Document ID: DOT-OST-2009-0092-0434
Agency: dot
Document Type: Notice
Title: Funding Availability: Letters of Interest for Credit Assistance under the Transportation Infrastructure Finance and Innovation Act Program
Posted Date: 2016-03-11T05:00Z

[Federal Register Volume 81, Number 48 (Friday, March 11, 2016)]
[Notices]
[Pages 13030-13036]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-05640]

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary of Transportation

Letters of Interest for Credit Assistance Under the 
Transportation Infrastructure Finance and Innovation Act (TIFIA) 
Program

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

ACTION: Notice of funding availability and request for comments.

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SUMMARY: Pursuant to the recently enacted Fixing America's Surface 
Transportation Act (the FAST Act), the DOT announces the availability 
of

[[Page 13031]]

funding authorized in the amount of $1.435 billion ($275 million in 
Fiscal Year (FY) 2016 funds, $275 million in FY 2017 funds, $285 
million in FY 2018 funds, $300 million in FY 2019 funds, and $300 
million in FY 2020 funds (and any funds that may be available from 
prior fiscal years)) to provide TIFIA credit assistance for eligible 
projects. The FY 2016-2020 authorized funds are subject to an annual 
obligation limitation that may be established in appropriations law. 
The amount of TIFIA funding authority available in a given year may be 
less than the amount authorized for that fiscal year. Under TIFIA, the 
DOT provides secured (direct) loans, lines of credit, and loan 
guarantees to public and private applicants for eligible surface 
transportation projects. Projects must meet statutorily specified 
eligibility criteria to receive credit assistance.
    This notice outlines the process that project sponsors must follow 
in seeking TIFIA credit assistance. The DOT is publishing this notice 
to give project sponsors an opportunity to submit Letters of Interest 
for the newly authorized funding as soon as possible. However, in 
addition to authorizing funding for TIFIA credit assistance, the FAST 
Act made a number of changes to the TIFIA program's structure, 
including the terms and conditions pursuant to which the DOT can 
provide TIFIA credit assistance. This notice outlines certain changes 
made by the FAST Act and invites interested parties to submit comments 
about the DOT's implementation of the FAST Act and the DOT's guidance 
for awarding TIFIA credit assistance. Unless otherwise noted, statutory 
section references in this notice are to sections of title 23 of the 
U.S. Code, as amended by the FAST Act, which took effect as of October 
1, 2015.
    Letter of Interest Submission: All project sponsors wishing to 
apply for TIFIA credit assistance must first submit a Letter of 
Interest, as more fully described in this notice of funding 
availability. Only after a project sponsor has submitted a Letter of 
Interest and demonstrated the satisfaction of all statutory eligibility 
requirements will the project sponsor be invited to submit an 
application. Letters of Interest will be received on a rolling basis 
using the form on the TIFIA Web site: https://www.transportation.gov/tifia/applications.

ADDRESSES: Addresses for Letters of Interest: Submit all Letters of 
Interest to the DOT via email at: TIFIACredit@dot.gov. Submitters 
should receive a confirmation email, but are advised to request a 
return receipt to confirm transmission. Only Letters of Interest 
received via email, as provided above, shall be deemed properly filed.
    Addresses for Comments: You must include the agency name (Office of 
the Secretary of Transportation) and the docket number DOT-OST-2016-
0032 with your comments. To ensure your comments are not entered into 
the docket more than once, please submit comments, identified by the 
docket number DOT-OST-2016-0032, by only one of the following methods:
    Web site: The U.S. Government electronic docket site is 
www.regulations.gov. Go to this Web site and follow the instructions 
for submitting comments into docket number DOT-OST-2016-0032;
    Fax: Telefax comments to DOT-OST-2016-0032;
    Mail: Mail your comments to U.S. Department of Transportation, 1200 
New Jersey Avenue SE., Docket Operations, M-30, Room W12-140, 
Washington, DC 20590; or
    Hand Delivery: Bring your comments to the U.S. Department of 
Transportation, 1200 New Jersey Avenue SE., Docket Operations, M-30, 
West Building Ground Floor, Room W12-140, Washington, DC 20590, between 
9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    Instructions for Submitting Comments: You must include the agency 
name (Office of the Secretary of Transportation) and Docket number DOT-
OST-2016-0032 for this notice at the beginning of your comments. You 
should submit two copies of your comments if you submit them by mail or 
courier. For confirmation that the Office of the Secretary of 
Transportation has received your comments you must include a self-
addressed stamped postcard. Note that all comments received will be 
posted without change to www.regulations.gov, including any personal 
information provided, and will be available to Internet users. You may 
review the DOT's complete Privacy Act Statement in the Federal Register 
published April 11, 2000 (65 FR 19477), or you may visit 
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For further information regarding this 
notice please contact Duane Callender via email at TIFIACredit@dot.gov 
or via telephone at (202) 366-1059. A TDD is available at (202) 366-
7687. Substantial information, including the TIFIA Program Guide and 
application materials, can be obtained from the TIFIA Web site: https://www.transportation.gov/tifia. The TIFIA Program Guide is being updated 
to reflect changes to the program under the FAST Act.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
II. Program Funding
III. Eligible Projects
    A. Transit-Oriented Development
    B. State Infrastructure Banks and TIFIA
    C. Refinancing
    D. Availability Payments
IV. Types of Credit Assistance
V. Eligibility Requirements
    A. Reduced Minimum Cost Threshold for Small Projects
    B. Ratings Requirements
    C. Other Requirements
VI. Application Process
    A. Letter of Interest
    B. Creditworthiness Review
    1. Relief from Fees for Small Projects
    C. Invitation To Apply
    D. Streamlined Application Process
VII. Additional Guidance and Request for Comments

