Federal Register Cap Grants NPRM

Federal Register / Vol. 72, No. 10 / Wednesday, January 17, 2007 / Proposed Rules
Executive Order 13045: Protection of
Children From Environmental Health
and Safety Risks
This proposed rule also is not subject
to Executive Order 13045 ‘‘Protection of
Children from Environmental Health
Risks and Safety Risks’’ (62 FR 19885,
April 23, 1997), because it is not
economically significant.

National Technology Transfer
Advancement Act
Section 12(d) of the National
Technology Transfer and Advancement
Act of 1995 (NTTA), 15 U.S.C. 272,
requires Federal agencies to use
technical standards that are developed
or adopted by voluntary consensus to
carry out policy objectives, so long as
such standards are not inconsistent with
applicable law or otherwise
impracticable. In reviewing program
submissions, EPA’s role is to approve
state choices, provided that they meet
the criteria of the Clean Air Act. Absent
a prior existing requirement for the state
to use voluntary consensus standards,
EPA has no authority to disapprove a
program submission for failure to use
such standards, and it would thus be
inconsistent with applicable law for
EPA to use voluntary consensus
standards in place of a program
submission that otherwise satisfies the
provisions of the Act. Redesignation is
an action that affects the status of a
geographical area but does not impose
any new requirements on sources. Thus,
the requirements of section 12(d) of the
National Technology Transfer and
Advancement Act of 1995 (15 U.S.C.
272 note) do not apply.
List of Subjects

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40 CFR Part 52
Environmental protection, Air
pollution control, Intergovernmental
relations, Nitrogen oxides, Ozone,
Volatile organic compounds.
40 CFR Part 81
Air Pollution Control, Environmental
protection, National parks, Wilderness
areas.

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DEPARTMENT OF TRANSPORTATION

49 CFR Part 262

Because it is not a ‘‘significant
regulatory action’’ under Executive
Order 12866 or a ‘‘significant energy
action,’’ this action is also not subject to
Executive Order 13211, ‘‘Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use’’ (66 FR 28355, May
22, 2001).

13:17 Jan 16, 2007

BILLING CODE 6560–50–P

Federal Railroad Administration

Executive Order 13211: Actions That
Significantly Affect Energy Supply,
Distribution, or Use

VerDate Aug<31>2005

Dated: January 4, 2007.
Bharat Mathur,
Acting Regional Administrator, Region 5.
[FR Doc. E7–520 Filed 1–16–07; 8:45 am]

[Docket No. FRA 2005–23774, Notice
No. 1]
RIN 2130–AB74

Implementation of Program for Capital
Grants for Rail Line Relocation and
Improvement Projects
Federal Railroad
Administration (FRA), Department of
Transportation (DOT).
ACTION: Notice of proposed rulemaking
(NPRM).
AGENCY:

SUMMARY: Section 9002 of the Safe,
Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy for
Users (SAFETEA–LU) (Pub. L. 109–59,
August 10, 2005) amends chapter 201 of
Title 49 of the United States Code by
adding section 20154. Section 20154
authorizes—but does not appropriate—
$350,000,000 per year for each of the
fiscal years (FY) 2006 through 2009 for
the purpose of funding a grant program
to provide financial assistance for local
rail line relocation and improvement
projects. Section 20154 directs the
Secretary of Transportation (Secretary)
to issue regulations implementing this
grant program, and the Secretary has
delegated this responsibility to FRA.
This NPRM proposes a regulation
intended to carry out that statutory
mandate. As of the publication of this
NPRM, Congress had not appropriated
any funding for the program for FY 2006
or FY 2007.
DATES: (1) Written Comments: Written
comments must be received on or before
March 5, 2007. Comments received after
that date will be considered to the
extent possible without incurring
additional expense or delay.
(2) Public Hearing: Requests for a
public hearing must be in writing and
must be submitted to the Department of
Transportation Docket Management
System at the address below on or
before March 5, 2007. If a public hearing
is requested and scheduled, FRA will
announce the date, location, and
additional details concerning the
hearing by separate notice in the
Federal Register.

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You may submit comments
identified by DOT DMS Docket Number
FRA 2005–23774 by any of the
following methods:
• Web site: http://dms.dot.gov.
Follow the instructions for submitting
comments on the DOT electronic docket
site.
• Fax: 1–202–493–2251.
• Mail: Docket Management Facility;
U.S. Department of Transportation, 400
Seventh Street, SW., Nassif Building,
Room PL–401, Washington, DC 20590–
001.
• Hand Delivery: Room PL–401 on
the plaza level of the Nassif Building,
400 Seventh Street, SW., Washington,
DC, between 9 am and 5 pm, Monday
through Friday, except Federal holidays.
• Federal eRulemaking Portal: Go to
http://www.regulations.gov. Follow the
online instructions for submitting
comments.
Instructions: All submissions must
include the agency name and docket
number or Regulatory Identification
Number (RIN) for this rulemaking. Note
that all comments received will be
posted without change to http://
dms.dot.gov, including any personal
information provided. Please see the
Privacy Act heading in the
SUPPLEMENTARY INFORMATION section of
this document for Privacy Act
information related to any submitted
comments or materials.
Docket: For access to the docket to
read background documents or
comments received, go to http://
dms.dot.gov at any time or to Room PL–
401 on the plaza level of the Nassif
Building, 400 Seventh Street, SW.,
Washington, DC, between 9 am and 5
pm, Monday through Friday, except
Federal holidays.
FOR FURTHER INFORMATION CONTACT: John
A. Winkle, Transportation Industry
Analyst, Office of Railroad
Development, Federal Railroad
Administration, 1120 Vermont Avenue,
NW., Mail Stop 13, Washington, DC
20590 (John.Winkle@fra.dot.gov or 202–
493–6320); or Elizabeth A. Sorrells,
Attorney-Advisor, Office of Chief
Counsel, Federal Railroad
Administration, 1120 Vermont Avenue,
NW., Mail Stop 10, Washington, DC
20590 (Betty.Sorrells@fra.dot.gov or
202–493–6057).
SUPPLEMENTARY INFORMATION:
ADDRESSES:

I. Background
Much of the economic growth of the
United States can be linked directly to
the expansion of rail service. As the
nation moved westward, railroads
expanded to provide transportation
services to growing communities. No

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1966

Federal Register / Vol. 72, No. 10 / Wednesday, January 17, 2007 / Proposed Rules

event better illustrates this point than
the ‘‘golden spike’’ ceremonies at
Promontory Point, Utah in 1869 that
ushered in transcontinental rail service.
Travel times between the Atlantic and
Pacific coasts were dramatically
reduced opening numerous new
markets for both passenger and freight
operations. Municipalities throughout
the country knew that their economic
success rested on being served by the
railroad and many offered incentives to
railroads for the chance to be served. As
a result, many communities’ land use
patterns are developed around the
railroad lines that became an economic
artery as important as ‘‘Main Street.’’ By
1916, rail expansion peaked as miles of
road owned 1 reached 254,251.
Soon after the end of the Second
World War, the railroads’ competitors—
the auto, truck, air, pipeline and modern
barge industries—proved to be superior
to the railroads in responding to many
of the growing demands for speed,
convenience and service quality that
characterized the evolving economy of
the 20th century. Mired in stifling
economic over-regulation, railroads
were unable to respond effectively to
the competitive challenges facing them.
These changes had a dramatic effect on
rail’s market share. From nearly 80
percent of the intercity freight market in
the early 1920s, rail share fell to less
than 37 percent in 1975. The decline
was even more dramatic with regard to
passenger service. The industry
responded by cutting excess capacity,
often through bankruptcy. By 1975,
miles of road owned had fallen to
199,126, a 22 percent decline from 1916.
The most current data from 2004 shows
a further decline to 140,806 road miles
or 45 percent fewer miles than was
available in 1916.
By the early years of the 21st century
up to the present time, however, the rail
industry has made a significant
turnaround. Beginning with rate
deregulation ushered in by the Staggers
Act in 1980, and a number of other
favorable changes, railroads have
introduced innovative services and
modern pricing practices, and, as a
result, have become profitable and have
recaptured market share. Between 1985
and 2004, revenue ton-miles 2 nearly
doubled from 876.9 billion to 1.7
trillion. Rail’s market share of intercity
revenue freight is approaching 45
percent. This growth is being
accommodated on a system that shrunk
1 This

measure is the aggregate length of roadway
and excludes yard tracks and sidings, and does not
reflect the fact that a mile of road may include two,
three or more parallel tracks.
2 A ton of any commodity transported one-mile.

