Implementation of Program for Capital Grants for Rail Line Relocation and Improvement Projects, 1965-1975 [07-45]

Agencies

• Federal Railroad Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 72, Number 10 (Wednesday, January 17, 2007)]
[Proposed Rules]
[Pages 1965-1975]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-45]


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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

49 CFR Part 262

[Docket No. FRA 2005-23774, Notice No. 1]
RIN 2130-AB74


Implementation of Program for Capital Grants for Rail Line 
Relocation and Improvement Projects

AGENCY: Federal Railroad Administration (FRA), Department of 
Transportation (DOT).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: Section 9002 of the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 
109-59, August 10, 2005) amends chapter 201 of Title 49 of the United 
States Code by adding section 20154. Section 20154 authorizes--but does 
not appropriate--$350,000,000 per year for each of the fiscal years 
(FY) 2006 through 2009 for the purpose of funding a grant program to 
provide financial assistance for local rail line relocation and 
improvement projects. Section 20154 directs the Secretary of 
Transportation (Secretary) to issue regulations implementing this grant 
program, and the Secretary has delegated this responsibility to FRA. 
This NPRM proposes a regulation intended to carry out that statutory 
mandate. As of the publication of this NPRM, Congress had not 
appropriated any funding for the program for FY 2006 or FY 2007.

DATES: (1) Written Comments: Written comments must be received on or 
before March 5, 2007. Comments received after that date will be 
considered to the extent possible without incurring additional expense 
or delay.
    (2) Public Hearing: Requests for a public hearing must be in 
writing and must be submitted to the Department of Transportation 
Docket Management System at the address below on or before March 5, 
2007. If a public hearing is requested and scheduled, FRA will announce 
the date, location, and additional details concerning the hearing by 
separate notice in the Federal Register.

ADDRESSES: You may submit comments identified by DOT DMS Docket Number 
FRA 2005-23774 by any of the following methods:
     Web site: https://dms.dot.gov. Follow the instructions for 
submitting comments on the DOT electronic docket site.
     Fax: 1-202-493-2251.
     Mail: Docket Management Facility; U.S. Department of 
Transportation, 400 Seventh Street, SW., Nassif Building, Room PL-401, 
Washington, DC 20590-001.
     Hand Delivery: Room PL-401 on the plaza level of the 
Nassif Building, 400 Seventh Street, SW., Washington, DC, between 9 am 
and 5 pm, Monday through Friday, except Federal holidays.
     Federal eRulemaking Portal: Go to https://
www.regulations.gov. Follow the online instructions for submitting 
comments.
    Instructions: All submissions must include the agency name and 
docket number or Regulatory Identification Number (RIN) for this 
rulemaking. Note that all comments received will be posted without 
change to https://dms.dot.gov, including any personal information 
provided. Please see the Privacy Act heading in the SUPPLEMENTARY 
INFORMATION section of this document for Privacy Act information 
related to any submitted comments or materials.
    Docket: For access to the docket to read background documents or 
comments received, go to https://dms.dot.gov at any time or to Room PL-
401 on the plaza level of the Nassif Building, 400 Seventh Street, SW., 
Washington, DC, between 9 am and 5 pm, Monday through Friday, except 
Federal holidays.

FOR FURTHER INFORMATION CONTACT: John A. Winkle, Transportation 
Industry Analyst, Office of Railroad Development, Federal Railroad 
Administration, 1120 Vermont Avenue, NW., Mail Stop 13, Washington, DC 
20590 (John.Winkle@fra.dot.gov or 202-493-6320); or Elizabeth A. 
Sorrells, Attorney-Advisor, Office of Chief Counsel, Federal Railroad 
Administration, 1120 Vermont Avenue, NW., Mail Stop 10, Washington, DC 
20590 (Betty.Sorrells@fra.dot.gov or 202-493-6057).

SUPPLEMENTARY INFORMATION:

I. Background

    Much of the economic growth of the United States can be linked 
directly to the expansion of rail service. As the nation moved 
westward, railroads expanded to provide transportation services to 
growing communities. No

[[Page 1966]]

