49 CFR Part 266 — Assistance to States for Local Rail Service Under Section 5 of the Department of Transportation Act

PART 266—ASSISTANCE TO STATES FOR LOCAL RAIL SERVICE UNDER SECTION 5 OF THE DEPARTMENT OF TRANSPORTATION ACT Authority: Sec. 5 of the Department of Transportation Act (49 U.S.C. 1654), as amended by the Local Rail Service Assistance Act of 1978, Pub. L. 95-607, 92 Stat. 3059. Source: 44 FR 51129, Aug. 30, 1979, unless otherwise noted. § 266.1 Definitions. As used in this part: Acquisition assistance Act et seq. Administrator Cash Commission Common carrier Designated State Agency Entitlement Equipment Facilities FRA Federal Share Final System Plan Gross ton miles per mile Line Maintenance Planning assistance Planning Work Program Program operation assistance Rail Act et seq. Rail banking Rail facility construction assistance Rail service continuation assistance (1) Where service was eligible to be subsidized under section 402(c)(2) (A) and (B) of the Rail Act, rail service continuation assistance means funds for payments determined in accordance with 49 CFR part 1125; and (2) Where service was eligible to be subsidized under section 402(c)(2)(C) of the Rail Act, rail service continuation assistance means funds for payments calculated, to the greatest extent possible, in a manner consistent with 49 CFR part 1121. Rehabilitation or improvement assistance Relocation costs State State Rail Plan Substitute service assistance § 266.3 Rail Service Assistance Program. (a) Scope of the program. (1) Rail service continuation assistance; (2) Acquisition assistance; (3) Rehabilitation or improvement assistance; (4) Substitute service assistance; (5) Rail facility construction assistance; (6) Planning assistance; and (7) Program operations assistance. (b) Special limitations on planning assistance and program operation assistance. (2) A State is eligible to receive up to 5 percent of the total amount of funds granted to it each fiscal year under paragraphs (a)(1) to (5) of this section as program operation assistance. § 266.5 State eligibility. (a) General eligibility requirements under the rail service assistance program. (1) The State has certified pursuant to section 5(j)(4) of the Act that it has or will adopt and maintain adequate procedures for financial control, accounting and performance evaluation in order to assure proper use of Federal funds; (2) For purpose of establishing a State Rail Plan, the State has submitted, in accordance with § 266.17(e) of this part, a planning application; and (3) For any other assistance, (i) The State has established an adequate plan for rail services in the State which: (A) Meets the requirements of § 266.15 of this part; (B) Is part of an overall planning process for all transportation services in the State; (C) Includes a suitable procedure for updating, revising, and amending such plan; and (D) As updated, revised, or amended has been approved by the Administrator; (ii) Such State Rail Plan: (A) Is administered or coordinated by a designated State agency; (B) Provides for the equitable distribution of resources; and (C) Includes a methodology for determining the ratio of benefits to costs of projects for which acquisition assistance, rehabilitation or improvement assistance, substitute service assistance, and rail facility construction assistance is sought; (iii) The State agency: (A) Has authority and administrative jurisdiction to develop, promote, supervise, and support safe, adequate, and efficient rail transportation services; (B) Employs or will employ, directly or indirectly, sufficient trained and qualified personnel; (C) Maintains or will maintain adequate programs of investigation, research, promotion, and development with provision for public participation; and (D) Is designated and directed solely or in cooperation with other State agencies to take all practicable steps to improve transportation safety and to reduce transportation-related energy utilization and pollution; and (iv) The State undertakes to immediately notify the Administrator of any changes in conditions which might affect its compliance with this section. § 266.7 Project eligibility. (a) Rail service continuation assistance, acquisition assistance and substitute service assistance. (1) The Commission pursuant to 49 U.S.C. 10903 has found since February 5, 1976, that the public convenience and necessity permit the abandonment and discontinuance of rail service on the line related to the project, except that any such line or related project eligible prior to October 1, 1978, is eligible only until September 30, 1981 and any such line eligible for rail service continuation assistance shall receive such assistance for no more than 36 months after October 1, 1978; (2) The line related to the project was eligible for assistance under section 402 of the Rail Act (45 U.S.C. 762), except that any such line or related project is eligible only until September 30, 1981; or (3) For purposes of acquisition assistance, the line related to the project is listed for possible inclusion in a rail bank in Part III, Section C of the Final System Plan. (b) Rehabilitation and improvement assistance and rail facility