Notice of Funding Opportunity for Letters of Interest for the RRIF Express Pilot Program Under the Railroad Rehabilitation & Improvement Financing Program, 15029-15032 [2020-05282]
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Federal Register / Vol. 85, No. 51 / Monday, March 16, 2020 / Notices
DEPARTMENT OF TRANSPORTATION
Office of the Secretary of
Transportation
Notice of Funding Opportunity for
Letters of Interest for the RRIF Express
Pilot Program Under the Railroad
Rehabilitation & Improvement
Financing Program
Office of the Secretary of
Transportation and U.S. Department of
Transportation (the ‘‘DOT’’).
ACTION: Notice of funding opportunity
AGENCY:
This notice modifies the pilot
Railroad Rehabilitation and
Improvement Financing (‘‘RRIF’’)
Express Program (‘‘RRIF Express’’)
aimed at increasing access to the RRIF
program by short line and regional
railroads. Specifically, this notice:
1. Clarifies dates and responsibilities
of applicants who have submitted RRIF
Express Letters of Interest between
January 13, 2020 and the date of this
notice (Section DATES)
2. Offers an alternative to the current
requirement for five years of audited
financial statements, allowing for audits
of the two most recent years’ financial
statements. If this option is selected,
applicants must produce five years of
(non-audited) financial statements plus
a self-certification from the applicant
that they will provide the most recent
two years of audited financial
statements within 60 days of submitting
the LOI and supporting materials
(Section IV(iv)).
3. Resets the 90-day application
period to begin on the date that this
revision is posted in the Federal
Register (Section DATES)
The original NOFO with
modifications follows.
The RRIF Express Program will be
administered by the DOT’s National
Surface Transportation and Innovative
Finance Bureau (the ‘‘Build America
Bureau’’ or ‘‘Bureau’’). The overall RRIF
program finances development of
railroad infrastructure, and is
authorized to have up to $35 billion in
outstanding principal amounts from
direct loans and loan guarantees at any
one time.
The 2018 Consolidated
Appropriations Act 1 appropriated $25
million in budget authority to the DOT
to cover the cost to the Federal
Government (‘‘the Government’’) of
RRIF credit assistance (Credit Risk
Premium (‘‘CRP’’) Assistance or ‘‘CRP
Assistance’’). Additionally, the 2016
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SUMMARY:
1 Pub. L. 115–141, div. L, tit. I, H.R. 1625 at 646
(as enrolled Mar. 23, 2018).
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Consolidated Appropriations Act 2 and
the 2018 Consolidated Appropriations
Act 3 provided $1.96 million and
$350,000, respectively (of which
approximately $1 million remains
available), to the DOT to fund certain
expenses incurred by prospective RRIF
borrowers in preparation of their
applications for RRIF credit assistance
(this approximately $1 million
assistance, collectively, ‘‘Cost
Assistance’’). Using existing authorities
and these new budget authorities, the
DOT has established the RRIF Express
Program.
Subject to the availability of funds,
applicants accepted into the RRIF
Express Program may benefit from two
types of financial assistance: (a) Cost
Assistance up to $100,000 per
application to pay for a portion of the
Bureau’s advisor expenses borne by
applicants; and (b) for those applicants
that ultimately receive RRIF credit
assistance, CRP Assistance up to 5% of
the final RRIF loan amount to offset the
CRP paid by the borrower. Any costs
beyond $100,000 and any CRP beyond
5% would be paid by the prospective
RRIF borrower. These funds will be
made available to benefit applicants
accepted into the RRIF Express Program
on a first come, first served basis until
each source of funding is expended or
this notice is superseded by a new
Notice of Funding Opportunity. Letters
of Interest will be accepted in the order
received and will be allocated cost
assistance based on the date of
acceptance into the pilot program. CRP
assistance will be allocated in the order
of financial close. For more information
about potential financial assistance for
RRIF Express applicants, see
Supplementary Information: Section II.
Funding of CRP and Cost Assistance.
This notice solicits Letters of Interest
from prospective RRIF borrowers
seeking acceptance into the RRIF
Express Program, establishes eligibility
criteria and describes the process that
prospective borrowers must follow
when submitting Letters of Interest.
DATES: Letters of Interest from
prospective RRIF borrowers for the RRIF
Express Program must be submitted
during the following submission
window: From March 16, 2020 to June
15, 2020.
Prospective RRIF borrowers that have
previously submitted a Letter of Interest
but that also seek acceptance into the
RRIF Express Program should resubmit
a Letter of Interest during the
2 Pub. L. 114–113, div. L, tit. I, § 152, 129 Stat.
2242, 2856.
3 Pub. L. 115–141, div. L, tit. I, H.R. 1625 at 646
(as enrolled Mar. 23, 2018).
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submission window above and follow
the instructions below. Applicants who
previously submitted Letters of Interest
under the RRIF Express Notice of
Funding Opportunity published on
December 13, 2019 and whose Letters of
Interest have not been returned as
ineligible, do not have to re-apply.
