Mica & Shuster statements from rail infrastructure hearing
(The House Transportation & Infrastructure Committee issued the following press release on February 17, 2011.)
WASHINGTON, D.C. — The following are the statements of Transportation and Infrastructure Committee Chairman John L. Mica (R-FL) and Railroads, Pipelines and Hazardous Materials Subcommittee Chairman Bill Shuster (R-PA) from today’s hearing entitled “Sitting on our Assets: Rehabilitating and Improving our Nation's Rail Infrastructure:"
“The Railroad Rehabilitation and Improvement Financing program (RRIF) authorizes Department of Transportation to lend up to $35 billion for railroad infrastructure, equipment, and facilities development.
“These loans cost the U.S. government nothing – the loan applicants pay credit risk premiums and fully collateralize the loans. The cost of the RRIF program to taxpayers is exactly zero, yet only $400 million is currently out in loans, of a total $35 billion loan authority, utilizing only a little more than one percent. DOT approved only two loans in 2010, two loans in 2009, and exactly one loan in 2008.
“The RRIF law requires DOT to consider and approve a loan application in 90 days, but in reality, the loan approval process drags on for more than a year. The Federal Railroad Administration says average loan processing time is 13˝ months.
“Additionally, the FRA released guidance for the RRIF program last September that could further slow down and restrict the RRIF program. Subcommittee Chairman Shuster and I wrote a letter to Secretary LaHood outlining our concerns with this new guidance.
“We need to eliminate barriers and reform existing programs, revenue sources, and financing tools like RRIF to successfully leverage federal funding with private sector resources. RRIF can be an innovative and successful way to finance rail infrastructure projects, including high-speed rail. But we need to stop sitting on our assets and make the RRIF program more accessible, faster, and better utilized.”
“The RRIF program was originally created in 1998, in TEA-21, as a dedicated source of loan funding for railroads’ infrastructure needs, limited to $3.5 billion in total outstanding loans. Congress, recognizing the need for a strong freight railroad improvement program, increased that amount to $35 billion in SAFETEA-LU.
“We also strengthened the RRIF program in the Passenger Rail Investment and Improvement Act of 2008 (PRIAA), by increasing the repayment period from 25 years to 35 years.
“It is also important to note that in the history of the program, we have not had a single default on any of the RRIF loans.
“Despite the efforts of this Committee, the RRIF program is in serious need of improvement. Chairman Mica has indicated that he is interested in pursuing improvement to a number of rail issues in a rail title to the transportation reauthorization bill, and addressing the issues in the RRIF program are a top priority.
“At a time when our nation is doing all that it can to spur economic activity, the RRIF program stands out as a potential model for how government can encourage economic growth.
“Because RRIF is an innovative loan program – not a grant where the government merely hands out cash – the private sector is incentivized to invest money in projects that will pay a financial dividend down the road.
“At today’s hearing, I am interested in exploring ideas for improving this important program. Specifically, I am interested in ways we can reform the program to leverage federal funding with private sector resources. I am also interested in ways that we might be able to apply the RRIF program to improve the eligibility for high-speed rail projects.
“I look forward to working with the Chairman and the members of the Subcommittee to improve and better utilize the RRIF program, and I look forward to the testimony from our witnesses.”
Friday, February 18, 2011
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