[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]






                            HIGH-SPEED RAIL
                         IN THE UNITED STATES:
                      OPPORTUNITIES AND CHALLENGES

=======================================================================

                                (111-69)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

             RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            October 14, 2009

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure








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20402-0001







             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice Chair                           DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
Columbia                             VERNON J. EHLERS, Michigan
JERROLD NADLER, New York             FRANK A. LoBIONDO, New Jersey
CORRINE BROWN, Florida               JERRY MORAN, Kansas
BOB FILNER, California               GARY G. MILLER, California
EDDIE BERNICE JOHNSON, Texas         HENRY E. BROWN, Jr., South 
GENE TAYLOR, Mississippi             Carolina
ELIJAH E. CUMMINGS, Maryland         TIMOTHY V. JOHNSON, Illinois
LEONARD L. BOSWELL, Iowa             TODD RUSSELL PLATTS, Pennsylvania
TIM HOLDEN, Pennsylvania             SAM GRAVES, Missouri
BRIAN BAIRD, Washington              BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington              JOHN BOOZMAN, Arkansas
MICHAEL E. CAPUANO, Massachusetts    SHELLEY MOORE CAPITO, West 
TIMOTHY H. BISHOP, New York          Virginia
MICHAEL H. MICHAUD, Maine            JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri              MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          JEAN SCHMIDT, Ohio
TIMOTHY J. WALZ, Minnesota           CANDICE S. MILLER, Michigan
HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma
MICHAEL A. ARCURI, New York          VERN BUCHANAN, Florida
HARRY E. MITCHELL, Arizona           ROBERT E. LATTA, Ohio
CHRISTOPHER P. CARNEY, Pennsylvania  BRETT GUTHRIE, Kentucky
JOHN J. HALL, New York               ANH ``JOSEPH'' CAO, Louisiana
STEVE KAGEN, Wisconsin               AARON SCHOCK, Illinois
STEVE COHEN, Tennessee               PETE OLSON, Texas
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
BETSY MARKEY, Colorado
PARKER GRIFFITH, Alabama
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
VACANCY

                                  (ii)



     SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

                   CORRINE BROWN, Florida Chairwoman

DINA TITUS, Nevada                   BILL SHUSTER, Pennylvania
HARRY TEAGUE, New Mexico             THOMAS E. PETRI, Wisconsin
NICK J. RAHALL II, West Virginia     JERRY MORAN, Kansas
JERROLD NADLER, New York             GARY G. MILLER, California
ELIJAH E. CUMMINGS, Maryland         HENRY E. BROWN, Jr., South 
GRACE F. NAPOLITANO, California      Carolina
JASON ALTMIRE, Pennsylvania          TIMOTHY V. JOHNSON, Illinois
TIMOTHY J. WALZ, Minnesota           SAM GRAVES, Missouri
MICHAEL A. ARCURI, New York          JIM GERLACH, Pennsylvania
CHRISTOPHER P. CARNEY, Pennsylvania  CHARLES W. DENT, Pennsylvania
ALBIO SIRES, New Jersey              LYNN A. WESTMORELND, Georgia
MARK H. SCHAUER, Michigan            JEAN SCHMIDT, Ohio
BETSY MARKEY, Colorado               CANDICE S. MILLER, Michigan
MICHAEL E. McMAHON, New York         VERN BUCHANAN, Florida
THOMAS S. P. PERRIELLO, Virginia     ROBERT E. LATTA, Ohio
PETER A. DeFAZIO, Oregon             BRETT GUTHRIE, Kentucky
JERRY F. COSTELLO, Illinois          AARON SCHOCK, Illinois
BOB FILNER, California               ANH ``JOSEPH'' CAO, Louisiana
EDDIE BERNICE JOHNSON, Texas         PETE OLSON, Texas
LEONARD L. BOSWELL, Iowa
RICK LARSEN, Washington
MICHAEL H. MICHAUD, Maine
DANIEL LIPINSKI, Illinois
STEVE COHEN, Tennessee
LAURA A. RICHARDSON, California
JAMES L. OBERSTAR, Minnesota
  (ex officio)

                                 (iii)










                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................   vii

                               TESTIMONY

Baugh, Robert, Executive Director of the Industrial Union 
  Council, AFL-CIO...............................................    39
Busalacchi, Honorable Frank, Secretary, Wisconsin Department of 
  Transportation and Chair, States for Passenger Rail Coalition..    12
Carper, Thomas, Chairman of the Board, National Railroad 
  Passenger Corporation, AMTRAK..................................    39
Fleming, Susan, Director, Government Accountability Office.......    12
Hamberger, Edward, President, Association of American Railroads..    39
Pracht, Michael P., President And CEO, US RailCar, LLC...........    39
Rubio, Nicolas, President, Cintra, US............................    39
Scardelletti, Robert, President Transportation Communications 
  International Union............................................    39
Simmons, Patrick, Rail Division Director, North Carolina 
  Department of Transportation, on Behalf of American Association 
  of State Highway and Transportation Officials..................    12
Szabo, Honorable Joseph C., Administrator, Federal Railroad 
  Administration, U.S. Department of Transportation..............    12
Todorovich, Petra, Director, America 2050........................    39

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Johnson, Hon. Eddie Bernice, of Texas............................    66
Richardson, Hon. Laura, of California............................    72

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Baugh, Robert....................................................    75
Busalacchi, Honorable Frank......................................    89
Carper, Thomas...................................................   101
Fleming, Susan...................................................   126
Hamberger, Edward................................................   138
Pracht, Michael P................................................   148
Rubio, Nicolas...................................................   163
Scardelletti, Robert.............................................   171
Simmons, Patrick.................................................   180
Szabo, Honorable Joseph C........................................   190
Todorovich, Petra................................................   238

                       SUBMISSIONS FOR THE RECORD

Baugh, Robert, Executive Director of the Industrial Union 
  Council, AFL-CIO, responses to questions from Rep. Corrine 
  Brown, a Representative in Congress from the State of Florida..    81
Busalacchi, Honorable Frank, Secretary, Wisconsin Department of 
  Transportation and Chair, States for Passenger Rail Coalition, 
  responses to questions from Rep. Corrine Brown, a 
  Representative in Congress from the State of Florida...........    97
Carper, Thomas, Chairman of the Board, National Railroad 
  Passenger Corporation, AMTRAK:.................................
      Responses to questions from Rep. Corrine Brown, a 
        Representative in Congress from the State of Florida.....   116
      Responses to questions from Rep. Michael E. McMahon, a 
        Representative in Congress from the State of New York....   122
Fleming, Susan, Director, Government Accountability Office:......
      Responses to questions from Rep. Corrine Brown, a 
        Representative in Congress from the State of Florida.....   134
      Response to question from Rep. Grace Napolitano, a 
        Representative in Congress from the State of California..    33
Hamberger, Edward, President, Association of American Railroads, 
  responses to questions from the Subcommittee...................   146
Pracht, Michael P., President And CEO, US RailCar, LLC:..........
      Press release..............................................   158
      Responses to questions from Rep. Corrine Brown, a 
        Representative in Congress from the State of Florida.....   160
Scardelletti, Robert, President Transportation Communications 
  International Union, responses to questions from the 
  Subcommittee...................................................   178
Simmons, Patrick, Rail Division Director, North Carolina 
  Department of Transportation, on Behalf of American Association 
  of State Highway and Transportation Officials, responses to 
  questions from Rep. Corrine Brown, a Representative in Congress 
  from the State of Florida......................................   187
Szabo, Honorable Joseph C., Administrator, Federal Railroad 
  Administration, U.S. Department of Transportation:.............
      Letter from the Capitol Corridor, Joint Powers Authority, 
        Jim Holmes, Chair........................................   225
      Responses to questions from Rep. Corrine Brown, a 
        Representative in Congress from the State of Florida.....   226
      Responses to questions from Rep. John L. Mica, a 
        Representative in Congress from the State of Florida.....   235
Todorovich, Petra, Director, America 2050, responses to questions 
  from Rep. Corrine Brown, a Representative in Congress from the 
  State of Florida...............................................   251

                        ADDITIONS TO THE RECORD

Siemens, Oliver Huck, President, letter to the Subcommittee......   254

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 
  HEARING ON HIGH-SPEED RAIL IN THE UNITED STATES: OPPORTUNITIES AND 
                               CHALLENGES

