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Yesterday, Reps. John Mica (R-Fla.) and Bill Shuster (R-Pa.) addressed the importance of improving the Railroad Rehabilitation and Improvement Financing (RRIF) program during their testimony at a House hearing titled, “Sitting on our Assets: Rehabilitating and Improving our Nation’s Rail Infrastructure.”

Created in 1998, the RRIF program authorizes the Federal Railroad Administration (FRA) to lend up to $35 billion for railroad infrastructure improvements, equipment and facilities development. However, average loan processing time is about 13-and-a-half months instead of the 90 days stipulated in the RRIF law, said Mica, who chairs the House Transportation and Infrastructure Committee, according to a prepared statement.
 
“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 1 percent,” he said, adding that the FRA approved only two loans in 2010, two in 2009 and one in 2008.

The program’s barriers need to be eliminated or reformed so “RRIF can be an innovative and successful way to finance rail infrastructure projects, including high-speed rail,” said Mica. “We need to stop sitting on our assets and make the RRIF program more accessible, faster and better utilized.”
 
Despite efforts to strengthen and improve the RRIF program — such as by increasing the repayment period from 25 years to 35 years — the program “is in serious need of improvement,” said Shuster, who chairs the House committee’s Railroads, Pipelines and Hazardous Materials Subcommittee.

“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,” he said. “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.
 
Shuster also expressed interest in exploring ways to reform the program to leverage federal funding with private sector resources or 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,” he said.