ST9904-MN 971016State Infrastructure Bank
(SIB)
Applicant Handbook
Texas
Department
~f Transportation
Texas Department of Transportation
Budget and Finance Division
October 1997
Version 1.0
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~h Street, Austin, TX 78701-2483 (512) 463-8684
Contacts
This handbook is designed to explain the State Infrastructure Bank (SIB)
program administered by the Texas Department of Transportation (TxDOT), and
to assist eligible applicants in applying for financial assistance from the SIB. An
application form is included in this handbook (see pages 11-12) and may be
submitted at any time to your local TxDOT district office or to the TxDOT Budget
and Finance Division in Austin. An electronic version of the application is
available at http://www.dot.state.tx. us. Additional information may be obtained
from the Budget and Finance Division at (512) 463-8684.
The contact phone number for the local TxDOT district offices are:
Abilene Amarillo Atlanta
(915) 676-6800 (806) 356-3200 (903) 796-2851
Austin Beaumont Brownwood
(512) 832-7000 (409) e92-7311 (915) 646-2591
Bryan Childress Corpus Christi
(409) 778-2165 (817) 937-2571 (512) 808-2300
Dallas El Paso Fort Worth
(214) 320-6100 (915) 774-4200 (817) 370-6500
Houston Laredo Lubbock
(713) 802-5000 (210) 712-7400 (806) 745-4411
Lufkin Odessa Paris
(409) 634-4433 (915) 332-0501 (903) 737-9300
Pharr San Angelo San Antonio
(210) 702-6100 (915) 944-1501 (210) 615-1110
Tyler Waco Wichita Falls
(903) 510-9100 (817) 867-2700 (817) 720-7700
Yoakum
(512) 293-4300
Applicant Handbook - Version 1.0 j 16-10-97
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~h Street, Austin, TX 78701-2483 (512) 463-8684
Table of Contents
CONTACTS ....................................................................................................................................... i
INTRODUCTION ..............................................................................................................................1
HOw DOES THE SIB WORK? ..........................................................................................................1
ADVANTAGE TO LOCAL COMMUNITIES ..............................................................................................1
BACKGROUND ................................................................................................................................2
PURPOSE ........................................................................................................................................3
ELIGIBILITY .....................................................................................................................................4
ELIGIBLE APPLICANTS .....................................................................................................................4
ELIGIBLE PROJECTS .......................................................................................................................4
SIB ADMINISTRATION ....................................................................................................................5
FINANCIAL ASSISTANCE MANAGEMENT .................................................................................... 6
TYPES OF FINANCIAL ASSISTANCE ..................................................................................................6
PROJECT AGREEMENT ....................................................................................................................6
TERMS ...........................................................................................................................................7
UNDERWRITING STANDARDS ...........................................................................................................7
PROJECT SPONSOR/APPLICANT LOAN REQUIREMENTS .................................................................... 8
APPLICATION PROCESS ...............................................................................................................9
FINANCIAL AND CREDIT REQUIREMENTS OF APPLICANT .................................................................. 10
OTHER REQUIREMENTS ................................................................................................................10
SUSPENSION OF APPLICATIONS .....................................................................................................10
OAPPLICATION FORM .................................................................................................................11
APPLICATION REVIEW PROCESS .............................................................................................. 13
DEPARTMENT ACTION ...................................................................................................................13
COMMISSION ACTION ....................................................................................................................13
Preliminary approval ..............................................................................................................13
Preliminary approval criteria ...................................................................................................14
Final approval .........................................................................................................................14
PROJECT MANAGEMENT ............................................................................................................16
PERFORMANCE OF WORK .............................................................................................................16
DESIGN, CONSTRUCTION AND PROCUREMENT STANDARDS ............................................................ 16
MAINTENANCE AND OPERATIONS ..................................................................................................16
GLOSSARY ....................................................................................................................................17
APPENDIX A - RULES GOVERNING THE OPERATION OF THE TEXAS SIB ........................... 21
Applicant Handbook - Version 1.0 16-10-97
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
Applicant Handbook - Version 1.0 16-10-97
State Infrastructure Bank
Texas D~e~hartment of Transportation - Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
Introduction
As the population of Texas grows, the challenge becomes harder to meet the
demand for a safe and efficient transportation system. Local demands for
transportation improvements greatly outnumber the funds available to meet them
under traditional federal and state funding methods. One tool to help TxDOT
address the growing transportation needs of this state is the State Infrastructure
Bank, or SIB.
How Does the SIB Work?
Much like a private bank, the SIB offers eligible customers a range of loans and
credit enhancement services. The SIB will offer its financial services to finance
or financially enhance transportation projects which meet its selection criteria.
As loans are repaid to the SIB, additional.assistance will be granted for more
transportation projects. The SIB, in effect, is a revolving loan fund.
Advantage to Local Communities
Why would a local entity want to borrow money from the SIB when historically
they have not had to pay for local transportation projects? The answer is
twofold: time and money.
Currently, TxDOT expects to be able to fund only about one third of the needed
transportation projects in Texas. TxDOT will-continue to fund as many needed
projects as possible. In many cases however, a project considered a very high
priority by one community, may not be ranked high enough on a gtatewide basis
to receive funding for several years.
If the local community wants the project completed faster, it could borrow money
from the SIB and advance the project by several years. Also, if the proposed
transportation project would generate additional economic development, the
local community may receive enough revenue from the increased tax base to
easily pay for the financial assistance from the SIB. Thus, the community could
get its project completed much sooner with little or no additional cost.
Applicant Handbook - Version 1.0 page I 16-10-97
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
Background
In November of 1995, the President of the United States signed Public Law 104-
59, known as the 1995 National Highway System Designation Act. Section 350
of that law allowed the United States Secretary of Transportation to designate a
maximum of ten states as pilot projects for the State Infrastructure Bank
program. Texas was selected as one of the initial pilot states.
A State Infrastructure Bank, or a SIB, operates chiefly as a revolving loan fund
and may provide a wide range of financial assistance in addition to loans. The
purpose of the pilot program is to attract new funding into transportation, to
encourage innovative approaches to transportation problems, and to help build
needed transportation infrastructure. The law provides that each designated
state may transfer up to ten percent of certain federal dollars, match those funds
with state funds, and deposit them into a State Infrastructure Bank. The greatest
benefit of this program may well be the creation of a self-sustaining, growing,
revolving loan fund.
In 1997, the 75th Texas Legislature passed Senate Bill 370 which created the
State Infrastructure Bank to be administered by the Texas Transportation
Commission, the governing body of the Texas Department of TranSportation. In
September 1997, the Texas Transportation Commission approved the
administrative rules that govern the State Infrastructure Bank.
