existing debt would be considered an 

eligible project cost. Eligible project 

costs must also be consistent with the 

Federal cost principles applicable to the 

borrower: 2 CFR Part 225 (OMB Circular 

A–87 (State and local governments)), 2 

CFR Part 230 (OMB Circular A–122 

(non-profit organizations)), or 48 CFR 

Part 31 (commercial organizations). 

Lobbying costs would continue to be 

excluded under existing law. (See 31 

U.S.C. 1352, 2 CFR Part 225, App. B, 2 

CFR Part 230, App. B, 48 CFR 31.205– 

22, and 49 CFR 20.100.) 

‘‘Guaranteed lender’’: The proposed 

definition is identical to the current 

rule’s, and to the TIFIA statute’s, 

definition of ‘‘lender.’’ Applicants 

should note that the limitations the 

TIFIA statute imposes on the types of 

institutions which may qualify to be a 

‘‘guaranteed lender’’ do not affect or 

limit who may hold project obligations. 

‘‘Investment-grade rating’’: The 

proposed definition recognizes that 

some projects receiving TIFIA 

assistance, particularly those with 

private developers using bank financing 

rather than capital markets debt, may 

not have a public rating, and it makes 

clear that, although the investmentgrade rating requirement still is 

imposed, the actual rating would not 

need to be published. The proposed 

definition also recognizes rating 

terminology used by rating agencies that 

have become identified by the Securities 

and Exchange Commission (SEC) as 

Nationally Recognized Statistical Rating 

Organizations (NRSROs) since the TIFIA 

rule was last published. The SEC 

engaged in a rulemaking, pursuant to 

the Credit Rating Agency Reform Act of 

2006,3 which modified the regulatory 

treatment of NRSROs.4 The TIFIA 

statute relies on the SEC’s determination 

of qualifications for NRSROs, 

irrespective of the regulatory regime the 

SEC uses for making such 

determination. 

‘‘Local servicer’’: The DOT services 

the TIFIA loan portfolio centrally and 

does not expect ever to use local 

servicers for TIFIA loans. In response, 

Congress eliminated the definition of 

‘‘local servicer’’ from the TIFIA statute 

and further expressed its intent that 

TIFIA loan servicing should be managed 

by a single entity 5; therefore, we 

propose to eliminate the definition of 

local servicer from the rule. 

‘‘Maturity date’’: The proposed 

definition recognizes that tying 

scheduled loan repayments to the date 

of substantial completion is not 

appropriate for credit assistance used to 

refinance long-term project obligations 

under 23 U.S.C. 603(a)(1)(C). Therefore, 

the proposed definition establishes the 

final maturity date for repayment of 

credit assistance used for refinancing 

purposes as the lesser of not later than 

35 years after the date the credit 

agreement is executed, or the useful life 

of the overall asset. 

‘‘Project’’: The proposed rule would 

expand the current rule’s definition to 

reflect the expanded definition 

contained in 23 U.S.C. 601(a)(8). In 

accordance with the SAFETEA-LU 

amendments, the proposed rule would 

permit TIFIA assistance for private 

freight-related rail facilities that serve a 

public benefit for highway users, which 

the proposed rule defines as the direct 

freight interchange between highway 

and rail carriers. In further accordance 

with the SAFETEA-LU amendments, the 

proposed rule would make eligible a 

group of such freight-related projects 

(e.g., bridge clearances throughout a rail 

corridor, traffic projects to improve port 

access) each of which separately might 

not be large enough to meet the 

threshold requirements, and surface 

transportation infrastructure 

improvements (e.g., road, rail, gate, 

equipment) necessary to facilitate direct 

intermodal transfer and access into and 

out of a port terminal. 

‘‘Project obligation’’: We propose to 

interpret the statutory definition 

contained in 23 U.S.C. 601(a)(9) to 

include a ‘‘loan’’ to make clear that a 

bank loan or other private debt, and not 

just capital markets debt, can be a 

‘‘project obligation’’ for purposes of the 

TIFIA program. With private entities 

now more frequently seeking TIFIA 

assistance, the DOT is sometimes 

presented with plans of finance relying 

on bank debt rather than capital markets 

debt for some or all of the non-TIFIA 

portion of the financing. Adding ‘‘loan’’ 

to the definition would make clear that 

in such financings bank debt would be 

treated as a project obligation. This is 

not intended to add any new forms of 

debt not currently available; rather it is 

intended to reflect TIFIA’s participation 

in bank financings. 

‘‘Project sponsor’’: The DOT believes 

that this definition no longer adequately 

characterizes those seeking or using 

TIFIA credit assistance. Generally, such 

an entity can be characterized as either 

an applicant or a borrower. If a public 

agency submits an application on behalf 

of multiple competing concessionaires, 

it can be characterized as an applicant. 

Therefore, we propose to eliminate this 

definition from the regulation. 

‘‘Rating agency’’: The proposed 

definition diverges from the statute only 

in its substitution of the word 

‘‘organization’’ for the words ‘‘rating 

agency’’ in order to eliminate the 

statutory language’s circularity. 

‘‘Refinance’’: The TIFIA statute at 23 

U.S.C. 603(a)(1)(c) uses ‘‘refinance’’ 

without defining the term; the DOT 

proffers a defined term. The proposed 

definition permits Borrowers to pay off 

existing project obligations and any 

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Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 3491 

6 ‘‘To be eligible to receive financial assistance 

under this chapter, a project shall meet the 

following criteria: Inclusion in transportation plans 

and programs.—The project shall satisfy the 

applicable planning and programming requirements 

of sections 134 and 135 at such time as an 

agreement to make available a Federal credit 

instrument is entered into under this chapter.’’ 23 

U.S.C 602(a)(1). 

7 ‘‘The project—(A) shall be included in the State 

transportation plan required under section 135; and 

(B) at such time as an agreement to make available 

a Federal credit instrument is entered into under 

this chapter, shall be included in the approved 

State transportation improvement program required 

under section 134.’’ Public Law 109–59, 

§ 1601(b)(1). 

8Each State must develop a STIP that covers a 

period of 4 years and is updated at least every 4 

years. 23 U.S.C. 135(g)(1). 

9While the House Bill does not make any change 

in threshold criteria, the Senate Bill says: ‘‘The 

change * * * clarifies the provision regarding 

statewide and metropolitan planning requirements. 

The existing provision contained language that 

could be misinterpreted to constrain TIFIA 

assistance in the case of a project with a 

construction timetable that extended beyond the 

typical three-year approved State Transportation 

Improvement Program (STIP).’’ H. Rept. 109–203 

(July 28, 2005) at H. 7458. The Conference 

Substitute accepts the Senate amendment without 

additional clarification: ‘‘Subsection (b) amends 

Section 182 of title 23 to clarify the requirements 

regarding statewide and metropolitan planning.’’ Id. 

at H. 7459. 

10 23 U.S.C. 602(a)(3). 

TIFIA credit assistance owed by the 

Borrower with funds acquired by the 

same Borrower (or its successor) 

through the creation of new project 

obligations and TIFIA credit assistance. 

‘‘Subsidy cost’’: The DOT proposes to 

change the defined term from ‘‘subsidy 

amount’’ to ‘‘subsidy cost’’ to reflect 

Federal credit terminology. 

‘‘Substantial completion’’: At 23 

U.S.C. 601(a)(14), the TIFIA statute 

defines this term to be ‘‘the opening of 

a project.’’ The DOT believes that the 

statute’s bare simplicity does not, in 

practice, always provide clear guidance, 

and that the Secretary has discretion to 

define, for a particular project, the 

circumstances constituting ‘‘substantial 

completion.’’ The current rule 

recognizes that discretion. Since 

publication of the current rule, the DOT 

has often, in individual TIFIA credit 

agreements, found it useful for both the 

DOT and the borrower to state explicitly 

in the credit agreement the precise 

circumstances the occurrence of which 

would constitute ‘‘substantial 

completion.’’ The proposed definition 

would continue to incorporate, with 

clarifying language changes, this 

beneficial use of Secretarial discretion. 

‘‘Term sheet’’: The proposed change 

in the definition of ‘‘term sheet’’ reflects 

a significant change in the procedure 

the DOT would use for entering into 

TIFIA agreements with borrowers. The 

term sheet would no longer be executed 

by both parties, but only by the DOT, 

and it would no longer serve as the 

instrument that the DOT uses to obligate 

Federal funds. The term sheet provides 

a transactional blueprint between the 

DOT and the borrower for the purposes 

of developing the credit agreement. The 

term sheet is subject to cancellation at 

any time for any reason at the discretion 

of the Secretary. Through this proposed 

administrative change, the DOT would 

create a single point—the execution of 

a credit agreement—when funds would 

be obligated. 

Section 80.5 Federal Requirements 

The current rule enumerates several 

specific Federal requirements set out in 

the TIFIA statute to which TIFIA funds 

are subject and adds to that list such 

other ‘‘requirements as applicable.’’ 

While carrying forward the statutorily 

specified requirements, the proposed 

rule would clarify the latter provision 

by providing that any such additional 

requirements would be imposed by 

Secretarial determination of 

applicability to a particular project. 

Each project would adhere to the 

requirements associated with the 

relevant DOT administration’s grant 

program. For example, under the 

Federal-aid highway program, most 

construction-related requirements apply 

only to those highway segments 

constructed with Federal assistance. A 

segment constructed without Federal 

assistance is not subject to these 

construction requirements. Because 

many TIFIA projects combine Federal 

grant and TIFIA assistance, adhering to 

the associated grant program 

requirements provides administrative 

efficiencies to the borrower and the 

relevant DOT administration. 

Section 80.7 Threshold Criteria for 

TIFIA Projects 

Eligibility for TIFIA financial 

assistance requires that the project 

satisfies the applicable planning and 

programming requirements of 23 U.S.C. 

134 and 135 at the time an agreement to 

make available a Federal credit 

instrument is entered into. 23 U.S.C. 

602(a)(1).6 Prior to the SAFETEA–LU 

amendments, eligibility required 

specifically that the project be included 

in an approved State Transportation 

Improvement Program (STIP) at the time 

an agreement to make available a 

Federal credit instrument was entered 

into.7 The NPRM proposes to conform 

the current threshold eligibility criteria 

for projects to changes mandated by the 

SAFETEA–LU amendments. 

The STIP is a multi-year 8, statewide 

listing of all transportation projects 

proposed for funding—Federal, State, 

and local. It must include all federally 

supported transportation expenditures 

within the State. 23 U.S.C. 123(g)(4)(A). 

Thus, a project funded by TIFIA 

financial assistance must be included in 

the STIP when an agreement to make 

available a Federal credit instrument is 

entered. 

Congress was apparently concerned 

that this requirement could be 

misinterpreted to constrain TIFIA 

assistance in the case of a project with 

a construction timetable that extended 

beyond the typical four-year approved 

STIP.9 We note that construction 

timetables for a project are not limited 

to the time horizon of a STIP; and multiphase, large scale projects often appear 

on updated STIPs. There may be 

circumstances where the Department, 

on a case-by-case basis, should exercise 

the discretion to determine the 

applicable planning and programming 

requirements that apply to a TIFIA 

project at the time a credit assistance 

agreement is entered into, and we 

interpret the SAFETEA–LU 

amendments as providing this 

discretionary authority. 

The new provisions, mandated by the 

SAFETEA–LU amendments, would 

permit smaller projects to participate in 

the TIFIA program. SAFETEA–LU 

provided that the minimum size for 

TIFIA projects is $50 million or onethird of a State’s apportionment of 

Federal-aid funds, whichever is less; 

SAFETEA–LU also provided that the 

minimum size for TIFIA projects 

principally involving the installation of 

an intelligent transportation system is 

$15 million.10 The proposed rule would 

amend the current TIFIA rule to 

implement these new, lower minimum 

size thresholds, as applicable. 

The NPRM also proposes to amend 

the current rule to elaborate on the 

statutory language with respect to 

security to make clear that the term 

‘‘dedicated revenue sources’’ 

encompasses not just user fees, but also 

taxes pledged to secure the TIFIA 

instrument. The standard by which 

taxes are deemed pledged is the same as 

for any revenue pledged to secure the 

TIFIA loan, i.e., the legal and 

commercial terms of the credit 

agreement. The proposed rule 

essentially would retain the provision of 

the current rule under sections 

80.13(a)(4) and 80.13(c) permitting use 

of general obligation pledges or general 

corporate promissory pledges as 

security or ‘‘collateral’’ for TIFIA credit 

assistance. The policy of the 

Department, however, is that preference 

will be given to user financed projects. 

The proposed rule would continue the 

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current rule’s bar against securing a 

TIFIA instrument with a pledge of 

Federal funds from any source, 

including Federal-aid reimbursements. 

Section 80.9 Application Process 

The NPRM proposes to re-organize 

the existing rule’s various provisions 

relating to the TIFIA application and 

provides greater detail than the current 

rule about the application process. 

The NPRM proposes that, prior to 

submission of the TIFIA application, the 

applicant must have submitted a letter 

of interest satisfactory to the DOT. 

Although applications would be 

accepted only during prescribed 

periods, the DOT would continue to 

accept letters of interest at any time. 

The NPRM maintains the current 

rule’s requirement for the DOT to 

publish an annual Federal Register 

notice to solicit applications for credit 

assistance. In maintaining this 

provision, the DOT intends to return to 

the practice of specifying timeframes 

during which it will accept TIFIA 

applications. This use of application 

cycles will help DOT manage the TIFIA 

project pipeline and enable consistent 

use of the TIFIA selection criteria. This 

marks a departure from DOT practice 

since 2001 of accepting applications at 

any time during the year. 

The NPRM proposes to add a 

requirement that an applicant must 

submit with its application a working 

model of the project’s comprehensive 

plan of finance. The DOT’s current 

practice is to ask applicants to submit 

such models. As many applicants 

consider such models proprietary in 

nature, the DOT has not publicly 

disclosed them, and the DOT will 

continue to treat them as confidential 

commercial information. Applicants 

should prominently mark the model as 

confidential and proprietary 

information. Having access to the 

models has greatly enhanced the ability 

of the DOT and its financial advisors to 

analyze and understand the plans of 

finance for which TIFIA assistance is 

sought. The DOT believes that requiring 

applicants to include models with their 

application is necessary to evaluate 

applications, and will ensure our 

continued ability to conduct appropriate 

analysis of plans of finance for proposed 

TIFIA projects. 

The proposed rule would make clear 

that the preliminary rating opinion 

letters must be submitted with the 

application. The NPRM also proposes to 

include a provision that the Secretary 

may request such additional 

information as necessary to determine 

whether TIFIA assistance should be 

provided. 