construction assistance. (1)(i) The Commission has not made a finding that the public convenience and necessity would require or permit abandonment or discontinuance of rail service on the line related to the project; (ii) Any pending application for a certificate of abandonment or discontinuance of rail service on the line related to the project is withdrawn within a reasonable period (as determined by the Administrator) following the execution of the grant agreement and before Federal funds are disbursed for the project; and (iii)(A) The line related to the project is certified by the railroad as having carried three million gross ton miles per mile or less during the prior year; or (B) The line related to the project is certified by the railroad in a written statement which identifies the name of the line, the State or States in which it is located, its length, termini, and termini mile posts as having carried between three and five million gross ton miles per mile during the prior year, and the Administrator has determined that the project is consistent with proposals made under the authority of subsections 5 (a) through (e) of the Act (49 U.S.C. 1654 (a)-(e)); (2)(i) An application for a certificate of abandonment or discontinuance of rail service on the line related to the project has been filed with the Commission during the period February 5, 1976 through December 31, 1978, whether or not such application has been granted; or (ii) During the period February 5, 1976, through December 31, 1978, the Commission has found that the public convenience and necessity would require or permit abandonment or discontinuance of rail service on the line related to the project irrespective of when the application was filed; (3) The line related to the project is listed for possible inclusion in a rail bank in Part III, Section C of the Final System Plan; or (4) The line related to the project was eligible to be acquired under section 402(c)(3) of the Rail Act (45 U.S.C. 762(c)(3)). (c) Projects eligible under paragraphs (b)(2), (b)(3), and (b)(4), of this section are eligible only until September 30, 1981. Projects initially eligible under paragraph (b)(2) of this section, may subsequently become eligible under paragraph (b)(1) of this section, if the Commission issues a new certificate of public convenience and necessity with respect to the line related to the project. § 266.9 Federal/State share. (a) Federal share. (b) State share-general. (c) In-kind benefits Eligible types of benefits and their valuation. (i) The value of forgiven taxes, such as those portions of gross receipts or revenue taxes which are applicable to an approved project or property taxes on project related property, shall be the amount which would otherwise have been levied by the taxing authority. Forgiveness may be through exemption or remission; (ii) The value of trackage rights secured by a State for a common carrier shall be the amount paid by railroads for comparable rights on comparable rail freight properties; (iii) The value of State salaries for State public employees working in the State Rail Service Assistance Program, shall be consistent with rates paid for similar work by state public employees working in comparable state programs but shall not include overhead or general administrative costs; (iv) The value of donations by the State or by a third party on behalf of the State of real property or tangible personal property of the kind necessary for safe and efficient operation of rail freight service, such as State or locally owned or leased buildings used in rail freight operations or equipment or materials, shall be determined as follows: (A) The value of State tangible personal property shall be established at the State's actual cost in accordance with Federal Management Circular 74-4; (B) The value of donated tangible personal property shall be determined in accordance with Attachment F of Office of Management and Budget Circular (OMB) A-102; (C) The value of State real property shall be established at the State's actual cost in accordance with Federal Management Circular 74-4, if at least one independent appraisal based on the results of a title search was performed when the property was purchased by the State, otherwise it shall be valued at the fair market value as established by at least one independent appraisal based on the results of a title search at the time the state proposes to make the property available as in-kind benefit; and (D) The value of donated real property shall be its fair market value, at the time of donation to the State, as established by at least one independent appraisal based on the results of a title search; (2) Eligibility criteria. (i) Be verifiable from the State's records; (ii) Be necessary and reasonable for proper and efficient accomplishment of the objectives of the Rail Service Assistance Program; (iii) Be provided for in the approved grant budget; and (iv) Be approved under paragraph (3) of this paragraph (c). (v) The State shall submit such information as the Administrator may request to verify the value of in-kind benefits. (3) Request for approval. (i) Full name and principal business address of