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in response to conditions noted above.
The smaller physical plant is handling
greater and greater freight volumes.
The clearest evidence of more intense
use of the industry’s plant is found in
measuring ‘‘traffic density.’’ ‘‘Traffic
density’’ is the millions of revenue tonmiles per owned mile of road. In 1985,
this indicator stood at 6.02. By 2004,
this figure had nearly tripled to 17.02
millions of revenue ton-miles per mile
of road owned. This more intense use of
rail infrastructure is especially
challenging in communities that
developed adjacent to or around rail
lines, most built over a century ago on
alignments appropriate to the times.
As a result, in many places
throughout the country, the rail
infrastructure that was once so critical
to communities now presents problems
as well as benefits. For example, the
tracks that run down the middle of
towns separate the communities on
either side. Rail yards and tracks occupy
valuable real estate. Trains parked in
sidings may present attractive nuisances
to children and vandals, and, in the case
of tank cars containing hazardous
materials, may present serious security
or health risks. Grade crossings may
present safety risks to the cars and
pedestrians that must cross the tracks.
These same crossings create
inconveniences when long trains block
crossings for extended periods of time
and sound horns as they operate
through crossings in neighborhoods. In
some cases, trains operate over lines at
speeds that are suited for the type of
track but often present safety concerns
to those in the surrounding community.
In some cases, rail lines have become so
congested that communities experience
what they perceive as almost
continuous train traffic. In short, rail
lines, which once brought economic
prosperity and social cohesion, are now
sometimes viewed as factors that
decline both.3
In an effort to satisfy all constituents,
state and local governments are looking
for ways to eliminate the problems
created by the increased demand on the
infrastructure while still maintaining
the benefits the railroad provides. Many
times, the solution is merely to relocate
the track in question to an area that is
better suited for it. For example, a
recently completed relocation project in
Greenwood, Mississippi eliminated
twelve at-grade highway-rail crossings,
which greatly improved safety for
3 In some locations, passenger trains, both
intercity and commuter, will continue to serve
downtown locations. Passenger trains generally
operate less often than freight trains, are shorter,
and, therefore, do not create the extensive problems
that freight trains do.

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motorists and eliminated blocked
crossings. With that success in mind,
Mississippi is currently looking to
relocate two main lines that run through
the heart of the Central Business District
in Tupelo. Combined, these two lines
cross 26 highways in the city, and all
but one are at-grade crossings. One of
the options the State is considering is
laterally relocating the lines outside of
the business district. FRA would like
commenters to discuss other potential
projects that could benefit from the
program implemented by this
regulation.
In some situations, vertical relocation
may be the best solution. For example,
Nevada has undertaken the Reno
Transportation Rail Access Project
(ReTRAC), the purpose of which is to
‘‘sink’’ 33 feet below the ground in a
trench the approximately 2.25 mile
segment of main line track that runs
through Reno. Both the Union Pacific
Railroad Company (UP) and Amtrak
operate over this line. The project will
allow for the closing of 11 grade
crossings and will generally improve
both highway efficiency and safety as
well as the safety and efficiency of the
trains that operate through Reno. Many
of these relocation projects, like the
ReTRAC project, are expensive, and
state and local governments lack the
resources to undertake them.4 When
commenting on potential projects, FRA
requests that commenters discuss the
estimated costs of those projects.
In addition to relocation projects,
many communities are eager to improve
existing rail infrastructure in an effort to
mitigate the perceived negative effects
of rail traffic on safety in general, motor
vehicle traffic flow, economic
development, or the overall quality of
life of the community. For example, in
an effort to improve train speed and
reduce the risk of derailments, rail lines
that were built a century ago with sharp
curves can be straightened. In addition,
significant efficiencies can be gained
and safety enhanced by, as examples,
extending passing tracks and yard lead
tracks, and adding track circuits and
signal spacing changes.
II. SAFETEA–LU
On August 10, 2005, President George
W. Bush signed SAFETEA–LU, (Pub. L.
109–59) into law. Section 9002 of
SAFETEA–LU amended chapter 201 of
Title 49 of the United States Code by
adding a new § 20154, which establishes
the basic elements of a funding program
for capital grants for local rail line
relocation and improvement projects.
4 The ReTRAC project is expected to cost in
excess of $260,000,000.

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Federal Register / Vol. 72, No. 10 / Wednesday, January 17, 2007 / Proposed Rules
Subsection (b) of the new § 20154
mandates that the Secretary issue
‘‘temporary regulations’’ to implement
the capital grants program and then
issue final regulations by October 1,
2006. This NPRM proposes a regulation
intended to carry out that statutory
mandate.
In order to be eligible for a grant for
an improvement construction project,
the project must mitigate the adverse
effects of rail traffic on safety, motor
vehicle traffic flow, community quality
of life, including noise mitigation, or
economic development, or involve a
lateral or vertical relocation of any
portion of the rail line, presumably to
reduce the number of grade crossings
and/or serve to mitigate noise, visual
issues, or other externality that
negatively impacts a community. A
more detailed explanation of the rule
text is provided below in the Sectionby-Section Analysis.
Congress authorized, but did not
appropriate, $350 million per year for
each fiscal year 2006 through 2009. At
least half of the funds awarded under
this program shall be provided as grant
awards of not more than $20 million
each. A State or other eligible entity will
be required to pay at least 10 percent of
the shared costs of the project, whether
in the form of a contribution of real
property or tangible personal property,
contribution of employee services, or
previous costs spent on the project
before the application was filed. The
state or FRA may also seek financial
contributions from private entities
benefiting from the rail line relocation
or improvement project.
In SAFETEA–LU, Congress directed
FRA to issue ‘‘temporary regulations’’
by April 1, 2006. Under the
Administrative Procedure Act and
Executive Orders governing rulemaking,
FRA could comply with Congress’s
deadline only by issuing a direct final
rule or an interim final rule by April 1,
2006. However, the FRA cannot use
either a direct final rule or an interim
final rule because the legal requirements
for using those instruments cannot be
satisfied. The case law is clear that a
statutory deadline does not suffice to
justify dispensing with notice and
comment prior to issuing a rule on
grounds that notice and comment are
‘‘impracticable, unnecessary, or contrary
to the public interest’’ under Section
553(b)(B) of the Administrative
Procedure Act. Because as of this date
no funding has been appropriated for
the program and no projects can be
funded at this time, FRA believes the
purposes of SAFETEA–LU can best be
met by proceeding in lieu of an interim
final rule with an NPRM, which satisfies

