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Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects (2015)

Chapter: Appendix B - State Rail Funding Programs

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Page 125
Suggested Citation:"Appendix B - State Rail Funding Programs." National Academies of Sciences, Engineering, and Medicine. 2015. Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects. Washington, DC: The National Academies Press. doi: 10.17226/22149.
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Suggested Citation:"Appendix B - State Rail Funding Programs." National Academies of Sciences, Engineering, and Medicine. 2015. Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects. Washington, DC: The National Academies Press. doi: 10.17226/22149.
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Page 126
Page 127
Suggested Citation:"Appendix B - State Rail Funding Programs." National Academies of Sciences, Engineering, and Medicine. 2015. Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects. Washington, DC: The National Academies Press. doi: 10.17226/22149.
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Page 127
Page 128
Suggested Citation:"Appendix B - State Rail Funding Programs." National Academies of Sciences, Engineering, and Medicine. 2015. Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects. Washington, DC: The National Academies Press. doi: 10.17226/22149.
×
Page 128
Page 129
Suggested Citation:"Appendix B - State Rail Funding Programs." National Academies of Sciences, Engineering, and Medicine. 2015. Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects. Washington, DC: The National Academies Press. doi: 10.17226/22149.
×
Page 129
Page 130
Suggested Citation:"Appendix B - State Rail Funding Programs." National Academies of Sciences, Engineering, and Medicine. 2015. Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects. Washington, DC: The National Academies Press. doi: 10.17226/22149.
×
Page 130
Page 131
Suggested Citation:"Appendix B - State Rail Funding Programs." National Academies of Sciences, Engineering, and Medicine. 2015. Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects. Washington, DC: The National Academies Press. doi: 10.17226/22149.
×
Page 131
Page 132
Suggested Citation:"Appendix B - State Rail Funding Programs." National Academies of Sciences, Engineering, and Medicine. 2015. Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects. Washington, DC: The National Academies Press. doi: 10.17226/22149.
×
Page 132
Page 133
Suggested Citation:"Appendix B - State Rail Funding Programs." National Academies of Sciences, Engineering, and Medicine. 2015. Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects. Washington, DC: The National Academies Press. doi: 10.17226/22149.
×
Page 133
Page 134
Suggested Citation:"Appendix B - State Rail Funding Programs." National Academies of Sciences, Engineering, and Medicine. 2015. Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects. Washington, DC: The National Academies Press. doi: 10.17226/22149.
×
Page 134

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125 The following state-specific funding programs were listed in a selection of state rail plans reviewed as part of the research. A P P E N D I X B State Rail Funding Programs

State Rail Funding Program Descrip on Arizona Sales tax for transporta on projects In Arizona, Maricopa County authorized a 20-year con nua on of the half-cent sales tax for transporta on projects in the county ini ally approved in 1985. The es mated revenues from the tax will total approximately $14.3 billion (year of expenditure dollars) for the 20-year period covering calendar years 2006 through 2025 and represent the major funding source for implementa on of the Maricopa Associa on of Governments Regional Transporta on Plan. Out of the $14.3 billion, 33.3% will be allocated to the public transporta on fund, for capital construc on, maintenance, and opera on of public transporta on classifica ons, and capital costs and u lity reloca on costs associated with a light rail public transit system. The other 66.6% is allocated to the regional road fund. Connec cut Gross Earnings Tax Exemp on Program Given that most of the tracks operated by freight railroads in Connec cut are owned by the state, Connec cut exempts railroads from the state’s Gross Earnings Tax if they are to use the money they save in capital improvements, ci ng them as a "public purpose." Exempons amount to several thousand dollars annually. Fixing Freight First Program—Rail Preservaon and Improvement Program This program provides capital grants to freight rail companies. The Conneccut General Assembly has authorized $10 million in bonds to fund the program, with an emphasis on projects that improve, modernize, or repair privately owned lines, increase freight rail traffic, improve safety at grade crossings, or connect to major freight generators. In January 2013, 9 million dollars were added by the Bond Commission to $1 million already in place for an economic development program designed to rebuild Conneccut’s freight rail system, called “Fixing Freight First.” Under this program, rail companies can apply for the $10 million to repair and modernize rail, rail beds, crossings, culverts, and related facilies. Delaware Shellpot Bridge Rehabilitaon Project As part of the Shellpot agreement, the Delaware DOT collects tolls from the Norfolk Southern Corporaon (NS) railroad company, calculated by scanning the electronic tags on rail cars. Automac Equipment Idenficaon scanners are used to count the number of cars and locomoves passing over the Shellpot Bridge. Payments to the DOT by NS are made annually for a 20-year period based on the number of freight cars that use the bridge in a specific year. Georgia Goods Movement Investment Fund This is a proposed fund that could be created in the state treasury and be capitalized by the following revenue sources to finance freight rail projects: (1) a diesel fuel tax paid by the railroads, (2) railroad property lease income, and (3) a penny gas tax.