the contributor if other than grantee; (ii) Detailed documentation of the in-kind benefits including identification of the kind of in-kind benefits to be provided as well as their estimated value. When in-kind benefits are to be provided by a third party, a copy of the executed agreement between the State and the third party; and (iii) Certification by the State that the contribution will be used solely for the purposes documented. § 266.11 Allowable costs. Allowable costs include only the following costs which are properly allocable to the work performed: Planning and program operation costs which are allowed under Federal Management Circular 74-4; and costs of projects eligible under § 266.7 of this part. All allowable costs shall be authorized by a fully executed grant agreement. A State may incur costs prior to the execution of a grant agreement only if the Administrator, based on the State's demonstration of a compelling need to incur costs prior to the execution of a grant agreement, has authorized the costs in writing prior to their incurrence by the State. § 266.13 Distribution of funds. (a) Formula. (1) Two-thirds of the funds will be allocated in the ratio which a State's rail mileage that, in accordance with 49 U.S.C. 10904(d), is either potentially subject to abandonment or is to become the subject of an application for a certificate of abandonment or discontinuance which a carrier plans to submit, but has not yet submitted, bears to the total such rail mileage in all the States; (2) One-third of the funds will be allocated in the ratio which a State's rail mileage for which the Commission has found within three years prior to the first day of the fiscal year for which the funds are being allocated that the public convenience and necessity permits the abandonment, or the discontinuance, of rail service on such rail mileage, bears to the total such rail mileage in all the States. Until September 30, 1981, such rail mileage includes the rail mileage which was eligible under the Rail Service Assistance Program pursuant to section 402 of the Rail Act, and all rail mileage which, prior to October 1, 1978, had been included for formula allocation purposes. The Administrator will calculate rail mileage under this paragraph as of October 1 of each year; and (3) The above calculations will be adjusted if necessary so that no State receives less than 1 percent of the funds appropriated for a fiscal year. (b) Reallocation. (c) Interstate sharing of allocated funds. § 266.15 Requirements for State Rail Plan. (a) State planning process. (b) Format of the State Rail Plan. (c) Contents of the State Rail Plan. (1) Specify the objectives of the State's Rail Service Assistance Program and explain how the implementation of the State Rail Plan will accomplish these objectives and explain relevant data sources, assumptions, analytical methodology, other legal constraints and special problems or conditions which will aid the public in understanding the State Rail Plan; (2) Contain an illustration of the State's entire rail system on suitable scale maps of the State highway system (such as a reduction of the County Highway Planning Series of maps), designating with respect to each line listed under subparagraph (3) of this subsection, including all lines connecting to them: (i) The operating carrier or carriers; (ii) Freight traffic density, and (iii) Location of passenger service. These maps shall be accompanied by a written description of the service provided on each line; (3) Identify the following classes of rail service within the State: (i) Lines in the State which are eligible for assistance under § 266.7 of this part other than those included in paragraph (c)(3)(ii) of this section; (ii) Lines in the State which a common carrier has identified on its system diagram map submitted under 49 CFR 1121.20(b) (1) and (2) as potentially subject to abandonment and lines which are anticipated to be the subject of an abandonment or discontinuance application within three years following the date of submission; (iii) [Reserved] (iv) Lines in the State for which abandonment or discontinuance applications are pending; (v) Lines in the State which are involved in the following kinds of proposals that have been submitted to the Commission for approval or are in the process of negotiation, to the extent that this information is publicly available: (A) Mergers; (B) Consolidations; (C) Reorganizations; (D) Purchases by other common carriers; or (E) Other unification and coordination projects. (vi) Rail projects for which the State plans to request Federal assistance or approval as in-kind benefits; and (vii) Rail projects for which a State provides or plans to provide assistance from sources other than the Rail Service Assistance Program, including the estimated cost of the projects; (4) Establish and describe screening criteria to be used in selecting the eligible lines which the State analyzes in detail, identify these lines, and explain how the application of the screening criteria resulted in their selection; (5) Describe the State's methodology for determining the ratio of benefits to the costs of proposed projects eligible under § 266.7 