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the requirements of the Administrative
Procedure Act and allows for greater
public participation in the rulemaking
process.
III. Section-by-Section Analysis
SAFETEA–LU contains very specific
language regarding implementation of
the rail line relocation and improvement
program. In several sections, the
language in this proposed regulation is
reprinted directly from SAFETEA–LU.
Given such an unambiguous statutory
mandate, FRA has made only a few
additions in this proposed regulation to
include language that was not in the
statute. For those sections, there is a
further discussion of FRA’s intent and a
request for comments. This Section-bySection Analysis does not discuss
Congressional intent.
Section 262.1 Purpose
This section merely states that the
purpose of this NPRM is to carry out the
Congressional mandate in § 9002 of
SAFETEA–LU by promulgating
regulations which implement the grant
financial assistance program for local
rail relocation and improvement
projects set forth in new § 20154 of Title
49 of the United States Code.
Section 262.3

Definitions

Act
When used in this Part, ‘‘Act’’ means
SAFETEA–LU.
Administrator
This definition makes clear that when
the term ‘‘Administrator’’ is used in this
Part, it refers to the Administrator of the
Federal Railroad Administration. It also
provides that the Administrator may
delegate authority under this rule to
other Federal Railroad Administration
officials.
Allowable costs
This definition makes clear that only
costs classified as ‘‘allowable’’ will be
reimbursable under a grant awarded
under this Part. Specifically,
construction costs are the only costs that
are reimbursable.
Construction
This definition sets out the types of
project costs that are contemplated as
being reimbursable under this Part.
Only these costs will be allowable under
a grant from this program. This
definition closely tracks 49 U.S.C.
20154(h)(1). Subsection 20154(h)(1)(F)
gave the Secretary the authority to
prescribe additional costs, other than
those specifically listed in § 20154(h)(1),
as allowable under this Part. As the
authority to promulgate this rule has

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1967

been delegated to FRA by the Secretary,
subsection (6) makes clear that FRA has
that authority to prescribe additional
costs. In addition, subsection (6) also
makes clear that architectural and
engineering costs associated with the
project as well as costs incurred in
compliance with applicable
environmental regulations are
considered construction costs, and will
be allowable. Because FRA has some
discretion with regard to this definition,
commenters are invited to suggest
additional costs that might be allowable
under the regulation.
FRA
This definition makes clear that when
the term ‘‘FRA’’ is used in this Part, it
refers to the Federal Railroad
Administration.
Improvement
The program established by the Act is
intended to provide funds for both rail
line relocation and improvement
projects. This definition makes clear the
types of projects that fall under the
category of ‘‘improvements.’’ FRA
considers improvements to be projects
such as those that repair defective
aspects of a rail system’s infrastructure,
projects that enhance an existing system
to provide for improved operations, or
new construction projects that result in
better operational efficiencies. Examples
include track work that increases the
class of track, signal system
improvements, and lengthening existing
sidings or building new sidings. FRA
invites comments on the definition of
‘‘improvement’’ as well as the types of
projects that should be considered.
Commenters should keep in mind,
however, that any project must achieve
the goals set forth in § 262.7(a)(1).
Non-Federal Share
This definition indicates that NonFederal share means the portion of the
allowable cost of the local rail line
relocation or improvement project that
is being paid for through cash or in-kind
contributions by a State or other nonFederal entity.
Private Entity
This definition makes clear what
types of entities are contemplated under
§ 262.13. A private entity must be a
nongovernmental entity, but can be a
domestic or foreign entity and can be
either for-profit or not-for-profit.
Project
This definition makes clear that the
term ‘‘project’’ refers only to a local rail
line relocation or improvement project

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Federal Register / Vol. 72, No. 10 / Wednesday, January 17, 2007 / Proposed Rules

undertaken with funding from a grant
from FRA under this Part.
Quality of Life
FRA is requesting comments on what
factors should be considered when
measuring ‘‘quality of life.’’ The Act
requires only that the definition include
first responders’’ emergency response
time, the environment, noise levels, and
other factors as determined by FRA.
Thus, Congress left FRA some discretion
in determining what else should be
considered under this definition. FRA
believes ‘‘quality of life’’ should include
factors associated with an individual’s
overall enjoyment of life or a
community’s ability both to function
and to provide services to its residents
at a reasonable level. Commenters are
invited to discuss specific factors that
can measure these somewhat
amorphous concepts, as well as any
other factors that may be appropriate.
Real Property
This definition makes clear that ‘‘real
property’’ refers to land, including land
improvements, structures and
appurtenances thereto, excluding
movable machinery and equipment.

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Relocation
This definition states what relocation
consists of and provides the distinction
between the two types of rail line
relocations. A lateral relocation occurs
when a rail line is horizontally moved
from one location to another, usually
away from dense urban development,
grade crossings, etc., in an effort to
allow trains to operate more efficiently
and the community surrounding the old
line to function more effectively. The
typical example is moving a rail line
that runs through the middle of a town
or city to a location outside of the town
or city.
A vertical relocation occurs when a
rail line remains in the same location,
but the track is lifted above the ground,
as with an overpass, or is sunk below
ground level, as with a trench. Vertical
relocations may be preferable when the
community surrounding the rail line
still needs the line (for example, when
a busy passenger station is located on
the line), but the line is causing
problems because of its location at
grade.
Secretary
This definition makes clear that
‘‘Secretary’’ refers to the Secretary of
Transportation.
State
This definition is reprinted from
SAFETEA–LU and can be found at 49

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U.S.C. 20154(h)(3). It makes clear that,
for the purposes of this Part except for
§ 262.17, any of the fifty States, political
subdivisions of the States, and the
District of Columbia is a ‘‘State’’ and
eligible for funding from this program.
The definition also makes clear,
however, that for purposes of § 262.17
only, ‘‘State’’ does not include political
subdivisions of States, but instead only
the fifty States and the District of
Columbia.
Tangible Personal Property
This definition indicates that
‘‘tangible personal property’’ refers to
property that has physical substance
and can be touched, but is not real
property. Examples of tangible personal
property include machinery, equipment
and vehicles.
Section 262.5 Allocation Requirements
This section is reprinted directly from
SAFETEA–LU and can be found at 49
U.S.C. 20154(d). It mandates that at least
fifty percent of all grant funds awarded
under this Part out of funds
appropriated for a fiscal year be
provided as grant awards of not more
than $20,000,000 each. Designated,
high-priority projects will be excluded
from this allocation formula. The statute
states that the $20,000,000 amount will
be adjusted by the Secretary to reflect
inflation for each fiscal year of the
program beginning in FY 2007. Under
the Secretary’s delegation of rulemaking
authority to FRA, however, FRA will
make the annual inflationary
adjustment. In making the adjustment
for inflation, FRA will use guidance
published by the Association of
American Railroads (AAR). Specifically,
FRA will use the materials and supplies
component of the AAR Railroad Cost
Indexes. FRA will make the adjustment
each October based on the most recent
edition of the Cost Indexes.
Section 262.7 Eligibility
This section is reprinted directly from
SAFETEA–LU and can be found at 49
U.S.C. 20154(b). It sets out the eligibility
criteria for projects and declares that
any state (or political subdivision of a
state) is eligible for a grant under this
section for any construction project for
the improvement of a route or structure
of a rail line that either is carried out for
the purpose of mitigating the adverse
effects of rail traffic on safety, motor
vehicle, traffic flow, community quality
of life, or economic development, or
involves a lateral or vertical relocation
of any portion of a rail line. Lateral
relocation refers to horizontally moving
the rail line to another location while
vertical relocation refers to either lifting

