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Federal Register / Vol. 86, No. 36 / Thursday, February 25, 2021 / Notices Financing supported by direct project user fees Examples of significant new revenueprovided it is dedicated to transportation investment across an applicants programinclude:
Revenue resulting from recent or pending increases to sales or fuel taxes Revenue resulting from the recent or pending implementation of tolling Revenue resulting from the recent or pending adoption of value capture strategies such as tax-increment financing Criterion 6: Performance and Accountability The Department encourages applicants to describe a credible plan to address the full lifecycle costs associated with the project and implement an accountability measure as described in Section A.2.f of this NOFO.
A credible plan to address full lifecycle costs should include, at a minimum, 1 an estimate of the lifecycle costs of the project; 2 an identified source of funding that will be sufficient to pay for operation and maintenance of the project; and 3 a description of controls in place to ensure the identified funding will not be diverted away from operation and maintenance. Examples of such controls include if a private sector entity is contractually obligated to maintain the project, if a project sponsor has a demonstrated history of fully funding maintenance on its assets, or if the sponsor describes an asset management plan or strategy. For a plan to be considered credible, the applicant should show that they have considered the impact of climate change on their plan.
Applicants intending to address the accountability measure portion of this criterion should describe how they meet at least one of the three options below:
1 The applicant should state in the application that it agrees to meet a specific construction start and completion date and state those dates in the application. If the project sponsor does not meet these deadlines, the project will be subject to forfeit or return of up to 10% of the awarded funds, or $10 million, whichever is lower.
2 The applicant should propose a specific indicator of project success that will be evident within 12 months of project completion. The indicator should relate to a benefit estimated in the BCA e.g., travel time savings, and the level of performance should be consistent with the estimates in the BCA. If the project fails to produce this specific outcome in the time allotted, it
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will be subject to forfeit or return of up to 10% of the awarded funds, or $10
million, whichever is lower.
3 The applicant should show that they will meet a negotiated Community Benefit Agreement or have completed an Equitable Project Assessment and will be monitoring compliance.
The project will be assigned a Performance and Accountability rating based on how it addresses these areas.
Applications that address both lifecycle costs and accountability measures will receive a high rating. Applications that address either lifecycle costs or accountability measures, but not both, will receive a medium rating.
Applications that address neither area will receive a low rating.
b. Additional Considerations i. Geographic Diversity By statute, when selecting INFRA
projects, the Department must consider contributions to geographic diversity among recipients, including the need for a balance between the needs of rural and urban communities.
The Department will also consider whether the project is located in a Federally designated community development zones such as a qualified opportunity zone, Empowerment Zone, Promise Zone, or Choice Neighborhood.
Applicants can find additional information about each of the designated zones at the sites below:
Opportunity Zones: https
opportunityzones.hud.gov/
Empowerment Zones: https
www.hud.gov/hudprograms/
empowerment_zones Promise Zones: https
www.hud.gov/program_offices/field_
policy_mgt/fieldpolicymgtpz Choice Neighborhoods: https
www.hud.gov/program_offices/
public_indian_housing/programs/ph/
cn A project located in a Federally designated community development zone is more competitive than a similar project that is not located in a Federally designated community development zone. The Department will rely on applicant-supplied information to make this determination and will only consider this if the applicant expressly identifies the designation in their application.
ii. Project Readiness During application evaluation, the Department considers project readiness in two ways: to assess the likelihood of successful project delivery and to confirm that a project will satisfy statutory readiness requirements.

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First, the Department will consider significant risks to successful obligation of funding for a project, including risks associated with environmental review, permitting, technical feasibility, funding, and the applicants capacity to manage project delivery. Risks do not disqualify projects from award, but competitive applications clearly and directly describe achievable risk mitigation strategies. A project with mitigated risks is more competitive than a comparable project with unaddressed risks. The Department will assign each application one of three risk ratings based on the likelihood of the project meeting the statutory obligation deadline: 1 High risk; 2 moderate risk; and 3 low risk. A project is assigned high risk if, based on the available information, there is a high likelihood that project will not be able to reach obligation within the statutory timeframe. It is moderate risk if, based on the available information, there is some possibility that the project will not be able to reach obligation within the statutory timeframe. It is low risk if, based on the available information, it is highly likely that the project will be able to be reach obligation within the statutory timeframe.
Second, by statute, the Department cannot award a large project unless that project is reasonably expected to begin construction within 18 months of obligation of funds for the project.
Obligation occurs when a selected applicant enters a written, projectspecific agreement with the Department and is generally after the applicant has satisfied applicable administrative requirements, including transportation planning and environmental review requirements. Depending on the nature of pre-construction activities included in the awarded project, the Department may obligate funds in phases.
Preliminary engineering and right-ofway acquisition activities, such as environmental review, design work, and other preconstruction activities, do not fulfill the requirement to begin construction within 18 months of obligation for large projects. By statute, INFRA funds must be obligated within three years of the end of the fiscal year for which they are authorized.
Therefore, for awards with FY 2021
funds, the Department will determine that large projects with an anticipated obligation date beyond September 30, 2024 are not reasonably expected to begin construction within 18 months of obligation.
iii. Freight Rating Projects that primarily serve freight and goods movement play an important
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