I. Background

    The Transportation Equity Act for the 21st Century (TEA-21), Public 
Law 105-178, 112 Stat. 107, 241 established the Transportation 
Infrastructure Finance and Innovation Act of 1998 (TIFIA), authorizing 
the DOT to provide credit assistance in the form of secured (direct) 
loans, lines of credit, and loan guarantees to public and private 
applicants for eligible surface transportation projects. In 2005, 
Congress enacted the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 
109-59, 119 Stat. 1144), which made a number of amendments to TIFIA 
including lowering the estimated project cost thresholds and expanding 
eligibility for TIFIA credit assistance. In 2012, Congress enacted the 
Moving Ahead for Progress in the 21st Century Act (MAP-21) (Pub. L. 
112-141). MAP-21 provided for substantial changes in the TIFIA credit 
program, including expanding eligibility and authorized uses of TIFIA 
credit assistance and modifying the selection process. On December 4, 
2015, the President signed the FAST Act into law (Pub. L. 114-94), 
which provided for substantial changes in the TIFIA credit program 
under Section 2001 of the FAST Act. This notice of funding availability 
addresses certain changes to the TIFIA credit program made by the FAST 
Act and solicits Letters of Interest for the funding made available 
under that law.
    The TIFIA program is a departmental program and final approval of 
credit assistance is reserved for the Secretary. In addition, the FAST 
Act mandates the creation of a National Surface

[[Page 13032]]

Transportation and Innovative Finance Bureau (Bureau), which will be 
responsible for administering the TIFIA application process. The Bureau 
will also provide assistance and communicate best practices for 
financing and funding opportunities to sponsors of projects eligible 
for TIFIA credit assistance, as well as other forms of DOT credit 
assistance.

II. Program Funding

    The FAST Act authorizes $1.435 billion in TIFIA funding authority 
over five fiscal years ($275 million in FY 2016 funds, $275 million in 
FY 2017 funds, $285 million in FY 2018 funds, $300 million in FY 2019 
funds, and $300 million in FY 2020 funds) from the Highway Trust Fund 
to pay the subsidy cost of credit assistance. Additional funds may also 
be available from funding authority carried over from previous fiscal 
years. Any funding authority not obligated in the fiscal year for which 
it is authorized remains available for obligation in subsequent years. 
The TIFIA funding authority is subject to an annual obligation 
limitation that may be established in appropriations law. Like all 
funds subject to the annual Federal-aid obligation ceiling, the amount 
of TIFIA funding authority available in a given year may be less than 
the amount authorized for that fiscal year. Historically, each dollar 
of TIFIA funding authority has allowed the DOT to provide approximately 
$10 in credit assistance. In recent years, the DOT has been able to 
leverage TIFIA funds to support closer to $14 in credit assistance. 
Given statutory changes in the TIFIA credit program under the FAST Act, 
and the need to calculate credit subsidies on a project-by-project 
basis, actual lending capacity will vary. In addition to direct funding 
for the TIFIA program, the FAST Act permits the use of certain Federal-
aid funds to cover the subsidy and administrative costs associated with 
TIFIA credit assistance. Under the FAST Act, Surface Transportation 
Block Grant Program funds (23 U.S.C. 133), National Highway Performance 
Program funds (23 U.S.C. 119), and Nationally Significant Freight and 
Highway Projects Program grant funds (23 U.S.C. 117) may be used by 
eligible recipients to cover the subsidy and administrative costs of 
TIFIA credit assistance (including the fees and expenses of the DOT's 
outside advisors hired in connection with the evaluation and 
negotiation of terms of TIFIA credit assistance for a project). As in 
previous years, Transportation Investment Generating Economic Recovery 
(TIGER) grant funds may also be used to cover these costs. (See Part VI 
below for more information regarding TIFIA administrative costs).
    To ensure maximum leverage of TIFIA program funds and efficient 
allocation of TIFIA resources, the DOT encourages eligible recipients 
to consider use of the three sources of Federal-aid funds listed above 
to cover the subsidy and administrative costs of TIFIA credit 
assistance, as authorized in the FAST Act. Project sponsors will be 
asked to indicate in their Letters of Interest whether other Federal-
aid funds are available to cover the subsidy and administrative costs 
of their requested TIFIA credit assistance, and provide an explanation 
therefor (for example, that the sponsor is not a State recipient of 
Federal-aid funds).