Applicants to the RRIF
Express Program must use the latest
version of the Letter of Interest form
available on the Build America Bureau
website: https://
www.transportation.gov/content/buildamerica-bureau (including applicants
who have previously submitted Letters
of Interest and who are now seeking
participation in the RRIF Express
Program). Letters of Interest must be
submitted to the Build America Bureau
via email at: RRIFexpress@dot.gov using
the following subject line: ‘‘Letter of
Interest for RRIF Express Program.’’
Submitters should receive a
confirmation email, but are advised to
request a return receipt to confirm
transmission. Only Letters of Interest
received via email at the above email
address with the subject line listed
above shall be deemed properly filed.
ADDRESSES:
For
further information regarding this notice
please contact William Resch via email
at william.resch@dot.gov or via
telephone at 202–366–2300. A TDD is
available at 202–366–3993.
FOR FURTHER INFORMATION CONTACT:
RRIF
Express pilot program information,
including any additional resources,
terms, conditions and requirements
when they become available, can be
found on the Build America Bureau
website at: https://
www.transportation.gov/buildamerica/
rrif-express. For further information
about the overall RRIF program in
general, including details about the
types of credit assistance available,
eligibility requirements and the
creditworthiness review process, please
refer to the Build America Bureau Credit
Programs Guide (‘‘Programs Guide),’’
available on the Build America Bureau
website: https://
www.transportation.gov/buildamerica/
programs-services/tifia/program-guide.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
II. Funding of CRP Assistance and Cost
Assistance
III. Eligibility Requirements for RRIF Credit
Assistance
IV. Eligibility Criteria for the RRIF Express
Program
V. Letter of Interest Process and Review and
Next Steps
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Federal Register / Vol. 85, No. 51 / Monday, March 16, 2020 / Notices
I. Background
The Transportation Equity Act for the
21st Century,4 established the RRIF
program, authorizing the DOT to
provide credit assistance in the form of
direct loans and loan guarantees to
public and private applicants for
eligible railroad projects. The RRIF
program is a DOT program and final
approval of credit assistance is reserved
for the Secretary of the DOT. The 2005
Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for
Users; 5 the Rail Safety Improvement
Act of 2008; 6 and the 2015 Fixing
America’s Surface Transportation Act 7
(the ‘‘FAST Act’’) each made a number
of changes to the RRIF program. In
addition, the FAST Act authorized the
creation of the Bureau to consolidate
administration of certain DOT credit
and grant programs, including the RRIF
program.
II. Funding of CRP Assistance and Cost
Assistance
Through the RRIF program, the DOT
is authorized to have, at any one time,
up to $35 billion in unpaid principal
amounts of obligations under direct
loans and loan guarantees to finance
development of railroad infrastructure.
CRP Assistance
Prior to the 2018 Consolidated
Appropriations Act, the RRIF program
did not have an appropriation of budget
authority to pay the cost to the
Government of providing RRIF credit
assistance. As a result, the RRIF
borrower or a third party was required
to bear this cost through the payment of
a CRP. The 2018 Consolidated
Appropriations Act 8 provided $25
million to the DOT to cover the cost to
the Government of RRIF credit
assistance. The DOT will use this
funding to pay or offset the CRP (up to
5% of the RRIF loan amount) payable by
participants in the RRIF Express
Program, until this funding is expended
or this notice is superseded by a new
Notice of Funding Opportunity.
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Cost Assistance
As described in the Programs Guide,
RRIF borrowers are required to pay (or
reimburse the DOT) for costs incurred
by the Bureau in connection with the
review of Letters of Interest and
applications for RRIF credit assistance.
4 Public
Law 105–178, § 7203, 112 Stat. 107, 471.
Law 109–59, § 9003, 119 Stat. 1144, 1921.
6 Public Law 110–432, § 701(e), 122 Stat. 4848,
4906.
7 Public Law 114–94, Subtitle F, 129 Stat. 1312,
1693.
8 Public Law 115–141, div. L, tit. I, H.R. 1625 at
646 (as enrolled Mar. 23, 2018).
5 Public
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The 2016 Consolidated Appropriations
Act 9 and the 2018 Consolidated
Appropriations Act 10 collectively
provided $2.31 million to the DOT to be
used to fund expenses incurred by
prospective RRIF borrowers in
preparation to apply for RRIF credit
assistance. A portion of these funds
have already been allocated for prior
RRIF projects. The DOT is reserving
approximately $1 million of remaining
funds from these appropriations to
offset the cost of DOT advisors (up to
$100,000 per application) that would be
payable by participants in the RRIF
Express Program, until this funding is
expended or this notice is superseded
by a new Notice of Funding
Opportunity.
III. Eligibility Requirements for RRIF
Credit Assistance
The RRIF statute and implementing
rules set forth eligibility requirements
for applicants and projects. These
requirements as well as other applicable
federal requirements are described in
detail in the Programs Guide and apply
to all applicants and projects, including
those seeking acceptance into the RRIF
Express Program. In addition, for
prospective borrowers seeking RRIF
Express Program benefits, the
requirements set forth in section IV
(Eligibility Criteria for the RRIF Express
Program) of this notice also apply.
IV. Eligibility Criteria for the RRIF
Express Program
The DOT has identified the following
strategic objectives for the RRIF Express
Program: Encouraging increased
utilization of RRIF credit assistance by
Class II and Class III railroads; reducing
transaction costs for Class II and Class
III railroads; and streamlining the
underwriting process for Class II and
Class III railroads. These priorities are
reflected in the eligibility criteria below.