Applicant Handbook - Version 1.0 page 2 16-10-97
State Infrastructure Bank
Texas De,~artment of Transportation - Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
Purpose
The SIB program arose out of the need to improve, rehabilitate and renovate
transportation facilities. Transportation needs are increasing while federal, state
and local financial resources are constant or declining. The SIB program is one
of the ways that the federal government is utilizing innovative financial
techniques to address growing transportation needs.
The purpose of the State Infrastructure Bank is to:
· Encourage public and private investment in transportation facilities, including
facilities that contribute to the multimodal and intermodal transportation
capabilities of the state;
· Expand the availability of funding for transportation projects and reduce direct
state costs; and
· Improve the efficiency of the state transportation system.
The mission of the SIB is to provide loans and other financial assistance to
improve transportation infrastructure in Texas. To accomplish this mission,
TxDOT, will operate the SIB as a self-sustaining, growth-oriented fund. TxDOT
will also ensure projects satisfy all appropriate federal, state and local planning
and programming requirements.
TxDOT has designed the SIB to enhance the ability of borrowers to access
capital funds at lower-than-market interest rates. The success of the SIB
program will depend on maintaining strong credit standards and successfully
leveraging funds to increase the program's activity through a revolving loan fund
structure. The quality and diversification of the SIB's financial assistance will
have a direct impact on the interest rates paid by borrowers.
Applicant Handbook - Version 1.0 page 3 16-10-97
State Infrastructure Bank
Texas Department of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
Eligibility
Eligible Applicants
Any public or private entity authorized by law to construct, maintain or finance an
eligible transportation project is eligible to apply for financial assistance from the
SIB.
Eligible Projects
For a project to be eligible for financial assistance from the SIB, it must qualify
for federal aid under existing federal rules. This generally means the project
must be on the state highway system and be included in the Statewide
Transportation Improvement Plan. In most cases, residential city streets and
county maintained rural roads will not be eligible. However, there are exceptions
to this requirement, such as off-system bridges. For information about whether a
specific project qualifies for assistance, please contact your local TxDOT district
office.
As an illustration, the following is a list of phases in a project that qualify for
assistance from the SIB:
l) Planning and preliminary studies
2) Feasibility, economical, and environmental studies
3) Right of way acquisition
4) Survey, appraisal and testing
5) Utility relocation
6) Engineering and design
7) Construction
8) Inspection and construction engineering
Each project must stand on its own merits. Therafore, a detailed understanding
of the project by TxDOT's local district office is the first step to determine if your
project qualifies.
Approval for financial assistance to a private entity shall be limited to an eligible
project that:
· provides transportation services or facilities that demonstrate public
benefit; or
· is constructed or operated in cooperation with a state agency or political
subdivision in accordance with an agreement between that state agency
or political subdivision and the private entity.
Applicant Handbook - Version 1.0 page 4 16-10-97
State Infrastructure Bank
Texas De.~hartrnent of Transportation ~ Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
Financial Assistance Management
Types of Financial Assistance
SIB financial assistance could include loans as well as a variety of credit
enhancements such as lines of credit, letters of credit, bond insurance, and
capital reserves. Determination of the final amount of financing and the
loan/bond mix will be based on factors such as:
· funds available in the SIB,
· the financial feasibility of a project,
· cost of the project,
· the individual credit strength of an applicant,
· the ability of the applicant to repay the assistance,
· the public benefit of the project, and
· any other applicable issues considered by the Texas Transportation
Commission.
Loans may be funded directly from available SIB resources or through the sale
of revenue bonds. Revenue bond financing can offer applicants low interest
rates and financing terms consistent with the nature of the project.
Grants are not an authorized form of assistance from the SIB. Projects that are
not financially feasible will not be funded by the SIB.
Project Agreement
All financial assistance from the SIB will be defined by a project agreement
entered into between TxDOT and the applicant, also referred to as the project
sponsor.
The Executive Director of TxDOT will negotiate the terms of the agreement
deemed necessary to comply with any requirements of preliminary approval, to
protect the public's safety, and to prudently provide for the protection of public
funds while furthering the purposes of the SIB.
After a project receives Commission preliminary approval and prior to requesting
Commission final approval, the Executive Director may negotiate a project
agreement that includes:
· the project's limits, scope, definition, design, and any other factors
which might impact the financing of the project;
· start and completion dates for construction;
· the amount, type and timing of disbursements of financial assistance;
Applicant Handbook - Version 1,0 page 6 16-10-97
State Infrastructure Bank
Texas De,~artment of Transportation - Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
SIB Administration
TxDOT, through its Budget and Finance Division, conducts the activities
necessary to manage and administer the SIB. The Texas Transportation
Commission capitalized the SIB with available federal and state money
designated for this purpose. The Commission will have final approval of any
financial assistance from the SIB. The SIB may issue bonds in the future to
generate additional capital for transportation projects. Interest earnings on fund
balances and repayments for financial assistance will also contribute to the
available capital.
The Budget and Finance Division has been designated as the department
contact for the purpose of providing information and assistance to potential
applicants. Assistance may include non-binding advice, counsel, and
consultation regarding all aspects of a potentially eligible project. If TxDOT
determines that the project is eligible for assistance and that TxDOT resources
are available, TxDOT may provide engineering and other technical assistance to
aid potential applicants in developing their application. (Any advice, assistance,
or aid provided will not constitute a commitment or liability on the part of TxDOT
or the Commission:) The application process for SIB financial assistance is a
collaborative effort between TxDOT headquarters, district staff, and the
applicant. Potential applicants are encouraged to communicate with TxDOT at
the earliest possible date. The Commission will be the final authority in
approving or disapproving all SIB applications.
The Budget and Finance Division will coordinate the efforts of other TxDOT
organizations to review and comment on all SIB applications.
Texas Department of Transportation
Budget and Finance Division
Frank J. Smith, Director
125 E. 11 th Street
Austin, Texas 78701-2483
(512) 463-8684
(512) 463-6661 fax
Applicant Handbook - Version 1.0 page 5 16-10-97
State Infrastructure Bank
Texas Department of Transportation - Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
· interest rates including subsidies;
· fees;
· bank charges;
· repayment schedules;
· term to maturity of any financial assistance;
· dedicated security and collateral for the term for the financial
assistance;
· covenants and pledges for the term of the financial assistance;
· default provisions;
· reporting mechanism for showing the status of the project's
development; and
· all other provisions necessary to complete an agreement for financial
assistance from the SIB.
Terms
The repayment of SIB assistance must commence no later than 5 years after the
project has been completed, or in the case of a highway project, when the facility
has opened to traffic (whichever is later). Repayments must be completed within
30 years after they commence. Projects which commence repayment sooner
and those with shorter amortization periods will be more attractive to the
department for SIB funding than longer term loans.