III. Eligible Projects

    The DOT has provided TIFIA credit assistance across a variety of 
transportation modes and the surface transportation components of 
multifaceted development and redevelopment projects. Generally, 
eligible projects include highway projects, passenger rail projects, 
transit and intermodal projects, private rail facilities providing 
public benefit to highway users, surface transportation infrastructure 
modifications within a port terminal, intelligent transportation 
systems, surface transportation projects eligible for Federal 
assistance under title 23 or title 49 of the U.S. Code, international 
bridges and tunnels, intercity passenger bus or rail facilities and 
vehicles, and related improvement projects grouped together, so long as 
the individual components are eligible and the related projects are 
secured by a common pledge.
    The FAST Act expands eligibility to include transit-oriented 
development and the capitalization of a rural projects fund within a 
State infrastructure bank (SIB). In addition, the FAST Act refines the 
scope of eligibility for project refinancing.

A. Transit-Oriented Development

    Under the FAST Act, a project to improve or construct public 
infrastructure that is located within walking distance of, and 
accessible to, a fixed guideway transit facility, passenger rail 
station, intercity bus station, or intermodal facility, including a 
transportation, public utility, or capital project described in 49 
U.S.C. 5302(3)(G)(v), and related infrastructure, is now eligible to 
receive TIFIA credit assistance (see 23 U.S.C. 601(a)(12)(E)). 
Activities to improve or construct such infrastructure are commonly 
known as ``transit-oriented development'' (or TOD). See Part V below 
for more information regarding general TIFIA eligibility requirements 
(such as minimum project costs).

B. State Infrastructure Banks and TIFIA

    In addition to certain accommodations for rural infrastructure 
projects, such as a reduced interest rate on TIFIA credit assistance 
and lower minimum eligible project cost thresholds (see Part IV below 
for more on rural infrastructure projects and interest rate 
calculation; see Part V below for more information on TIFIA eligibility 
requirements), the FAST Act enables SIBs to receive TIFIA secured loans 
to be used to capitalize a rural projects fund within the SIB (see 23 
U.S.C. 601(a)(12)(F)).
    A TIFIA loan to capitalize a rural projects fund must be secured by 
a dedicated revenue source(s) available to the SIB (see 23 U.S.C. 
602(a)(6) and 603(b)(3)(A)(V) for a description of the requirements for 
a dedicated revenue source for a TIFIA loan to a SIB). The TIFIA loan 
to the SIB may not be less than $10 million or more than $100 million. 
SIBs will be eligible to receive the reduced interest rate (equal to 
one-half of the Treasury Rate) to the extent of available funds for 
such reduced-rate loans. (See Part IV below for additional discussion 
regarding the set-aside for rural infrastructure projects and rural 
projects fund capitalizations). Notably, the SIB, rather than specific 
subsidiary projects, would be responsible for all stages and 
requirements of the standard TIFIA application process, beginning with 
submission of a Letter of Interest that will be reviewed for factors 
including eligibility and creditworthiness, including review from an 
independent financial advisor. (See Part VI below for additional 
discussion regarding the application process; additional information 
regarding the application process can also be found in the TIFIA 
Program Guide.) The SIB would then use the TIFIA loan proceeds to make 
direct loans for rural infrastructure projects out of its rural 
projects fund. (See Part IV below for more discussion regarding, and 
the definition of, rural infrastructure projects.) The SIB, rather than 
the DOT, would review the specific projects. The FAST Act also requires 
that the SIB use all of its loan commitment within two years after 
obligation of the loan unless extended by the DOT.
    Prior to the FAST Act, SIBs were permitted to use Federal-aid funds 
to capitalize a highway, a transit, and a rail account within the SIB. 
The funds in those accounts could then be used to make loans to 
eligible highway, transit,

