(a) Preliminary approval.
  (1) Considerations. Prior to granting preliminary approval of an eligible project, the commission will consider:
    (A) the transportation need for and anticipated public benefit of the project, including such factors as the project's potential ability to accelerate needed transportation facilities or to reduce financial and other burdens on the commission and the department regarding the development, operation, and maintenance of such facilities;
    (B) availability of funding from all sources;
    (C) the percentage of the total project cost that is represented by the requested financial assistance;
    (D) the financial feasibility of the project;
    (E) potential social, economic, and environmental impacts of the project;
    (F) the extent to which the requestor's toll collection system or plan for a toll collection system provides interoperability;
    (G) evidence of local public support; and
    (H) the requestor's past experience with similar projects and past performance working in collaboration with the department in the development of such projects, if applicable.
  (2) Project requirements. The commission may grant preliminary approval of a project for 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 an MPO;
    (B) if the project is in a nonattainment area, the project will be consistent with the Statewide Transportation Improvement Program, with the conforming plan and Transportation Improvement Program for the MPO 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) if the financial assistance is required to be repaid, the application shows that the project and the requestor are likely to have sufficient revenues to assure repayment of the financial assistance according to the terms of the agreement.
  (3) Authorized actions. By granting preliminary approval, the commission authorizes the executive director to:
    (A) evaluate the project's limits, scope, definition, design, and other features, and identify any which adversely affect the financing of the project, including EPIC;
    (B) negotiate the amount, type and timing of disbursements of financial assistance;
    (C) if the financial assistance is required to be repaid, negotiate an interest rate, a repayment schedule, collateral securing the financial assistance, and default provisions;
    (D) negotiate provisions providing, if necessary for the project's financial feasibility, for the subordination of financial assistance provided under this subchapter to any other debt obligations for the project; and
    (E) negotiate all other provisions necessary to complete an agreement under this subchapter.
  (4) Relevant facts. In determining the extent to which the executive director will seek changes to the features described in subsection (a)(3)(A) of this section, the executive director shall consider:
    (A) the requestor's past experience with similar projects; and
    (B) whether the project is intended to become part of the state highway system or otherwise subject to the jurisdiction of the department.
(b) Project impacts and traffic and revenue report.
  (1) Prior to receiving final approval under subsection (c) of this section for financial assistance for the construction of a project, the requestor shall:
    (A) complete a study of the social, economic, and environmental impacts of the project and provide for public involvement in the manner prescribed by Chapter 2, Subchapter C of this title (relating to Environmental Review and Public Involvement For Transportation Projects); and
    (B) obtain an investment grade traffic and revenue report for the project from a nationally recognized traffic engineer.
  (2) The executive director may waive the requirements of paragraph (1)(A) or (B) of this subsection if the director determines that the study or report is inapplicable or unnecessary due to the nature of the requested assistance.
(c) Final approval. Subsequent to preliminary approval, completion of negotiations, and compliance with this section, the commission may grant final approval if it determines that:
  (1) providing financial assistance will prudently provide for the protection of public funds; and
  (2) the project will provide for all reasonable and feasible measures to avoid, minimize, or mitigate adverse environmental impacts.
(d) Contingencies. The commission may make its preliminary approval contingent upon the requestor making changes, performing other acts, or establishing certain conditions necessary to provide for the adequacy of any required repayments. The commission may make its final approval subject to the requestor fulfilling specified conditions precedent to the release of financial assistance under this subchapter, which shall also be set forth in the financial assistance agreement. The necessity and nature of such changes, acts or conditions will be determined with consideration for the requestor's past experience with similar projects and past performance working in collaboration with the department in the development of such projects, especially with regard to the requestor's previous use of the commission's financial assistance.

Source Note: The provisions of this §27.54 adopted to be effective August 15, 2002, 27 TexReg 7178; amended to be effective March 18, 2004, 29 TexReg 2745; amended to be effective May 16, 2018, 43 TexReg 3122