Interest rates while expected to be below market, will be driven to a significant
degree by:
· type of project funded,
· the security pledged by borrowers,
· how effectively the project fulfills local and statewide transportation
needs, and
· interest rates in both the taxable and the tax-exempt markets at the
time the assistance is provided.
If the department determines that all the loaned funds are not needed to
complete a transportation project, the department may accept early repayment
from the recipient and discharge that part of the recipient's obligation.
Underwriting Standards
In order to be successful in developing a healthy revolving fund program,
maintenance of SIB underwriting standards is crucial. The underwriting
standards define the type of loans the SIB will make and under what conditions
the loans are made. By law the SIB must maintain an investment grade rating.
Depending on the security agreement, applicants may generally expect that
Applicant Handbook - Version 1.0 page 7 16-10-97
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463°8684
revenues pledged to repay loans will exceed 1.2 times the anticipated loan
repayment.
In general, the SIB underwriting standards will be developed to insure that loans
and other financial assistance made from the SIB will be repaid. In addition,
standards will be established to insure that eligible, beneficial, and creditworthy
projects receive funding from the SIB. This will enhance the credit quality of the
program, and result in a higher capacity for leveraging. More leveraging will
allow a greater number of transportation projects around the state to receive
funding.
Project Sponsor/Applicant Loan Requirements
TxDOT will assess the credit rating of the applicant and determine if sufficient
resources exist to repay the loan. The applicant must also certify to this effect.
For revenue-backed projects, project feasibility must include an evaluation of
potential earnings or revenue to be generated by the project and debt service
coverage. If a project involves the general obligation guarantee of an applicant,
the analysis must include an evaluation of the taxing powers of the jurisdiction.
Approval of SIB assistance must maintain the credit standards of the program.
In doing so, TxDOT shall use reasonable and prudent standards for evaluating
applications that consider the use of available bond financing as well as direct
loans.
As part of their financial review of the applicant, TxDOT also must determine:
1 ) that sufficient moneys are or will be available in the SIB for the
project,
2) that the applicant has the authority and is willing and able to enter into
a project agreement with TxDOT for the repayment, and
3) the project sponsor has authority for the project.
If a portion of the non-SIB funds needed to complete the project are not available
at the time an application is reviewed, any SIB funding will be conditional on the
securing of the other needed funds.
Applicant Handbook - Version 1.0 page 8 16-10-97
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
Application Process
An applicant should submit an application (see TxDOT Form 1960 on pages 11
and 12) to TxDOT containing the following information:
1) An overview and description of the project.
2) The total estimated cost of the project.
3) The total amount and proposed use of requested financial assistance.
4) The proposed collateral or security and priority claim to those items.
5) A description of the need for the project and potential impact on traffic
congestion and mobility.
6) The latest bond rating of the applicant or other evidence of
creditworthiness similar to that required to obtain a bond rating.
7) For public roadway projects, the applicant shall conduct a preliminary
design study which includes:
· the initial route and potential alignments;
· the project's logical termini and independent utility;
· the location of all right-of-way, facilities and equipment required to
make the project functional; and
· any revisions or changes to state highway system facilities
necessitated by the project.
8) For transit projects, the applicant shall conduct a preliminary scope study
which includes:
preliminary layouts,
· architectural drawings,
· equipment specifications, and
· any other information necessary to fully describe the project.
Additional information may be requested depending on the complexity and size
of the project, the type of infrastructure or asset involved, the type and
complexity of financial 'assistance requested, the applicant's financial status, and
how soon transportation benefits will begin.
Applicant Handbook - Version 1.0 page 9 16-10-97
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
Financial and Credit Requirements of Applicant
Prior to final approval of the project and as part of the project agreement, the
applicant shall agree to the following:
· provide collateral and security for repayment, or other protections as
the Executive Director may deem necessary;
· repay the financial assistance at specified interest rates over specified
time periods according to repayment schedules and including agreed
upon bank fees or compensation;
· abide by provisions governing default;
· have periodic audits in compliance with all applicable federal and state
requirements; and
· reimburse TxDOT for all costs or losses of funds resulting from a
failure to perform by the applicant.
Other Requirements
Depending on the facts and circumstances of each project, the applicant, and
the type of financial assistance provided, the Executive Director may require
additional terms and conditions necessary to protect the public safety, prudently
provide for the protection of public funds, and further the purposes and
requirements of the SIB.
Suspension of Applications
If the Texas Transportation Commission determines that bank funding is fully
committed or other uncertainties exist which warrant suspension of acceptance
of applications, TxDOT may publish in the Texas Register a notice providing that
applications will no longer be accepted. When conditions change, the
Commission shall publish in the Texas Register a notice that applications are
again being accepted.
Applicant Handbook - Version 1.0 page 10 16-10-97
State Infrastructure Bank
Texas De.~artrnent of Transportation - Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
Application for Financial Assistance
FORM 1960
(10/97)
Please respond to the information requested in Sections il and III on a separate page.
Project Name:
Applicant Name:
IRS Employer ID #:
Business Address:
Street City State zip
Business Phone: Business Fax:
Contact Person(s):
Contact's Phone: Contact's Fax:
Requested Amount of Financial Assistance (Types, Terms) Including Any Reserve Funds
Total Cost (estimate) of Project
Proposed Use of Requested Financial Assistance
Proposed Pledge of Collateral or Security and Pdority of Claim to Those Items
Latest Bond Rating Obtained Using the Sources of Revenue Pledged, or Other Evidence of Creditworthiness
Similar to that Required to Obtain a Bond Rating
An electronic version is available at http:l/www.dot.state.tx.us
Applicant Handbook - Version 1.0 page 11 16-10-97
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
Application for Financial Assistance
FORM 1960
Please respond to the information requested in Sections ~ and III on a separate page.
Type of Project Highway Project Transit Project
Description of project and its need including the potential impact on traffic congestion and mobility.
For highway projects:
Please provide a preliminary design study which includes:
* an initial route and potential alignments;
* the project's logical termini and independent utility;
* the location of all right-of-way, facilities and equipment required to make the
project functional; and
* revisions or changes to state highway system facilities necessitated by the project.
For transit projects:
Please provide a preliminary scope study which shall include preliminary layouts, architectural drawings,
equipment specifications, and other information necessary to fully descdbe the project and to comply with all
requirements of the Federal Transit Administration.
I certify that:
The project sponsor has the authority to request and incur the debt described in this
application, and upon approval, will enter into contract for the repayment of any financial
assistance granted by the State Infrastructure Bank.
The preliminary requirements have been completed as specified by the State
Infrastructure Bank, and the project sponsor will comply with all applicable state and
federal regulations and requirements.