Generally, projects most suitable for the
RRIF Express Program are rail line
modernization projects where the
borrower has a well-documented
financial history and easily identified
revenue stream(s) for loan repayment.
To differentiate among Letters of
Interest received for projects under this
notice of funding opportunity, the DOT
will consider whether the project
satisfies the following eligibility criteria
as demonstrated by the Letter of
Interest:
(i) Applicant: The applicant must be
a Class II railroad, a Class III railroad,
9 Public Law 114–113, div. L, tit. I, § 152, 129
Stat. 2242, 2856.
10 Public Law 115–141, div. L, tit. I, H.R. 1625 at
646 (as enrolled Mar. 23, 2018).
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or a joint venture with a Class II or III
railroad.
(ii) Project Size: The project must
have eligible project costs of $50 million
or less.
(iii) Project Scope: The project scope,
as described in Section B4 of the Letter
of Interest, must be limited to the
activities below:
(a) Track improvement predominantly
within existing railroad right-of-way,
including stabilizing embankments,
installing or reinstalling track, regrading, replacing rail, ties, slabs and
ballast, installing, maintaining, or
restoring drainage ditches, cleaning
ballast, constructing minor curve
realignments, improving or replacing
interlockings, improving grade crossings
and warning devices, and the
installation of ancillary equipment such
as for communication, signals and train
control;
(b) Bridge rehabilitation, including
reconstruction or replacement, the
rehabilitation of the rail elements of
docks or piers for the purposes of
intermodal transfers, and the
construction of bridges, culverts, or
grade separation projects that are
predominantly within existing right-ofway and that do not involve extensive
in-water construction activities, such as
projects replacing bridge components
including stringers, caps, piles, or
decks, the construction of roadway
overpasses to replace at-grade crossings,
construction or reconstruction of
approaches or embankments to bridges,
or construction or replacement of short
span bridges;
(c) Rolling stock acquisition including
locomotives, passenger coaches, freight
cars, trainsets, and construction,
maintenance or inspection equipment;
(d) Planning and design related to the
project activities included under items
(a)–(c) above;
(e) Refinancing of non-federal debt
(incurred at least three years prior to
March 16, 2020 and for the purpose of
one or more of the activities listed in 45
U.S.C. 822(b)(1)(A) or (C). Refinancing is
limited to up to 40% of the final RRIF
loan amount. Letters of Interest
including refinancing must demonstrate
with specificity in Section D5 how the
refinancing would improve the
creditworthiness of the applicant and
document how such improvement
would facilitate the activities referenced
in items (a)–(c) above and would
increase the applicant’s ability to repay
a RRIF loan and the overall financial
health of the applicant.
(iv) Applicant Financial History and
Projections: Attachment D–1 of the
Letter of Interest must include audited
financial statements (by a qualified third
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party, e.g., a certified public accountant)
for the two (2) most recent consecutive
years preceding the year of application
and that have no significant unresolved
findings (e.g. fiscal years 2018 and
2019). Interim unaudited financial
statements may be submitted with a
letter pledging to provide these audited
statements within 60 days of submitting
of the LOI and supporting materials.
Failure to provide the audited financial
statements within 60 days will
disqualify the LOI. Applicants choosing
this option must still provide unaudited
financial statements for the previous
five years and prospective financial
projections (pro-forma) for the term of
the loan.
(v) Collateral: If collateral will be
pledged for the RRIF loan, Section D9 of
the Letter of Interest must be supported
with an independent appraisal of the
collateral that must have been
completed within the past 12 months
preceding submission of an LOI. Section
D9 of the Letter of Interest must
demonstrate that the collateral will be
unencumbered at time of closing,
including a description of any lien
release process that would occur prior
to closing on the RRIF loan to render
currently pledged collateral
unencumbered.
(vi) Environmental Clearance: Section
B6 and Attachment B–6 of the Letter of
Interest must demonstrate that either
NEPA review is complete or the project
qualifies for a Categorical Exclusion
under NEPA, in which case Attachment
B–6 must include a completed Federal
Railroad Administration Categorical
Exclusion worksheet with its Letter of
Interest. For projects involving
replacement of existing railroad bridges,
supporting documentation must be
provided that assesses the eligibility of
the bridge for listing in the National
Register of Historic Places and
addressing compliance with Section 106
of the National Historic Preservation
Act.
(vii) Domestic Preference: Section
B4(a) of the Letter of Interest must
demonstrate that the steel, iron, and
manufactured goods used in the project
will be produced in the United States in
accordance with the Federal Railroad
Administration ‘‘RRIF Buy America’’
policy, which follows 49 U.S.C.
24405(a). Projects that require a waiver
are not eligible for the RRIF Express
Program, however, prospective
borrowers can seek a loan from the
overall RRIF program for projects that
require a waiver.
(viii) Project Readiness: Section B4(c)
of the Letter of Interest must
demonstrate the prospective borrower’s
ability to commence the contracting
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process for construction of the project
(e.g., issuance of a final RFP) by not
later than 90 days after the date on
which a RRIF credit instrument is
obligated for the project.