of this part (except projects to be funded with rail service continuation assistance); (6) Include, to the extent that the information is available to the State, the following data for each line the State has selected to analyze in detail: (i) Annual freight tonnage and carloads segregated by commodity type and indicating any seasonal traffic fluctuations and the number of shippers and receivers on the line aggregated by type (e.g., grain elevator, power plant, heavy manufacturing), including identification of information which a shipper wishes the Administrator to consider confidential to the extent permitted by law; (ii) Revenues and costs of providing rail freight service on the line; (iii) Condition of the related rail facilities and equipment, and for a line eligible under § 266.7(b) of this part, a description of the particular rail facilities involved in any project a State may be considering on the line; (iv) When the State is considering a line for rail service continuation assistance, projections of freight traffic needs on the line for at least the three succeeding calendar years and estimates of the amount and type of equipment, the condition of the rail facilities, and the level of service necessary to satisfy the projected traffic needs as well as estimates of the revenue and costs of providing this service; and (v) When the State is considering a project eligible under § 266.7(b) of this part, the amount of funds expended for the maintenance of the line and the kinds of work performed during the five year period preceding its eligibility. (vi) When the State is considering a line for rail banking, a description of the line's future economic potential, such as the existence of fossil fuel reserves or agricultural production likely to be served; (7) Describe the alternatives which the State will analyze in applying the methodology described in paragraph (c)(5) of this section, such as: Rail service continuation payments, rehabilitation or improvement, acquisition, rail facility construction, potential for moving freight by alternate modes, or abandonment or discontinuance of rail freight service; (8) Apply the methodology described in paragraph (c)(5) of this section to each line the State has selected to analyze in detail; (9) Specify the State's decision regarding the alternative selected for each line the State has analyzed in detail and include the following: (i) An indication of whether Federal assistance will be requested or other funds will be used to implement the alternative selected; (ii) An identification of lines which may be affected by the alternative selected; (iii) An explanation of how the alternative selected contributes to the accomplishment of the State's objectives as stated in paragraph (c)(1) of this section; and (iv) A statement of the projected future of the line after the alternative selected is implemented and the line is no longer eligible for rail service continuation assistance under § 266.7(a) of this part or after the payback period used in the State's benefit-cost analysis, whichever is appropriate; (10) Describe the planning process participation of local and regional governmental bodies, the railroads, railroad labor, rail service users, and the public in general; (11) Describe the overall planning process for all transportation services in the State; and (11A) Indicate how the overall planning process in the State addresses the need to improve national energy efficiency, reduce the national use of petroleum and natural gas, and increase the national use of coal. (12) Include a program of projects which identifies the projects for which the State expects to submit applications and the anticipated submission date. The program shall group the proposed projects in the order they comply with the State's criteria and goals for assistance, and shall: (i) Identify the type of project (i.e., rail service continuation payments, acquisition, rehabilitation or improvement, rail facility construction, or substitute service), its location, and duration; and (ii) Include the anticipated amount of funds to be requested for each project: (d) Updates, revisions, and amendments of the State Rail Plan General. (2) Contents. (i) A response to unanswered FRA comments on previously submitted updates, revisions, amendments, or the original State Rail Plan; (ii) An update of information in previous submittals which is no longer accurate as a result of plan implementation, action by a governmental entity or railroad, or changed conditions; (iii) For lines receiving rail service continuation assistance, inclusion of revenue and cost information from the past year's operating experience and a reevaluation of service based on these new data; (iv) Updating of the maps and descriptions required under paragraph (c)(2) of this section; (v) Analysis of any new projects developed by the State in accordance with paragraphs (c)(4), (5) and (6) of this section; (vi) Changes in agency responsibilities and authority including ability to provide the non-Federal share; and (vii) Revisions in the State's policies, objectives or long-range expectations. (e) Adoption and submission of State Rail Plan and annual