State Rail Funding Program Descrip on Illinois Rail Freight Program (RFP) The RFP’s primary goal is to provide capital assistance to communi es, railroads, and shippers to preserve and improve rail freight service in Illinois and to facilitate investments in rail service and infrastructure by serving as a broker between interested par es and channeling government funds to projects that achieve statewide economic development. Capital funding is provided in the form of low-interest loans and/or grants. For fiscal years 2011–2015, the program has allocated $18.5 million from federal budget and state revenues for rail improvement projects. CREATE The Chicago Region Environmental and Transporta on Efficiency Program (CREATE) is a $3.2 billion program brought about to facilitate cri cally needed capital investment for rail infrastructural improvements, focused on increasing the efficiency of the region's rail network, and subsequently enhancing the quality of life of Chicago-area residents. This PPP will be jointly funded by federal and state funds, as well as by par cipa ng railroad companies. Indiana Industrial Rail Service Fund (IRSF) Funded through 0.029% of the state sales tax and the repayment of past loans, the IRSF provides grants and low-interest loans to Class II and III railroads, as well as short lines operated by local port authori es to help upgrade freight railroad infrastructure and accommodate new business development. Funding cannot exceed 75% of the total cost of the project, but the railroad’s contribu on may include funds from other state or federal en  es. In FY 2011, IRSF grants totaling $1,498,407 were awarded to eight railroads in the state. IRSF 2014 Guidelines were issued in October 2013. Railroad Grade Crossing Fund (RRGCF) RRGCF, administered by the state DOT, provides resources for railroad crossing safety improvements to local jurisdic ons, coun es, and Class II and III railroads. The RRGCF is divided into two programs: the Crossing Closure Program and the Other Safety Improvements Program. The Crossing Closure Program is designed to compensate communi es that close a crossing, if deemed the most effec ve safety measure by the FRA. Iowa Railroad Revolving Loan and Grant Program The program offers loans, grants, or combinaons thereof, to spur economic development and job growth and aid railroads in preserving and improving the rail transportaon system. The program is funded through appropriaons from the state legislature and repayments from loans for rail development projects funded in the past. The grant funding is limited to 50% of the total funds available. In September 2012, the Iowa Transportaon Commission approved $2.8 million for loans and $ 1.2 million in grants. For state FY 2015, the program has an expected minimum of $4,000,000 available for eligible projects. Grade Crossing Surface Repair Fund The grade crossing surface repair programs parcipate in the cost to rebuild highway-railroad grade crossings. The fund covers 60% of project costs, with the remainder coming from the railroad (20% match) and public road jurisdicon (20% match). Funding stands at approximately $900,000 per year. Highway Grade Crossing Safety Program Intended to improve the safety of public railway-highway grade crossings, the program has an annual funding of $4 million to $5 million and pays for up to 75% of the maintenance costs of acve warning systems installed. The program requires a 10% non-federal match by the railroad/public road jurisdicon. Kansas State Rail Service Improvement Fund (SRSIF) Iniated in 1999, the SRSIF provided $3 million annually for 10 years in low-interest loans and grants to railroads and port authories operang in the state of Kansas for the purpose of preserving rail service and improving level of service. The loan program is structured as a 70% state loan and a 30% railroad/port authority match funding arrangement. The Kansas legislature approved an increase in SRSIF funding to $5 million annually beginning July 1, 2013.