[[Page 13033]]

and rail projects, respectively. As discussed above, the FAST Act 
permits SIBs to establish a fourth account (a rural projects fund) that 
can be capitalized by a TIFIA loan to a SIB. The SIB must use the funds 
in its rural projects fund to make loans for projects meeting the rural 
infrastructure project definition. (See Part IV below for the 
definition of rural infrastructure project.) A SIB loan for a rural 
infrastructure project must comply with certain specific requirements, 
including: (i) the SIB loan cannot exceed 80 percent of the cost of 
carrying out the project; (ii) the SIB loan must bear interest at or 
below the interest rate on the TIFIA loan used to capitalize the rural 
projects fund; (iii) repayment of the SIB loan must commence not later 
than 5 years after completion of the project; and (iv) the term of the 
SIB loan cannot exceed 30 years after the date of the first payment on 
the loan.\1\ For more information regarding SIBs, including the 
specific requirements for SIB loans to rural infrastructure projects, 
see 23 U.S.C. 610.
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    \1\ Note that certain of these requirements differ for loans 
made from the SIB's other accounts (i.e., the highway, transit, or 
rail account). For a list of the specific requirements applicable to 
SIB loans, see 23 U.S.C. 610.
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    The DOT recognizes that this is a new category of activity and will 
provide further guidance on the formal application and credit 
evaluation processes, informed by feedback from stakeholders through 
this NOFA. The DOT intends for such guidance to be included in the 
forthcoming TIFIA Program Guide update which will be published in the 
near future to inform the preparation of formal SIB applications and 
credit evaluations. In the interim, the DOT will conduct targeted 
outreach and provide technical assistance to potential applicants in 
preparing SIB Letters of Interest.

C. Refinancing

    TIFIA loan proceeds can be used to refinance existing obligations 
in three scenarios: (i) to refinance Federal credit instruments for 
rural infrastructure projects, (ii) to refinance long-term project 
obligations of Federal credit instruments if the refinancing provides 
additional funding capacity for the completion, enhancement, or 
expansion of any project that would otherwise be eligible, and (iii) to 
refinance interim construction financing for eligible projects. The 
FAST Act clarified the parameters of interim construction financing: 
the maturity of such existing interim financing must not be later than 
one year after substantial completion of the project and the 
refinancing must occur prior to one year after substantial completion 
of the project (see 23 U.S.C. 603(a)(2)).

D. Availability Payments

    The FAST Act codifies the DOT practice of allowing payments made by 
a State pursuant to a long-term concession agreement, such as 
availability payments, for a highway project being delivered as a 
public-private partnership to be eligible for Federal-aid reimbursement 
where the State has advance construction authorization (see Pub. L. 
114-94, section 2002). It is important to note, however, that TIFIA 
credit assistance cannot be repaid using Federal-aid funds. As such, 
where TIFIA credit assistance is provided directly to a concessionaire 
receiving availability payments and the State sponsor intends to seek 
Federal-aid reimbursement for such payments, the DOT will require the 
State sponsor to demonstrate the availability of non-Federal funds 
sufficient to cover TIFIA debt service.

IV. Types of Credit Assistance

    The DOT may provide credit assistance in the form of secured 
(direct) loans, lines of credit, and loan guarantees (see 23 U.S.C. 
603(a)(1), 603(e)(1), and 604(a)(1)). These types of credit assistance 
are defined in Section 601. The TIFIA credit facility, which must have 
a senior or senior-parity lien in the event of bankruptcy, liquidation 
or insolvency, can be subordinate as to cash flows absent such an 
event. The TIFIA loan may be fully subordinated, even in the event of a 
bankruptcy, liquidation or insolvency, if the borrower is a public 
agency that is financing ongoing capital programs and has outstanding 
senior bonds under a preexisting indenture so long as (i) the TIFIA 
loan is rated A-category or higher, (ii) the revenue pledge is not 
affected by project performance, such as a tax-backed revenue or system 
pledge, and (iii) TIFIA is financing 33 percent or less of the eligible 
project costs. However, in such cases, the maximum credit subsidy to be 
paid by the Government may not be more than 10 percent of the principal 
amount of the loan; the obligor is responsible for paying any remaining 
subsidy cost.
    The maximum amount for a TIFIA secured loan for a project is 49 
percent \2\ of the project's eligible project costs. For a TIFIA line 
of credit, the maximum amount remains at 33 percent of the project's 
eligible project costs. Project sponsors may not include any costs 
associated with reimbursing TIFIA for the fees of its outside advisors, 
or costs related to the application process (such as charges associated 
with obtaining the required preliminary rating opinion letter 
referenced in Part VI), among eligible project costs for the purpose of 
calculating the maximum 49 or 33 percent credit amount. Project 
sponsors should identify in each Letter of Interest the level of 
funding (including the percentage of eligible project costs) being 
requested, as specified in Part VI.
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    \2\ Limited to 33 percent where the nonsubordination requirement 
is waived, as described above.
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    Section 603(b)(4) provides that the interest rate on a secured loan 
may not be less than the yield on U.S. Treasury securities of a similar 
maturity to the maturity of the secured loan on the date of execution 
of the loan agreement (for lines of credit, Section 604(b)(4) provides 
that the interest rate may not be lower than the 30-year rate for U.S. 
Treasury securities, as of the date of execution of the line of credit 
agreement) (the Treasury Rate). In general, TIFIA currently charges 
interest rates equal to the Treasury Rate on the date of execution of 
the TIFIA credit instrument.
    As with MAP-21, the FAST Act allows for up to 10 percent of the 
TIFIA program's annual funding authority to be provided to rural 
infrastructure projects or to capitalize rural projects funds within 
SIBs at a reduced interest rate of one-half of the Treasury Rate. 
However, the FAST Act modified the definition of rural infrastructure 
projects set forth in MAP-21; under the FAST Act, rural infrastructure 
projects are defined as surface transportation infrastructure projects 
located in an area that is outside of an urbanized area with a 
population greater than 150,000 individuals, as determined by the 
Bureau of the Census (see 23 U.S.C. 601(a)(15)). The reduced interest 
rate applies only to rural projects and SIB capitalizations funded with 
the up-to 10 percent of funding authority set-aside. Once the set-aside 
has been fully committed, any loans for rural projects or SIB 
capitalization would accrue interest at the Treasury Rate.
    The FAST Act also clarified the requirements for a master credit 
agreement. Under MAP-21, the DOT was able to provide a contingent 
commitment of future TIFIA credit assistance in the form of a master 
credit agreement, subject to the availability of future funding and the 
satisfaction of all the conditions for the provision of credit 
assistance under the TIFIA program. The FAST Act clarified that a 
master credit agreement can be used either for a program of projects 
secured by a common revenue pledge or for a single

