A Railroader's Guide to CRISI, Grant Writing, and Funding For Infrastructure Projects
By Tom Loftus, Director of Finance & Operations
Last Updated March 30th, 2024
The US Department of Transportation has detailed an array of new funding opportunities for freight and passenger rail infrastructure projects supported by the Bipartisan Infrastructure Law (“BIL”). For Class II and Class III railroads, state and local governments, and other public organizations, exploring and applying for federal funding can be a formidable task. Planning and lead time for grant writing and funding are key, so let’s summarize some of the programs and opportunities meant for the rehabilitation and construction of rail infrastructure.
Rail Infrastructure Grant Requirements
While you may have case studies and data in hand already, the need to demonstrate the Net Economic Benefits and the Environmental Impact means your project may need additional time to research, prepare, and analyze this information before submitting it.
The two primary requirements for grant applications are:
demonstration of a project’s net economic benefits; and
determination of a project’s potential environmental impact as viewed by the National Environmental Policy Act (“NEPA”).
Defining Benefit-Cost Analysis for Rail Projects
Net economic benefits are demonstrated in a required Benefit-Cost Analysis (“BCA”). Benefits are based on a project’s effect on the DOT’s funding priorities – improve railroad safety, efficiency and reliability; mitigate congestion at chokepoints; enhance multi-modal connections, address climate change and environmental justice, invest in low-income and underserved communities, and promote racial equity.
NEPA requires different levels of analysis depending on the characteristics and location of the project. NEPA investigations, which can add months or years to the time needed to implement a project, must be completed before grant funds will be released. The lowest level of investigation is a Categorical Exclusion (“CE”). NEPA excludes a project from higher levels of the investigation if it meets the requirements stated in the CE worksheet. Preparing a CE can take three to four months so it would be time well spent considering the NEPA implications of projects chosen for your grant application.
In addition to ongoing financing available through the Railroad Rehabilitation and Investment Financing (“RRIF”) program, the following are six federal grant programs available to Class II, Class III, port, and public sector-owned railroads.
Consolidated Rail Infrastructure and Safety Improvements Grant Program – CRISI GRANTS
The Consolidated Rail Infrastructure and Safety Improvements grant program (“CRISI”) is a versatile funding source. Eligible uses include fundamental railroad maintenance and upgrades such as tie and ballast renewal, surfacing, rail replacement, as well as expansion and enhancement of services like constructing a spur to an online industry or building a transload facility.
The BIL appropriated $5.0 billion for the CRISI program over five years, FY 2022 (October 2021 to September 2022) to FY 2026 (October 2025 to September 2026). On top of this, an additional $5.0 billion has been authorized subject to future appropriation. The opportunity to apply for a CRISI grant under the FY 2022 program was announced on September 2, 2022, in a Notice of Funding Opportunity (“NOFO”.
At $1.4 billion authorized in 2022, the annual funding is an enormous increase over recent appropriations. The FY 2021 appropriation was $362 million, FY 2020 was $312 million and FY 2019 was $245 million. The increased appropriation is especially important because requests for grant funds from previous CRISI programs far exceeded the funds available.
FMW, through its consulting arm the National Rail Consulting Group, has completed multiple successful CRISI Grant Applications, including most recently a $14.7 million project in support of a short line freight railroad overhaul in Pennsylvania - details here. Contact FMW or NRCG today to learn how we can assist your company in completing a CRISI Grant Application.
Rebuilding American Infrastructure Sustainably and Equitably – RAISE GRANTS
Rebuilding American Infrastructure Sustainably and Equitably (“RAISE”) (formerly BUILD and TIGER) was appropriated $7.5 billion. On January 27, 2022, $1.5 billion was announced for the FY 2022 program with applications due April 14, 2022. $1.5 billion is a 50% increase over the FY 2021 amount. The FY 2022 NOFO, for reference, is available at https://www.transportation.gov/RAISEgrants/raise-nofo.
RAISE grant funding is available to states, tribal governments, government agencies, political subdivisions, special purpose districts, and port authorities. Short line railroads can partner with these entities to implement eligible projects. DOT’s objectives for RAISE grants are to invest efficiently and equitably, promote the competitiveness of the U.S. economy, improve job opportunities by focusing on high labor standards and equal employment opportunity, strengthen infrastructure resilience to all hazards including climate change, and to effectively coordinate with State, local, Tribal, and territorial government partners. Focus will be on projects that reduce greenhouse gas emissions, address climate change impacts and environmental justice, and target at least 40 percent of resources and benefits towards low-income communities, disadvantaged communities, communities underserved by affordable transportation, or overburdened communities.
