[Federal Register Volume 63, Number 136 (Thursday, July 16, 1998)]
[Notices]
[Pages 38448-38449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18941]


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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration


Railroad Rehabilitation and Improvement Financing

July 9, 1998.
ACTION: Notice.

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SUMMARY: The Transportation Equity Act for the 21st Century (``TEA-
21''), Pub. L. No. 105-178, 112 Stat. 107 (1998), established the 
Railroad Rehabilitation and Improvement Financing program (``RRIF''). 
To assist in its implementation, the Federal Railroad Administration 
(``FRA'') is requesting information on (1) types of projects which 
might benefit from financial assistance available under RRIF, and (2) 
potential applicants for such financial assistance.

ADDRESSES: Responses should be sent to James T. McQueen, Associate 
Administrator, Office of Railroad Development, Federal Railroad 
Administration, 400 7th Street, S.W., Washington, D.C. 20590.

FOR FURTHER INFORMATION CONTACT: James T. McQueen or JoAnne M. McGowan, 
Chief, Freight Programs, (202) 632-3290.

SUPPLEMENTARY INFORMATION: TEA-21 amended Title V of the Railroad 
Revitalization and Regulatory Reform Act of 1976, as amended, 45 U.S.C. 
821 et seq., by establishing RRIF, which will make financial 
assistance, in the form of direct loans and loan guarantees, available 
for eligible railroad projects. The aggregate unpaid principal balance 
of all financial assistance outstanding may not exceed $3.5 billion, of 
which not less than $1 billion shall be available solely for other than 
Class I railroads.
    Applicants for assistance include State or local governments, 
government sponsored authorities and corporations, shippers, railroads, 
and joint ventures, but each application must include at least one 
railroad. Funds can be used to (1) acquire, improve or rehabilitate 
intermodal or rail equipment or facilities, including track, components 
of track, bridges, yards, buildings and

[[Page 38449]]

shops; (2) refinance outstanding debt incurred for the purposes 
described above; or (3) develop or establish new intermodal or railroad 
facilities. Priority will be given to projects that--
    (1) enhance public safety;
    (2) enhance the environment;
    (3) promote economic development;
    (4) enable U.S. companies to be more competitive in international 
markets;
    (5) are endorsed by plans prepared under 23 U.S.C. 135, by the 
state or states in which they are located; or
    (6) preserve or enhance rail intermodal service to small 
communities or rural areas.
    Prerequisites to granting financial assistance under RRIF include:
    (1) the repayment of the financial assistance is required to be 
made within a term of not more than 25 years from the date of its 
execution;
    (2) the financial assistance is justified by the present and 
probable future demand for rail services or intermodal facilities;
    (3) the applicant has given reasonable assurances that the 
facilities or equipment to be acquired, rehabilitated, improved, 
developed, or established with the proceeds of the financial assistance 
will be economically and efficiently utilized; and
    (4) the obligation can reasonably be repaid, using an appropriate 
combination of credit risk premiums and collateral offered by the 
applicant to protect the Federal Government.
    The Federal Credit Reform Act of 1990, 2 U.S.C. 661, requires that 
before making any loan or loan guarantee, agencies of the Federal 
Government must have received an appropriation of funds from Congress 
adequate to cover the cost to the Government of making that loan or 
loan guarantee (referred to in the TEA-21 as the credit risk premium 
(``Premium'')). However, this requirement is modified by TEA-21 which 
provides that the source of the Premium may be either appropriated 
Federal funds, funds from a non-Federal source, or any combination 
thereof. Congress has not appropriated funds to provide the Premium for 
borrowers, and in the absence of such an appropriation, the Premium 
associated with any direct loan or loan guarantee must be provided by 
the project applicant or infrastructure partner, which includes any 
participant in the project. The Premium must be paid before 
disbursement of any loan proceeds.
    FRA anticipates many different applicants and for many types of 
projects. These could include cooperative ventures for railroad 
acquisition, rehabilitation, or improvement involving railroads, 
states, local governments and/or shippers. Of particular interest to 
the FRA are the implementation of Positive Train Control systems and 
the improvement of highway-rail crossing protection. Further, RRIF is 
not limited to rail freight projects, and passenger service of all 
types are eligible.
    FRA is seeking comments on a project or projects that a potential 
applicant may submit under the RRIF. Comments should include a brief 
description of the project, preliminary cost estimates, and type and 
term of financial assistance that might be sought. The information will 
not constitute an application, but it will greatly enhance FRA's 
understanding of the potential scope of applications and accordingly 
assist in the appropriate implementation of RRIF. Please submit 
comments by August 14, to provide an opportunity for adequate 
consideration.

    Issued in Washington, D.C. on July 9, 1998.
Jolene M. Molitoris,
Federal Railroad Administrator.
[FR Doc. 98-18941 Filed 7-15-98; 8:45 am]
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