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the rail line above the ground or sinking
it below the ground. Subpart (b) of this
section also makes clear that only costs
associated with construction, as defined
in this Part, will be allowable costs for
purposes of this Part. Therefore, only
construction costs will be eligible for
reimbursement under a grant agreement
administered under this Part.
Section 262.9 Criteria for Selection of
Rail Lines
This section is reprinted almost
entirely from SAFETEA–LU and, aside
from subsection (f), can be found at 49
U.S.C. 20154. It sets out the criteria for
FRA to use in determining which
projects should be approved for grants
under this Part. It mandates that the
Secretary, through FRA, consider the
following factors in deciding whether to
award a grant to an eligible state (as
defined in this Part):
• The capability of the state (as
defined in this part) to fund the project
without Federal grant funding;
• The requirement and limitation
relating to allocation of grant funds
provided in § 262.5 of this Part;
• Equitable treatment of the various
regions of the United States;
• The effects of the rail line, relocated
or improved as proposed, on motor
vehicle and pedestrian traffic, safety,
community quality of life, and area
commerce; and
• The effects of the rail line, relocated
or improved as proposed, on the freight
and rail passenger operations on the rail
line.
In making the determination required
by the first factor of the State’s
capability to fund the project without
Federal grant funding, FRA will look at
indicators such as the existence of
authorized and funded State programs
for railroad improvement projects, the
State’s use of available highway-rail
grade crossing improvement funds
provided through 23 U.S.C. 130, and
other indicia of credit worthiness such
as bond ratings. FRA welcomes
comments on these indicators as well as
proposals for additional information
that may be relevant in determining the
State’s ability to fund the project
without Federal grant funding.
With regard to the third factor—
equitable treatment of the various
regions of the United States—Congress
did not indicate how the geographical
boundaries of the regions should be
determined. For purposes of this
regulation, FRA is proposing to divide
the country into the same regions that
FRA’s Office of Safety divides the
country for enforcement purposes.
FRA’s regional boundaries take into
account factors such as density of rail

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lines, frequency of rail operations, and
population centers. For example, FRA’s
Regions 1 and 2, which encompass all
of Amtrak’s Northeast Corridor, contain
many large cities, and have extensive
freight, commuter, and intercity
passenger rail operations; cover much
less territory that FRA’s Region 8, which
encompasses the Pacific Northwest,
including States such as Montana,
Wyoming, and Idaho that have smaller
populations, little or no commuter or
intercity passenger service, and less
frequent freight rail operations. A map
of FRA’s Regions is included as
Appendix A. FRA is soliciting
comments on this proposed division of
the country and welcomes suggestions
for alternative methods.
Subsection (f) states that FRA will
consider the level of commitment of
non-Federal and/or private funds when
determining whether to award a grant
under this program. This requirement
was not listed in § 20154(c) of
SAFETEA–LU, but the statute did not
mandate that FRA consider only the
listed factors in determining whether to
award a grant to an eligible state. The
listed factors are fairly comprehensive,
but FRA wants to retain the flexibility
to consider other factors, as well, that
may not be readily apparent. Therefore,
FRA added a ‘‘catch-all’’ factor to the
criteria. Subsection (f) allows FRA to
also consider any other factors that the
agency deems relevant to assessing the
effectiveness and or efficiency of the
grant application in achieving the goals
of the national program and specifically
mentions the level of financial
commitment provided by non-Federal
and/or private entities noted in
§ 20154(e)(4)(B). FRA welcomes
comments on this addition and any
other potential factors that the FRA may
consider in determining whether to
award a grant.
Section 262.11 Application Process
All grant applications submitted
under this program must be submitted
to FRA through the Internet at http://
www.grants.gov. All Federal grantmaking agencies are required to receive
applications through this website.
Potential applicants should note that the
information below describes FRA’s
typical grant application requirements.
However, the specific requirements for
individual grants will be listed in the
‘‘Instructions’’ section for the particular
grant for which FRA is accepting
applications.
The application process for funds
appropriated under § 20154 will differ
depending on whether the grant is noncompetitive or discretionary
(competitive). Non-competitive

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applications—usually projects
designated in the appropriations statute
or in the Conference Report
accompanying an annual appropriation
as high-priority—generally must include
the following: (1) A detailed project
description; (2) Standard Forms (SF)
424 —Application; SF 424A or C—
Budget Information; SF 424B or D—
Assurances; Certifications and
Assurances, i.e. debarment/suspension/
ineligibility, Drug-free Work Place;
Lobbying, Indirect Costs; SF 3881—
Payment Information; SF 1194—
Authorized Signatures; and (3) an Audit
History. Potential applicants should
keep in mind that these are the typical
forms that FRA requests with noncompetitive applicants. FRA may not
require all of these for a particular
application.
For a discretionary (competitive)
grant, applicants will be provided with
certain basic information covering
deadlines and addresses for submitting
statements of interest, the entities
eligible for funding, an estimate of the
amount of funding available and the
expected number of awards, and the
selection criteria for evaluating
statements of interest. A major
responsibility of FRA’s technical staff
will be development of a Source
Selection Plan (SSP) to be used for
evaluating applications. The SSP will be
available to all applicants.
All applicants should keep in mind
that no funding will be available for this
program unless and until Congress
appropriates funding for it. SAFETEA–
LU authorized, but did not appropriate,
$350 million per fiscal year for each
fiscal year 2006 through 2009. As of the
publication date of this Part, Congress
has not appropriated any funds for fiscal
year 2006 or 2007. If Congress
appropriates non-competitive funds for
a specific project under this Program,
FRA will notify the potential recipient
of the appropriation. If Congress
approves funding for a discretionary
grant or grants, FRA will publish a
Notice of Funds Availability in the
Federal Register and eligible applicants
will be able to apply for a grant through
http://www.grants.gov.
Subsection (b) of this section
mandates that, when submitting an
application, a state must submit a
description of the anticipated public
and private benefits associated with
each proposed rail line relocation or
improvement project. The
determination of the benefits must be
developed in consultation with the
owner and user of the rail line being
relocated and improved or other private
entity involved in the project. Since one
of the factors that FRA will consider in

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1969

selecting projects is the level of
commitment of non-Federal and/or
private funds available for the project
(see proposed section 262.9(f)),
applications should also identify the
financial contributions or commitments
the state has secured from any private
entities that are expected to benefit from
the proposed project. The language for
this subsection is based upon
SAFETEA–LU requirements and can be
found at 49 U.S.C. 20154(e)(4)(A) and
(B).
Subsection (c) of this section allows
for a potential applicant to request a
meeting with the FRA Associate
Administrator for Railroad Development
or his designee to discuss a project the
potential applicant is considering for
financial assistance under this Part.
Subsection (c) does not require that
such a meeting occur, but it has been
FRA’s experience that pre-application
meetings generally save the potential
applicant both time and money, and,
therefore, FRA strongly encourages
potential applicants to schedule such a
meeting.
Section 262.13 Matching Requirements
This section is reprinted entirely from
SAFETEA–LU and can be found at 49
U.S.C. § 20154(e). It sets out the
requirement that a State (as defined in
this Part) or other non-Federal entity
shall pay at least ten (10) percent of the
shared costs of a project that is funded
in part by a grant awarded under this
Part. The ten percent may be in cash or
in the form of the following in-kind
contributions:
• Real property or tangible personal
property, whether provided by the State
(as defined by this Part) or a person for
the State;
• The services of employees of the
State or other non-Federal entity,
calculated on the basis of costs incurred
by the State or other non-Federal entity
for the pay and benefits of the
employees, but excluding overhead and
general administrative costs;
• A payment of any costs that were
incurred for the project before the filing
of an application for a grant for the
project under this section, and any inkind contributions that were made for
the project before the filing of the
application, if and to the extent that the
costs were incurred or in-kind
contributions were made to comply
with a provision of a statute required to
be satisfied in order to carry out the
project.
Finally, this section states that FRA
will consider the feasibility of seeking
financial contributions or commitments
from private entities involved with the
project in proportion to the anticipated