Section 80.11 Preliminary Rating 

Opinion Letter and Investment-Grade 

Rating 

We propose to add a requirement that 

each applicant and borrower obtain a 

preliminary rating opinion letter and 

subsequent investment-grade rating 

from at least two rating agencies, and 

seek public comment on this proposal. 

We propose to add a requirement that 

the preliminary rating opinion letters 

and the subsequent ratings address the 

credit quality of the TIFIA instrument; 

i.e., the preliminary rating opinion letter 

must address the likely rating category 

of the TIFIA instrument, and the 

borrower must obtain a rating for the 

TIFIA instrument when it obtains the 

investment-grade rating for the project 

obligations. The DOT already draws 

substantially on the credit analysis work 

of the rating agencies, and this 

requirement would assist the internal 

capital allocation process that results in 

a subsidy cost estimate for each TIFIA 

transaction. 

To provide flexibility for a 

governmental agency seeking to make 

TIFIA assistance available to multiple 

potential borrowers as part of its 

solicitation of a private concession, the 

DOT is proposing to require submission 

of the credit ratings at a later stage in the 

process. In such an instance, the 

governmental agency must submit a 

TIFIA application that addresses the 

seven statutory criteria, and the selected 

concessionaire must provide the 

preliminary rating opinion letters with 

its submission of the project’s finance 

plan. 

The proposed rule would make clear 

that all debt senior to the TIFIA 

instrument must receive an investmentgrade rating, not just the senior project 

obligations. While the DOT accepts 

multi-lien debt structures, it believes 

that a non-investment-grade lien senior 

to the TIFIA lien would not comport 

with the legislative intent underlying 

the investment-grade rating 

requirement. Thus, the DOT considers 

this proposed change a clarification of 

the TIFIA statute’s requirement. 

The proposed rule would require that 

the borrower deliver final ratings, and 

other such evidence related to the most 

current project financial plan upon 

which the rating evidence is based, to 

the DOT at least two weeks before the 

credit agreement closing in order to give 

the DOT adequate time to analyze any 

credit issues those ratings identify. This 

requirement will be restated in the 

project term sheet. 

The DOT believes that implicit in the 

statute’s investment-grade rating 

provision is a requirement that the 

TIFIA instrument itself attain an 

investment-grade rating if there are no 

project obligations senior to the TIFIA 

instrument. The statute, at 23 U.S.C. 

602(b)(2)(B), imposes such a 

requirement with respect to the 

preliminary rating opinion letter. The 

proposed rule would make that 

requirement explicit for both the 

preliminary rating opinion letter and the 

investment-grade rating. 

The proposed rule would elaborate 

and clarify the current rule’s 

specification that all TIFIA program 

credit rating requirements pertain to 

‘‘underlying’’ ratings. 

Section 80.13 Selection Criteria for 

TIFIA Projects 

As noted above, the DOT seeks 

comment on potential methods of 

incorporating benefit-cost analysis into 

the project selection process. 

The statute prescribes eight criteria 

for project evaluation, without 

specifying any relative weighting or 

whether any of the criteria is 

mandatory. The current rule assigns 

weights, ranging from 5 percent to 20 

percent, to each of the 8 statutory 

criteria. In the past, the DOT has 

assigned scores on a scale of zero to four 

to each of the eight criteria for all 

projects for which it has received 

applications and then weighted those 

scores to arrive at a composite score. 

The NPRM proposes to make several 

important changes to this framework: 

First, a project’s ‘‘creditworthiness’’ 

would now be evaluated separately. For 

every TIFIA project, the DOT analyzes 

the project economics and legal 

provisions supporting the Government’s 

credit security. This analysis is 

fundamentally important and should be 

treated separately from the other seven 

statutory criteria. The proposed rule 

would make creditworthiness a 

requirement. In order for a project to be 

selected for TIFIA assistance under the 

proposed rule, the Secretary must 

determine that it is creditworthy. This 

proposed requirement that a project 

must be determined to be creditworthy 

does not mean that a project’s TIFIA 

instrument, if subordinated to project 

obligations which are investment-grade 

itself, would be required to be 

investment-grade. Guidelines on how 

DOT will evaluate and determine 

creditworthiness will be published and 

updated regularly in the TIFIA program 

guidance. 

In addition, should project selection 

and ranking continue to consist of a 

weighted scoring of statutory criteria, 

the DOT proposes to realign the weights 

assigned to the remaining seven criteria 

to match national transportation 

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11See section V, paragraph 4 of OMB Circular A– 

129, ‘‘Managing Federal Credit Programs’’ 

(November 2000). This Circular is available at the 

following URL: http://www.whitehouse.gov/omb/ 

circulars/a129/a129rev.html. 

12The DOT publishes detailed guidance for TIFIA 

borrowers in a Program Guide. The Program Guide 

also includes the TIFIA application form and the 

text of both the TIFIA statute and the TIFIA rule, 

and will post a form loan template. The Program 

Guide may be found on the TIFIA Web site at: 

http://tifia.fhwa.dot.gov/. 

policies and the goals of reducing 

congestion and improving system 

performance. Because creditworthiness 

would be evaluated separately, the 

weights attached to these criteria would 

be changed so that the seven weightings, 

as revised, would total 100 percent. The 

DOT retains the discretion not to 

advance projects that rate low in these 

seven criteria even if the project is 

creditworthy. 

Under the current rule, the extent to 

which a project is nationally and 

regionally significant is weighted at 20 

percent of the total score, and is scored 

based on the extent to which a project 

generates economic benefits, supports 

international commerce, or otherwise 

enhances the national transportation 

system. The proposed change would 

increase the weight to 40 percent and 

reorganize the evaluation factors by 

creating 2 subcategories, and assigning 

each subcategory a percentage of the 

total weight for this criterion. Under the 

proposed revision, national and regional 

significance would be assessed based 

on: (A) The ability of a project to 

enhance the national or regional 

transportation system by reducing 

congestion and improving overall 

system performance on a sustainable 

basis (30 percent), and (B) the extent to 

which the project generates economic 

benefits beyond those captured under 

(A) and furthers interstate or 

international commerce (10 percent). 

To accommodate the increased 

emphasis on national and regional 

significance, the DOT proposes to 

reassign the weights given to the 

following criteria: Likelihood that 

Federal credit assistance would enable 

the project to proceed at an earlier date 

than the project would otherwise be 

able to proceed (5 percent; currently 

12.5 percent); extent to which the 

project helps maintain or protect the 

environment (10 percent; currently 20 

percent); extent to which the project 

uses new technologies (10 percent; 

currently 5 percent); and amount of 

budget authority required to fund the 

Federal credit instrument made 

available (10 percent; currently 5 

percent). The DOT proposes to evaluate 

the budget authority criterion by 

measuring the amount of TIFIA budget 

authority required to fund the Federal 

credit instrument relative to the total 

project investment. 

Weights for the remaining two 

criteria—private participation (20 

percent) and reduced Federal grant 

assistance (5 percent)—would remain as 

under the current rule. 

The proposed rule would clarify the 

DOT’s preference for applications for 

TIFIA loan guarantees over applications 

for secured loans and lines of credit. 

Such a preference is in accordance with 

Federal credit policies, as expressed in 

OMB Circular A–129, and is further 

reflected in proposed section 80.23(d)(6) 

below concerning refinancing of 

existing debt. The DOT seeks comments 

on how to increase the participation of 

private sector lenders in providing 

guaranteed loans consistent with the 

TIFIA statute and government-wide 

credit policy. 

Section 80.15 Term Sheet 

We propose to add a new section on 

term sheets that would make significant 

changes in how the DOT uses the TIFIA 

program term sheet and in how we 

obligate Federal funds for TIFIA 

projects. 

Currently, the term sheet is a letter 

contract between the DOT and the 

borrower, and the DOT uses it to 

obligate budget authority. The DOT 

proposes to streamline loan 

administration and use the term sheet as 

an expression of the DOT’s intent to 

proceed to negotiation of a credit 

agreement with the borrower. Budget 

authority would be obligated at the time 

the credit agreement is executed rather 

than, as is the current practice, at the 

time the term sheet is executed. 

Because the term sheet would no 

longer be used to obligate current year 

budget authority, we propose to 

eliminate the ‘‘conditional term sheet’’ 

provided for in the current rule. To aid 

budgetary planning, the DOT may issue 

future-year term sheets which, like 

current-year term sheets, also would be 

cancellable at any time by the DOT at 

its own discretion. 

Section 80.17 Interest Rate on Federal 

Credit Instruments 

The proposed rule contains language 

that would implement the TIFIA 

statute’s various interest rate provisions. 

Under the amended TIFIA statute, the 

interest rate on both TIFIA secured 

loans and TIFIA lines of credit is set at 

the time the credit agreement is 

executed, and this requirement is set 

forth in the proposed rule. The 

proposed rule provides that the rate on 

a guaranteed loan would be negotiated 

between the borrower and the 

guaranteed lender, but in accordance 

with the TIFIA statute, makes such 

negotiated rate subject to the Secretary’s 

approval. 

The proposed rule provides, in 

accordance with Federal credit 

policies,11 that all TIFIA credit 

agreements impose an interest rate 

penalty on outstanding loan balances in 

the event of a development default. DOT 

will publish guidelines on development 

default penalties in its program 

guidance. 

The TIFIA statute specifies only a 

lower bound on the interest rate for a 

TIFIA instrument: The rate on United 

States Treasury securities of a similar 

maturity. The current rule contains no 

provision implementing the statute’s 

rate-setting provisions. Under both the 

statute and the current rule, therefore, 

the DOT currently has broad discretion 

to set the interest rate so long as the rate 

is at or above the statutory minimum. In 

administering the TIFIA program, 

however, the DOT has set the rate, in all 

transactions to date, at the statutory 

minimum. As noted above, the DOT 

seeks comment regarding the use of its 

authority to charge different interest 

rates to different borrowers, on the basis 

of program policy goals and guidance in 

OMB Circular A–129. 

The current rule is silent on the 

calculation method by which the 

statutory minimum is determined. The 

DOT has determined the statutory 

minimum for a specific transaction by 

reference on the closing date to the rate 

table, published daily by the Treasury 

Department, for State and Local 

Government Series (SLGS) securities, 

and we have previously noted in the 

TIFIA Program Guide that we use this 

method of determining interest rate 

minimums. The NPRM proposes to 

incorporate into the regulation the 

calculation method for interest rate 

minimums heretofore noted in the 

Program Guide.12

Section 80.19 Guaranteed Loans; 

Eligibility Requirements for Guaranteed 

Lenders 

The NPRM proposes to include a new 

section to provide that the terms of a 

guaranteed loan, including the interest 

rate, would be subject to approval by the 

Secretary. The proposed new section 

also specifies eligibility requirements 

for guaranteed lenders and would 

require that the Secretary approve all 

guaranteed lenders. Currently, eligibility 

standards for guaranteed lenders are set 

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13For information about the TIFIA Program 

Guide, see the preceding note 13 and section 80.35 

of the proposed rule. 

forth in the TIFIA Program Guide.13 The 

DOT believes these eligibility standards 

should instead be incorporated in the 

regulation. 

Section 80.21 Draws on Line of Credit 

The proposed rule would move the 

current rule’s line of credit provisions, 

contained in 49 CFR 80.5, into a new 

section with modifications to 

implement the changes made by the 

SAFETEA–LU amendments to the TIFIA 

statute. The proposed rule would limit 

draws that are made to pay debt service 

on project obligations to the payment of 

debt service on those project obligations 

which financed eligible project costs, 

and it requires that draws for the 

purpose of paying debt service may not 

be made until any capitalized interest 

fund is exhausted. Consistent with the 

changes in SAFETEA–LU, the proposed 

rule would make clear that a draw for 

payment of debt service may be made 

even if a debt service reserve fund is 

available, thereby enabling borrowers to 

use a line of credit to avoid the default 

which usually arises when a debt 

service reserve fund is drawn. 

There would be no limitation in the 

amount that may be drawn under a line 

of credit in any one year, reflecting an 

amendment to the TIFIA statute. 

Section 80.23 Refinancing 

This proposed rule creates a new 

section on refinancing to implement the 

new TIFIA refinancing authority created 

by SAFETEA–LU and contained in 23 

U.S.C. 603(a)(1). In addition, the current 

rule’s provision dealing with 

refinancing of interim construction 

financing not more than one year after 

substantial completion is moved into 

this proposed new section. 

SAFETEA–LU amended TIFIA to 

permit the use of TIFIA secured loans 

and loan guarantees in certain 

refinancing transactions. In general, the 

new provision authorizes the Secretary 

to enter into TIFIA secured loan 

agreements, or loan guarantee 

agreements, to refinance long-term 

project obligations, or Federal credit 

instruments, if such refinancing will 

provide additional funding capacity that 

will be used to fund the completion, 

enhancement, or expansion of a project. 

This proposed new section provides 

guidance on the types of refinancing 

transactions the DOT will consider for 

TIFIA credit assistance and specifies 

application requirements and certain 

refinancing terms that the DOT believes 

are consistent with Federal credit 

policies. In addition, in order to 

minimize displacement of private sector 

credit markets while achieving program 

goals, the DOT proposes to participate 

in a qualified refinancing only by means 

of a TIFIA loan guarantee. As noted in 

the section 80.13 discussion above, the 

DOT seeks comments on how to 

increase the participation of private 

sector lenders in providing guaranteed 

loans consistent with the TIFIA statute 

and government-wide credit policy. 

The DOT’s new refinancing authority 

continues the TIFIA program’s principle 

emphasis: Stimulating investment in 

new transportation infrastructure. 

The DOT will require the applicant to 

demonstrate that the refinancing will 

increase available funding capacity for 

the completion, enhancement, or 

expansion of a project that qualifies for 

funding under 23 U.S.C. 602. The new 

improvement facilitated as part of the 

TIFIA refinancing must cost at least $50 

million (in eligible project costs) 

consistent with the SAFETEA–LU 

statutory minimum threshold for a new 

TIFIA project. The DOT notes that 

certain selection criteria tend to favor a 

project comprised entirely of new 

construction over one that includes the 

refinancing of existing project debt. 

While the new transportation project 

must follow the same Federal 

requirements as any TIFIA project, the 

DOT believes that an asset previously 

financed with the debt being refinanced 

under the TIFIA program is subject to 

those Federal requirements to which it 

was previously subject, including 

applicable Federal requirements 

concerning operations, maintenance, 

and design standards for future 

construction for a project receiving 

TIFIA refinancing assistance. 