V. Letter of Interest Process and Review
and Next Steps
A. Submission of Letters of Interest
All prospective borrowers seeking
acceptance into the RRIF Express
Program should submit a Letter of
Interest following the instructions
described in this notice of funding
opportunity. The Letter of Interest
should be annotated with ‘‘RRIF
EXPRESS’’ immediately following the
Applicant Name in the Summary
Information section on page one of the
Letter of Interest. The Letter of Interest
must, among other things:
(i) Describe the project and its
components, location, and purpose in
Section B, and include as Attachment
B–2 the project budget organized
according to construction elements from
preliminary engineering estimates, and
including costs as appropriate for
property, vehicles, professional services,
allocated and unallocated contingency,
and finance charges;
(ii) Outline the proposed financial
plan in Section C, and include the
financial model, that addresses such
aspects as model assumptions, annual
cash flows, balance sheets, income
statements and repayment schedules for
the duration of the loan, as well as
coverage ratios and debt metrics. The
model should allow reviewers the
flexibility to evaluate scenarios in the
native spreadsheet (Microsoft Excel, or
equivalent) format and be included in
the application as Attachment C–1;
(iii) Provide information regarding
satisfaction of other statutory eligibility
requirements of the RRIF credit
program; and
(iv) Provide information regarding
satisfaction of the RRIF Express Program
eligibility criteria (as described in
Section IV above).
Prospective RRIF Express borrowers
should describe in Letter of Interest
Section D8 if the project will (1)
decrease transportation costs and
improve access, especially for rural
communities or communities in
Opportunity Zones,11 through reliable
and timely access to employment
centers and job opportunities; (2)
improve long-term efficiency, reliability
or costs in the movement of workers or
goods; (3) increase the economic
productivity of land, capital, or labor,
11 See https://www.cdfifund.gov/Pages/
Opportunity-Zones.aspx for more information on
Opportunity Zones.
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15031
including assets in Opportunity Zones;
(4) result in long-term job creation and
other economic opportunities; or (5)
help the United States compete in a
global economy by facilitating efficient
and reliable freight movement. Projects
that bridge gaps in service in rural areas,
and projects that attract private
economic development, all support
local or regional economic
competitiveness.
Letters of Interest must be submitted
using the latest form on the Build
America Bureau website: https://
www.transportation.gov/content/buildamerica-bureau. Other RRIF Express
pilot program information including any
additional terms, conditions, and
requirements can be found on the Build
America Bureau website at: https://
www.transportation.gov/buildamerica/
rrif-express. The Bureau may contact a
prospective borrower for clarification of
specific information included in the
Letter of Interest. The Bureau will
review all Letters of Interest properly
filed and received in the submission
time window provided herein.
B. Review and Evaluation
Each Letter of Interest that is properly
filed and received will be evaluated for
completeness and eligibility for the
RRIF Express Program using the criteria
in this notice. This initial step of the
review process will include (1) an
evaluation as to whether the proposed
project and applicant satisfy RRIF
statutory eligibility requirements, and
(2) an evaluation as to whether the
proposed project and applicant satisfy
the RRIF Express Program eligibility
criteria.
The Letters of Interest determined to
be eligible for the RRIF Express Program
will then be advanced to the Bureau’s
creditworthiness review process, which
is an in-depth creditworthiness review
of the project sponsor and the revenue
stream proposed to repay the RRIF
credit assistance as described in the
Programs Guide. The Secretary reserves
the right to limit the number of
applications from a single entity or
subordinates of a single parent or
holding company. Prospective RRIF
borrowers whose RRIF Express Program
Letters of Interest are determined to be
ineligible, but whose projects are
otherwise statutorily eligible for
standard RRIF credit assistance, have
the option to be considered under the
overall RRIF program.
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Federal Register / Vol. 85, No. 51 / Monday, March 16, 2020 / Notices
Issued in Washington, DC, on March 10,
2020.
Morteza Farajian,
Executive Director, The Build America
Bureau.
[FR Doc. 2020–05282 Filed 3–13–20; 8:45 am]
BILLING CODE 4910–9X–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
Agency Information Collection
Activities: Information Collection
Renewal; Submission for OMB Review;
Guidance on Sound Incentive
Compensation Policies
Office of the Comptroller of the
Currency (OCC), Treasury.
ACTION: Notice and request for
comment.
AGENCY:
The OCC, as part of its
continuing effort to reduce paperwork
and respondent burden, invites the
general public and other Federal
agencies to take this opportunity to
comment on the renewal of an
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sponsor, and a respondent is not
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Compensation Policies.’’ The OCC also
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phone numbers. Comments received,
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20503 or by email to oira_submission@
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You may review comments and other
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close of the 30-day comment period for
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methods:
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Go to www.reginfo.gov. Click on the
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Underneath the ‘‘Currently under
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Treasury’’ and then click ‘‘submit.’’ This
information collection can be located by
searching by OMB control number
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Upon finding the appropriate
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FOR FURTHER INFORMATION CONTACT:
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who are deaf or hearing impaired, TTY,
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1 On December 12, 2019, the OCC published a 60day notice for this information collection, 84 FR
68012.