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public and private benefits that accrue
to such entities from the project. FRA
invites comments and suggestions from
commenters on how FRA can best
accomplish this requirement. Since
project sponsors are most directly
involved and familiar with the details of
the proposed projects and are required
to submit a description of the
anticipated public and private benefits
associated with each rail line relocation
or improvement project as a part of the
application process, the requirement to
seek financial contributions or
commitments from private entities
might best be accomplished by the
project sponsors in assembling the
overall financial package to complete
the project. This could then be one of
the factors to be evaluated by the FRA
in deciding whether to proceed with a
project or in selecting one project over
another should there be more than one
project competing for any available
funding.
Section 262.15 Environmental
Assessment
This section clearly states to all
grantees that, in order for FRA to award
funding for any project, the National
Environmental Policy Act (42 U.S.C.
4321 et seq.) (NEPA) and related laws,
regulations and orders must be
complied with. NEPA mandates that
before any ‘‘major’’ Federal action can
take place, the Federal entity performing
the action must complete an appropriate
environmental review. The use of
Federal funds in a project triggers the
NEPA process. Thus, because FRA will
be providing Federal funds to grantees
for local rail line relocation and
improvement projects, a completed
NEPA review will be required before the
agency decides to approve any project.
A State may be requested to provide
environmental information and/or fund
the NEPA review, either directly (if the
entity administering the grant is a State
agency with statewide jurisdiction) or
through a third party contract. FRA’s
NEPA compliance will be governed by
FRA’s ‘‘Procedures for Considering
Environmental Impacts’’ (65 FR 28545)
and the NEPA regulations of the Council
on Environmental Quality (40 CFR part
1500).
This section also notes several of the
other environmental and historic
preservation statutes that must be
considered during the NEPA review.
This is not, however, a comprehensive
list of all environmental and historic
preservation statutes and implementing
regulations that must be considered, but
instead merely illustrative of the issues
that a State may be required to address
in the environmental review.

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Section 261.17
Awards

Combining Grant

This section is reprinted entirely from
SAFETEA–LU and can be found at 49
U.S.C. 20154(f). It allows for two or
more States, but not political
subdivisions of States, pursuant to an
agreement entered into by the States, to
combine any part of the amounts
provided through grants for a project
under this Part, provided the project
will benefit each State and the
agreement is not a violation of a law of
any of the States. SAFETEA–LU
specifically excludes political
subdivisions of States from taking
advantage of this section, but does not
exclude the District of Columbia.
Section 261.19

Closeout Procedures

The ‘‘grant closeout’’ is the process by
which the FRA and grantee perform
final actions that document completion
of work, administrative requirements,
and financial requirements of the grant
agreement. FRA, the grantee, and any
other involved parties, such as an
auditor, need to fulfill these
requirements promptly in order to avoid
unnecessary delays in grant closeout.
FRA will notify the grantee in writing
30 days before the end of the grant
period regarding what final reports are
due, the dates by which they must be
received, and where they must be
submitted. The grantee will be required
to submit the reports within 90 days
after the expiration or termination of the
grant. Copies of any required forms and
instructions for their completion will be
included with the notification. The
financial, performance, and other
reports required as a condition of the
grant will generally include the
following:
• Final performance or progress
report;
• Financial Status Report (SF–269) or
Outlay Report and Request for
Reimbursement for Construction
Programs (SF–271);
• Final Request for Payment;
• Federally-Owned Property Report.
A grantee must submit an inventory of
all Federally-owned property (as
opposed to property acquired with grant
funds) for which it is accountable and
request disposition instructions from
FRA if the property is no longer needed.
Upon receipt of this information, FRA
will determine whether any additional
funds are due the grantee or whether the
grantee needs to refund any funds. FRA
will also determine final costs and, if
necessary, make upward or downward
adjustments to any allowable costs
within 90 days after receipt of reports
and make prompt payment to the

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grantee for any unreimbursed allowable
costs. If the grantee has received more
funds than the total allowable costs, the
grantee must immediately refund to
FRA any balance of unencumbered cash
advanced that is not authorized to be
retained for use on other grants.
FRA will notify the grantee in writing
that the grant has been closed out. The
grant agreement will in most cases be
ready to be closed out before receipt of
the single audit report that covers the
period of the grant performance.
Therefore, the grant will be closed
administratively without formal audit.
The grant may be reopened later to
resolve subsequent audit findings.
The closeout of a grant does not affect
FRA’s right to disallow costs and
recover funds on the basis of a later
audit or other review and the grantee’s
obligation to return any funds due as a
result of later refunds, corrections, or
other transactions.
IV. Regulatory Impact
A. Executive Order 12866 (Regulatory
Planning and Review) and DOT
Regulatory Policies and Procedures
FRA has determined preliminarily
that this action represents a ‘‘significant
regulatory action’’ within the meaning
of DOT’s Regulatory Policies and
Procedures (44 FR 11034, February 26,
1979) and Executive Order 12866. This
determination is based on a finding that
the rule may have an annual effect on
the economy of $100 million or more
because Congress has authorized the
appropriation of $350,000,000 per year
for fiscal years 2006 through 2009.
However, no funds to implement the
program were appropriated for fiscal
year 2006 and no funds were requested
in the Administration’s Fiscal Year 2007
budget request. The NPRM was
reviewed by the Office of Management
and Budget under E.O. 12866.
This section summarizes the
estimated economic impact of the
proposed rule. As mandated by section
9002 of SAFETEA–LU, this rulemaking
proposes establishment of the basic
elements of a funding program for
capital grants for local rail line
relocation and improvement projects.
This regulation would affect only those
entities that voluntarily elected to apply
for the capital grants under section 9002
and were selected to receive a grant
under the program. It would not impose
any direct involuntary un-reimbursed
costs on non-participants. Prospective
applicants will normally have available
the information needed to prepare
applications for funding so these costs
would be minimal.

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FRA has undertaken a preliminary
evaluation of the economic impact of
this proposed regulatory action.
However, because the number, nature,
and size of projects to be assisted would
not be known until funds are
appropriated and specific applications
are received, this analysis is by
necessity an estimate. Since the actual
projects have yet to be identified, it is
also not possible at this stage to
ascertain the appropriate benefit/cost
ratios. The only costs imposed on the
participants (States and political
subdivisions) are the costs associated
with completing an application and
providing the required minimum ten
percent non-Federal funding match.
FRA has also concluded that the local
rail line relocation and improvement
projects capital grants program could
generate both direct and indirect
benefits, providing economic, safety and
environmental benefits. Of the $350
million authorized to be appropriated
annually, fifty percent of all grant funds
awarded are reserved for projects of no
more than $20 million each, adjusted for
inflation. Lacking specifics about
individual projects, it is difficult to
estimate whether the benefits are
anticipated to surpass the combined
potential direct costs to the Federal
Government (potentially $350 million
annually) and to the entities that elect
to participate in the program. The
statutory criteria for evaluating
applications do not require a cost/
benefit analysis for each project but
instead focus on the capability of the
state to fund the project without Federal
grant funding, the effects of the
relocated or improved rail line on
traffic, safety, quality of life, area
commerce, and freight and passenger
operations on the line. Because of the
voluntary nature of participation in the
program, this regulatory action is not
anticipated to impose any nonreimbursed costs upon non-participants
(relocation assistance is an eligible
program cost which would mitigate
impacts to non-participants). The FRA
requests comments, information, and
data from the public and potential users
concerning the economic impact of
implementing this rule and the local rail
line relocation and improvement
projects capital grants program.
This rule is not anticipated to
adversely affect, in a material way, any
sector of the economy. This rulemaking
sets forth eligibility and selection
criteria for project proposals in the local
rail line relocation and improvement
projects capital grants program, which
will result in only minimal cost to
program applicants. In addition, this
proposed rule would not create a

