RAILROAD ASSISTANCE PROGRAM

LOCAL RAIL FREIGHT ASSISTANCE (LRFA)

The State of Kansas began a revolving loan program in 1991, through the Federal Railroad Administration to assist railroads in their rehabilitation efforts.  The revolving loan program works in the following manner: federal funds from the Federal Local Rail Freight Assistance (LRFA) Program are loaned to railroads at a rate below the prime interest rate.  The payments on the loan (including principle and interest) are used to generate additional loans.  Currently, the State of Kansas has eight loans outstanding in fiscal year 2000.

The total number of dollars currently in this program for the State of Kansas is slightly more than $3 million dollars.  The table shows the details of the grant and loan program by year, federal funds allocated, distribution of funds, and entity receiving funds.  Some of the grants resulted from the 1993 floods in Kansas.

This program is intended to help ensure that rail service continues in Kansas.  This loan program allows the railroads to improve and rehabilitate their systems for more profit and safety.  Such service contributes to the state’s economy, enhances market competitiveness, attracts new industry, and encourages expansion of current business.