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Under the
PRA (44 U.S.C. 3501 et seq.), Federal
agencies must obtain approval from
OMB for each collection of information
that they conduct or sponsor.
‘‘Collection of information’’ is defined
in 44 U.S.C. 3502(3) and 5 CFR
1320.3(c) to include agency requests or
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The requirements of this collection have
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Title: Guidance on Sound Incentive
Compensation Policies.
OMB Number: 1557–0245.
Description: Under the guidance, each
large national bank and Federal savings
association should: (i) Have policies and
procedures that identify and describe
the role(s) of the personnel and units
authorized to be involved in the design,
implementation, and monitoring of
incentive compensation arrangements,
identify the source of significant riskrelated inputs into these processes and
establish appropriate controls governing
the development and approval of these
inputs to help ensure their integrity, and
identify the individual(s) and unit(s)
whose approval is necessary for the
establishment of new incentive
compensation arrangements or
modification of incentive compensation
arrangements; (ii) have any material
exceptions or adjustments to the
incentive compensation arrangements
established for senior executives
approved and documented by its board
of directors; and (iii) have its board of
directors receive and review, on an
annual or more frequent basis, an
assessment by management of the
effectiveness of the design and
operation of the organization’s incentive
compensation system in providing risktaking incentives that are consistent
with the organization’s safety and
soundness. Application of the guidance
to banking organizations will vary with
their size and complexity, and
monitoring methods for small banks are
not directly tied to these three policies
and procedures. In addition, the
guidance states that all banks should
create and maintain sufficient
documentation to permit an audit of the
organization’s processes for developing
and administering incentive
compensation arrangements.
Type of Review: Regular.
Affected Public: Business or other forprofit.
Estimated Number of Respondents: 41
large banks; 1,105 small banks.
Total Annual Burden: 35,330 hours.
This estimate has been adjusted from
SUPPLEMENTARY INFORMATION:
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[Federal Register Volume 85, Number 51 (Monday, March 16, 2020)]
[Notices]
[Pages 15029-15032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05282]
[[Page 15029]]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary of Transportation
Notice of Funding Opportunity for Letters of Interest for the
RRIF Express Pilot Program Under the Railroad Rehabilitation &
Improvement Financing Program
AGENCY: Office of the Secretary of Transportation and U.S. Department
of Transportation (the ``DOT'').
ACTION: Notice of funding opportunity
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SUMMARY: This notice modifies the pilot Railroad Rehabilitation and
Improvement Financing (``RRIF'') Express Program (``RRIF Express'')
aimed at increasing access to the RRIF program by short line and
regional railroads. Specifically, this notice:
1. Clarifies dates and responsibilities of applicants who have
submitted RRIF Express Letters of Interest between January 13, 2020 and
the date of this notice (Section DATES)
2. Offers an alternative to the current requirement for five years
of audited financial statements, allowing for audits of the two most
recent years' financial statements. If this option is selected,
applicants must produce five years of (non-audited) financial
statements plus a self-certification from the applicant that they will
provide the most recent two years of audited financial statements
within 60 days of submitting the LOI and supporting materials (Section
IV(iv)).
3. Resets the 90-day application period to begin on the date that
this revision is posted in the Federal Register (Section DATES)
The original NOFO with modifications follows.
The RRIF Express Program will be administered by the DOT's National
Surface Transportation and Innovative Finance Bureau (the ``Build
America Bureau'' or ``Bureau''). The overall RRIF program finances
development of railroad infrastructure, and is authorized to have up to
$35 billion in outstanding principal amounts from direct loans and loan
guarantees at any one time.
The 2018 Consolidated Appropriations Act \1\ appropriated $25
million in budget authority to the DOT to cover the cost to the Federal
Government (``the Government'') of RRIF credit assistance (Credit Risk
Premium (``CRP'') Assistance or ``CRP Assistance''). Additionally, the
2016 Consolidated Appropriations Act \2\ and the 2018 Consolidated
Appropriations Act \3\ provided $1.96 million and $350,000,
respectively (of which approximately $1 million remains available), to
the DOT to fund certain expenses incurred by prospective RRIF borrowers
in preparation of their applications for RRIF credit assistance (this
approximately $1 million assistance, collectively, ``Cost
Assistance''). Using existing authorities and these new budget
authorities, the DOT has established the RRIF Express Program.
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\1\ Pub. L. 115-141, div. L, tit. I, H.R. 1625 at 646 (as
enrolled Mar. 23, 2018).
\2\ Pub. L. 114-113, div. L, tit. I, Sec. 152, 129 Stat. 2242,
2856.
\3\ Pub. L. 115-141, div. L, tit. I, H.R. 1625 at 646 (as
enrolled Mar. 23, 2018).