A borrower will have the flexibility to 

apply the proceeds of a TIFIA 

guaranteed loan to the refinancing, the 

new project, or apportion an amount to 

each element of the transaction. It is not 

required that guaranteed loan proceeds 

be used to build the new project. If the 

guaranteed loan is made available for 

both the refinancing and the new 

project, the assistance will be structured 

in two tranches. The proposed rule 

establishes a maximum maturity date of 

35 years from the date the credit 

agreement is executed for the portion of 

credit assistance used for the 

refinancing. The maximum maturity 

date for the new project will be 35 years 

from the date of substantial completion, 

the same as for any new project 

receiving TIFIA credit assistance. In no 

case will the term of the loan guarantee 

exceed the useful life of the asset being 

financed. 

The DOT is proposing to provide 

credit assistance in connection with a 

refinancing in an amount no greater 

than the eligible project costs of the new 

transportation investment that is 

facilitated through the additional 

funding capacity provided by the 

refinancing. However, to provide an 

incentive to the private sector to invest 

in transportation infrastructure, 

consistent with the objectives of the 

TIFIA program, DOT may approve an 

increase in this limit up to an amount 

equal to the amount of equity actually 

committed at financial close. For any 

refinancing transaction, the maximum 

amount of credit assistance is limited to 

33 percent of the combined total of 

eligible project costs of the refunding 

and new project. 

The DOT considers that generating 

new investment in transportation is the 

essential purpose of a TIFIA-assisted 

refinancing transaction. For that reason, 

it will require that construction of the 

new project commence within a 

reasonable period of time. This 

requirement will apply even if the new 

construction is financed from sources 

other than TIFIA. To ensure timely 

advancement and completion of project 

construction, the DOT will require a 

penalty interest rate in the guaranteed 

loan in the event there is a development 

default. Guidelines on development 

default penalties for refinancing 

transactions will be published in the 

TIFIA program guidance. 

An applicant seeking TIFIA 

refinancing assistance must submit an 

application, including the new 

transportation asset construction 

project, using the TIFIA application 

form contained in the DOT’s TIFIA 

Program Guide. The application should 

describe in detail the refinancing plan of 

finance and demonstrate that it 

conforms to statutory and regulatory 

requirements. The fee for a refinancing 

application is proposed to be the same 

as the fee for a new TIFIA project 

application. 

Section 80.25 Limitations on Federal 

Credit Assistance 

The proposed rule would impose 

certain limitations on TIFIA assistance. 

Amount of credit assistance: The 

current rule incorporates the statutory 

limitation of 33 percent of reasonably 

anticipated eligible project costs, and 

the proposed rule would retain that 

provision. In addition, we propose to 

incorporate the new statutory provision, 

contained in 23 U.S.C. 603(b)(2), further 

limiting the amount of TIFIA credit 

assistance to the sum of project 

obligations senior to the TIFIA 

instrument when the TIFIA instrument 

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does not have an investment-grade 

rating. 

Look-back in determining project 

costs: The current rule permits costs 

incurred prior to submission of the 

TIFIA application to be included in the 

calculation of eligible project costs if 

approved by the Secretary. The 

proposed rule would permit costs 

incurred up to three years prior to the 

TIFIA application to be used in the 

calculation of eligible project costs, 

while allowing for further look-backs 

only in exceptional circumstances and if 

approved by the Secretary. However, the 

proposed rule would limit the 

consideration of such total costs to no 

more than 20 percent of total eligible 

project costs. 

Operating costs during construction: 

The proposed rule clarifies that the 

operating costs of a special purpose 

entity formed solely to construct and 

operate the facility for which the TIFIA 

credit assistance is provided would be 

included in the calculation of eligible 

project costs. The proposed rule would 

limit the consideration of such total 

costs to no more than 5 percent of total 

eligible project costs. 

Lease acquisition payments or 

concession fees: To be considered 

eligible project costs, payments to a 

public entity associated with the lease 

acquisition or concession fee must be 

dedicated to transportation projects 

eligible under title 23 or chapter 53 of 

title 49, United States Code. Lease 

acquisition payments must be part of a 

project in which new capital costs 

constitute a significant portion of 

project costs and represent fair market 

value. In other words, the concession 

fee, in and of itself, does not comprise 

an eligible project cost. In order to 

implement this policy, the DOT 

proposes to limit its consideration of 

such concession payments to 25 percent 

of total eligible project costs and seeks 

public comment on this proposal. 

Timing of funding of assistance: The 

current rule specifies that the DOT will 

fund a secured loan ‘‘based on a 

project’s funding needs.’’ In practice, 

the DOT has funded TIFIA loans on a 

reimbursement basis; i.e., borrowers 

may draw funds only for the payment of 

costs already incurred. This 

reimbursement practice aligns TIFIA 

assistance with assistance provided to 

Federal-aid grant-funded projects. In 

addition, the DOT has typically 

included in the credit agreement a 

provision specifying the maximum 

frequency (e.g., monthly or quarterly) 

with which draw requests can be 

submitted. Therefore, we propose to 

incorporate these practices into the 

regulation. 

Section 80.27 Credit Agreement 

Closing and Obligation of Funds 

The proposed new section states that 

obligation of Federal funds would occur 

at the closing of the credit agreement, 

thus making clear that the DOT is 

changing its current practice of 

obligating funds at the time a term sheet 

is executed. 

Section 80.29 Reporting Requirements 

and Credit Monitoring 

The proposed rule reorganizes the 

current rule to consolidate within a 

single section all reporting and 

monitoring requirements. The NPRM 

proposes to provide that the DOT may 

impose, in a particular credit agreement, 

additional reporting requirements 

which it considers necessary in order to 

properly monitor the credit performance 

of the specific project. 

The proposed rule moves the current 

rule’s annual credit reporting 

requirement to this section. It would 

require borrowers to maintain a credit 

rating at their own expense and furnish 

it annually to the DOT. The current rule 

requires borrowers to provide ongoing 

credit evaluations to the DOT annually. 

The proposed rule makes clear that such 

credit evaluations must be current credit 

ratings. It is not the intent of this 

provision to require borrowers with 

project obligations that have published 

credit ratings to obtain new ratings, but 

rather merely to require that the 

borrower establish that such ratings are 

still in effect. Borrowers which do not 

have project obligations with published 

credit ratings, such as borrowers which 

use bank debt and fulfill the statutory 

investment-grade rating requirement by 

obtaining a private rating, would be 

required to obtain a credit rating each 

year. 

The current rule provides that the 

DOT may conduct periodic financial 

and compliance audits of TIFIA 

borrowers. The proposed rule would 

make clear that such audits conducted 

by the DOT are at the borrower’s 

expense. 

Section 80.31 Fees 

Consistent with section 603(b)(7), 

section 604(b)(9), and 605(b) of title 23, 

United States Code, the proposed rule 

identifies several fees the DOT would 

assess program participants to recover 

the program’s various administrative 

and transactional costs. The following 

fees cannot be considered eligible 

project costs for the purpose of 

calculating the maximum amount of 

credit assistance. 

The proposed rule would not specify 

amounts for fees that are fixed, i.e., fees 

that are not transaction-based, namely 

the application fee and the servicing fee. 

The DOT needs to retain the flexibility 

to change these fixed fees from time to 

time, in response to changes in its own 

costs. Thus, rather than specify the fee 

amounts in the regulation, the DOT 

would announce changes in these fees 

by notice published from time to time 

in the Federal Register. A schedule of 

fees currently in effect will also be 

posted on the TIFIA Web site. 

The current rule prohibits payment of 

the application fee or the processing fee 

by anyone other than the applicant. The 

DOT is not aware of any circumstance 

where such fees were not paid by the 

applicant or an affiliated entity; even if 

a third party were to pay such fees, the 

DOT does not believe the TIFIA 

program would be adversely affected. 

The DOT has concluded this prohibition 

is unnecessary, and thus proposes to 

eliminate it. 

The NPRM proposes that the DOT 

would assess the following fees: 

1. Application fee. The applicant 

would be required to remit the 

application fee with its application for 

TIFIA assistance. There would be a 

single application fee for each 

application, irrespective of the number 

of TIFIA instruments the applicant is 

seeking. The current rule provides that 

the application fee is non-refundable, 

and the proposed rule would leave that 

provision unchanged. The purpose of 

the application fee is to cover, in part, 

the DOT’s cost for outside consulting 

services engaged to assist in reviewing 

the application. The amount of the 

application fee will be posted on the 

TIFIA Web site. The DOT may change 

the amount of the application fee from 

time to time, and will publish these 

changes in the Federal Register and 

post on the TIFIA Web site. The 

application fee is not considered an 

eligible project cost for the purpose of 

calculating the maximum amount of 

credit assistance. 

2. Subsidy fee. As authorized by 

section 603(b)(7) and section 604(b)(9) 

of Title 23, United States Code, the 

current rule, in section 80.17(c), permits 

the payment of a supplemental fee to 

reduce the subsidy cost of a project. The 

proposed rule would identify this as a 

‘‘subsidy fee’’ and restate the current 

rule’s language. If, in any given year, 

there is insufficient budget authority to 

fund the credit instrument for a 

qualified project that has been selected 

to receive assistance under TIFIA, the 

DOT and the approved applicant may 

agree upon a supplemental fee to be 

paid by or on behalf of the approved 

applicant at the time of execution of the 

term sheet to reduce the subsidy cost of 

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3496 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 

that project. Although such a fee has yet 

to be imposed, the DOT anticipates use 

of this provision as the demand for 

TIFIA assistance increases. The subsidy 

fee is not considered an eligible project 

cost for the purpose of calculating the 

maximum amount of credit assistance. 

3. Transaction fee. The transaction fee 

would be a one-time fee, set at an 

amount sufficient to reimburse the DOT 

for the actual costs, other than Federal 

employee costs, incurred in evaluating 

the application and negotiating the 

credit agreement. Such costs consist 

principally of fees the DOT pays to its 

consultants and outside legal advisors. 

The transaction fee would be due at 

closing of the credit agreement or within 

30 days of financial close as specified in 

the credit agreement. The proposed rule 

provides that the transaction fee would 

be an obligation of the applicant, 

payable irrespective of whether or not 

the credit agreement was ever executed. 

The transaction fee is not considered an 

eligible project cost for the purpose of 

calculating the maximum amount of 

credit assistance. 

4. Servicing fee. The DOT would 

assess the servicing fee annually in 

accordance with section 605(b)(1)(B) of 

SAFETEA–LU. There would be a 

servicing fee for each credit instrument 

so that a single borrower could be 

assessed more than one servicing fee. 

The servicing fee would offset, in part, 

the DOT’s costs in servicing its portfolio 

of TIFIA loans. The amount of the 

servicing fee will be posted on the 

TIFIA Web site. The DOT may change 

the amount of the servicing fee from 

time to time, and will publish these 

changes in the Federal Register and 

post on the TIFIA Web site. The 

servicing fee is not considered an 

eligible project cost for the purpose of 

calculating the maximum amount of 

credit assistance. 

5. Monitoring fee. The DOT would 

include in each credit agreement a 

provision obligating the borrower to 

reimburse the DOT for costs incurred in 

connection with monitoring the credit 

performance of a project, the 

enforcement of credit agreement 

provisions, amendments to the credit 

agreement and related documents, and 

other performance-related activities in 

accordance with section 603(b)(7) of 

SAFETEA–LU. The monitoring fee is 

not considered an eligible project cost 

for the purpose of calculating the 

maximum amount of credit assistance. 

The proposed rule provides that the 

DOT would seek administrative offset to 

recoup the above fees in the event the 

applicant or borrower fails to pay them. 

Section 80.33 Use of Administrative 

Offset 

The proposed rule carries forward the 

current rule’s provision making clear 

that the DOT does not intend to recoup 

by means of administrative offset losses 

incurred through TIFIA credit 

instruments except under circumstances 

relating to fraud, misrepresentation, 

false claims or similar acts. It clarifies 

the DOT’s intent, as stated in the rule, 

to recover through administrative offset 

any fees assessed under the TIFIA 

program and not paid. 

Section 80.35 Program Guide; TIFIA 

Web site 

The proposed rule would establish a 

new section advising those interested in 

the TIFA program of the TIFIA Program 

Guide and the TIFIA Web site (http:// 

tifia.fhwa.dot.gov). The proposed new 

section would be informational only, 

intended to notify the public of where 

to find additional program information, 

including information relating to a fee 

schedule. 

Section 80.37 Applicant Information 

Requirements 

The proposed rule would establish a 

new section addressing certain 

requirements that apply to all recipients 

of Federal assistance, including entities 

receiving credit assistance. First, an 

applicant must obtain a Data Universal 

Number System (DUNS) number. The 

DUNS number, which is a unique ninecharacter number that identifies an 

organization, is a tool used by the 

Federal Government to track how 

Federal money is distributed. Second, 

an applicant must register with the 

Central Contractor Registration (CCR). 

The Federal Government requires that 

Federal agencies collect certain 

information from recipients of Federal 

assistance. This information is collected 

through the CCR system, which is the 

primary registrant database for the 

Federal Government. Registration in the 

CCR requires a DUNs number. 

Distribution and Derivation Tables 

For ease of reference, distribution and 

derivation tables are provided for the 

current sections of the proposed rule as 

follows. 

DERIVATION TABLE

New section Old section 

80.1 ...................................................................................................................................................................... 80.1. 

80.3 ...................................................................................................................................................................... 80.3 Administrative offset. 

80.3 Borrower .................................................................................................................................................... None. 

80.3 Budget authority ........................................................................................................................................ None. 

None ............................................................................................................................................................. 80.3 Conditional term sheet. 

80.3 ...................................................................................................................................................................... 80.3 Credit Agreement. 

80.3 Current Credit Evaluation ......................................................................................................................... 80.3 None. 

80.3 ...................................................................................................................................................................... 80.3 Eligible project costs. 

80.3 ...................................................................................................................................................................... 80.3 Federal credit instrument. 

80.3 Guaranteed lender .................................................................................................................................... None. 

80.3 ...................................................................................................................................................................... 80.3 Investment-grade rating. 

None ............................................................................................................................................................. 80.3 Lender. 

80.3 ...................................................................................................................................................................... 80.3 Line of credit. 

80.3 ...................................................................................................................................................................... 80.3 Loan guarantee. 

None ............................................................................................................................................................. 80.3 Local servicer. 

80.3 Maturity Date ............................................................................................................................................. None. 

None ............................................................................................................................................................. 80.3 Obligor. 

80.3 Preliminary rating opinion letter ................................................................................................................ None. 

80.3 ...................................................................................................................................................................... 80.3 Project. 

80.3 ...................................................................................................................................................................... 80.3 Project obligation. 

None ............................................................................................................................................................. 80.3 Project sponsor. 

80.3 ...................................................................................................................................................................... 80.3 Rating agency. 

80.3 Refinance .................................................................................................................................................. None. 

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Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 3497 

DERIVATION TABLE—Continued 

New section Old section 

80.3 Secretary ................................................................................................................................................... None. 