State Rail Funding Program Descrip on Highway/Railroad Crossing Program The state-funded Highway/Railroad Crossing Program is a $300,000 per year program that addresses highway/railroad safety improvements that do not meet federal aid program eligibility requirements. Local jurisdic ons must submit poten al projects for funding through this program. Projects selected for funding are eligible for 80% state funding with a required 20% rail company funding match. Community Development Block Grant Program The Community Development Block Grant Program, run through the Department of Commerce, provides economic development funds to eligible small city and county governments. This program provides 50% grant/50% loan funding for infrastructure improvements, including rail spurs, designed to assist companies in crea ng jobs through the construc on or renova on of facili es. Companies may apply for up to $35,000 per job created with a maximum limit of $750,000. The loan por on of funding is required to be paid back over a 10-year period with 2% interest. Maine Industrial Rail Access Program (IRAP) The program offers 50/50 matching funds to private businesses looking to upgrade sidings, switches, and other rail infrastructure. More than $6.2 million has been invested in IRAP since 1997 (approximately $500,000 annually). The 2014 program is funded with $2 million in state funds. Criˆcal Rail Corridors Program The program provides 50% matching funds for priority investments on criˆcal rail corridors. Projects that score the strongest in terms of providing public benefit will be undertaken during this program. Funding allocated for this program in the state work plan for 2010–2011 stood at $16 million. Freight Rail Interchange Program (FRIP) FRIP provides 50% matching funds on capital investment projects for improvements to railroad interchanges/juncˆons. The result of such projects can improve the flow of goods in and out of the state as well as between the rail providers. Rail Access Iniave Links Program (RAIL) RAIL provides 100 lb. sck rail to businesses adjacent to rail lines on a 50% matching funds basis. This program can also be used to induce new rail service for groups of rail-dependent industries. Local Rail Freight Assistance Program (LRFA) LRFA is a revolving, interest-free loan program for those property owners adjacent to railroads and wishing to improve access to rail facilies. Rail Corridor Protecon Program (RCPP) RCPP allows the State of Maine to partner with railroads to lease or buy rail corridors in order to improve threatened rail corridors. Preserving the rail corridors that serve as a vital link to Maine businesses is crical to the state‘s economy. This program will protect against deferred maintenance or abandonment by the rail owner on rail corridors crical to the state‘s economy. Capital Rail Maintenance of State-Owned Track Rail maintenance funding amounts to $150,000 annually for Maine’s 320 miles of state-owned track, which is highly insufficient considering future needs given the substanal backlog of work needed on state-owned track. The state‘s Two-Year Capital Work Plan proposed a $2-million funding level for this program. In the summer of 2009, the Maine State legislature reduced the funding level on the November FY 2010–2011 bond proposal to $1 million. The bond issue was approved in November 2009.

State Rail Funding Program Descrip on Massachuses Industrial Rail Access Program (IRAP) IRAP was proposed in the 2010 state rail plan to allow financial assistance to locali es, businesses, and/or industries seeking to provide freight rail service between the site of an exis ng or proposed commercial facility and common carrier railroad tracks. IRAP would give private rail companies access to public funds, thus boos ng economic development. The proposed IRAP requirements include a compe ve grant process with at least 50% matching funds and projects should demonstrate quan ta ve and qualita ve economic benefits (e.g., job crea on and reten on) and increased state/local tax revenue from the benefi ng businesses with mi ga on for any impacts on passenger rail services. In April 2013, the state announced that nine IRAP recipients would receive a total of $2.85 million. Michigan Michigan Rail Loan Assistance Program (MiRLAP) MiRLAP is a revolving loan program designed to contribute to the stability and growth of the state’s business and industry by helping to preserve and improve Michigan’s rail freight infrastructure. The program awards interest-free loans on a compe ve basis to fund rail infrastructure preserva on projects (e.g., track rehabilita on and bridge/culvert repair projects). Up to 90% of a project’s eligible costs can be covered, with a repayment period of up to 10 years. Since 1997, $7.2million have been appropriated to the program. Due to state budgetary constraints, the MiRLAP fund balance was diverted to the state’s General Fund in 2010. The program began accep€ng applica€ons again in June 2012. Freight Economic Development Program (FEDP) FEDP provides low-interest loans to provide new or expanding businesses access to the rail system. Up to 50% of rail infrastructure costs can be loaned at a minimum interest rate of 2% below the prime rate, with a 5-year repayment period. If shipping commitments are met for each of the 5 years, the loan payments are forgiven and funding converts to a grant. State-Owned Rail Property Capital Development The Capital Development Program provides ongoing property management and infrastructure rehabilita€on so as to maintain the safety and func€onality of the 530 miles of ac€ve state-owned lines and to ensure service provision to the shippers. Local Grade Crossing Program (LGCP) LGCP helps local governments and railroad companies develop and implement projects that enhance safety at public highway-railroad crossings. LGCP provides cash incen€ves to road authori€es for road closures and covers up to 100% of the project costs associated with reloca€ng/realigning ac€ve track to eliminate public grade crossings. Since 2000, $8.5 million have been spent on safety measures as part of this program. Minnesota Tax Credit Programs Two programs offer tax credits: - A state income tax credit for 25% of the annual amount spent on capacity expansion—track, structures, yards, signal and communica€on systems, terminals, and intermodal facili€es. - A state Maintenance Tax Credit for short-line rail improvements to track and structures to accommodate standard 286,000 lb. train cars could be calibrated to offset 10% of the total costs of the upgrades. Grade crossing improvements Minnesota DOT receives roughly $5 million annually in federal grade crossing protec€on funds, matched by $600,000 in state funding.