updates. (f) Review of the State Rail Plan and Updates. [44 FR 51129, Aug. 30, 1979, as amended at 45 FR 58038, Aug. 29, 1980; 48 FR 29274, June 24, 1983] § 266.17 Applications. (a) General. (2) Applications for rail service continuation assistance shall comply with paragraphs (b), (c), (d) and (f) of this section. (3) Applications for acquisition assistance shall comply with paragraphs (b), (c), (d) and (g) of this section. (4) Applications for rehabilitation or improvement assistance and rail facility construction assistance shall comply with paragraphs (b), (c), (d) and (h) of this section. (5) Applications for substitute service assistance shall comply with paragraphs (b), (c), (d) and (i) of this section. (b) Submission. (2) A State may apply for planning assistance to cover prospective costs at any time during the planning process. (3) Exhibits previously filed with the Administrator need not be refiled unless the prior filing has been rendered obsolete by changed circumstances. Such prior filing shall be appropriately referenced by source, location of data and date of submittal. (c) Contents. (1) Full name and principal business address of the applicant; (2) Name, title, address and phone number of the person to whom correspondence regarding the application should be addressed; (3) Budget estimates for the total amount of assistance required for projects or planning; (4) Applicant's proposed means of furnishing its share of the total costs of the projects, as well as copies of executed agreements between the agency and any third party which may be providing the non-Federal share or a portion thereof; (5) Assurance by the chief executive officer of the applicant that the Federal funds provided under the Act will be used solely for the purpose for which the assistance will be provided and in conformity with limitations on expenditures under the Act and applicable regulations; (6) Evidence that the applicant has established in accordance with Attachment G of OMB Circular A-102, adequate procedures for financial control, accounting and performance evaluation in order to assure proper use of the Federal funds; (7) Assurance by applicant's chief executive officer that the timing of all advances by the applicant will comply with the Department of Treasury advance financing regulations (31 CFR part 205); (8) Statement as to whether the applicant prefers to receive disbursement of Federal funds by advance payment or reimbursement; (9) Opinion of applicant's legal counsel showing that counsel is familiar with the corporate or other organizational powers of the applicant, that the applicant is authorized to make the application, that the applicant is eligible to participate in the Rail Service Assistance Program in accordance with the provisions of the Act and this part, and that the applicant has the requisite authority to carry out actions proposed in the application and to assume the responsibilities and obligations created thereby; (10) Assurances that the applicant will comply with and that the program will be conducted in accordance with the following Federal laws, policies, regulations and pertinent directives: (i) Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d et seq., (ii) Section 905 of the Railroad Revitalization and Regulatory Reform Act of 1976, 45 U.S.C. 803, and 49 CFR part 265; (iii) The Rehabilitation Act of 1973, 29 U.S.C. 794 and 49 CFR part 27 (44 FR 31442, May 31, 1979) relating to non-discrimination on the basis of handicap; and (iv) The State and Local Fiscal Assistance Act of 1972, 31 U.S.C. 1221 et seq. (11) When two or more States desire to combine their entitlements or any portion of them for the purpose of funding a project, certification of the Governor or the Governor's delegate of each State involved that it is a party to an interstate agreement as required under section 5(h)(4) of the Act (49 U.S.C. 1654(h)(4)). Such certification shall include the amount of money to be used from each State's entitlement and which State is to enter into a grant for the project. (d) Additional contents. (e) Planning assistance. (1) An explanation of how the State Rail Plan will be related to the overall planning process for transportation within the State. This explanation shall concentrate on the expectations of the State for the future of local rail freight services and consider such factors as likelihood of profitability of existing rail lines, necessity of rail service continuation payments, State acquisition of rail lines, use of alternate modes of transportation in lieu of rail freight service, and other long-term alternatives; (2) A description of the methods by which the State will involve local and regional governmental bodies and the public generally in its rail planning process, including its methods of providing for equitable distribution of resources; (3) An identification of the data to be obtained on the rail network and rail services in the State, the sources of this data, and the methodology to be employed in the collection of the data; (4) A description of the method by which the State will develop the State Rail Plan, including a brief description of discrete tasks or activities to be