80.3 ...................................................................................................................................................................... 80.3 Secured loan. 

80.3 ...................................................................................................................................................................... 80.3 State. 

80.3 Subsidy cost .............................................................................................................................................. 80.3 Subsidy amount. 

80.3 ...................................................................................................................................................................... 80.3 Substantial completion. 

80.3 ...................................................................................................................................................................... 80.3 Term sheet. 

80.3 ...................................................................................................................................................................... 80.3 TIFIA. 

80.5(a)–(e) ........................................................................................................................................................... 80.3(a)–(e). 

80.7(a) ................................................................................................................................................................. 80.13(a). 

80.7(a)(1) ............................................................................................................................................................. 80.13(a)(1) and (a)(5). 

80.7(a)(2) through (a)(2)(i) .................................................................................................................................. 80.13(a)(3). 

80.7(a)(2)(ii) ......................................................................................................................................................... 80.13(b). 

80.7(a)(3) ............................................................................................................................................................. 80.13(a)(4). 

80.7(b) through (c) ............................................................................................................................................... 80.13(c). 

80.9(a) ................................................................................................................................................................. 80.7(d) Added to new section. 

80.9(b) ................................................................................................................................................................. None. 

80.9(c) .................................................................................................................................................................. 80.7(b). 

80.9(c)(1) ............................................................................................................................................................. 80.7(b)(1). 

80.9(c)(2) ............................................................................................................................................................. None. 

80.9(c)(3) ............................................................................................................................................................. 80.7(b)(1). 

80.9(c)(4) ............................................................................................................................................................. 80.7(b)(2). 

80.9(c)(5) ............................................................................................................................................................. 80.7(b)(3). 

80.9(c)(6) ............................................................................................................................................................. 80.7(b)(4). 

80.9(c)(7) ............................................................................................................................................................. 80.7(b)(5). 

80.9(c)(8) ............................................................................................................................................................. None. 

80.9(c)(9) ............................................................................................................................................................. None. 

80.9(c)(10) ........................................................................................................................................................... None. 

80.9(d) ................................................................................................................................................................. 80.7(c). 

80.11(a) through (a)(1) ........................................................................................................................................ 80.11(a). 

80.11(a)(2) ........................................................................................................................................................... None. 

80.11(b) ............................................................................................................................................................... None. 

80.11(c)(1) through 80.11(c)(1)(i) ........................................................................................................................ 80.11(b). 

80.11(c)(1)(ii) ....................................................................................................................................................... None. 

80.11(c)(2) ........................................................................................................................................................... None. 

80.11(d) ............................................................................................................................................................... None. 

80.11(e) ............................................................................................................................................................... 80.11(c). 

80.13(a) ............................................................................................................................................................... 80.15(a)(2). 

80.13(b) ............................................................................................................................................................... 80.15(a). 

80.13(b)(1) ........................................................................................................................................................... 80.15(a)(1). 

80.13(b)(2) ........................................................................................................................................................... 80.15(a)(3). 

80.13(b)(3) ........................................................................................................................................................... 80.15(a)(4). 

80.13(b)(4) ........................................................................................................................................................... 80.15(a)(5). 

80.13(b)(5) ........................................................................................................................................................... 80.15(a)(6). 

80.13(b)(6) ........................................................................................................................................................... 80.15(a)(7). 

80.13(b)(7) ........................................................................................................................................................... 80.15(a)(8). 

80.13(c) ................................................................................................................................................................ 80.15(c). 

80.15(a) through (b) ............................................................................................................................................ 80.5(d)(1) through (d)(2). 

80.17(a) through (d) ............................................................................................................................................ None. 

80.19(a) through (c) ............................................................................................................................................. None. 

80.21(a) through (b) ............................................................................................................................................ 80.5(e). 

80.23(a) ............................................................................................................................................................... 80.5(c). 

80.23(b) through (e)(7) ........................................................................................................................................ None. 

80.25(a) through (a)(1) ........................................................................................................................................ 80.5(a). 

80.25(a)(2) ........................................................................................................................................................... None. 

80.25(b)(1) ........................................................................................................................................................... 80.5(b). 

80.25(b)(2) ........................................................................................................................................................... None. 

80.25(b)(3) ........................................................................................................................................................... None. 

80.25(c) ................................................................................................................................................................ None. 

80.25(d) ............................................................................................................................................................... 80.5(g) in part. 

80.27 Heading ..................................................................................................................................................... None. 

80.27(a) ............................................................................................................................................................... None. 

80.27(a)(1) ........................................................................................................................................................... 80.13(a)(1). 

80.27(a)(2) ........................................................................................................................................................... 80.5(f). 

80.27(a)(3) ........................................................................................................................................................... 80.11(b). 

80.27(a)(4) ........................................................................................................................................................... None. 

80.27(b) ............................................................................................................................................................... 80.5(d)(2). 

80.29 Heading ..................................................................................................................................................... 80.19. 

80.29(a) ............................................................................................................................................................... 80.11(d). 

80.29(b) ............................................................................................................................................................... 80.19 First sentence. 

80.29(c) through (c)(2) ........................................................................................................................................ None. 

80.29(d) ............................................................................................................................................................... 80.19 Second sentence. 

80.29(e) ............................................................................................................................................................... 80.19(d) Last sentence. 

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3498 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 

DERIVATION TABLE—Continued 

New section Old section 

80.31 Heading ................................................................................................................................................... 80.17. 

80.31 .................................................................................................................................................................... None. 

80.31(a) ............................................................................................................................................................... 80.17(a). 

80.31(b) ............................................................................................................................................................... 80.17(c). 

80.31(c) ................................................................................................................................................................ 80.17(a). 

80.31(d) ............................................................................................................................................................... 80.17(d). 

80.31(e) ............................................................................................................................................................... None. 

80.33 .................................................................................................................................................................... 80.21. 

80.35 .................................................................................................................................................................... None. 

80.37 .................................................................................................................................................................... None. 

DISTRIBUTION TABLE

Old section Part 80 New section Part 80 

80.1 Heading ................................................................................................................. 80.1 Heading text unchanged. 

Purpose ........................................................................................................................... 80.1 Revised. 

80.3 Heading ................................................................................................................. 80.3 Heading text unchanged. 

Administrative offset ........................................................................................................ Revised. 

None ......................................................................................................................... 80.3 Borrower replaced obligor; definition revised. 

None ......................................................................................................................... 80.3 Budget authority added. 

Conditional term sheet .................................................................................................... 80.3 Removed. 

Credit Agreement ............................................................................................................ 80.3 Revised. 

None ......................................................................................................................... 80.3 Current Credit Evaluation added. 

Eligible project costs ........................................................................................................ 80.3 Revised. 

Federal credit instrument ................................................................................................. 80.3 Revised. 

None ......................................................................................................................... 80.3 Guaranteed lender replaces lender. 

Investment-grade rating ................................................................................................... 80.3 Revised. 

Lender .............................................................................................................................. Removed, replaced by Guaranteed lender. 

Line of credit .................................................................................................................... 80.3 Revised. 

Loan guarantee ............................................................................................................... 80.3 Revised. 

Local Servicer .................................................................................................................. 80.3 Removed. 

None ......................................................................................................................... 80.3 Maturity date added. 

Obligor ............................................................................................................................. Removed, replaced by Borrower. 

None ......................................................................................................................... 80.3 Preliminary rating opinion letter added. 

Project .............................................................................................................................. 80.3 Revised. 

Project obligation ............................................................................................................. 80.3 Revised. 

Project sponsor ................................................................................................................ 80.3 Removed. 

Rating agency .................................................................................................................. 80.3 Revised. 

None ......................................................................................................................... 80.3 Refinance added 

None ......................................................................................................................... 80.3 Secretary added. 

Secured loan ................................................................................................................... 80.3 Revised. 

State ................................................................................................................................ 80.3 ‘‘States’’capitalized. 

Subsidy amount ............................................................................................................... 80.3 Changed to Subsidy cost. 

Substantial completion .................................................................................................... 80.3 Revised. 

Term sheet ...................................................................................................................... 80.3 Revised. 

TIFIA ................................................................................................................................ 80.3 Revised. 

80.5 Heading ................................................................................................................. 80.25 Heading redesignated and revised. 

80.5(a) ............................................................................................................................. 80.25(a) through (a)(1) Redesignated and revised. 

None ......................................................................................................................... 80.25(a)(2) Added. 

80.5(b) ............................................................................................................................. 80.25(b)(1) Redesignated and revised. 

None ......................................................................................................................... 80.25(b)(2) Added. 

None ......................................................................................................................... 80.25(b)(3) Added. 

80.5(c) .............................................................................................................................. 80.23(a) Redesignated and revised. 

80.5(d)(1) through (d)(2) .................................................................................................. 80.15(a) through (b) Conditional term sheet deleted; redesignated and revised with regard to term sheet. 

80.5(e) ............................................................................................................................. 80.21(a) through (b) Redesignated and revised. 

80.5(f) .............................................................................................................................. 80.27(a)(2) Redesignated and revised. 

None ......................................................................................................................... 80.25(c) Added. 

80.5(g) ............................................................................................................................. 80.25(d) Redesignated and revised. 

80.7 Heading ................................................................................................................. 80.9 Heading redesignated. 

80.7(a) ............................................................................................................................. Removed. 

None ......................................................................................................................... 80.9(a) Added; language from 80.7(d) incorporated. 

None ......................................................................................................................... 80.9(b) Added. 

80.7(b) ............................................................................................................................. 80.9(c) Redesignated and revised. 

80.7(b)(1) ......................................................................................................................... 80.9(c)(1) and (c)(3) Redesignated and revised. 

None ......................................................................................................................... 80.9(c)(2) Added. 

80.7(b)(2) ......................................................................................................................... 80.9(c)(4) Redesignated and revised. 

80.7(b)(3) ......................................................................................................................... 80.9(c)(5) Redesignated and revised. 

80.7(b)(4) ......................................................................................................................... 80.9(c)(6) Redesignated and revised. 

80.7(b)(5) ......................................................................................................................... 80.9(c)(7) Redesignated and revised. 

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DISTRIBUTION TABLE—Continued 

Old section Part 80 New section Part 80 

80.7(c) .............................................................................................................................. 80.9(d) Redesignated and revised. 

80.7(d) ............................................................................................................................. 80.9(a) Language incorporated. 

80.9 Heading ................................................................................................................... 80.5 Redesignated and heading text unchanged. 

80.9 .................................................................................................................................. 80.5 Redesignated and revised. 

80.9(a) ............................................................................................................................. 80.5(a) Redesignated and revised. 

80.9 through (d) ............................................................................................................... 80.5(b) through (d) Redesignated and text unchanged. 

80.9(e) ............................................................................................................................. 80.5(e) Redesignated. 

80.11 Heading ................................................................................................................. 80.11 Heading revised. 

80.11(a) ........................................................................................................................... 80.11(a) through (a)(1) Revised. 

None ......................................................................................................................... 80.11(a)(2) Added. 

None ......................................................................................................................... 80.11(b) Added. 

80.11(b) ........................................................................................................................... 80.11(c)(1) through (c)(1)(i) Redesignated and revised. 

None ......................................................................................................................... 80.11(c)(1)(ii) Added. 

None ......................................................................................................................... 80.11(c)(2) Added. 

None ......................................................................................................................... 80.11(d) Added. 

80.11(c) ............................................................................................................................ 80.11(e) Redesignated and revised. 

80.11(d) ........................................................................................................................... 80.29(a) Redesignated and revised. 

80.13 Heading ................................................................................................................. 80.7 Redesignated and heading revised. 

80.13(a) ........................................................................................................................... 80.7(a) Redesignated and revised. 

80.13(a)(1) ....................................................................................................................... 80.7(a)(1) Redesignated and revised. 

80.13(a)(2) ....................................................................................................................... Removed. 

80.13(a)(3) ....................................................................................................................... 80.7(a)(2)(i) Redesignated and revised. 

80.13(a)(4) ....................................................................................................................... 80.7(a)(3) Redesignated and revised. 

80.13(a)(5) ....................................................................................................................... 80.7(a)(1) Redesignated and revised. 

80.13(b) ........................................................................................................................... 80.7(a)(2)(ii) Redesignated and revised. 

80.13(c) ............................................................................................................................ 80.7(b) through (c) Redesignated and revised. 

80.15 Heading ............................................................................................................... 80.13 Redesignated and heading revised. 

80.15(a) ........................................................................................................................... 80.13(b) Redesignated and revised. 

80.15(a)(1) ....................................................................................................................... 80.13(b)(1) Redesignated 

80.15(a)(2) ....................................................................................................................... 80.13 Redesignated and revised. 

80.15(a)(3) ....................................................................................................................... 80.13(b)(2) Redesignated and revised. 

80.15(a)(4) ....................................................................................................................... 80.13(b)(3) Redesignated and revised. 

80.15(a)(5) ....................................................................................................................... 80.13(b)(4) Redesignated and revised. 

80.15(a)(6) ....................................................................................................................... 80.13(b)(5) Redesignated and revised. 

80.15(a)(7) ....................................................................................................................... 80.13(b)(6) Redesignated and revised. 

80.15(a)(8) ....................................................................................................................... 80.13(b)(7) Redesignated. 

80.15(b) ........................................................................................................................... 80.11(a) Redesignated and revised. 

80.15(c) ............................................................................................................................ 80.13(c) Redesignated and revised. 

80.17 Heading ............................................................................................................... 80.31 Redesignated and revised. 

None ......................................................................................................................... 80.31 Added. 

80.17(a) ........................................................................................................................... 80.31(a) and (c) Redesignated and revised. 

80.17(b) ........................................................................................................................... Removed. 

80.17(c) ............................................................................................................................ 80.31(b) Redesignated. 

80.17(d) ........................................................................................................................... 80.31(d) Redesignated and revised. 

None ......................................................................................................................... 80.31(e) Added. 

80.19 Heading ............................................................................................................... 80.29 Redesignated and revised. 

80.19 First sentence ..................................................................................................... 80.29(b) Redesignated and revised. 

None ......................................................................................................................... 80.29(c)(1) through (c)(2) Added. 

80.19 Second sentence ................................................................................................ 80.29(d) Redesignated and revised. 

80.19 Last sentence ...................................................................................................... 80.29(e) Redesignated and revised. 

80.21 Heading ............................................................................................................... 80.33 Redesignated. 

80.21 ................................................................................................................................ 80.33 Redesignated and revised. 

None ................................................................................................................................ 8015 New heading added. 

80.5(d)(1) through (d)(2) .................................................................................................. 80.15(a) through (b) Redsignated and revised. 

None ......................................................................................................................... 80.17 New heading added. 