                              ----------                              


                      Wednesday, October 14, 2009,

                  House of Representatives,
Subcommittee on Railroads, Pipelines and Hazardous 
                                         Materials,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 2:00 p.m., in 
Room 2167, Rayburn House Office Building, the Honorable Corrine 
Brown [Chairwoman of the Subcommittee] presiding.
    Ms. Brown. Will the Subcommittee on Railroads, Pipelines, 
and Hazardous Materials come to order?
    This is a wonderful time; we have standing room only.
    The Subcommittee is meeting today to hear testimony on 
high-speed rail in the United States. The dream of high-speed 
rail in America is finally coming true. In 2007, this 
Subcommittee held a hearing to listen to the experiences of 
international operators and other countries in developing high-
speed rail. Their advice was to invest, get a high-speed rail 
line operational, and once everyone saw it working they would 
want it for themselves. In other words, build it and they will 
come.
    The American Recovery and Reinvestment Act of 2009 laid the 
foundation. It included $8 billion for high-speed rail and $1.3 
billion for Amtrak. The Fiscal Year 2010 Appropriations bill 
that passed the House included an additional $4 billion, and 
the surface transportation bill being developed by this 
Committee includes another $50 billion for development of high-
speed rail corridors over the next six years.
    Since enactment of the Recovery Act, interest in high-speed 
rail has been phenomenal. The Federal Railroad Administration 
has received numerous applications from the States for 
development of high-speed and intercity passenger rail 
projects. These include 45 applications from 24 States totaling 
$50 billion. They also received 214 applications from 34 States 
totaling $7 billion for corridor planning and small projects.
    I would just like to caution the Federal Railroad 
Administration that you choose two to three systems that will 
truly work. If you spend the money around in too many systems, 
the money will not work the way it is supposed to, and I don't 
want to see bridges to nowhere when it comes to high-speed 
rail. We really want a system that works.
    These numerous requests clearly indicate a very strong and 
growing interest in high-speed rail in the United States. They 
also make clear that the Federal Government needs to invest in 
high-speed rail in order to make the President and this 
Congress' vision a reality, and we need to find a dedicated 
source of funding to do it. The private sector, including 
international operators, and foreign governments like Spain, 
Japan, and China aren't going to help us if they don't see a 
true commitment from the Federal Government to make high-speed 
rail a priority.
    Beijing will spend $50 billion on high-speed rail this year 
alone, and the central government plans to spend another $250 
billion over the next decade. By 2020, China will have laid 
nearly 16,000 miles of high-speed track capable of carrying the 
fastest trains in the world. So far, the construction of the 
Beijing-Shanghai high-speed route alone has created about 
110,000 jobs and is playing an enormous role in China's 
economic recovery.
    I know that the U.S. faces major challenges that aren't 
faced by China's central government, but it shows that one of 
our main international competitors is making high-speed rail a 
key component of their economic development and recovery.
    We need to give credit where credit is due, and I want to 
personally thank President Obama for his vision, and Vice 
President Biden for his longstanding commitment to rail in the 
U.S. For eight years we battled the Bush Administration's 
zeroing out funding for rail, and it is a refreshing change to 
have real leadership in the White House that supports rail.
    Finally, I believe that one great opportunity that will 
come from this new funding will be the ability to establish a 
domestic manufacturing base for high-speed rail right here in 
the United States. Since 1998, the U.S. has lost nearly six 
million manufacturing jobs. We should seize this opportunity 
and find ways to incentivize production right here in America. 
We can work on replacing many of the manufacturing jobs that 
have disappeared in this Country with well paying jobs building 
new locomotive and passenger railcars to be used in America and 
sold to other countries throughout the world.
    With sustained funding for high-speed rail and a strong 
commitment from the Federal Government, our State partners, and 
other stakeholders, I am convinced that the United States can 
once again build passenger rail rolling stock that will be the 
envy of the world.
    With that, I welcome today's panelists and thank you for 
joining us. I am looking forward to hearing and the testimony.
    Before I yield Mr. Shuster, I ask Members to be given 14 
days to revise and extend their remarks, and to permit the 
submission of additional statements and materials for Members 
and witnesses. Without objection, so ordered.
    I yield to Mr. Shuster for his opening statement.
    Mr. Shuster. Thank you very much.
    As the Chairwoman pointed out, we have a standing room only 
crowd here today, which is obviously an indication of the 
importance and the great interest that there is in this town 
and this Country with high-speed rail.
    I also want to welcome my colleague from Ohio and good 
friend, Mr. Tiberi. Thanks for being here to introduce one of 
our panelists. I also welcome everybody else that is here 
today.
    Since the passage of the Rail Investment and Improvement 
Act was signed into law a year ago Friday, high-speed rail has 
emerged as a central issue on the transportation planning of 
this Country and, in consensus, high-speed rail should be a 
part of the national transportation strategy. It is a long time 
coming, but with the support of the Administration and strong 
bipartisan agreement in Congress and this Committee, the stage 
is finally set for high-speed rail in the United States.
    Still, there are may questions about just how high-speed 
rail is going to be implemented in the United States. DOT and 
FRA control the dispersal of huge amounts of money. I would 
like to learn more about how they are planning to distribute 
the $8 billion that was appropriated for high-speed rail in the 
stimulus. It cannot be overstated how important these decisions 
will be in the future of high-speed rail. If the funds are 
spread too thinly among the $57 billion worth of applications, 
as the Chair alluded to the award, in too many different 
places, I fear that they may end up failing to focus on 
developing a few key high-speed lines that will improve the 
value of this initiative, leading not more investment.
    The second point I would like to make is that I believe we 
should be looking for projects that leverage non-Federal funds. 
We need to make sure the private sector is involved, along with 
commitments from States and local governments, in order to 
fully leverage Federal investment. I am interested in hearing 
how the FRA is planning and evaluating the funding sources for 
projects that are being considered for grants, and I look 
forward to hearing from the witnesses on how they see private 
partnerships working in the context of high-speed rail.
    The final point I would like to make is that we need to 
ensure that high-speed rail does not have a negative impact on 
the national freight rail network. Our freight rail system is 
the best in the world. Some of the plans that have emerged from 
high-speed rail involve running faster trains on track that is 
currently used for freight operations. We need to ensure that 
we have explored any possible detrimental impacts to freight 
operations posed by trains running faster than the current 79 
miles per hour, the top speed, on hosted tracks.
    Again, I am very pleased with the progress we have made in 
a very short time, but we have already reached a critical 
juncture for high-speed rail in the United States and we must 
ensure that this large stimulus investment generates real 
results. We can't afford to misstep. We are already falling 
behind the rest of the world in developing high-speed systems. 
China is spending $300 billion to develop 8,000 miles of new 
high-speed track by 2020. That is enough rail to go from here 
to Los Angeles three times over. Amazingly, the Chinese budget 
for high-speed rail in 2009 is $50 billion.
    We must continue to work together to keep momentum going. I 
want to thank all of you again for being here.
    I am going to have to excuse myself; I am going back to 
Pennsylvania. It is Senior Night at Hollidaysburg High School. 
My son is a senior player on the soccer team, so I have to be 
there. And since I haven't been getting many headlines in the 
paper and he has been on the sports page weekly in the 
headlines, I figure I ought to keep the perception people think 
that their Congressman is a soccer player. So I have to head up 
to Pennsylvania. So I am very sorry I have to leave, but duty 
calls in Pennsylvania, so thank you very much.
    I yield back.
    Ms. Brown. Congresswoman Napolitano?
    Mrs. Napolitano. Thank you, Madam Chair, and thank you for 
holding this very critical meeting, especially for the State of 
California.
    We, of course, are in the throws of evaluating high-speed 
rail in California, which was bonded and approved by California 
voters recently. In my area, the high-speed rail would go 
through quite a few portions of my district. There would be two 
tracks that would have to be going through, the Los Angeles-San 
Diego corridor, there would be an NSF line with a stop in 
Norwalk, where I reside; and in the Alameda corridor, East 
Corridor, the New Pacific Line with a stop in the City of 
Pomona.
    There are concerns that I have about high-speed rail. First 
of all, that the State does not divert any funds that are 
already committed to mass public transit in the State of 
California going to the high-speed rail. We have discussed 
these in many hearings and meetings in California with some of 
the proponents and some of the councils of government who have 
concerns over this.
    High-speed rail cannot work without a good transit system 
in place, and it is expensive. I still am for mass transit; I 
will continue to fight for being able to move masses that go to 
work and seniors. I have no--how would I say?--axe to grind 
with the high-speed rail, love to see it, and I am sure I will 
be working on that with our leadership in California, how to 
work collaboratively with our councils of government and with 
our city so that this can become a reality.
    My concern is for the local communities and their safety 
impact and noise impact, the road congestion impact, and, of 
course, the issue of eminent domain, which, in California--I 
don't know about other States--is a dirty word. You don't talk 
eminent domain. This is something that people will not allow, 
will not tolerate. And, of course, the impact on freight and 
regional passenger rail, the high-speed rail will take away 
from the current freight and regional passenger rail corridors 
because it will need a dedicated rail and may go alongside the 
current system.
    Would this take goods movement and put it on a highway that 
is already congested? Will the railroads cooperate in high-
speed rail projects? Those are all concerns that have been 
brought to me by my residents and also concerns of mine.
    So, with that, thank you, Madam Chair. I yield back.
    Ms. Brown. I yield to the Ranking Member and my colleague 
from Florida, Mr. Mica.
    Mr. Mica. Thank you and thank you for conducting this 
hearing on high-speed rail and its future in the United States. 
I think this is a very timely hearing. We are on the verge, 
hopefully, of entering the era of high-speed rail. The United 
States is a third world country when it comes to high-speed 
transportation systems. I was pleased to work with my 
colleagues in passing the first rail passenger reauthorization 
in 11 years, which we did the last few months of the Bush 
Administration, and the President then signed the legislation 
that not only included reforms and reauthorization for Amtrak, 
but rail safety, also a strong provision to promote high-speed 
rail.
    Was pleased when the Obama Administration came forward and 
the President himself injected himself--it wasn't any Member of 
Congress--but committed to a substantial investment, $8 
billion, which we now have available. We do have a slight delay 
in awarding of those grants and, in a way, I am pleased that 
all three now are going to be, I think, awarded at once, rather 
than dribble this and drabble this thing out. But it is 
important that that money be expended on what I consider true 
high-speed rail. I don't want this high-speed rail effort 
hijacked and we cannot take people's money and spend it and not 
give them what others take for granted in Europe and Asia as 
far as high-speed rail.
    Right now, some of the average speeds--I have a little clip 
here. Put that clip up here. This will just take a second. This 
is high-speed rail. This is a TGV train in France and it is 
going 186 miles per hour. That is high-speed. Ms. Brown just 
said she has been on it. I was on high-speed rail in Spain, and 
in Spain the AVE service routinely travels at 186 miles per 
hour, and the Shinkansen bullet train in Japan, 164 miles per 
hour.
    I will just put up the little photograph for contrast. 
Where is my little contrast? Okay, this is Acela. Now, put your 
tray tables in an upright position.
    [Laughter.]
    Mr. Mica. Secure your seatbelts. You are going to go 
forward at 83 miles an hour. This is not high-speed rail. 
Spending $10 billion and getting it up to 89 miles an hour is 
not high-speed service. So I don't want funds hijacked.
    I think we also have to look at the corridors in the United 
States that deserve service. First of all, Amtrak, the only 
corridor it owns in the United States, it owns about 98 percent 
of it, from Washington to New York and then on to Boston, what, 
400-some miles? That is the only corridor that they own, 24, 
25,000 miles, whatever. The balance of what Amtrak runs service 
on is freight rail.
    These systems are very expensive. Eight billion sounds like 
a lot. Mr. Oberstar and I committed to $50 billion 
authorization in the next surface transportation bill. Still 
sounds like a lot, but listen to this. In Japan, the Shinkansen 
high speed system is being expanded by 400 miles with a total 
estimated cost of $40 billion. In Spain, a country about the 
size of Oregon, the government is committed to a national high-
speed rail network that will cost $140 billion. So it takes big 
money to do these projects.
    The benefits in the northeast corridor are immense, and I 
am telling you that I will raise the roof on the Capitol 
Building if we do not develop high-speed rail in the northeast 
corridor. Not only will it serve some of the densest population 
in the United States; it will help us with our aviation delays. 
Eighty-three percent of the chronically delayed flights in the 
United States emanated from New York and that airspace, the 
northeast airspace. So we have to have a concerted effort not 
to fool people and say we are putting in high-speed rail; we 
have to have real high-speed service that travels at last 
competitively; 150 used to be the standard, now you are looking 
at 160, 180 around the world.
    So I wanted to come today and make that statement. And if 
you know me and you know Ms. Brown, we are rather tenacious and 
we will get it done. So I urge labor, I urge people who have 
money to invest to work with us. We do need to leverage money. 
There is no need to put all Federal cash out; we can take a 
small amount of money, you will hear, and leverage it; $1 of 
Federal money and we can match it with $8 of private sector 
investment if we do this the right thing and get real high-
speed service where we need it the most.
    I am pleased to yield back the balance of my time.
    Ms. Brown. Thank you, Mr. Mica.
    And now everybody can see what true bipartisanship is all 
about. Mr. Perry?
    Mr. Perry. Thank you. I would really like to echo a lot of 
the concerns and the hopes that have been raised.
    High-speed rail is really a game changer for this Country. 
We have been watching as we lose competitive advantage 
globally, and certainly part of that has been because of an 
under-investment in infrastructure; our inability to move 
items, but also to move people; increased lost time from work 
and other things. This is a chance for us to look for those 
game changers through the high-speed rail system, and we are 
not going to get that many bites at this. So while we all have, 
certainly, our own parochial interests in this, I am very 
interested in seeing this thing pass through southern Virginia.
    What is most important is that we match the dollars to 
regional and national priorities; that we are looking at ways 
to put the most investments, the most dollars into the areas of 
greatest need, whether that is of congestion or areas of the 
Country that we can open up. So certainly the corridor 
stretching from Charlotte, and maybe even Atlanta, up to D.C. 
is of great interest. I think there has been increasing 
cooperation between States, which is encouraging, so that we 
can build on some of the lessons that have been learned and 
other things.
    Right now, in this economic crisis, you can look around the 
world and see countries that are focused on where they were 20 
years and those that are focused on where they could be 20 
years from now. We have heard some of the staggering numbers of 
investments that other countries are making in high-speed rail 
and related infrastructure investments. We are not matching 
that. At a time that we have already seen manufacturing and 
other jobs go overseas, this is a chance, this is a moment for 
us to really reinvent our comparative advantage, and I think 
high-speed rail done right can be a component of that.
    I think we are stewards of this moment. If we can figure 
out how to use these dollars effectively and efficiently, I 
think the American people will continue to support more work in 
this area. If we blow it, to be honest, that interest will not 
be there. So I hope we will take full advantage of this moment 
to make the most of this and really present some game changers 
on the competitive advantage side.
    With that, I yield back.
    Ms. Brown. Thank you.
    Mr. Cao?
    Mr. Cao. Thank you, Madam Chair, for holding this important 
hearing today. I have to say that I am a very big supporter of 
the high-speed rail project and I believe that high-speed rail 
is part of the solution for modernizing transportation in the 
United States. Too many communities are on the verge of a level 
of connectivity that would bring together economic opportunity 
while at the same time reduce impacts on our environment.
    This is especially the case in Louisiana, where we have 
been working on developing a rail system for decades. Local, 
State, and Federal officials, particularly between our major 
corridor of Baton Rouge and New Orleans, realize the economic 
significance a multi-State southern rail corridor would bring 
to our area. The proposed project of the southern corridor 
would extend from Houston, Texas through Baton Rouge, through 
New Orleans, to Atlanta, and I believe that this project will 
provide a huge economic boost to the region, as well as to the 
great city of New Orleans that I represent.
    I was thoroughly disappointed when my State failed to file 
a track 2 application this past month. We worked very hard to 
secure the support for the project. We worked to get the 
municipal governments, as well as the parish governments, to 
support the rail project at a time when the State does not have 
the money to do so. But besides that particular fact, I hope 
that there will be future and continuous funding for the high-
speed rail project because I believe in this development and I 
fully support the implementation, as well as the expansion, of 
other projects in areas that are in need of high-speed rail.
    Thank you very much, Madam Chair.
    Ms. Brown. Ms. Markey?
    Ms. Markey. Yes. Thank you, Madam Chair, for holding this 
important meeting. I also do believe that high-speed rail is an 
integral part of this Nation's future.
    I have joined several of my House and Senate western 
colleagues in supporting a high-speed intercity passenger rail 
program grant application that would conduct a feasibility 
study for a high-speed rail corridor between El Paso, Texas, 
and Denver, Colorado. If you look at a map of the designated 
corridors, the intermountain west, which is growing rapidly--a 
lot of our population growth in this Country is in the west--
but the intermountain west is completely left out of the high-
speed rail system. And in a region with burgeoning development 
and population, a high-speed rail corridor would provide for 
both efficient and environmentally friendly transportation 
options as we continue to develop in this area.
    Currently, going from El Paso to Denver, a traveler must 
first go either to Los Angeles or Chicago and change trains. 
The existing rail lines in the area--the California Zephyr, 
Sunset Limited, and Southwest Chief--could be connected by a 
north-south high-speed rail corridor.
    High-speed rail in both the west and in other parts of the 
Country has great potential to spur both job creation and 
economic growth. I look forward to hearing from our witnesses 
today and further discussing the potential that high-speed rail 
holds for the Nation.
    Thank you again very much. I yield back, Madam Chair.
    Ms. Brown. Mr. Schauer.
    Mr. Schauer. Thank you, Madam Chair. Thank you for holding 
this hearing. I was very pleased to have an opportunity to 
serve on this Subcommittee, primarily for the purpose of 
advancing high-speed rail as a national priority. I was also 
proud to support the American Recovery and Reinvestment Act 
that included an unprecedented investment in high-speed rail in 
this Country.
    I represent the State of Michigan; in the State legislature 
worked on supporting Amtrak and passenger rail, and even 
supported the Midwest high-speed rail strategy. Fortunately, my 
State has been a leader and the Midwestern States, including 
Michigan, have submitted an aggressive application for high-
speed rail stimulus dollars. My district, which is southern 
Michigan, includes two Amtrak lines, which both would be 
converted into high-speed rail lines; one is the Wolverine 
line, which goes from Ann Arbor on the eastern part of my 
district through Battle Creek on the western part of my 
district on the way to Chicago. The other is the Blue Water 
line that originates in Port Huron, goes through Battle Creek 
and Eaton County to, ultimately, Chicago.
    This is a jobs issue for my State and for our Country. We 
will put people to work and spur economic activity. We will 
immediately put people to work through improving our tracks, 
our signaling, and our rail infrastructure. We will put people 
to work by building high-speed rail engines, cars, and, in 
Michigan, I hope we can at least build components for those. We 
will provide an economic boost to communities along those high-
speed rail lines, like many, and some of which I have mentioned 
already in my testimony.
    And this hasn't been said. Investing in high-speed rail 
sends all the right signals to knowledge-based workers in those 
knowledge-based jobs we are working hard to create, and to new 
technology knowledge-based companies that we are creating 
throughout the Country and we are creating in my district in 
Michigan. So I am very excited about the testimony we are about 
to hear and the steps we can take to invest in high-speed rail 
in this Country, and I yield back, Madam Chair. Thank you.
    Ms. Brown. Thank you.
    Ms. Richardson, and then we will proceed. Ms. Richardson?
    Ms. Richardson. Thank you, Madam Chair. First of all, I 
would like to say, for those who are here present, that they 
should know that our Chairwoman, no one advocates harder and 
stronger on rail issues in this United States Congress than 
Chairwoman Brown, whether it is talking about stimulus or 
wherever it is. Even just with Secretary Napolitano she was 
advocating on this issue. So we should know that we are in good 
hands and she is helping us move forward into the future.
    Let me say that the United States has fallen tragically 
behind in the development of high-speed rail. While we consider 
$8 billion was put in the stimulus and many of us were 
surprised and excited about it, as has been reported, it is 
alarming when you consider our other neighboring countries when 
you look at Europe. Just recently this year, I had an 
opportunity in South America to ride on the high-speed rail, 
and it is really embarrassing to be an American citizen where 
we lack this basic form of transportation.
    While we were excited and jumped up and down about $8 
billion, when you consider, for example, China intends upon 
investing $730 billion--that is, again, $730 billion--by 2012, 
we have a much longer way to go.
    High-speed rail will, yes, assist us; it will help us with 
travel; but it will also help us with jobs, as some of my 
colleagues have alluded to. But it will also help us with air 
quality, congestion relief on our roadways and in our skies, 
reducing greenhouse emissions, and it will, most importantly, 
enhance the mobility for people living.
    Now, just on October 9, 2009, The Wall Street Journal had a 
report and it was listing information from the Brookings 
Institute talking about considering the Country's busiest air 
routes and a call for high-speed rail, and on that, the State 
that I am from, California, three key sections were listed in 
that top ten. Consider 6 million people fly between Los Angeles 
basin and San Francisco basin each year. This is something that 
we cannot wait; we must make the investment. I don't want to 
hear anything about a second stimulus; we need to put the money 
into our roads and our infrastructure and get people moving.
    So I welcome the discussion today and I welcome us taking 
big steps forward.
    Thank you, Madam Chairwoman.
    Ms. Brown. Thank you.
    As I indicated, there is a lot of interest. Mr. Teague?
    Mr. Teague. Yes, thank you, Madam Chairwoman, for holding 
this meeting and letting me speak here. I just want to concur 
with everyone else here about how important I think it is that 
we have high-speed rail to remain competitive and also for our 
national security. But I especially would like to associate 
myself with the remarks made by Ms. Markey from Colorado, 
because I think it is terribly important that we have the rail 
service between El Paso through Las Cruces and Santa Fe, New 
Mexico to Denver.
    As has happened so many times in the past with the 
interstate system and communication systems, I am scared that 
the intermountain region will be left out and not have much 
chance to participate. I think that it is very important not 
only that we have it for the Country, but especially for the 
intermountain region north out of El Paso.
    Thank you.
    Ms. Brown. Thank you.
    Now, the last one, Mr. McMahon.
    Mr. McMahon. Thank you, Chairwoman Brown and Ranking Member 
Shuster. Thank you for holding this hearing on clearly what is 
to all of us an important issue. And, of course, to the 
Chairman of the overall Committee, Chairman Oberstar, thank you 
for your continued leadership in helping us get the 
infrastructure and transportation of America back to where we 
have to get it.
    As many of you know, I represent Staten Island and 
Brooklyn, New York, and each week I travel by Amtrak back to my 
district from Washington. I consider myself lucky to be able to 
do that. Rail is no doubt the fastest, most energy efficient, 
environmentally responsible way to travel between our larger 
cities; it takes cars off the roads and helps relieve air and 
traffic congestion. It is reliable and relatively comfortable. 
Amtrak has made great strides in upgrading the northeast 
corridor and other lines throughout the Country, but we are 
far, far behind the rest of the world when it comes to high-
speed rail and it is time for that to change.
    We need only to look to our competitors in Europe and Japan 
and in China to see the possibilities that high-speed rail can 
bring to our own economy and to the convenience of passenger 
travel in the United States. Think about it, we have the 
technology to make trains run at a speed of over 200 miles an 
hour. At that speed, it would take just over an hour to get 
from Washington, D.C. to the heart of New York City. Japan and 
Europe have had high-speed trains for decades, but we are now 
just starting to get in the game. China is in the process of 
building a train line, scheduled to be ready by 2013, that can 
travel between Beijing and Shanghai in less than four hours, 
even though the distance is almost 700 miles.
    America does not need to settle for a second rate rail 
network. America deserves the best passenger rail network in 
the world, and we can do our part in Congress to make this a 
priority. Both the 2008 Passenger Rail Initiative and 
Improvement Act and the American Recovery and Reinvestment Act 
that we passed in February of this year made some strong down 
payments for high-speed rail. The $8 billion provided in the 
Recovery Act is a great start, but we to think much more 
strategically about the benefits of high-speed rail and what it 
can bring to the Nation as a whole and make our investments 
accordingly.
    So I commend you, Chairwoman Brown and Chairman Oberstar, 
for your tireless advocacy to give our Country a truly first-
class integrated high-speed rail transportation network. The 
proposed framework for the reauthorization of the surface T-
bill will provide $50 billion for high-speed bill, which would 
help us catch up to where we should be. We look forward to 
working with you all under your leadership, Chairwoman Brown, 
and all of our colleagues to give America a top-notch high-
speed rail system. Thank you.
    Ms. Brown. Before we go on, the Chair, Mr. Oberstar, of the 
full Committee, would like to make remarks.
    Mr. Oberstar. Just briefly to compliment you, Chairwoman 
Brown, whom I call Ms. Amtrak. She led an unrelenting effort 
during the years when Amtrak was faced with bankruptcy budgets 
to keep Amtrak funding alive, did a Harry Truman style 
whistlestop tour on Amtrak trains to generate support for 
Amtrak, and her continuing efforts in the Committee as Chair of 
this Subcommittee are just extraordinary, and we are grateful 
to you. That is why we are at a point where we can have a 
hearing on high-speed rail on developments that will happen; 
not that may happen, but that will happen.
    I also want to thank Mr. Mica, who has been a long-time 
strong advocate for high-speed rail, whether it was Maglev or 
TGV or Talgo technology. He has been a champion and he was a 
principle reason we are able to get the Amtrak authorization 
bill through to signature by President Bush in the last 
Congress, for which I will always be mindful.
    But just one thought. This is back to the future. Back to 
75 years ago, when trains traveled faster moving passengers 
than they do today. We have to do better than that. That the 
Burlington Railroad--it wasn't called that in the time--but 
their Zephyr trains and the Chicago and Northwestern trains 
moved between the Twin Cities in Chicago at over a mile a 
minute. There were passenger trains steam powered that moved at 
100 miles an hour. There was the Pioneer Zephyr that set a 
speed record between Chicago and Denver, 1,015 miles, in 13 
hours and 5 minutes, 77 miles an hour.
    The standard we are setting today is 79 miles an hour as 
the threshold. That is an ion ago; that is when I was born, for 
gosh sakes. We ought to do better. That is why we are here and 
I thank the witnesses and I thank the Members for their 
support.
    Ms. Brown. Thank you, Mr. Chairman.
    Now, before we introduce the first panel, I want to thank 
Mr. Tiberi for being here at this hearing this afternoon. You 
want to introduce one of our witnesses.
    Mr. Tiberi. Thank you, Chairwoman Brown and Chairman 
Oberstar, Mr. Mica, and Members of the Subcommittee for 
allowing me to testify before you today for the purposes of 
introducing Mr. Michael Pracht, President and CEO of US 
Railcar.
    I applaud you for including Mr. Pracht as part of the 
hearing today. He has years of experience in the rail industry. 
In addition, his company represents the future of railcar 
manufacturing in the United States.
    US Railcar is considering proposing to build a diesel 
multiple unit manufacturing facility in Gahanna, Ohio, in the 
heart of the congressional district that I represent. It would 
be the first of its kind in the United States and would 
represent an historic opportunity for the United States. The 
facility would bring new jobs to Ohio.
    As Congress continues to discuss the opportunities and 
challenges of expanding passenger rail infrastructure, we must 
also discuss how to establish a railcar manufacturing base in 
our Country. I am proud of the work being done by Mr. Pracht 
and US Railcar to achieve this role, and thank you for giving 
me the opportunity, Madam Chair, for introducing Mr. Pracht 
before you today. Thank you.
    Ms. Brown. Thank you. Thank you for your patience. Now the 
first panel, please.
    Thank you and thank you for your patience. I am pleased to 
introduce our first panel of witnesses. We are starting out 
with Mr. Joseph Szabo, who is the Administrator of the Federal 
Railroad Administration. We have Ms. Susan Fleming, Director of 
Government Accountability Office; Mr. Patrick Simmons, who is 
the Rail Division Director of the North Carolina Department of 
Transportation. He is testifying on behalf of the American 
Association of State Highway and Transportation Officials. And 
Secretary Busalacchi, Secretary of the Wisconsin Department of 
Transportation, on behalf of the States for Passenger Rail 
Coalition.
    Welcome, and we will start with Mr. Szabo. Good seeing you 
again.

  TESTIMONY OF THE HONORABLE JOSEPH C. SZABO, ADMINISTRATOR, 
      FEDERAL RAILROAD ADMINISTRATION, U.S. DEPARTMENT OF 
      TRANSPORTATION; SUSAN FLEMING, DIRECTOR, GOVERNMENT 
    ACCOUNTABILITY OFFICE; THE HONORABLE FRANK BUSALACCHI, 
 SECRETARY, WISCONSIN DEPARTMENT OF TRANSPORTATION AND CHAIR, 
STATES FOR PASSENGER RAIL COALITION; AND PATRICK SIMMONS, RAIL 
DIVISION DIRECTOR, NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, 
    ON BEHALF OF AMERICAN ASSOCIATION OF STATE HIGHWAY AND 
                    TRANSPORTATION OFFICIALS

