Federal Register / Vol. 75, No. 188 / Wednesday, September 29, 2010 / Notices 60165 

of this notice nor the inclusion or 

omission of information in the summary 

is intended to affect the legal status of 

the petition or its final disposition. 

DATE: Comments on this petition must 

identify the petition docket number 

involved and must be received on or 

before October 19, 2010. 

ADDRESSES: You may send comments 

identified by Docket Number FAA– 

2010–0446 using any of the following 

methods: 

• Government-wide rulemaking Web 

site: Go to http://www.regulations.gov 

and follow the instructions for sending 

your comments electronically. 

• Mail: Send comments to the Docket 

Management Facility; U.S. Department 

of Transportation, 1200 New Jersey 

Avenue, SE., West Building Ground 

Floor, Room W12–140, Washington, DC 

20590. 

• Fax: Fax comments to the Docket 

Management Facility at 202–493–2251. 

• Hand Delivery: Bring comments to 

the Docket Management Facility in 

Room W12–140 of the West Building 

Ground Floor at 1200 New Jersey 

Avenue, SE., Washington, DC, between 

9 a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. 

Privacy: We will post all comments 

we receive, without change, to http:// 

www.regulations.gov, including any 

personal information you provide. 

Using the search function of our docket 

Web site, anyone can find and read the 

comments received into any of our 

dockets, including the name of the 

individual sending the comment (or 

signing the comment for an association, 

business, labor union, etc.). You may 

review DOT’s complete Privacy Act 

Statement in the Federal Register 

published on April 11, 2000 (65 FR 

19477–78). 

Docket: To read background 

documents or comments received, go to 

http://www.regulations.gov at any time 

or to the Docket Management Facility in 

Room W12–140 of the West Building 

Ground Floor at 1200 New Jersey 

Avenue, SE., Washington, DC, between 

9 a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Michael Menkin, ANM–113, Federal 

Aviation Administration, Transport 

Airplane Directorate, 1601 Lind Ave., 

SW, Renton, WA 98057; 425–227–2793; 

or Katherine Haley, ARM–203, Office of 

Rulemaking, Federal Aviation 

Administration, 800 Independence 

Avenue, SW.; Washington, DC 20591; 

(202) 493–5708. 

This notice is published pursuant to 

14 CFR 11.85. 

Issued in Washington, DC, on September 

24, 2010. 

Pamela Hamilton-Powell, 

Director, Office of Rulemaking. 

Petition for Exemption 

Docket No.: FAA–2010–0446. 

Petitioner: Gulfstream Aerospace 

Corporation (GAC). 

Section of 14 CFR Affected: 14 CFR 

25.813(e). 

Description of Relief Sought: To allow 

the installation of doors between 

passenger seats, occupiable for taxi, take 

off and landing, and a passenger 

emergency exit for the Gulfstream GVI 

airplane. GAC intends to operate the 

airplane under part 135. 

[FR Doc. 2010–24368 Filed 9–28–10; 8:45 am] 

BILLING CODE 4910–13–P 

DEPARTMENT OF TRANSPORTATION 

Federal Railroad Administration 

Notice Regarding Consideration and 

Processing of Applications for 

Financial Assistance Under the 

Railroad Rehabilitation and 

Improvement Financing (RRIF) 

Program 

AGENCY: Federal Railroad 

Administration (FRA), Department of 

Transportation (DOT). 

ACTION: Notice of priorities for 

consideration of applications. 

SUMMARY: Under this notice, FRA is 

providing the basis for its consideration 

of potential applications for financial 

assistance under the RRIF Program 

authorized by 45 U.S.C. 821 et seq. 

DATES: This notice is effective for all 

applications received by FRA after 

October 29, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Barbara Amani, Chief of the Credit 

Programs Division, Office of Railroad 

Development, Federal Railroad 

Administration, 1200 New Jersey 

Avenue, SE., Washington, DC 20590 

(telephone: (202) 493–6051; fax: (202) 

493–6333; and e-mail: 

Barbara.Amani@dot.gov); or Casey 

Symington, Attorney Advisor, Office of 

Chief Counsel, Federal Railroad 

Administration, 1200 New Jersey 

Avenue, SE., Washington, DC 20590 

(telephone: (202) 493–6349; fax: (202) 

493–6068; and e-mail: 

Casey.Symington@dot.gov). 