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Subject to the availability of funds, applicants accepted into the
RRIF Express Program may benefit from two types of financial
assistance: (a) Cost Assistance up to $100,000 per application to pay
for a portion of the Bureau's advisor expenses borne by applicants; and
(b) for those applicants that ultimately receive RRIF credit
assistance, CRP Assistance up to 5% of the final RRIF loan amount to
offset the CRP paid by the borrower. Any costs beyond $100,000 and any
CRP beyond 5% would be paid by the prospective RRIF borrower. These
funds will be made available to benefit applicants accepted into the
RRIF Express Program on a first come, first served basis until each
source of funding is expended or this notice is superseded by a new
Notice of Funding Opportunity. Letters of Interest will be accepted in
the order received and will be allocated cost assistance based on the
date of acceptance into the pilot program. CRP assistance will be
allocated in the order of financial close. For more information about
potential financial assistance for RRIF Express applicants, see
Supplementary Information: Section II. Funding of CRP and Cost
Assistance.
This notice solicits Letters of Interest from prospective RRIF
borrowers seeking acceptance into the RRIF Express Program, establishes
eligibility criteria and describes the process that prospective
borrowers must follow when submitting Letters of Interest.
DATES: Letters of Interest from prospective RRIF borrowers for the RRIF
Express Program must be submitted during the following submission
window: From March 16, 2020 to June 15, 2020.
Prospective RRIF borrowers that have previously submitted a Letter
of Interest but that also seek acceptance into the RRIF Express Program
should resubmit a Letter of Interest during the submission window above
and follow the instructions below. Applicants who previously submitted
Letters of Interest under the RRIF Express Notice of Funding
Opportunity published on December 13, 2019 and whose Letters of
Interest have not been returned as ineligible, do not have to re-apply.
ADDRESSES: Applicants to the RRIF Express Program must use the latest
version of the Letter of Interest form available on the Build America
Bureau website: https://www.transportation.gov/content/build-america-bureau (including applicants who have previously submitted Letters of
Interest and who are now seeking participation in the RRIF Express
Program). Letters of Interest must be submitted to the Build America
Bureau via email at: [email protected] using the following subject
line: ``Letter of Interest for RRIF Express Program.'' Submitters
should receive a confirmation email, but are advised to request a
return receipt to confirm transmission. Only Letters of Interest
received via email at the above email address with the subject line
listed above shall be deemed properly filed.
FOR FURTHER INFORMATION CONTACT: For further information regarding this
notice please contact William Resch via email at [email protected]
or via telephone at 202-366-2300. A TDD is available at 202-366-3993.
SUPPLEMENTARY INFORMATION: RRIF Express pilot program information,
including any additional resources, terms, conditions and requirements
when they become available, can be found on the Build America Bureau
website at: https://www.transportation.gov/buildamerica/rrif-express.
For further information about the overall RRIF program in general,
including details about the types of credit assistance available,
eligibility requirements and the creditworthiness review process,
please refer to the Build America Bureau Credit Programs Guide
(``Programs Guide),'' available on the Build America Bureau website:
https://www.transportation.gov/buildamerica/programs-services/tifia/program-guide.
Table of Contents
I. Background
II. Funding of CRP Assistance and Cost Assistance
III. Eligibility Requirements for RRIF Credit Assistance
IV. Eligibility Criteria for the RRIF Express Program
V. Letter of Interest Process and Review and Next Steps
[[Page 15030]]
I. Background
The Transportation Equity Act for the 21st Century,\4\ established
the RRIF program, authorizing the DOT to provide credit assistance in
the form of direct loans and loan guarantees to public and private
applicants for eligible railroad projects. The RRIF program is a DOT
program and final approval of credit assistance is reserved for the
Secretary of the DOT. The 2005 Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for Users; \5\ the Rail Safety
Improvement Act of 2008; \6\ and the 2015 Fixing America's Surface
Transportation Act \7\ (the ``FAST Act'') each made a number of changes
to the RRIF program. In addition, the FAST Act authorized the creation
of the Bureau to consolidate administration of certain DOT credit and
grant programs, including the RRIF program.
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\4\ Public Law 105-178, Sec. 7203, 112 Stat. 107, 471.
\5\ Public Law 109-59, Sec. 9003, 119 Stat. 1144, 1921.
\6\ Public Law 110-432, Sec. 701(e), 122 Stat. 4848, 4906.
\7\ Public Law 114-94, Subtitle F, 129 Stat. 1312, 1693.
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II. Funding of CRP Assistance and Cost Assistance
Through the RRIF program, the DOT is authorized to have, at any one
time, up to $35 billion in unpaid principal amounts of obligations
under direct loans and loan guarantees to finance development of
railroad infrastructure.
CRP Assistance
Prior to the 2018 Consolidated Appropriations Act, the RRIF program
did not have an appropriation of budget authority to pay the cost to
the Government of providing RRIF credit assistance. As a result, the
RRIF borrower or a third party was required to bear this cost through
the payment of a CRP. The 2018 Consolidated Appropriations Act \8\
provided $25 million to the DOT to cover the cost to the Government of
RRIF credit assistance. The DOT will use this funding to pay or offset
the CRP (up to 5% of the RRIF loan amount) payable by participants in
the RRIF Express Program, until this funding is expended or this notice
is superseded by a new Notice of Funding Opportunity.
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\8\ Public Law 115-141, div. L, tit. I, H.R. 1625 at 646 (as
enrolled Mar. 23, 2018).