    Mr. Szabo. Good to see you. Chairwoman Brown, Ranking 
Member Shuster, and Members of the Subcommittee, I am honored 
to appear here today to discuss one of the most significant 
initiatives of the President, Vice President, and Secretary, 
the development of high-speed rail in America. This initiative 
builds upon the foundation laid last year by Congress in the 
Passenger Rail Investment and Improvement Act.
    Our Federal investment in transportation over the last 60 
years has been focused primarily on highways, aviation, and 
transit. Investment in high-speed rail is an opportunity to 
bring balance to our transportation network.
    Many States have been engaged in planning for rail while 
they have waited for a Federal partner. When FRA took pre-
applications from the States to gage interest in our rail 
program, we heard from 40 States and the District of Columbia 
with projects exceeding $103 billion, and interest was from 
every region of the Country.
    Discussions of high-speed rail tend to begin with the 
fundamental question: What is high-speed rail? Is it peak 
speed, say, 200 miles per hour? We need to remember that we are 
about moving people, not just moving trains, so top speed is 
not necessarily the end-all. I prefer a more market-oriented 
definition, and that is rail service that cost-effectively 
provides trip times that are superior to auto or air in a given 
market. So making high-speed rail a reality, we need to be 
talking about a range of speed and investment options that each 
has their own sets of opportunities and challenges.
    The President's vision is to invest in efficient high-speed 
passenger rail networks of 100 to 600 mile corridors that 
connect communities and regions across America. This aligns 
well with the DOT's strategic goals that ensure safe and 
efficient transportation choices, promote energy efficiency and 
environmental quality, build a foundation for economic 
competitiveness, and support interconnected livable 
communities. But while the potential for high-speed rail is 
great in achieving these goals, so are the challenges in 
delivering on that potential.
    Challenge number one: sustainability and managing 
expectations. We are committed to making sure the $8 billion 
are spent wisely, on the very best projects that produce real 
results. The goal is to ensure the system's long-term 
viability. The challenge for all of us is to make sure that 
this program is sustainable for the long-term. The model I like 
to point to is development of the interstate highway system, a 
program that took over four decades to complete.
    We have to manage expectations. Interest by the States in 
high-speed rail far exceeds the funds available today, just as 
it was in the beginning of the interstate system. But public 
support for the interstate system didn't wane, because citizens 
could see early successes and knew that ultimately the 
interstate system would serve them too. Of all of our 
challenges, managing expectations may be the most important one 
for us to address.
    Challenge number two is capability of the States. A handful 
of States have been engaged in railroad issues for many years. 
Fortunately, we have a couple at the table with us. But, 
unfortunately, the number of States with the strong and 
experienced rail staffs capable of implementing complex rail 
improvements are the exception rather than the rule. And that 
is why FRA has engaged the States early and often, and is 
committed to continuing that effort to enhance the ability of 
States to manage rail projects.
    Freight railroad partnerships is another challenge. 
America's freight railroad system is the envy of the world. But 
while we build a world-class high-speed passenger rail system, 
we cannot do that at the expense of degrading our world-class 
freight rail system. FRA believes there are opportunities to 
develop partnerships between freight railroads and States to 
address common interests like requirements for positive train 
control and safety at highway-rail grade crossings.
    Finally, we have safety. FRA's mission is, first and 
foremost, safety. If high-speed rail is to be successful, it 
must be safe. Ensuring the safety standards evolve as necessary 
is critical. FRA has recently made available for comment a 
draft High-Speed Passenger Rail Safety Strategy, which is 
appended to the testimony. This Strategy endeavors to achieve 
uniform safe rail passenger service, regardless of speed.
    In conclusion, the FRA of two years from now will be a 
significantly different agency than what you see today. While 
safety will always be our most important mission, we will also 
be playing a leading role in making the investments that 
position our Country's transportation system for the future. I 
am incredibly proud to be at FRA today and to have the 
opportunity to lead the dedicated team through this 
transformation.
    I look forward to a dialog with you on this exciting new 
initiative. Thank you.
    Ms. Brown. Thank you.
    Secretary Busalacchi?
    Mr. Busalacchi. Chairwoman Brown, Ranking Member Mica, 
Members of the Committee, my name is Frank Busalacchi. I am 
Secretary of the Wisconsin Department of Transportation and 
Chair of the States for Passenger Rail Coalition. I am here 
today representing the Coalition and appreciate the opportunity 
to share my views on achieving our national passenger rail 
vision.
    The Passenger Rail Investment and Improvement Act of 2008 
and the American Recovery and Reinvestment Act of 2009 provided 
a policy and funding basis for significant expansion of the 
Nation's passenger rail network. Through President Obama's 
Federal 2010 budget request and the action of the House and 
Senate Appropriation Committees, Congress has shown its 
commitment to passenger rail. States have seized this 
opportunity by submitting ARRA passenger rail applications that 
have far exceeded the $8 billion that ARRA provided. But the 
challenge facing us all is to build the right projects, use the 
available funds wisely, and plan for the future.
    When passed, PRIIA legislation employed the New Starts 
model for funding distribution. However, under that program, 
funding is competitive on a year-to-year basis and competition 
among the States for funding would be intense. It doesn't have 
to be this way.
    I strongly urge Congress to adopt the interstate model to 
build the national passenger rail network. Many States want to 
develop their passenger rail networks and can support projects 
on an 80/20 Federal/State funding split, but they need that 
Federal share.
    The Federal Government and the States need to think 
strategically about expanding the passenger rail network and to 
work toward a long-term vision. The reality is that States are 
in different phases of development. A phased approach allows 
States that are ready to go to construct their projects, while 
States who are not ready can work on their planning and 
environmental process with some confidence that they will be 
able to fund their projects in a later phase.
    This issue should be addressed in the National Rail Plan 
that FRA is developing.
    Whether you are building a home, school, or a rail network, 
you have to know when you begin your planning that you will 
have the capacity to pay for the project through completion.
    The States for Passenger Rail Coalition has been consistent 
in pursuit of a Federal funding partner that can make a long-
term commitment to passenger rail. In our view, elements of a 
funding policy include: recognition that passenger rail is a 
critical transportation element; provision of an 80/20 Federal/
State funding program to plan, design, and implement passenger 
rail; provision of an ongoing source of Federal revenue; and 
establishment of program and funding policies similar to the 
highway program.
    In the Coalition's view, the next surface transportation 
authorization bill must contain a multi-year authorization for 
passenger rail funding with a strong Federal partnership so 
more States can develop and deliver passenger rail service.
    Because of the growing interest in passenger rail, States 
are in fact coordinating with each other now. For example, 
eight Midwest Governors and the Mayor of the City of Chicago 
recently signed a Memorandum of Understanding to create a 
steering group to align efforts as we develop our passenger 
rail network.
    Recently, Wisconsin agreed to buy two Talgo train sets. 
These 14-car sets will largely be manufactured in Wisconsin, 
with only 30 percent of the manufacturing to take place in 
Spain. Wisconsin is investing $47 million in these train sets, 
with the goal of bringing manufacturing jobs back to the 
Midwest. To make this happen, train manufacturers need the 
reliable revenue stream that only a long-term Federal 
commitment will provide so they can justify their economic 
investments in plants and equipment.
    Since most expanded and new service will run on privately 
owned freight tracks, capacity is a critical challenge for the 
States and the freight lines. Coalition States have been 
successful so far in working together with freight railroads, 
but fair negotiations with freight rail lines on capacity and 
other issues are growing and will need to be addressed.
    We have all been frustrated with the pace of the surface 
transportation authorization bill, but its passage is 
critically important to the Nation if we want to define a 
policy that will allow the Nation to build a 21st century rail 
network. For that reason, I think it is imperative that we pass 
forward with the development of the National Rail Plan. We 
should not wait another six years to complete that task.
    I also encourage the Subcommittee to take another look at 
the National Surface Transportation Policy and Revenue Study 
Commission's Passenger Rail Working Group report. It outlines a 
50-year vision for what passenger rail could be in this Nation. 
A copy of the report is attached to my written testimony.
    States are ready to be partners in the development and 
delivery of new passenger rail service in our Nation. We have 
proven that the partnership works in the highway and transit 
modes. There are many opportunities and challenges ahead, but I 
believe that through a solid Federal/State partnership we can 
maximize this golden opportunity to create a 21st century 
passenger rail network that will benefit the citizens of our 
Nation for decades to come.
    Thank you.
    Ms. Fleming. Madam Chair, Ranking Member Mica, and Members 
of the Subcommittee, I am pleased to be here today to discuss 
funding for high-speed and other intercity passenger rail 
projects under the American Recovery and Reinvestment Act. The 
$8 billion provided by the Act for high-speed and other 
intercity passenger rail projects has focused more attention on 
and generated a great deal of anticipation about the 
possibility of developing high-speed rail in the United States.
    My testimony has three parts: I will discuss some 
principles that could guide the effective use of these funds, 
some challenges that States will need to surmount in 
establishing high-speed and other intercity passenger rail 
service, and the nature of our ongoing work on Recovery Act 
high-speed rail projects.
    First, several principles could guide the effective use of 
Recovery Act funds and any future investment in high-speed 
rail. These principles include establishing clear Federal 
objectives and stakeholder roles, clearly identifying expected 
outcomes, basing decisions on reliable ridership and other 
forecasts, and re-examining how intercity passenger rail 
service fits in with other Federal surface transportation 
programs. While each of these principles is important, the 
third principle will soon come into play as FRA decides which 
projects will receive initial Recovery Act funding.
    As you know, FRA has received applications totaling almost 
$60 billion for $8 billion available in Recovery Act funds. 
Determining which, if any, high-speed rail project may 
eventually be economically viable will rest on the factors such 
as ridership potential, cost, and public benefits.
    High-speed rail is more likely to attract riders in densely 
and highly populated corridors, especially where there is 
congestion on existing transportation modes and where it 
compares favorably to travel alternatives in terms of door-to-
door trip times, price, frequency of service, reliability, and 
safety. Costs largely hinge on the availability of rail right-
of-way, land use patterns, and a corridor's terrain.
    To stay within financial or other constraints, project 
sponsors typically make tradeoffs between cost and service 
characteristics. We are pleased to note that FRA's notice of 
funding availability of high-speed rail projects generally asks 
applicants to address those factors.
    I will now turn to my second point. Once FRA chooses 
projects for funding, project sponsors face several significant 
challenges. These include securing the significant up-front 
investment for construction costs; sustaining public, 
political, and financial support; and resolving outstanding 
liability issues.
    We found that in other countries with high-speed intercity 
passenger rail systems, the central government generally funded 
the majority of up-front costs of high-speed rail lines. The $8 
billion in Recovery Act funds represents a significant increase 
in Federal funds available to develop new or enhanced intercity 
passenger rail. This amount, however, represents only a small 
fraction of the estimated cost for starting or enhancing 
service on the federally authorized high-speed rail corridors.
    Furthermore, the challenge of sustaining public and 
political support and stakeholder consensus is compounded by 
long project lead times, the diverse interests of numerous 
stakeholders, and the absence of an institutional framework for 
coordination and decision-making.
    Finally, several State and industry stakeholders have told 
us that outstanding questions about liability coverage for 
passenger rail providers on freight railroad tracks is a major 
barrier to entry for service providers and for host railroads.
    Moving on to my last topic-- our ongoing Recovery Act work 
on intercity passenger rail projects-- our work is focused on 
determining how States that have recently initiated passenger 
rail service have met these challenges, how the rail industry 
can accommodate this increased investment, and how FRA is 
planning to oversee the use of Recovery Act funds for intercity 
passenger rail service.
    We are in the beginning stages of our work and plan to 
report on these issues early next spring. We would be pleased 
to discuss our work with you or your staff as we progress.
    In conclusion, the infusion of up to $8 billion in Recovery 
Act funds is only a first step in developing potentially viable 
high-speed passenger rail projects. The principles we have 
identified can be applied to promote the effective investment 
of Recovery Act and future Federal funds for these projects. 
Surmounting these challenges will require Federal, State, and 
other stakeholder leadership to champion the development of 
economically viable high-speed rail corridors and have the 
political will to carry them out. They will also require clear, 
specific policies and delineations of expected outcomes and 
objective realistic analysis of ridership costs and other 
factors to determine the viability of projects and their 
transportation impact.
    Madam Chair, this concludes my statement. I would be 
pleased to answer any questions you or Members of this 
Subcommittee may have.
    Ms. Brown. Thank you.
    We are going to hear from Mr. Simmons, then we will have 
questioning after we have five votes.
    So, Mr. Simmons, we are going to hear from you and then we 
will go to questions and answers when we get back.
    Mr. Simmons. Thank you, Madam Chairman and Ranking Member 
Mica and Members of the Committee, for this opportunity to be 
here today. I represent the American Association of State 
Highway and Transportation Officials today. That is away from 
my daily job as directing a rail division at the State level. 
We interact there with freight and passenger interests; we 
manage safety programs; we conduct industry inspections; we 
partner with Class I railroads, Amtrak and short lines, to make 
economic development opportunities occur in our States around 
the Country. North Carolina is the lead State in developing the 
federally designated Southeast High-Speed Rail Corridor which 
we refer to as SEHSR.
    Today, my boss, Gene Conti, Secretary Conti could not be 
with the Committee, so he asked me to stand in for him. 
Secretary Conti chairs the Standing Committee of rail 
transportation officials across the Country. Through AASHTO, we 
advocate for improved transportation policies and we share with 
one another; we provide each other with technical assistance.
    This is my third time this year to appear before this 
Subcommittee. Each time we have had a valuable dialog, we have 
had constructive engagements on the issues, and it has really 
been a learning experience for me.
    As I prepared testimony, I refreshed myself by looking at 
the vision for high-speed rail expressed by President Obama. 
There, he identified high-speed and intercity passenger rail, 
and we have interest across the Country in that. Of course, 
with the new express, the higher-end projects of 150 miles an 
hour and above, there are a number of emerging and regional 
corridors around the Country looking at top speeds of 90 to 110 
miles an hour, and then there are projects that are looking to 
get into the game, States that do not have service or are 
looking to upgrade reliability for conventional operations.
    That is really the last time I am going to mention speed 
itself, but I am going to refer to mobility and travel time.
    The U.S., particularly FRA, has a tough job. I can't tell 
you how refreshed I am to have completed the task of submitting 
our application, and I know that my colleagues around the 
Country also put forward their best efforts. It will be tough 
for Administrator Szabo and his staff to judge these efforts. 
We are pleased, as States, to partner both with the States for 
Passenger Rail and through AASHTO to compliment the agency and 
the work that they are now doing.
    Last week, in North Carolina, we had the announcement of 
another factory, one that we had invested a lot in as a State, 
and it closed, and that represented 1,000 jobs that went away. 
That hurts anywhere that happens, but clearly the main 
opportunity for the Reinvestment Act is to create jobs. We need 
that in our State; we need that in States across the Country; 
we need that across our Nation.
    We also need to partner to make capacity investments. Prior 
to the downturn in the economy, passenger service across the 
Country suffered from poor on-time performance. It did so 
because we didn't have the capacity in our national network. 
These investments and partnerships with the freight railroads 
can help ensure mobility for freight and passenger services. 
Now is the time to put people to work making meaningful, long-
term infrastructure investments.
    High-speed rail is a lead policy element; it will help 
guide our transportation future, but it challenges us also to 
consider energy, the environment, and land use in putting 
forward these projects. I challenge the Committee to also think 
a little more broadly, rather than a single project. A single 
project would be a lovely signature project for our Country, 
but it will not recover the Nation's economy, nor will it 
foster partnerships across the Country that will leverage 
mobility.
    Our State DOTs are poised on an era of change. Our 
department is the second largest highway department in the 
Country, but we now need to build broader mobility options in 
transit and with rail. We will need to broaden our partnerships 
with the freight railroad companies to improve both passenger 
and freight throughput. That is important. PRIIA and ARRA are 
great starts. We know that we need to be transparent in 
progressing these initiatives, and we need to be prepared to 
make adjustments as we learn more as we go forward.
    All elements of our society will be challenged to grow and 
to manage the capacity that we have with these opportunities. 
As States, we need a couple of tools. I want to echo some of 
what Secretary Busalacchi said about the need for investments 
in planning funds so that States can help design a national 
network that will serve our Country well into the future. In 
addition to the new authority that U.S. DOT has to issue 
letters of intent for projects to build over a period of time, 
States will need the program stability and contract authority 
to be able to deploy this scale of infrastructure improvements.
    Thank you on behalf of AASHTO and State rail programs 
across the State for this opportunity today. States have risen 
to the challenge and have presented FRA with proposals for real 
mobility investments, real partnerships, real agreements with 
our freight railroads across the Country. States are ready to 
build today and we hope to have the opportunity soon.
    Ms. Brown. Thank you.
    We are going to stand in informal recess while we go to 
vote. We have five votes, then we will start up. Thank you. We 
will have questions when we get back. Thank you.
    [Recess.]
    Ms. Brown. Will the Committee please come back to order? I 
understand that Mr. Szabo has a plane at 5:30, so we want to 
start with you with the questioning, and I know my colleague, I 
saw him jotting down notes quickly when you were speaking on 
the question of high-speed and what constitutes high-speed. I 
know there is much discussion, but would you discuss with us 
what you all visualize as high-speed and what are some of the 
elements that you are using to make the decision?
    I know I had the Secretary, less than a week ago, down in 
Florida, and he was saying it is on the Web site. Well, would 
you tell us some of the criteria? Because there is such 
excitement throughout the Country. I have been to California, 
Texas, Florida, Tennessee, and all of the Committee Members. 
Everywhere I go there is such an interest and one of the things 
we have to make sure is that we put in a system that really 
works and the American people can see it.
    Most American people--and we can ask this audience how many 
people have been on high-speed rail. Raise your hand, let's 
just see. See, this is such an unusual audience. Thank you.
    Most people in this Country, when we talk about high-speed, 
don't know what we are talking about. So, with that, would you 
answer that question? We have other questions.
    And if the other Members don't mind, we will ask him 
questions and then let him catch his plane. Is that okay with 
the Committee? Thank you.
    Mr. Szabo. I think the first important point to note is 
that virtually all speeds are eligible under the grant 
guidance, and if you go back to my written testimony, in the 
Vision for High-Speed Rail in America that was released by the 
White House, there essentially are four areas that it talks 
about, which is conventional rail, which operates in that 79 to 
90 mile an hour range; emerging high-speed rail, which are 
developing corridors of roughly 100 to 500 miles an hour in 
length, with top speeds of 90 to 110 miles an hour; and then 
high-speed regional rail, which, of course, is more frequent 
service between major and moderate population centers roughly 
100 to 500 miles apart, with top speeds roughly in the range of 
110 to 500; and then high-speed rail express, which is that 
service between major population centers more in the range of 
200 to 600 miles apart, with very few stops, with top speeds in 
excess of 150 miles an hour.
    I think it is real important to note, first off, that all 
of these speeds and all of these services are important. We 
talk quite a bit about the European model, and this is in fact 
the model that is used in Europe and Asia. Not every single 
train is going 200 miles an hour. It is important to understand 
how these pieces fit together depending on the market being 
served, and I like to compare it to our road and highway 
system, where you have local streets, you have county roads, 
you have State highways, you have U.S. highways, and then you 
have the interstate system; and all of them are very, very 
important components that fit together to make a comprehensive 
road and highway network. So what we need to ensure is that we 
build out a comprehensive passenger rail program.
    It is also, I think, important to note that quite often 
your startup is going to be more meager, but will be an 
important incremental step into the ultimate build-out. For 
example, if you go back and look at what Spain did, they didn't 
start out at 200 miles an hour; they started out roughly about 
110, 125 miles an hour, with about a half dozen trains a day, 
and the ridership grew. It was so successful that from there 
they were able to go up to whatever it is, roughly 20 trains a 
day at speeds of 200 miles an hour. So it is about what can you 
most cost-effectively achieve immediately to build the 
ridership base before you take that next step.
    Certainly, I don't want to leave the impression that we are 
diminishing 150 mile or 200 mile an hour service. Certainly, 
that is a standard that we expect to be achieved and that we 
intend to make happen. But, again, not every train everywhere 
will be running 200 miles an hour.
    The other question that you asked, I think the second part 
to that, was the criteria that we will be using. As we went 
through the first round of applications, we put together 
panels; we gave them a strong orientation, one day of 
orientation to make sure that all members of the panel were on 
the same page, understood the criteria, that there was a 
consistency in how these projects were judged; and then we 
divided those panels up and, on a random basis, assigned to 
them applications to review. So nobody knew whose applications 
from where they were given, it was a lottery.
    The approach will be, obviously, similar as we go now into 
the major corridors. I think we ended up with a dozen panels in 
the first go-round. Obviously, we won't need that many in this 
go-round, it will be a smaller handful. But they will be a 
little bit larger because they are going to need a higher level 
of technical expertise and we need to make sure that that 
technical expertise is available to those panels. Quite 
obviously, it is going to be a longer process, a much more 
intense process as they take a look at those markets that have 
the strongest value.
    Ms. Brown. So do you have an idea as to when you all are 
going to announce the initial rounds?
    Mr. Szabo. We strategically chose to hold that. While the 
work has been done, it really comes back to the comments that 
you made, that Ranking Member Mica made, and other Members of 
the Committee about making sure this is done right. You know, 
it was painful to delay because we had given our word, and it 
is always very painful not to deliver on your word, 
particularly when you do have the ability to deliver on your 
word. But a three month delay or so. We are talking about the 
birth of a new program, so in the grander scheme of things, to 
make sure this is done right and that we look at all these 
applications holistically, to make sure that all the pieces fit 
together properly, a short three-, four-month delay is 
minuscule.
    Ms. Brown. Okay. All right, I am going to Mr. Mica.
    Mr. Mica. Thank you. A couple of comments. I want to 
respect your time, but, Mr. Administrator, you heard me talk 
about the northeast corridor. As you know, that really is the 
only corridor that Amtrak owns. We have a couple of small 
pieces, but we have nothing as extensive as that heavily 
traveled corridor. I always consider one of our most important 
assets and I always joke about us sitting on our asset. The 
northeast corridor doesn't have a high-speed designation right 
now, but you have the ability to designate that and qualify it 
for some of these funds. What is your thought there?
    Mr. Szabo. Well, I think the first and most important point 
to make is that that designation is not necessary in order to 
be the recipient of any of the ARRA high-speed grants.
    Mr. Mica. So you are saying you can without. I don't want 
to get you into prioritizing, but certainly when you own that 
kind of an asset, when it is so critical to transportation and 
the entire northeast corridor, it would seem that it should be 
the top of the list. The problem is I heard our commissioner, 
who is sitting next to you, talk about having a plan. We have 
designated corridors, but we really don't have a strategic 
passenger rail plan. Where would the northeast corridor, you 
think, fit into a future plan?
    Mr. Szabo. Well, I think that is the key second part that I 
wanted to state. While it is not necessary to have the 
designation to receive the grants today, the important news is 
the designations will be better flushed out as we do move 
forward with our National Rail Plan. FRA is required to deliver 
to Congress a preliminary draft of a rail plan by this Friday, 
October 16th. We are on time to do so. In fact, your staff will 
be briefed on it, I believe, tomorrow.
    Mr. Mica. That is on time and will be here?
    Mr. Szabo. Yes, sir.
    Mr. Mica. Okay. Good. Do you want to give us any 
preliminary, since it is only a day or two away and we may be 
gone Friday?
    Mr. Szabo. You will get the briefing tomorrow, sir. But, 
no, that is where we will start flushing out these issues of 
the additional potential designations, you know, where are the 
best potential markets; how does it fit together with freight 
rail. The National Rail Plan is not strictly a passenger rail 
document; it will be a comprehensive rail document.
    Mr. Mica. Well, the other thing you have heard today--well, 
first of all, $8 billion is a significant amount of money, but 
in the scheme of these larger investment projects and systems 
it is not a lot. Even with the $50 billion Mr. Oberstar and I 
have committed to try to get into the surface reauthorization, 
$50 billion won't cut it. But what will cut it is leveraging. 
How do you view leveraging? And we will hear from another panel 
that leveraging is possible; they do it with other 
infrastructure projects as much as eight to one, which would 
give you huge capacity, and you have huge revenues if it is a 
huge success.
    Mr. Szabo. The good news is that the States have the 
flexibility to choose the provider of their choice. There is 
dialogue that is going on between the States and various 
private entities, and certainly we encourage that dialogue.
    Mr. Mica. Well, I heard your analogy to the interstate 
system, and we do have other components in rail in place, but I 
think it would be beneficial, based on the fact that we really 
have no high-speed rail system, to have one or two successes 
not just at the 79 to 90 mile an hour or 90 to 110, but 
something that would be competitive with the rest of the world 
and also at least one model that we could show true high-speed 
service.
    Mr. Szabo. Yes. Certainly, we are aware of the need to 
provide some very real, very tangible success.
    Mr. Mica. Quite frankly, Ms. Brown, I can't speak for her, 
but we are not parochial about this. We are not campaigning for 
any site. You haven't heard us. We look in our district or our 
area, and we model pretty much. We are looking for a success 
for the Country. So we appreciate your efforts and look forward 
to working with you.
    Yield back.
    Ms. Brown. True bipartisan.
    Mr. Cohen.
    Mr. Cohen. Thank you, Madam Chair. I am going to be quite 
parochial.
    I am from Memphis. Memphis is the transportation hub of the 