SUPPLEMENTARY INFORMATION: Title V of 

the Railroad Revitalization and 

Regulatory Reform Act of 1976, Public 

Law 94–210 (1976), authorized a 

program of financial assistance 

necessary to furnish assistance to 

railroads for facilities maintenance, 

rehabilitation, improvements and 

acquisitions. FRA used this financial 

assistance program to provide financial 

assistance to portions of the thenfiscally challenged rail industry. The 

program was most active during the four 

years following the enactment of the 

statute. The improving financial 

condition of the rail industry 

subsequent to enactment of the Staggers 

Rail Act of 1980 and the partial 

economic deregulation of the rail 

industry helped improve the larger 

railroads’ access to private capital, 

reducing interest in the program. 

The Federal Credit Reform Act of 

1990 resulted in fundamental changes 

in all federal credit programs, by 

requiring that the subsidy cost of any 

federal credit assistance be reserved 

prior to the credit assistance being made 

available. Although the subsidy cost 

required an appropriation, FRA’s 

subsequent annual appropriations acts 

contained a specific prohibition on the 

use of FRA’s funds for this purpose. As 

a result, use of the Title V program was 

limited to projects specifically 

authorized by Congress. 

A secondary impact of the Staggers 

Rail Act of 1980 was a more liberalized 

approach to restructuring railroads, 

which led to the growth in the number 

and importance of short line and 

regional railroads (also known as Class 

III and Class II railroads). A number of 

studies conducted during the 1980s and 

1990s concluded that significant 

portions of the short line and regional 

railroad industry were challenged by 

deferred maintenance and a lack of 

access to the private capital markets at 

rates and terms comparable to debt 

financing opportunities available to the 

larger, Class I railroads. 

In 1998, Title V of the Railroad 

Revitalization and Regulatory Reform 

Act of 1976 was amended by the 

Transportation Equity Act for the 21st 

Century of 1998, Public Law 105–178 

(1998) (TEA–21) to establish the RRIF 

Program. TEA–21 authorized a program 

of financial assistance to the rail 

industry in the form of loans and loan 

guarantees and other financial 

instruments. The program was 

subsequently amended and expanded in 

the Safe, Accountable, Flexible, 

Efficient Transportation Equity Act: A 

Legacy for Users, Public Law 109–59 

(2005) (SAFETEA–LU) and the Rail 

Safety Improvement Act of 2008 (RSIA), 

Division A of Public Law 110–432. 

TEA–21 addressed capital needs by 

providing a program of loans and loan 

guarantees for rail investment purposes. 

A combined total of $3.5 billion in 

direct loans and loan guarantees was 


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authorized to be outstanding at any one 

time. One billion dollars were 

specifically reserved for non-Class I 

railroads. The financial terms available 

for such loans were significantly better 

than those available to Class III and 

Class II railroads in private markets. 

Those terms included a term up to 25 

years and an interest rate equal to the 

treasury rate for similar-term securities. 

Most importantly, the TEA–21 

amendments provided that non-Federal 

sources could pay the subsidy cost of 

the loan (referred to in the RRIF 

Program as the Credit Risk Premium) on 

behalf of an eligible applicant. Thus, 

FRA through the RRIF Program could 

provide financial assistance without the 

need for an appropriation or any other 

specific act by Congress. 

SAFETEA–LU amended the RRIF 

Program to, among other things, 

increase the amount of financial 

assistance available from $3.5 billion to 

$35 billion, and to increase the amount 

reserved for other than Class I railroads 

from $1 billion to $7 billion. SAFETEA– 

LU also repealed, by statute, certain 

regulatory provisions. The RRIF 

program was further amended in the 

RSIA to extend the maximum term of a 

loan under the RRIF program from 25 

years to 35 years. A total of 22 loans in 

an aggregate initial principal amount of 

$779 million have been made under the 

RRIF Program since TEA–21 was 

enacted. Of these, a total of 3 loans in 

an aggregate initial principal amount of 

$381 million have been repaid. 

This notice supplements the existing 

notice of evaluation criteria for the RRIF 

Program published in the Federal 

Register on September 26, 2005 (70 FR 

56207) and provides policy guidance. 

The public has an interest in how 

federal funds are allocated, including 

use of federal loans. To provide sound 

stewardship of federal funds, the 

Secretary of Transportation has 

authority and discretion in approving 

loan applications. That authority has 

been delegated to the Administrator of 

the Federal Railroad Administration (49 

CFR 1.49(t)). In exercising discretion to 

evaluate the merits of proposed loans, 

the Administrator may consider public 

policy priorities and federal credit 

policies as outlined in the Office of 

Management and Budget Circular A– 

129, Revised, November 2000. FRA will 

perform a cost-benefit analysis of each 

loan or loan guarantee application and 

examine public benefits derived from 

the loan relative to the amount of 

financial assistance committed to 

achieve those public benefits. Proposals 

generating public benefits using limited 

federal financial assistance to achieve 

policy goals will be viewed more 

favorably than proposals generating 

limited public benefits with significant 

federal RRIF assistance. Please note that 

the collection of information associated 

with the RRIF Program is currently 

approved under OMB No. 2130–0580. 