event better illustrates this point than the ``golden spike'' 
ceremonies at Promontory Point, Utah in 1869 that ushered in 
transcontinental rail service. Travel times between the Atlantic and 
Pacific coasts were dramatically reduced opening numerous new markets 
for both passenger and freight operations. Municipalities throughout 
the country knew that their economic success rested on being served by 
the railroad and many offered incentives to railroads for the chance to 
be served. As a result, many communities' land use patterns are 
developed around the railroad lines that became an economic artery as 
important as ``Main Street.'' By 1916, rail expansion peaked as miles 
of road owned \1\ reached 254,251.
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    \1\ This measure is the aggregate length of roadway and excludes 
yard tracks and sidings, and does not reflect the fact that a mile 
of road may include two, three or more parallel tracks.
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    Soon after the end of the Second World War, the railroads' 
competitors--the auto, truck, air, pipeline and modern barge 
industries--proved to be superior to the railroads in responding to 
many of the growing demands for speed, convenience and service quality 
that characterized the evolving economy of the 20th century. Mired in 
stifling economic over-regulation, railroads were unable to respond 
effectively to the competitive challenges facing them. These changes 
had a dramatic effect on rail's market share. From nearly 80 percent of 
the intercity freight market in the early 1920s, rail share fell to 
less than 37 percent in 1975. The decline was even more dramatic with 
regard to passenger service. The industry responded by cutting excess 
capacity, often through bankruptcy. By 1975, miles of road owned had 
fallen to 199,126, a 22 percent decline from 1916. The most current 
data from 2004 shows a further decline to 140,806 road miles or 45 
percent fewer miles than was available in 1916.
    By the early years of the 21st century up to the present time, 
however, the rail industry has made a significant turnaround. Beginning 
with rate deregulation ushered in by the Staggers Act in 1980, and a 
number of other favorable changes, railroads have introduced innovative 
services and modern pricing practices, and, as a result, have become 
profitable and have recaptured market share. Between 1985 and 2004, 
revenue ton-miles \2\ nearly doubled from 876.9 billion to 1.7 
trillion. Rail's market share of intercity revenue freight is 
approaching 45 percent. This growth is being accommodated on a system 
that shrunk in response to conditions noted above. The smaller physical 
plant is handling greater and greater freight volumes.
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    \2\ A ton of any commodity transported one-mile.
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    The clearest evidence of more intense use of the industry's plant 
is found in measuring ``traffic density.'' ``Traffic density'' is the 
millions of revenue ton-miles per owned mile of road. In 1985, this 
indicator stood at 6.02. By 2004, this figure had nearly tripled to 
17.02 millions of revenue ton-miles per mile of road owned. This more 
intense use of rail infrastructure is especially challenging in 
communities that developed adjacent to or around rail lines, most built 
over a century ago on alignments appropriate to the times.
    As a result, in many places throughout the country, the rail 
infrastructure that was once so critical to communities now presents 
problems as well as benefits. For example, the tracks that run down the 
middle of towns separate the communities on either side. Rail yards and 
tracks occupy valuable real estate. Trains parked in sidings may 
present attractive nuisances to children and vandals, and, in the case 
of tank cars containing hazardous materials, may present serious 
security or health risks. Grade crossings may present safety risks to 
the cars and pedestrians that must cross the tracks. These same 
crossings create inconveniences when long trains block crossings for 
extended periods of time and sound horns as they operate through 
crossings in neighborhoods. In some cases, trains operate over lines at 
speeds that are suited for the type of track but often present safety 
concerns to those in the surrounding community. In some cases, rail 
lines have become so congested that communities experience what they 
perceive as almost continuous train traffic. In short, rail lines, 
which once brought economic prosperity and social cohesion, are now 
sometimes viewed as factors that decline both.\3\
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    \3\ In some locations, passenger trains, both intercity and 
commuter, will continue to serve downtown locations. Passenger 
trains generally operate less often than freight trains, are 
shorter, and, therefore, do not create the extensive problems that 
freight trains do.
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    In an effort to satisfy all constituents, state and local 
governments are looking for ways to eliminate the problems created by 
the increased demand on the infrastructure while still maintaining the 
benefits the railroad provides. Many times, the solution is merely to 
relocate the track in question to an area that is better suited for it. 
For example, a recently completed relocation project in Greenwood, 
Mississippi eliminated twelve at-grade highway-rail crossings, which 
greatly improved safety for motorists and eliminated blocked crossings. 
With that success in mind, Mississippi is currently looking to relocate 
two main lines that run through the heart of the Central Business 
District in Tupelo. Combined, these two lines cross 26 highways in the 
city, and all but one are at-grade crossings. One of the options the 
State is considering is laterally relocating the lines outside of the 
business district. FRA would like commenters to discuss other potential 
projects that could benefit from the program implemented by this 
regulation.
    In some situations, vertical relocation may be the best solution. 
For example, Nevada has undertaken the Reno Transportation Rail Access 
Project (ReTRAC), the purpose of which is to ``sink'' 33 feet below the 
ground in a trench the approximately 2.25 mile segment of main line 
track that runs through Reno. Both the Union Pacific Railroad Company 
(UP) and Amtrak operate over this line. The project will allow for the 
closing of 11 grade crossings and will generally improve both highway 
efficiency and safety as well as the safety and efficiency of the 
trains that operate through Reno. Many of these relocation projects, 
like the ReTRAC project, are expensive, and state and local governments 
lack the resources to undertake them.\4\ When commenting on potential 
projects, FRA requests that commenters discuss the estimated costs of 
those projects.
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    \4\ The ReTRAC project is expected to cost in excess of 
$260,000,000.
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    In addition to relocation projects, many communities are eager to 
improve existing rail infrastructure in an effort to mitigate the 
perceived negative effects of rail traffic on safety in general, motor 
vehicle traffic flow, economic development, or the overall quality of 
life of the community. For example, in an effort to improve train speed 
and reduce the risk of derailments, rail lines that were built a 
century ago with sharp curves can be straightened. In addition, 
significant efficiencies can be gained and safety enhanced by, as 
examples, extending passing tracks and yard lead tracks, and adding 
track circuits and signal spacing changes.

II. SAFETEA-LU

    On August 10, 2005, President George W. Bush signed SAFETEA-LU, 
(Pub. L. 109-59) into law. Section 9002 of SAFETEA-LU amended chapter 
201 of Title 49 of the United States Code by adding a new Sec.  20154, 
which establishes the basic elements of a funding program for capital 
grants for local rail line relocation and improvement projects.

[[Page 1967]]

Subsection (b) of the new Sec.  20154 mandates that the Secretary issue 
``temporary regulations'' to implement the capital grants program and 
then issue final regulations by October 1, 2006. This NPRM proposes a 
regulation intended to carry out that statutory mandate.
    In order to be eligible for a grant for an improvement construction 
project, the project must mitigate the adverse effects of rail traffic 
on safety, motor vehicle traffic flow, community quality of life, 
including noise mitigation, or economic development, or involve a 
lateral or vertical relocation of any portion of the rail line, 
presumably to reduce the number of grade crossings and/or serve to 
mitigate noise, visual issues, or other externality that negatively 
impacts a community. A more detailed explanation of the rule text is 
provided below in the Section-by-Section Analysis.
    Congress authorized, but did not appropriate, $350 million per year 
for each fiscal year 2006 through 2009. At least half of the funds 
awarded under this program shall be provided as grant awards of not 
more than $20 million each. A State or other eligible entity will be 
required to pay at least 10 percent of the shared costs of the project, 
whether in the form of a contribution of real property or tangible 
personal property, contribution of employee services, or previous costs 
spent on the project before the application was filed. The state or FRA 
may also seek financial contributions from private entities benefiting 
from the rail line relocation or improvement project.
    In SAFETEA-LU, Congress directed FRA to issue ``temporary 
regulations'' by April 1, 2006. Under the Administrative Procedure Act 
and Executive Orders governing rulemaking, FRA could comply with 
Congress's deadline only by issuing a direct final rule or an interim 
final rule by April 1, 2006. However, the FRA cannot use either a 
direct final rule or an interim final rule because the legal 
requirements for using those instruments cannot be satisfied. The case 
law is clear that a statutory deadline does not suffice to justify 
dispensing with notice and comment prior to issuing a rule on grounds 
that notice and comment are ``impracticable, unnecessary, or contrary 
to the public interest'' under Section 553(b)(B) of the Administrative 
Procedure Act. Because as of this date no funding has been appropriated 
for the program and no projects can be funded at this time, FRA 
believes the purposes of SAFETEA-LU can best be met by proceeding in 
lieu of an interim final rule with an NPRM, which satisfies the 
requirements of the Administrative Procedure Act and allows for greater 
public participation in the rulemaking process.