To the best of my knowledge all information contained in this application is valid and
accurate and the submission of this application has been authorized by the governing
body of the undersigned jurisdiction.
Signature Date
Print or type name Title, Jurisdiction
Please complete ALL sections of the application. Additional
information may be requested.
Applicant Handbook - Version 1.0 page 12 16-10-97
State Infrastructure Bank
Texas De hartment of Transportation - Budget and Finance Division
125 E. 11~h Street, Austin, TX 78701-2483 (512) 463-8684
Application Review Process
Department Action
TxDOT will review the application and any required preliminary studies, and
notify the applicant if the application is complete.
The Executive Director shall perform an analysis of the application (including the
preliminary studies) to support a recommendation to the Texas Transportation
Commission. The Executive Director will submit the application together with
findings and recommendations to the Commission.
Commission Action
The Commission may analyze the sufficiency of the information, the probable
accuracy of the projections, the anticipated financial condition of the applicant
and the project, the impact of the project on the economy of the region, and any
other information that the Commission determines appropriate.
Preliminary approval
Prior to granting preliminary approval of an eligible project, the Commission will'
consider:
· whether the project is on or can be added to the state highway system;
· the transportation need and publiCbenefit of the project;
· the present and projected financial condition of the SIB;
· . the potential social, economic and environmental impacts of the
project;
· the project's conformity with purposes of the SIB;
· the evidence of public support;
· the probable ability of any pledged revenues to meet all obligations of
the project and to repay the financial assistance to the SIB;
· management of the project;
· adequacy of working capital and operating funds;
Applicant Handbook - Version 1.0 page 13 16-10-97
State Infrastructure Bank
Texas De ~artment of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
· collateral and other guarantees of repayment;
· how quickly the financial assistance will be repaid;
· the presence of credit insurance or other guarantees; and
· how quickly the transportation benefits of the project can be achieved.
Preliminary approval criteria
The Commission may grant preliminary approval to a project for SIB financial
assistance if it finds that:
· the project is consistent with the Statewide Transportation Plan and, if
appropriate, with the metropolitan transportation plan developed by the
metropolitan planning organization in which the project is located;
· if the project is in a Clean Air Act non-attainment area, the project will
be consistent with the Statewide Transportation Improvement Plan,
with the conforming plan and Transportation Improvement Program
(TIP) for the metropolitan planning organization in which the project is
located (if necessary), and with the State Implementation Plan;
· the project will improve the efficiency of the state's transportation
systems;
· the project will expand the availability of funding for transportation
projects or reduce direct state costs; and
· the preliminary studies show that the project and the applicant are
likely to attain an investment grade credit rating acceptable for
financial assistance from the SIB.
Final approval
After preliminary approval is granted, and upon completion of the necessary
negotiations and acceptance of the social, economic and environmental impact
studies, the Texas Transportation Commission may grant final approval if it
determines that:
Applicant Handbook - Version 1.0 page 14 16-10-97
State Infrastructure Bank
Texas De artrnent of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
· providing financial assistance will protect the public safety and will
prudently provide for the protection of public funds while furthering the
purposes of the SIB; and
· the project will provide all reasonable and feasible measures to avoid,
minimize, or mitigate for adverse environmental impacts.
The Commission may postpone final approval if it finds the current or projected
financial condition of the SIB warrants this action.
The Commission may make its preliminary or final approval contingent upon the
applicant making changes, levying taxes, performing other acts, or maintaining
certain conditions necessary to provide for adequacy of repayments.
Approval or disapproval of the project, whether preliminary or final, shall be by
the Commission, and shall include the rationale, findings, and conclusions on
which approval or disapproval is based.
Applicant Handbook - Version 1.0 page 15 16-10-97
State Infrastructure Bank
Texas De hartment of Transportation - Budget and Finance Division
125 E. 11~h Street, Austin, TX 78701-2483 (512) 463-8684
Project Management
Performance of Work
TxDOT may, at its discretion and consistent with state law, provide all or part of
the work connected with the project in TxDOT's normal course of business. If
TxDOT allows the project sponsor to conduct all or part of the work, the project
sponsor shall comply with the federal act, Title 23, United States Code, Title 49,
United States Code, other applicable state and federal law, and all terms and
conditions of any agreements. The project sponsor shall reimburse TxDOT for
any loss of federal funds resulting from the project sponsor's failure to comply.
Design, Construction and Procurement Standards
For federal-aid and state highway improvement projects, plans and specifications
must be in compliance with the design manuals and the latest versions of
TxDOT's standard specifications for construction of highways, streets, and
bridges. All construction plans shall be signed and dated by a professional
engineer who is registered in Texas. All Right of Way acquisition and
environmental procedures must also comply with applicable state and federal
laws.
Maintenance and Operations
When funds for repayment are derived from fees or tolls on the project, or the
project or asset is collateral for the financial assistance from the SIB, TxDOT
may require that its standards and procedures be used in maintenance of the
project.
If applicable, speed limits shall be posted in accordance with procedures used by
TxDOT for the state highway system, but in no case shall such limits exceed the
maximum prima facie speed limits prescribed by state law for a public road
having the same characteristics.
Applicant Handbook - Version 1.0 page 16 16-10-97
State Infrastructure Bank
Texas De.~artment of Transportation - Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
Glossary
Collateral Financial resource, usually future revenue, used
as a pledge or guarantee to secure a loan.
Commission The Texas Transportation Commission
Construction A term as defined by Title 23, United States Code,
§101, and which includes preliminary studies
required to determine the feasibility of an eligible
project.
Credit enhancement Financing tools - such as letters of credit, lines of
credit, bond insurance, debt service reserves, and
debt service guarantees - that improve the credit
quality of underlying financial commitments.
Credit enhancements, which can be provided
through a SIB, have the effect of lowering interest
costs and improving the marketability or liquidity of
bond issues.
Debt Service Reserve Unobligated money set aside in the Texas State
Infrastructure Bank to be used as debt service for
bonds issued, in the event that debt service is not
met by project sponsor.
Design manual The latest editions of and successors to the
following documents:
a) operations and procedures manual of TxDOT's
Design Division;
b) bridge operational planning manual of
TxDOT's Design Division;
c) hydraulic manual of the TxDOT's Design
Division;
d) Texas Manual of Uniform Traffic Control
Devices;
e) standard highway sign designs for Texas; and
f) traffic control standard sheets booklet of
TxDOT's Traffic Operations Division.
Executive Director The Executive Director of the Texas Department
of Transportation, or his or her designee.
Expected financing period The time taken to fully pay any and all liabilities
incurred to finance an eligible project, including all
extensions of time through refunding or
restructuring.