This approval expires on January 31, 

2013. 

Priority Projects: Selection of projects 

falls into eight priorities for RRIF 

financial assistance as described in 45 

U.S.C. 822(c). These priorities are 

restated below with clarifying language 

(where appropriate) and consistent with 

DOT’s Strategic Plan FY 2010–FY 2015 

‘‘Transportation for a New Generation’’ 

(draft). 

FRA will give priority to projects 

that— 

(1) Enhance public safety. This is 

DOT’s highest programmatic priority. 

FRA will prioritize projects that ensure 

safe and efficient transportation choices. 

DOT’s goal is to improve public health 

and safety by reducing transportationrelated fatalities and injuries and 

improving the safety experience for all 

transportation system users, including 

passengers, employees, pedestrians and 

motorists. In determining which 

projects best enhance public safety, FRA 

will pay particular attention to projects 

that do the following: Address specific 

chronic safety concerns, including those 

identified during periodic inspections 

by FRA’s Office of Railroad Safety; 

facilitate implementation of 

enhancements of signal and train 

control systems; reduce or eliminate the 

potential for accidents at highway-rail 

at-grade crossings; limit the access to 

rail infrastructure by trespassers and 

other unauthorized persons; lead to a 

sustained improvement in the class of 

track as defined by FRA’s safety 

regulations; and/or lead to the operation 

of safer railroad equipment. 

(2) Enhance the environment. FRA 

prioritizes projects that promote 

environmental sustainability of 

transportation through investments that 

focus on energy efficiency and 

environmental quality. DOT pursues 

transportation policies and investments 

that reduce carbon emissions and 

protect the human and natural 

environment. In determining which 

projects best further those goals, FRA 

will give priority to investments that do 

the following: Reduce the consumption 

of fossil fuels and otherwise improve 

energy efficiency of rail operations; 

reduce air pollutant emissions from rail 

equipment and facilities, including 

acquisition of locomotives meeting the 

U.S. Environmental Protection Agency’s 

locomotive emissions standards; 

facilitate the development of intercity 

and commuter rail public transportation 

alternatives to single occupant motor 

vehicle transportation; reduce the levels 

of noise emitted from rail operations, 

including reductions of noise 

experienced by on-board personnel; 

and/or reduce the contribution of 

pollutants into the Nation’s waterways. 

It is important to note that applications 

for financial assistance under the RRIF 

Program will require environmental 

review in compliance with the National 

Environmental Policy Act (NEPA). 

(3) Promote economic development, 

and (4) Enable United States companies 

to be more competitive in international 

markets. FRA will prioritize projects 

that build a foundation for economic 

competitiveness. DOT fosters 

transportation policies and investments 

that serve the travelling public and 

freight movement to bring lasting 

economic and social benefit to the 

Nation. DOT seeks to encourage the 

expansion and development of domestic 

manufacturing of transportation systems 

and equipment in a manner consistent 

with law. In determining which projects 

best promote economic development 

and enable American companies to be 

more competitive in international 

markets, FRA will pay particular 

attention to projects that do the 

following: Lead to the construction, 

reconstruction or improvement of 

infrastructure or the acquisition of 

equipment or other capital assets on 

both freight and passenger (including 

commuter) rail corridors and related 

intermodal and multi-modal facilities 

that address capacity constraints in the 

Nation’s transportation system and 

deliver integrated transportation system 

improvements, while spurring domestic 

employment in both the short-term and 

long-term; facilitate the development of 

new industries and businesses’ access to 

the Nation’s transportation system; and/ 

or improve the efficiency and reduce the 

cost of freight movements of domestic 

products into global commerce. To 

further address these priorities, FRA 

will expect recipients of direct loans or 

loan guarantees under the RRIF Program 

to agree to use funds provided to them 

under the RRIF Program to purchase 

steel, iron and other manufactured 

goods produced in the United States for 

the project. Mitigating factors include 

but are not limited to limitations on 

sufficient quantity, availability and 

quality; inability to purchase and have 

delivered rolling stock or power train 

equipment within a reasonable time; 

and whether including domestic 

material would increase the cost of the 

overall project by more than 25 percent. 