accomplished; and (5) A list of the individuals responsible for the planning, a work schedule and a budget. (f) Rail service continuation assistance. (1) The amount of the estimated rail service continuation payment for each line; and (2) A description of the arrangements which the applicant has made for operation of the rail services to be subsidized including copies of the proposed operating agreements, leases, or other compensation agreements under which service is to be provided, and the results of the application's preaward audit of proposed operators and equipment leasing companies if the equipment to be used in providing the rail service is to be leased by the proposed operator. (g) Acquisition assistance. (1) Copies of the results of a title search, and the basis for the proposed acquisition price including two independent valuation appraisals by qualified appraisers. Such appraisals shall be performed in accordance with the “Uniform Appraisal Standards for Federal Land Acquisition” proposed by the Interagency Land Acquisition Conference and shall be based on the results of a title search and comparable sales and shall take cognizance of all easements, encumbrances and restrictions that may affect the value of the property. Such appraisals shall be reviewed by a State Review appraiser to establish just compensation; (2) Written assurance that the acquisition is being undertaken in accordance with 49 CFR 25.253, 25.255, 25.257, and 25.259 to the greatest extent practicable under State law and fully in compliance with 49 CFR 25.261(a) and 25.263; (3) Written assurance that the owner of the property to be acquired has been advised of the requirements of 49 CFR 25.259 or will be advised of such requirements prior to the consummation of the acquisition; (4) A description of the necessary steps, and timing for completion of the acquisition; (5) When rail service is to be immediately provided over the line, a description of the arrangements which the applicant has made for operation of the rail service, including copies of the proposed operating agreements, leases, and other compensation agreements under which the service is to be provided, and a description of the means by which the State will continue rail service on the property to be acquired once assistance under the Act is terminated; (6) For applications regarding rail banking, evidence that the properties for which assistance is requested have potential for rail freight service such as plans for agricultural development or existence of fossil fuel reserves, the State's anticipated timetable for returning the line to service, and its proposed use of the property while it is out of service including its maintenance plans; and (7) Evidence that the anticipated benefits and costs of the proposed acquisition have been analyzed in accordance with the methodology established by the State under § 266.15(c)(5) of this part. (h) Rehabilitation or improvement assistance and rail facility construction assistance. (i) A detailed estimate of the materials and labor required to complete the work, the total estimated costs of the work, the estimated numbers and kinds of ties and other material, the milepost termini involved, and a schedule for completion of the work; (ii) Evidence that the anticipated benefits and costs of the proposed acquisition have been analyzed in accordance with the methodology established by the State under § 266.15(c)(5) of this part; (iii) When rehabilitation assistance is requested— (A) A copy of the document by which funds will be granted or loaned (at an interest rate determined by the State) to the owner of the rail properties or the operator of the rail service related to the project; and (B) An assurance by the chief executive officer of the applicant that: ( 1 ( 2 ( 3 (iv) An assurance by chief executive officer of the applicant that rehabilitated or improved facilities or newly constructed facilities will be maintained to prevent deterioration below the speed at which the line could be operated upon completion of the project during the period of time established as the payback period in the benefit-cost analysis of the project; (2) In addition to meeting the requirements of paragraphs (b), (c), and (d) and (h)(1) of this section, each application for a project eligible under § 266.7(b)(2)(i) (if the Commission has made a finding granting the application for abandonment and discontinuance) (ii), (3) or (4) shall also include the following: (i) An indication of which of the following methods will be used to complete the work, including proposed contracts unless the work will be performed under method (A): (A) On an actual cost basis by the operator or the applicant; (B) By contracting for the work in accordance with Attachment O to OMB Circular A-102; or (C) Under an existing continuing contract between the operator and another firm provided that the applicant can demonstrate the costs are comparable to those under paragraph (h)(2)(i) (A) or (B) of this section; and (ii) A description of the plans for inspection of the work including identification and qualifications of the staff to be responsible for the inspection and a proposed schedule of