[[Page 13034]]

project where adequate funding is not available to fund TIFIA credit 
assistance in the fiscal year in which the project sponsor's 
application for credit assistance is approved (see 23 U.S.C. 
602(b)(2)). In addition, the FAST Act clarified that the common revenue 
source pledged in support of the master credit agreement must receive 
an investment grade rating at the time the TIFIA credit assistance is 
obligated (see 23 U.S.C. 601(a)(10)).

V. Eligibility Requirements

    A project must meet all of the eligibility criteria set forth in 
Section 602(a) to receive TIFIA credit assistance.

A. Reduced Minimum Cost Threshold for Small Projects

    For instance, projects seeking TIFIA assistance must meet certain 
statutory threshold requirements for project costs (see 23 U.S.C. 
602(a)(5)). Generally, the minimum size for TIFIA projects is at least 
$50 million in total eligible project costs (23 U.S.C. 
602(a)(5)(A)(i)); however, the minimum size is lower for certain types 
of projects. The FAST Act established a threshold of $10 million in 
eligible project costs for both TOD projects (23 U.S.C. 
602(a)(5)(B)(ii)) and for local projects (eligible projects the sponsor 
of which is a local government or instrumentality, which are located on 
a facility owned by a local government or the development of which a 
local government is substantially involved (23 U.S.C. 
602(a)(5)(B)(iv))). The minimum size for TIFIA projects principally 
involving the installation of an intelligent transportation system is 
$15 million (23 U.S.C. 602(a)(5)(B)(i)). The FAST Act lowered the 
minimum cost threshold for rural infrastructure projects from $25 
million to $10 million in eligible project costs (23 U.S.C. 
602(a)(5)(B)(iii)); however, the FAST Act added a maximum size for 
rural infrastructure projects of $100 million in eligible project costs 
(23 U.S.C. 602(a)(5)(B)(iii)). As applied to the capitalization of a 
rural projects fund in a SIB, the FAST Act limits the size of a TIFIA 
loan to a SIB to between $10 and $100 million (23 U.S.C. 
602(a)(5)(B)(iii)).

B. Ratings Requirements

    Prior to execution of a TIFIA credit instrument, the senior debt 
obligations for each project receiving TIFIA credit assistance must 
obtain investment grade ratings from at least two nationally recognized 
rating agencies, and the TIFIA debt obligations must obtain ratings 
from at least two nationally recognized rating agencies, unless the 
total amount of the debt is less than $75 million, in which case only 
one investment grade rating is required for the senior debt obligations 
and one rating for the TIFIA debt obligations. The term rating agency 
is defined in Section 601(a)(14) and 49 CFR 80.3. If the TIFIA credit 
instrument is proposed as the senior debt, then it must receive the 
investment grade ratings.
    To demonstrate the potential to achieve the above credit rating 
requirements, each project sponsor must provide a preliminary rating 
opinion letter from a rating agency that addresses the creditworthiness 
of the senior debt obligations funding the project and concludes that 
there is a reasonable probability for the senior debt obligations to 
receive an investment grade rating. The preliminary rating opinion 
letter should also provide an opinion on the default risk for the TIFIA 
instrument and must provide indicative ratings for both the senior debt 
obligations and the TIFIA credit instrument. A project that does not 
demonstrate the potential for its senior obligations to receive an 
investment grade rating will not be considered for TIFIA credit 
assistance. More detailed information about these TIFIA credit opinions 
and ratings may be found in the Program Guide on the TIFIA Web site at: 
https://www.transportation.gov/tifia/program-guide. As noted elsewhere 
in this notice of funding availability, the Program Guide is being 
updated in light of the FAST Act.