III. Section-by-Section Analysis

    SAFETEA-LU contains very specific language regarding implementation 
of the rail line relocation and improvement program. In several 
sections, the language in this proposed regulation is reprinted 
directly from SAFETEA-LU. Given such an unambiguous statutory mandate, 
FRA has made only a few additions in this proposed regulation to 
include language that was not in the statute. For those sections, there 
is a further discussion of FRA's intent and a request for comments. 
This Section-by-Section Analysis does not discuss Congressional intent.

Section 262.1 Purpose

    This section merely states that the purpose of this NPRM is to 
carry out the Congressional mandate in Sec.  9002 of SAFETEA-LU by 
promulgating regulations which implement the grant financial assistance 
program for local rail relocation and improvement projects set forth in 
new Sec.  20154 of Title 49 of the United States Code.

Section 262.3 Definitions

Act

    When used in this Part, ``Act'' means SAFETEA-LU.

Administrator

    This definition makes clear that when the term ``Administrator'' is 
used in this Part, it refers to the Administrator of the Federal 
Railroad Administration. It also provides that the Administrator may 
delegate authority under this rule to other Federal Railroad 
Administration officials.

Allowable costs

    This definition makes clear that only costs classified as 
``allowable'' will be reimbursable under a grant awarded under this 
Part. Specifically, construction costs are the only costs that are 
reimbursable.

Construction

    This definition sets out the types of project costs that are 
contemplated as being reimbursable under this Part. Only these costs 
will be allowable under a grant from this program. This definition 
closely tracks 49 U.S.C. 20154(h)(1). Subsection 20154(h)(1)(F) gave 
the Secretary the authority to prescribe additional costs, other than 
those specifically listed in Sec.  20154(h)(1), as allowable under this 
Part. As the authority to promulgate this rule has been delegated to 
FRA by the Secretary, subsection (6) makes clear that FRA has that 
authority to prescribe additional costs. In addition, subsection (6) 
also makes clear that architectural and engineering costs associated 
with the project as well as costs incurred in compliance with 
applicable environmental regulations are considered construction costs, 
and will be allowable. Because FRA has some discretion with regard to 
this definition, commenters are invited to suggest additional costs 
that might be allowable under the regulation.

FRA

    This definition makes clear that when the term ``FRA'' is used in 
this Part, it refers to the Federal Railroad Administration.

Improvement

    The program established by the Act is intended to provide funds for 
both rail line relocation and improvement projects. This definition 
makes clear the types of projects that fall under the category of 
``improvements.'' FRA considers improvements to be projects such as 
those that repair defective aspects of a rail system's infrastructure, 
projects that enhance an existing system to provide for improved 
operations, or new construction projects that result in better 
operational efficiencies. Examples include track work that increases 
the class of track, signal system improvements, and lengthening 
existing sidings or building new sidings. FRA invites comments on the 
definition of ``improvement'' as well as the types of projects that 
should be considered. Commenters should keep in mind, however, that any 
project must achieve the goals set forth in Sec.  262.7(a)(1).

Non-Federal Share

    This definition indicates that Non-Federal share means the portion 
of the allowable cost of the local rail line relocation or improvement 
project that is being paid for through cash or in-kind contributions by 
a State or other non-Federal entity.

Private Entity

    This definition makes clear what types of entities are contemplated 
under Sec.  262.13. A private entity must be a nongovernmental entity, 
but can be a domestic or foreign entity and can be either for-profit or 
not-for-profit.

Project

    This definition makes clear that the term ``project'' refers only 
to a local rail line relocation or improvement project

[[Page 1968]]

undertaken with funding from a grant from FRA under this Part.

Quality of Life

    FRA is requesting comments on what factors should be considered 
when measuring ``quality of life.'' The Act requires only that the 
definition include first responders'' emergency response time, the 
environment, noise levels, and other factors as determined by FRA. 
Thus, Congress left FRA some discretion in determining what else should 
be considered under this definition. FRA believes ``quality of life'' 
should include factors associated with an individual's overall 
enjoyment of life or a community's ability both to function and to 
provide services to its residents at a reasonable level. Commenters are 
invited to discuss specific factors that can measure these somewhat 
amorphous concepts, as well as any other factors that may be 
appropriate.

Real Property

    This definition makes clear that ``real property'' refers to land, 
including land improvements, structures and appurtenances thereto, 
excluding movable machinery and equipment.

Relocation

    This definition states what relocation consists of and provides the 
distinction between the two types of rail line relocations. A lateral 
relocation occurs when a rail line is horizontally moved from one 
location to another, usually away from dense urban development, grade 
crossings, etc., in an effort to allow trains to operate more 
efficiently and the community surrounding the old line to function more 
effectively. The typical example is moving a rail line that runs 
through the middle of a town or city to a location outside of the town 
or city.
    A vertical relocation occurs when a rail line remains in the same 
location, but the track is lifted above the ground, as with an 
overpass, or is sunk below ground level, as with a trench. Vertical 
relocations may be preferable when the community surrounding the rail 
line still needs the line (for example, when a busy passenger station 
is located on the line), but the line is causing problems because of 
its location at grade.

Secretary

    This definition makes clear that ``Secretary'' refers to the 
Secretary of Transportation.

State

    This definition is reprinted from SAFETEA-LU and can be found at 49 
U.S.C. 20154(h)(3). It makes clear that, for the purposes of this Part 
except for Sec.  262.17, any of the fifty States, political 
subdivisions of the States, and the District of Columbia is a ``State'' 
and eligible for funding from this program. The definition also makes 
clear, however, that for purposes of Sec.  262.17 only, ``State'' does 
not include political subdivisions of States, but instead only the 
fifty States and the District of Columbia.

Tangible Personal Property

    This definition indicates that ``tangible personal property'' 
refers to property that has physical substance and can be touched, but 
is not real property. Examples of tangible personal property include 
machinery, equipment and vehicles.

Section 262.5 Allocation Requirements

    This section is reprinted directly from SAFETEA-LU and can be found 
at 49 U.S.C. 20154(d). It mandates that at least fifty percent of all 
grant funds awarded under this Part out of funds appropriated for a 
fiscal year be provided as grant awards of not more than $20,000,000 
each. Designated, high-priority projects will be excluded from this 
allocation formula. The statute states that the $20,000,000 amount will 
be adjusted by the Secretary to reflect inflation for each fiscal year 
of the program beginning in FY 2007. Under the Secretary's delegation 
of rulemaking authority to FRA, however, FRA will make the annual 
inflationary adjustment. In making the adjustment for inflation, FRA 
will use guidance published by the Association of American Railroads 
(AAR). Specifically, FRA will use the materials and supplies component 
of the AAR Railroad Cost Indexes. FRA will make the adjustment each 
October based on the most recent edition of the Cost Indexes.