Federal Act Section 350 of the National Highway System
Designation Act of 1995 (Pub. L. No. 104-59) and
all rules and regulations adopted under the Act.
Applicant Handbook - Version 1.0 page 17 16-10-97
State Infrastructure Bank
Texas De.~artment of Transportation - Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
Federal-aid Highway A term as defined in Title 23, United States Code,
§101.
Financial assistance A term for any type of assistance from the SIB
such as direct loan or credit enhancement.
Grant anticipation notes Short-term debt that is secured by grant money
(GANs) expected to be received after debt is issued. The
SIB may buy anticipation notes on behalf of
project sponsors in advance of intergovernmental
assistance, to enable a faster project start. Helps
project sponsors advance projects, especially
when unable to access capital markets.
Interest subsidy The SIB may subsidize interest rates for project
sponsors, lowering overall financing costs. With
this tool, project sponsors repay loans at less than
current market rates. Market rates may be
determined by the cost of borrowing through
conventional issues of comparable duration.
Investment grade rating Creditworthiness sufficient to qualify a debt as
eligible for commercial bank investment under
regulations issued by the Comptroller of the
Currency. For bonds, these debts are limited to
ratings of "AAA," "AA," "A," and "BBB" by Standard
and Poor's Rating Services or corresponding
ratings used by other rating services.
Letter of credit A form of loan from the SIB to be used only in the
instance of a shortfall in net revenue for debt
service (i.e., a contingent loan). A letter of credit
is security provided directly to the
lender/bondholders (via the trustee), rather than to
the borrower/project sponsor.
Leveraging A term used to describe the process where a
certain sum of money is used to secure a larger
sum of money.
Line of credit A form of loan from the SIB to be used only in the
instance of a shortfall in net revenue for debt
service or other financial commitments (i.e., a
contingent loan). A line of credit, which is similar
to a letter of credit, is security available directly to
the borrower/project sponsor with flexibility in use
of the funds.
Loan Any form of direct financial assistance from the
SIB, subject to repayment, which is provided to a
project sponsor.
Applicant Handbook - Version 1.0 page 18 16-10-97
State Infrastructure Bank
Texas Department of Transportation - Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
Metropolitan planning An organization designated in certain urbanized
organization (MPO) areas to carry out the transportation planning
process as required by Title 23, United States
Code, §134.
Priority claim The legal order of claims against security pledged
for a loan.
Project agreement A legally binding contract between the Texas
Department of Transportation and the Project
Sponsor that sets out the terms and conditions
for receipt of financial assistance from the Texas
State Infrastructure Bank.
Project revenues All rates, rents, fees, assessments, charges, and
other receipts derived by a project sponsor from a
project. Generally, the source of SIB assistance
repayment.
Project sponsor/Applicant Entity responsible for the completion and payment
of the project.
Secondary funds A term which includes: the repayment of a loan,
including interest, principal, fees, charges, or other
assistance that is provided with money deposited
to the credit of the bank; and the investment
income generated by secondary funds deposited
to the credit of the bank.
SIB The State Infrastructure Bank managed by the
Texas Department of Transportation.
TxDOT Texas Department of Transportation
Unified Transportation That group of transportation projects for which the
Program commission has authorized the department to
prepare or complete plans, specifications, and
estimates, acquire right-of-way, adjust utilities, or
be let to contract.
Applicant Handbook - Version 1.0 page 19 16-10-97
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~h Street, Austin, TX 78701-2483 (512) 463-8684
This page intentionally left blank.
Applicant Handbook - Version 1.0 page 20 16-10-97
State Infrastructure Bank
Texas De,~hartment of Transportation - Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
Appendix A-
Rules Governing the Operation of the Texas SIB
SUBCHAPTER A. GENERAL PROVISIONS.
§6.1. Purpose.
(a) Transportation Code, Chapter 222, Subchapter D, establishes a state
infrastructure bank as an account within the state highway fund, to be
administered by the Texas Transportation Commission. The commission shall
use money deposited in the bank to:
(1) encourage public and private investment in transportation
facilities, including facilities that contribute to the multimodal and intermodal
transportation capabilities of the state; and
(2) develop financing techniques designed to:
(A) expand the availability of funding for transportation
projects and to reduce direct state costs;
(B) maximize private and local participation in financing
projects; and
(C) improve the efficiency of the state transportation system.
(b) This chapter specifies the procedures and conditions by which an
eligible entity may apply for and obtain financial assistance from the bank.
§6.2. Definitions. The following words and terms, when used in this chapter,
shall have the following meanings, unless the context clearly indicates otherwise.
Bank -- The state infrastructure bank account in the state highway
fund.
Commission -- The Texas Transportation Commission.
Construction -- A term as defined by Title 23, United States Code,
§101, and which includes preliminary studies required to determine the feasibility
of an eligible project.
Department -- The Texas Department of Transportation.
Design manual -- The latest editions of and successors to the:
(A) operations and procedures manual of the design division;
(B) bridge operational planning manual of the design division;
(C) hydraulic manual of the design division;
(D) Texas Manual on Uniform Traffic Control Devices;
(E) standard highway sign designs for Texas; and
(F) traffic control standard sheets booklet of the traffic operations
division.
Executive director -- The executive director of the Texas Department
of Transportation, or his or her designee.
Expected financing period -- The time taken to fully pay any and all
liabilities incurred to finance an eligible project, including all extensions of time
through refunding or restructuring.
Applicant Handbook - Version 1.0 page 21 16-10-97
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~h Street, Austin, TX 78701-2483 (512) 463-8684
Federal Act -- Section 350 of the National Highway System
Designation Act of 1995 (Pub. L. No. 104-59) and all rules and regulations
adopted under the Act.
Federal-aid highway -- A term as defined in Title 23, United States
Code, §101.
Financial assistance -- A term which includes:
(A) extending credit by direct loan;
(B) providing credit enhancements;
(C) sewing as a capital reserve for bond or debt instrument funding;
(D) subsidizing interest rates;
(E) insuring the issuance of a letter of credit or credit instrument;
(F) financing a purchase or lease agreement in connection with a
transit project;
(G) providing security for bonds and other debt instruments; or
(H) providing methods of leveraging money that have been approved
by the United States Secretary of Transportation and which relate to the project
for which the assistance is provided.
Investment grade rating - Creditworthiness sufficient to qualify a debt
as eligible for commercial bank investment under regulations issued by the
Comptroller of the Currency. For bonds, these debts are limited to ratings of
"AAA," "AA," "A," and "BBB" by Standard and Poor's Rating Services or
corresponding ratings used by other rating services.
Metropolitan planning organization (MPO) --An organization
designated in certain urbanized areas to carry out the transportation planning
process as required by Title 23, United States Code, §134.
