Understanding the Conditional Term Sheet for Credit Assistance in Surface Transportation Projects
Definition & Meaning
A conditional term sheet is a type of contract between the U.S. Department of Transportation (DOT) and a project sponsor, which may also include a lender. This agreement outlines the terms under which the DOT agrees to reserve funding from the Transportation Infrastructure Finance and Innovation Act (TIFIA) for a specific surface transportation project. The funding is contingent upon the project meeting certain conditions and the future availability of budget authority. Until these conditions are satisfied, the DOT is not legally bound to provide the funds. Once the conditions are met, the term sheet can be revised to initiate the funding process.
Legal Use & context
Conditional term sheets are primarily used in transportation law and finance, specifically in projects seeking federal credit assistance. They are relevant in various legal contexts, including public finance and infrastructure development. Users may encounter this term when dealing with federal grants or loans for transportation projects. Legal forms related to conditional term sheets can be found on platforms like US Legal Forms, which provide templates drafted by legal professionals to assist users in navigating these agreements.
Real-world examples
Here are a couple of examples of abatement:
Example 1: A city plans to build a new transit line and applies for TIFIA funding. The DOT issues a conditional term sheet that specifies the conditions the city must meet, such as environmental assessments and securing local funding, before the federal funds can be released.
Example 2: A state department of transportation seeks federal assistance for a highway expansion project. The DOT provides a conditional term sheet outlining the necessary approvals and documentation required for the funding to be activated. (hypothetical example)
Relevant laws & statutes
Key legislation related to conditional term sheets includes:
- Transportation Infrastructure Finance and Innovation Act (TIFIA)
- 49 CFR Part 80 - Credit Assistance for Surface Transportation Projects