Nation; largest cargo airline, highways, rail yards, 
Mississippi River. No high-speed rail. Last year, Marion Barry 
and I worked together and got a portion of a bill passed that 
would have a feasibility study for the South Central High-Speed 
Rail Corridor where you go from Little Rock to Memphis. It has 
been a year and the study has not commenced. Memphis is no 
closer to high-speed rail service, and it would be a very 
important thing. We have a hub airline there; people like to 
come in for that. They like to come and eat barbecue, sing the 
blues after they watch our football games, and things like 
that. Can I ask you can you give me any assurances that you are 
going to get that study commenced and started so we can foresee 
some high-speed rail?
    Mr. Szabo. The good news is that we have requested those 
resources in the fiscal year 2010 budget request, and if that 
funding is provided we will in fact provide the study.
    Mr. Cohen. For Memphis-Little Rock?
    Mr. Szabo. Yes, sir.
    Mr. Cohen. Have you ever heard of Alex Chilton? Have you 
ever heard of the Box Tops?
    Mr. Szabo. Yes, I remember the Box Tops.
    Mr. Cohen. Well, Alex was stretching me a little bit, but 
Alex was 18 and wrote that song, number one hit, number one 
hit, the Box Tops. Give me a ticket for an airplane; ain't got 
time to catch a fast train; my baby just wrote me a letter.
    [Laughter.]
    Mr. Cohen. We will write you a new song. Get us a fast 
train.
    [Laughter.]
    Mr. Cohen. Thank you.
    I yield the remainder of my time.
    Ms. Brown. Mr. Oberstar, how are you going to top that?
    Mr. Cohen. Top that.
    Mr. Oberstar. I don't compose music or lyrics; we compose 
legislation. Sometimes lyrics can help you move things along. 
You have a good spirit going.
    I know that, Mr. Szabo, you have a time limitation; you 
have to get underway. The question is the Buy America 
requirement going to create problems in the development as we 
move into the implementation phase? Have you evaluated the 
availability of railcar, locomotive, subassemblies, trucks? 
Rail is not a problem, most of it is in place, some may need 
upgrading; switches. Positive train controls are going to be 
necessary for these high-speed projects, especially where 
passenger rail must intersect with freight rail that is using 
the same track or the same corridor. What is your assessment of 
the availability of the parts, equipment, subassemblies, and 
other under the Buy America provisions?
    Mr. Szabo. When, an absolute goal out of this whole process 
is to ensure that we reinvigorate domestic manufacturing. Are 
the Buy American provisions going to be a problem? Absolutely 
not because they are a requirement that are going to have to be 
met. We are going through right now the development of a 
strategy about how we can better bring together both the 
foreign and domestic manufacturers. The biggest thing that we 
need to ensure that we reinvigorate domestic manufacturing is 
knowing that there is going to be a sustainable long-term 
program. You are not going to see the investment into plant and 
equipment if the businessman doesn't believe he is going to get 
an appropriate return on his investment. So, unfortunately, at 
this point, so many of the opportunities rest with foreign 
manufacturers. We need to bring the parties together to make 
sure that there are joint ventures; to make sure that if it a 
foreign manufacturer, that is more than just simply assembling 
the cars or locomotives in this Country, but that there 
actually is a downstream supply, you know, the suppliers 
involved, the domestic suppliers----
    Mr. Oberstar. Well, you are on the right agenda here. I was 
going to say the right track, but that is stretching things. I 
am going to send you relevant pages of testimony from hearings 
I held in 1988 on Buy America in our highway and transit and 
Corps of Engineer programs. What we found in the course of that 
set of hearings was that the Federal Highway Administration was 
in full compliance, 100 percent compliance; every rebar, every 
I-beam, every guardrail, every fence post was steel made in 
America.
    When we got to the transit program, we found that because 
of the abandonment of public transit by our fellow citizens 
from the 1920s through the early post-war era, track was pulled 
up, locomotives set off, passenger cars were sold to Central 
and South America. The manufacturing capability went offshore. 
The only major U.S. component manufacturer was Allied Signal, 
and they were bring subassemblies in from overseas and 
assembling them in the U.S. So it was a dismal picture. Not 
that Federal transit was avoiding the law; there just wasn't a 
market for those products, for the buses, for the passenger 
railcars, and for the locomotives appropriate for passenger 
rail service. Now there is.
    Mr. Szabo. That is right.
    Mr. Oberstar. We have a robust Federal transit program. 
There are manufacturers for light rail, commuter rail, 
intercity passenger rail. Bus manufacturers that left have been 
replaced by those who founded their American facilities and are 
producing American parts; some imported, but well below the 
threshold required.
    I asked the question because there is some passenger 
railcar manufacturing capability in the United States, but 
certainly not sufficient to supply what we hope will be a 
robust outpouring of projects that you and the Secretary are 
going to have to decide on in the next month and a half or so, 
because I want you to pay attention to that. We have American 
railcar, we have Kawasaki that is located somewhere in the 
United States; we have Bombardier. Talgo has made a commitment 
with the governor of Wisconsin to locate a manufacturing 
facility in Wisconsin should they be awarded a portion of the 
stimulus to do the Chicago to Milwaukee to Madison to Minnesota 
segment. There are others.
    But we had a problem in the current stimulus with the EPA 
program, where EPA and the State agencies did not think ahead 
and anticipate shortage of pumps, because we have a lack of 
pump and valve manufacturing capability in the United States. A 
good many of those products are produced in Canada. We had to 
work out exceptions. That delayed the implementation of the EPA 
portion of stimulus and many States, about 20 States, have 
nothing going, have no contracts underway.
    So I don't want to see that happen. I want you to take a 
close look at that aspect of it and make sure that when you 
award these projects, there is going to be compliance and that 
is not going to be an impediment.
    Mr. Szabo. Chairman, the good news is that the Secretary 
clearly shares your point of view and has made that message 
very clear to us, and we are in fact trying to get ahead of the 
curve on this. Again, we are just starting our strategy now on 
the format that we are going to use, but we are probably going 
to call some type of summit with the manufacturers and 
suppliers. And, again, the Secretary has made very clear that 
he expects a downstream benefit on this of all the suppliers 
that are providing carpeting for the railcars, leather for the 
seats, you know, light bulbs, whatever the components are.
    Mr. Oberstar. That is very good and you tell the Secretary 
I sent my compliments. He started out well. He started his 
career in Congress here in this Committee.
    Is one of the considerations in making these awards under 
stimulus going to be sustainability of the project?
    Mr. Szabo. Absolutely.
    Mr. Oberstar. And by that what do you mean?
    Mr. Szabo. Well, obviously, that is exactly the type of 
criteria that we are going to be looking at and the type of 
merits that we will be judging the projects on. Again, we have 
to know that what we do here supports the long-term vision, and 
that is why the evaluation criteria that we will be using is 
not only the obvious, like the transportation benefits, the 
energy efficiency and livable communities, but then the 
applicants' track record of comparable projects, the 
thoroughness of their management plan, the reasonableness of 
their financial estimates, the quality of their planning 
process, a detailed review of their financial plan. Clearly, we 
understand that it has to be sustainable. Everything we are 
talking about doing is based on that long-term vision.
    Mr. Oberstar. But also be careful about the legacy of the 
previous administration in the transit arena, and their cost-
effectiveness index that was invented out of whole cloth for 
the purpose of denying, rather than affirming, transit 
projects. So don't get caught up and deterred by those invalid 
premises.
    Mr. Szabo. We have spent a great deal of time studying the 
transit process to learn both from best examples as well as, 
perhaps, mistakes.
    Mr. Oberstar. Are you going to--you have selected four 
tracks. Are you going to be making simultaneous awards or are 
you going to do track one, and then two, and then three, and 
then four? How are you going to sequence this process?
    Mr. Szabo. We would anticipate at this time that it will be 
more comprehensive announcements, but it won't be sequenced; we 
will come out with comprehensive announcements.
    Mr. Oberstar. Okay. There are lots of other questions I 
have, but those suffice for the moment. Thank you for tackling 
this assignment and getting it underway very expeditiously.
    Mr. Szabo. We are enjoying the challenge.
    Mr. Oberstar. Listen to Mr. Busalacchi, though, he will 
tell you a lot about how to do things right.
    Ms. Brown. I understand you only have about five more 
minutes.
    Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Madam Chair.
    Mr. Szabo, so glad to see you again. My questions are in 
regard to the efforts that California is making. I am sure you 
heard my comments before we recessed. But is there anything in 
your plan to require the rail authorities involved to mitigate 
not only the noise, the congestion, the safety impacts of the 
high-speed rail? That is question number one. And how do you 
plan to work with those communities or are you only going to 
work with the States?
    Mr. Szabo. The key is the important news and the good news 
is that this essentially is what gets flushed out during the 
process and the development of the environmental impact 
statement, and that is the very reason why that document is 
required to be created, that you must go in and work with the 
communities and understand the effect upon them, the effects 
upon them on noise and analyzing various routes and 
understanding the effects, pros and cons, of each of those 
routes. So that is an important part of the process; it is 
something that Federal law requires. We require it and we 
review it.
    Mrs. Napolitano. You will be working with the communities 
themselves also?
    Mr. Szabo. We won't be directly involved with the 
communities per se, but, again, we will be reviewing the work 
that the States do in developing their EIS and make sure that 
it is a document that is going to be legally supportable so 
there aren't suits from the communities.
    Mrs. Napolitano. Great. The fact that many of the railroads 
are opposed to local government taking the right-of-ways for 
the high-speed rail, in other words, to build that extra track 
for dedicated service, because it does hinder their freight 
movement and that is where their profitability is. So how do we 
address these concerns and how do we implement what Secretary 
LaHood informed me that Chicago and--I forget what other city 
he mentioned; it escapes me at my age--that are working at 
looking at the tri-methods that we need: goods movement, mass 
transit, and high-speed rail?
    Mr. Szabo. First off, I think it is important that we keep 
in mind that the rail right-of-way in most cases is a privately 
owned asset by a private for-profit corporation that answers to 
a board of directors and to shareholders, so we have to 
understand that it truly is their property. However, I do think 
we have the opportunity--it really comes back to what I talked 
about in my testimony--to form partnerships, and it has to be 
partnerships that achieve win-win solutions. The worst thing we 
could do is to advance the President's agenda for high-speed 
rail to get passengers on trains at the expense of forcing 
freight off the rail and onto the highways and creating even 
worse congestion and pollution and use of fuel.
    So we are going to have to find the careful balance. I 
think it will come in a couple places. First off, we will touch 
on this in the development of the National Rail Plan, but I 
also think probably more important than that, it will be a part 
of the work that FRA continues to do with the State DOTs to 
strengthen their level of expertise, their level of experience 
in negotiating these types of agreements. You know, you tend to 
find less problems in those States where there is a mature 
relationship between the freight railroads and the rail bureau 
of the DOT, and it is a lot more challenging for a new State 
that is just venturing in and perhaps dealing with that freight 
carrier for the first time and doesn't understand all of the 
issues. They are pretty complex.
    Mrs. Napolitano. Right. But understand that in Los Angeles 
County, which is over 12 million people, there is no room left, 
no open land. So there will be a lot of need of rail 
separation, and the railroads will not support very much that 
financially; it is only about three percent. So that leaves the 
locals and the State and the county and others to come up with 
the funding. That is a big issue.
    Mr. Szabo. Yes, it is, and it is one we have to continue to 
work through.
    Mrs. Napolitano. Thank you, sir.
    I yield back.
    Ms. Brown. I have a couple of quick questions that I want 
to run by you before you leave. I understand you have only one 
minute so, let's see how we are going to do that.
    [Laughter.]
    Ms. Brown. In the Passenger Rail Investment Improvement Act 
of October, 2008, Congress attempted to address the issue of 
how railroad labor laws would be applied to workers on 
passenger rail operations and infrastructure such as signalmen 
who benefit from grants issued to the States. Can you tell me 
how the FRA has interpreted the Act and how these labor laws 
will be applied?
    Mr. Szabo. Yes, Madam Chair, we believe the law is very, 
very clear. The intent of Congress is very, very clear. In 
almost all circumstances, if you accept FRA funding for the 
purpose of pursuing high-speed or intercity passenger rail, you 
will be deemed a ''railcarrier'' under 49 U.S.C. 24405(b), and 
fall under all of those Federal laws that apply to railroads 
and rail workers, the Railroad Retirement Act, the Railway 
Labor Act, and any of these other applicable Federal laws. And 
certainly we intend to make that a part of our grant 
agreements, to just reinforce what the law already states.
    Ms. Brown. One last point, I note that you are not giving 
us a drop dead date, but we are going to adjourn in, I guess, 
some time before Christmas. Will you make your announcement 
before Christmas?
    Mr. Szabo. No. I am fairly certain it will not come until 
after the first of the year. I would rather promise little and 
deliver much than make a promise I can't keep. So I think it is 
safe to say after the first of the year.
    Ms. Brown. Well, thank you very much, and I understand that 
maybe Mark Yachmetz will take your place. Thank you very much, 
Mr. Administrator. I just want you to know that there is, if 
you look around in the room, a lot of interest.
    Mr. Szabo. Yes, there is.
    Ms. Brown. There is. You are a very popular person right 
now.
    [Laughter.]
    Ms. Brown. Okay, we have some other questions for the other 
panelists.
    The first question I want to ask you is I have heard, and I 
know you have, that there is a lot of discussion concerning 
planning grants, and that we didn't have enough in the 
pipeline. What is FRA doing to address those needs?
    Mr. Yachmetz. First off, you are correct. There was one of 
the oversights in the Recovery Act was planning was not an 
eligible expense, and so all we had was the $9 million in our 
fiscal year 2009 appropriation. We have been working with the 
appropriators to make sure that that oversight is addressed in 
the 2010 bill, and I believe both Houses have significantly 
increased the amounts of funds. I believe the House is at $50 
million for 2010. We would actually like to see it a little bit 
higher.
    Ms. Brown. Okay, okay. Thank you.
    Next question is for Mrs. Fleming. In your written 
testimony, you mentioned that outstanding questions on 
liability coverage for passenger rail providers and operators 
on freight rail tracks is a major barrier to inter-service 
providers for the host railroads. What recommendations do you 
have to minimize the barriers that liability issues may cause 
between State and host railroads in efforts to expand high-
speed passenger rail? And that is really shaping up to not just 
high-speed, period, inter-city rail.
    Ms. Fleming. Right. Well, as you know, this is a huge, 
complex issue and negotiations can take many years. There is 
really no cookie cutter approach. What our work has found is 
that it really varies depending on the freight railroad and the 
commuter rail, the who owns the track, the speed of the trains, 
and when they would be running. So there are a lot of different 
nuances. But, we have found that it is in the mutual best 
interest for both the freight and other, the commuter rail or 
in this case it would be high-speed rail projects, to work 
together to resolve these.
    While it takes a long time, they eventually do come up with 
a mutually beneficial agreement.
    Ms. Brown. What have we learned from other--you have done 
extensive studies on foreign high-speed rail systems. What can 
you report back to us about lessons learned as we develop? I 
mean, because we are at the baby stage.
    Ms. Fleming. Well, there are several. In the countries we 
visited-- which were Spain, France and Japan-- there was a 
commitment and a priority to develop high-speed rail. And that 
commitment, basically, started out as a financial commitment. 
So the majority of up front construction costs were paid by the 
central government, often without the expectation that its 
initial investment would be recouped.
    This model basically, as well as an integrated intermodal 
approach, and taking the time to develop a vision and plan for 
high-speed rail, as well as with the goals and objectives, very 
much led to the successful development of high-speed rail.
    A second lesson learned is that in many of these countries, 
the initial investment was to build a trunk line between two 
intercity pairs with dense populations, and an existing market 
of intercity travelers in other modes. These lines would be 
like Madrid to Seville and Tokyo to Osaka. These initial lines 
have proven to be very viable, so much so that the revenues 
have been sufficient to cover their operating costs, as well as 
some of the initial investments.
    I think our last lesson would be that high-speed rail 
systems are reliable and safe, and are very often designed to 
be time and price competitive with other modes.
    Ms. Brown. Mr. Simmons, do you want to respond to that?
    Mr. Simmons. Yes. One of the observations that we have of 
the development internationally of high-speed rail are several. 
First, they have been at it for decades, and so there is a 
well-developed industry to design and implement these services. 
A second point, which is often missed, is that particularly in 
Japan and some of the other places, that they fully developed 
their base railway system first, and then deployed the 
dedicated true high-speed lines.
    I think we should learn from the lessons that we see from 
abroad, recognize it is going to take us a while to overcome a 
40 or 50 year head start. I think we can make some constructive 
investments, and I will give you an example of one that we are 
working on.
    And it is that today, our top service speed is 79 miles an 
hour, and we can't go faster until we make some improvements to 
the railroad, but primarily until positive train control is 
implemented. Then we will be able to hit top speeds of 90 to 
110.
    As we have designed our corridor, and I believe as other 
States have designed their corridors, they designed them for 
even higher speeds, but we need to wait on technology and 
policies to change. So that with our particular corridor, you 
will later be able to go faster on the same tracks within the 
same corridor, but with a different machine, an electrified 
locomotive.
    So I think one should observe what is happening around the 
world, learn some of those lessons carefully, figure out how to 
apply them, learn from some of the technology that has been 
developed elsewhere that can help us here in America, and 
figure out how to do it in our mixed freight and passenger 
environment.
    I think we have some good opportunities to do that.
    Ms. Brown. I have been on several of the systems, but I 
have never been on a high-speed system that interact with the 
freight. So I would like to know, are we looking at separate 
tracks? We certainly have to be looking at positive train 
controls.
    One of the things that we have right here, every year we go 
on a trip on the train and we share, of course, with the 
freight, and it is kind of embarrassing that we are, we go on a 
two-hour trip and we get there four hours late, but we are 
sharing the track.
    So these are some of the, I guess Mr. Yachmetz, you can 
respond to that. As we move forward, when we are really talking 
about high-speed rail, are we talking about separate tracks?
    Mr. Busalacchi. Well, I think----
    Ms. Brown. Well, I mean, I would love to hear from all of 
you on that subject area.
    Mr. Busalacchi. Well, let me just say, I think Pat was 
right on the mark in what he said.
    Ms. Brown. I can't hear you, Mr. Secretary.
    Mr. Busalacchi. Yes, I did that. I thought I did that. Can 
you hear now?
    Ms. Brown. Yes, sir.
    Mr. Busalacchi. Okay. What Pat said is absolutely true, but 
I think we have to be careful about high-speed rail versus the 
regular rail. I can speak for what we do in our State; we will 
deliver service on a host railroad. We work off of the freight 
track.
    Now, is that a good situation for us? For us, it works and 
it works very, very well. The key is that our trains are 90 
percent on time. We have a great working relationship with 
Amtrak. We have a terrific working relationship with Canadian 
Pacific. So in our particular situation, it does work.
    We seem to get in this push and shove about high-speed 
versus the 100 or 110 mile per hour service. And I believe 
that, we need to walk, like Pat said. We need to walk first, 
and work our way into this before we really get into the true 
high speed.
    The concern that I have, and it has been my main concern, 
is that we are spending a lot of money here, and the public is 
looking at all of us. We understand this stuff, all of us here. 
We know what is going on. But the average citizen, well, I am 
not so sure. And we have to make sure that when we spend these 
dollars on passenger rail, that we do it right.
    This is going to be the key here, that we do it and we do 
it right. We need to listen to the experts, FRA. We need to 
listen to the AAR. And together, we need to work these 
situations out, Madam Chair. We can do it. I am not saying that 
we can't. The worst thing that can happen is that these trains 
are not on time. If we get into that situation where people are 
sitting at these stations and they are waiting and waiting and 
waiting, people are going to abandon these trains. They are 
going to go back to their cars. That is not what we need to do 
here.
    And that is why Pat and I talk, coming out of the gate, we 
need to do it right.
    Ms. Brown. Well, if you listen to the testimony that I have 
had from the international people, one of the things at the top 
of the list is on time, capacity, on time, I mean, those are 
major factors. But we have got to throw ridership. I mean, 
because we cannot have a train and just, we have got to make 
sure the people are on the train.
    And I guess we are talking about a combination. Maybe we 
are talking about two or three corridors that are high speed, 
and then we are talking about more speed. I mean, you look at 
some of the areas like in the Northeast Corridor, I mean, some 
people would like to see them going 200 miles an hour. Well, 
maybe that is not the best thing. Maybe the best thing is that 
we can improve some of those tracks and some of those bridges 
and some of those tunnels, and be able to go from Washington to 
New York in two hours. I mean, that might be a good thing.
    Mr. Yachmetz?
    Mr. Yachmetz. Well, to the question that you raised about 
whether at some point we need to have the high speed on 
separate tracks, yes. At some point, there is. High speed, fast 
trains raise safety issues, reliability issues, capacity 
issues. And so at some point, there will be a need for either a 
separate track on the same right-of-way or an all new right-of-
way.
    And those decisions will be driven by, a lot of the 
analysis of how much freight traffic is on there right now; 
what is the terrain; what are the other issues that would 
affect these decisions. And I think that is part of the good 
planning that needs to be done cooperatively between the 
freight railroads, the States, the passenger railroads, and 
FRA.
    And we have done this on some corridors already, and we 
will assist the States and other corridors in doing these 
plannings.
    Ms. Fleming. Madam Chair, may I add to that as well?
    Ms. Brown. Yes, please.
    Ms. Fleming. One of the things that we found that in order 
to be competitive with other modes that time is of the essence. 
In order to be time competitive, it is likely that high-speed 
rail would have to be on dedicated track.
    Ms. Brown. I didn't hear you.
    Ms. Fleming. Yes. It is likely that high-speed rail service 
would have to be on dedicated track, again, to be time 
competitive with air or highway.
    And the other factor is I think that when you are talking 
about the alignment, you would want the alignment to be fairly 
straight, and you can achieve the higher speeds. So that is 
also likely to require purchasing rail right-of-way, which as 
you know can be very costly and problematic.
    Ms. Brown. Do you see, Ms. Fleming, that we are trying to 
compete with the air service? I don't necessarily even view it 
that way. I mean, I don't know what we are trying to do as we 
develop it, but maybe we are trying to not clog up some of the 
air space between here and there.
    Ms. Fleming. I think that gets to one of our points, which 
is that it is very important to really lay out a vision for the 
national high-speed program, particularly as it fits in with 
our whole transportation system. And it is going to be very 
important that we lay out the goals and objectives we are 
trying to achieve with our high-speed rail project. And then 
again, identify--and I am looking to FRA--to identify the 
expected outcomes, and then to put together some metrics so you 
can see what progress we are making toward achieving those 
goals.
    So for us, that is the starting place for an endeavor of 
this magnitude.
    Ms. Brown. Mr. Simmons?
    Mr. Simmons. Yes, Madam Chair, thank you.
    I just wanted to say I would applaud your efforts to join 
with us to get beyond the embarrassment of the delayed train. 
It really is a signal that we don't have the capacity that we 
need to build, and it is more than embarrassment. It is a cost 
to our society, the cost of congestion is a true expense.
    Now, we can get beyond that. We get beyond that through 
partnerships with the class one railroads to add the capacity 
that is necessary, to have the throughput and the network that 
can do that. And my personal definition of a partnership is 
when I am willing to reach in my pocket and you are willing to 
reach into your pocket and make an investment that we can both 
honor and feel good about and use.
    And I know that there are those opportunities around the 
Country today.
    Ms. Brown. I think as we move forward, it is the vision 
that we need to work on together, and it has truly got to be a 
partnership between the Federal Government, the States and the 
local, and private. So it is a marriage, and it is putting all 
of these stakeholders together.
    Ms. Napolitano, you had additional questions?
    Mrs. Napolitano. Yes, ma'am. Thank you, Madam Chair.
    And great interest in GAO's reported, GAO has reported 
extensively on foreign high-speed rail systems. And there are 
lessons that you have touched on. But is it true that most of 
those systems are built on government-owned land, so they can 
create additional track lines if necessary or be able to do all 
the things they need to do?
    So I am not quite sure, and this is, I guess, for Mr. 
Yachmetz, is whether or not this is being part of the 
consideration of being able to help communities be able to work 
on.
    Mr. Yachmetz. If we are looking at very high speed, the 
equivalent of what you find in Europe or Japan, they have gone 
off and generally bought new right-of-way, or acquired new 
right-of-way under their country's laws to develop their 
systems.
    If you look at the European model, the European model is 
basically new rights-of-way right until you get to the 
outskirts of town, and then shifting over to the historic rail 
routes into town. And the Japanese model was sort of building 
their system in what was then the suburbs, but is now the new 
center cities of many of the communities in Japan.
    We see there being a mix. We see, as an example, California 
high-speed rail, most of its system would be acquired on new 
rights-of-way, but as an example, between San Jose into San 
Francisco, they would be sharing the current right-of-way with 
CalTrans. The services that are in, say, from here to Charlotte 
would, at least initially, be on existing freight railroads 
right-of-way except in a large part of North Carolina where the 
State actually continues to own and has always owned the rail 
line between Raleigh and Charlotte.
    So we see this being a mixture, but getting back to it, and 
the answer that Mr. Szabo gave, a key element of this is the 
environmental process. And while our partner in doing the 
environmental reviews are the States, part of the environmental 
reviews do require the engagement of the communities and other 
interested groups in evaluating options and opportunities.
    Mrs. Napolitano. Ms. Fleming?
    Ms. Fleming. I would have to get back to you in terms of 
the countries that we visited, whether or not it was public 
land or not. But one of the things that we did hear time and 
time again was that one of the challenges they did face was 
having to try to make sure that the rail system was going to be 
connected with the other parts of the rail in the country. That 
was a big part of their vision was to make sure that they had 
connectivity.
    So as Mark said, that it is very important to up front kind 
of figure out what your goals are and to make sure that you are 
going to build in that connectivity from city center to city 
center. So that is why many of the European countries decided 
to go with steel wheel and steel rail, rather than maglev in 
order to be able to do that.
    But I can get back to you in terms of the public land and 
percentage that was in the three countries that we went to.
    Mrs. Napolitano. Would you? Because my understanding is in 
Southern California in the high-speed rail, BNSF is quite 
willing, but UP is very unwilling. So while we say that there 
is a great deal of support for it, unless the railroads play 
ball, it is not going to be an easy movement.
    [Information follows:]