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serious inconsistency with any other
agency’s action or materially alter the
budgetary impact of any entitlements,
grants, user fees, or loan programs.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980
(Pub. L. 96–354, 5 U.S.C. 601–612)
requires a review of rules to assess their
impact on small entities. FRA is not able
to certify that this proposed rule would
not have a significant impact on a
substantial number of small entities and
seeks comments from the public. For
government entities, the definition of
small entities is based on population
served. As defined by the Small
Business Administration (SBA), this
term means governments of cities,
counties, towns, townships, villages,
school districts, or special districts with
a population of less than fifty thousand.
States are not included in the definition
of small entity set forth in 5 U.S.C. 601,
but political subdivisions of states may
well fall into this category. Given FRA’s
lack of knowledge about specific
projects, applicants or applications that
might be filed if Congress appropriated
funds for the program, it is not possible
to determine the number of small
government entities that may be
involved in applications under the local
rail line relocation and improvement
projects capital grants program or the
impacts to those entities from the
program.
FRA has not conducted a regulatory
flexibility assessment of this proposed
rule’s impact on small entities. FRA
views it as unlikely that a small entity
such as a local government would be
disproportionately impacted by the
proposed rule. The capital grants for rail
line relocation program could certainly
provide benefits to small entities, such
as local governments (political
subdivisions of a State). The funds being
made available through this program
could provide economic, safety, and
environmental benefits. Moreover,
participation in the local rail line
relocation and improvement projects
capital grants program is voluntary. The
statute requires a State or other nonFederal entity to provide at least ten
percent of the shared cost of a project
funded under this program. To the
extent a small entity was providing that
non-Federal share, the impact would be
calculated by the small entity in
deciding whether to file the application
under the program.
At the same time, small governmental
entities, limited by Section 9002 to
political subdivisions of a State, would
likely benefit from the economic
opportunities resulting from
infrastructure improvements to existing

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1971

rail lines that connect small
governmental entities to the national
railroad system. As discussed in greater
detail in the background section of this
NPRM, rail infrastructure that was once
critical to many communities can now
present problems as well as benefits. To
the extent the program can be used by
a local government to address an
existing problem, it could provide a
substantial benefit to the community.
The cost to governmental entities of
applying for the program would be
minimal since applicants will normally
have available most of the information
needed to prepare applications for a
grant under Section 9002.
Written public comments that will
clarify the number of affected small
entities and what the impacts will be for
the affected small entities are requested.
FRA especially encourages political
subdivisions that may be considered to
be small entities to participate in the
comment process and submit written
comments to the docket.
Small entities, other than political
subdivisions of states, are not eligible to
apply for relocation or improvement
funds, though on a voluntary basis a
non-governmental small entity could
agree to supply the non-Federal match.
The statute also requires the Secretary to
consider the feasibility of seeking
financial contributions or commitments
from private entities involved with a
project in proportion to the expected
benefits that accrue to such private
entities. Project beneficiaries could
include small entities; however, without
details about specific projects, it is not
possible to realistically estimate
whether impacts to non-governmental
small entities in these circumstances is
likely. FRA invites public comment on
this component of the analysis, as well.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) addresses the
collection of information by the Federal
government from individuals, small
businesses and State and local
governments and seeks to minimize the
burdens such information collection
requirements might impose. A
collection of information includes
providing answers to identical questions
posed to, or identical reporting or
record-keeping requirements imposed
on ten or more persons, other than
agencies, instrumentalities, or
employees of the United States. This
Notice of Proposed Rulemaking contains
information requirements that would
apply to States or political subdivisions
of States that file applications for
Federal funding for local rail line
relocation and improvement projects.

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The information collection
requirements in this proposed rule have
been submitted for approval to the
Office of Management and Budget

Respondent
universe

CFR section—49 CFR

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262.11—Application Process ........................
—Requests for Meeting with FRA .........
—Meeting Discussions ..........................
262.15—Environmental Assessment ............
262.19—Close-Out Procedures ....................
—Inspection of All Construction Report

All estimates include the time for
reviewing instructions; searching
existing data sources; gathering or
maintaining the needed data; and
reviewing the information. Pursuant to
44 U.S.C. 3506(c)(2)(B), the FRA solicits
comments concerning: whether these
information collection requirements are
necessary for FRA to properly perform
its functions, including whether the
information has practical utility; the
accuracy of FRA’s estimates of the
burden of the information collection
requirements; the quality, utility, and
clarity of the information to be
collected; and whether the burden of
collecting information on those who are
to respond, including through the use of
automated collection techniques or
other forms of information technology,
may be minimized. For information or
a copy of the paperwork package
submitted to OMB, contact Mr. Robert
Brogan, Information Clearance Officer,
at 202–493–6292.
Organizations and individuals
desiring to submit comments on the
collection of information requirements
should direct them to Mr. Robert
Brogan, Federal Railroad
Administration, 1120 Vermont Avenue,
NW., Mail Stop 21, Washington, DC
20590. Comments may also be
submitted via e-mail to Mr. Brogan at
the following address:
robert.brogan@fra.dot.gov.
OMB is required to make a decision
concerning the collection of information
requirements contained in this proposed
rule between 30 and 60 days after
publication of this document in the
Federal Register. Therefore, a comment
to OMB is best assured of having its full
effect if OMB receives it within 30 days
of publication. The final rule will
respond to any OMB or public
comments on the information collection
requirements contained in this proposal.
FRA is not authorized to impose a
penalty on persons for violating
information collection requirements
which do not display a current OMB
control number, if required. FRA

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(OMB) under the Paperwork Reduction
Act of 1995, 44 U.S.C. 3501 et seq. The
sections that contain the new
information collection requirements and

50
50
50
50
50
50

States
States
States
States
States
States

...
...
...
...
...
...

Total annual
responses
7
5
5
7
7
7

applications .........
requests ..............
meetings .............
documents ..........
document sets ....
reports ................

Average time
per response

D. Environmental Impact
FRA has evaluated these regulations
in accordance with its procedures for
ensuring full consideration of the
potential environmental impacts of FRA
actions, as required by the National
Environmental Policy Act (42 U.S.C.
4321 et seq.) (NEPA) and related
directives (see FRA Policy Statement on
Procedures for Considering
Environmental Impacts, 64 FR 28545).
FRA has concluded that the issuance of
this NPRM, which establishes
regulations governing the awarding of
grants for local rail line relocation and
improvement projects, does not have a
potential impact on the environment
and does not constitute a major Federal
action requiring an environmental
assessment or environmental impact
statement. Because all projects
undertaken with grants administered
under this section will involve Federal
funding, appropriate NEPA analyses,
including studies of any potential
environmental justice issues, will be
necessary prior to the award of any
grant.
E. Federalism Implications
FRA has analyzed this NPRM in
accordance with the principles and
criteria contained in Executive Order
13132, issued on August 4, 1999, which
directs Federal agencies to exercise great
care in establishing policies that have
federalism implications. See 64 FR
42355. This NPRM will not have a
substantial effect on the States, on the
relationship between the national
government and the States, or on the
distribution of power and
responsibilities among various levels of
government. This NPRM will not have

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Total annual
burden hours

580 hours ....
30 minutes ..
2 hours ........
200 hours ....
6 hours ........
80 hours ......

intends to obtain current OMB control
numbers for any new information
collection requirements resulting from
this rulemaking action prior to the
effective date of the final rule. The OMB
control number, when assigned, will be
announced by separate notice in the
Federal Register.