Section 262.7 Eligibility

    This section is reprinted directly from SAFETEA-LU and can be found 
at 49 U.S.C. 20154(b). It sets out the eligibility criteria for 
projects and declares that any state (or political subdivision of a 
state) is eligible for a grant under this section for any construction 
project for the improvement of a route or structure of a rail line that 
either is carried out for the purpose of mitigating the adverse effects 
of rail traffic on safety, motor vehicle, traffic flow, community 
quality of life, or economic development, or involves a lateral or 
vertical relocation of any portion of a rail line. Lateral relocation 
refers to horizontally moving the rail line to another location while 
vertical relocation refers to either lifting the rail line above the 
ground or sinking it below the ground. Subpart (b) of this section also 
makes clear that only costs associated with construction, as defined in 
this Part, will be allowable costs for purposes of this Part. 
Therefore, only construction costs will be eligible for reimbursement 
under a grant agreement administered under this Part.

Section 262.9 Criteria for Selection of Rail Lines

    This section is reprinted almost entirely from SAFETEA-LU and, 
aside from subsection (f), can be found at 49 U.S.C. 20154. It sets out 
the criteria for FRA to use in determining which projects should be 
approved for grants under this Part. It mandates that the Secretary, 
through FRA, consider the following factors in deciding whether to 
award a grant to an eligible state (as defined in this Part):
     The capability of the state (as defined in this part) to 
fund the project without Federal grant funding;
     The requirement and limitation relating to allocation of 
grant funds provided in Sec.  262.5 of this Part;
     Equitable treatment of the various regions of the United 
States;
     The effects of the rail line, relocated or improved as 
proposed, on motor vehicle and pedestrian traffic, safety, community 
quality of life, and area commerce; and
     The effects of the rail line, relocated or improved as 
proposed, on the freight and rail passenger operations on the rail 
line.
    In making the determination required by the first factor of the 
State's capability to fund the project without Federal grant funding, 
FRA will look at indicators such as the existence of authorized and 
funded State programs for railroad improvement projects, the State's 
use of available highway-rail grade crossing improvement funds provided 
through 23 U.S.C. 130, and other indicia of credit worthiness such as 
bond ratings. FRA welcomes comments on these indicators as well as 
proposals for additional information that may be relevant in 
determining the State's ability to fund the project without Federal 
grant funding.
    With regard to the third factor--equitable treatment of the various 
regions of the United States--Congress did not indicate how the 
geographical boundaries of the regions should be determined. For 
purposes of this regulation, FRA is proposing to divide the country 
into the same regions that FRA's Office of Safety divides the country 
for enforcement purposes. FRA's regional boundaries take into account 
factors such as density of rail

[[Page 1969]]

lines, frequency of rail operations, and population centers. For 
example, FRA's Regions 1 and 2, which encompass all of Amtrak's 
Northeast Corridor, contain many large cities, and have extensive 
freight, commuter, and intercity passenger rail operations; cover much 
less territory that FRA's Region 8, which encompasses the Pacific 
Northwest, including States such as Montana, Wyoming, and Idaho that 
have smaller populations, little or no commuter or intercity passenger 
service, and less frequent freight rail operations. A map of FRA's 
Regions is included as Appendix A. FRA is soliciting comments on this 
proposed division of the country and welcomes suggestions for 
alternative methods.
    Subsection (f) states that FRA will consider the level of 
commitment of non-Federal and/or private funds when determining whether 
to award a grant under this program. This requirement was not listed in 
Sec.  20154(c) of SAFETEA-LU, but the statute did not mandate that FRA 
consider only the listed factors in determining whether to award a 
grant to an eligible state. The listed factors are fairly 
comprehensive, but FRA wants to retain the flexibility to consider 
other factors, as well, that may not be readily apparent. Therefore, 
FRA added a ``catch-all'' factor to the criteria. Subsection (f) allows 
FRA to also consider any other factors that the agency deems relevant 
to assessing the effectiveness and or efficiency of the grant 
application in achieving the goals of the national program and 
specifically mentions the level of financial commitment provided by 
non-Federal and/or private entities noted in Sec.  20154(e)(4)(B). FRA 
welcomes comments on this addition and any other potential factors that 
the FRA may consider in determining whether to award a grant.

Section 262.11 Application Process

    All grant applications submitted under this program must be 
submitted to FRA through the Internet at https://www.grants.gov. All 
Federal grant-making agencies are required to receive applications 
through this website. Potential applicants should note that the 
information below describes FRA's typical grant application 
requirements. However, the specific requirements for individual grants 
will be listed in the ``Instructions'' section for the particular grant 
for which FRA is accepting applications.
    The application process for funds appropriated under Sec.  20154 
will differ depending on whether the grant is non-competitive or 
discretionary (competitive). Non-competitive applications--usually 
projects designated in the appropriations statute or in the Conference 
Report accompanying an annual appropriation as high-priority--generally 
must include the following: (1) A detailed project description; (2) 
Standard Forms (SF) 424 --Application; SF 424A or C--Budget 
Information; SF 424B or D--Assurances; Certifications and Assurances, 
i.e. debarment/suspension/ineligibility, Drug-free Work Place; 
Lobbying, Indirect Costs; SF 3881--Payment Information; SF 1194--
Authorized Signatures; and (3) an Audit History. Potential applicants 
should keep in mind that these are the typical forms that FRA requests 
with non-competitive applicants. FRA may not require all of these for a 
particular application.
    For a discretionary (competitive) grant, applicants will be 
provided with certain basic information covering deadlines and 
addresses for submitting statements of interest, the entities eligible 
for funding, an estimate of the amount of funding available and the 
expected number of awards, and the selection criteria for evaluating 
statements of interest. A major responsibility of FRA's technical staff 
will be development of a Source Selection Plan (SSP) to be used for 
evaluating applications. The SSP will be available to all applicants.
    All applicants should keep in mind that no funding will be 
available for this program unless and until Congress appropriates 
funding for it. SAFETEA-LU authorized, but did not appropriate, $350 
million per fiscal year for each fiscal year 2006 through 2009. As of 
the publication date of this Part, Congress has not appropriated any 
funds for fiscal year 2006 or 2007. If Congress appropriates non-
competitive funds for a specific project under this Program, FRA will 
notify the potential recipient of the appropriation. If Congress 
approves funding for a discretionary grant or grants, FRA will publish 
a Notice of Funds Availability in the Federal Register and eligible 
applicants will be able to apply for a grant through https://
www.grants.gov.
    Subsection (b) of this section mandates that, when submitting an 
application, a state must submit a description of the anticipated 
public and private benefits associated with each proposed rail line 
relocation or improvement project. The determination of the benefits 
must be developed in consultation with the owner and user of the rail 
line being relocated and improved or other private entity involved in 
the project. Since one of the factors that FRA will consider in 
selecting projects is the level of commitment of non-Federal and/or 
private funds available for the project (see proposed section 
262.9(f)), applications should also identify the financial 
contributions or commitments the state has secured from any private 
entities that are expected to benefit from the proposed project. The 
language for this subsection is based upon SAFETEA-LU requirements and 
can be found at 49 U.S.C. 20154(e)(4)(A) and (B).
    Subsection (c) of this section allows for a potential applicant to 
request a meeting with the FRA Associate Administrator for Railroad 
Development or his designee to discuss a project the potential 
applicant is considering for financial assistance under this Part. 
Subsection (c) does not require that such a meeting occur, but it has 
been FRA's experience that pre-application meetings generally save the 
potential applicant both time and money, and, therefore, FRA strongly 
encourages potential applicants to schedule such a meeting.

