part7-78

The National Railroad Retirement Investment Trust (NRRIT) was established,
effective February 1, 2002, by section 105 of the Railroad Retirement and
Survivors Improvement Act of 2001 (RRSIA), P.L. 107-90. The RRSIA amended
the Railroad Retirement Act of 1974 (45 USC 231) by adding new subsection
15(j) establishing the NRRIT. Section 202 of the RRSIA amended the Internal
Revenue Code by adding new IRC 501(c)(28) to provide for the exemption of
the National Railroad Retirement Investment Trust from federal income taxation.

The NRRITs sole purpose is to manage and invest industry-funded Railroad
Retirement assets.

While the NRRIT is not a department, agency, or instrumentality of the
Federal government, the cash and investments held by the NRRIT for the Railroad
Retirement Board (RRB) are nevertheless assets of the Federal government.

The NRRIT is domiciled in the District of Columbia.

The NRRIT is governed by a Board of seven Trustees — three selected
from railroad carriers, three selected from railroad labor unions, and an
independent Trustee selected by the other six Trustees.

The NRRIT’s fiscal year ends on September 30.

Pursuant to section 105(a)(5)(E) of the RRSIA, the NRRIT must submit
an annual management report to the Congress not later than 180 days after
the end of the NRRIT’s fiscal year, and provide a copy of the report
to –

The annual management report must include —

Pursuant to the RRSIA, the NRRIT’s annual audit must be prepared
in accordance with Generally Accepted Accounting Principles (GAAP).

In addition to the statutory reporting requirements described above,
pursuant to a four-way Memorandum of Understanding (MOU), the NRRIT must report
on a monthly basis to the Department of Treasury, the OMB, and the RRB its
—

The NRRIT posts its annual management reports on a World Wide Web page
established and maintained by the RRB (www.rrb.gov/mep/nrrit.asp), thus making
them widely available in a manner consistent with the public inspection and
disclosure requirements applicable to Form 990 filers, as provided in IRC
6104(d)(1) and Treas. Regs. 301.6104(d)-1 and 301.6104(d)-2.

Pursuant to his discretionary authority under IRC 6033(a)(2)(B) and
Treas. Reg. 1.6033-2(g)(6), and reflected in a letter filed with NRRITs 2003
return, the Commissioner has determined that the reporting of financial information
to the Service on Form 990 by the NRRIT would be substantially duplicative
of the NRRITs extensive reporting requirements under the RRSIA and its additional
reporting obligations under the MOU. The reporting of such financial information
on Form 990 would, therefore, serve no useful purpose and would not be necessary
to the efficient administration of the internal revenue laws.

Despite such extensive reporting requirements, the NRRIT is nonetheless
not required under the RRSIA or the MOU to report to the Congress, or make
available to the public, information relating to the compensation
paid to its officers, directors, trustees, and key employees.

Accordingly, as reflected in NRRITs 2003 return, the Commissioner has
determined that the NRRIT is required to file with the Internal Revenue Service
annually only so much of Form 990 that relates to the names and addresses
of its officers, directors, trustees, and key employees, and their titles,
compensation, and hours devoted to their positions (currently reported in
Part V of Form 990). Additionally, Form 990, Organization Type (currently
Item J), must be completed to indicate that the NRRIT is an IRC 501(c)(28)
organization.

If at any time the NRRIT ceases to meet the statutory reporting requirements
pursuant to the RRSIA or ceases to make its annual management reports widely
available for public inspection consistent with IRC 6104(d) and the regulations
thereunder, the NRRIT is required to file a complete Form
990 for the year it first ceases such reporting or public disclosure, and
for all subsequent years.

If the NRRIT is subject to the tax on unrelated business income under
IRC 511, it must also file an income tax return on Form 990-T,
Exempt Organization Business Income Tax Return.

There is no provision for an application form for applying for recognition
of exemption under IRC 501(c)(28).