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    Ms. Fleming. I think it can be a deal breaker.
    Mrs. Napolitano. Okay. The Administrator is gone, so maybe 
Mr. Yachmetz can answer it. Does the FRA have sufficient 
resources to handle all of the applications from all the 
States?
    Mr. Yachmetz. We will handle those, the applications, but 
the answer is no, we do not have the resources we need for a 
mature program. The Recovery Act did not include any new 
positions for any of the agencies implementing the programs, 
and in particular FRA. And also, one of the challenges of the 
Recovery Act is it provided us only the opportunity to take 
one-quarter of 1 percent to fund oversight, even though the 
legislation that came out of this Committee that was passed 
last year, the PRIIA, authorized one percent.
    And so we are using those funds right now doing the 
application reviews, and if the situation isn't addressed, we 
are going to have a serious problem when it comes to oversight 
of project implementation.
    Mrs. Napolitano. Madam Chair, I would like to put that down 
for the record that they do need some additional assistance to 
be able to carry out what we have asked them to do.
    The last question, and this is going along with the buy 
American and helping develop the manufacturing base in the U.S. 
We have so many areas that are so faced with economic downturn 
and high unemployment.
    Is there a way that we can be able to entice, develop the 
building of some of those systems here in the U.S.?
    Mr. Busalacchi. Well, let me just say something here.
    I am sorry, Mark.
    Mr. Yachmetz. Go ahead.
    Mr. Busalacchi. We purchased two train sets. I know that 
the Chairman talked a little bit about it, but we actually 
purchased two train sets for the----
    Mrs. Napolitano. Built in Spain.
    Mr. Busalacchi. Well, that is what I am going to get to. 
For the Chicago-Milwaukee Corridor that is in operation, and we 
will have those sets in two years. Talgo has agreed, the 
wheels, the steel wheels and the shelves will be made in Spain, 
but the rest of the trains are going to be made in the United 
States, 70 percent, just to start with, Congresswoman. And that 
is going to increase. If we are successful in our grant, then 
we will also purchase two more train sets. But I believe that 
we have, coming out of the gate with Talgo, we have shown that 
we are willing to take this gamble and get these trains built 
here in the United States.
    Mrs. Napolitano. Right. But unless Congress commits a 
larger amount of money, $9 million is not going to do it.
    Mr. Busalacchi. Well, you are absolutely right. I mean, 
there is no question about that. And I think in my speech I 
talked a little bit about it. But there has to be a long-term 
commitment here. You are absolutely right. I don't want anybody 
to think that $8 billion is chump change, because it is not. 
But in order to get manufacturers interested, whether it is 
Talgo or any of the other train manufacturers, there has to be 
this attitude that we are going to implement this program and 
we are going to go forward with dollars, with a commitment.
    And then I believe people are going to come to the table, 
Congresswoman.
    Mrs. Napolitano. But if we are not even putting enough 
money in--well, I would say enough. You say it is not chump 
change. I agree with you. But if we are not putting in support 
for FRA to put additional people to just handle the 
applications, what are we looking at?
    Mr. Yachmetz, can you respond to my question?
    Mr. Yachmetz. Yes. We are strongly committed to 
implementing the buy America provisions. We are. But beyond 
that, Secretary LaHood and Deputy Secretary Porcari are very 
committed to using this opportunity of standing up this program 
to rejuvenate our manufacturing base. And we are looking for 
opportunities to help that. I know we are committed.
    We don't want to go through the it is made over there and 
assembled here type buy America. We want to make sure that the 
components and sub-components are also domestic manufacture. 
And so you will see that reflected in our grant agreements. But 
as the Secretary says, the key is going to be showing that 
there is a sustainable market that justifies continued domestic 
investment and with that we will see the rebirth of our 
domestic rail supply industry.
    Mrs. Napolitano. And also the inclusion of the automatic 
train control.
    Mr. Yachmetz. That is correct. One of the other points that 
I would make is that we have also requested, and the House has 
been generous so far in the 2010 appropriation for research and 
development in high-speed rail, and part of that is designed to 
help develop North American solutions to high-speed rail issues 
that could also help support a domestic manufacturing base.
    Mrs. Napolitano. Thank you, sir.
    Thank you, Madam Chair. You have been very generous.
    Ms. Brown. Thank you.
    I just want to be clear that I think there is not only a 
commitment in the Congress for rail passenger, but the 
commitment and the excitement throughout the Country, we cannot 
deny it. It is there. The Secretary talked about it, and I can 
tell you in traveling all over the Country, there is an 
excitement there.
    And I think the Administrator mentioned how we have to 
manage--what is it he said?--he said we have to manage 
expectations. Well, I am expecting big things also.
    So I think this is an exciting time to be involved in it, 
and I want to comment the Secretary of what you all have done 
in Wisconsin. You participated in our roundtable discussion 
wherein we had standing room only there, and we were talking 
about how we were going to put American people back to work 
because we have thousands of people out of jobs. They have 
skills. We need to maybe have a pilot program on how we can 
retrofit and put some of those people back to work. We had 
manufacturers that were interested. I mean, there is an 
interest there in what we can do to retrain and employ a lot of 
American people.
    And so as we move forward, we will be looking for 
recommendations on what we could do in Congress and partner 
with these local communities.
    Do you want to respond to that, and I will go into my last 
question.
    Mr. Yachmetz. Well, let me just give you one example of 
excitement. There is a GS-12 person who works in my office 
normally on the RRIF Loan Program. And we had to bring in 
everybody to review applications, and she was on a team that 
was reviewing a set of the track one applications. Going home 
one night, she stepped off Metro and broke her ankle, spent the 
night in the emergency room, and was in the office at 7 a.m. 
the next morning working with her team reviewing applications. 
That is genuine excitement about where we are at with this 
program.
    Ms. Brown. Yes.
    Mr. Secretary, your testimony on ongoing sources of Federal 
revenue to fund the high-speed rail program, it is important to 
have a dedicated funding source. What advantages of securing a 
dedicated funding source for high-speed rail have on a State's 
ability to develop a high-speed rail system? And I mean, I 
think that is one of the major problems that we have. We have a 
lot of interest in local, even though we say we have a lot of 
interest in the State system, they have not put up the money, 
and that is several States. So I know we will be reviewing that 
when we look at applications.
    But Mr. Secretary, what do you say about the dedicated 
source?
    Mr. Busalacchi. Well, you mean it is going to be critical. 
It is going to be critical to this program. As Ms. Fleming said 
the Europeans made a commitment, and they did.
    Ms. Brown. The central government.
    Mr. Busalacchi. They did. That is exactly right.
    Ms. Brown. Yes.
    Mr. Busalacchi. And the government made a commitment and 
that is how it got done. We look at these systems and we are 
always amazed. Well, a magic bunny didn't pull them out of a 
hat. I mean, it took a lot of will and it took a lot of money 
and a commitment. And Congressman Oberstar has been very 
supportive. As you know, I sat on the national commission. We 
made a recommendation. Our recommendation to Congress through 
the year 2050 is $357 billion that we need to invest in this 
Country in passenger rail.
    Now, I know that is a big number, but in order to get this 
done, Madam Chair, we will have to make that commitment. We are 
certain of it. And if we do that, Mark will get all his people 
that he needs, and everybody will be happy, but we do have to 
commit to it.
    Ms. Fleming. May I answer that as well?
    Ms. Brown. Yes.
    Ms. Fleming. I just want to build on what he said. We have 
had some attempts in this Country, and they failed in large 
part due to their inability to sustain political and public 
support, as well as financial support, enough to carry the 
project through multiple political cycles, as well as the 
lengthy project development time line.
    They also struggled and couldn't overcome the challenge 
with securing the up front investment needed to get these 
projects going. So absolutely, sustaining this commitment over 
the project time line will be critical at all levels, at the 
Federal, State, local and private sector.
    Ms. Brown. And Mr. Simmons?
    Mr. Simmons. I would just echo that, and I am familiar with 
communities, particularly in our State, and our State level 
that are working towards setting up dedicated funds to provide 
the matching dollars. And it will take the leadership at the 
national level, the regional level, the local level to make the 
commitments and invest in the infrastructure that we need to 
build our communities.
    Ms. Brown. Okay. You all have been so gracious with your 
time. Any closing remarks that you would like to make, either 
one?
    Mr. Busalacchi. Well, Madam Chair, I am going to suck up to 
you right now.
    [Laughter.]
    Mr. Busalacchi. I just want to say thank you. You have 
really been a breath of fresh air. I have been around, Pat's 
been around this. We have all been around passenger rail here 
for years. We remember the gloom and doom days where we 
couldn't get six people in a room to have a meeting. Now we 
have a meeting and it is standing room only. And it is because 
of people like you. Thank you.
    Ms. Brown. Thank you. And do you know that is true 
everywhere I go, all over the Country. I mean, it is just 
amazing the interest. I don't care what city, what State, what 
hamlet is, the interest is a packed house.
    Anyone else? Thank you very much.
    The last panel, they are mostly in order. Okay.
    Thank you, first of all, for your patience. We are very 
excited, as you all know, about what is going on in 
transportation. It went longer than we anticipated, but thank 
you for being able to stick with us.
    I would like to welcome the second panel of witnesses. 
Today, we have Mrs. Petra Todorovich, Director of America 2050. 
And we have Mr. Tom Carper, Chairman of Amtrak Board of 
Directors. Okay. We are almost in order. And Mr. Bob 
Scardelletti, President of the Transportation Communications 
International Union. Welcome.
    And Mr. Michael Pracht, President and CEO of US Railcar; 
and Mr. Robert Baugh, Executive Director of the AFL-CIO 
Industrial Union Council; Mr. Nicolas Rubio, President of the 
Cintra US; and lastly but not least, my friend Ed Hamberger, 
President and CEO of the Association of American Railroads.
    Let me remind witnesses that under our Committee rules, 
oral statements must be limited to five minutes, but the entire 
statement will appear in the record.
    And we will start with Ms. Todorovich.

