TEA-21 - Transportation Equity Act for the 21st Century
Moving Americans into the 21st Century
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RAILROAD REHABILITATION AND IMPROVEMENT FINANCING
The railroad rehabilitation and improvement financing program is intended to make funding available through loans and loan guarantees for railroad capital improvements. No direct Federal funding is authorized in TEA-21; however, the Secretary is authorized to accept a commitment from a non-Federal source to fund the required credit risk premium. The aggregate unpaid principal amounts of obligations for direct loans and loan guarantees cannot exceed $3.5 billion at any one time, of which not less than $1 billion shall be available solely for other than Class I carriers. 
Use of Funds
To provide direct loans and loan guarantees to
These loans are to be used to acquire, improve, develop or rehabilitate intermodal or rail equipment or facilities, including track, bridges, yards and shops.
Priority in selecting projects is to be given to those that
Credit Risk Premiums
The Secretary is authorized to accept a commitment from a non-Federal source to fund in whole or in part required credit risk premiums (which fund the costs associated with a potential default on the loan/loan guarantee).
These private commitments can be used in lieu of or in combination with future appropriations of Federal funds.
The Secretary is to determine the amount required for credit risk premiums on the basis of the circumstances of the applicant, including
May not exceed 25 years.
Must be justified by the present and probable future demand for rail services or intermodal facilities.
The applicant must provide reasonable assurance that the facilities or equipment to be acquired, rehabilitated, improved, developed or established will be economically and efficiently utilized.
The obligation must be reasonably expected to be repaid, taking into account an appropriate combination of credit risk premiums and collateral.
September 14, 1998