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51 GLOSSARY OF TERMS, ABBREVIATIONS, AND ACRONYMS Glossary of Terms vehicles (HOVs) are allowed to use the lanes for free or at a discounted toll rate. 63-20 Non-Profit Corporations--Corporations established Life-cycle costs--Costs of a project over its entire useful under IRS Revenue Rule 63-20, which permits nonprofit life, from project inception to the end of its design life. corporations other than solely governmental bodies to issues Long-term concessions--Publicly financed facilities are tax-exempt debt. leased to private sector concessionaires for specified time Availability payments--Periodic typically annual payments periods. The concessionaire may pay an upfront fee to made by sponsoring agency to private investors on the the public agency in return for revenue generated by the basis of the availability of facility capacity or other perfor- facility. The concessionaire must operate and maintain the mance measures considered important to users, as defined facility and sometimes make capital improvements. by contract. Private Activity Bonds--Tax-exempt bonds issued by states Brownfield--Concession agreements involving an existing and local governments for project sponsored by a private roadway, and may include operations, maintenance and entity. expansion/extension of the facility. Publicprivate partnership--Contractual agreement between Build-Operate-Transfer (BOT)--See Design-Build-Operate- a public agency and the private sector that allows for Maintain. greater private sector participation in the delivery of trans- Build-Own-Operate (BOO)--A private contractor constructs portation projects. and operated a facility while retaining ownership. Shadow tolls--Per-vehicle amount paid to a facility opera- Build-Transfer-Operate (BTO)--See Design-Build- tor by the facility owner or sponsoring agency. Shadow Operate-Maintain. tolls are not paid by facility users. Commercial debt--Any type of loan or credit instrument Special Experimental Project Number 14 (SEP-14)-- that is issued by a private investor. Program established in 1990 to identify, evaluate, and Construction Manager @ Risk--A hired construction document innovative contracting practices that have the manager (CM) begins work on the project during the design potential to reduce the life cycle cost of projects while phase to provide constructability, pricing, and sequencing maintaining product quality. analysis of the design. The CM becomes the design-build contractor when a guaranteed maximum price is agreed Special Experimental Project Number 15 (SEP-15)-- upon by the project sponsor and CM. SAFETEA-LU enacted program that allows FHWA to Design-Bid-Build (DBB)--Traditional project delivery experiment in four areas of project delivery: contracting, method where design and construction are sequential steps right-of-way acquisition, project finance and compliance in the project development process, with both activities with the National Environmental Policy Act (NEPA) and bid separately. other environmental requirements. Design-Build (DB)--A procurement or project delivery State Infrastructure Bank (SIB)--A state or multi-state method whereby a single entity (which can be a consor- revolving fund that provides loans, credit enhancement, tium of various parties, including engineers/architects and and other forms of financial assistance to surface trans- contractors, for instance) is responsible for both the design portation projects. and construction of a project. Tax-exempt debt--Bonds, issued by a state or local govern- Design-Build with Warranty--A design-build in which the ment, whose interest payments are not subject to federal design-builder guarantees to meet material, workmanship, income tax, and sometimes are also exempt of state or and/or performance measures for a specified period after local income tax. the project has been delivered. Transportation Infrastructure Finance and Innovation Act Design-Build-Operate-Maintain (DBOM)--Also Build- of 1998 (TIFIA)--Federal transportation credit program Operate-Transfer (BOT) or Build-Transfer-Operate (BTO). enacted under TEA-21, and modified by SAFETEA-LU, A procurement method in which the selected contractor is that provides direct federal loans, lines of credit, or loan responsible for the design, construction, operations, and guarantees provided through the U.S.DOT to large pro- maintenance of the facility for a specified time. jects of national significance, under criteria developed by Equivalent single-axle load (ESALs)--Damage per pass to Congress. a pavement caused by a specific axle load relative to the Unsolicited proposals--A bid by a private company to the damage per pass of a standard 18,000 lb axle load moving government for a project for which bids have not been on the same pavement. solicited. Greenfield--Concession agreements involving the construc- Warranty--When used in publicprivate partnerships for tion of a new facility. the construction of roads, a clause that guarantees that the High-occupancy toll (HOT) lanes--On HOT lanes, low- roadway will meet certain level of quality or repairs will occupancy vehicles are charged a toll, while high-occupancy be made at the private contractor's expense.
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52 Weighted Average Cost of Capital (WACC)--The rate that DOT Department of transportation a company is expected to pay to finance its assets. WACC ESAL Equivalent single-axle load is the minimum return that a company must earn on exist- GAO Government Accountability Office ing asset base to satisfy its creditors, owners, and other HOT lanes High-occupancy toll lanes providers of capital. It is calculate by combining the invested OECD Organisation for Economic Cooperation and equity and debt with their respective rates of return. Development O&M Operations and Maintenance Abbreviations and Acronyms PAB Private Activity Bonds PPP or P3 PublicPrivate Partnerships BOO Build-Own-Operate SEP-14 Special Experimental Project Number 14 BOT Build-Operate-Transfer SEP-15 Special Experimental Project Number 15 CM@R Construction Manager @ Risk SIB State Infrastructure Bank DB Design-Build TIFIA Transportation Infrastructure Finance and DBB Design-Bid-Build Innovation Act of 1998 DBFO Design-Build-Finance-Operate WACC Weighted Average Cost of Capital