 TESTIMONY OF PETRA TODOROVICH, DIRECTOR, AMERICA 2050; THOMAS 
  CARPER, CHAIRMAN OF THE BOARD, NATIONAL RAILROAD PASSENGER 
  CORPORATION, AMTRAK; NICOLAS RUBIO, PRESIDENT, CINTRA, US; 
 ROBERT SCARDELLETTI, PRESIDENT TRANSPORTATION COMMUNICATIONS 
 INTERNATIONAL UNION; MICHAEL P. PRACHT, PRESIDENT AND CEO, US 
     RAILCAR, LLC; ROBERT BAUGH, EXECUTIVE DIRECTOR OF THE 
   INDUSTRIAL UNION COUNCIL, AFL-CIO; AND EDWARD HAMBERGER, 
          PRESIDENT, ASSOCIATION OF AMERICAN RAILROADS

    Ms. Todorovich. Thank you Chairwoman Brown, Mrs. Napolitano 
and Members of the Committee. Thank you for inviting me to 
testify on the important and timely topic of high-speed rail.
    I am Director of America 2050, a national urban planning 
initiative to develop an infrastructure and growth strategy for 
the United States. We are based at the Independent Regional 
Plan Association in New York.
    America 2050 strongly supports the creation of a national 
network of high-speed rail corridors organized around the 
Nation's mega-regions. Mega-regions are networks of 
metropolitan areas like the Northeast, like the Florida mega-
region, the Texas Triangle, Southern California, that are 
connected by travel patterns, economic links and large natural 
systems.
    Spanning areas of roughly 300 to 600 miles across, mega-
regions are the ideal size for high-speed rail networks, and 
have densities comparable to Asian and European countries with 
high-speed rail. Over 70 percent of America's population and 
jobs are concentrated in the 11 mega-regions that we have 
identified across the Country.
    By the year 2050, American will grow by more than 140 
million people, a greater number of people than we added from 
1950 to 2000, during which we built the entire interstate 
highway system. Just as limited access highways made daily 
commutes within metropolitan regions possible, high-speed rail 
will open the possibility of daily commutes within mega-
regions.
    And high-speed rail stations, when located in city centers, 
will support the type of energy efficient land development 
patterns that will reduce carbon emissions and save households 
and businesses money on transportation and electricity bills.
    However, going from virtually no high-speed rail system in 
America to a robust national network is not without its risks. 
Therefore, the Federal Government should proceed strategically 
and invest first in corridors that show the greatest promise 
for generating ridership that will offset long-term operating 
costs.
    America 2050 offers one mechanism for assessing which 
potential high-speed rail corridors will have the greatest 
ridership demand in our recently released study, Where High-
Speed Rail Works Best. We evaluated 27,000 possible pairs of 
cities of at least 50,000 people or more located between 100 
and 500 miles from each other, against the following criteria.
    We looked at population size, favoring cities with large 
populations in large metropolitan regions; distance between 
city pairs, with distances of 150 to 300 miles receiving the 
highest value; presence and size of local and regional rail 
transit networks to account for access to high-speed rail 
stations at the beginning and end of the trip; economic 
productivity, measured by per capita GDP; auto congestion, 
measured by the Texas Transportation Institute's travel time 
index; and whether the city pairs were located within a mega-
region to account for the benefits of connecting numerous 
metropolitan hubs.
    By weighing these various criteria and calculating them in 
a formula, we produced a score and a ranking for all 27,000 
city pairs. The list of the top 100 city pairs with the 
greatest potential for ridership demand is provided in my 
written testimony. The three mega-regions with the most high 
ranking city pairs were the Northeast, California, and the 
Midwest. But the presence of any city pair in the top 100 
indicates a potential to support high-speed rail service in 
that corridor. Many on the ground factors will make the 
difference in whether ridership will materialize.
    We think the most critical factors will be the integration 
of high-speed rail within existing local and regional transit 
networks, the location of stations within walkable dense 
environments with easy access to major destinations, and the 
existence of intercity travel markets as demonstrated by 
current auto or air travel patterns.
    Our analysis did not take into account on the ground 
factors such as existing rail infrastructure, matching funds, 
local political support, preliminary engineering. We are 
confident that these are factors that the FRA will strongly 
consider, and they have access to that information through the 
grant applications.
    Therefore, we intend for our ranking system to be 
considered as an additional factor for the FRA to consider, not 
the only factor. We hope the FRA will develop its own 
guidelines and methodology for comparing ridership demands 
across corridors and determining the quality of the financial 
plans submitted by rail applicants.
    We hope our study will spur additional research and public 
discussion about what factors must be in place to create the 
conditions to maximize high-speed rail investment. Since 
releasing the report, we have already collected suggestions on 
additional criteria that would improve this analysis, such as 
looking at existing air travel patterns, and I am sure Members 
of this Committee may have suggestions as well.
    In closing, I urge this Committee to think about ways to 
secure new long-term revenue sources for high-speed rail in 
America. High-speed rail needs a dedicated source of funding 
and a long-term commitment in order to succeed, similar to the 
process we put in place to build the interstate highway system.
    Unfortunately, we no longer have the luxury of enjoying the 
excess capacity built into the infrastructure systems of the 
20th century. That capacity is now used up. We must begin 
building the infrastructure of tomorrow today.
    Thank you very much.
    Ms. Brown. Mr. Carper?
    Mr. Carper. Thank you, Madam Chairman and Congressman 
Napolitano for the invitation to testify here today on the 
opportunities and challenges of high-speed intercity passenger 
rail in America.
    As the former Mayor of a small Illinois college town that 
was heavily dependent on Amtrak for its mobility needs, I know 
the opportunities rail networks offer to communities that wish 
to develop a livable urban living structure and transportation 
solutions they need for survival and for growth. Amtrak is 
ideally positioned to address those needs.
    We fully support the Administration's vision for high-speed 
rail and we have strong partnership with States, the Federal 
Railroad Administration, and freight railroads. We are 
positioning ourselves to aggressively be the intercity provider 
of choice.
    I would like to talk a little bit about the expertise that 
underpins that strategy before I turn to a discussion of the 
challenges and opportunities.
    First slide, please. I am going to continue, Madam Chair.
    Ms. Brown. Did you call for the slides?
    Mr. Carper. Yes, I did.
    Ms. Brown. Okay. I think they have it now.
    Mr. Carper. There we go. Okay.
    First slide, please. These photos were taken on our 
Northeast Corridor, and illustrate something important. Amtrak 
is a high-speed rail provider. More than half of our daily 
trains exceed 100 miles an hour. It is a unique system that 
mixes high-speed Acela and regional trains with commuter and 
freight service to provide a broad range of public benefit.
    Slide two. When people hear the term high-speed rail, this 
is what they have in mind: very fast trains running on brand 
new grade-separated straight-arrow rights-of-way. This is one 
of the very successful AVE services in Spain, which operates at 
186 miles an hour.
    Slide three. Here is a slightly different picture. This is 
the Northeast Corridor, and you can see an Amtrak Acela train 
on a bridge that was built in 1835, although it now carries 125 
mile an hour trains. And here you see the difference between 
these two approaches. They designed the infrastructure to 
realize the potential of the equipment, and we designed the 
equipment to operate within the constraints of the 
infrastructure.
    Slide four, please. Both have their merits. The development 
of high-speed service on the Northeast Corridor began in the 
early 1960s. Successful high-speed services of all kinds are 
built on incremental improvements, but whatever the approach, 
the constraining factors are the same: cost and environmental 
impact.
    Slide five, please. Next slide. Here is a comparison of two 
complementary high-speed projects. On the left we have Amtrak's 
Harrisburg line, which underwent a round of incremental 
investment that culminated in the introduction of 110 mile an 
hour service in 2006. On the right, we see a brand new Madrid 
service high-speed line finished in 2007 and designed to carry 
trains at 186 miles an hour. This compares and highlights the 
importance of relating the investments to benefits. We want to 
make sure that we get as much return on our money as we can, 
and we want to do it in a timely manner.
    Next slide, please. The Northeast Corridor has undergone 
several rounds of incremental improvements since 1976. On the 
right, you see the results in terms of the travel market we 
share with all the airlines. We have also invested in other 
corridors, putting positive train control systems on the 
Amtrak-owned Michigan line, and laying the groundwork for 110 
mile an hour service on our St. Louis to Chicago line. Amtrak 
wants more high-speed rail, but we always need to remember that 
the goal is a competitive trip time. Sometimes, that means 
raising speeds from 79 to 110; sometimes that means raising 
speeds from 110 to 150; and it also means the development of 
much higher speeds where we need to be competitive.
    Next slide, please. This slide breaks out the funding 
programs from ARRA, which will finance the next round of 
development. These grant programs are a tremendous first step, 
but we definitely need help to develop long-term funding 
streams to support future needs. The High-speed Rail Initiative 
Chairman Oberstar proposed would be a potential source of 
funding, and we strongly support this program.
    We have partnered with States to apply for ARRA funding. 
This slide highlights some of the major track projects. Some 
will be new service. We have also applied for funding to 
improve service and speed up trains on existing routes Projects 
to increase frequencies and install PTC will improve capacity 
and trip times. And equipment is a vital need, and we are 
working with vendors and the FRA and our State partners to 
develop specifications and funding plans for new equipment 
procurement.
    Last slide. Amtrak will deliver. We must help our Nation 
retain its economic competitiveness and communities and 
transportation are a vital component of that. We are eager to 
develop a partnership that will make these projects possible, 
and look forward to working closely with the States and the FRA 
as we build the foundation for a generation of economic growth 
and prosperity.
    Thank you, Madam Chairman.
    Ms. Brown. Leave that last slide up there. There seem to be 
a major part that is not connected. If you look at Florida, 
that little dot on there, it stops right there in Georgia and 
it doesn't go to Jacksonville to Orlando. This system was 
developed how long ago? Before I came to Congress. I mean, I 
know it was developed----
    Mr. Carper. The high-speed rail designations, Madam 
Chairman?
    Ms. Brown. Yes. We need to update it. You can't stop in 
Georgia and then pick up somewhere down there in Florida. It 
needs to be connected. It doesn't have to be high speed. I 
mean, several of the Members have pointed out places in this 
particular that are not connected.
    Mr. Carper. Duly noted, Madam Chairman.
    [Laughter.]
    Ms. Brown. I understand that you have to leave. Listen, let 
me just ask you one quick question. I know it is dedicated 
sources of revenue, and we have been struggling with Amtrak, 
trying to move it forward and work out some of the problems. 
And I can say, from New York to D.C., I think we can do it in 
two and a half hours. And if we fix some of the tunnels and 
trains, we could do it maybe in two hours.
    But from Boston to Washington it is eight hours. And so if 
other factors other than the conditions of the tracks, I mean, 
we are talking about developing high-speed on systems that are 
already developed. What do you think we need to do to move 
forward? What are some of the recommendations? In other words, 
we are starting out and the towns and communities are already 
developed, whether we are talking about someone stopping in 
this area. I am 100 percent in favor of it, but we don't want 
to blow the whistle, or the train has to go through the 
communities. So we need to do some things in those communities 
so that we can have the rail going through.
    Mr. Carper. Well, first of all on the Northeast Corridor, I 
am not sure of the total time between Boston and Washington, 
D.C., but I think----
    Ms. Brown. I think it is eight hours. I tried to put 
somebody on the train and they wouldn't do it.
    Mr. Carper. I believe on the Acela service or even on the 
regional service, it is somewhat lower than that, but I will 
get back to you on that.
    Let me simply say we can cut some trip time down on 
Northeast Corridor service, and I can provide you----
    Ms. Brown. You say we can or we can't?
    Mr. Carper. We can.
    Ms. Brown. Okay.
    Mr. Carper. We certainly can. If you go back to one of the 
comments that I made about with the amount of resources that 
are available, to cut 15 minutes off is perhaps a number that 
we could deal with. But to get down to something about half an 
hour off, it is in the range of multiple billions of dollars. 
And when you look in the incremental approach out in the other 
parts of the Country, the things that we can do to help 
accessibility in our stations and to bring some new service on 
line and to put some service in the Midwest, we could get many 
things done with that amount of money. And those are the things 
that we are balancing that will need to be balanced on how we 
allocate limited resources.
    Ms. Brown. I am not disagreeing with you. I just want to 
point out that, okay, fine, if we can only cut it down 15 
minutes, but one of the complaints that I get is on time. So if 
we could, I mean, it doesn't matter if it is going to run in 
two hours and 15 minutes, but the fact is it is delayed by two 
hours going and coming.
    Mr. Carper. The Northeast Corridor is pretty much the only 
service that we have where we control our own destiny. We 
manage the railroad, transit and freight. In my part of the 
Country, in the Midwest and throughout the system, we work with 
our State partners and there are some good investments to be 
made that can ensure a much, much better on time performance by 
making some. And we have just lists and lists and lists, and I 
could name some in the Midwest that would be good investments 
for relatively small amounts of money that can help that on 
time performance.
    And I agree with you 100 percent, if we are going to 
continue to attract new riders, and not only get them one time, 
but to have them continue to come back, we need to be able to 
arrive at the station and leave when we say, and arrive at the 
destination when we say. And we are working towards that and 
are putting good use of funds that were allocated to Amtrak at 
one point, $3 billion, to work on many of those things, Madam 
Chairman.
    Ms. Brown. I am sorry for the rest of the Members. He has 
to leave, I guess. He has to catch a train, and not a plane, I 
hope.
    [Laughter.]
    Ms. Brown. Ms. Napolitano?
    Mrs. Napolitano. I really don't have very many questions on 
Amtrak other than just a comment, because part of it in 
California, there is Amtrak service. And I have had some 
complaints about it being late. It is not always on time. And I 
have visited their facility, their center, their routing 
center, if you want to call it that.
    Mr. Carper. Yes.
    Mrs. Napolitano. And I am very impressed. So how do we 
continue to move forward, and as you see on your own map, there 
is very little on the west side of the United States. There is 
hardly anything in the central. How do we connect all of those 
to be able to ensure that people have options for travel and be 
able to get where they need to go?
    Mr. Carper. Well, it is interesting that you bring that up, 
because one of the things that we are looking very seriously at 
at Amtrak is not only improving the system we have, but seeing 
where we can make incremental connectivity improvements 
throughout the Country. Bringing new service on line, as this 
Committee knows, much better than I, is a monumental task. But 
making the incremental investments in the system and looking 
for opportunities through the system that is in place, that the 
FRA will be rolling out here this winter, will be a start with 
that.
    And I couldn't agree more with the comments that were made 
in the previous panel. Early success and measurable success 
will be very helpful in expanding that system. Again, it is 
important to understand where I come from. I come from a 
community that had no air service, no scheduled bus service, 
and was 250 miles with a State university from Chicago, 
Illinois. This was the mode of transportation for students.
    We doubled the service in Illinois two years ago with 
tremendous success in ridership. It did not diminish the 
morning service. Now we have two round trips a day. We went for 
three decades with one round trip a day, and doubling that 
service was a monumental success. I have seen it work. I have 
seen economic development spurred by these incremental 
improvements. And this is at 79 miles an hour, with improved on 
time performance, better quality equipment, and increased 
frequency.
    We can really add and be a tool in the economic development 
revival of my part of the Country and the rest of the Country. 
So I commend you for, again Madam Chairman, for what you have 
done. I was in the battle in the '90s as a Mayor trying to save 
our service.
    Ms. Brown. Thank you. And I do know that we talked during 
that time period because there was a move to cut out the 
services viewed as not profitable. And in your area and in many 
areas, the only kind of service that people have is the train 
service. If it wasn't for the train service, they don't have 
bus service. They don't have air service. They would not be 
connected at all.
    And I tell people it is not just the trains. It is homeland 
security. We have to be able to move people.
    Mr. Carper. Madam Chairman, you are absolutely correct. And 
the Illinois Legislature recognized that and doubled the State 
investment to double that service, and the results have been 
extraordinary.
    And part of that is the service that Secretary Busalacchi 
was talking about, because we do participate in the Hiawatha, 
the partnership agreement with the State of Wisconsin. We have 
seen it work first-hand, and I have seen it work on other 
corridors, other Amtrak corridors, and the incremental approach 
of improvement, without giving up the vision of higher speed 
and high-speed rail, is a good use of taxpayer dollars, I 
believe, and will show some immediate results.
    Ms. Brown. Last question. Under the dedicated source of 
revenue, having a dedicated source from the State, and you 
knowing that what you are getting from the Federal Government, 
how would that affect how you plan and how you all run a 
railroad as Chair of the Amtrak Board?
    Mr. Carper. Well, first and foremost, and I wish CEO 
Boardman were here today to be able to answer this, but from my 
perspective, one of the things we are trying to do with Amtrak 
is put together a management team and start laying the 
groundwork for well beyond my tenure on the Board into the 
future. And understandably, we need to do that.
    It will allow us to plan and to rotate equipment in and 
out, and to do some planning and scheduled maintenance, rather 
than waiting and hoping for a funding mechanism. So to run any 
successful business or any concern, you need to have the 
resources to plan. And that will allow us to look into the 
future. And the payback, we believe and know from past 
experience, should be a good payback for the citizens of the 
United States.
    Ms. Brown. Thank you.
    Mrs. Napolitano. Well, thank you, Madam Chair. But lastly, 
so you won't be late wherever you need to go, but one of the 
things that when you were showing your slide in regard to the 
systems upgrading or the new systems in Europe versus the 
systems that you have, that you contend with on Amtrak, has 
there been concerted effort to look at what it would take to be 
able to upgrade to address those areas, to be able to utilize 
higher speed instead of just 100 or 110, but rather 180 or 
more, to be able then to truly be a high-speed rail?
    Mr. Carper. I don't want to speak out of turn here. I am 
certain I can bring you information on what it would take to 
upgrade the Northeast Corridor, which is right now the only 
corridor that we have control over. The other corridors would 
perhaps likely be more in line with what you saw on the slide.
    So, and we would be happy to get that information to you.
    Mrs. Napolitano. I would love to be able to have that, 
Madam Chairs, because then you have an idea of what we are 
looking at for the future, and it is probably way beyond my 
time in Congress.
    Thank you, Madam Chair.
    Mr. Carper. Thank you.
    Ms. Brown. Thank you. You are dismissed.
    [Laughter.]
    Mr. Carper. Thank you, Madam Chair.
    Ms. Brown. If you all could just be patient with us. Mr. 
Rubio I think has a plane, and we are running late, so I know 
everybody has probably got somewhere to go, but if you could go 
next, please, and thank you, everybody else, for your patience.
    Mr. Rubio. Thank you, Mrs. Chair, and I will be more than 
happy to wait if I can help, and I will be more than happy to 
miss my plane if that helps in all this effort.
    Thank you for this opportunity today. My name is Nicolas 
Rubio. I am the President of Cintra, US. Cintra is a 
transportation infrastructure developer. We have been in this 
business now for 50 years. In the United States, we are 
currently responsible for the development of three new 
construction projects in Texas, and we manage existing roadway 
assets in Illinois and Indiana. Combined, these five assets 
represent an investment value of over $11.6 billion, with an 
equity commitment of over $2.8 billion.
    On a worldwide scale, our group manages major 
infrastructure assets including more than 1,900 miles of 
highways with a total investment of $29 billion. We also manage 
seven airports in the U.K, including London Heathrow Airport, 
tube lines, the lead private operator in the London Underground 
transportation system.
    We have been in this business and we have been as well 
involved in the development of high-speed rail, with nearly 413 
miles built of high-speed rail infrastructure very much in line 
with what you have seen in that slide.
    Private involvement in the development of rail 
infrastructure is not new. In fact, as has been mentioned here, 
freight rail models are radically different in Europe than in 
the U.S., with much deeper involvement of the private sector 
and a clear advantage in efficiency and usage on this side of 
the Atlantic.
    In its beginning, high-speed rail in Europe and Japan, as 
has been mentioned as well, was owned and developed through 
conventional delivery methods in which governments took the 
risk associated with the design, bid, construction, finance and 
maintenance aspects of the project. In most cases, the 
operation of the passenger service was adopted by government-
owned operators as well.
    Since the beginning of this decade, nevertheless, high-
speed rail development in Europe has shifted away from this 
purely public model towards a partnership-based model that 
encourages private sector participation. While a multitude of 
ownership, development and operational alternatives could be 
considered, different European countries ended up opting for 
very similar P3 schemes to develop high-speed rail, following a 
model separating the provision, operation and maintenance of 
the infrastructure on one side, and the ownership of rolling 
stock and the provision of transportation services to final 
users on the other one.
    Ultimately, the European Union has opted to introduce 
legislation ensuring that any rail operator will be able to 
provide transportation services in any European network.
    Even with private funds, the development of this rail 
network requires strong public financial support. Many of the 
social benefits of high-speed rail transportation, like its 
impact in improving the environment, cannot be easily converted 
into actual project revenues.
    Other modes of transportation take advantage of the 
availability of low cost infrastructure already built, which 
true global cost are not always being charged to users.
    We are convinced that involving private infrastructure 
developers in its implementation is paramount to maximizing 
efficiency in the provision of a high-speed rail network. This 
will not only provide access to new sources of funds, it will 
also reduce the overall cost, accelerate its implementation, 
and maximize the leverage of limited public funds. Public-
private partnerships shift the financial risk of transportation 
projects to the private sector and away from the government or 
public taxpayer.
    Through the early investment of private funds, we can 
anticipate much needed infrastructure, with significant impact 
in global economic development, as has been mentioned as well.
    As recent examples in the U.S. demonstrate, the P3 model is 
unchallenged when looking to maximize output for taxpayer money 
invested. In Texas alone, our company is developing through 
three partnerships with the State, in Dallas, Fort Worth and 
Austin, more than $8 billion of congestion-relieving roadway 
projects with only $990 million taxpayer dollars utilized.
    We were asked to come here, and one of the questions was, 
what do private developers need to see happen to bring them to 
the table for U.S. high-speed rail development. And there were 
many things said today. Susan Fleming mentioned that the 
advantage of high-speed is that it is reliable, safe and timely 
mode of transportation. And I will say those three factors are 
what the private sector would be looking for to invest here: 
reliability, safety of valuable investment, and timeliness.
    Ultimately, the development of a high-speed rail network in 
the United States will face many challenges. But, with the 
desire and the commitment of both the public and private sector 
working together, I strongly believe that those challenges will 
be overcome to the benefit of the citizens we are all honored 
to serve.
    Thank you very much.
    Ms. Brown. The one question I would ask to you is what is 
it, we talk a lot about the partnership is the State, the 
local, the Federal, but I think the private, in my opinion, 
could play an equal role. And what do you think are some of the 
things that we could do to leverage that, to encourage the 
investors to invest?
    For example, I was talking to some investors, and one of 
the things that they indicated would be to see some tax 
credits. So what would you recommend to be some of the ways 
that we can entice that private investment? Because we do have 
