Railroad Revolving Loan and Grant (RRLG) Program
The Railroad Revolving Loan and Grant (RRLG) Program is administered by the Office of Rail Transportation at the Iowa Department of Transportation. The program provides financial assistance to improve rail facilities that will create jobs, spur economic activity and improve the rail transportation system in Iowa in three separate categories::
- Targeted job creation. These rail projects are those that provide immediate, direct job opportunities. Loans and grants are available. Grant funding is contingent on job creation and retention commitments by the applicant and loans can supplement grants if the project cost exceeds that available in grant funding. A local match is required for both grants and loans.
- Rail network improvement. These rail projects are those that support existing rail lines and service or improve industrial access when no direct job creation is involved. Only loans are available in this category. Loans will be offered at zero percent for a 10-year term. Loan requests require a 20 percent matching contribution.
- Rail port planning and development. Grants of up to $100,000 are available for planning studies that enable a community, county, or region to make fact-based decisions concerning the location, design or funding requirements for a rail port facility. The end result of a planning study should help decision makers evaluate rail development options that support industrial and business progress and economic growth in the community and region. Grant requests require a 20 percent matching contribution.
Industries, railroads, local governments, or economic development agencies are eligible to apply.
General provisions applicable to all RRLG applications/projects
The following general provisions apply to all three categories of assistance. Eligible projects, project criteria, award limitations, and review processes for each category of assistance vary and are detailed individually below.
- Eligible applicants are cities, counties, development organizations, businesses, rail companies, and alliances of such organizations.
- Applications will be accepted on the forms provided by the Office of Rail, Iowa Department of Transportation. The application forms for each of the three categories of awards are available on the Office of Rail Transportation's website.
- Only applications submitted on Iowa DOT forms and completed in full will be reviewed.
- Applications will be accepted at any time.
- Projects are reviewed based on information provided in the application. The department reserves the right to request additional information or clarifications and conduct a site visit, if warranted or desired, to fully assess the project.
- No part of a project may begin until a grant or loan agreement is signed, unless an advance eligibility waiver is obtained.
- An applicant may request a written advance eligibility waiver from the department for specified costs incurred prior to an award such as land acquisition and advance design costs. If granted, the waiver will permit a specified expenditure by the applicant without jeopardizing the project’s eligibility for future funding approval. Granting a waiver shall not imply or guarantee the department will fund a subsequent application. An advance eligibility waiver must be requested and approved prior to the expenditure; any cost incurred before a written waiver is granted will be ineligible for reimbursement.
- Both grants and loans require the applicant to provide a local match as detailed for each type of award.
- In-kind labor or materials may be considered for match if documentation can be provided to adequately quantify the in-kind contribution.
- Eligible project costs are reimbursed by the department upon receipt of appropriate documentation.
- Loans will be offered for a maximum term of 10 years at zero percent interest.
- Collateral for loans will be the track and materials used in the project.
- Staff will prepare a summary of eligible applicants to present to the Iowa Transportation Commission.
- Staff will review applications and prepare a recommendation for funding to present to the Commission for formal action at the next scheduled meeting.
- The Commission has the flexibility to award projects in any or all categories.
- Awards may be limited or reduced due to funding availability.
- Awards may take into consideration the number of projects and amount awarded to each in order to maximize the benefits of limited funding.
- Applicants must return a signed letter of award acceptance to Iowa DOT within 45 days of the award announcement.
- All agreements must be signed by the recipient within 180 days of award.
Targeted Job Creation projects
All general provisions above apply to Targeted Job Creation projects.
Eligible projects: Rail infrastructure construction or improvements serving specific industries, industrial development projects, or industrial park development.
Provisions specific to Targeted Job Creation projects
Job creation and quality wages are the top priorities for the program and will be reflected as such in the ranking process.
Job creation is defined to include new direct jobs and retained jobs within three years of project completion. If a company chooses to claim retained jobs, they must provide evidence of potential job loss due to a plant closing or relocation of the business out of state.
Jobs created or retained must pay a starting wage that meets or exceeds the 100 percent laborshed wage for the location of the project. Applications not meeting the laborshed 100 percent wage threshold will not be considered for funding.
Combinations of grants and loans may be requested if a project request exceeds the allowed per-job grant limit.
Grant application requests require a minimum local contribution that matches the amount of the grant request. If requesting both a grant and a loan, a minimum local contribution that represents 20 percent of the total rail project cost is required. Greater consideration will be given to projects that meet or exceed the preferred match that represents a 50 percent match for grants as well as a 20 percent match for loans. Download the worksheet below to assist in calculations.
As of March 2016, a maximum of $12,000 per job may be awarded as a grant with a matching local contribution. If the requested grant amount cannot be fully awarded, a loan may be offered to fulfill the dollar amount requested.
All projects must be completed within 36 months of the executed agreement. An extension of up to 12 months may be requested by the award recipient in writing and must be approved in writing by the Iowa DOT.
DOT CalculationsThe worksheet linked below may be used to help calculate your request and match, particularly if requesting both a grant and a loan. Projects meeting or exceeding the preferred match may receive additional consideration.
Targeted Job Creation Worksheet - PDF
Targeted Job Creation Worksheet - Excel file
Refer to RRLG Program guidelines for additional information on the review process for Targeted Job Creation projects.
Rail Network Improvement projects
All general provisions above apply to Rail Network Improvement projects.