State Rail Funding Program Descrip on Missouri State Transporta on Assistance Revolving Fund (STAR) STAR, administered by the Missouri Highways and Transporta on Commission, provides loans on favorable terms for the planning, acquisi on, development, and construc on of passenger and freight rail facili es and the purchase of rolling stock for transit purposes, although it is not limited to rail transit and includes avia on, water, and mass transit. Loans have ranged from $84,000 to $1 million with interest rates ranging from 2.57% to 3.61%. The loan term is typically no more than 10 years. STAR has disbursed approximately $3 million in loans over the past 5 years. The Missouri Transporta on Finance Corpora on (MTFC) MTFC provides loans to all transporta on modes (including highway projects) with the same terms as STAR. However the MTFC is a larger program and can fund larger projects than STAR. Rail projects are eligible under the MTFC Loan Program. Montana Montana Rail Freight Loan Program (MRFL) MRFL is a revolving loan fund administered by the Montana DOT to facilitate construcon/reconstrucon and rehabilitaon of railroads and related facilies in the state. The fund issues grants, interest, and no-interest loans. Projects have to demonstrate cost-effecve service to community and businesses. Rehabilitaon and improvement projects require a 30% match, while construcon projects require a 50% match. New Hampshire Special Railroad Fund The fund constutes income from state-owned rail lines, as well as 25% of the revenue received from the state railroad tax, deposited in a dedicated fund and used for maintenance and repair of state-owned rail lines. Rail Line Revolving Loan Fund Established in 1993, the Rail Line Loan Fund was funded by state bonds and addional money, to a total amount of $4 million. Loans were issued for up to 20 years. Eligible projects included short-line railroad capital improvement projects. State Capital Budget The New Hampshire's bi-annual capital budget provides funding for major long-term capital investments. As owner of railroad property, the state includes repairs to the state-owned lines in the capital budget. Rail projects funded include bridge repairs, rail replacement, and other improvements on various rail lines. New York Rail Service Preserva­on Program The program appropriates $100 million over 5 years to passenger and freight rail capital projects, beginning in 2005-6. Funding includes a state subsidy paid to Amtrak by the NYS DOT. No local match is required. Rebuild and Renew New York Transporta­on Bond Act 2005 The Act allocates $27 million annually for rail and port projects. A 10% local match is required. Industrial Access Program The program provides state funding for necessary road and bridge improvements that enhance traffic flow and boost economic development, resul­ng in crea­on/reten­on of jobs. The program has a 60% grant, 40% loan configura­on, with repayment periods based on project cost. No new funding has been appropriated since SFY 06-07. Mul­modal Program The program provides state funding for capital improvements, not limited to railroads. Projects are nominated by the governor or the legislature. The DOT has no role in project selec­on. No local matching is required.