Section 262.13 Matching Requirements

    This section is reprinted entirely from SAFETEA-LU and can be found 
at 49 U.S.C. Sec.  20154(e). It sets out the requirement that a State 
(as defined in this Part) or other non-Federal entity shall pay at 
least ten (10) percent of the shared costs of a project that is funded 
in part by a grant awarded under this Part. The ten percent may be in 
cash or in the form of the following in-kind contributions:
     Real property or tangible personal property, whether 
provided by the State (as defined by this Part) or a person for the 
State;
     The services of employees of the State or other non-
Federal entity, calculated on the basis of costs incurred by the State 
or other non-Federal entity for the pay and benefits of the employees, 
but excluding overhead and general administrative costs;
     A payment of any costs that were incurred for the project 
before the filing of an application for a grant for the project under 
this section, and any in-kind contributions that were made for the 
project before the filing of the application, if and to the extent that 
the costs were incurred or in-kind contributions were made to comply 
with a provision of a statute required to be satisfied in order to 
carry out the project.
    Finally, this section states that FRA will consider the feasibility 
of seeking financial contributions or commitments from private entities 
involved with the project in proportion to the anticipated

[[Page 1970]]

public and private benefits that accrue to such entities from the 
project. FRA invites comments and suggestions from commenters on how 
FRA can best accomplish this requirement. Since project sponsors are 
most directly involved and familiar with the details of the proposed 
projects and are required to submit a description of the anticipated 
public and private benefits associated with each rail line relocation 
or improvement project as a part of the application process, the 
requirement to seek financial contributions or commitments from private 
entities might best be accomplished by the project sponsors in 
assembling the overall financial package to complete the project. This 
could then be one of the factors to be evaluated by the FRA in deciding 
whether to proceed with a project or in selecting one project over 
another should there be more than one project competing for any 
available funding.

Section 262.15 Environmental Assessment

    This section clearly states to all grantees that, in order for FRA 
to award funding for any project, the National Environmental Policy Act 
(42 U.S.C. 4321 et seq.) (NEPA) and related laws, regulations and 
orders must be complied with. NEPA mandates that before any ``major'' 
Federal action can take place, the Federal entity performing the action 
must complete an appropriate environmental review. The use of Federal 
funds in a project triggers the NEPA process. Thus, because FRA will be 
providing Federal funds to grantees for local rail line relocation and 
improvement projects, a completed NEPA review will be required before 
the agency decides to approve any project. A State may be requested to 
provide environmental information and/or fund the NEPA review, either 
directly (if the entity administering the grant is a State agency with 
statewide jurisdiction) or through a third party contract. FRA's NEPA 
compliance will be governed by FRA's ``Procedures for Considering 
Environmental Impacts'' (65 FR 28545) and the NEPA regulations of the 
Council on Environmental Quality (40 CFR part 1500).
    This section also notes several of the other environmental and 
historic preservation statutes that must be considered during the NEPA 
review. This is not, however, a comprehensive list of all environmental 
and historic preservation statutes and implementing regulations that 
must be considered, but instead merely illustrative of the issues that 
a State may be required to address in the environmental review.

Section 261.17 Combining Grant Awards

    This section is reprinted entirely from SAFETEA-LU and can be found 
at 49 U.S.C. 20154(f). It allows for two or more States, but not 
political subdivisions of States, pursuant to an agreement entered into 
by the States, to combine any part of the amounts provided through 
grants for a project under this Part, provided the project will benefit 
each State and the agreement is not a violation of a law of any of the 
States. SAFETEA-LU specifically excludes political subdivisions of 
States from taking advantage of this section, but does not exclude the 
District of Columbia.

Section 261.19 Closeout Procedures

    The ``grant closeout'' is the process by which the FRA and grantee 
perform final actions that document completion of work, administrative 
requirements, and financial requirements of the grant agreement. FRA, 
the grantee, and any other involved parties, such as an auditor, need 
to fulfill these requirements promptly in order to avoid unnecessary 
delays in grant closeout.
    FRA will notify the grantee in writing 30 days before the end of 
the grant period regarding what final reports are due, the dates by 
which they must be received, and where they must be submitted. The 
grantee will be required to submit the reports within 90 days after the 
expiration or termination of the grant. Copies of any required forms 
and instructions for their completion will be included with the 
notification. The financial, performance, and other reports required as 
a condition of the grant will generally include the following:
     Final performance or progress report;
     Financial Status Report (SF-269) or Outlay Report and 
Request for Reimbursement for Construction Programs (SF-271);
     Final Request for Payment;
     Federally-Owned Property Report. A grantee must submit an 
inventory of all Federally-owned property (as opposed to property 
acquired with grant funds) for which it is accountable and request 
disposition instructions from FRA if the property is no longer needed.
    Upon receipt of this information, FRA will determine whether any 
additional funds are due the grantee or whether the grantee needs to 
refund any funds. FRA will also determine final costs and, if 
necessary, make upward or downward adjustments to any allowable costs 
within 90 days after receipt of reports and make prompt payment to the 
grantee for any unreimbursed allowable costs. If the grantee has 
received more funds than the total allowable costs, the grantee must 
immediately refund to FRA any balance of unencumbered cash advanced 
that is not authorized to be retained for use on other grants.
    FRA will notify the grantee in writing that the grant has been 
closed out. The grant agreement will in most cases be ready to be 
closed out before receipt of the single audit report that covers the 
period of the grant performance. Therefore, the grant will be closed 
administratively without formal audit. The grant may be reopened later 
to resolve subsequent audit findings.
    The closeout of a grant does not affect FRA's right to disallow 
costs and recover funds on the basis of a later audit or other review 
and the grantee's obligation to return any funds due as a result of 
later refunds, corrections, or other transactions.