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Cost Assistance
As described in the Programs Guide, RRIF borrowers are required to
pay (or reimburse the DOT) for costs incurred by the Bureau in
connection with the review of Letters of Interest and applications for
RRIF credit assistance. The 2016 Consolidated Appropriations Act \9\
and the 2018 Consolidated Appropriations Act \10\ collectively provided
$2.31 million to the DOT to be used to fund expenses incurred by
prospective RRIF borrowers in preparation to apply for RRIF credit
assistance. A portion of these funds have already been allocated for
prior RRIF projects. The DOT is reserving approximately $1 million of
remaining funds from these appropriations to offset the cost of DOT
advisors (up to $100,000 per application) that would be payable by
participants in the RRIF Express Program, until this funding is
expended or this notice is superseded by a new Notice of Funding
Opportunity.
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\9\ Public Law 114-113, div. L, tit. I, Sec. 152, 129 Stat.
2242, 2856.
\10\ Public Law 115-141, div. L, tit. I, H.R. 1625 at 646 (as
enrolled Mar. 23, 2018).
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III. Eligibility Requirements for RRIF Credit Assistance
The RRIF statute and implementing rules set forth eligibility
requirements for applicants and projects. These requirements as well as
other applicable federal requirements are described in detail in the
Programs Guide and apply to all applicants and projects, including
those seeking acceptance into the RRIF Express Program. In addition,
for prospective borrowers seeking RRIF Express Program benefits, the
requirements set forth in section IV (Eligibility Criteria for the RRIF
Express Program) of this notice also apply.
IV. Eligibility Criteria for the RRIF Express Program
The DOT has identified the following strategic objectives for the
RRIF Express Program: Encouraging increased utilization of RRIF credit
assistance by Class II and Class III railroads; reducing transaction
costs for Class II and Class III railroads; and streamlining the
underwriting process for Class II and Class III railroads. These
priorities are reflected in the eligibility criteria below. Generally,
projects most suitable for the RRIF Express Program are rail line
modernization projects where the borrower has a well-documented
financial history and easily identified revenue stream(s) for loan
repayment.
To differentiate among Letters of Interest received for projects
under this notice of funding opportunity, the DOT will consider whether
the project satisfies the following eligibility criteria as
demonstrated by the Letter of Interest:
(i) Applicant: The applicant must be a Class II railroad, a Class
III railroad, or a joint venture with a Class II or III railroad.
(ii) Project Size: The project must have eligible project costs of
$50 million or less.
(iii) Project Scope: The project scope, as described in Section B4
of the Letter of Interest, must be limited to the activities below:
(a) Track improvement predominantly within existing railroad right-
of-way, including stabilizing embankments, installing or reinstalling
track, re-grading, replacing rail, ties, slabs and ballast, installing,
maintaining, or restoring drainage ditches, cleaning ballast,
constructing minor curve realignments, improving or replacing
interlockings, improving grade crossings and warning devices, and the
installation of ancillary equipment such as for communication, signals
and train control;
(b) Bridge rehabilitation, including reconstruction or replacement,
the rehabilitation of the rail elements of docks or piers for the
purposes of intermodal transfers, and the construction of bridges,
culverts, or grade separation projects that are predominantly within
existing right-of-way and that do not involve extensive in-water
construction activities, such as projects replacing bridge components
including stringers, caps, piles, or decks, the construction of roadway
overpasses to replace at-grade crossings, construction or
reconstruction of approaches or embankments to bridges, or construction
or replacement of short span bridges;
(c) Rolling stock acquisition including locomotives, passenger
coaches, freight cars, trainsets, and construction, maintenance or
inspection equipment;
(d) Planning and design related to the project activities included
under items (a)-(c) above;
(e) Refinancing of non-federal debt (incurred at least three years
prior to March 16, 2020 and for the purpose of one or more of the
activities listed in 45 U.S.C. 822(b)(1)(A) or (C). Refinancing is
limited to up to 40% of the final RRIF loan amount. Letters of Interest
including refinancing must demonstrate with specificity in Section D5
how the refinancing would improve the creditworthiness of the applicant
and document how such improvement would facilitate the activities
referenced in items (a)-(c) above and would increase the applicant's
ability to repay a RRIF loan and the overall financial health of the
applicant.
(iv) Applicant Financial History and Projections: Attachment D-1 of
the Letter of Interest must include audited financial statements (by a
qualified third
[[Page 15031]]
party, e.g., a certified public accountant) for the two (2) most recent
consecutive years preceding the year of application and that have no
significant unresolved findings (e.g. fiscal years 2018 and 2019).
Interim unaudited financial statements may be submitted with a letter
pledging to provide these audited statements within 60 days of
submitting of the LOI and supporting materials. Failure to provide the
audited financial statements within 60 days will disqualify the LOI.
Applicants choosing this option must still provide unaudited financial
statements for the previous five years and prospective financial
projections (pro-forma) for the term of the loan.
(v) Collateral: If collateral will be pledged for the RRIF loan,
Section D9 of the Letter of Interest must be supported with an
independent appraisal of the collateral that must have been completed
within the past 12 months preceding submission of an LOI. Section D9 of
the Letter of Interest must demonstrate that the collateral will be
unencumbered at time of closing, including a description of any lien
release process that would occur prior to closing on the RRIF loan to
render currently pledged collateral unencumbered.