None ......................................................................................................................... 80.17(a) through (d) Added. 

None ......................................................................................................................... 80.19 New heading added. 

None ......................................................................................................................... 80.19(a) through (c) Added. 

None ......................................................................................................................... 80.21 New heading added 

80.5(e) ............................................................................................................................. 80.21(a) through (b) Redesignated and revised. 

None ......................................................................................................................... 80.23 New heading added. 

80.5(c) .............................................................................................................................. 80.23(a) Redesignated and revised. 

None ......................................................................................................................... 80.23(b) through (e)(7) Added. 

None ......................................................................................................................... 80.27 New heading added. 

None ......................................................................................................................... 80.27(a) Added 

80.13(a)(1) ....................................................................................................................... 80.27(a)(1) Redesignated and revised. 

80.5(f) .............................................................................................................................. 80.27(a)(2) Redesignated and revised. 

80.11(b) ........................................................................................................................... 80.27(a)(3) Redesignated and revised. 

None ......................................................................................................................... 80.27(a)(4) Added. 

80.5(d)(1) through (d)(2) .................................................................................................. 80.27(b) Redesignated and revised. 

None ......................................................................................................................... 80.35 New heading added. 

None ......................................................................................................................... 80.35(a) through (c) Added. 

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3500 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 

14These reports to Congress are available on the 

TIFIA Web site: http://tifia.fhwa.dot.gov. 

15 Government Accountability Office, Highway 

and Transit Investments: Options for Improving 

Information on Projects’ Benefits and Costs and 

increasing Accountability for Results (GAO)–05– 

172), Washington, DC, January 2005. 

16Theofanis P. Mamuneas and M. Ishaq Nadiri, 

‘‘Production, Consumption and the rates of Return 

to Highway Infrastructure Capital,’’ (September 

2003). 

17See http://www.fightgridlocknow.gov. 

18United States Department of Transportation, 

http://www.fightgridlocknow.gov. 

19 ‘‘Urban Traffic Congestion Costs the USA $63 

Billion per Annum,’’ September 14, 2004, Texas 

Transportation Institute. (http:// 

www.citymayors.com/transport/ 

congestion_usa.html;). 

20 ‘‘Transportation Investment in our Future 

Needs of the U.S. Transportation System’’ by the 

American Association of State Highway and 

Transportation Officials, http:// 

www.transportationl.org/tiflreport/, March 2007. 

DISTRIBUTION TABLE—Continued 

Old section Part 80 New section Part 80 

None ......................................................................................................................... 80.37 Added. 

Rulemaking Analyses and Notices 

All comments received before the 

close of business on the comment 

closing date indicated above will be 

considered and will be available for 

examination in the docket at the above 

address. Comments received after the 

comment closing date will be filed in 

the docket and will be considered to the 

extent practicable. In addition to late 

comments, the DOT will also continue 

to file relevant information in the docket 

as it becomes available after the 

comment period closing date, and 

interested persons should continue to 

examine the docket for new material. A 

final rule may be published at any time 

after close of the comment period. 

Executive Order 12866 (Regulatory 

Planning and Review) and U.S. DOT 

Regulatory Policies and Procedures 

The DOT has determined 

preliminarily that this action would be 

an economically significant regulatory 

action within the meaning of Executive 

Order 12866, and that it would it be 

significant within the meaning of 

Department of Transportation regulatory 

policies and procedures because it 

implements important changes made to 

statutory law and makes a number of 

substantive changes to the current TIFIA 

regulation. Our determination is based 

on the activity to date of the program, 

which has had an annual effect on the 

economy of $100 million or more. 

This action proposes to update and 

streamline the DOT’s regulation on 

Credit Assistance for Surface 

Transportation Projects. It implements 

the changes SAFETEA–LU made to the 

TIFIA statute, and reorganizes the 

current rule to make it more 

comprehensible to users. 

As of May 2008, the TIFIA program 

has provided approximately $4.8 billion 

in Federal credit assistance which has 

supported an aggregate of $18.6 billion 

in combined public and private sector 

capital investment, at a budgetary cost 

of approximately $346 million. 

The proposed regulation would affect 

only those entities that elect to apply for 

TIFIA assistance and are selected to 

receive a Federal credit instrument. It 

would not impose any direct costs on 

non-participants. 

Recognizing the significant impact of 

this program, SAFETEA–LU directed 

the Secretary of Transportation to 

submit biannually to Congress a report 

summarizing the financial performance 

of the projects receiving assistance 

under the TIFIA credit program. Two 

reports have been submitted to date, and 

a June 2008 report was recently 

submitted. The June 2006 report briefly 

updates financial information originally 

presented in the Department’s 

comprehensive June 2002 report to 

Congress.14

The DOT and industry research has 

indicated that there are economic 

productivity gains to be derived from 

efficient capital investment in surface 

transportation facilities. According to a 

2005 GAO report, ‘‘[t]ransportation 

improvements also lead to increased 

productivity and economic growth, 

through improving access to goods and 

services for businesses and individuals 

and increasing the geographic size of 

potential labor pools for employers and 

potential jobs for individuals.’’ 15 This 

GAO report cited a September 2003 

study, which estimated that average 

annual returns on highway investment 

of approximately 14 percent between 

1990 and 2000.16 The DOT continues 

research, updating the returns on 

highway capital investment for 2000– 

2005. Preliminary results show positive 

returns but lower than the 1990–2000 

time period. TIFIA can serve to 

efficiently allocate public and private 

investment in surface transportation 

infrastructure and encourage depoliticizing investments. In addition to 

the direct returns it produces, 

transportation capital investment 

typically generates spillover benefits, 

which may yield financial and nonfinancial benefits, such as reduced 

pollution, increased safety, improved 

international competitiveness, and 

enhanced accessibility. 

Just as transportation investment 

produces benefits, failure to invest 

results in cost increases. According to 

the DOT, ‘‘transportation system 

congestion is one of the single largest 

threats to our nation’s economic 

prosperity and way of life.’’ 17 In 2003, 

Americans lost 3.7 billion hours and 2.3 

billion gallons of fuel due to traffic jams, 

resulting in an estimated cost of $200 

billion per year.18 According to the 

Texas Transportation Institute, ‘‘The 

solutions to this problem will require 

commitment by the public and by 

national, state and local officials to 

increase investment levels and identify 

projects, programs and policies that can 

achieve mobility goals.’’ 19

According to a recent study by the 

American Association of State Highway 

and Transportation Officials (AASHTO), 

the U.S. population will grow at a more 

rapid pace in the next 50 years than 

during the previous 50 years when the 

nation’s modern highway system was 

first being constructed. As a result of 

this growth, the number of vehicles on 

U.S. highways, estimated at 246 million 

in 2007 (compared to 65 million cars 

and trucks in 1955), could rise to nearly 

400 million by 2055. The AASHTO 

report also estimated that between 2004 

and 2035 truck tonnage could increase 

114 percent and rail tonnage could 

increase 63 percent; truck traffic, 

measured in trucks per day, per mile, is 

expected to more than double in the 

same period.20

The TIFIA program was established to 

provide fractional credit assistance to 

major transportation infrastructure 

projects—such as highway, transit, 

passenger rail, certain freight facilities, 

and certain port projects—that have the 

potential of generating substantial 

economic benefits both regionally and 

nationally. In many cases, such projects 

are capable of being supported through 

direct user charges or dedicated revenue 

streams that can be used to access 

private capital and other non-Federal 

funding sources. The TIFIA program is 

designed to fill market gaps through 

providing supplemental and/or 

subordinate capital to such projects, 

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facilitating access to the capital markets 

or other financing sources for the 

majority of project funding needs. 

Through the TIFIA program’s leverage 

of limited Federal funds with private 

capital, these capital-intensive projects 

can be advanced without displacing 

smaller, more traditional grantsupported projects. Federal risk 

exposure is mitigated by substantial coinvestment from non-Federal parties 

and the use of objective, market-based 

credit evaluation criteria. 

Through SAFETEA–LU, Congress 

authorized $122 million for each 

Federal Fiscal Year (FFY) from 2005 

through 2009. Under TEA–21, Congress 

had authorized up to a total of $530 

million for FFY 1999 through FFY 2003. 

These funds pay the subsidy cost to the 

Federal Government of providing credit 

assistance, and are available until 

expended by the DOT or reprogrammed 

by Congress. Based on experience, this 

funding amount can support more than 

$2 billion of average annual credit 

assistance. Under the terms of the 

legislation, the Federal share is limited 

to 33 percent of total eligible project 

costs. In many cases, however, the 

actual share of TIFIA assistance is 

considerably less. For example, the 

average request for TIFIA assistance by 

applicants to the TIFIA program 

between October 1998 and March 2007 

was approximately 26 percent of total 

project cost. 

Under the Federal Credit Reform Act 

of 1990 (FCRA), the amount of budget 

authority necessary to support a Federal 

credit instrument depends upon the 

subsidy cost (i.e., the estimated present 

value cost of estimated losses that will 

be incurred as a result of defaults, net 

of any fee income or recoveries on 

default). Each project is assigned a 

subsidy cost based upon an evaluation 

of its creditworthiness and the specific 

terms and conditions of the loan or loan 

guarantee agreement. As noted 

previously, since the inception of the 

TIFIA program, total subsidy costs have 

amounted to nearly $346 million, 

supporting approximately $4.8 billion 

in Federal credit with an aggregate of 

$18.6 billion in public and private 

capital investment. 

The TIFIA program can promote the 

efficient functioning of project delivery 

and the private markets, and can 

generate both direct and indirect 

benefits, including reduced congestion, 

greater mobility, improved safety, an 

enhanced environment, and greater 

economic growth, all of which further 

interstate commerce. 

Regulatory Flexibility Act 

In compliance with the Regulatory 

Flexibility Act (Pub. L. 96–354, 5 U.S.C. 

601–612) the DOT has evaluated the 

effects of this proposed action on small 

entities and has determined 

preliminarily that the proposed action 

would not have a significant economic 

impact on a substantial number of small 

entities. 

The TIFIA program is generally 

intended to assist large transportation 

projects and large entities and has little 

effect on small entities. This action 

proposes to extend availability of TIFIA 

credit assistance to smaller projects than 

those heretofore eligible; thus, to the 

degree they affect small entities, the 

changes will have a positive effect on 

small entities by making it possible for 

such smaller projects to obtain Federal 

credit assistance. The DOT expects, 

nevertheless, that the bulk of TIFIA 

assistance will go to large projects and 

that most small entities will be 

unaffected by the proposed action. 

Unfunded Mandates Reform Act of 

1995 

This proposed rule would not impose 

unfunded mandates as defined by the 

Unfunded Mandates Reform Act of 1995 

(Pub. L. 104–4, March 22, 1995, 109 

Stat. 48). The proposed updates are 

applicable only to Federal and federallyassisted programs. This proposed rule 

will not result in the expenditure by 

State, local, and tribal governments, in 

the aggregate, or by the private sector, of 

$128.1 million or more in any one year 

(2 U.S.C. 1532). 

Executive Order 13132 (Federalism) 

This proposed action has been 

analyzed in accordance with the 

principles and criteria contained in 

Executive Order 13132, and the DOT 

has determined that this proposed 

action would not have a substantial 

direct effect or sufficient federalism 

implications on States that would limit 

the policymaking discretion of the 

States. The DOT has also determined 

that this proposed action would not 

preempt any State law or State 

regulation or affect the States’ ability to 

discharge traditional State governmental 

functions. 

Executive Order 12372 

(Intergovernmental Review) 

Catalog of Federal Domestic 

Assistance Program Number 20.205, 

Highway Planning and Construction. 

The regulations implementing Executive 

Order 12372 regarding 

intergovernmental consultation on 

Federal programs and activities apply to 

this program. 

Paperwork Reduction Act 

Under the Paperwork Reduction Act 

of 1995 (PRA) (44 U.S.C. 3501, et seq.), 

Federal Agencies must obtain approval 

from the Office of Management and 

Budget (OMB) for each collection of 

information they conduct, sponsor, or 

require through regulations. This 

proposed rule does not contain 

information collection requirements for 

the purpose of the PRA. Since the 

inception of the TIFIA program, the 

DOT has never received 10 or more 

applications for Federal credit 

assistance in a single year. During the 

years the program has been in existence, 

the DOT has received an average of 

three TIFIA applications per year. 

Preparing a TIFIA application requires a 

significant commitment of resources on 

the part of the applicant, and even with 

the lower project-size thresholds 

enacted by the SAFETEA–LU 

amendments, the DOT does not expect 

to receive 10 or more applications for 

TIFIA assistance in a single year. If in 

the future it appears that there will be 

10 or more applications in a year, the 

DOT will take immediate steps to seek 

approval from OMB for an information 

collection control number, as required 

under the PRA. 

National Environmental Policy Act 

This proposed rule would make a 

number of changes in the way the TIFIA 

Federal credit assistance program is 

administered. As specified under 23 

U.S.C. 602(c)(2), each project obtaining 

such assistance under the TIFIA 

program is required to adhere to the 

National Environmental Policy Act of 

1969, as amended (42 U.S.C. 4321 et 

seq.) (NEPA). None of the changes this 

NPRM proposes would affect the 

applicability of NEPA to TIFIA projects. 

Therefore, this proposed rule would not 

have any effect on the quality of the 

environment. 

Executive Order 12630 (Taking of 

Private Property) 

This proposed action would not affect 

a taking of private property or otherwise 

have taking implications under 

Executive Order 12630, Government 

Actions and Interface with 

Constitutionally Protected Property 

Rights. 

Executive Order 12988 (Civil Justice 

Reform) 

This proposed action meets 

applicable standards in sections 3(a) 

and 3(b)(2) of Executive Order 12988, 

Civil Justice Reform, to minimize 

litigation, eliminate ambiguity, and 

reduce burden. 

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3502 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 

Executive Order 13045 (Protection of 

Children) 

We have analyzed this proposed 

action under Executive Order 13045, 

Protection of Children from 

Environmental Health Risks and Safety 

Risks. This proposed action does not 

concern an environmental risk to health 

or safety that may disproportionately 

affect children. 

Executive Order 13175 (Tribal 

Consultation) 

The DOT has analyzed this proposal 

under Executive Order 13175, dated 

November 6, 2000, and believes that the 

proposed action will not have 

substantial direct effects on one or more 

Indian tribes; will not impose 

substantial direct compliance costs on 

Indian tribal governments; and will not 

preempt tribal law. Therefore, a tribal 

summary impact statement is not 

required. 

Executive Order 13211 (Energy Effects) 

We have analyzed this proposed rule 

under Executive Order 13211, Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use. We have 

determined that it is not a significant 

energy action under that order because 

although it is a significant regulatory 

action under Executive Order 12866, it 

is not likely to have a significant 

adverse effect on the supply, 

distribution, or use of energy. Therefore, 

a Statement of Energy Effects under 

Executive Order 13211 is not required. 