Secondary Funds w A term which includes:
(A) the repayment of a loan, including interest, principal, fees,
charges, or other assistance that is provided with money deposited to the credit
of the bank; and
(B) the investment income generated by secondary funds deposited
to the credit of the bank.
Transit project - Capital expenditures, excluding expenditures for
commuter rail, eligible for funding under Title 49, United States Code, §5307,
§5309, and §5311.
Unified Transportation Program, Priority 1 and Priority 2 designations -
That group of transportation programs for which the commission has authorized
the department to prepare or complete plans, specifications, and estimates, or
acquire right-of-way, or adjust utilities, or be let to contract.
§6.3. General Policies.
(a) All actions of the bank will be in accordance with applicable federal
and state law, and applicable rules and regulations. (b) Grant financing will not be considered.
(c) No actions will be knowingly taken which would result in the bank's
credit rating falling below investment grade.
Applicant Handbook - Version 1.0 page 22 16-10-97
State Infrastructure Bank
Texas De,~hartment of Transportation, Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
(d) If the bank's credit rating falls below investment grade, the
commission will take actions necessary or appropriate to return the bank's credit
rating as promptly as practicable to investment grade.
(e) The federal government shall not be obligated by any act of the
commission or department under this chapter.
(f) Repayment of any financial assistance from the bank will commence
at the earliest reasonable date consistent with applicable federal and state law,
rules, and regulations. The term for repaying any financial assistance will not
exceed 30 years after the date of the first payment.
(g) The Federal Highway Administration, the Federal Transit
Administration, the Comptroller General. of the United States, the Texas State
Auditor's Office, and the department, or any of their authorized representatives,
shall have the right of access to any books, documents, papers, or other records
of the applicant which are pertinent to any agreement, in order to make audits,
examinations, excerpts, and transcripts.
§6.4. Applicability. The requirements of this chapter do not apply, and the
commission may authorize the bank to provide financial assistance, to an eligible
project for which an innovative financing proposal has been submitted by the
department and approved by the Federal Highway Administration prior to
September 1, 1997.
Applicant Handbook - Version 1.0 page 23 16-10-97
zgelIte-
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~h Street, Austin, TX 78701-2483 (512) 463-8684
SUBCHAPTER B. ELIGIBILITY.
§6.11. Eligible Entities. A public or private entity authorized by law to construct,
maintain, or finance an eligible project is eligible to apply for financial assistance
under Subchapter C of this chapter.
§6.12. Eligible Projects.
(a) The following public or private projects are eligible for financial
assistance:
(1) construction of a federal-aid highway, including required
preliminary studies;
(2) a transit project; or
(3) for the expenditure of secondary funds, a transit project including
a project eligible for assistance under Title 49, United States Code, §5310, or the
planning, development, construction, maintenance, or operation of a public road,
provided that:
(A) the project is eligible for assistance under Title 23 or Title 49,
United States Code; and
(B) the department is authorized by state law to provide
assistance for the project.
(b) Financial assistance to a private entity shall be limited to an eligible
project that:
(1) provides transportation services or facilities that provide a
demonstrated public benefit; or
(2) is constructed or operated in cooperation with a state agency or
political subdivision in accordance with an agreement between that state agency
or political subdivision and a private entity.
Applicant Handbook - Version 1.0 page 24 16-10-97
State Infrastructure Bank
Texas De artrnent of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
SUBCHAPTER C. PROCEDURES.
§6.21. Department Contact. The executive director will designate a contact
within the department for the purpose of providing information and assistance to
potential applicants. Assistance may include non-binding advice, counsel, and
consultation regarding all aspects of a possible eligible project. If the executive
director determines that the project is otherwise eligible for assistance, that the
department is authorized by state law to provide assistance, and that department
resources are available, the department may provide engineering and other
technical assistance to aid potential applicants in developing an application. Any
advice, assistance, or aid provided will not constitute a commitment or liability on
the part of the department or the commission. Potential applicants are
encouraged to communicate with the contact at the earliest possible date.
§6.22. Requested Financial Assistance. An applicant may request any form of
financial assistance authorized by this chapter. In general, all requests for
financial assistance shall be treated as requests for the use of specific sums of
money from the bank for certain periods of times at stated interest rates with
scheduled repayments of principal, interest, and any appropriate charges or
fees.
§6.23. Application Procedure.
(a) Basic application. An eligible entity shall submit an application to
the executive director in a form prescribed by the department. The application
must be accompanied by:
(1) an overview of the project, which shall include a description of
the project, the total cost of the project and the proposed use of the requested
financial assistance;
(2) the amounts of money required to supply the requested
assistance (including the needs of any reserve funds which must be established
and held by the bank for the applicant's benefit, but which may not be expended
from the bank);
(3) any proposed pledge of collateral or security and priority of claim
to those items;
(4) a description of the need for the project and potential impact on
traffic congestion and mobility; and
(5) the latest bond rating obtained by the applicant when using the
sources of revenue to be pledged, or if not applicable, other evidence of
creditworthiness similar to that required to obtain a bond rating;
(6) for public roadway projects, a preliminary design study which
includes:
(A) an initial route and potential alignments;
(B) the project's logical termini and independent utility;
(C) the location of all right-of-way, facilities and equipment
required to make the project functional; and
(D) revisions or changes to state highway system facilities
necessitated by the project; and
Applicant Handbook - Version 1.0 page 25 16-10-97
State Infrastructure Bank
Texas De~,artment of Transportation - Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
(7) for transit projects, a preliminary scope study which shall include
preliminary layouts, architectural drawings, equipment specifications, and other
information necessary to fully describe the project and to comply with all
requirements of the Federal Transit Administration.
(b) Supplemental information and data. The applicant shall submit the
following supplemental information and data. If the project is in the Unified
Transportation Program's Priority 1 or Priority 2 designations, the applicant must
submit only that supplemental information and data which the executive director
finds relevant to the project and the requested financing. In determining relevant
supplemental information and data, the executive director will consider the
complexity and size of the project, the type of infrastructure or asset involved, the
type and complexity of financial assistance requested, the complexity of the
project's and the applicant's financial status, and how soon transportation
benefits will begin.
