RD Instruction 2000-V

PART 2000 - GENERAL

SUBPART V - MEMORANDUM OF COOPERATION BETWEEN THE FEDERAL RAILROAD

ADMINISTRATION AND THE FARMERS HOME ADMINISTRATION

§2000.1051 [General]{.underline}.

The Farmers Home Administration (FmHA) has entered into a Memorandum of
Cooperation with the Federal Railroad Administration (FRA). The
memorandum provides for an exchange of program information and the
establishment of liaison and an atmosphere of cooperation with the
appropriate State Government person and each State Director. The
Memorandum is attached as Exhibit A.

§2000.1052 [Handling loan applications]{.underline}.

Loan applications for railroad facilities are to be processed for
essential community facilities in accordance with RD Instruction 1942-A,
or for private entrepreneurs in accordance with RD Instruction 1980-E.

§2000.1053 [State supplements]{.underline}. State Directors may issue
State supplements to the extent necessary to properly implement the
policies of this Memorandum.

§2000.1053 - 2000.1100 \[Reserved\]

Attachment: Exhibit A

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Distribution: W, S, D, C Administration

General

## 1

(5-23-79) PN 675

FmHA lnstruction 2000 V

Exhibit - A

## Office of the Secretary of Transportation

## Washington, D.C. 20590

## 

## 

## Rural Transportation Facilities

## Memorandum of Cooperation

The Administrator, Farmers Home Administration (FmHA), and the
Administrator, Federal Railroad Administration (FRA), make this
agreement to cooperate in assisting rural areas of the United States to
continue reliable railroad and rail shipper transportation facilities.
This agreement is made pursuant to the November 2, 1978, Joint Policy
Statement on railroad rehabilitation in rural areas signed by the
Assistant Secretary for Budget and Programs (USDOT) and the Assistant
Secretary for Rural Development (USDA).

FmHA may, through authorities contained in the Consolidated Farm and
Rural Development Act of 1972, provide loan and/or grant assistance to
eligible applicants to assist in construction of viable transportation
facilities, including railroad branch lines and rail shipper facilities.

FRA may, through authorities contained in Section 5 of the Department of
Transportation Act of 1966, as amended, provide grant assistance to
States to plan and implement projects designed to:

> o Rehabilitate, through grants or loans to railroads, preabandoned
> lines carrying three million gross ton miles of traffic or less per
> mile annually.
>
> o Provide alternative transportation facilities and services; for
> example, team tracks for use by shippers.
>
> o Assist in maintaining service on branch lines which have been
> abandoned.

Therefore, FmHA and FRA agree to cooperate in every manner possible to
provide financial and technical assistance available from FmHA or FRA
through their respective programs to qualified applicants for
transportation assistance.

The Administrator, FmHA, will notify State Directors that transportation
projects are to be included in the public service facility category and
given appropriate priority. The Administrator, FmHA, will emphasize to
FmHA\'s State Directors the need to inform likely applicants of the
eligibility of transportation related activities in rural development
efforts. FmHA expects to provide an increased level of loan activity

(5-23-79) PN 675

RD Instruction 2000-V

Exhibit A

Page 2

for railroad rehabilitation and rail shipper facility projects during
Fiscal Year 1979 and subsequent years. The State Directors of FmHA will
give prompt attention and replies to inquiries and applications for
assistance under this agreement.

FRA will continue to encourage State Rail Agencies to select
rehabilitation and alternative service projects that both meet the
transportation needs of shippers in rural communities in a
cost-effective manner and further the goals of restructuring the
national rail system. Pursuant to the 1978 Local Rail Service Assistance
Act, FRA will also require State consideration of the economic costs and
benefits to local communities of rail service improvement as part of the
State rail planning process.

FRA shall provide the Administrator, FmHA, with informational materials
concerning its program procedures and objectives, annual allocation of
funds memoranda, and lists of key State people administering the program
for distribution to appropriate FmHA field personnel. FRA will also
provide FmHA with assistance in the technical and financial review of an
application for FmHA loan assistance for a rail project.

FRA will notify FmHA of appropriate regional training sessions of
meetings designed to inform State and local officials of the
requirements of the State Rail Assistance Program. FmHA will notify FRA
and appropriate State government officials of training sessions designed
to provide information on the Community Facility and Business and
Industrial Loan Programs.