Regulation Identification Number 

A regulation identification number 

(RIN) is assigned to each regulatory 

action listed in the Unified Agenda of 

Federal Regulations. The Regulatory 

Information Service Center publishes 

the Unified Agenda in April and 

October of each year. The RIN contained 

in the heading of this document can be 

used to cross reference this action with 

the Unified Agenda. 

List of Subjects 

23 CFR Part 180 

Credit programs—transportation, 

Highways and roads, Investments. 

49 CFR Part 80 

Credit programs—transportation, 

Highways and roads, Investments, 

Public transportation, Railroads, 

Reporting and recordkeeping 

requirements. 

49 CFR Part 261 

Credit programs—transportation, 

Investments, Railroads. 

49 CFR Part 640 

Credit programs—transportation, 

Investments, Mass transit. 

49 CFR Part 1700 

Credit programs—transportation. 

Issued on: January 13, 2009. 

Mary E. Peters, 

Secretary of Transportation. 

For the reasons set forth in the 

preamble, and under the authority of 23 

U.S.C. 601–609 it is proposed to amend 

Chapter I of Title 23, Code of Federal 

Regulations by amending part 180, and 

to amend Title 49, Code of Federal 

Regulations, by revising part 80, and 

amending parts 261 and 640, and 

adding Chapter XIII consisting of part 

1700 respectively as set forth below: 

Title 23—Highways 

CHAPTER I 

PART 180—CREDIT ASSISTANCE FOR 

SURFACE TRANSPORTATION 

PROJECTS 

1. Revise the authority citation for 

part 180 to read as follows: 

Authority: Secs. 1501 et seq., Pub. L. 105– 

178, 112 Stat. 107, 241, as amended; sec. 

1601, 1602 Pub. L. 109–59, 119 Stat. 1144; 23 

U.S.C. 601–609 and 315; 49 CFR 1.48. 

Title 49—Transportation 

Subtitle A—Office of the Secretary of 

Transportation 

2. Revise Part 80 to read as follows: 

PART 80—CREDIT ASSISTANCE FOR 

SURFACE TRANSPORTATION 

PROJECTS 

Sec. 

80.1 Purpose. 

80.3 Definitions. 

80.5 Federal requirements. 

80.7 Threshold criteria for TIFIA projects. 

80.9 Application process. 

80.11 Preliminary rating opinion letter and 

investment-grade rating. 

80.13 Selection criteria for TIFIA projects. 

80.15 Term sheet. 

80.17 Interest rate on Federal credit 

instruments. 

80.19 Guaranteed loans; eligibility 

requirements for guaranteed lenders. 

80.21 Draws on line of credit. 

80.23 Refinancing. 

80.25 Limitations on Federal credit 

assistance. 

80.27 Credit agreement closing and 

obligation of funds. 

80.29 Reporting requirements and credit 

monitoring. 

80.31 Fees. 

80.33 Use of administrative offset. 

80.35 Program Guide; TIFIA Web site. 

80.37 Applicant Information Requirements. 

Authority: Secs. 1501 et seq., Pub. L. 105– 

178, 112 Stat. 107, 241, as amended; Sec. 

1601, 1602, Pub. L. 109–59. 119 Stat. 1144; 

23 U.S.C. 601–609 and 315; 49 CFR 1.4, 1.48, 

1.49, and 1.51. 

§ 80.1 Purpose. 

This part implements TIFIA (as 

defined within), a statute establishing a 

Federal credit assistance program for 

surface transportation projects. 

§ 80.3 Definitions. 

The following definitions apply to 

this part: 

Administrative offset means the 

withholding of funds, otherwise payable 

by the government, to satisfy a claim 

due the government from a debtor. 

Borrower means an obligor primarily 

liable for payment of the principal of or 

interest on a Federal credit instrument, 

which obligor may be a corporation, 

partnership, joint venture, trust, or a 

non-Federal governmental entity, 

agency, or instrumentality. 

Budget authority means the authority 

provided by Federal law for the 

government to incur financial 

obligations. 

Credit agreement means the definitive 

agreement between the DOT and the 

borrower (or between the DOT and the 

guaranteed lender, for the benefit of the 

borrower) pursuant to which the DOT 

provides a Federal credit instrument to, 

or for the benefit of, the borrower. 

Current credit evaluation means: 

(1) In the case of a project with a 

published rating, either a current rating 

or the borrower’s certification stating 

the rating and outlook then in effect, 

and; 

(2) In the case of a project without a 

published rating, a current rating of the 

project obligations and the Federal 

credit instrument. 

Eligible project costs mean amounts 

substantially all of which are paid by, or 

for the account of, a borrower in 

connection with a project, including the 

cost of: 

(1) Development phase activities, 

including planning, feasibility analysis, 

technical studies, revenue forecasting, 

environmental review and related 

engineering studies, preliminary 

engineering and preliminary design 

work, and other pre-construction 

activities that are eligible for funding 

consistent with 23 CFR 771.113 and 

771.117; 

(2) Final design, construction 

(including the associated operating costs 

during construction of a special purpose 

entity formed solely to construct and 

operate the facility), reconstruction, 

rehabilitation, replacement, permitting, 

acquisition of real property (including 

land related to the project and 

improvements to land), lease acquisition 

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payments (including concession 

payments acceptable to the Secretary) 

made under an acquisition agreement, 

environmental mitigation, construction 

contingencies, and acquisition of 

equipment after the project has 

completed the National Environmental 

Policy Act (NEPA) process and the DOT 

has made an environmental finding, 

unless the cost activity is eligible for a 

categorical exclusion under 23 CFR 

771.117; 

(3) Capitalized interest necessary to 

meet market requirements, reasonably 

required reserve funds, capital issuance 

expenses, other carrying costs during 

construction; and 

(4) Refinancing of long-term project 

obligations or Federal credit 

instruments pursuant to 23 U.S.C. 

603(a)(1)(C). 

Federal credit instrument means 

Federal credit assistance in the form of 

a secured loan, loan guarantee, or line 

of credit authorized to be made 

available under TIFIA with respect to a 

project. 

Guaranteed lender means any nonFederal qualified institutional buyer (as 

defined in 17 CFR 230.144A(a), known 

as Rule 144A(a) of the Securities and 

Exchange Commission and issued under 

the Securities Act of 1933 (15 U.S.C. 77a 

et seq.)), including: 

(1) A qualified retirement plan (as 

defined in section 4974(c) of the 

Internal Revenue Code of 1986, 26 

U.S.C. 4974(c)) that is a qualified 

institutional buyer; and 

(2) A governmental plan (as defined 

in section 414(d) of the Internal 

Revenue Code of 1986, 26 U.S.C. 414(d)) 

that is a qualified institutional buyer. 

Investment-grade rating means a 

rating, published or unpublished, not 

lower than BBB minus, Baa3, bbb 

minus, BBB (low), or an equivalent 

assigned by a rating agency. 

Line of credit means an agreement 

entered into by the Secretary with a 

borrower under section 604 of Title 23, 

United States Code to provide a secured 

loan at a future date upon the 

occurrence of certain events. 

Loan guarantee means an agreement 

by the Secretary under section 603 of 

Title 23, United States Code to pay all 

or part of the principal of and interest 

on a loan or other debt obligation issued 

by a borrower and funded by a 

guaranteed lender. 

Maturity date means the final 

maturity date of the Federal credit 

instrument which shall be the lesser of 

not later than 35 years after the date of 

substantial completion of the project, or 

the remaining useful life of the project. 

For a refinancing pursuant to 23 U.S.C. 

603(a)(1)(C), the final maturity date for 

the repayment of that portion of the 

TIFIA credit assistance applied to the 

refinancing of long-term obligations 

shall not be later than 35 years after the 

date the credit agreement is executed. 

Preliminary rating opinion letter is a 

letter from an NRSRO that assigns a 

preliminary rating opinion of the 

project’s creditworthiness as described 

in section 80.11 of this Part. 

Project means: 

(1) Any surface transportation project 

eligible for Federal assistance under 

Title 23, United States Code or under 

chapter 53 of Title 49, United States 

Code; 

(2) An international bridge or tunnel 

for which an international entity 

authorized under Federal or State law is 

responsible; 

(3) Intercity passenger bus or rail 

facilities and vehicles, including 

facilities and vehicles owned by the 

National Railroad Passenger 

Corporation, and components of 

magnetic levitation transportation 

systems; and 

(4) A project that: 

(i) Is a project: 

(A) For a public freight rail facility or 

a private facility providing public 

benefit for highway users via direct 

freight interchange between highway 

and rail carriers 

(B) For an intermodal freight transfer 

facility 

(C) For a means of access to a facility 

described in subparagraph (A) or (B); 

(D) For a service improvement for a 

facility described in subparagraph (A) or 

(B) (including a capital investment for 

an intelligent transportation system); or 

(E) That comprises a series of projects 

described in subparagraphs (A) through 

(D) with the common objective of 

improving the flow of goods; 

(ii) May involve the combining of 

private and public sector funds, 

including investments of public funds 

in private sector facility improvements; 

(iii) If located within the boundaries 

of a port terminal, includes only such 

surface transportation infrastructure 

modifications as are necessary to 

facilitate direct intermodal interchange, 

transfer, and access into and out of the 

port. 

Project obligation means any note, 

bond, debenture, loan, or other debt 

issued by a borrower in connection with 

the financing of a project, other than a 

Federal credit instrument. 

Rating agency means an organization 

identified by the Securities and 

Exchange Commission as a Nationally 

Recognized Statistical Rating 

Organization. 

Refinance means to pay off existing 

project obligations and any TIFIA credit 

assistance owed by the Borrower with 

funds acquired by the same Borrower 

(or its successor) through the creation of 

new project obligations and TIFIA credit 

assistance, pursuant to section 603(a)(1) 

of Title 23, United States Code. 

Secretary means the United States 

Secretary of Transportation. 

Secured loan means a direct loan or 

other debt obligation issued to a 

borrower and funded by the Secretary in 

connection with the financing of a 

project under section 603 of Title 23, 

United States Code. 

State means any one of the fifty 

States, the District of Columbia, or 

Puerto Rico. 

Subsidy cost means the amount of 

budget authority sufficient to cover the 

estimated long-term cost to the Federal 

Government of a Federal credit 

instrument, calculated on a net present 

value basis, excluding administrative 

costs and any incidental effects on 

governmental receipts or outlays in 

accordance with the provisions of the 

Federal Credit Reform Act of 1990 (2 

U.S.C. 661 et seq.). 

Substantial completion means the 

opening of a project to vehicular or 

passenger traffic or, if determined by the 

Secretary and specified in the Credit 

Agreement, the occurrence of a 

comparable event. 

Term sheet means a letter from the 

Secretary or the Secretary’s designee to 

the borrower (and the guaranteed 

lender, if applicable) that sets forth the 

essential terms and conditions of a 

Federal credit instrument. A term sheet 

may be cancelled at any time by the 

Secretary for any reason, and does not 

obligate budget authority. 

TIFIA means the Transportation 

Infrastructure Finance and Innovation 

Act of 1998, Pub. L. 105–178, 112 Stat. 

107, 241 (1998), as amended by the Safe, 

Accountable, Flexible, Efficient 

Transportation Equity Act: A Legacy for 

Users, Pub. L. 109–59, 119 Stat. 1239 

(2005). 

§ 80.5 Federal requirements. 

All projects receiving Federal credit 

assistance must comply with: 

(a) The relevant requirements of Title 

23, United States Code, for highway 

projects; chapter 53 of Title 49, United 

States Code, specifically including, 

without limitation, section 5333(b) 

dealing with employee protective 

arrangements, for transit projects; and 

section 5333(a) of Title 49, United States 

Code, for rail projects, as appropriate; 

(b) Title VI of the Civil Rights Act of 

1964 (42 U.S.C. 2000d, et seq.); 

(c) The National Environmental 

Policy Act of 1969 (42 U.S.C. 4321, et 

seq.); 

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(d) The Uniform Relocation 

Assistance and Real Property 

Acquisition Policies Act of 1970 (42 

U.S.C. 4601, et seq.); and 

(e) Other Federal and compliance 

requirements as may be applicable. 

§ 80.7 Threshold criteria for TIFIA projects. 

(a) To be eligible to receive a Federal 

credit instrument, a project must meet 

the following threshold criteria: 

(1) The project must have satisfied the 

applicable planning and programming 

requirements of section 134 and 135 of 

Title 23 of the United States Code; 

(2) The project must have eligible 

project costs that are reasonably 

anticipated to equal or exceed the lesser 

of $50 million or one-third 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, provided 

that: 

(i) 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; and 

(ii) In the case of a project located in 

more than one State, eligible project 

costs must be reasonably anticipated to 

equal or exceed the lesser of $50 million 

or one-third of the amount of Federalaid highway funds apportioned for the 

most recently completed fiscal year to 

the participating State that receives the 

least amount of such funds; and 

(3) The proposed Federal credit 

instrument must be secured by and 

payable from, in whole or in part, tolls, 

user fees, rentals, taxes, or other 

dedicated revenue sources. In order to 

fulfill the requirements of § 80.11, any 

of these dedicated revenue sources that 

secure any project obligations senior to 

or on a parity with the Federal credit 

instrument must also secure, in similar 

proportion, the Federal credit 

instrument. 

(b) In addition to or in lieu of the 

dedicated revenue sources specified in 

paragraph (a)(3) of this section, the 

Secretary may accept municipal general 

obligation pledges, general corporate 

promissory pledges, or other pledges 

and forms of collateral as security for a 

Federal credit instrument. 

(c) A pledge of Federal funds, 

regardless of source, may not be used to 

secure a Federal credit instrument. 

§ 80.9 Application process. 

(a) Letter of interest. Prior to 

submission of an application for Federal 

credit assistance, the applicant must 

have submitted to the DOT a letter of 

interest and been notified by the DOT 

that the letter of interest adequately 

addresses threshold criteria discussed in 

this paragraph. The letter of interest 

required by this section should describe 

the project, the project’s plan of finance, 

and the amount and type of Federal 

credit instrument(s) sought. An 

applicant who has been notified by the 

DOT that its letter of interest is 

satisfactory may apply for Federal credit 

assistance in accordance with the 

schedule set forth by the DOT. 

(b) At least once each fiscal year for 

which Federal assistance is available 

under this part, the DOT shall publish 

a Federal Register notice to solicit 

applications for credit assistance. Such 

notice will specify the relevant due 

dates, the estimated amount of funding 

available to support TIFIA credit 

instruments for the current and future 

fiscal years, contact name(s), and other 

details for that cycle of application 

submissions and funding approvals. 