Nationally Significant Multimodal Freight and Highways Projects; National Infrastructure Project Assistance; Rural Surface Transportation
Nationally Significant Multimodal Freight and Highways Projects (“INFRA”), National Infrastructure Project Assistance (“Mega”), Rural Surface Transportation (“Rural”) grant programs were appropriated $7.25 billion, $5.0 billion, and $1.0 billion, respectively. A NOFO issued on March 22, 2022, combined the INFRA, Mega and Rural grant programs into one notice with applications due on May 23, 2022. The FY 2022 NOFO makes available $1.55 billion for INFRA, $1.0 billion for Mega, and $300 million for Rural. Applicants can submit one application and indicate whether they are applying for one, two, or all three programs. The NOFO is available at https://www.transportation.gov/grants/multimodal-project-discretionary-grant-notice-funding-opportunity.
Applicant and project eligibility are similar under each program. States, tribal governments, government agencies, special purpose districts, and port authorities are eligible for grants for projects including railroad grade crossings, and multimodal freight projects. Short line railroads can partner with these entities to implement eligible projects. Each program has minor, specific differences, for example, Amtrak is eligible for the Mega program, and wildlife crossing projects are eligible for INFRA grants.
The investment priorities for the programs are the same as for the RAISE grant program, to invest efficiently and equitably, promote the competitiveness of the U.S. economy, improve job opportunities by focusing on high labor standards and equal employment opportunity, strengthen infrastructure resilience to all hazards including climate change, and to effectively coordinate with State, local, Tribal, and territorial government partners. Focus will be on projects that reduce greenhouse gas emissions, address climate change impacts and environmental justice, and target at least 40 percent of resources and benefits towards low-income communities, disadvantaged communities, communities underserved by affordable transportation, or overburdened communities.
Railroad Crossing Elimination Grant Program
Railroad Crossing Elimination Grant Program, a new program included in the BIL, was appropriated $3.0 billion, with potentially an additional $2.5 billion to be appropriated, to eliminate safety hazards at railway/highway grade crossings. Funding is available to states, tribal governments, political subdivisions, port authorities, and metropolitan planning organizations (“MPOs”) for projects that implement grade separations (bridge, embankment, tunnel), relocate track, or improve crossing protections by installing signals, gates, and other protective devices. The NOFO release date for this program has not yet been determined.
Railroad Rehabilitation and Improvement Financing Loan Program
The Railroad Rehabilitation and Improvement Financing (“RRIF”) loan program, administered by the DOT’s Build America Bureau (“Bureau”), has up to $35 billion available for loans to support a broad range of rail investments: rail infrastructure improvements; locomotive, freight car, and equipment purchases; funding acquisitions; and repaying outstanding debt. Standard loan terms are: loans up to 35 years; low interest rates based on US Treasuries; Credit Risk Premium (“CRP”) required to offset the government’s cost to provide the loan; repayment deferred up to 5 years after project completion; no prepayment penalties; collateral not required but could reduce the CRP; CRP repaid with interest when loan is completely repaid.
Applications can be submitted at any time. The Bureau has an established application process with the first step to contact the Bureau to review the proposed project.
As of December 31, 2021, $7.1 billion had been lent in 30 transactions. RRIF has reserved "not less than" $7.0 billion for Class II and III freight railroads, of which approximately $128 million is currently outstanding. There are funds available.
In 2020, the Bureau announced RRIF Express, a pilot program with three primary objectives: (1) encourage “increased utilization” of RRIF funding by Class II and III railroads, (2) reduce the cost of obtaining a loan, and (3) streamline the application and approval process. The time and cost of completing loan approval have often inhibited small railroads’ participation.
RRIF Express responds to these concerns by limiting loans to a maximum of $150 million. The size limit is expected to reduce the complexity of applications and therefore the time required to complete evaluations. RRIF Express also provides up to $100,000 to offset the cost of third-party advisors and Bureau funding of the CRP up to 10% of the loan value.
Transportation Infrastructure Finance and Innovation Act – TIFIA GRANTS
The Transportation Infrastructure Finance and Innovation Act (“TIFIA”), administered by the Bureau, was appropriated $1.25 billion over 4 years. TIFIA financing is available to state and local governments, transit agencies, railroad companies, special authorities, special districts, and private entities. Eligible rail projects include intercity passenger rail, freight rail, intermodal projects, and transit-oriented development (“TOD”). TIFIA is geared toward large value projects and is designed to fill gaps in funding. The program offers loans, loan guarantees, and standby lines of credit with minimum financing of $50 million, limited to 33% of expected project costs. The application process is similar to the RRIF loan process described earlier.
FMW and its consulting division, the National Rail Consulting Group, offer clients extensive experience in the management, drafting, and submission of applications for federal award and rail grant requests as part of its suite of professional services for the railroad industry. Additional services include mechanical and engineering design, diesel locomotive servicing and repair, rail operations, strategic planning support, marketing, public relations, safety compliance administration, training, and alternative fuel technology research and development. For more on FMW Solutions, to request a quote, proposal, or to explore opportunities for your railroad operation, visit fmwsolutions.com, email us, or call (423) 425-9753.