inspections; and (iii) A description of the arrangements made for the operation of rail service over the property including copies of the proposed operating agreements, leases or other compensation agreements under which service is to be provided, and the proposed method of financing the operation of such rail service; (3) In addition to meeting the requirements of paragraphs (b), (c), (d), and (h)(1) of this section, each application for a project eligible under § 266.7 (b)(1) or (2)(i) (if the Commission has not made a finding granting the application for abandonment discontinuance) shall include an assurance by the common carrier which operates service on or owns the line related to the project that if an application for a certificate of abandonment or discontinuance has been filed with the Commission the application will be withdrawn within a reasonable period following execution of a grant agreement and before Federal funds are disbursed for the project; and (4) When rail facility construction assistance is requested an assurance by the chief executive officer of the applicant that if the facility is abandoned, sold, or converted to non-rail freight use during its useful life, FRA will be compensated an amount computed by applying FRA's participation in the cost of constructing the facility to the fair market value of the facility at the time it is abandoned, sold, or converted to non-rail use. (i) Substitute service assistance. (1) A detailed description of the substitute service project, including evidence that the cost and scope of the project are limited to that necessary to replace the rail service being discontinued; (2) Evidence that the anticipated benefits and costs of the proposed acquisition have been analyzed in accordance with the methodology established by the State under § 266.15(c)(5) of this part; (3) For construction or improvement of fixed facilities, a description of the proposed work, including: (i) The cost and timing of the work; and (ii) An assurance by the chief executive officer of the applicant that the Federal share of the project will be repaid in accordance with Attachment N of OMB Circular A-102, if the properties are not used for rail freight service during the useful life of the project properties; (4) For relocation costs, the following assurances by the chief executive officer of the applicant: (i) When the rail line related to the project is eligible under section 5(k)(4)(A) of the Act (49 U.S.C. 1654(k)(4)(A)), an assurance that the applicant is requesting only such assistance as is needed to relocate the shippers which were receiving rail service on the line at the time the Commission found that the public convenience and necessity would permit discontinuance or abandonment of the rail service; (ii) When the rail line related to the project is eligible under section 5(k)(4)(B) of the Act (49 U.S.C. 1654(k)(4)(B)), an assurance that assistance is being requested to relocate only the shippers who received rail service on the line as of April 1, 1976; and (iii) An assurance, and the basis therefor, that the shippers will not be relocated to a line with respect to which an application for a certificate of abandonment or discontinuance has been filed with the Commission or that if an application has been filed it will be withdrawn within a reasonable period following execution of a grant agreement and before Federal funds are disbursed for the project; (5) An assurance by the chief executive officer of the applicant that after completion of the substitute service project, additional Federal assistance will not be requested for the continuation of the rail freight service that the substitute service is designed to replace, unless the Administrator determines that circumstances have changed so that continuation of rail freight service is more cost-effective than continued use of the substitute service project; (6) A description of the arrangements made for operation of service where rail service is to be provided in conjunction with a substitute service project, including copies of proposed operating agreements, leases, or other compensation agreements under which service is to be provided; and (7) An assurance by the chief executive officer of the applicant that assistance provided will not be used to pay the non-Federal share under any Federal program. (j) Execution and filing of applications. (2) Each application for planning assistance, and two (2) copies thereof, shall be filed with the Administrator through the appropriate Federal Highway Administration Division Office; (3) Each application (excluding requests for planning assistance), and two (2) copies thereof, shall be filed with the Administrator through the appropriate Regional Director of Federal Assistance. A current list of the appropriate mailing addresses of the above officials will be provided by FRA to each State. § 266.19 Environmental impact. (a) General. (b) Substitute service assistance, rail facility construction assistance, and non-exempt rehabilitation or improvement assistance Environmental assessment. (A) Prepare an environmental assessment to determine whether the future use of the property will significantly