(c) Application. An application for 

Federal credit assistance must provide: 

(1) Documentation sufficient to 

demonstrate that the project satisfies 

each of the threshold criteria in 49 CFR 

80.7; 

(2) The applicant’s confirmation that 

it has complied with the environmental 

clearance requirement of 49 CFR 80.9(a); 

(3) A description of the extent to 

which the project satisfies each of the 

selection criteria in 49 CFR 80.13; 

(4) A description of the project for 

which Federal credit assistance is 

sought, status of environmental and 

other major governmental permits and 

approvals, and the construction 

schedule; 

(5) A description of the applicant and 

borrower; 

(6) Historical information, if 

applicable, concerning the applicant’s 

financial condition, including, for 

example, independently audited 

financial statements and certifications 

concerning bankruptcies or 

delinquencies on other debt; 

(7) Current financial information 

concerning both the project and the 

applicant, and a comprehensive project 

plan of finance, including sources and 

uses of funds for the project and a 

forecast of cash flows available to 

service all project obligations and the 

Federal credit instrument(s). 

Spreadsheets and cash flows must be 

submitted in both hard copy and in the 

form of a working computer model. 

Computer models should include 

among other things intact logic 

functions and assumption drivers, all 

business cases considered by the 

borrower and project sponsors, and an 

analysis of expected returns for each 

source of capital; 

(8) If the Federal credit assistance 

applied for is not a loan guarantee, a 

statement as to why a loan guarantee 

would not be as useful as the Federal 

credit assistance sought; 

(9) Preliminary rating opinion letters 

from at least two rating agencies; and 

(10) Such additional information as 

the Secretary may from time to time 

prescribe. 

(d) An application for a project 

located in or sponsored by more than 

one State or other entity may be 

submitted to the DOT. The sponsoring 

States or entities must designate a single 

borrower for purposes of receiving and 

repaying the Federal credit instrument. 

§ 80.11 Preliminary rating opinion letter 

and investment-grade rating. 

(a) An applicant must submit with its 

application preliminary rating opinion 

letters from at least two rating agencies. 

The letters must be current and based 

on the same project plan of finance that 

is submitted as part of the TIFIA 

application per § 80.9(b)(7). Each 

preliminary rating opinion letter must 

provide a conditional credit assessment 

of the project’s overall creditworthiness 

and must specifically address: 

(1) The potential of all project 

obligations having a lien senior to that 

of the Federal credit instrument on the 

pledged security to achieve an 

investment-grade rating; and, 

(2) The likely credit rating category of 

the Federal credit instrument. 

(b) If a governmental agency is 

submitting an application on behalf of 

potential borrowers in connection with 

a concession procurement process, the 

governmental entity does not need to 

submit a preliminary rating opinion 

letter. Rather, the DOT will require the 

selected concessionaire seeking TIFIA 

assistance to provide the preliminary 

rating opinion letters, which meet all of 

the requirements of § 80.11(a), with its 

submission of its comprehensive 

financial plan. 

(c) Not later than 14 days prior to the 

closing of the credit agreement, the 

borrower must cause to be delivered to 

the DOT: 

(1) Satisfactory evidence, such as a 

rating letter or rating confirmation letter, 

that at least two rating agencies have 

assigned ratings: 

(i) To all project obligations that have 

a lien senior to that of the Federal credit 

instrument on the pledged security, 

which ratings must be investment-grade; 

and 

(ii) To the Federal credit instrument. 

(2) Other such evidence related to the 

most current project financial plan upon 

which the rating evidence is based. 

(d) If no project obligations have a 

lien senior to that of the Federal credit 

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instrument, then the requirements of 

paragraphs (a) and (b) of this section 

apply to the Federal credit instrument. 

(e) The ratings required by this 

section are underlying ratings. Neither 

the preliminary rating opinion letter, 

nor the investment-grade rating, may 

reflect the effect of bond insurance or 

other private credit enhancement, 

unless such private credit enhancement 

secures the Federal credit instrument. 

§ 80.13 Selection criteria for TIFIA 

projects. 

(a) For a project to be selected for 

Federal credit assistance, the Secretary 

must have determined that it is 

creditworthy. The Secretary’s 

determination will ensure that any 

financing for the project has appropriate 

security features, such as a rate 

covenant, to ensure repayment. 

Notwithstanding the creditworthiness of 

the project, the Secretary retains the 

discretion not to advance a project that 

is not highly rated under the criteria 

discussed below. 

(b) In addition to making a 

determination with respect to 

creditworthiness, the Secretary will 

consider the degree to which a project 

advances the policy objectives 

embodied in the following seven 

criteria. The Secretary will assign 

weights as indicated in evaluating and 

selecting which eligible projects will 

receive Federal credit assistance: 

(1) The extent to which the project is 

nationally or regionally significant, in 

terms of: 

(i) The ability of the project to 

enhance the national or regional 

transportation system by reducing 

congestion and improving overall 

system performance (30 percent); and 

(ii) The extent to which the project 

generates economic benefits not 

accounted for above in 80.13(b)(1)(i), 

and supports interstate and 

international commerce (10 percent). 

(Total: 40 percent); 

(2) The extent to which Federal credit 

assistance would foster innovative 

public-private partnerships and attract 

private debt or equity investment (20 

percent); 

(3) The likelihood that Federal credit 

assistance would enable the project to 

proceed at an earlier date than the 

project would otherwise be able to 

proceed (5 percent); 

(4) The extent to which the project 

uses new technologies, including 

Intelligent Transportation Systems 

(ITS), that enhances the efficiency of the 

project (10 percent); 

(5) The amount of budget authority, 

relative to total dollars invested in the 

project, required to fund the Federal 

credit instrument made available (10 

percent); 

(6) The extent to which the project 

helps maintain or protect the 

environment (10 percent); and 

(7) The extent to which such 

assistance would reduce the 

contribution of Federal grant assistance 

to the project (5 percent). 

(c) The Secretary will give preference 

to applications for loan guarantees 

rather than other forms of Federal credit 

instruments. Such preference is 

consistent with Federal credit policies 

under OMB Circular A–129 that state 

when Federal credit assistance is 

necessary to meet a Federal objective, 

loan guarantees should be favored over 

loans, unless attaining the Federal 

objective requires a subsidy, as defined 

by the Federal Credit Reform Act of 

1990 (2 U.S.C. 661, et seq.), deeper than 

can be provided by a loan guarantee. 

§ 80.15 Term sheet. 

(a) When the Secretary has approved 

the project for Federal credit assistance 

processing, the Secretary will issue a 

term sheet to the approved applicant. 

Although the term sheet will be used to 

administratively reserve the requisite 

budget authority, it is subject to 

cancellation at the discretion of the 

Secretary. 

(b) Subject to the limitation of 33 

percent of eligible project costs, the 

Secretary may make a future-year 

administrative reservation of budget 

authority and the associated 

commitment of Federal credit 

assistance. This reservation will ensure 

that a project with a future reservation 

will have a priority (along with the 

priority of any other projects receiving 

such future reservations) on budget 

authority becoming available in the 

specified year(s). 

§ 80.17 Interest rate on Federal credit 

instruments. 

(a) Except as described in section (b) 

below, the interest rate on secured loans 

and lines of credit will be set at the 

discretion of the Secretary. 

(b) The minimum interest rate on 

secured loans and lines of credit will be 

set as follows: 

(1) The interest rate on a secured loan 

will be not less than the yield on United 

States Treasury securities of a similar 

maturity to the final maturity of the 

secured loan on the date of execution of 

the credit agreement. 

(2) The interest rate on any draw 

made on a line of credit will be not less 

than the yield on United States Treasury 

securities of a 30-year maturity on the 

date of execution of the credit 

agreement. 

(c) The interest rate on a guaranteed 

loan is the rate agreed to by the 

borrower and the guaranteed lender, 

subject to approval by the Secretary. 

(d) For purposes of this section, the 

DOT may determine the ‘‘yield on 

United States Treasury securities’’ by 

reference to the published rate for State 

and Local Government Series (‘‘SLGS’’) 

securities, adjusted as appropriate to 

reflect the market yield of publicly 

traded United States Treasury securities. 

(e) Consistent with Section V, 

Paragraph 4, of OMB Circular A–129, 

and 31 U.S.C. 3717, the DOT will 

include in the credit agreement a 

provision imposing a default interest 

rate. 

§ 80.19 Guaranteed loans; eligibility 

requirements for guaranteed lenders. 

(a) Terms of a guaranteed loan must 

be approved by the Secretary. 

(b) To participate in this program, a 

guaranteed lender must be approved by 

the Secretary and must: 

(1) Not be debarred or suspended 

from participation in any Federal 

program; 

(2) Not be delinquent on any Federal 

debt or loan; 

(3) Be duly organized and legally 

authorized to enter into the transaction; 

(4) Demonstrate experience in 

originating and servicing loans for largescale developments; and 

(5) Have sufficient capital to originate 

the loan and disburse its own portfolio. 

(c) The Secretary will periodically 

review lender eligibility, consistent with 

Federal credit policies under OMB 

Circular A–129. 

§ 80.21 Draws on line of credit. 

(a) Use of proceeds. A borrower may 

draw on a line of credit to pay debt 

service on project obligations, 

extraordinary repair and replacement 

costs, operation and maintenance 

expenses, and costs associated with 

unexpected Federal or State 

environmental restrictions imposed 

after credit agreement closing; provided, 

however, that when the line of credit is 

drawn to pay debt service, it may be 

applied only to debt service on project 

obligations which were used to finance 

eligible project costs. 

(b) Eligibility to draw. A draw on the 

line of credit may be made only if net 

revenues from the project are 

insufficient to pay the costs specified in 

the preceding paragraph. With respect 

to any shortfall in the sufficiency of net 

revenues to pay debt service, a draw on 

the line of credit may be made only after 

application of any funds in a capitalized 

interest account. The borrower may 

draw on the line of credit before 

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3506 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 

drawing on a debt service reserve fund. 

A draw on the line of credit may not be 

made to replenish a debt service reserve 

fund. 

§ 80.23 Refinancing. 

(a) Proceeds of a secured loan 

provided under 23 U.S.C. 603 may be 

used to refinance interim construction 

financing of eligible project costs, 

provided that such refinancing is 

completed not later than one year after 

substantial completion. Otherwise 

secured loans used for this purpose are 

generally made available under the 

same provisions as loans under 23 

U.S.C. 603(a)(1)(A). 

(b) Except for the purpose described 

in section (a) above, proceeds of a 

secured loan provided under section 

603 of Title 23, United States Code may 

not be used to refinance long-term 

project obligations or Federal credit 

instruments. 

(c) Proceeds of a loan provided by a 

guaranteed lender receiving a TIFIA 

loan guarantee may be used to refinance 

long-term project obligations or Federal 

credit instruments if the project 

applicant demonstrates to the DOT’s 

satisfaction that such refinancing will 

provide at least $50 million of 

additional funding capacity and that 

such capacity will be used to fund the 

completion, enhancement, or expansion 

of a project that: 

(1) Is selected under section 602 of 

Title 23, United States Code, or 

(2) Otherwise meets the requirements 

of section 602 of Title 23, United States 

Code. 

(d) The fee for a refinancing 

application is the same as the fee for a 

new TIFIA project application. 

(e) The following special provisions, 

terms, and limitations are applicable to 

the Federal loan guarantee for a 

refinancing made available under 23 

U.S.C. 603(a)(1)(C): 

(1) The borrower will have the 

flexibility to apply the guaranteed loan 

proceeds to the refinancing, the new 

project, or apportion an amount to each 

element of the transaction. It is not 

required that the guaranteed loan 

proceeds be used to build the new 

project. However, Federal requirements 

(see § 80.5) will apply to the new 

project. 

(2) The loan guarantee made available 

in connection with a refinancing under 

this paragraph will be in an amount not 

larger than the greater of: 

(i) The amount applied to funding the 

completion, enhancement, or expansion 

of the project; and 

(ii) The amount of equity invested in 

the project, provided that in no event 

will the amount of the secured loan 

exceed 33 percent of the amount of the 

financing. 

(3) Returns and payouts on equity 

investments in a financing transaction 

under this paragraph must be 

subordinated to the Federal credit 

instrument for so long as the TIFIA debt 

is outstanding, consistent with OMB 

Circular A–129 requirements that 

business borrowers have equity at risk. 

(Appendix A, section II, 3a. (2)). 

(4) If the guaranteed loan proceeds are 

disbursed to fund both the refinancing 

of the long-term obligations and the 

completion, enhancement, or expansion 

of the project, the following provisions 

apply to the repayment: 

(i) The guaranteed loan will be 

structured in two tranches. The first 

tranche will be that portion funding the 

refinancing of the long-term obligations 

and the second tranche will be that 

portion funding the project. 

(ii) Repayments of principal or 

interest on the first tranche shall be 

scheduled to commence six months 

following the first disbursement of 

funds and to conclude, with full 

repayment of principal and interest, by 

the date that is the lesser of not later 

than 35 years after the date the credit 

agreement is executed, or the remaining 

useful life of the asset. 

(iii) Repayments of principal or 

interest on the second tranche shall be 

scheduled based on project cash flow 

and shall commence not later than five 

years after substantial completion of the 

capital improvement. The final maturity 

of the tranche shall be the lesser of no 

later than 35 years after substantial 

completion of the project, or the 

remaining useful life of the asset. 

(5) For improvements financed with 

guaranteed loan proceeds under this 

section, terms and conditions will be 

incorporated into the guaranteed loan 

agreement to ensure that the 

completion, enhancement, or expansion 

of the refinanced facility will commence 

and be completed within a reasonable 

period after the closing of the 

transaction. The DOT will require a 

binding commitment assuring the 

project will be completed and shall 

require a penalty interest rate on the 

guaranteed loan in the event of a 

development default. 

(6) An applicant seeking a TIFIA loan 

guarantee under this section must 

submit an application that addresses the 

proposed refinancing and the 

improvement(s) facilitated by the 

refinancing using the TIFIA application 

form contained in the DOT’s TIFIA 

Program Guide, describing in detail the 

plan of finance associated with the 

refinancing, and demonstrate 

conformance with TIFIA requirements, 

and how the refinancing will increase 

the funding capacity and enable the 

completion, enhancement, or expansion 

of the facility. 

(7) The improvement being financed 

with proceeds of a guaranteed loan must 

adhere to the requirements in § 80.5. 

§ 80.25 Limitations on Federal credit 

assistance. 

(a) The total dollar amount of Federal 

credit assistance offered to a project in 

the form of Federal credit instruments 

will not exceed the lesser of: 

(1) 33 percent of the reasonably 

anticipated eligible project costs, as 

measured on an aggregate cash (year-ofexpenditure) basis; or 

(2) If the Federal credit instrument 

does not receive an investment-grade 

rating, the amount of project obligations 

senior to the Federal credit instrument. 