C. Other Requirements

    Each project seeking TIFIA assistance must submit an application 
acceptable to the Secretary pursuant to the process set forth in this 
notice, and must satisfy applicable State and local transportation 
planning requirements. Each private applicant must receive public 
approval for its project as demonstrated by satisfaction of the 
applicable planning and programming requirements. Each project must 
have a dedicated revenue source to repay the TIFIA loan. Projects 
receiving TIFIA credit assistance have been supported by a variety of 
revenue sources, including tolls, user fees, payments owing to the 
obligor under a public-private partnership (e.g., availability 
payments), and other dedicated revenue sources that also secure or fund 
the project obligations (including real estate tax increments, 
interjurisdictional funding agreements, and room and sales taxes).
    The eligibility criteria also require a determination by the DOT 
that the project is creditworthy, which must be based on, at a minimum: 
(i) A rate covenant, if applicable, (ii) adequate coverage requirements 
to ensure repayment, and (iii) meeting the credit rating requirements 
set forth in Part VI below. The DOT will also utilize a report and 
recommendation from an independent financial advisor and any other 
information it needs to determine a project's creditworthiness.
    Section 602(a) further requires that, for each project, TIFIA 
credit assistance must: (i) Foster (if appropriate) partnerships that 
attract public and private investment for the project, (ii) enable the 
project to proceed at an earlier date than the project would otherwise 
be able to proceed or reduce lifecycle costs (including debt service 
costs) of the project, and (iii) reduce the contribution of Federal 
grant assistance for the project.
    Each project must also demonstrate that the construction 
contracting process for the project can commence no more than 90 days 
after execution of a TIFIA credit instrument. In addition, TIFIA credit 
assistance cannot be obligated for a project until it receives a 
categorical exclusion, finding of no significant impact or record of 
decision, pursuant to the National Environmental Policy Act.
    With respect to SIB applicants requesting a TIFIA loan to 
capitalize a rural projects fund, the DOT will conduct a 
creditworthiness and readiness evaluation that will assess the 
institutional capacity and ability of the SIB to administer and 
disburse the requested TIFIA loan proceeds within the requisite time 
frame, as well as a creditworthiness review of the proposed repayment 
source for the TIFIA loan. The Program Guide on the TIFIA Web site will 
be updated to provide further guidance to SIB applicants.

VI. Application Process

    The TIFIA application process begins with the submission of a 
Letter of Interest and determination of eligibility. Only after a 
project sponsor has submitted a Letter of Interest and met all 
statutory eligibility requirements will the project sponsor be invited 
to submit an application.
    The DOT will conduct a rolling application process where project 
sponsors may submit Letters of Interest at any time. The DOT will 
permit project sponsors to apply once a favorable eligibility 
determination is made. An invitation to submit an application for 
credit assistance does not guarantee the DOT's approval, which will 
remain subject to evaluation, based on all of the TIFIA statutory 
evaluation criteria, and the successful negotiation of terms and 
conditions acceptable to the Secretary.

[[Page 13035]]