(vi) Environmental Clearance: Section B6 and Attachment B-6 of the
Letter of Interest must demonstrate that either NEPA review is complete
or the project qualifies for a Categorical Exclusion under NEPA, in
which case Attachment B-6 must include a completed Federal Railroad
Administration Categorical Exclusion worksheet with its Letter of
Interest. For projects involving replacement of existing railroad
bridges, supporting documentation must be provided that assesses the
eligibility of the bridge for listing in the National Register of
Historic Places and addressing compliance with Section 106 of the
National Historic Preservation Act.
(vii) Domestic Preference: Section B4(a) of the Letter of Interest
must demonstrate that the steel, iron, and manufactured goods used in
the project will be produced in the United States in accordance with
the Federal Railroad Administration ``RRIF Buy America'' policy, which
follows 49 U.S.C. 24405(a). Projects that require a waiver are not
eligible for the RRIF Express Program, however, prospective borrowers
can seek a loan from the overall RRIF program for projects that require
a waiver.
(viii) Project Readiness: Section B4(c) of the Letter of Interest
must demonstrate the prospective borrower's ability to commence the
contracting process for construction of the project (e.g., issuance of
a final RFP) by not later than 90 days after the date on which a RRIF
credit instrument is obligated for the project.
V. Letter of Interest Process and Review and Next Steps
A. Submission of Letters of Interest
All prospective borrowers seeking acceptance into the RRIF Express
Program should submit a Letter of Interest following the instructions
described in this notice of funding opportunity. The Letter of Interest
should be annotated with ``RRIF EXPRESS'' immediately following the
Applicant Name in the Summary Information section on page one of the
Letter of Interest. The Letter of Interest must, among other things:
(i) Describe the project and its components, location, and purpose
in Section B, and include as Attachment B-2 the project budget
organized according to construction elements from preliminary
engineering estimates, and including costs as appropriate for property,
vehicles, professional services, allocated and unallocated contingency,
and finance charges;
(ii) Outline the proposed financial plan in Section C, and include
the financial model, that addresses such aspects as model assumptions,
annual cash flows, balance sheets, income statements and repayment
schedules for the duration of the loan, as well as coverage ratios and
debt metrics. The model should allow reviewers the flexibility to
evaluate scenarios in the native spreadsheet (Microsoft Excel, or
equivalent) format and be included in the application as Attachment C-
1;
(iii) Provide information regarding satisfaction of other statutory
eligibility requirements of the RRIF credit program; and
(iv) Provide information regarding satisfaction of the RRIF Express
Program eligibility criteria (as described in Section IV above).
Prospective RRIF Express borrowers should describe in Letter of
Interest Section D8 if the project will (1) decrease transportation
costs and improve access, especially for rural communities or
communities in Opportunity Zones,\11\ through reliable and timely
access to employment centers and job opportunities; (2) improve long-
term efficiency, reliability or costs in the movement of workers or
goods; (3) increase the economic productivity of land, capital, or
labor, including assets in Opportunity Zones; (4) result in long-term
job creation and other economic opportunities; or (5) help the United
States compete in a global economy by facilitating efficient and
reliable freight movement. Projects that bridge gaps in service in
rural areas, and projects that attract private economic development,
all support local or regional economic competitiveness.
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\11\ See https://www.cdfifund.gov/Pages/Opportunity-Zones.aspx
for more information on Opportunity Zones.
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Letters of Interest must be submitted using the latest form on the
Build America Bureau website: https://www.transportation.gov/content/build-america-bureau. Other RRIF Express pilot program information
including any additional terms, conditions, and requirements can be
found on the Build America Bureau website at: https://www.transportation.gov/buildamerica/rrif-express. The Bureau may
contact a prospective borrower for clarification of specific
information included in the Letter of Interest. The Bureau will review
all Letters of Interest properly filed and received in the submission
time window provided herein.
B. Review and Evaluation
Each Letter of Interest that is properly filed and received will be
evaluated for completeness and eligibility for the RRIF Express Program
using the criteria in this notice. This initial step of the review
process will include (1) an evaluation as to whether the proposed
project and applicant satisfy RRIF statutory eligibility requirements,
and (2) an evaluation as to whether the proposed project and applicant
satisfy the RRIF Express Program eligibility criteria.
The Letters of Interest determined to be eligible for the RRIF
Express Program will then be advanced to the Bureau's creditworthiness
review process, which is an in-depth creditworthiness review of the
project sponsor and the revenue stream proposed to repay the RRIF
credit assistance as described in the Programs Guide. The Secretary
reserves the right to limit the number of applications from a single
entity or subordinates of a single parent or holding company.
Prospective RRIF borrowers whose RRIF Express Program Letters of
Interest are determined to be ineligible, but whose projects are
otherwise statutorily eligible for standard RRIF credit assistance,
have the option to be considered under the overall RRIF program.
[[Page 15032]]
Issued in Washington, DC, on March 10, 2020.
Morteza Farajian,
Executive Director, The Build America Bureau.
[FR Doc. 2020-05282 Filed 3-13-20; 8:45 am]
BILLING CODE 4910-9X-P