(5) Are endorsed by the plans 

prepared under 23 U.S.C. 135 by the 


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State or States in which they are 

located. 

(6) Preserve or enhance rail or 

intermodal service to small 

communities or rural areas, and (7) 

Enhance service and capacity in the 

national rail system. FRA will prioritize 

projects that support the development of 

interconnected, livable communities. 

DOT promotes place-based policies that 

provide transportation choices and 

improve the quality of life for all 

Americans. In determining which 

projects will best preserve or enhance 

rail or intermodal service to small 

communities or rural areas and enhance 

service and capacity in the national rail 

system, FRA will pay particular 

attention to projects that do the 

following: Preserve access for small 

communities and rural America to the 

Nation’s rail system; facilitate the 

development of rail and rail-related 

intermodal facilities that encourage the 

reduction of highway freight 

transportation in urban areas; facilitate 

the development of rail-related 

intermodal passenger facilities that 

improve the operation of and expand 

the public’s access to public 

transportation; and/or provide 

investments that expand the access to 

intercity passenger and commuter rail 

transportation by persons with 

disabilities. 

(8) Materially alleviate rail capacity 

problems which degrade the provision 

of service to shippers and would fulfill 

a need in the national transportation 

system. FRA will prioritize projects 

promoting a state of good repair for 

transportation assets to ensure a reliable 

and safe rail system. In determining 

which projects best enhance service and 

capacity in the national rail system, 

alleviate rail capacity problems which 

degrade the provision of service to 

shippers and fulfill a need in the 

national transportation system, FRA 

will give priority to projects that do the 

following: Assure sustained 

performance of rail and rail-related 

intermodal infrastructure and 

equipment in a safe, reliable and 

efficient manner, including the 

replacement of capital assets before they 

reach the end of their economic and 

useful life; permit rail infrastructure to 

accommodate safe operation of 286,000 

pound rail cars; and/or incorporate into 

the rail infrastructure innovative design 

and construction procedures, innovative 

quality assurance practices, and/or 

innovative materials to extend the 

useful life of assets and reduce onsite 

repairs, rehabilitation and 

reconstruction. 

Eligible Purposes: A list of eligible 

purposes is provided in 45 U.S.C 822(b). 

Although that section permits RRIF 

financial assistance for certain 

categories of refinancing, FRA believes 

the greatest benefit to the public of 

providing financial assistance under the 

RRIF Program occurs when that 

assistance is used to directly fund 

capital improvements. In particular, the 

RRIF Program has its most positive 

impact by directly financing those 

improvements that would not otherwise 

be undertaken, or whose undertaking 

would be substantially delayed without 

RRIF assistance. Thus, in considering 

whether to approve a loan or loan 

guarantee under the RRIF Program, FRA 

will give more weight to those projects 

that need the type of financial assistance 

provided by the RRIF Program to be 

financially feasible. FRA is mindful that 

Congress at times imposes statutory 

mandates on the rail industry that 

require certain specific investments by 

specified times. In order to meet those 

statutory requirements, some eligible 

applicants may be required to divert 

available fiscal resources away from 

other investment needs, including 

investment needs that align with DOT’s 

strategic goals. In those circumstances, 

such statutory mandates will also be 

afforded greater weight, to the extent 

that the applicant can demonstrate the 

adverse impact on its investment plan if 

RRIF financial assistance were not made 

available. FRA will also consider the 

applicant’s use of other forms of federal 

assistance and subsidies including tax 

credits and grant programs in its 

financing plan. 

FRA will also consider applications 

for RRIF financial assistance for projects 

that the applicant would and could 

undertake without such assistance. It 

will be the obligation of the applicant to 

identify with specificity how the 

public’s interest would benefit from 

RRIF financial assistance when 

compared to use of conventional 

funding. It is the difference between the 

two scenarios that can be viewed as the 

net benefit to the public of providing 

financial assistance under the RRIF 

Program. FRA will evaluate this net 

benefit in comparison to the amount of 

financial assistance required to achieve 

this benefit. FRA intends to include 

requirements in its RRIF loan 

documents to ensure that the net 

financial benefit made available through 

the RRIF financial assistance results in 

increased public benefits. 