A. Letter of Interest

    The Letter of Interest must (i) describe the project and the 
location, purpose, and cost of the project, (ii) outline the proposed 
financial plan, including the requested credit assistance and the 
proposed obligor, (iii) provide a status of environmental review, and 
(iv) provide information regarding satisfaction of other eligibility 
requirements of the TIFIA credit program. Letters of Interest must be 
submitted using the form on the TIFIA Web site: https://www.transportation.gov/tifia/applications. The DOT will be updating 
this form to reflect changes made to the TIFIA program by the FAST Act. 
Pending publication of the updated form, project sponsors should 
continue to use the form posted on the TIFIA Web site.
    The Letter of Interest form requires project sponsors to provide 
information demonstrating satisfaction (or expected satisfaction if 
permitted by TIFIA) of each of the eligibility requirements included in 
TIFIA. These eligibility requirements are outlined above in Part V and 
elsewhere in this notice.
    As described in Part IV, the DOT may provide secured loans to 
finance up to 49 percent of reasonably anticipated eligible project 
costs, which is substantially more than the maximum of 33 percent that 
the DOT could provide prior to MAP-21. The Letter of Interest form 
requires a project sponsor requesting TIFIA credit assistance to 
provide a rationale for the amount of TIFIA credit assistance it is 
requesting, as a percentage of its reasonably anticipated eligible 
project costs. Similarly, the form requires a project sponsor to 
specify whether it has flexibility in its financial plan to finance the 
project with a reduced percentage of TIFIA credit assistance. In 
providing a rationale for the amount of credit assistance requested, a 
project sponsor can demonstrate that traditional sources of financing 
are not available at feasible rates without the TIFIA assistance, or 
that the costs of traditional financing options would constrain the 
sponsor's ability to deliver the project, or that delivery of the 
project through traditional financing approaches would constrain the 
sponsor's ability to deliver a group of related projects, or a full 
capital program. This information will help the DOT ensure that it 
allocates TIFIA's funding authority effectively.
    A project sponsor must also describe the purpose of its project in 
the Letter of Interest form, including the public purpose of the 
project. A project sponsor should provide quantitative or qualitative 
information about the public benefits that its project will achieve. 
Examples of public benefits include objectives specified in Section 101 
and 49 U.S.C. 101(a) and 5301, other DOT grant or credit assistance 
programs, relevant Federal, State, or local transportation laws or 
plans, and other public benefits that can be achieved through 
transportation investments.
    In the context of a public-private partnership, where multiple 
bidders may be competing for a concession such that the obligor has not 
yet been identified, the procuring agency may submit the project's 
Letter of Interest on behalf of the eventual obligor. The DOT will not 
consider Letters of Interest from entities that have not obtained 
rights to develop the project.
    The DOT will review each Letter of Interest submitted in accordance 
with this NOFA. The DOT may contact a project sponsor for clarification 
of specific information included in the Letter of Interest. The DOT 
will notify a project sponsor if the DOT determines that its project is 
not eligible or that the DOT will not be able to continue reviewing its 
Letter of Interest until certain eligibility concerns are addressed. If 
the DOT does not determine a project to be ineligible based on its 
initial review, the DOT will request additional information to 
supplement the Letter of Interest and complete its eligibility 
determination. This information may include, among other things, more 
detailed descriptions of the project, the project's readiness to 
proceed, the project's financial plan, including financial commitments 
to the project from sources other than TIFIA, and/or the applicant and 
its organizational structure.

B. Creditworthiness Review

    Before completing its review of a Letter of Interest and rendering 
a determination of eligibility, the DOT will request that the project 
sponsor provide a preliminary rating opinion letter, as further 
described below, and the DOT will engage an independent financial 
advisor to prepare a report and recommendation acceptable in form and 
substance to the DOT. The DOT typically engages an independent legal 
advisor as part of the evaluation and negotiation of terms of TIFIA 
credit assistance for the project. There is no fee to submit a Letter 
of Interest; however, project sponsors will be required to reimburse 
the DOT for the costs of its outside financial and legal advisors. In 
order to enable the DOT to initially procure financial and legal 
advisors as part of the Letter of Interest review process, a project 
sponsor must submit $250,000 to the DOT. This amount is due upon 
request by the DOT and must be submitted before the DOT hires outside 
advisors. These funds will be used, dollar for dollar, to cover the 
first $250,000 in costs of the DOT's financial and legal advisors. In 
the event the DOT's advisors' fees are less than $250,000, the excess 
will be returned to the project sponsor. If, due to the duration and 
complexity of the project, the DOT's advisors' fees exceed $250,000, 
the DOT will invoice the project sponsor for fees in excess of 
$250,000. Payment of such invoices will be required within 30 days 
after receipt.
1. Relief From Fees for Small Projects
    For projects having eligible project costs that are reasonably 
anticipated to be $75 million or less, the FAST Act provides for the 
reservation of not less than $2 million of the TIFIA program's annual 
funding authority to be used in lieu of the third-party costs charged 
by the DOT. Project sponsors wishing to be considered for this 
available funding should indicate such in their Letters of Interest. 
For more details on this set-aside, please see the Program Guide on the 
TIFIA Web site: https://www.transportation.gov/tifia/program-guide.

C. Invitation To Apply

    After concluding its review of the Letter of Interest and making a 
determination of eligibility, the DOT will inform the project sponsor 
of its determination. If a project is determined to be eligible, the 
DOT will inform the project sponsor that it may submit an application. 
If the DOT determines that a project is ineligible, it will notify the 
project sponsor of this determination and/or that the DOT will not be 
able to continue reviewing the Letter of Interest until certain 
eligibility concerns are addressed. The DOT will review Letters of 
Interest on a rolling basis and invite a project sponsor to apply once 
a favorable eligibility determination is made.
    An invitation to apply for credit assistance does not guarantee the 
DOT's approval, which will remain subject to a project's continued 
eligibility, including creditworthiness, the successful negotiation of 
terms acceptable to the Secretary, and the availability of funds. In 
determining the availability of funds, the DOT may consider other 
projects seeking credit assistance through TIFIA.
    By statute, the DOT works on a timeline for assessing applications 
for credit assistance. No later than 30 days after receipt of an 
application, the DOT will inform each applicant whether its

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application is complete or, if not complete, identify additional 
materials needed to complete the application. No later than 60 days 
after issuing such notice, the applicant will be notified whether the 
application is approved or disapproved.