IV. Regulatory Impact

A. Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    FRA has determined preliminarily that this action represents a 
``significant regulatory action'' within the meaning of DOT's 
Regulatory Policies and Procedures (44 FR 11034, February 26, 1979) and 
Executive Order 12866. This determination is based on a finding that 
the rule may have an annual effect on the economy of $100 million or 
more because Congress has authorized the appropriation of $350,000,000 
per year for fiscal years 2006 through 2009. However, no funds to 
implement the program were appropriated for fiscal year 2006 and no 
funds were requested in the Administration's Fiscal Year 2007 budget 
request. The NPRM was reviewed by the Office of Management and Budget 
under E.O. 12866.
    This section summarizes the estimated economic impact of the 
proposed rule. As mandated by section 9002 of SAFETEA-LU, this 
rulemaking proposes establishment of the basic elements of a funding 
program for capital grants for local rail line relocation and 
improvement projects. This regulation would affect only those entities 
that voluntarily elected to apply for the capital grants under section 
9002 and were selected to receive a grant under the program. It would 
not impose any direct involuntary un-reimbursed costs on non-
participants. Prospective applicants will normally have available the 
information needed to prepare applications for funding so these costs 
would be minimal.

[[Page 1971]]

    FRA has undertaken a preliminary evaluation of the economic impact 
of this proposed regulatory action. However, because the number, 
nature, and size of projects to be assisted would not be known until 
funds are appropriated and specific applications are received, this 
analysis is by necessity an estimate. Since the actual projects have 
yet to be identified, it is also not possible at this stage to 
ascertain the appropriate benefit/cost ratios. The only costs imposed 
on the participants (States and political subdivisions) are the costs 
associated with completing an application and providing the required 
minimum ten percent non-Federal funding match.
    FRA has also concluded that the local rail line relocation and 
improvement projects capital grants program could generate both direct 
and indirect benefits, providing economic, safety and environmental 
benefits. Of the $350 million authorized to be appropriated annually, 
fifty percent of all grant funds awarded are reserved for projects of 
no more than $20 million each, adjusted for inflation. Lacking 
specifics about individual projects, it is difficult to estimate 
whether the benefits are anticipated to surpass the combined potential 
direct costs to the Federal Government (potentially $350 million 
annually) and to the entities that elect to participate in the program. 
The statutory criteria for evaluating applications do not require a 
cost/benefit analysis for each project but instead focus on the 
capability of the state to fund the project without Federal grant 
funding, the effects of the relocated or improved rail line on traffic, 
safety, quality of life, area commerce, and freight and passenger 
operations on the line. Because of the voluntary nature of 
participation in the program, this regulatory action is not anticipated 
to impose any non-reimbursed costs upon non-participants (relocation 
assistance is an eligible program cost which would mitigate impacts to 
non-participants). The FRA requests comments, information, and data 
from the public and potential users concerning the economic impact of 
implementing this rule and the local rail line relocation and 
improvement projects capital grants program.
    This rule is not anticipated to adversely affect, in a material 
way, any sector of the economy. This rulemaking sets forth eligibility 
and selection criteria for project proposals in the local rail line 
relocation and improvement projects capital grants program, which will 
result in only minimal cost to program applicants. In addition, this 
proposed rule would not create a serious inconsistency with any other 
agency's action or materially alter the budgetary impact of any 
entitlements, grants, user fees, or loan programs.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (Pub. L. 96-354, 5 U.S.C. 
601-612) requires a review of rules to assess their impact on small 
entities. FRA is not able to certify that this proposed rule would not 
have a significant impact on a substantial number of small entities and 
seeks comments from the public. For government entities, the definition 
of small entities is based on population served. As defined by the 
Small Business Administration (SBA), this term means governments of 
cities, counties, towns, townships, villages, school districts, or 
special districts with a population of less than fifty thousand. States 
are not included in the definition of small entity set forth in 5 
U.S.C. 601, but political subdivisions of states may well fall into 
this category. Given FRA's lack of knowledge about specific projects, 
applicants or applications that might be filed if Congress appropriated 
funds for the program, it is not possible to determine the number of 
small government entities that may be involved in applications under 
the local rail line relocation and improvement projects capital grants 
program or the impacts to those entities from the program.
    FRA has not conducted a regulatory flexibility assessment of this 
proposed rule's impact on small entities. FRA views it as unlikely that 
a small entity such as a local government would be disproportionately 
impacted by the proposed rule. The capital grants for rail line 
relocation program could certainly provide benefits to small entities, 
such as local governments (political subdivisions of a State). The 
funds being made available through this program could provide economic, 
safety, and environmental benefits. Moreover, participation in the 
local rail line relocation and improvement projects capital grants 
program is voluntary. The statute requires a State or other non-Federal 
entity to provide at least ten percent of the shared cost of a project 
funded under this program. To the extent a small entity was providing 
that non-Federal share, the impact would be calculated by the small 
entity in deciding whether to file the application under the program.
    At the same time, small governmental entities, limited by Section 
9002 to political subdivisions of a State, would likely benefit from 
the economic opportunities resulting from infrastructure improvements 
to existing rail lines that connect small governmental entities to the 
national railroad system. As discussed in greater detail in the 
background section of this NPRM, rail infrastructure that was once 
critical to many communities can now present problems as well as 
benefits. To the extent the program can be used by a local government 
to address an existing problem, it could provide a substantial benefit 
to the community. The cost to governmental entities of applying for the 
program would be minimal since applicants will normally have available 
most of the information needed to prepare applications for a grant 
under Section 9002.
    Written public comments that will clarify the number of affected 
small entities and what the impacts will be for the affected small 
entities are requested. FRA especially encourages political 
subdivisions that may be considered to be small entities to participate 
in the comment process and submit written comments to the docket.
    Small entities, other than political subdivisions of states, are 
not eligible to apply for relocation or improvement funds, though on a 
voluntary basis a non-governmental small entity could agree to supply 
the non-Federal match. The statute also requires the Secretary to 
consider the feasibility of seeking financial contributions or 
commitments from private entities involved with a project in proportion 
to the expected benefits that accrue to such private entities. Project 
beneficiaries could include small entities; however, without details 
about specific projects, it is not possible to realistically estimate 
whether impacts to non-governmental small entities in these 
circumstances is likely. FRA invites public comment on this component 
of the analysis, as well.
C. Paperwork Reduction Act
    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) 
addresses the collection of information by the Federal government from 
individuals, small businesses and State and local governments and seeks 
to minimize the burdens such information collection requirements might 
impose. A collection of information includes providing answers to 
identical questions posed to, or identical reporting or record-keeping 
requirements imposed on ten or more persons, other than agencies, 
instrumentalities, or employees of the United States. This Notice of 
Proposed Rulemaking contains information requirements that would apply 
to States or political subdivisions of States that file applications 
for Federal funding for local rail line relocation and improvement 
projects.

