Photo of filling up a gas tank

Transportation Transformation Group White Paper on Implementing MAP-21 TIFIA Provisions

PDF Download as a PDF

The Transportation Transformation Group (T2) is a non-profit group built around a consensus that federal surface transportation policies demand a transformation that emphasizes congestion relief, increased safety, and the efficient movement of goods to America's transportation customers. Our members include departments of transportation of Texas, Florida, Indiana, Utah, New Hampshire, the North Texas Tollway Authority, Port of Houston, Pioneer Institute, Reason Foundation, Cintra US, Dannenbaum Engineering, HDR Engineering, Inc., Nossaman LLP, International Bridge, Tunnel and Turnpike Association, Bank of America-Merrill Lynch, Barclays Capital, Wells Fargo, Goldman, Sachs & Co., HNTB Corp., JP Morgan, Raymond James & Associates, Inc., Piper Jaffray, Morgan Stanley, Siebert Brandford & Shank and Citi.

Congress and President Barack Obama have enacted the Moving Ahead for Progress in the 21st Century Act (MAP–21), focusing policy on solutions that free state ingenuity and reduce restrictions on innovation. T2 suggests that these concepts should remain at the forefront of the U.S. Department of Transportation's efforts to implement the new law.

MAP-21 provides significant positive revisions to the TIFIA program. Most importantly, the bill authorizes the TIFIA program at $750 million for FY 2013 and $1 billion for FY 2014, and increases the maximum share of project costs from 33 percent to 49 percent. T2 is pleased that USDOT is moving swiftly to implement the law with a timely notice of funding availability.

The announcement raises issues of concern, among them:

  • USDOT's intent to pass judgment on whether a project has sufficient "public benefits" to find that it is "in the public interest to provide credit assistance to the proposed project." This is exactly the type of opaque, policy-driven discretionary role of the Administration that Congress intended to eliminate from the program;
  • USDOT's intent to limit credit assistance to 33% absent showing a strong rationale why a project needs up to 49%;
  • USDOT's requirement for an indicative rating opinion before application submission, even though the statute has no such requirement at the pre-application stage;
  • The need to clarify that a project sponsor with an existing accepted LOI or application that wants to ask for more TIFIA support does not jeopardize its existing allocation by submitting an LOI for the augmented support;
  • USDOT's use of a beefed-up LOI process, including legal and financial due diligence, a preliminary rating opinion letter, and a $100,000 non-refundable fee, prior to submitting a formal application, the effect of which is to deter use of TIFIA, defer applications, and avoid the strict time limits on processing applications;
  • Whether the $100,000 fee at the pre-application stage is excessive;
  • USDOT's presumption that no entity can submit an application, and that DOT has no obligation to genuinely evaluate an application, unless USDOT "invites" an application submission;
  • How USDOT will process applications and move a project through the underwriting process during the pendency of a PPP procurement. T2 suggests USDOT change its current practice of suspending all processing after action on a letter of interest until the private developer is selected;
  • USDOT's current practice of refusing to accept paid-in subsidies to augment depleted budget authority;
  • How to treat projects where a significant portion of it, though not all, is "rural" as defined in the MAP amendments; and
  • How and when to effectively utilize master credit agreements.

T2 recommends these issues be resolved immediately in order to move the immediate TIFIA funding process forward as expeditiously as possible.

2015 Surface Transportation Primer »

MAP-21 »

  • Resource Center
  • Moving Past MAP-21

Explainers »

  • What is the Highway Trust Fund and How Is It Funded?
  • Is the Highway Trust Fund Going Broke?
  • How should we finance transportation?
  • What is a VMT?
  • What transportation policies create value for consumers?
  • How do Private Activity Bonds (PABs) and TIFIA Work?
  • What is a Public-Private Partnership?
  • How TIFIA Helps to Solve the Problem
  • Six-year vs. Two-year Transportation Legislation

Position Summary »