The refinancing of eligible capital 

investments poses similar issues. In a 

refinancing, RRIF financial assistance is 

not required to achieve the benefits of 

the project being refinanced. Thus, 

when reviewing RRIF applications for 

refinancing, FRA will expect that the 

financial resources made available by 

refinancing at the favorable rates under 

RRIF be used by the applicant to 

achieve public benefits. However, 

proposals to use RRIF funds directly for 

capital improvements will be given 

preference over those that include 

refinancing. FRA will evaluate those 

benefits against the cost of the financial 

assistance in order to assess the overall 

benefit of the application. Examples of 

preferred uses from the decreased cost 

of capital from a RRIF loan are: 

Improving cash flow to implement a 

demonstrably expanded capital 

improvement program, preserving the 

viability of a rail service, or lowering the 

debt service obligation burden of States 

and public agencies. In considering 

requests for RRIF loans to refinance 

debt, FRA will evaluate the borrower’s 

ability to efficiently access private 

sector capital. FRA will request that 

prospective borrowers describe the 

terms of equivalent debt that they 

believe would be available from private 

sector sources and the amount they 

anticipate to save should a RRIF loan be 

approved. As described above, FRA 

intends to protect the public benefits of 

a RRIF loan through binding covenants 

in its loan documents when appropriate. 

Requests to refinance debt incurred to 

finance the acquisition of a railroad by 

an equity owner raise different 

considerations. Under the statute, FRA 

may refinance debt that was originally 

incurred for any eligible purpose stated 

in 45 U.S.C. 822(b)(1)(A). Under the 

statute, RRIF loans may not be incurred 

to refinance outstanding debt incurred 

for purposes other than the acquisition, 

improvement or rehabilitation of 

eligible rail equipment or facilities. 

Since RRIF loans may not be used to 

refinance outstanding debt incurred to 

acquire, for example, goodwill or 

intangibles, FRA’s ability to refinance 

acquisition debt is limited. The value of 

railroad property, like the value of any 

other asset, is normally set by the 

market. FRA is concerned that the 

potential for long-term, low-cost federal 

refinancing of short-term, high-cost 

acquisition debt might skew the true 

value of the assets being acquired, and 

perhaps even have an inflationary 

impact in the rail industry as a whole. 

RRIF financial assistance for refinancing 

the acquisition of eligible railroad 

property might encourage transactions 

that otherwise would not be made or 

transactions by entities that might lack 

the full knowledge of the rail industry 

that will be needed to assure the 

sustainability of the railroad. In 

considering proposed financing or 

refinancing debt, in particular shortVerDate Mar<15>2010 15:17 Sep 28, 2010 Jkt 220001 PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 E:\FR\FM\29SEN1.SGM 29SEN1

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60168 Federal Register / Vol. 75, No. 188 / Wednesday, September 29, 2010 / Notices 

term debt, used for the acquisition of a 

significant amount of rail assets, FRA 

will require the applicant to 

demonstrate significantly more than 

minimal public benefit from the 

transaction. Circumstances where the 

acquisition is required to preserve 

essential rail service or where a public 

agency is acquiring a rail property for 

direct public benefit (e.g. use for public 

transportation) are more favorably 

considered. 

Applicants: A list of eligible 

applicants is provided in 45 U.S.C. 

822(a). The RRIF Program was originally 

established as a means to provide access 

to capital for critical infrastructure 

improvements by the Class III and Class 

II railroads. Although the RRIF program 

has changed since its creation, FRA 

views the original purpose as one of the 

highest priorities for the use of RRIF 

financial assistance. 

In recent months, FRA has seen 

increased interest for RRIF financing by 

public authorities and publicly owned 

and/or controlled railroads providing 

passenger service. The public interest in 

using federal credit is easier to identify 

in situations where the credit program 

preserves or expands transportation 

services used by the public or where the 

credit reduces the burden on public 

agencies and federal or State taxpayers 

to provide such services. The challenge 

in considering public transportation for 

credit financing comes from the fact that 

few, if any, of these systems generate 

sufficient revenues to cover all of their 

costs. Indeed, public policy frequently 

finds sufficient value in the nonmonetary benefits of increasing the 

utilization of such systems to justify the 

use of public funds to keep fares low. 

FRA as a potential lender will look to 

other revenue sources for assured 

repayment. 