At the beginning of each state fiscal year (July), the department may set aside at least 10 percent or a minimum of $200,000 of the total amount of available Rail Revolving Loan and Grant (RRLG) funds for Rail Network Improvement projects. These projects are not dependent on job creation. Improvement projects support the sustainability of the existing rail system in Iowa and assist industry in building or improving rail infrastructure in the absence of verified job creation.
Eligible projectsProjects include, but are not limited to:
- Rail yard improvement, expansion, or rehabilitation; construction of branch lines or passing track; bridge repair or replacement.
- Industrial park development without a specific committed business and associated jobs.
- Improvement or creation of industrial spurs or other rail infrastructure that adds or improves access of industry to the rail transportation network.
Provisions specific to Rail Network Improvement projectsNote: General provisions above that apply to all RRLG projects.
- Loans will be offered for this category of funding.
- Loan application requests require a minimum local match of 20 percent of the proposed rail project cost (the loan request multiplied by 25 percent).
- Immediate job creation is not required.
- All projects must be completed within 36 months of the date of the executed agreement. An extension of up to 12 months may be requested in writing by the award recipient and must be approved in writing by the Iowa DOT.
Review process for Rail Network Improvement projectsFollowing the application deadline published in the notice of funding availability, department staff will use the following criteria from the application to evaluate projects.
1. Calculate the ratio of private/other public capital investment dollars to RRLGP public investment in the rail project.
Total private and public rail investment, excluding requested RRLG loan divided by RRLG Program loan requested. This provides the dollars invested by others per dollar of RRLG investment.
2. Analyze other transportation economic and public benefits.
Applications will be reviewed to determine the benefits provided by the project, including but not limited, to the following.
- What are the immediate benefits to shippers as a result of this project?
- Are there additional sales opportunities to shippers?
- What are the projected economic impacts of the rail development for the community? For the region? Examples include possible or likely job creation, increase in tax base, increased wages, expansion of related economic activity, etc.
- Are there expected private and public investments supporting the proposed rail project?
- What are the projected transportation savings and benefits from the proposed project? Examples include diversion of truck traffic from highway systems, a reduction in dwell time, increased capacity, etc.
Rail port planning and development studies
All general provisions above apply to rail port planning and development projects.
Eligible projects include planning and development studies that collect data and information that enable a community, county, or region to make fact-based decisions concerning the location, design, or funding requirements for a rail port facility. The end result of a planning study should help decision-makers evaluate rail development options that support industrial and business progress and economic growth in the community and region.
Provisions specific to rail port planning and development projects
- Grants will be offered for this category of funding.
- Immediate job creation is not required.
- Grants are offered for a maximum of $100,000 per individual applicant.
- Grant application requests require a minimum cash match of 20 percent of the proposed planning and development study cost (the grant request multiplied by 25 percent).
- All studies are expected to be completed within 18 months of the date of the executed agreement. An extension of up to 12 months may be requested in writing by the award recipient and must be approved in writing by the Iowa DOT.
Review process for rail port planning and development studies
Following the application deadline published in the notice of funding availability, department staff will use the following criteria from the application to evaluate projects using a 100 point scale.
- Existing/Site information: 20 possible points
What is currently known about the potential site or sites that will be included in the study?
- Goals of the study: 50 possible points
Details on the goals of the study, the research to be conducted, and the study time frame.
- Organizational structure and capacity: 30 possible points
Information on the organization overseeing the study.
The Iowa DOT will quarterly determine if sufficient funds are available for an application review cycle. Application review typically occurs one time per year following the adjournment of the state legislature. When sufficient funds are available, a notice of funding availability is issued that includes an application due date and approximate amount of funding available. Funding availability will be posted here when available funding is determined. Contact Laura.Hutzell@dot.iowa.gov for additional information.
Application forms and information
- RRLGP Program guidelines
- Targeted job creation application (form 260021)
- Rail Network Improvement application ( form 260025)
- Rail port planning and development feasibility study application (form 260026)
- Railroad project preliminary cost estimate (form 260012)
- Minority impact statement (form 105101)
Railroad Revolving Loan and Grant Program — Administrative Rules set out the basic parameters and requirements for the RRLG Program. RRLG Program guidelines include more specific requirements and information about the review process.
The funding guide provides information on this and a variety of other funding programs available for transportation projects.
For further program information or questions, E-mail Laura Hutzell or call 515-239-1066.
Applications, recommendations and awards
2015 commission recommendation presentation
Awards (approved by the Iowa Transportation Commission)
- More than $1.29 million made available through Iowa’s Railroad Revolving Loan and Grant Program, November 10, 2015
- More than $4.6 million made available through Iowa’s Railroad Revolving Loan and Grant Program, October 14, 2014
- More than $3 million made available through Iowa's Railroad Revolving Loan and Grant Program on October, 8, 2013
- More than $4 million made available through Iowa's Railroad Revolving Loan and Grant Program on September 11, 2012
- More than $5.5 million made available through Iowa's Railroad Revolving Loan and Grant Program on November 8, 2011
- More than $3.1 million made available through Iowa's Railroad Revolving Loan and Grant Program, December 14, 2010
- Iowa Transportation Commission awards $7.5 million for four Iowa rail projects to support wind energy industry, December 14, 2010
- Iowa Transportation Commission approves funding for railroads, December 8, 2009
- Iowa Railway Finance Authority approves loans for flood-damaged railroads on July 31, 2008
- Iowa Rail Finance Authority approved project funding on Oct. 24, 2007, for eleven projects.
- Iowa Rail Finance Authority approved project funding on June 26, 2006, for fourteen projects.
- Iowa Rail Finance Authority approved project funding on Dec. 14, 2006, for six projects.