State Rail Funding Program Descrip on Passenger & Freight Rail Assistance Program The NY SFY 2014–15 budget provides an addi onal $16 million in new accelerated capital funding to maintain and modernize freight rail infrastructure across the State. Although there is no minimum or maximum amount of individual project award, the individual award cannot exceed the funds available. Eligible project types include any rail capital improvement with a service life of 10 years or greater. NYSDOT cannot approve, undertake, support or finance a public infrastructure project, including grants, awards, loans, or other assistance programs, unless, to the extent prac cable, it is consistent with the relevant Smart Growth Public Infrastructure Criteria. The Program is a reimbursement grant program; project grantees are required to pay all bills before reques ng reimbursement. There is no minimum match requirement; the Program may fund up to 100% of project costs. Preference will be given to those applica ons able to provide a greater local share of total project costs. North Carolina Rail Industrial Access Program The DOT for North Carolina created the Rail Industrial Access Program to encourage railroads to locate or expand their facili es in North Carolina and improve rail access. The funding helps ensure that companies have access to well-maintained and funconal tracks needed to transport freight and materials. The fund supports construcon and refurbishing of tracks as required by the local economy. Eligible applicants may include local governments, community development agencies, railroad companies, and industries. The program uses state funding with a commitment of matching funds by the applicant; recipients may receive a maximum 50% of total project costs. North Dakota Local Rail Service Assistance (LRSA) Both LRSA and FRIP rail loan funds make available reduced-interest loans, mostly for infrastructure projects on short-line railroads, and provides them with an alternave to commercial lending sources, which are considerably more costly. The funds offer low interest rates and a 10-year repayment period. The LRSA account is funded with the principal from repaid loans, plus the interest the LRSA account itself bears. The FRIP account is funded with the principal and interest from repaid FRIP loans, interest from repaid LRSA loans, and the interest the account itself bears. Freight Rail Improvement Program (FRIP) Ohio Freight Development/Rail Spur Program This program helps companies for new rail and rail-related infrastructure. The goal of the program is to promote the retenon and development of Ohio companies through the use of rail transportaon, including rail access and carload generaon to exisng operaons. Grant funding is generally limited to projects where job creaon is involved. Loan financing is available, even when jobs are not created or retained. The standard loan package is a 5-year loan term and an interest rate, which equals 2/3 of prime at the me of the loan closing. Collateral or a le–er of credit is required. Rail Improvement Program The Rail Improvement Program is intended to preserve and enhance exisng rail lines and corridors; provide rail access to retain exisng and a–ract new businesses; provide Ohio’s communies and industries with transportaon opons, connecvity, and opportunies; improve safety at grade crossings; reduce derailments; improve environmental quality, especially in terms of air quality; improve on-me performance; preserve, maintain, expand, and modernize Ohio’s rail system; preserve exisng tracks and rights of way for future use; and improve access to global and domesc markets.

State Rail Funding Program Descrip on Rail Line Acquisi on Program This program provides assistance for the acquisi on of rail lines to prevent the cessa on of service, preserve the line or right of way for future rail development, or enhance the line’s viability. Funding requests are evaluated on the basis of the importance of the rail line for rail users and overhead traffic, the number of people employed by rail-dependent rail users, and the importance of the line with respect to affected shipper transporta on costs. Railroad Grade Crossing Safety Program This program provides funding for highway-railroad grade crossing safety improvements or correc ve ac vi es designed to alleviate highway-railroad hazards. The Program is divided into four programs based on the type of project and method of project iden fica on: • Formula-based upgrade program (warning device) • Corridor-based upgrade program (warning device) • Cons tuent-iden fied program (warning device) • Preempon program (warning device with traffic signal interconnecon) FY 2011-2012 Program results include investments of approximately $47.7 million in safety improvements around the state. Oklahoma Railroad Maintenance Revolving Fund The fund is mostly capitalized using revenue from the Oklahoma Freight Car Tax, an annual 4% tax on freight rail car revenues. Other sources of revenue for the fund include annual lease and operaons payments from seven separate short- line rail operators and right-of-way sales by the Oklahoma DOT, although the sales are not a very significant contributor to annual funding. If the ConnectOklahoma Mulmodal Transportaon Act passed in 2014, this program is now the ConnectOklahoma Mass Transit and Infrastructure Revolving Fund. Oregon Short-line infrastructure program Oregon State designated $2 million to create a short-line infrastructure program in 2001, offering loans and grants. In 2003, the legislature approved an addional $2 million for the original program and began an $8 million rail spur program for all types of railroads. Connect Oregon The Oregon legislature authorized $100 million to fund the program in each of the 2005-07, 2007-09, and 2009-11 biennia and an addional $40 million was authorized in 2011 for the 2011-13 biennium for a Mulmodal Transportaon program known as Connect Oregon, a lo–ery-backed program. Pennsylvania Rail Freight Assistance Program (RFAP) RFAP preserves essenal rail freight service where economically feasible and preserves or smulates economic development by generang new or expanded rail freight service. Grants are awarded on a compeve basis. The maximum state funding for a RFAP project is 70% of the total project costs. RFAP project funding is not to exceed $700,000, with the construcon component limited to $250,000 for new construcons. The current RFAP allocaon is $10.5 million. Rail Transportaon Assistance Program (Rail TAP) Rail TAP preserves essenal rail freight service where economically feasible and preserves or smulates economic development by generang new or expanded rail freight service. Grants are awarded on a compeve basis. The maximum state funding for a Rail TAP project is 70% of the total project costs. Rail TAP funds can be used for various construcon and rehabilitaon projects, including land acquision for rail projects. The typical annual Rail TAP appropriaon has been approximately $30 million; the current allocaon is $20 million.