[[Page 1972]]

    The information collection requirements in this proposed rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq. 
The sections that contain the new information collection requirements 
and the estimated time to fulfill each requirement are as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                      Respondent                                  Average time per    Total annual
       CFR section--49 CFR             universe        Total annual  responses        response        burden hours         Total annual burden cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
262.11--Application Process.....  50 States........  7 applications............  580 hours.........           4,060  $0 (Cost incl. in RIA).
    --Requests for Meeting with   50 States........  5 requests................  30 minutes........               3  $120.
     FRA.
    --Meeting Discussions.......  50 States........  5 meetings................  2 hours...........              10  $700.
262.15--Environmental Assessment  50 States........  7 documents...............  200 hours.........           1,400  $0 (Cost incl. in RIA).
262.19--Close-Out Procedures....  50 States........  7 document sets...........  6 hours...........              42  $1,680.
    --Inspection of All           50 States........  7 reports.................  80 hours..........             560  $39,200.
     Construction Report.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    All estimates include the time for reviewing instructions; 
searching existing data sources; gathering or maintaining the needed 
data; and reviewing the information. Pursuant to 44 U.S.C. 
3506(c)(2)(B), the FRA solicits comments concerning: whether these 
information collection requirements are necessary for FRA to properly 
perform its functions, including whether the information has practical 
utility; the accuracy of FRA's estimates of the burden of the 
information collection requirements; the quality, utility, and clarity 
of the information to be collected; and whether the burden of 
collecting information on those who are to respond, including through 
the use of automated collection techniques or other forms of 
information technology, may be minimized. For information or a copy of 
the paperwork package submitted to OMB, contact Mr. Robert Brogan, 
Information Clearance Officer, at 202-493-6292.
    Organizations and individuals desiring to submit comments on the 
collection of information requirements should direct them to Mr. Robert 
Brogan, Federal Railroad Administration, 1120 Vermont Avenue, NW., Mail 
Stop 21, Washington, DC 20590. Comments may also be submitted via e-
mail to Mr. Brogan at the following address: robert.brogan@fra.dot.gov.
    OMB is required to make a decision concerning the collection of 
information requirements contained in this proposed rule between 30 and 
60 days after publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. The final rule will 
respond to any OMB or public comments on the information collection 
requirements contained in this proposal.
    FRA is not authorized to impose a penalty on persons for violating 
information collection requirements which do not display a current OMB 
control number, if required. FRA intends to obtain current OMB control 
numbers for any new information collection requirements resulting from 
this rulemaking action prior to the effective date of the final rule. 
The OMB control number, when assigned, will be announced by separate 
notice in the Federal Register.

D. Environmental Impact

    FRA has evaluated these regulations in accordance with its 
procedures for ensuring full consideration of the potential 
environmental impacts of FRA actions, as required by the National 
Environmental Policy Act (42 U.S.C. 4321 et seq.) (NEPA) and related 
directives (see FRA Policy Statement on Procedures for Considering 
Environmental Impacts, 64 FR 28545). FRA has concluded that the 
issuance of this NPRM, which establishes regulations governing the 
awarding of grants for local rail line relocation and improvement 
projects, does not have a potential impact on the environment and does 
not constitute a major Federal action requiring an environmental 
assessment or environmental impact statement. Because all projects 
undertaken with grants administered under this section will involve 
Federal funding, appropriate NEPA analyses, including studies of any 
potential environmental justice issues, will be necessary prior to the 
award of any grant.

E. Federalism Implications

    FRA has analyzed this NPRM in accordance with the principles and 
criteria contained in Executive Order 13132, issued on August 4, 1999, 
which directs Federal agencies to exercise great care in establishing 
policies that have federalism implications. See 64 FR 42355. This NPRM 
will not have a substantial effect on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among various levels of government. This 
NPRM will not have federalism implications that impose any direct 
compliance costs on State and local governments. There will be costs 
associated with the submission of applications, but they are 
discretionary and will only be incurred should a State or local 
government wish to apply for funding. Otherwise, this NPRM directs how 
Federal funds will go to the States, and thus, there are no federalism 
implications.

F. Unfunded Mandate Reform Act of 1995

    Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency ``shall, unless 
otherwise prohibited by law, assess the effects of Federal regulatory 
actions on State, local, and tribal governments, and the private sector 
(other than to the extent that such regulations incorporate 
requirements specifically set forth in law).'' Section 202 of the Act 
(2 U.S.C. 1532) further requires that ``before promulgating any general 
notice of proposed rulemaking that is likely to result in the 
promulgation of any rule that includes any Federal mandate that may 
result in the expenditure by State, local, and tribal governments, in 
the aggregate, or by the private sector, of $100,000,000 or more 
(adjusted annually for inflation) in any 1 year, and before 
promulgating any final rule for which a general notice of proposed 
rulemaking was published, the agency shall prepare a written 
statement'' detailing the effect on State, local, and tribal 
governments and the private sector.
    There are no ``regulatory actions'' contemplated within the meaning 
of the Unfunded Mandate Reform Act of 1995. Furthermore, this grant 
program is not an ``unfunded mandate,'' in that there will be no money 
until Congress specifically appropriates it. The only requirements in 
this NPRM for funding other than grant funds provided to State and 
local governments is the ten percent matching requirement, which may

[[Page 1973]]

include costs associated with NEPA compliance. That requirement, 
however, is specifically set forth in Sec.  9002 of SAFETEA-LU and FRA 
need not assess its effect. This NPRM, therefore, will not result in 
the expenditure by State, local, or tribal governments, in the 
aggregate, of $100,000,000 or more in any one year, and thus 
preparation of such a statement is not required.

