David Miller - Comments

The ability for a project to fund all or a portion of the TIFIA Credit Charge could be a valuable enhancement to the TIFIA program. Given the limited availability of TIFIA budget authority and potentially excessive competing demands for TIFIA loans and credit assistance, a program to allow project funding of the TIFIA Credit Charge can allow more projects to move forward. My main comment regarding project payment of the TIFIA Credit Charge relates to the purpose/use of the credit charge and what happens to the funds. The credit charge is characterized as a reserve against loss due to non-repayment of any TIFIA loan or credit enhancement. In effect, however, the credit charge is treated like a credit enhancement fee or loan commitment fee. And a 10-15% upfront fee can wreck project financial feasibility. Once paid by the project, it doesn't appear that the project may ever again access or receive back the funds. But the project is still obligated to fully repay any TIFIA funds dispersed to it, and TIFIA even receives senior lien creditor status in a worst case bankruptcy-related event. If TIFIA wants/needs to assess a reasonable commitment fee, then that may be appropriate. But the Credit Charge which is a reserve against loss should be treated like a reserve fund. It is available to repay TIFIA if the project can not. If the project credit rating/quality improves, then TIFIA's risk is reduced, and a portion of the reserve should be released to the project (maybe as a payment toward any outstanding TIFIA balance). And if/when the project is capable of fully repaying TIFIA, then the reserve fund should be released to the project and/or to help make the final TIFIA payment. As long as the reserve is in place and fully funded, the project should benefit from any interest earnings on any fund balances. If the TIFIA Credit Charge is truly treated like a reserve fund, I believe many more projects will be financially feasible and apply for TIFIA assistance.