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the estimated time to fulfill each
requirement are as follows:

4,060
3
10
1,400
42
560

Total annual burden cost
$0 (Cost incl. in RIA).
$120.
$700.
$0 (Cost incl. in RIA).
$1,680.
$39,200.

federalism implications that impose any
direct compliance costs on State and
local governments. There will be costs
associated with the submission of
applications, but they are discretionary
and will only be incurred should a State
or local government wish to apply for
funding. Otherwise, this NPRM directs
how Federal funds will go to the States,
and thus, there are no federalism
implications.
F. Unfunded Mandate Reform Act of
1995
Pursuant to Section 201 of the
Unfunded Mandates Reform Act of 1995
(Pub. L. 104–4, 2 U.S.C. 1531), each
Federal agency ‘‘shall, unless otherwise
prohibited by law, assess the effects of
Federal regulatory actions on State,
local, and tribal governments, and the
private sector (other than to the extent
that such regulations incorporate
requirements specifically set forth in
law).’’ Section 202 of the Act (2 U.S.C.
1532) further requires that ‘‘before
promulgating any general notice of
proposed rulemaking that is likely to
result in the promulgation of any rule
that includes any Federal mandate that
may result in the expenditure by State,
local, and tribal governments, in the
aggregate, or by the private sector, of
$100,000,000 or more (adjusted
annually for inflation) in any 1 year, and
before promulgating any final rule for
which a general notice of proposed
rulemaking was published, the agency
shall prepare a written statement’’
detailing the effect on State, local, and
tribal governments and the private
sector.
There are no ‘‘regulatory actions’’
contemplated within the meaning of the
Unfunded Mandate Reform Act of 1995.
Furthermore, this grant program is not
an ‘‘unfunded mandate,’’ in that there
will be no money until Congress
specifically appropriates it. The only
requirements in this NPRM for funding
other than grant funds provided to State
and local governments is the ten percent
matching requirement, which may

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include costs associated with NEPA
compliance. That requirement, however,
is specifically set forth in § 9002 of
SAFETEA–LU and FRA need not assess
its effect. This NPRM, therefore, will not
result in the expenditure by State, local,
or tribal governments, in the aggregate,
of $100,000,000 or more in any one
year, and thus preparation of such a
statement is not required.
G. Energy Impact
Executive Order 13211 requires
Federal agencies to prepare a Statement
of Energy Effects for any ‘‘significant
energy action.’’ See 66 FR 28355 (May
22, 2001). Under the Executive Order a
‘‘significant energy action’’ is defined as
any action by an agency that
promulgates or is expected to lead to the
promulgation of a final rule or
regulation, including notices of inquiry,
advance notices of proposed
rulemaking, and notices of proposed
rulemaking: (1)(i) That is a significant
regulatory action under Executive Order
12866 or any successor order, and (ii) is
likely to have a significant adverse effect
on the supply, distribution, or use of
energy; or (2) that is designated by the
Administrator of the Office of
Information and Regulatory Affairs as a
significant energy action. FRA has
evaluated this NPRM in accordance
with Executive Order 13211. FRA has
determined that this NPRM is not likely
to have a significant adverse effect on
the supply, distribution, or use of
energy. Consequently, FRA has
determined that this NPRM is not a
‘‘significant energy action’’ within the
meaning of the Executive Order.
H. Privacy Act Statement
Anyone is able to search the
electronic form of all comments
received into any of DOT’s dockets by
the name of the individual submitting
the comment (or signing the comment,
if submitted on behalf of an association,
business, labor union, etc). You may
review DOT’s complete Privacy Act
Statement published in the Federal
Register on April 11, 2000 (Volume 65,
Number 70, Pages 19477–78) or you
may visit http://dms.dot.gov.

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V. The Proposed Rule
For the reasons discussed in the
preamble, the Federal Railroad
Administration proposes to add part 262
to Title 49, Code of Federal Regulations,
as follows:

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PART 262—PROGRAM FOR CAPITAL
GRANTS FOR RAIL LINE RELOCATION
AND IMPROVEMENT PROJECTS
Table of Contents for Proposed Part 262
Sec.
262.1
262.3
262.5
262.7
262.9
262.11
262.13
262.15
262.17
262.19

Purpose.
Definitions.
Allocation requirements.
Eligibility.
Criteria for selection of rail lines.
Application process.
Matching requirements.
Environmental assessment.
Combining grant awards.
Close-out procedures.

Authority: 49 U.S.C. 20154 and 49 CFR
1.49.
§ 262.1

Purpose.

The purpose of this part is to carry out
the statutory mandate set forth in § 9002
of the Safe, Accountable, Flexible,
Efficient Transportation Equity Act—A
Legacy for Users (Pub. L. 109–59) that
the Secretary of Transportation
promulgate regulations implementing
new § 20154 of Title 49 of the United
States Code, which establishes a capital
grants program to provide financial
assistance for local rail line relocation
and improvement projects.
§ 262.3

Definitions.

Act means the Safe, Accountable,
Flexible, Efficient Transportation Equity
Act—A Legacy for Users (Pub. L. 109–
59).
Administrator means the Federal
Railroad Administrator, or his or her
delegate.
Allowable costs means those project
costs for which Federal funding may be
expended under this part. Only
construction and construction-related
costs will be allowable.
Construction means supervising,
inspecting, demolition, actually
building, and incurring all costs
incidental to building a project
described in § 262.9 of this part,
including bond costs and other costs
related to the issuance of bonds or other
debt financing instruments and costs
incurred by the Grantee in performing
project related audits, and includes:
(1) Locating, surveying, and mapping;
(2) Track and related structure
installation, restoration, and
rehabilitation;
(3) Acquisition of rights-of-way;
(4) Relocation assistance, acquisition
of replacement housing sites, and
acquisition and rehabilitation,
relocation, and construction of
replacement housing;
(5) Elimination of obstacles and
relocation of utilities; and
(6) Any other activities as defined by
FRA, including architectural and

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engineering costs, and costs associated
with compliance with the National
Environmental Policy Act, National
Historic Preservation Act, and related
statutes, regulations, and orders.
FRA means the Federal Railroad
Administration.
Improvement means repair or
enhancement to existing rail
infrastructure, or construction of new
rail infrastructure, that results in
improvements to the efficiency of the
rail system and the safety of those
affected by the system.
Non-Federal share means the portion
of the allowable cost of the local rail
line relocation or improvement project
that is being paid for through cash or inkind contributions by a state or other
non-Federal entity.
Private Entity means any domestic or
foreign nongovernmental for-profit or
not-for-profit organization.
Project means the local rail line
relocation or improvement for which a
grant is requested under this section.
Quality of Life means the level of
social, environmental and economic
satisfaction and well being a community
experiences, and includes factors such
first responders’ emergency response
time, the environment, grade crossing
safety, and noise levels.
Real Property means land, including
land improvements, structures and
appurtenances thereto, excluding
movable machinery and equipment.
Relocation means moving a rail line
vertically or laterally to a new location.
Vertical relocation refers to raising
above the current ground level or
sinking below the current ground level
a rail line. Lateral relocation refers to
moving a rail line horizontally to a new
location.
Secretary means the Secretary of
Transportation.
State except as used in § 262.17,
means any of the fifty United States, a
political subdivision of a State, and the
District of Columbia. In § 262.17, State
means any of the fifty United States and
the District of Columbia.
Tangible personal property means
property, other than real property, that
has a physical existence and an intrinsic
value, including machinery, equipment
and vehicles.
§ 262.5

Allocation requirements.