(b) The costs used to calculate eligible 

project costs may not include: 

(1) Costs incurred more than three 

years prior to the submission of an 

application for a Federal credit 

instrument unless exceptional 

circumstances exist, and inclusion of 

such costs is approved by the Secretary. 

(2) Costs incurred prior to submission 

of an application for a Federal credit 

instrument that are in excess of 20 

percent of total eligible project costs. 

(3) Operating costs incurred prior to 

substantial completion of the project by 

a special purpose entity formed solely to 

construct and operate the facility that 

are in excess of 5 percent of total 

eligible project costs. 

(c) To be considered eligible project 

costs, payments to a public entity 

associated with the lease acquisition or 

concession fee must reflect fair market 

value and be dedicated to transportation 

projects eligible under title 23 or 

chapter 53 of title 49, United States 

Code. Further, the eligibility of such 

payments is limited to 25 percent of 

total eligible project costs. The final 

amount of eligible project costs 

associated with such payments is 

subject to the approval of the Secretary. 

(d) Any loan made in connection with 

a credit agreement, whether a secured 

loan, a guaranteed loan, or a loan made 

by drawing on a line of credit, will be 

funded on a reimbursement basis, at 

such intervals as specified in the credit 

agreement. In the case of a secured loan 

or a guaranteed loan, the credit 

agreement will include the anticipated 

schedule for such loan disbursements, 

which schedule the parties may amend 

from time to time. 

§ 80.27 Credit agreement closing and 

obligation of funds. 

(a) Closing conditions. The DOT will 

enter into a credit agreement only when 

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the project to receive Federal credit 

assistance meets the following 

requirements: 

(1) The project or project elements, as 

appropriate, comply with applicable 

planning and programming 

requirements in 23 U.S.C. 134 and 135; 

(2) The project has received an 

environmental Categorical Exclusion, 

Finding of No Significant Impact, or 

Record of Decision; 

(3) The requirements of 49 CFR 80.11 

with respect to the investment-grade 

rating must have been satisfied; and 

(4) The project, if eligible pursuant to 

Section 5302 of 49 U.S.C., Chapter 53, 

has complied with 49 U.S.C. 5333(b) as 

evidenced by a letter from the U.S. 

Department of Labor. 

(b) Obligation of Federal funds. The 

DOT will obligate the subsidy amount at 

the time it executes the credit 

agreement. 

§ 80.29 Reporting requirements and credit 

monitoring. 

(a) Credit rating maintenance. 

Throughout the life of the Federal credit 

instrument, the borrower must obtain 

annually, at no cost to the Federal 

government, current credit evaluations 

of the project, the project obligations, 

and the Federal credit instrument. The 

current credit evaluations must be 

performed by a rating agency. In the 

case of an unpublished rating, the credit 

evaluation must consist of a formal 

credit rating letter. 

(b) Annual financial plan. Each 

recipient of Federal credit assistance 

must submit an annual financial plan, 

elements of which may be specified in 

the credit agreement, and audited 

financial statements to the DOT not later 

than 180 days following the recipient’s 

fiscal year-end for each year during 

which the Federal credit instrument 

remains outstanding. The annual 

financial plan must include a current 

credit evaluation, as described in the 

preceding paragraph 80.29(a). 

(c) The borrower will furnish the DOT 

with: 

(1) Any information it submits to any 

rating agency; and 

(2) Any report of which the borrower 

has knowledge relating to the project 

credit, whether prepared by a rating 

agency or other institution and 

irrespective of whether prepared at the 

direction of the borrower or otherwise. 

(d) Periodic audits. The DOT may 

periodically conduct, so long as a 

Federal credit instrument is 

outstanding, such financial and 

compliance audits as it deems 

necessary. Such audits will be at the 

borrower’s expense. 

(e) Additional reporting requirements. 

The DOT may require additional 

reporting requirements in the credit 

agreement which it deems necessary to 

enable it properly to monitor the credit 

performance of the project. 

§ 80.31 Fees. 

Section 603(b)(7) and section 

604(b)(9) of Title 23, United States 

Code, and Appendix A, Part II, Section 

3b of OMB Circular A–129 authorize the 

Secretary to establish fees at a level 

sufficient to recover all or a portion of 

the cost of making credit assistance 

available under the TIFIA program. The 

following fees are not considered 

eligible project costs for the purpose of 

calculating the maximum amount of 

credit assistance. 

(a) Application fee. An applicant must 

remit with its application for Federal 

credit assistance a non-refundable 

application fee. The amount of the 

application fee will be posted on the 

TIFIA Web site. The DOT may change 

the application fee from time to time by 

notice published in the Federal 

Register. 

(b) Subsidy fee. If, in any given year, 

there is insufficient budget authority to 

fund the credit instrument for a 

qualified project that has been selected 

to receive assistance under TIFIA, the 

DOT and the approved applicant may 

agree upon a supplemental fee to be 

paid by or on behalf of the approved 

applicant at the time of execution of the 

credit agreement to reduce the subsidy 

cost of that project. No such fee may be 

included among eligible project costs for 

the purpose of calculating the maximum 

33 percent credit amount referenced in 

§ 80.25(a). 

(c) Transaction fee. The DOT will 

assess each borrower a transaction fee to 

reimburse the DOT for its actual costs 

incurred in evaluating the application 

and processing the transaction, which 

transaction fee the borrower must pay 

not later than thirty days after closing. 

In the event a transaction does not result 

in a credit agreement closing, the 

approved applicant must pay the 

transaction fee not later than 30 days 

after notifying the DOT that it will no 

longer seek credit assistance, or if the 

approved applicant fails to give the DOT 

such notice, the Secretary establishes by 

objective evidence that the approved 

applicant is no longer seeking credit 

assistance and so notifies the approved 

applicant, not later than 30 days after 

such notification. 

(d) Servicing fee. The DOT will assess 

each borrower a servicing fee for each 

Federal credit instrument to reimburse 

the DOT for the costs of servicing 

Federal credit instruments. The amount 

of the servicing fee will be posted on the 

TIFIA Web site. The DOT may change 

the servicing fee from time to time by 

notice published in the Federal 

Register. 

(e) Monitoring fee. The DOT will 

include in each credit agreement terms 

and conditions obligating the borrower 

to reimburse the DOT for costs incurred 

in connection with monitoring the 

credit performance of a project, the 

enforcement of credit agreement 

provisions, amendments to the credit 

agreement and related documents, and 

other performance-related activities. 

§ 80.33 Use of administrative offset. 

(a) The DOT will not apply an 

administrative offset to recover any 

losses to the Federal Government 

resulting from project risk the DOT has 

assumed under a Federal credit 

instrument. 

(b) The DOT will employ an 

administrative offset to recover fees 

assessed under 49 CFR 80.31 and also 

in cases of fraud, misrepresentation, 

false claims, or similar criminal acts or 

acts of malfeasance or wrongdoing. 

§ 80.35 Program Guide; TIFIA Web site. 

(a) Program Guide. The DOT will from 

time to time publish updates to a TIFIA 

Program Guide, which will include 

updated information, a loan template, 

and may reflect modifications to the 

application process to provide more 

flexibility to project sponsors who are 

advancing projects as private 

concessions. Reference should be made 

to the Program Guide for additional 

information about the TIFIA program. 

(b) Web site. The DOT maintains a 

Web site for the TIFIA program: 

http://tifia.fhwa.dot.gov. The DOT will 

post on the TIFIA Web site: 

(1) Amounts of application fee and 

monitoring fee assessed under 49 CFR 

80.31; 

(2) Promptly after execution, each 

term sheet, and; 

(3) Promptly after closing of each 

credit agreement, the credit agreement 

for such transaction to the extent that 

the credit agreement does not contain 

confidential commercial information. 

(c) Additional information. 

Additional DOT records related to the 

TIFIA program may be requested 

through a Freedom of Information Act 

request pursuant to 49 CFR Part 7. 

§ 80.37 Applicant Information 

Requirements. 

An applicant must obtain a Data 

Universal Number System (DUNS) 

number and register on the Central 

Contractor Registration (CCR) site. 

These requirements apply to all 

recipients of Federal assistance, 

including entities receiving credit 

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3508 Federal Register / Vol. 74, No. 12 / Wednesday, January 21, 2009 / Proposed Rules 

assistance. If an applicant does not have 

a DUNS number, it can be obtained free 

of charge through the Dun & Bradstreet 

(D&B) online Web process at http:// 

fedgov.dnb.com/webform. Information 

on CCR’s on-line registration can be 

found at http://www.ccr.gov. Additional 

information on these requirements can 

be found at http://www.grants.gov/ 

applicants/register_your_

organization.jsp. 

CHAPTER II—FEDERAL RAILROAD 

ADMINISTRATION, DEPARTMENT OF 

TRANSPORTATION 

PART 261—CREDIT ASSISTANCE FOR 

SURFACE TRANSPORTATION 

PROJECTS 

3. Revise the authority citation for 

part 261 to read as follows: 

Authority: secs. 1501, et seq., Pub. L. 105– 

178, 112 Stat. 107, 241, as amended; sec. 

1601, 1602, Pub. L. 109–59, 119 Stat.1144; 23 

U.S.C. 601–609 and 315; 49 CFR 1.49. 

CHAPTER VI—FEDERAL TRANSIT 

ADMINISTRATION, DEPARTMENT OF 

TRANSPORTATION 

PART 640—CREDIT ASSISTANCE FOR 

SURFACE TRANSPORTATION 

PROJECTS 

4. Revise the authority for Part 640 to 

read as follows: 

Authority: secs. 1501, et seq., Pub. L. 105– 

178, 112 Stat. 107, 241, as amended; sec. 

1601, 1602, Pub. L. 109–59, 119 Stat.1144; 23 

U.S.C. 601–609 and 315; 49 CFR 1.51. 

5. Add 49 CFR Chapter XIII to read as 

follows: 

CHAPTER XIII—MARITIME 

ADMINISTRATION, DEPARTMENT OF 

TRANSPORTATION 

PART 1700—CREDIT ASSISTANCE 

FOR SURFACE TRANSPORTATION 

PROJECTS 

Sec. 

1700.1 Cross-reference to credit assistance. 

Authority: secs. 1501, et seq., Pub. L. 105– 

178, 112 Stat. 107, 241, as amended; sec. 

1601, 1602, Pub. L. 109–59, 119 Stat. 1144; 

23 U.S.C. 601–609 and 315; 49 CFR 1.66. 

§ 1700.1 Cross-reference to credit 

assistance. 

The regulations in 49 CFR Part 80 

shall be followed in complying with the 

requirements of this part. Title 49, CFR 

Part 80 implements the Transportation 

Infrastructure Finance and Innovation 

Act of 1998, secs. 1501, et seq., (Pub. L. 

105–178, 112 Stat. 107, 241), as 

amended; sec. 1601, 1602, Pub. L. 109– 

59, 119 Stat. 1144; 23 U.S.C. 601–609. 

[FR Doc. E9–1117 Filed 1–16–09; 8:45 am] 

BILLING CODE 4910–62–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–150670–07] 

RIN 1545–BH49 

Guidance Regarding the Treatment of 

Stock of a Controlled Corporation 

Under Section 355(a)(3)(B); Correction 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Correction to notice of proposed 

rulemaking by cross-reference to 

temporary regulations. 

SUMMARY: This document contains a 

correction to a notice of proposed 

rulemaking by cross-reference to 

temporary regulations (REG–150670–07) 

that was published in the Federal 

Register on Monday, December 15, 2008 

(73 FR 75979) giving guidance regarding 

the distribution of stock of a controlled 

corporation acquired in a transaction 

described in section 355(a)(3)(B) of the 

Internal Revenue Code. This action is 

necessary in light of amendments to 

section 355(b). The text of those 

regulations also serves as the text of 

these proposed regulations. These 

regulations will affect corporations and 

their shareholders. 

FOR FURTHER INFORMATION CONTACT: 

Russell P. Subin, (202) 622–7790 (not a 

toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

The correction notice that is the 

subject of this document is under 

section 355 of the Internal Revenue 

Code. 

Need for Correction 

As published, the notice of proposed 

rulemaking by cross-reference to 

temporary regulations (REG–150670–07) 

contains an error that may prove to be 

misleading and is in need of 

clarification. 

Correction of Publication 

Accordingly, the publication of the 

notice of proposed rulemaking by crossreference to temporary regulations 

(REG–150670–07), which was the 

subject of FR Doc. E8–29545, is 

corrected as follows: 

On page 75980, column 2, under the 

CFR part heading ‘‘PART 1—INCOME 

TAXES’’, line 2 of the authority citation, 

the language ‘‘Section 1.355–2(g) also 

issued under 26’’ is corrected to read 

‘‘Section 1.355–2(g) and (i) also issued 

under 26’’. 

LaNita Van Dyke, 

Chief, Publications and Regulations Branch, 

Legal Processing Division, Associate Chief 

Counsel (Procedure and Administration). 

[FR Doc. E9–1104 Filed 1–16–09; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[REG–149519–03] 

RIN 1545–BC63 

Section 707 Regarding Disguised 

Sales, Generally 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Withdrawal of notice of 

proposed rulemaking. 

SUMMARY: This document withdraws 

proposed regulations relating to the 

treatment of transactions between a 

partnership and its partners as disguised 

sales of partnership interests between 

the partners under section 707(a)(2)(B) 

of the Internal Revenue Code. The 

withdrawal affects partnerships and 

their partners. 

FOR FURTHER INFORMATION CONTACT: 

Deane M. Burke or Allison R. Carmody, 

(202) 622–3070 (not a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

Section 707(a)(2)(B) provides that, 

under regulations prescribed by the 

Secretary, if transfers of property 

between a partner or partners and a 

partnership, when viewed together, are 

properly characterized as a sale or 

exchange of property, such transfers 

shall be treated as either transactions 

between the partnership and one who is 

not a partner or between two or more 

partners acting other than in their 

capacity as partners. The legislative 

history of section 707(a)(2)(B) indicates 

the provision was adopted as a result of 

Congressional concern that taxpayers 

were deferring or avoiding tax on sales 

of partnership property, including sales 

of partnership interests, by 

characterizing sales as contributions of 

property, including money, followed or 

preceded by related partnership 

distributions. See H.R. Rep. No. 861, 

98th Cong. 2nd Sess. 861 (1984), 1984– 

3 (Vol. 2) CB 115. Specifically, Congress 

was concerned about court decisions 

that allowed tax-free treatment in cases 

that were economically 

mstockstill on PROD1PC66 with PROPOSALS