G. Energy Impact

    Executive Order 13211 requires Federal agencies to prepare a 
Statement of Energy Effects for any ``significant energy action.'' See 
66 FR 28355 (May 22, 2001). Under the Executive Order a ``significant 
energy action'' is defined as any action by an agency that promulgates 
or is expected to lead to the promulgation of a final rule or 
regulation, including notices of inquiry, advance notices of proposed 
rulemaking, and notices of proposed rulemaking: (1)(i) That is a 
significant regulatory action under Executive Order 12866 or any 
successor order, and (ii) is likely to have a significant adverse 
effect on the supply, distribution, or use of energy; or (2) that is 
designated by the Administrator of the Office of Information and 
Regulatory Affairs as a significant energy action. FRA has evaluated 
this NPRM in accordance with Executive Order 13211. FRA has determined 
that this NPRM is not likely to have a significant adverse effect on 
the supply, distribution, or use of energy. Consequently, FRA has 
determined that this NPRM is not a ``significant energy action'' within 
the meaning of the Executive Order.

H. Privacy Act Statement

    Anyone is able to search the electronic form of all comments 
received into any of DOT's dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc). You may review DOT's 
complete Privacy Act Statement published in the Federal Register on 
April 11, 2000 (Volume 65, Number 70, Pages 19477-78) or you may visit 
https://dms.dot.gov.

V. The Proposed Rule

    For the reasons discussed in the preamble, the Federal Railroad 
Administration proposes to add part 262 to Title 49, Code of Federal 
Regulations, as follows:

PART 262--PROGRAM FOR CAPITAL GRANTS FOR RAIL LINE RELOCATION AND 
IMPROVEMENT PROJECTS

Table of Contents for Proposed Part 262

Sec.
262.1 Purpose.
262.3 Definitions.
262.5 Allocation requirements.
262.7 Eligibility.
262.9 Criteria for selection of rail lines.
262.11 Application process.
262.13 Matching requirements.
262.15 Environmental assessment.
262.17 Combining grant awards.
262.19 Close-out procedures.

    Authority: 49 U.S.C. 20154 and 49 CFR 1.49.


Sec.  262.1  Purpose.

    The purpose of this part is to carry out the statutory mandate set 
forth in Sec.  9002 of the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act--A Legacy for Users (Pub. L. 109-59) that the 
Secretary of Transportation promulgate regulations implementing new 
Sec.  20154 of Title 49 of the United States Code, which establishes a 
capital grants program to provide financial assistance for local rail 
line relocation and improvement projects.


Sec.  262.3  Definitions.

    Act means the Safe, Accountable, Flexible, Efficient Transportation 
Equity Act--A Legacy for Users (Pub. L. 109-59).
    Administrator means the Federal Railroad Administrator, or his or 
her delegate.
    Allowable costs means those project costs for which Federal funding 
may be expended under this part. Only construction and construction-
related costs will be allowable.
    Construction means supervising, inspecting, demolition, actually 
building, and incurring all costs incidental to building a project 
described in Sec.  262.9 of this part, including bond costs and other 
costs related to the issuance of bonds or other debt financing 
instruments and costs incurred by the Grantee in performing project 
related audits, and includes:
    (1) Locating, surveying, and mapping;
    (2) Track and related structure installation, restoration, and 
rehabilitation;
    (3) Acquisition of rights-of-way;
    (4) Relocation assistance, acquisition of replacement housing 
sites, and acquisition and rehabilitation, relocation, and construction 
of replacement housing;
    (5) Elimination of obstacles and relocation of utilities; and
    (6) Any other activities as defined by FRA, including architectural 
and engineering costs, and costs associated with compliance with the 
National Environmental Policy Act, National Historic Preservation Act, 
and related statutes, regulations, and orders.
    FRA means the Federal Railroad Administration.
    Improvement means repair or enhancement to existing rail 
infrastructure, or construction of new rail infrastructure, that 
results in improvements to the efficiency of the rail system and the 
safety of those affected by the system.
    Non-Federal share means the portion of the allowable cost of the 
local rail line relocation or improvement project that is being paid 
for through cash or in-kind contributions by a state or other non-
Federal entity.
    Private Entity means any domestic or foreign nongovernmental for-
profit or not-for-profit organization.
    Project means the local rail line relocation or improvement for 
which a grant is requested under this section.
    Quality of Life means the level of social, environmental and 
economic satisfaction and well being a community experiences, and 
includes factors such first responders' emergency response time, the 
environment, grade crossing safety, and noise levels.
    Real Property means land, including land improvements, structures 
and appurtenances thereto, excluding movable machinery and equipment.
    Relocation means moving a rail line vertically or laterally to a 
new location. Vertical relocation refers to raising above the current 
ground level or sinking below the current ground level a rail line. 
Lateral relocation refers to moving a rail line horizontally to a new 
location.
    Secretary means the Secretary of Transportation.
    State except as used in Sec.  262.17, means any of the fifty United 
States, a political subdivision of a State, and the District of 
Columbia. In Sec.  262.17, State means any of the fifty United States 
and the District of Columbia.
    Tangible personal property means property, other than real 
property, that has a physical existence and an intrinsic value, 
including machinery, equipment and vehicles.


Sec.  262.5  Allocation requirements.

    At least fifty percent of all grant funds awarded under this 
section out of funds appropriated for a fiscal year shall be provided 
as grant awards of not more than $20,000,000 each. Designated, high-
priority projects will be excluded from this allocation formula. FRA 
will adjust the $20,000,000 amount to reflect real inflation for fiscal 
years beginning

[[Page 1974]]

after fiscal year 2006 based on the materials and supplies component 
from the all-inclusive index of the AAR Railroad Cost Indexes.


Sec.  262.7  Eligibility.

    (a) A state is eligible for a grant from FRA under this section for 
any construction project for the improvement of the route or structure 
of a rail line that either:
    (1) Is carried out f