limited dollars and we watch the system develop around the 
world, and transportation really is a commitment of the 
government. It is not going to pay for itself like you hear 
some of my colleagues talking. It doesn't pay for itself 
anywhere in the world.
    Mr. Rubio. Madam Chair, private investment in 
infrastructure is a long shot. It is a very long-term 
investment. I think there are three things that are needed. One 
is commitment from the public authority. The second one is 
alignment of the stakeholders that will bring reliability, 
credibility to the whole thing. And the third one I would say 
is realism. Try to develop projects that make economic sense.
    Ms. Brown. Thank you.
    Ms. Napolitano, do you have a question?
    Mrs. Napolitano. Very quickly, and welcome, Mr. Rubio.
    The systems you have in Texas, are they passenger, freight?
    Mr. Rubio. The three systems I have mentioned in Texas are 
highways. They are not rails. We do not run rail operations in 
the U.S. We run highway operations.
    Mrs. Napolitano. Highways, so that is truck traffic.
    Mr. Rubio. That is passenger and truck traffic. Those are 
managed lanes, basically adding capacity to existing highways 
and maintaining the whole capacity in the long term, and 
getting users of those managed lanes to pay for the use.
    Mrs. Napolitano. So they are tolled, toll lanes?
    Mr. Rubio. Only in managed lanes, only the additional 
capacity that is built is being tolled. The actual capacity has 
been maintained. It has been upgraded and it is not being 
tolled.
    Mrs. Napolitano. Okay. The partnerships you spoke of, can 
you give us a rough estimate of the percentage that each one 
has been able to help with, contribute, be part of?
    Mr. Rubio. Excuse me?
    Mrs. Napolitano. The percentages, your percentage into 
making it happen, the county, the State, the Fed?
    Mr. Rubio. Yes. I mentioned three projects, two of them in 
Dallas and Forth Worth, and another one in Austin. The global 
initial investment in those three projects is $6 billion in 
construction. On the long term, the maintenance investment will 
add another $3 billion on top of that. And all that needed a 
contribution from the State of $990 million. The rest is being 
paid through the tolls that are going to be collected in the 
coming 50 years, only for those users using the managed lanes.
    Mrs. Napolitano. And that is going to be feasible? Will it 
pay for itself?
    Mr. Rubio. I want to keep my job. I hope it will be 
feasible.
    [Laughter.]
    Mrs. Napolitano. Well, the reason I ask is we had a freeway 
in California, 91, that was supposed to be profitable, and 
ended up not being profitable. So pardon me if I ask, because 
those are one of the things that we have found to be evident.
    Now, just thank you, Madam Chair. That is it.
    Ms. Brown. Thank you.
    And you are dismissed.
    Mr. Rubio. Thank you.
    Ms. Brown. OK, Mr. Scardelletti?
    Mr. Scardelletti. Thank you, Madam Chairman, Congresswoman 
Napolitano.
    My name is Robert Scardelletti, and I am the International 
President of Transportation Communications/IAM. Our union, 
together with other rail unions, represent over 150,000 workers 
on America's freight, passenger and commuter lines.
    TCU/IAM is the largest union on Amtrak, representing six 
crafts. All rail labor has long supported high-speed rail in 
the United States, which included the passage of the Passenger 
Rail and Investment and Improvement Act of 2008, PRIIA, and the 
American Recovery and Reinvestment Act, ARRA.
    This historic commitment to intercity and high-speed rail 
will create and sustain thousands of good jobs. The passage of 
PRIIA and the appropriations in ARRA is a good start for what 
can be a great opportunity for high-speed rail in our Country. 
Labor protections and requirements to preserve existing 
collective bargaining agreements must be administered fairly 
and consistent with the law. Davis-Bacon prevailing wage 
requirements must fully apply to all covered construction work. 
Buy America requirements must be applied and strongly enforced.
    Amtrak and its workforce must be fully utilized as the 
backbone of high-speed rail in America. Amtrak is by law 
America's national passenger rail carrier and the only current 
provider of high-speed rail through its Acela Express service 
in the Northeast Corridor.
    Amtrak has an established national network which includes 
an extensive reservation system, existing rolling stock, 
statutory relationships with the freight railroads for trackage 
rights, and decades of demonstrated compliance with all Federal 
rail laws.
    Amtrak has also partnered with States and local governments 
to provide passenger rail service for decades. Amtrak has a 
track record of adhering to various grant requirements imposed 
by the Federal Government. Most importantly, Amtrak has a 
dedicated and very experienced workforce.
    Collective bargaining has existed with Amtrak since its 
creation in 1971. And current labor agreements are in place 
with all the companies' unions. High-speed rail is just that, 
railroad work. Amtrak should receive credit for complying with 
all railroad statutes and not be placed at a competitive 
disadvantage.
    For example, Amtrak as a rail carrier has financial 
obligations to its employees through the Railroad Retirement 
Act. If another entity seeks to provide service, but does so 
with the intention of evading, for example, one law, the rail 
retirement law, that entity could artificially undercut Amtrak 
on a cost basis. Potential providers of service must not be 
allowed to evade the railroad statutes so that all applicants 
will be judged on a level playing field.
    All rail labor supports a strong buy America requirement, 
as contained in both the Amtrak statute and ARRA. Almost all 
existing major high-speed rail equipment manufacturers are 
foreign. Buy America in this context must mean that even if the 
developer is foreign-owned, any equipment must be assembled 
entirely in the United States.
    Amtrak, with its skilled and unionized shop craft 
employees, should be the first choice to repair and maintain 
all new high-speed rail equipment. Foreign companies should not 
be allowed to avoid the application of railroad statutes. 
Employee protections under law should be seen as a means of 
integrating the existing workforce into high-speed rail and 
expanding intercity service.
    Existing collective bargaining agreements can assure that 
new operations have access to experienced and trained workers 
and, in the process, minimize labor uncertainty.
    In summary, funding for Amtrak and its current services 
must not be cut. We call upon Congress and the Administration 
to fully fund Amtrak's capital and operating needs at its 
currently authorized level, and any new high-speed rail 
programs must be fully funded. We must be committed to the long 
haul.
    Good labor policy and sound transportation policy are not 
inconsistent propositions. In fact, high-speed rail in this 
Country will succeed if workers are brought into the process 
and treated fairly. The benefits will be the best high-speed 
rail system in the world.
    Thank you, Madam Chairman.
    Ms. Brown. Thank you.
    Mr. Pracht?
    We are going to have questions. We will just hear the rest 
of the testimony, if you don't mind.
    Mr. Pracht?
    Mr. Pracht. Good afternoon, Madam Chairman, Members of this 
Subcommittee, and staff. My name is Mike Pracht. I am the 
President and CEO of US Railcar, a newly formed American-owned 
Ohio-based company with a business plan to resume manufacturing 
American-made passenger trains in the United States. It is a 
real privilege to be here. Thank you for this opportunity.
    As an almost 30-year veteran of the rail transportation 
industry, I have never seen the level of excitement, support, 
and commitment for passenger rail that exists today in both 
Houses of Congress on both sides of the aisle, and with such 
determination put forth by the current Administration.
    Prior to taking this position, I held several key positions 
at two of the world's leading rail transportation companies, 
Ansaldo from Italy and Siemens from Germany. Six months ago, I 
became involved with a group of investors from Columbus, Ohio 
led by Barry Fromm, an entrepreneur with a passion for trains, 
a desire to make a difference, and a vision for putting 
American passengers back on America's tracks. I would like to 
just take a minute and acknowledge Barry back there, for his 
leadership in this area.
    Barry owns and runs and is the founder of a company called 
Value Recovery Group, which works at several levels of Federal, 
State, and local government in areas that include distressed 
asset management, brownfield and economic development, and 
energy management. Two of Barry's larger accounts include the 
U.S. Departments of Energy and Education.
    Earlier this year, Barry acquired the assets of Colorado 
RailCar. This company, entrepreneurial in its own right, 
developed a modern version of a bygone self-propelled train set 
called the diesel multiple unit, or DMU. This product was 
originally developed by the Budd Company back in 1947. Like 
many other American innovations, DMUs went on to become a core 
component in the fleet pools of just about every modern 
industrialized nation around the world.
    Unfortunately, as with the Budd Company and other iconic 
manufacturers like Pullman and St. Louis Car, Colorado RailCar 
fell victim to a market with insufficient investment, lack of 
priority, and missed opportunity.
    The original Colorado RailCar DMU was developed in 2003 and 
is currently the only FRA-compliant DMU in production today. 
Ten of these units operate in daily revenue service in Florida, 
Oregon, and Alaska, each meeting and/or exceeding their 
customers' expectations.
    I have traveled extensively in these last few months, 
welcomed by transportation agencies across the country with 
renewed interest in purchasing the US Railcar DMU. This 
assumes, of course, we can attract sufficient investment to 
secure our business plan. In so doing, we are not here seeking 
public subsidy for a private venture. Rather, we are 
encouraging continued public investment in passenger rail and 
support for American manufacturing and American jobs.
    We are willing to put our business plan to the competitive 
test with sufficient resolve and entrepreneurial spirit. 
However, we are concerned about doing so on an uneven playing 
field with deep-pocketed foreign suppliers, some of whom 
receive home government subsidies and others of whom practice 
predatory pricing.
    It is important to note that there are currently no 
American-owned passenger rail car manufacturers in the United 
States. All existing rail cars are produced by foreign 
suppliers from Europe and Asia. These companies assemble 
locally, however typically import 40 percent of their content 
from abroad and export most, if not all, of their profits back 
home where they are then reinvested in foreign technology.
    My company's investors are committed to reestablishing an 
American-owned company that engineers, designs, manufactures, 
and develops in America. We believe several elements will be 
prerequisite to the success of US Railcar and the country's 
renewed passenger rail initiative as a whole.
    We encourage strong Federal leadership in the following 
five areas:
    One, approval of the Ohio Rail Development Commission's 
TIGER application. US Railcar has joined with the Ohio RDC in a 
public-private partnership to produce and ultimately maintain 
trains at a new rail car manufacturing and maintenance facility 
to be established just outside of Columbus.
    Two, support for the FRA's proposed 2010 High-speed Rail 
Research and Development Program. This important initiative 
will help new start and new entry American companies develop 
and advance the state of American technology to better compete 
with foreign suppliers.
    Three, effective implementation of the PRIIA next-
generation equipment pool that must include DMUs made in 
America by American-owned companies. This program will assure 
product standardization, adequate sources of domestic supply, 
and reduce much of the wasteful costs associated with the one-
off vehicle procurements all too typical in the transit sector.
    Four, consistent administration of PRIIA Buy America 
standards. Implementing these new Buy America standards with 
resolve will test our national commitment to establishing a new 
American rail car manufacturing industry.
    Five, a sustained commitment and funding for high-speed 
intercity passenger rail. Perhaps the most critical in the mix, 
sufficient levels of capital cannot be attracted from the 
private sector without confidence in a sustainable and reliable 
market.
    US Railcar applauds the leadership of this Committee and 
encourages the establishment of a dedicated funding source to 
assure continuity.
    Thank you again for this opportunity to testify. I am happy 
to answer your questions, and I am really excited about these 
times.
    Ms. Brown. Thank you.
    Mr. Baugh?
    Mr. Baugh. Chairwoman Brown and Member of the Committee, we 
thank you for the opportunity to testify here today. I am 
speaking for the 10 million members of the AFL-CIO and the 
affiliates of the Industrial Union Council, which are the 
manufacturing unions of the AFL-CIO.
    With high-speed rail, the Nation stands at the crossroads 
of opportunity for domestic investments in innovation, new 
technology and energy efficiency that will save jobs, create 
new jobs, and new industries, and revitalize American 
manufacturing.
    However, while we can be certain that the rail lines will 
be built here, there is no guarantee that they and all the 
related technology will be made here. What is needed is an 
environmental economic development policy to guarantee that 
these investments are made in the United States and that they 
result in good, sustainable jobs.
    It has been commented on this Committed earlier today the 
situation in this Country is dismal. We are at 10 percent 
unemployment. The real number is closer to 15 percent 
unemployment. We have lost jobs for 21 straight months. It is 
frankly a continuation of what has happened in the last decade 
of manufacturing. We lost 5 million manufacturing jobs. We saw 
40,000 manufacturing facilities close in this Nation. And over 
1 million of those jobs were professional technical jobs, 
engineers, designers, developers, people with the skills that 
give us the technical capacity as a Nation to make things.
    These came with record trade deficits, $701 billion in 
2007, of which it was driven by an $850 billion deficit in 
manufactured goods; $500 billion of that was in manufactured 
goods alone. The rest was oil. Even with record oil prices, the 
manufacturing deficit has been driving our record trade 
deficits.
    We are looking at another record deficit this coming year 
with China, and China will account for 75 percent of the 
manufactured good deficit in our overall trade deficit. It is 
shocking, and we ought to be concerned about it.
    The industrial Midwest and the State of Michigan, with real 
unemployment approaching 25 percent, sit at ground zero, 
surrounded by an army of dislocated, discouraged skilled 
workers, engineers, designers, scientists, and closed 
facilities. And they represent the best of our Nation's skills 
and technical capacity to create, innovate and manufacture the 
goods needed for a sustainable future. We have ignored the 
maxim: It matters where things are made.
    It is time to change direction. Our Nation is stumbling 
towards an economic development policy, one that says we want 
auto. One that says we are making a new investment in energy 
policy. And now we have a manufacturing strategist for the 
Country, which is a first, Ron Bloom. It is a good thing. It is 
what our competitors internationally do. We have got to start 
acting like them as a Nation and think about the economic 
development policies of their country.
    High-speed rail investments like the ones in new energy 
infrastructure must be designed to create the jobs here. This 
is the challenge. Three decades ago, we led the world in 
renewable energy technology. Today, we built last year a record 
8,300 megawatts of wind turbines in this Nation. Less than half 
were made here.
    These are technologies the rest of the world in the last 
three decades went ahead of us on. And it is exactly the same 
situation in high-speed rail. And the challenge there may even 
be greater. The innovation, knowledge and experience of 
building and maintaining high-speed rail is embedded in the 
nations that have led the way, and we are far behind.
    We have one firm, Maglev, that is dealing with the next 
generation of high-speed rail technology. We have some limited 
experience in the Northeast Corridor with high-speed rail. And 
these are examples of the broad range of technologies an 
advanced manufacturing economy like ours should be capable of 
delivering. But as has been noted here, the leading 
technologies in the world are in other countries that have been 
doing this for several decades.
    The Industrial Union Council joined with our transportation 
labor brothers and sisters in support of a broad program of 
investment in our transportation infrastructure, and in 
particular in high-speed rail. The Recovery Act made an 
important statement about that with the inclusion of buy 
America, and this has been a very enlightening discussion here 
this afternoon.
    We supported that. We worked very hard on it. But I think 
we have to recognize that is tactical move, not a strategic 
move. It doesn't do what we need to do. The challenge is to 
develop a high-speed rail industry, get the entire production 
system from the supply chain to engineering to R&D. That takes 
scale. That takes financial leverage. And that takes 
cooperation.
    Right now, the money will be spent in many places around 
the Country. It doesn't give you the leverage to negotiate an 
entire production system from another country. And that is what 
you want to capture, not just a rail car assembly operation. We 
want to talk about the entire technology in the system.
    And we have to be able to move and negotiate at scale to 
achieve those opportunities and have these things done here. It 
requires the ability to think in that larger context, to be 
able to say we want to do something about the Midwest, and 
target this idle capacity.
    And within the macro context of this, the goal should be to 
leverage and encourage comparable systems and common design by 
seeking the best technology in the world. We have a set of 
recommendations, too, for Congress. We must make an aggressive, 
sustained commitment of the resources. We must link our R&D to 
actual job and employment opportunities in this Country, and we 
support the idea of an R&D network to support the high-speed 
rail industry.
    We must enforce and strengthen buy America and other 
domestic investment provisions, including putting the waivers 
on the internet so people can see them and even compete on 
this. This is silly. We have the technology.
    We have a series of other recommendations on how to 
strengthen those provisions. We believe we must enact other 
forms of investment criteria for making these products here. 
And finally, we think that the Congress needs to use its 
financial leverage here to encourage regional-national 
collaboration to achieve these set of goals, common design, 
systems comparability, attracting the world's best technology, 
mobilizing private capital, and establishing a domestic state 
of the art high-speed rail production system for the United 
States.
    And finally, we would join with Brother Scardelletti in 
saying that we must actually obey our own labor laws in this 
Country to protect the interests of the workers that work in 
these industries. We look forward to working with this 
Committee to develop a high-speed rail system in this Country 
that is made in America.
    Thank you.
    Ms. Brown. Mr. Hamberger?
    Mr. Hamberger. Madam Chairwoman, Congresswoman Napolitano, 
on behalf of the members of the AAR, thank you for the 
opportunity to testify this evening on the opportunities and 
challenges flowing from expanded high-speed passenger rail in 
America.
    Madam Chairwoman, you opened this hearing by praising the 
President for his leadership in this area, and that is 
certainly well deserved. But having worked with you and this 
Committee and having seen you run this hearing this afternoon, 
I believe I would be remiss for not making sure we get on the 
record that there has been leadership from Congress in this 
area.
    Chairman Oberstar, your leadership here in this 
Subcommittee, Mr. Mica, Mr. Shuster and the entire Committee, 
successfully last year passed the Passenger Rail Improvement 
Act, the Passenger Rail Safety Improvement Act. And so thank 
you. I will just join Secretary Busalacchi in thanking you and 
the full Committee for that leadership in the past, and look 
forward to working with you in the future.
    Let me start by saying that I want to emphasize that our 
Nation's privately owned freight railroads support development 
of passenger rail and our actions to date prove this fact. We 
are already successful partners with passenger rail across the 
Country. Outside of the Northeast Corridor, almost all Amtrak 
trains operate over tracks owned and maintained by freight 
railroads.
    In addition, hundreds of millions of commuter trips each 
year occur on commuter rail systems that operate at least 
partially over tracks or rights-of-way owned by freight 
railroads.
    As the FRA's recently released Vision for High-speed Rail 
in America points out, both freight and passenger railroads 
provide enormous public benefits to our Nation, including 
reduced traffic congestion, reduced fuel consumption, lower 
greenhouse gas emissions, and less pollution. Railroads, both 
passenger and freight, are the smart, sensible way to help 
solve America's 21st century transportation challenges. And 
that is why AAR is a member of OneRail, a new coalition that 
brings together both passenger and freight rail stakeholders, 
including labor and environmental representatives, to advance 
railroading nationwide. OneRail supports increased public and 
private investment in freight rail, and also supports State 
efforts to seek an ongoing dedicated funding source for 
intercity passenger rail expansion.
    And one of the reasons that we were able to coalesce around 
these goals is jobs. One billion dollars of capital investment 
in the freight railroad industry conservatively produces 20,000 
jobs in the economy. That is using Department of Commerce, 
Bureau of Employment Administration multiplier effects. So we 
believe that the money should be spent, and I want to emphasize 
that these are jobs that stay within our borders. There is no 
way to in any way outsource those jobs.
    All of us involved in this effort know that reshaping the 
Nation's passenger transportation system with expanded rail 
choices will bring significant challenges. Administrator Szabo 
said it best earlier this afternoon when he observed that 
America deserves the world's best passenger rail system, but 
not at the expense of impairing what is already the world's 
best freight passenger system.
    Mr. Szabo understands that the economy depends on freight 
rail. The combination of safety, efficiency, environmental 
friendliness and affordability of our freight rail network is 
unmatched by any other freight rail system in the world, and 
provides a huge competitive advantage for America's farmers and 
manufacturers as they compete in the global economy.
    Now, ideally, freight railroads and intercity passenger 
railroads would operate in completely separate worlds, but that 
is not practicable at this time. As a result, high-speed 
passenger rail will, in many cases, have to share tracks, or at 
least the right-of-way, with freight railroads. Clearly, each 
freight rail corridor is unique and is governed by its own 
circumstances, but I would like to highlight four general 
principles that we believe should apply in all circumstances of 
joint use.
    First, safety must be the top priority. Railroads are an 
extremely safe way to move both people and freight, and 
everyone involved in railroading wants to make sure it stays 
that way.
    Second, capacity concerns must be properly addressed. 
Increased demand for rail transport will require more capacity 
for both freight and passenger rail. Notwithstanding the recent 
downturn in the economy, freight rail will be asked to carry as 
much as 100 percent more freight by the year 2035.
    Third, freight railroads should receive full compensation 
for use of their assets. It should be remembered that no 
comprehensive passenger rail system in the world operates today 
without significant government assistance. Once you, as 
policymakers, agree on the scope of passenger railroading in 
this Country, you must be willing to fund both operating and 
capital on a long-term basis.
    Fourth, freight railroads must be adequately protected from 
liability risks that would not have resulted but for the added 
presence of passenger rail service to their networks.
    These are critical challenges, but they are hardly 
insurmountable. Freight railroads are committed to working with 
Members of Congress, the Administration, the States and 
passenger interests to implement a strategy that will allow 
both freight and passenger rail to grow in the national 
interest.
    Thank you for allowing me to be here today.
    Ms. Brown. Thank you.
    I think I want to start with you.
    If Mr. Oberstar was here, he would give us a history of the 
rail in the United States. So we are going to bypass that. But 
I want to know, I understand most of the rail is owned by 
freight. How does AAR plan to work with the State and high-
speed rail operators to clarify issues of liability? I mean, 
that is a major one, and have you engaged the freight line? I 
know we have had some discussions.
    Mr. Hamberger. With respect to liability, and that is why 
I, of course, mentioned it in our testimony, liability is one 
of the key issues. GAO has issued a report on that, I believe, 
earlier this year. We are not seeking legislation at this 
point. ``To clarify'' was already in the statute limiting 
liability at $200 million for a passenger rail accident. And I 
think that each of our members has been able to work out with 
their State and local partners the ability to address that 
issue.
    I was talking earlier with the representatives from the 
States for Passenger Rail, and I believe we will be getting 
together and talking about it on a broader scale to see if 
there are other areas of agreement that can be reached. But 
primarily, it is a contract issue worked out between the host 
railroad and the passenger provider.
    Ms. Brown. How do you think that positive train control 
fits into this as we move forward?
    Mr. Hamberger. Well, Congress, of course, mandated last 
year positive train control on all track that has passengers on 
it. I think, again, that is an area where the host railroad 
will have to sit down with Amtrak and with the commuter rail 
operators and try to allocate appropriately the cost of the PTC 
to be put there, because of course, Congress also mandated 
positive train control wherever toxic by inhalation hazardous 
materials, TIH, hazardous materials are transported. So that is 
a cost that would not be a passenger cost. So that kind of 
discussion I suspect will begin at some point in the not too 
distant future once we have the final rules out of the FRA.
    Ms. Brown. Who are the partners with the OneRail?