D. Streamlined Application Process

    The FAST Act requires that the DOT develop a streamlined 
application process for certain projects within 180 days after 
enactment. The DOT is in the process of developing such a process. Once 
that process has been developed, it will be included in the Program 
Guide on the TIFIA Web site: https://www.transportation.gov/tifia/program-guide. The statutory criteria for the streamlined application 
process are set forth in Section 603(f). A key component of the 
streamlined application process will likely be a requirement that TIFIA 
credit assistance is provided on the DOT's standard terms as set forth 
in the loan agreement templates on the TIFIA Web site: https://www.transportation.gov/tifia/tifia-loan-term-sheet-and-agreement. 
Project sponsors should indicate in their Letters of Interest whether 
they are requesting the streamlined process and, if so, demonstrate how 
they meet the criteria.
    As noted above, the project sponsor must submit $250,000 to the DOT 
before the DOT hires financial and/or legal advisors as part of the 
Letter of Interest review process (subject to availability of the set-
aside for small projects, as discussed above). This amount is due upon 
request by the DOT. Project sponsors will be invoiced for any costs in 
excess of $250,000 incurred by the DOT from its outside financial and 
legal advisors (subject to availability of the $2 million set-aside for 
small projects, as discussed above). More detailed information about 
these costs can be found in the TIFIA Program Guide, which is in the 
process of being updated to reflect the changes made by the FAST Act: 
https://www.transportation.gov/tifia/program-guide.
    TIFIA borrowers should expect to track and report certain 
information with respect to each project's performance. The information 
may be used to assist the DOT in determining whether TIFIA is meeting 
the program's goals of leveraging Federal funds and encouraging private 
co-investment. The DOT may also use the information for purposes of 
identifying and measuring performance with respect to goals, 
strategies, time frames, resources, and stakeholder involvement.

VII. Additional Guidance and Request for Comments

    As noted in the Summary section, the DOT is publishing this notice 
to give project sponsors the opportunity to submit Letters of Interest 
for the newly authorized funding as soon as is practicable. However, in 
addition to authorizing funding for TIFIA credit assistance, the FAST 
Act made some significant changes to the TIFIA program's structure, 
including the terms and conditions pursuant to which the DOT can 
provide TIFIA credit assistance. This notice provides guidance about 
the TIFIA application process and how the DOT will implement some of 
the changes made by the FAST Act, but it does not provide comprehensive 
guidance about how the DOT will implement all of the changes made by 
the FAST Act.
    This notice also does not include an exhaustive list of statutory 
and program requirements, such as the requirement that Federal funding 
recipients must comply with Title VI of the Civil Rights Act of 1964 
and other nondiscrimination requirements. The Background section of 
this notice identifies the relevant laws that govern the TIFIA program. 
The FAST Act provides that the Secretary may promulgate such 
regulations as the Secretary determines to be appropriate to carry out 
the TIFIA program. The TIFIA regulations (49 CFR part 80), which 
provide specific guidance on the program requirements, were last 
updated in 2000. The DOT will continue to evaluate, based on 
stakeholder feedback and experience with implementation of new 
provisions contained in the FAST Act, whether future regulatory updates 
would be beneficial, and if so, what subject areas they would cover. 
The primary document that the TIFIA program uses to provide ongoing 
program guidance is a ``Program Guide'' published on the TIFIA Web 
site. The DOT is updating the TIFIA Program Guide to reflect changes to 
the program under the FAST Act and will endeavor to address comments 
received in response to this request for comments. For additional 
guidance, applicants are encouraged to check the TIFIA program Web site 
regularly to obtain updated programmatic and application information. 
DOT staff are also available to provide technical assistance on a real-
time basis.
    Because of the significance of the changes made by the FAST Act to 
the TIFIA program, this notice invites interested parties to submit 
comments about that program's implementation of the FAST Act and the 
DOT's guidance for awarding TIFIA credit assistance. Interested parties 
can provide comments on any aspect of the DOT's implementation of the 
TIFIA changes made by the FAST Act, including identifying specific 
topic areas where additional clarification or guidance would be 
beneficial to potential applicants. The DOT is particularly interested 
in comments from interested parties regarding the provisions in the 
FAST Act relating to rural projects fund capitalizations and SIBs. The 
DOT will consider these comments as it continues to implement the 
program and develop supplemental program guidance. The instructions for 
submitting comments are included below.
    Comments should be sent to the DOT by April 11, 2016. Late-filed 
comments will be considered to the extent practicable.

    Authority:  23 U.S.C. 601-610 (as set forth in the FAST Act); 49 
CFR 1.48(b)(6); 23 CFR part 180; 49 CFR part 80; 49 CFR part 261; 49 
CFR part 640.

    Issued on: March 7, 2016.
Anthony R. Foxx,
Secretary.
[FR Doc. 2016-05640 Filed 3-10-16; 8:45 am]
 BILLING CODE 4910-9X-P