FmHA State Directors or their designees shall contact the appropriate
State government person and establish liaison and an atmosphere of
cooperation which can be drawn upon when either FmHA or the State
receives application(s) or notice(s) of activity on project(s) where
either FmHA or the State may benefit from the expertise of the other. In
this connection, FmHA shall seek written comments on all rail
rehabilitation loan applications from the State agency responsible for
State rail planning. FRA will request that States provide notices of
public hearings on rail projects to the appropriate FmHA State official.

The Department of Agriculture and the Department of Transportation will
establish a task force to monitor the implementation of this agreement
and to assess the success of FmHA and FRA cooperation on rural
transportation assistance. That assessment will be accomplished one year
after the signing of this agreement.

RD Instruction 2000-V

Exhibit A

Page 3

This Memorandum of Cooperation will remain effective until either FmHA
or FRA provided written notification that the Memorandum is no longer
effective.

Requests for modifications or amendments to the Memorandum may be
initiated by either FmHA or FRA. Such modifications or amendments will
only be effective upon mutual agreement by both parties.

This Memorandum of Cooperation shall become effective immediately on the
date it is signed by the Administrator, FmHA, and the Administrator,
FRA.

/s/ Gordon Cavanaugh /s/ John M. Sullivan

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Gordon Cavanaugh John M. Sullivan

Administrator Administrator

Farmers Home Administration Federal Railroad

1/10/79 2/11/79

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Date Date

/s/ Mortimer L. Downey /s/ Alex P. Mercure

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Mortimer L. Downey Alex P. Mercure

Assistant Secretary for Assistant Secretary for Rural

Budget and Programs Development

Department of Transportation Department of Agriculture

Date: 2/2/79 Date: 2/2/79

(5-23-79) PN 675

RD Instruction 2000-V

Exhibit A

Page 4

## Cooperation on Railroad Rehabilitation in Rural Areas

Continued, reliable and efficient rail service is of key importance to
local economies in many rural areas. The physical deterioration of
railroad facilities on light density lines in rural areas has often led
to poor service and the threat of eventual service cessation. While we
believe technological innovations and the expanded infrastructure of
other modes of transportation have made many railroad branchlines
obsolete, some branchlines could become economically viable if they were
rehabilitated.

In recognition of the importance of rail service, we believe that the
Federal Government should provide financial assistance for railroad
rehabilitation when the public benefits of those rehabilitations exceed
their costs and when capital shortages in the rail industry prevent
private investment. We agree to take full advantage of the significant
modifications of the Federal Railroad Administration\'s (FRA) Local Rail
Service Continuation Program provided by the Local Rail Service
Assistance Act of 1978. We will supplement this program by providing
additional assistance through the FmHA\'s Community Facilities and
Business Loans Program. This will enable our two Departments to provide
financial assistance for the rehabilitation of marginal but potentially
viable branchlines.

To supplement the branchline rehabilitation assistance available from
the Federal Railroad Administration, the Farmers Home Administration
will now recognize railroad branchline rehabilitation as an eligible
project purpose under its Community Facilities Loan Assistance and
Business and Industry Loan Programs. FmHA\'s programs provide loans for
projects benefiting rural areas. FmHA will inform eligible applicants of
this new flexibility in its loan program and give high priority to
requests for railroad rehabilitation loan assistance.

(5-23-79) PN 675

RD Instruction 2000-V

Exhibit A

Page 5

Finally, FRA of DOT and FmHA of USDA will shortly prepare a memorandum
of understanding that details these areas of program coordination and
states each agency\'s railroad branchline assistance goals. In addition,
both departments will develop a mutually supporting plan to provide
technical assistance to states and local recipients participating in
this endeavor. The combined efforts of these two agencies, in
conjunction with the states and local recipients, should lead to
improved rail service and healthier local economies in rural areas.

/s/ Mortimer L. Downey /s/ Alex P. Mecure

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Mortimer L. Downey Alex P. Mercure

Assistant Secretary for Budget & Programs Assistant Secretary for

Department of Transportation Rural Dev.

Department of Agriculture

[DATED: Nov. 2, 1978]{.underline}