affect the quality of the human environment; or (B) Provide sufficient documentation to enable the Administrator to determine that the project satisfies the following criteria: ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 (ii) Prior to submitting an application, FRA recommends that the applicant seek the Administrator's advice as to form and substance of the assessment for the project under consideration. The environmental assessment shall utilize an interdisciplinary approach in identifying the type, degree of effect, and probability of occurrence of primary, secondary and cumulative potential environmental impacts (positive and negative) of the proposed action and of alternative courses of action. The depth of coverage shall be consistent with the magnitude of the project and its expected environmental effects. The environmental assessment and all documents used as a basis for the assessment shall be submitted together with the application for assistance. (2) Environmental impact statement. (3) Finding of no significant impact. (4) Section 4(f) determination. (i) There is no feasible and prudent alternative to the use of such land; and (ii) The project includes all planning to minimize harm resulting from such use. (5) Historic preservation. (c) Highway or highway-related facilities. § 266.21 Grant agreement and disbursement. (a) Grant agreement. (2) The grant agreement will identify the amount of the grantee's share of program costs to be furnished in cash and through approved in-kind benefits. The grantee shall expend a pro-rata share of its cash contribution at the same time payments of the Federal share are made available to the grantee. (b) Disbursement. (2) Prior to receipt of advance payments, the grantee must have demonstrated to the satisfaction of the Administrator that it has established procedures to comply with OMB Circular A-102, Attachment J, including procedures that will minimize the time elapsing between the receipt of funds by the grantee and their disbursement. Evidence of such compliance shall be provided to the Administrator at least 30 days prior to the anticipated date of receipt of advance payments. An advance by letter-of-credit is used when the rail service assistance is expected to be provided for a minimum of one (1) year, and is expected to involve annual payments aggregating at least $120,000. Otherwise, advance payments are made by Treasury check. (3) If the grantee is not eligible for advance payments or does not desire them, the grantee will be reimbursed for eligible expenditures at the end of each fiscal quarter upon submission of a request for reimbursement. (4) Before disbursement of Federal funds can be made to a grantee for payment to third parties under this subsection, the grantee must have executed an agreement with the third party. (5) Acquisition assistance will be disbursed only after the following have been approved by the Administrator: (i) A title opinion of the chief legal officer of the grantee that describe the type of title being acquired, and if a general warranty deed is not being given, it must explain why it could not be given. The opinion shall also advise of any need for use of the State's eminent domain powers to assure adequate title. In addition, the opinion shall explain how the defects disclosed by the title search might affect the marketability of the property; (ii) A written determination that the property acquired is limited to the land and facilities that are needed for the rail freight services which would have been curtailed or abandoned but for the acquisition has been accepted by the Administrator; and (iii) A written determination that the purchase price is consistent with the value of the property interest being acquired, and the evidence upon which the determination is based. (c) Settlement. § 266.23 Record, audit, and examination. (a) Retention and custodial requirements for financial records, supporting documents, statistical records, and all other records pertinent to a grant provided under this part shall be governed by Attachment C of OMB Circular A-102. (b) The Administrator and the Comptroller General of the United States or any of their duly authorized representatives shall, until the expiration of three years after submission to the Administrator of the grantee's final accounting of all program funds, and for any longer period necessary to resolve audit findings, have access for the purpose of audit and examination to any books, documents, papers, and records which in the opinion of the Administrator or the Comptroller General of the United States may be related or pertinent to the grants, contracts, or other arrangements arising out of, or in any way connected with, the rail service assistance program. § 266.25 Waivers and modifications. The Administrator may, with respect to individual requests, upon good cause shown, waive or modify any requirement of this part not required by law or make any additional requirements the Administrator deems necessary. Procedures for submission and consideration of petitions for waiver or modification are governed by 49 CFR part 211.

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