At least fifty percent of all grant funds
awarded under this section out of funds
appropriated for a fiscal year shall be
provided as grant awards of not more
than $20,000,000 each. Designated,
high-priority projects will be excluded
from this allocation formula. FRA will
adjust the $20,000,000 amount to reflect
real inflation for fiscal years beginning

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after fiscal year 2006 based on the
materials and supplies component from
the all-inclusive index of the AAR
Railroad Cost Indexes.
§ 262.7

Eligibility.

(a) A state is eligible for a grant from
FRA under this section for any
construction project for the
improvement of the route or structure of
a rail line that either:
(1) Is carried out for the purpose of
mitigating the adverse effects of rail
traffic on safety, motor vehicle traffic
flow, community quality of life, or
economic development; or
(2) Involves a lateral or vertical
relocation of any portion of the rail line.
(b) Only costs associated with
construction will be considered
allowable costs.
§ 262.9

Criteria for Selection of Rail Lines.

FRA will consider the following
factors in determining whether to award
a grant to an eligible State under this
part:
(a) The capability of the State to fund
the rail line relocation project without
Federal grant funding;
(b) The requirement and limitation
relating to allocation of grant funds
provided in § 262.7;
(c) Equitable treatment of various
regions of the United States;
(d) The effects of the rail line,
relocated or improved as proposed, on
motor vehicle and pedestrian traffic,
safety, community quality of life, and
area commerce;
(e) The effects of the rail line,
relocated as proposed, on the freight rail
and passenger rail operations on the
line;
(f) Any other factors FRA determines
to be relevant to assessing the
effectiveness and or efficiency of the
grant application in achieving the goals
of the national program, including the
level of commitment of non-Federal
and/or private funds to a project.

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§ 262.11

Application process.

(a) All grant applications for
opportunities funded under this section
must be submitted to FRA through
www.grants.gov. Opportunities to apply
will be posted by FRA on
www.grants.gov only after funds have
been appropriated for Capital Grants for
Rail Line Relocation Projects. The
electronic posting will contain all of the
information needed to apply for the
grant, including required supporting
documentation.
(b) In addition to the information
required with an individual application,
a State must submit a description of the
anticipated public and private benefits

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associated with each rail line relocation
or improvement project described in
§ 262.7(a)(1) and (2). The determination
of such benefits shall be developed in
consultation with the owner and user of
the rail line being relocated or improved
or other private entity involved in the
project. The State should also identify
any financial contributions or
commitments it has secured from
private entities that are expected to
benefit from the proposed project.
(c) Potential applicants may request a
meeting with the FRA Associate
Administrator for Railroad Development
or his designee to discuss the nature of
the project being considered.
§ 262.13

Matching requirements.

(a) A State or other non-Federal entity
shall pay at least ten percent of the
construction costs of a project that is
funded in part by the grant awarded
under this section.
(b) The non-Federal share required by
sub-part (a) of this section may be paid
in cash or in-kind. In-kind contributions
that are permitted to be counted under
this section are as follows:
(1) A contribution of real property or
tangible personal property (whether
provided by the State or a person for the
State) needed for the project;
(2) A contribution of the services of
employees of the State or other nonFederal entity or allowable costs,
calculated on the basis of costs incurred
by the State or other non-Federal entity
for the pay and benefits of the
employees, but excluding overhead and
general administrative costs;
(3) A payment of any allowable costs
that were incurred for the project before
the filing of an application for a grant
for the project under this section, and
any in-kind contributions that were
made for the project before the filing of
the application; if and to the extent that
the costs were incurred or in-kind
contributions were made, as the case
may be, to comply with a provision of
a statute required to be satisfied in order
to carry out the project.
(c) In determining whether to approve
an application, FRA will consider the
feasibility of seeking financial
contributions or commitments from
private entities involved with the
project in proportion to the expected
benefits determined under § 262.11(b) of
this Part that accrue to such entities
from the project.
§ 262.15

Environmental assessment.

The provision of grant funds by FRA
under this Part is subject to a variety of
environmental and historic preservation
statutes and implementing regulations
including, but not limited to, the

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National Environmental Policy Act
(NEPA) (42 U.S.C. 4332 et seq.), Section
4(f) of the Department of Transportation
Act (49 U.S.C. 303(c)), the National
Historic Preservation Act (16 U.S.C.
470(f)), and the Endangered Species Act
(16 U.S.C. 1531). Appropriate
environmental and historic
documentation must be completed and
approved by the Administrator prior to
a decision by FRA to approve a project
for construction. FRA’s ‘‘Procedures for
Considering Environmental Impacts’’
(65 FR 28545 (May 26, 1999)) or any
replacement environmental review
procedures that FRA may later issue and
the NEPA regulation of the Council on
Environmental Quality (40 CFR Part
1500) will govern FRA’s compliance
with applicable environmental and
historic preservation review
requirements. Applicants will be
expected to fund costs associated with
FRA NEPA compliance. Those costs
will be considered allowable costs
should FRA and the state enter into a
grant agreement.
§ 262.17

Combining grant awards.

Two or more States, but not political
subdivisions of States, may, pursuant to
an agreement entered into by the States,
combine any part of the amounts
provided through grants for a project
under this section provided:
(a) The project will benefit each of the
States entering into the agreement; and
(b) The agreement is not a violation of
the law of any such State.
§ 262.19

Close-out procedures.

(a) Thirty days before the end of the
grant period, FRA will notify the state
that the period of performance for the
grant is about to expire and that closeout procedures will be initiated.
(b) Within 90 days after the expiration
or termination of the grant, the state
must submit to FRA any or all of the
following information, depending on
the terms of the grant:
(1) Final performance or progress
report;
(2) Financial Status Report (SF–269)
or Outlay Report and Request for
Reimbursement for Construction
Programs (SF–271);
(3) Final Request for Payment (SF–
270);
(4) Patent disclosure (if applicable);
(5) Federally-owned Property Report
(if applicable)
(c) If the project is completed, within
90 days after the expiration or
termination of the grant, the State shall
complete a full inspection of all
construction work completed under the
grant and submit a report to FRA. If the
project is not completed, the State shall

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unreimbursed allowable costs. If the
State has received more funds than the
total allowable costs, the State must
immediately refund to the FRA any
balance of unencumbered cash
advanced that is not authorized to be
retained for use on other grants.

(e) FRA will notify the State in
writing that the grant has been closed
out.
Issued in Washington, DC, on December
19, 2006.
Joseph H. Boardman,
Federal Railroad Administrator.
BILLING CODE 4910–06–P

[FR Doc. 07–45 Filed 1–16–07; 8:45 am]
BILLING CODE 4910–06–C

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submit a report detailing why the
project was not completed.
(d) FRA will review all closeout
information submitted, and adjust
payments as necessary. If FRA
determines that the State is owed
additional funds, FRA will promptly
make payment to the State for any

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