FINAL 2012-15 STIP

MINNESOTA RAIL SERVICE IMPROVEMENTPROGRAMThe Minnesota Rail Service Improvement Program (MRSI),established in 1976, helps prevent the loss of rail service onlines potentially subject to abandonment by railroads. Usingstate-developed eligibility rules, the state and rail users and/orrailroads enter into contracts for rail line rehabilitation, capitalimprovements, purchase assistance to rail authorities, loanguarantees and state rail banking. Funding for these projects isin the form of a loan. When the project is completed, therecipient repays the state. These reimbursements are returnedto the Minnesota Rail Service Improvement Program accountto fund future rehabilitation projects.Projects fall within the program areas identified below. TheMRSI Program has identified $27 million in railroad trackproject needs. Projects will move ahead if funding is availableand project agreements can be completed and contractsexecuted. These loan projects are typically funded with statebond funds. Figure B-1 at the end of this section identifies thepotential number of projects and funding.The following five programs are funded under the MinnesotaRail Service Improvement Program.of the property. State funds are secured and require repaymentif the line is sold or ceases to serve the purpose intended.Rail Rehabilitation ProgramProvides low and no-interest loans to rehabilitate and preserverail lines that are financially viable and have the potential toincrease rail use. A shipper’s survey, cost/benefit analysis, anda rehabilitation needs assessment are conducted to determinewhich lines are prospective rail projects. Repayment of loansis required.Capital Improvement Loan ProgramProvides rail users and railroads with loans for projects thatimprove rail service and/or strengthen the financial conditionof the associated line. Eligible projects have typically includedcapital improvements such as building and expandingindustrial spurs, upgrading bridges and building more efficientloading/un-loading facilities. Repayment of loans is on aquarterly basis.State Rail Bank ProgramAllows the state to acquire and preserve abandoned rail linesfor future transportation use or for transmitting energy, fuel orother commodities.Rail Purchase Assistance ProgramAssists Regional Railroad Authorities in acquiring rail linesthat can be operated on a self-sustaining basis to provide localrail service. MnDOT may provide up to 50 percent of the valueB-1(1)