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2006 TIFIA Rulemaking
Revisions & corrections to existing rule
Changes required by SAFETEA-LU
1. Changes specified in new statute
2. Elaboration of new statutory provisions
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SAFETEA-LU Changes to TIFIA
• Eligibility broadened:
Private freight rail facility providing public benefits
Port improvements necessary for intermodal access
• Project size thresholds lowered:
$50 MM (old law: $100 MM)
1/3 of state's F-A apportionment (old law: 1/2)
ITS projects: $15 MM (old law: $30 MM)
• DOT permitted to collect and spend fees, subject to appropriation
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SAFETEA-LU Changes to TIFIA
• “Work-out” authority: 10-year limit removed
• Line of credit:
DSR need not be tapped before TIFIA draw
20 percent annual draw restriction removed
• Authorized program size:
$122 million annual authorization to fund cost of credit assistance
Annual authorized limit on credit assistance removed
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$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
(Bill
ion
s )
1999 2000 2001 2002 2003 SAFETEA-LU(per year)
Credit Amount
Budget Authority
TIFIA Funding: Past and Future
Annual Authorizations: 2005 - 2009Maximum Credit Amount: No limit
Maximum Budgetary Cost: $122 Million
Annual Authorizations: 2005 - 2009Maximum Credit Amount: No limit
Maximum Budgetary Cost: $122 Million
$ 1.6$ 1.8
$ 2.2 $ 2.4$ 2.6
No Limit
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New TIFIA Refinancing Authority
SAFETEA-LU authorizes TIFIA secured loans: “to refinance long-term project obligations or Federal credit instruments if such refinancing provides additional funding capacity for the completion, enhancement, or expansion of any project that (i) is selected under section 602 or (ii) otherwise meets the requirements of section 602.”
["section 602" specifies TIFIA eligibility and project selection criteria]
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TIFIA Refinancing Issues
What are “long term obligations”?
What is the meaning of “provides additional funding capacity”?
What limits, if any, should there be on using TIFIA to refinance a prior TIFIA loan?
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TIFIA Refinancing Issues
Does the refinancing authority encompass acquisition financing (e.g., Chicago Skyway)?
If TIFIA’s new refinancing authority does not contemplate acquisition financing, does it permit refinancing of interim acquisition financing?
How should new SAFETEA-LU refinancing authority be harmonized with prior TEA-21 TIFIA authority to refinance construction financing?
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TIFIA Refinancing Issues
Do the basic TIFIA project requirements carry over to refinancing transactions?
1. size threshold
total refinancing transaction > $50 MM?
new construction > $50 MM?
2. participation limit
TIFIA participation < 33% total transaction?
TIFIA participation < 33% new construction?
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Applicability of federal requirements (NEPA, planning process, Buy America, labor, etc.)? What do they apply to, new construction or refinanced project?
If project readiness requirements (e.g. NEPA complete, conforming planning process) apply to new construction, must those requirements be met before the refinancing transaction closes?
Must there be a nexus between the refinancing and the new construction?
TIFIA Refinancing Issues
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Private Activity Bonds
• SAFETEA-LU authorizes $15 billion in “exempt facility bonds”
• Not subject to state volume caps
• Secretary of Transportation has broad discretion.
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Private Activity Bonds
• Eligible projects:
surface transportation project which receives Federal assistance under title 23,
international bridge or tunnel which receives Federal assistance under title 23,
Intermodal truck-rail freight transfer facility which receives Federal assistance under either title 23 or title 49.
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Private Activity Bonds
• Private activity bond authorization is not part of TIFIA program
• DOT expects that project sponsors may pair PABs and TIFIA in project plans of finance
• Implications for the TIFIA rule??
