White House Briefing on Bipartisan Infrastructure Law Guidebook: Railroads

February 28, 2022

Stephanie Sykes, Director of Intergovernmental Affairs, Infrastructure Implementation
A few weeks ago, the White House released a guidebook for state and local governments as a resource for stakeholders and is intended as a roadmap, and it contains the most comprehensive information the White House has to date on the more than 375 programs in the bipartisan infrastructure law. President Biden and the entire team here have made it a priority to make sure that we’re giving you all the resources that you need to make sure that this money hits the ground and reaches all corners of this country. Today’s conversation will focus on rail programs and the implementation of the Bipartisan Infrastructure bill.

Florence Chen, Associate Director, Bipartisan Infrastructure Law Implementation, DOT
In the Bipartisan Infrastructure Law, DOT was funded with more than 660 billion dollars over five years across all modes of transportation. This law represents the largest investment in rails to date. This law directly supports the administration and departments goals of safety, equity and inclusion, climate change resilience, and transformation of our nation’s transportation infrastructure.

Paul Nissenbaum, Associate Administrator for Railroad Policy and Development, FRA
Infrastructure funding is the largest level of funding the Federal Railroad Administration has ever received. The Federal Railroad Administration has five key goals with the Bipartisan Infrastructure Law funding: renew Amtrak’s fleet and facilities; build the foundation for a long-term rail program; grow a safer, cleaner, more equitable rail system; modernize the Northeast Corridor; and bring world-class passenger rail service to other regions across the country. The investment in the Northeast Corridor is the largest in history. Today we’ll discuss the new grant programs within the Bipartisan Infrastructure law. The first program is the federal-state partnership for intercity passenger rail. We are currently in the middle of a notice of funding opportunity for the FY21 program under the predecessor of the federal-state partnership funding program. The second program will be grants to Amtrak. Amtrak will receive $22 billion in direct grants over five years. That includes $16 billion for its national network for services outside of the Northeast corridor and then $6 billion for services in the Northeast corridor. The next discretionary grant program is the consolidated rail infrastructure and safety improvement transfer receipt program. This is funded at $5 billion over a five-year period, plus additional funding provided annually through the appropriations process. A new grant program will address railroad crossing elimination and improvements. This is funded with $3 billion over five years through the advanced appropriation. The goal will be to make a dent in the 200,000 railroad crossings. The Restoration and Enhancement program will also be part of these grants. The total of these programs is $66 billion in advanced appropriations, and then another $36 billion in authorized annual appropriations. The Corridor Identification and Development Program and the Interstate Rail Compacts Program are other programs authorized by the Bipartisan Infrastructure Law.

Morteza Farajian, Executive Director, Build America Bureau
The discussion focused on the new opportunities for stakeholders to leverage dollars more and be able to get finance projects and build faster. Other options include combining projects, creating a portfolio of projects, combining different phases and getting things built faster. The Build America Bureau has two credit programs, TIFIA and RRIF. RRIF programs provide low-interest rate loans set essentially at Treasury rates, a loan today would be about 2% for a loan that could mature in about 35-40 years. RRIF can be used in conjunction with grants, RRIF can finance up to 100% of railroad projects. There is a program through RRIF that finances mixed-use developments. This funding can go to affordable housing, offices, or commercial developments. RRIF can fund 75% of project costs. RRIF receives $50 million a year to pay for risk costs out of budget. RRIF has a cap of $35 billion and the budget for TPS is $70 billion dollars, equaling about $100 billion. RRIF has about $30 billion available for new loans currently. RRIF express is a new program that pays for credit risk premium on up to 10% of the loan and covers some of the advising fees. There are two other grant programs under the bill. One program relates to asset concessions and innovative financing technical assistance with $40 million of funding a year. The other program is related to projects in tribal or urban areas, with $2 billion a year of funding.

Q&A:
Sykes asked about railroad crossings and who is eligible for funding. Nissenbaum said it is a high priority to address railroad crossings. There are two programs that are relevant. The first is the Railroad Crossing Elimination Program, which provides $600 million of funding a year. It is open to communities, cities, states, and federally recognized Indian tribes. The other program is the Consolidated Real Infrastructure and safety Improvement Program which has a billion dollars of advanced appropriation funding for the next five years. Notice of funding for those programs will be put out in the Spring of this year.

Sykes asked how the department will purchase equipment that will pollute less. Nissenbaum said that he would point towards to the Consolidated Rail Safety Improvement Program. One of the priorities will be to look for alternative power sources and locomotives that pollute less. The FRA will encourage railroads to apply for grants and will partner with railroads. Class two and three railroads are eligible to apply themselves. Class one railroads must partner with the public sector to apply for grants. Farajian said that there can be loans to projects that are receiving a source of revenue over the next couple of years. This allows for borrowers to purchase an entire set of equipment and pay the loan over time. The life of most equipment being purchased is not very long at 20-30 years. With the new legislation, repayment duration can be extended to up to 75 years after completion.

Sykes asked what plans the FRA has for moving freight. Nissenbaum said that the Consolidated Rail Safety Improvement Program will focus on safety improvements, energy efficiency, and infrastructure. Short line railroads are a particular focus as they connect communities in rural areas. Upgrading track and infrastructure such as bridges will be part of this program.

Sykes asked how to ensure that disparities are accounted for. Nissenbaum said the DOT is currently undertaking a disparity study to look at our contracting within the railroad industry and identified any disparities in the way those contracts are written. As part of that, we will look to potentially advance the Disadvantaged Business Enterprise Program. FRA was one of the few modes not to have a DBE Program. so we’re looking forward to the results of that disparity study. We also have in the department, the Office of Small Disadvantaged Business Utilization that’s working to increase utilization of the programs under the VIL with the goal of increasing Small and Disadvantaged Business Utilization which is really one of the Secretary, Secretary Buttigieg’s top priorities for the department. Bose said that the disparity study is a big focus for FRA. It was challenging to reach people during the pandemic with our surveys. We are in the middle of completing the study. And then we will go to next steps. For FRA to be able to look at lived experiences of people and companies in a quantifiable way has been a big endeavor, but we are moving forward with the study.

Sykes asked if there is additional funding for Amtrak. Bose said that the bipartisan infrastructure law, as you’ve heard, provides $66 billion for rail programs across the country. Amtrak will be spending $20 billion of that for specific activities that will allow them to bring all Amtrak stations to ADA access compliance. Over 1,000 obsolete railcars and the Northeast Corridor will be brought to a state of repair. FRA is starting the long distance study of Amtrak routes. We’re also in the midst of initiating the corridor study. The long distance studies study will evaluate the restoration of long-distance routes and the potential exploration of new long-distance routes. Amtrak owns large chunks of the Northeast Corridor, they’re publicly owned.

Sykes asked about increases in train size. Bose said that this is a topic that is often discusses in communities around the country. Reporting through the blocked crossing portal allows for data collection and shows how communities feel that they are being harmed through longer trains. The FRA understands there are concerns regarding block launch. The Bipartisan Infrastructure law requires companies to study train link. Longer trains, require minimum crew size and a greater level of attention. The FRA is looking for ways to address these issues.