Some public transportation entities 

have access to relatively reliable longterm sources of revenue (e.g. a sales tax 

or access to a dedicated revenue stream) 

or can offer the full faith and credit of 

their States as a guarantee that the RRIF 

loan will be repaid. In such cases, FRA’s 

ability to make findings on the 

likelihood of repayment is easier than 

for applications that can only be repaid 

through ongoing actions by future 

Congresses or State legislatures. Solely 

relying on future appropriations for 

repayment may not be optimal and 

could result in a 100% credit risk 

premium. However, FRA will consider 

appropriations as a repayment source if 

it is part of an overall financing package 

that uses other revenue streams to 

service the debt. Among the factors that 

FRA will consider, in addition to the 

public benefits derived from the 

financing, will be the history of support 

for the public transportation entity in 

the past and the extent that the total 

amount of debt service, including the 

RRIF financing, falls within the historic 

range of debt service obligations of the 

entity that has been publicly funded. 

Loan Amount: Pursuant to 45 U.S.C. 

822(d), the RRIF Program is authorized 

to provide up to $35 billion in direct 

loans and loan guarantees at any one 

time. The RRIF Program is subject to 

authority provided in annual 

appropriations. Appropriations are not 

required to pay for the credit risk 

premium, but merely grant FRA the 

authority to obligate the remaining 

balance of the $35 billion authorized. 

The balance currently available is 

approximately $34.6 billion. The timing 

and sequencing of this volume of credit 

assistance could, under some 

circumstances, create dislocations in the 

rail industry, which could create 

inflationary pressures and lead to 

inefficient practices, particularly in light 

of other federally sponsored rail 

investments occurring over the next 

several years. FRA sees the need to 

balance the volume of RRIF-financed 

work at any one time with a need to 

timely realize the Department’s strategic 

goals. FRA will not set an arbitrary limit 

on the size of an application or the total 

dollar value of applications under 

consideration at any one time. FRA will 

periodically, however, assess whether 

the volume of RRIF-assisted rail capital 

improvements is continuing to have a 

positive impact on rail investment in 

the U.S. 

Ability To Repay: Pursuant to 45 

U.S.C. 822(g), and as a prerequisite to 

making loans or loan guarantees, the 

FRA must make a number of findings 

including the finding that ‘‘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 * * * .’’ To this 

end, FRA will evaluate the credit risk of 

the application including the financial 

strength of the applicant or of the 

project and the potential recovery in the 

event of default including the nature 

and value of collateral if offered. 

Additionally, pursuant to 45 U.S.C. 

823(a), FRA is permitted to establish 

terms and conditions for loans and loan 

guarantees made under 45 U.S.C. 822. 

To this end, FRA will continue to 

require terms and conditions in its RRIF 

loan documents sufficient to ensure that 

applicants will repay their loans with 

interest within the term of the loan. 

Pre-Application Discussions: The 

application process can involve a 

substantial amount of work and expense 

for potential applicants, particularly for 

smaller railroads or entities proposing 

larger projects that might require 

additional levels of review, such as 

projects requiring an environmental 

impact statement to comply with NEPA. 

Regulations governing the RRIF Program 

have always included provisions for 

pre-application discussions, which 

provide a foundation to better address 

expectations about both the timing and 

ultimate outcome of the process. FRA 

will use the pre-application meetings 

and requests for clarification to develop 

a project outline, including a 

preliminary analysis of the benefits of 

the proposed financing. 

Evaluation Charge: Demand for 

funding under the RRIF Program has 

increased significantly in the past two 

years. In addition to the increased 

volume of applications, FRA has noted 

a significant increase in the size and 

complexity of the proposed 

transactions. 

FRA has typically staffed RRIF 

transactions solely with FRA attorneys 

and not employed outside counsel. As 

a result, while we are permitted to pass 

on the cost of outside counsel as an 

evaluation charge under 45 U.S.C. 

823(k), we have not had a need to do so. 

Given the increased demand for RRIF 

loans and the increasing size and 

complexity of the transactions 

submitted for our consideration, we 

expect to employ outside counsel more 

frequently in the future. We believe that 

employing outside counsel will both 

enhance our ability to structure and 

document our transactions in a way that 

best protects the taxpayers’ investment 

and helps us manage the increased 

volume of complex financing proposals 

more quickly and efficiently. 

While we may include the cost of 

outside counsel in our evaluation 

charges, the total evaluation charges for 

a given transaction will not exceed onehalf of 1 percent of the principal amount 

of our loan, as provided in the statute. 

We do not expect that we will employ 

outside counsel for traditional RRIF 

loans to Class III applicants, unless the 

loan contains complicated structuring or 

documentation issues. 

Issued in Washington, DC, on September 

24, 2010. 

Joseph C. Szabo, 

Administrator. 

[FR Doc. 2010–24467 Filed 9–28–10; 8:45 am] 

BILLING CODE 4910–06–P 


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