[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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