(1) Financial feasibility study. The applicant shall submit a financial
feasibility study which must include:
(A) a project construction or asset acquisition schedule identifying
the timing, amount, and source of all cash required;
(B) an analysis of the expected financing period of the project;
(C) a pro forma analysis based on cash basis accounting for the
expected financing period of the project showing:
(i) anticipated cash revenues to be used in repayment by
source;
(ii) anticipated cash disbursements by category including
disbursements for operations, maintenance, renewal, and replacement;
(iii) anticipated cash balances at the close of each calendar or
fiscal year; and
(iv) cash used to meet the requirements of any sinking funds,
reserve funds, and loan amortization payments;'
(D) a description of the methods used in preparing the financial
feasibility study, the assumptions contained in the study, and persons and
entities responsible for the preparation of the study;
(E) the length of time the amounts will be outstanding or
obligated;
(F) the anticipated interest rates applicable during the term of the
financial assistance;
(G) any interest rate subsidies requested;
(H) the expected savings to the applicant resulting from the
assistance; and
(I) a description of how the requested assistance will:
(i) expand the availability of funding for transportation projects;
(ii) reduce direct state costs;
(iii) maximize private and local participation in financing
projects;
(iv) improve the efficiency of the state's transportation systems;
and
Applicant Handbook - Version 1.0 page 26 16-10-97
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
(v) accelerate the project's transportation benefits over
conventional financing methods.
(2) Project impacts. The applicant shall conduct studies analyzing
the impact of the project. The studies must include:
(A) how the project will be consistent with the Statewide
Transportation Plan and, if appropriate, with the metropolitan transportation plan
developed by a metropolitan planning organization;
(B) if the project is in a Clean Air Act non-attainment area, how
the project will be consistent with the Statewide Transportation Improvement
Plan, with the conforming plan and Transportation Improvement Program (TIP)
for the metropolitan planning organization in which the project is located (if
necessary), and with the State Implementation Plan; and
(C) the economic impact based on a study assessing the potential
impact of the project on the economy of the region in which the project is to be
located, including the economies of each county in which the project is to be
located and of the municipalities within those counties.
(3) Commitments and approvals. The applicant shall obtain
commitments and approvals which must include:
(A) official written approval of the project by the governing body of
each entity which may become liable for repayment of any financial assistance;
(B) a binding commitment that the environmental consequences
of the proposed project will be fully considered, and that the proposed project will
comply with all applicable local, state, and federal environmental laws,
regulations, and requirements;
(C) a preliminary identification of potential social, economic, and
environmental impacts; and
(D) appropriate documentary evidence of community involvement
in development of the proposed project and public support for it.
(c) Waiver of required information or data. The executive director may
waive submission of individual items of information or data required by this
section if:
(1) the information or data required by this section is not relevant to
the project, applicant, or the financial assistance requested (in determining
relevant supplemental information and data, the executive director will consider
the complexity and size of the project, the type of infrastructure or asset involved,
the type and complexity of financial assistance requested, the complexity of the
project's and the applicant's financial status, and how soon transportation
benefits will begin); or
(2) the department already possesses information or data in a format
which may be substituted for the required information or data.
(d) Requirement of additional information. The executive director may
require the applicant to submit explanations and expansions of information or
data required by this section which are relevant to the project, applicant, or
financial assistance requested. In determining when additional relevant
explanations and expansions of information or data are required, the executive
director will consider the complexity and size of the project, the type of
Applicant Handbook - Version 1.0 page 27 16-10-97
State Infrastructure Bank
Texas De,~artment of Transportation - Budget and Finance Division
125 E. 11 Street, Austin, TX 78701-2483 (512) 463-8684
infrastructure or asset involved, the type, complexity, and amount of financial
assistance requested, and the complexity of the project's and the applicant's
financial status.
§6.24. Suspension of Applications. If the commission determines that bank
funding is fully committed or other uncertainties exist which warrant suspension
of acceptance of applications, the department may publish a notice in the Texas
Register providing that applications will no longer be accepted. When conditions
change, the commission shall publish a notice in the Texas Register that
applications are again being accepted.
Applicant Handbook - Version 1,0 page 28 16-10:97
State Infrastructure Bank
125 E. ~ '
SUBCHAPTER D. DEPARTMENT AND COMMISSION ACTION.
§6.31. Department Action.
(a) Notification. The department will review the application submitted
under Subchapter C. When the application is complete, the department will so
notify the applicant.
(b) Analysis. The executive director will perform an analysis of the
application to support findings and recommendations for the commission. The
executive director will submit the application together with findings and
recommendations to the commission.
§6.32. Commission Action.
(a) Commission analysis. The commission will determine the
sufficiency of the information, the probable reliability of the projections, and the
anticipated financial condition of the applicant and the project.
(b) Preliminary approval.
(1) Considerations. Prior to granting preliminary approval of an
eligible project, the commission will consider:
(A) whether the project is on the state highway system;
(B) transportation need for and anticipated public benefit of the
project;
(C) the present and projected financial condition of the
bank;
(D) potential social, economical, and environmental impacts;
(E) conformity with the purposes of the bank; and
(F) evidence of local public support.
(2) Project requirements. The commission may grant preliminary
approval to a project for bank financing if it finds that:
(A) the project is consistent with the Statewide Transportation
Plan and, if appropriate, with the metropolitan transportation plan developed by a
metropolitan planning organization; '.
(B) if the project is in a Clean Air Act non-attainment area, the
project will be consistent with the Statewide Transportation Improvement Plan,
with the conforming plan and Transportation Improvement Program (TIP) for the
metropolitan planning organization in which the project is located (if necessary),
and with the State Implementation Plan;
(C) the project will improve the efficiency of the state's
transportation systems;
(D) the project will expand the availability of funding for
transportation projects or reduce direct state costs; and
(E) the application shows that' the project and the applicant are
likely to have sufficient revenues to assure repayment of the financial assistance
according to the terms of the agreement. In making this finding, the commission
will consider:
(i) the probable ability of any pledged revenues to meet all
obligations of the project and to repay the financial assistance to the bank;
(ii) management of the project;
Applicant Handbook - Version 1.0 page 29 16-10-97
State Infrastructure Bank
Texas De hartment of Transportation - Budget and Finance Division
125 E 11~ Street, Austin, TX 78701-2483 (512) 463-8684
(iii) adequacy of working capital and operating funds;
(iv) collateral and other guarantees of repayment;
(v) how quickly the financial assistance will be repaid; and
(vi) the presence of credit insurance or other guarantees.
(3) Authorized actions. By granting preliminary approval, the
commission authorizes the executive director to negotiate:
(A) the project's limits, scope, definition, design, and any other
factors which might impact the financing of the project;
(B) the amount, type and timing of disbursements of financial
assistance;
(C) interest rates including subsidies;
(D) fees;
(E) charges;
(F) repayment schedules;
(G) term to maturity of any financial assistance;
(H) collateral securing the financial assistance;
(I) appropriate covenants applicable to the financial assistance;
(J) default provisions; and
(K) all other provisions necessary to complete an agreement
under Subchapter E of this Chapter.
(c) Social, economical, and environmental impact.