    Mr. Hamberger. I will get that for you for the record. I 
don't want to miss anybody, but I know UTU is a member, States 
for Passenger Rail, the Natural Resources Defense Council, 
Amtrak, the NRP, the National Rail Passenger Association. So it 
is a pretty good group, APTA, American Public Transit 
Association.
    Ms. Brown. Is labor a part of that?
    Mr. Hamberger. The only one right now is UTU, but thank you 
for asking because I am trying to get Mr. Scardelletti to join, 
and I think he would be a very valuable member if he were to 
sign up.
    Ms. Brown. We need all our representatives at the table.
    Mr. Hamberger. Yes.
    Ms. Brown. Ms. Napolitano?
    Mrs. Napolitano. Thank you, Madam Chair.
    And it is great to be able to listen to the dialogue from 
all the panelists.
    And to Mr. Baugh, I have questioned some of the folks that 
are working on the high-speed rail in California whether they 
consider maglev. And they tell me it is prohibitive, yet I 
heard one of my Mayors, from Cerritos, say that in Europe, some 
of them were considering transferring from their current system 
to maglev.
    Question: do you have any information on that?
    Mr. Baugh. All that I know is that it is the next 
generation of rail technology, and it is being used in Germany, 
and it is being used in China, and it is being used in 
Singapore. And it is a technology that is out there.
    I would be happy to have the maglev people, I don't know if 
they are still here, but I would be happy to come and talk with 
you and share the information with you.
    I think the point I was trying to make here is that there 
is a number of high-speed rail technologies out there and our 
point is that they are not here, with some minor exceptions, 
and that it should be in our interest to utilize our financial 
leverage from the investments we are going to make as a 
government and a Country to capture the best technologies in 
the world and have them made here.
    This is no different, frankly, coming from manufacturing 
and having dealt with trade, this is no different than what is 
being done to us for the last decade by governments that 
actually have strategies around developing and targeting 
industries in their country. And that is all we are asking is 
we are going to spend the money, then let's do it here.
    Mrs. Napolitano. Well, my concern is that I am hearing that 
it is more expensive, yet if this is the future, then why are 
we not going parallel to finding what there is and how to work 
with it or how to implement it in the future, or build the 
systems so that in the future they may be incorporated?
    Mr. Baugh. Madam Chairman, Congresswoman Napolitano, I 
would beg off on this one to actually talk to the people who 
know more about the technologies than I. I think that is really 
the point.
    Ms. Brown. And let me just clear up my position, because I 
have made sure that I have not advocated one system or another. 
I don't think I should be in the position to tell the State or 
the Federal Government which system to use. I am sure when we 
negotiate and when we partner, we will get proposals. Every 
last one of those countries I have been to, they have 
proposals. They want to participate. They are ready to cut 
deals.
    And so what is the best deal for the taxpayer? And I never 
want to put myself in the position because I like all of them. 
And what we have to do is get the one that is tailored to our 
system. I mean, whether it is the French or the English or the 
Italians or the Germans or--I have been in all the systems, and 
it is just so exciting to be able to go from one place to 
another, 300 miles in two hours and a half, or 200 miles in one 
hour and 15 minutes.
    But keep in mind, all of those tracks in that system was 
invented for them. And so therefore, their freight is not 
running over those systems, not those high-speed systems, 
nowhere I have been. And so I don't know that we should be in 
the business of telling the government which system. I mean, 
that is going to be negotiated. It is going to be bid on and it 
is going to be the best deal for the taxpayers. And that has 
kind of been my position.
    But I want to go back to Mr. Scardelletti.
    Mrs. Napolitano. Do I have two minutes left?
    Ms. Brown. Go ahead. Take all the time you like. I thought 
you were finished. I am sorry.
    Mrs. Napolitano. Oh, no.
    [Laughter.]
    Mrs. Napolitano. Well, actually, Mr. Baugh, one of the 
things that was mentioned was the enforcement of trade 
agreement violations, and that, to me, is a great issue because 
in the past I know they have been wanting to have the 
inspection of some of the rail cars south of the border, by 
technicians that we don't know whether they were trained to the 
level that our men and women are trained in the U.S., or 
required to have training. And have we done a good job of 
getting the State Department to go after the violations so that 
we are ensured that the cars that those operating, whether they 
are carrying hazardous material or not, are actually going 
safely through our communities, where there are high 
residential areas?
    Mr. Baugh. Congresswoman, I would defer to the people who 
have the expertise. I will get that question answered and get 
you the information back.
    Mrs. Napolitano. Thank you.
    And I know that Mr. Hamberger, you knew I was going to talk 
to you, sir.
    [Laughter.]
    Mrs. Napolitano. But I am very concerned about the Union 
Pacific in California not really coming to the table on working 
with the High-speed Rail Authority, and hopefully also with the 
Councils of Government through which the system is going to go 
through.
    And I am wondering whether or not there are other options. 
What do they feel we need to do to be able to get them on 
board?
    Mr. Hamberger. I am going to answer that question, but may 
I answer your last question first? Because it is a very 
important point. In fact, the Federal Railroad Administration, 
working with the AAR's Tank Car Committee did publish I believe 
about a year and a half ago now a new enhanced tank car safety 
standard for the hazardous materials and TIH materials.
    Mrs. Napolitano. And the placarding?
    Mr. Hamberger. Yes. What there is, however, I understand, a 
hole in the regulatory structure. Our coal cars go through more 
testing than transit cars do. There is a bus testing facility 
in Altoona, Pennsylvania. I don't know how it got there. And 
the AAR runs the Technology Test Center in Pueblo, Colorado, 
where we test other new-designed cars. Nowhere are passenger 
rail cars tested, and I think that is something that this 
Committee might want to take a look at.
    Getting to your second question. Union Pacific, I don't 
know exactly what specific issue you are talking about, but I 
do know that they run hundreds of passenger trains a week in 
California alone, probably thousands throughout their whole 
system every week.
    Mrs. Napolitano. Mostly through my District. Thank you.
    Mr. Hamberger. These are passengers as well, and I know 
that the number of applications that came in for the high-speed 
rail grants, I am sure that they were part of any number of 
those as they came in.
    I do know there is one line in California that we have 
talked about in the past that because of the volume of traffic 
and the physical characteristics of that right-of-way, there 
just is no more capacity. And so I think that it is not a 
reflection of their desire not to cooperate. It is just that in 
that particular case, the physical restrictions of the right-
of-way preclude the passenger.
    Mrs. Napolitano. Which then my comment is, what are the 
options they would recommend? And that is one of the things, 
because as I mentioned before, L.A. County being 12 million, 
there is no more open land to be had unless you go to eminent 
domain, and that is going to be very hard for anybody to pass 
through.
    So essentially if they are concerned about it, then we 
ought to have them tell the High-speed Rail Authority and the 
Councils of Government, OK, let's build up or let's utilize 
another ability to go with the freeways, build on the freeways. 
But they have to be partners, and they have to be able to 
ensure that where they are going to be affecting a lot of 
residents, especially through the Alameda Corridor East, that 
they assist in being able to help fund the grade separations, 
which are critical for fast movement of trains. And they tell 
me there are going to be four crossing that are going to be 
covered through funding hopefully with the high-speed rail in 
my area, which is wonderful, except what about the rest of 
them? And at one point, they said no, we are reneging a little 
bit; we are not going to cover them. And now I believe they are 
back on track, so to speak.
    And we keep tags on these because this is a safety issue. 
It is an employee safety issue. It is a community and citizen 
issue, especially if they are going to be carrying hazardous 
material, toxics, et cetera.
    So those are the things I would like to share and maybe 
later go into with you.
    Mr. Hamberger. Absolutely. I have exhausted my knowledge of 
that particular line out there, but let me carry your message 
back. But on a broader issue, just of the grade crossings that 
is a shared--the railroads do pay some percentage.
    Mrs. Napolitano. Three.
    Mr. Hamberger. Well, actually it is up to 10 percent if it 
is a, it is up to 10 percent, but it is 5 to 10 percent. And 
that is in the Code of Federal Regulations. But what is 
important is when we move the reauthorization bill, I would 
like to make sure that the Committee understands the importance 
of fully funding the Section 130 Grade Crossing Program that 
that program, notwithstanding the desire to skinny down the 
number of programs, that is one that I think deserves extra 
special attention to keeping alive.
    And if I might go back to your question, Madam Chairwoman, 
I somehow missed the most important member of the OneRail 
Coalition, our Chairwoman Anne Canby of the STPP Program. So 
that would be another. I will get you the full list for the 
record.
    Mrs. Napolitano. Well, thank you. And if you would supply 
any of the answers to this, any of the witnesses who have 
information, to the full Subcommittee because I think all of us 
would be interested in it.
    Mr. Hamberger. Absolutely.
    Mrs. Napolitano. And thank you very much, Madam Chairwoman, 
for being so patient and also for continuing to make sure that 
we get this information out in the open.
    Ms. Brown. Do you want to have a follow-up question?
    Mrs. Napolitano. No.
    Ms. Brown. Okay, I can go on then.
    I have a question for both of my labor people here. Do you 
support a dedicated source of revenue funding for high-speed, 
as we do the reauthorization of, I don't know what we are going 
to call it this time, but as we do the reauthorization bill?
    And also, you talked about technology. Do you think that 
the workers need additional training to ensure they can operate 
the new equipment and the new transportation infrastructure 
technology, so they can keep up with it as we move forward?
    We have a very safe system, and one of the reasons why it 
is very safe is the workers are well trained. And a lot of 
times, we all want to talk about jobs, jobs, jobs. That is the 
key, but as we develop a system, we need to make sure we 
develop a safe system, and we need to have that built into the 
system.
    So do you want to respond to that?
    Mr. Scardelletti. Yes, thank you.
    As far as dedicated funding, of course. If there is not 
dedicated funding on a continued basis, then it will never 
work. It will just drop off the line somewhere.
    Ms. Brown. But with the new Administration?
    Mr. Scardelletti. Well, we are only having this hearing 
because there is a new Administration.
    Ms. Brown. Right, right.
    Mr. Scardelletti. I mean, it was only two years ago where 
Amtrak was proposed zero funding.
    Ms. Brown. Yes.
    Mr. Scardelletti. So that was going out of business.
    Ms. Brown. It was a fight every year.
    Mr. Scardelletti. Right, right.
    Now, yes, of course, because of President Obama, Vice 
President Biden, and the Democrats taking control, Amtrak's on 
a top list.
    Ms. Brown. But the point that I am talking about, dedicated 
source, I am seeing just like when we built the highway system 
50 years ago, we developed a formula. We had a system. We knew 
we were going to do it from gasoline tax.
    So I am saying, do you think, and the others can respond to 
it, do we need a dedicated source of funding for high-speed 
rail?
    Mr. Scardelletti. Well, yes. If we had that, then we 
wouldn't be coming to Congress every year trying to get money. 
I mean, absolutely. That would be up to Congress as to how to 
figure that out, but that is what we need. That is what we have 
always needed for Amtrak. Amtrak basically operates at the whim 
of each Administration. Some are for it, some are against it, 
some are in the middle. That is why it is in the situation it 
is.
    As far as the railroad industry, freight railroads and 
passenger have been implementing new systems forever. And the 
rail workers, all the crafts, or whatever is involved, adapt, 
are trained by the railroads and perform that work.
    Right now on Amtrak, you have Bombardier Superliners, 
Amfleet, Acela. We do all that. All our crafts do that, and 
yes, they had to be trained, but it is not like you are 
training somebody to do something that is really that new 
because they have been working on cars their whole life, so 
they have that whole background. And if something new is 
brought in, we are 75 percent there, if not 80, ready to go, 
and it is just a matter of whatever the new things are. We have 
adapted to all of them forever, since railroading began.
    And all the complicated safety technology, centralized 
traffic control, all the electronics that enable, 100 trains to 
move through Penn Station, New York and Washington, mostly Penn 
Station, New York, where you have four or five commuter 
railroads all merging. That is all handled by rail workers.
    Ms. Brown. Well, I want to give you a shout out in the 
system. Are you familiar with the Beech Grove Station?
    Mr. Scardelletti. Yes.
    Ms. Brown. I visited the Beech Grove Station, and they have 
been trying to do away with it. And we were able to get 
additional funding to keep it open. And then when Amtrak had a 
major problem, you had those craftsmen there already trained. 
They was able to intervene, and now in the new planning, we are 
going to expand that system and we are going to fix it up. And 
that is the way it should be. We already own that property. We 
can upgrade that property and it could be a model hub to repair 
trains in the system.
    Mr. Scardelletti. You are 100 percent right. Beech Grove is 
way under-utilized. It could be a major part of Amtrak's 
existing and expansion. The same with Delaware, the Delaware 
shop. And we have people, rail workers.
    Ms. Brown. Yes, that is right. I mean, they are trained in 
the craft. I mean, I saw some of the work that they have done. 
If they had some more equipment like the paint shop, they could 
operate two teams at the same time. I mean, there is great 
potential there.
    Mr. Scardelletti. Right. At one time, we did everything.
    Ms. Brown. Yes.
    Mr. Scardelletti. We built everything there was to build on 
the railroad. We built it.
    Ms. Brown. Well, I talked to the guys who could fix 
everything.
    [Laughter.]
    Mr. Scardelletti. Yes.
    Ms. Brown. Yes, sir? Yes?
    Mr. Baugh. Madam Chair, I think the answer we would give is 
the same. To do this, to build a national infrastructure of 
this nature takes a commitment of funds over the long term, and 
we said that as part of our testimony. There is something very 
consistent, we have said, in all the climate testimony we have 
delivered, that as we look at these things, there has to be an 
aggressive long-term investment policy on the side of this 
Country to do these things.
    And concurrent with that, the folks in the rail shops can 
do the maintenance, repair and do all this. In the 
manufacturing end of this thing, we need the same confidence 
that if we are introducing new technology that develops this 
equipment, right, to make these things, we have to train these 
workers as well to be able to do that. And again, it builds 
upon existing skills from the past, but we recognize that the 
technologies that we use in making things have changed and 
continue to change. And therefore, you constantly have to deal 
with the upgrade of the skills of your workforce.
    And I am not just talking about the front line workers. I 
am talking about, as we talk about a high-speed rail system, we 
have to develop the engineering expertise. We have lots of 
engineering expertise. It is unemployed. It will require some 
specialty adaption to move to higher speed rail, so that we can 
actually not only just work on this stuff, we can innovate, 
that we become an innovation leader as we learn and adapt to 
these new technologies.
    So I think you have to think of training and education that 
runs the gamut from the people that are on the engineering side 
of the business, or the people who are actually down in the 
trenches maintaining the equipment, and upgrading it and 
modernizing it.
    Ms. Brown. And I think you gave a lengthy discussion about 
as we move forward with this, what we are trying to do in this 
area, I want us to keep in mind that what we are trying to do 
is to move people, goods and services so we can compete. That 
is what they are doing, so they can get their goods to 
services, so they can move their people around, so that you can 
live in maybe Orlando and work in Miami, so we can move people 
around the Country. That is what our competitors are already 
there, and that is where we have to get quickly so that we can 
compete.
    Mr. Baugh. I was in Japan a year ago this time. And I was 
working with somebody who commuted from a city 150 miles away 
and worked in Tokyo every day. That was our guide for what we 
were doing and looking at their technology. So we actually 
studied their trains and rode them and it was quite an 
experience.
    Ms. Brown. And we have those stories, too. I was in Spain 
and I was Mr. Oberstar and they went, we were in Barcelona, I 
went to Madrid, and they stopped in between, on the tour, and I 
went on to Madrid and spent the day. But it was the first of 
the new system and I did it in two hours and a half. I did 300 
miles and it was just like we are sitting here.
    So the technology there is--but, see, those are our 
competitors and we can't forget it, and we have to be able to 
get our people and goods and services and move them around 
where the jobs are. In many cases, we have jobs, but the people 
are not there. So we need to be able to get them where the jobs 
are.
    And of course, I tell people the only real stimulus that 
works is transportation because we know for every billion 
dollars we invest in transportation, it generates 44,000 
permanent jobs.
    And part of the problem, and Mr. Oberstar, he has had 
hearings and follow-up on the stimulus dollars, and there is a 
direct correlation between the stimulus dollars not getting out 
and the fact is we still have that high unemployment.
    And I suggest that the Administration have a report card in 
every area. We doing it in transportation, but in every single 
area we need that kind of commitment to follow through.
    And I know I am getting off the subject a little bit. Did 
you want to respond? I am sorry. Yes?
    Ms. Todorovich. Yes, Madam Chair.
    I agree with the previous speakers that a sustained 
commitment by the Federal government and a dedicated revenue 
source is the surest way that we can built out a national 
system. But I do want to encourage us to think about all 
sources of revenue for high-speed rail, including one of the 
oldest public-private partnerships for transportation 
infrastructure, which is the relationship between 
transportation and real estate investment.
    And I haven't been to Japan, but I understand that around 
the train stations, around the Shinkansen, you walk out and you 
are in the middle of a department store or major retail center, 
and those are owned by the train companies. As we move forward, 
we must realize that these stations will create tremendous 
value, particularly if they are planned right with transit-
oriented development and walkable communities, and people will 
want to be close to these services.
    So let's provide an opportunity for the rail companies to 
capture some of that value that is created to help fund the 
transportation services.
    Ms. Brown. Or the private-public partnership, we don't have 
to run it. I mean, we could just run the train system.
    Ms. Todorovich. Sure.
    Ms. Brown. But we could lease the property or help develop, 
or the taxes would pay for itself. I mean, we need to figure 
out how we can partner because everywhere that I have gone 
where the train station around it, those communities have 
developed whether it was from, you go from Paris to Lille. I 
mean, all of those little towns, everywhere you have a station, 
you have a development.
    And we don't have to go that far. Even here, if you go to 
Crystal City, I mean, that is a city that was built up around 
that Metro stop. So that is true all over.
    Ms. Todorovich. Absolutely.
    Ms. Brown. Yes, Ms. Napolitano?
    Mrs. Napolitano. Thank you, Madam Chair. There was one last 
question, and since you have been so kind, I thought I would 
continue to ask, and this is of Mr. Baugh and Mr. Scardelletti, 
and the young lady who just brought up the public-private 
partnerships.
    But there are still some concerns that that brings up. 
Would you mind commenting on those? How it affects labor.
    Mr. Baugh. Well, certainly. Everything we have said, and I 
didn't go into detail because Mr. Scardelletti did, about the 
need to recognize existing labor law and to comply with it, and 
comply with all the requirements under the Federal labor laws. 
And we believe that public-private partnerships, when it 
involves the public dollar, is certainly required to live by 
those laws.
    And I would be happy to provide our resolution on green 
jobs, where we discuss these matters that we just passed at our 
convention. But we remain on target with the idea that we want 
two things out of this. One, we want a greener economy. We want 
to do things more efficiently, more effectively. We want high-
speed rail for these same reasons.
    At the same time, we want to be sure we create good jobs. 
And this doesn't happen because we have good intentions. It 
actually happens because you have standards, and you live by 
them. That is our expectation, and that is what we believe is 
the idea, as Mr. Hamberger said, having all the stakeholders at 
the table to arrive at a conclusion about how we are going to 
get this done, and that people are treated decently in this 
process.
    Mrs. Napolitano. Mr. Scardelletti?
    Ms. Brown. I have one last question.
    Mrs. Napolitano. I don't know if he has an answer, if he 
wants to comment.
    Mr. Scardelletti. That is why in the bill, as the FRA 
Administrator Szabo said, if anybody gets any money, they get 
us. They get the rail labor laws. They are going to get us. And 
what we bring is good middle class jobs.
    And so as a result of this law that carries over our law, 
the railroad laws, you will be creating what you always say you 
wanted, the jobs we are losing every day that are almost 
impossible to recreate. This will recreate them.
    Mrs. Napolitano. And that leads also, Mr. Hamberger, to 
prior hearings where I have mentioned that the training that 
the railroads give the employees has to be training that is 
going to be able to keep them safe and keep our communities 
safe. And I think we have gone through that before.
    So thank you, Madam Chair.
    Ms. Brown. One of the last questions.
    Mr. Pracht, you mentioned that the DMU are operating in 
both Asia and Europe. Where are you operating now? You have 
operated, and at what speeds of the service, and do you have a 
lesson learned that you can share about those operations?
    Mr. Pracht. Yes, we are currently operating five trains a 
day in Florida.
    Ms. Brown. Where in Florida?
    Mr. Pracht. I am sorry?
    Ms. Brown. Where in Florida? I live in Florida.
    Mr. Pracht. Running between Miami and Fort Lauderdale on 
the Tri-Rail service, South Florida SFT.
    Ms. Brown. Oh, goodness.
    Mr. Pracht. Five trains.
    Ms. Brown. I rode on the train in August. There is nothing 
wrong with the train. There is just something wrong, we have to 
make sure we get the system off life support.
    Mr. Pracht. Yes, Madam Chairman.
    Ms. Brown. But the train is clean. I like the operation. I 
just rode on it, I rode the system to get the attention that we 
need the State as partners to make sure that that system is up 
and operational. And the Federal Government has told the State 
of Florida, you must run those trains and you must run at 
certain capacities.
    Well, thank you, the train is fine.
    Mr. Pracht. Yes, I would just like to add a general 
comment. We have this groundswell of interest in high-speed 
rail, and it is significant and it is important. But let's not 
forget incrementalism. Let's not forget incremental rail. All 
of these nations around the world, and I have worked with many 
of them in my career, that have the high-speed rail networks, 
they didn't have this sort of hiatus back in the '20s and the 
'30s and all of a sudden and wind up with high-speed rail in 
2009.
    They got to high-speed rail, as Mr. Szabo said, through an 
incremental approach, similar to what we did with primary, 
secondary, and tertiary roads with the Interstate Highway 
Program.
    I think in terms of jobs, bang for the buck, and 
acquainting Americans around the Country with high-speed rail 
or higher speed rail, so that we get public support, we have to 
not discount the incremental approach in many of these 
corridors.
    You get outside the Northeast Corridor, and you talk to 
somebody in Wyoming about supporting trains, and there is no 
interest whatsoever because they don't know what a train is. If 
we begin to run 79 mile an hour trains, 90 mile an hour trains, 
110 mile an hour trains in places like Wyoming and the middle 
of the country in these population centers, and they see what 
modern trains are, not the long distance, 40 year old Amtrak 
equipment, but modern trains are, we will get a lot more 
support.
    And building the trains to support those corridors around 
the country will create a lot more jobs.
    Ms. Brown. I am not going to disagree with you. And I just 
want to add that there is a population or a culture that is 
very interested in riding the trains. We just have to make it 
more convenient. I mean, there is an older generation that want 
to move, and they don't like the plane and they would, if it 
was possible, they would move around the Country if it was 
convenient.
    And of course, we have seen the ridership go up with 
Amtrak, so there is a real interest in the service.
    Mr. Pracht. Absolutely.
    Ms. Brown. Let me just thank you all for your patience. It 
is almost 7:00 o'clock. We have been here all day, but this is, 
a great time to be involved in transportation.
    And as we move forward, we are looking forward to 
additional comments, input, and moving our Country forward. I 
mean, as I say all the time, we are the caboose and we don't 
use cabooses anymore.
    So thank you very much for your interest and your support.
    [Whereupon, at 6:35 p.m. the Subcommittee was adjourned.]

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