State Rail Funding Program Descrip on Tennessee Short-Line Railroad Rehabilita on Program The State of Tennessee levies a tax on diesel fuel used by aeronau cs, railroads, and towboats. From this tax, a por on is used to fund its Short-Line Railroad Rehabilita on Program. The program is split into two parts: track rehabilita on and bridge rehabilita on, with both requiring a 10% match. Over the past 10 years, the program has awarded $66.87 million to short lines in Tennessee, typically $7 million to $8 million annually. Texas Rail Reloca on and Improvement Fund In 2005, Texas created the Rail Reloca on and Improvement Fund to help share the cost of reloca ng and improving rail facili es, both public and private, to improve freight mobility and relieve traffic conges on. The cost of reloca on is shared by the state and the railroads in propor on to the benefit each en ty receives for improvements. In 2009, the Texas legislature appropriated $182 million for the Rail Reloca on Fund for the 2-year budget period; FY 2011 funding was uncertain. Virginia Rail Industrial Access program (RIA) RIA provides up to $450,000 in grant funds for construcon of rails to serve industry per jurisdicon per year with the first $300K unmatched and addional $150K matched 50/50; all $450K can be applied to one project. The funding for this program is to be set forth in the Appropriaons Act. In recent years, RIA has been budgeted an average of approximately $2.4 million per year. Rail Enhancement Fund Created in 2005, the fund supports improvements for passenger and freight rail transportaon throughout Virginia. Projects must exceed 1.0 on a Benefit-Cost Analysis. The fund has a dedicated revenue stream from the Rental Car Tax. Rail Preservaon and Development Program The Rail Preservaon and Development Program was iniated in 1991. Since then it has grown to nearly $3 million per year. This fund administers grants to the railroads for qualifying projects, with recipients providing a 30% match. The Program is funded annually through the Appropriaons Act. Washington The Essenal Rail Assistance Account This dedicated rail account in the state treasury is to be used for acquision or rehabilitaon of rail lines, equipment, migaon of port or mainline congeson, and corridor preservaon. Grain Train Revolving Fund This revolving fund is a financially self-sustaining transportaon program that supports Washington’s farmers, short-line railroads, and rural economic development. The program operates without taxpayer subsidy. Freight Rail Assistance Program This is a grant program where WSDOT provides grants to support branch lines and light-density rail lines, provide or improve access to ports, maintain mainline capacity, and preserve and restore rail corridors and infrastructure. The program was allocated $2.75 million in 2009-2011, $4 million during the 2013–2015 biennium and there has been a call for projects for the 2015–2017 biennium. Freight Rail Investment Bank Program This grant program is managed by the State Rail and Marine Office. The governor and state legislature allocated $7.33 million for the Freight Rail Investment Bank Program (Rail Bank) during the 2013–2015 biennium. The Rail Bank provides funding assistance to smaller capital rail projects. Funds will be available for up to $250,000 with at least 20% matching from other sources.

State Rail Funding Program Descrip on Ac ve SIBs: Alaska, Colorado, Florida, Maine, Michigan, Minnesota, Missouri, Nebraska, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, Wyoming Inac ve SIBs: Arizona, Arkansas, California, Delaware, Indiana, Iowa, New York, Oklahoma, Rhode Island, Tennessee State Infrastructure Banks (SIBs) A State Infrastructure Bank (SIB) is a revolving fund established and operated by the state. A SIB can offer direct loans with low interest rates and various types of credit enhancement products to surface transporta on infrastructure projects, including loan guarantees and lines of credit. It may provide financial support to both public and private sponsors of eligible transporta on projects. Federal and state funds are used to capitalize the SIB, although several states have established SIBs or separate SIB accounts capitalized solely with state funds. A percentage of federal funds is transferred from specific modal accounts, and these funds are matched with state money. A state must provide 20% matching to the federal funds used to capitalize the SIB. The interest rate is set by the state and is typically below market rate, even 0% in some cases, thus it can make large projects affordable. Maximum loan term is 35 years, although nego able. Technically speaking, 33 states to date have established SIBs since the program incep on in 1995, however 10 are inac ve (not capitalized). Their size varies from under $1 million to more than $100 million. Source: State Rail Plans

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TRB’s National Cooperative Rail Research Program (NCRRP) Report 1: Alternative Funding and Financing Mechanisms for Passenger and Freight Rail Projects identifies alternative funding and financing tools that can be used to realize passenger and freight rail project development, including capital investments, operations, and maintenance. The report summary is available online.

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