(1) Prior to receiving final approval under subsection (d) of this
section, the department or the applicant shall complete a study of the social,
economical, and environmental impact of the project, consistent with the spirit
and intent of the National Environmental Policy Act, Title 42, United States Code,
§§4321 et seq., and Title 23, United States Code, §109(h), and shall provide for
public involvement and meet all other requirements of Chapter 2, Subchapter C
of this title (relating to Environmental Review and Public Involvement For
Transportation Projects).
(2) For a project not on the state highway system, the applicant shall
be responsible for completing required studies of social, economical, and
environmental impacts unless the applicant and the department agree otherwise.
If the department agrees to be responsible for these studies, then any costs will
be charged according to the department's local participation agreement.
(3) For a project on the state highway system, the department shall
be responsible for completing required studies of social, economical, and
environmental impacts with any costs to be charged to the project.
(d) Final approval. Subsequent to preliminary approval under
subsection (b) of this section, the completion of negotiations under subsection
(b)(3) of this section, and the approval of the social, economical, and
environmental impact required by subsection (c) of this section, the commission
may grant final approval if it determines that:
(1) providing financial assistance will protect the public safety and
prudently provide for the protection of public funds while furthering the purposes
of this chapter; and
Applicant Handbook - Version 1.0 page 30 16-10-97
State Infrastructure Bank
Texas De hartment of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
(2) the project will provide for all reasonable and feasible measures
to avoid, minimize, or mitigate for adverse environmental impacts.
(e) Postponement. The commission may postpone final approval if it
finds that the current or projected financial condition of the bank warrants this
action.
(f) Contingencies. The commission may make its preliminary or final
approval contingent upon the applicant making changes, levying taxes,
performing other acts, or maintaining certain conditions necessary to provide for
adequacy of repayments.
(g) Order of approval or disapproval. Approval or disapproval of the
project, whether preliminary or final, shall be by written order of the commission,
and shall include the rationale, findings, and conclusions on which approval or
disapproval is based.
Applicant Handbook - Version 1.0 page 31 16-10-97
State Infrastructure Bank
Texas Department of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701-2483 (512) 463-8684
SUBCHAPTER E. FINANCIAL ASSISTANCE AGREEMENTS.
§6.41. Executive Director. The executive director will negotiate the terms of
agreements deemed necessary to comply with any requirements of preliminary
approval, to protect the public's safety, and to prudently provide for the protection
of public funds while furthering the purposes of this chapter. These agreements
shall include, but not be limited to, terms provided for in this subchapter, as
applicable to the nature of the project.
§6.42. Performance of Work.
(a) Work performed by the department. The department may, in its
discretion and consistent with state law, provide all or part of the work connected
with the project in the department's normal course of business. For work
performed by the department, the following provisions will apply.
(1) The department will account for all costs of the project in the
normal course of business as it does for all federal-aid eligible projects.
(2) The department will make progress payments or set aside funds
from the bank on behalf of the applicant as the department deems necessary.
Such actions shall bind the applicant to repayment according to the terms of the
agreement(s). Interest shall accrue from the date of the payment or setting
aside of funds.
(3) The department's actions and decisions regarding the project
shall not be contestable by the applicant.
(4) The applicant shall provide the department, the Federal Highway
Administration, and the Federal Transit Administration, or their authorized
representatives, with right of entry or access to all properties or locations
necessary to perform activities required to execute the work, inspect the work or
aid otherwise in the prompt pursuit of the work.
(b) Work performed by applicant. The department may, in its discretion
and consistent with state law, provide that the applicant conduct all or part of the
work connected with the project. For work performed by the applicant, the
following provisions apply.
(1) The applicant shall comply with the federal act, Title 23, United
States Code, Title 49, United States Code, other applicable state and federal
law, and all terms and conditions of any agreements. Where approval or
concurrence of the Federal Highway Administration, the Federal Transit
Administration, or other federal agency is required, the applicant shall seek such
action through the department. The applicant shall reimburse the department for
any loss of federal funds to the department resulting from the applicant's failure
to comply.
(2) The applicant shall maintain project records and accounts in
accordance with generally accepted accounting principles, and all applicable
federal and state requirements.
(3) The applicant shall, at the applicant's cost, have a full audit
performed annually of the project records and accounts by an independent
certified public accountant. The applicant shall cause the auditor to provide a full
Applicant Handbook - Version 1.0 page 32 16-10-97
State Infrastructure Bank
Texas De artment of Transportation - Budget and Finance Division
125 E. 11ph Street, Austin, TX 78701-2483 (512) 463-8684
copy of the audit report and any other management letters or auditor's
comments directly to the department.
(4) The applicant shall hold all project records, accounts, and
supporting documents open for state or federal audits until project completion.
(5) Upon completion of the project, the applicant shall forward to the
department all project files as prescribed by the department. The department
shall retain these files until all financial assistance has been repaid and
necessary audits have been performed.
§6.43. Design, Construction, and Procurement Standards.
(a) Plans and specifications. For federal-aid and state highway
improvement projects, plans and specifications must be in compliance with the
design manuals and the latest version of the department's standard
specifications for construction of highways, streets, and bridges. All construction
plans shall be signed and dated by a professional engineer registered in Texas.
(b) Change orders. The department may require standards and
procedures to be used in making any design change orders.
(c) Transit projects must comply with all requirements established
under §§31.42-31.47 of this title (relating to Program Administration).
§6.44. Maintenance and Operations.
(a) Maintenance. When funds for repayment are derived from fees or
tolls on the project, or the project or asset is collateral for the financial
assistance, the department may require standards and procedures to be used in
maintenance of the project.
(b) Speed limits. If applicable, speed limits shall be posted in accordance
with procedures used by the department for the state highway system, but in no
case shall such limits exceed the maximum prima facie speed limits prescribed
by state law for a public road having the same characteristics.
§6.45. Financial and Credit Requirements. The applicant shall agree to:
(1) provide collateral and security for repayment, or other protections as
the executive director may deem necessary;
(2) repay the financial assistance at specified interest rates over specified
time periods according to repayment schedules and including agreed upon bank
fees or compensation;
(3) abide by provisions governing default;
(4) have periodic audits in compliance with all applicable federal and state
requirements; and
(5) reimburse the department for all costs or losses of funds resulting from
a failure to perform by the applicant.
§6.46. Other Requirements. Depending on the facts and circumstances of each
project, the applicant, and type of financial assistance provided, the executive
director may require additional terms and conditions necessary to protect the
Applicant Handbook - Version 1.0 page 33 16-10-97
State Infrastructure Batik
Texas De artment of Transportation - Budget and Finance Division
125 E. 11~ Street, Austin, TX 78701°2483 (512) 463-8684
public safety, prudently provide for the protection of public funds, and further the
purposes and requirements of this chapter.
Applicant Handbook - Version 1.0 page 34 16-10-97