[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                  FEDERAL REGULATORY OVERREACH IN THE
                  RAILROAD INDUSTRY: IMPLEMENTING THE
                      RAIL SAFETY IMPROVEMENT ACT

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



                                (112-18)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

                       RAILROADS, PIPELINES, AND

                          HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON

                   TRANSPORTATION AND INFRASTRUCTURE

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 17, 2011

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure


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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    JOHN L. MICA, Florida, Chairman

DON YOUNG, Alaska                    NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
FRANK A. LoBIONDO, New Jersey        Columbia
GARY G. MILLER, California           JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois         CORRINE BROWN, Florida
SAM GRAVES, Missouri                 BOB FILNER, California
BILL SHUSTER, Pennsylvania           EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia  ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan          TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California            RICK LARSEN, Washington
TOM REED, New York                   MICHAEL E. CAPUANO, Massachusetts
ANDY HARRIS, Maryland                TIMOTHY H. BISHOP, New York
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL H. MICHAUD, Maine
JAIME HERRERA BEUTLER, Washington    RUSS CARNAHAN, Missouri
FRANK C. GUINTA, New Hampshire       GRACE F. NAPOLITANO, California
RANDY HULTGREN, Illinois             DANIEL LIPINSKI, Illinois
LOU BARLETTA, Pennsylvania           MAZIE K. HIRONO, Hawaii
CHIP CRAVAACK, Minnesota             JASON ALTMIRE, Pennsylvania
BLAKE FARENTHOLD, Texas              TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana               HEATH SHULER, North Carolina
BILLY LONG, Missouri                 STEVE COHEN, Tennessee
BOB GIBBS, Ohio                      LAURA RICHARDSON, California
PATRICK MEEHAN, Pennsylvania         ALBIO SIRES, New Jersey
RICHARD L. HANNA, New York           DONNA F. EDWARDS, Maryland
STEPHEN LEE FINCHER, Tennessee
JEFFREY M. LANDRY, Louisiana
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma

                                  (ii)



     Subcommittee on Railroads, Pipelines, and Hazardous Materials

                  BILL SHUSTER, Pennsylvania, Chairman

GARY G. MILLER, California           CORRINE BROWN, Florida
SAM GRAVES, Missouri                 JERROLD NADLER, New York
SHELLEY MOORE CAPITO, West Virginia  RICK LARSEN, Washington
JEAN SCHMIDT, Ohio                   TIMOTHY H. BISHOP, New York
CANDICE S. MILLER, Michigan          MICHAEL H. MICHAUD, Maine
TOM REED, New York, Vice Chair       GRACE F. NAPOLITANO, California
JAIME HERRERA BEUTLER, Washington    DANIEL LIPINSKI, Illinois
RANDY HULTGREN, Illinois             JASON ALTMIRE, Pennsylvania
LOU BARLETTA, Pennsylvania           TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana               LAURA RICHARDSON, California
BILLY LONG, Missouri                 ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania         PETER A. DeFAZIO, Oregon
RICHARD L. HANNA, New York           JERRY F. COSTELLO, Illinois
STEPHEN LEE FINCHER, Tennessee       NICK J. RAHALL II, West Virginia
JEFFREY M. LANDRY, Louisiana           (Ex Officio)
JEFF DENHAM, California
JOHN L. MICA, Florida (Ex Officio)

                                 (iii)

                                CONTENTS

                                                                   Page

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

                               TESTIMONY

Gallegly, Hon. Elton, a Representative in Congress from the State 
  of California..................................................     3
Giulietti, Joseph J., Executive Director, South Florida Regional 
  Transportation Authority.......................................     3
Hamberger, Edward R., President and Chief Executive Officer, 
  Association of American Railroads..............................     3
Manion, Mark D., Executive Vice President and Chief Operating 
  Officer, Norfolk Southern Railway..............................     3
Pierce, Dennis R., National President, Brotherhood of Locomotive 
  Engineers and Trainmen.........................................     3
Souser, Mackenzie, of Camarillo, California......................     3
Strang, Jo, Associate Administrator for Railroad Safety/Chief 
  Safety Officer, Federal Railroad Administration................     3
Victor, Paul, President, Anacostia & Pacific Railroad Company, 
  Inc............................................................     3

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Reed, Hon. Tom, of New York......................................    56

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Gallegly, Hon. Elton.............................................    57
Giulietti, Joseph J..............................................    60
Hamberger, Edward R. and Manion, Mark D., joint statement........    85
Pierce, Dennis R.................................................   112
Souser, Mackenzie................................................   124
Strang, Jo.......................................................   128
Victor, Paul.....................................................   149

                       SUBMISSIONS FOR THE RECORD

Casey, Joseph M., General Manager, Southeastern Pennsylvania 
  Transportation Authority, written statement....................    24
Dooley, Cal, President and Chief Executive Officer, American 
  Chemistry Council, March 16, 2011, letter to Hon. Bill Shuster, 
  a Representative in Congress from the State of Pennsylvania....    14
Fenton, John E., Chief Executive Officer, Southern California 
  Regional Rail Authority (Metrolink), written statement.........    16
Giulietti, Joseph J., Executive Director, South Florida Regional 
  Transportation Authority:

  Responses to questions from Hon. Corrine Brown, a 
    Representative in Congress from the State of Florida.........    68
  Responses to questions from Hon. Bill Shuster, a Representative 
    in Congress from the State of Pennsylvania...................    72
Hamberger, Edward R., President and Chief Executive Officer, 
  Association of American Railroads, responses to questions from 
  Hon. Corrine Brown, a Representative in Congress from the State 
  of Florida.....................................................   107
Joseph, Mark L., Vice Chairman and Chief Executive Officer, 
  Veolia Transportation, Inc., March 16, 2011, letter to Hon. 
  John L. Mica, a Representative in Congress from the State of 
  Florida, and Hon. Bill Shuster, a Representative in Congress 
  from the State of Pennsylvania.................................    20
Pierce, Dennis R., National President, Brotherhood of Locomotive 
  Engineers and Trainmen, responses to questions from Hon. 
  Corrine Brown, a Representative in Congress from the State of 
  Florida........................................................   118
Strang, Jo, Associate Administrator for Railroad Safety/Chief 
  Safety Officer, Federal Railroad Administration:

  Supplementary remarks..........................................39, 40
  Response to request for information from Hon. Corrine Brown, a 
    Representative in Congress from the State of Florida.........    51
  Responses to questions from Hon. Corrine Brown, a 
    Representative in Congress from the State of Florida.........   138
  Responses to questions from Hon. Bill Shuster, a Representative 
    in Congress from the State of Pennsylvania...................   146

                        ADDITIONS TO THE RECORD

Joseph, Mark L., Vice Chairman and Chief Executive Officer, 
  Veolia Transportation, Inc., March 24, 2011, letter to Hon. 
  John L. Mica, a Representative in Congress from the State of 
  Florida, and Hon. Bill Shuster, a Representative in Congress 
  from the State of Pennsylvania.................................   153
West, Ford B., President, The Fertilizer Institute, March 25, 
  2011, letter to Hon. Bill Shuster, a Representative in Congress 
  from the State of Pennsylvania.................................   158


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                  FEDERAL REGULATORY OVERREACH IN THE



                  RAILROAD INDUSTRY: IMPLEMENTING THE



                      RAIL SAFETY IMPROVEMENT ACT





                              ----------                              


                        THURSDAY, MARCH 17, 2011

                  House of Representatives,
               Subcommittee on Railroads, Pipelines
                           and Hazardous Materials,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:00 a.m. in 
Room 2167, Rayburn House Office Building, Hon. Bill Shuster 
(Chairman of the subcommittee) presiding.
    Mr. Shuster. The hearing will come to order. I thank 
everybody for coming here today. And this is going to--the 
opening of this committee hearing is going to be a little bit 
disjointed. There is some razzle-dazzle. We are going to have 
votes here approximately at 10:15. And we would like our friend 
from California and his guest to make sure that they get 
through their testimony before we have to head off to vote.
    So, again, good morning. Welcome, everybody, to the 
Subcommittee on Railroads, Pipelines and Hazardous Materials 
hearing on regulatory overreach in the railroad industry, and 
the implementation of the Rail Safety Improvement Act. We are 
specifically--we will be focusing on the Federal Railroad 
Administration's final rule implementing the requirements for 
freight and passenger railroads to install positive train 
control, or PTC, system by December 31, 2015. And so, I am 
looking forward to hearing everybody's testimony today.
    And with that I will yield to the chairman of the full 
committee, Mr. Mica.
    Mr. Mica. Well, thank you, Mr. Chairman, and thank you for 
convening this hearing this morning of the rail subcommittee. 
This is a very important hearing, and people--I think it is 
very important that we put also a human face on some of the 
issues that challenge the Congress and the Administration.
    I was requested by Mr. Gallegly to have a witness, and he 
chose this morning's first witness. And I think, again, that it 
is very important that the Congress try, when we enact laws, 
when the Administration enacts regulations, that we do so in a 
responsible fashion to all parties. And we will hear more about 
that from both his comments and the comments of his witness 
today.
    So, again, I thank you for convening this. I look forward 
to hearing from them, and yield back.
    Mr. Shuster. Well, I thank the gentleman, and I yield for 
the opening statement the ranking member of the full committee, 
Mr. Rahall, from West Virginia.
    Mr. Rahall. Thank you very much, Chairman Shuster. I 
appreciate your having these hearings, the first hearing the 
committee has held to oversee implementation of the Rail Safety 
Improvement Act of 2008, which reauthorized FRA and mandated 
several significant rail safety initiatives, including those 
relating to the positive train control technologies.
    I have concerns with how the FRA is implementing the PTC 
mandate, and whether the mandate can actually be implemented by 
the deadline provided in the legislation. We all want a safe 
system, but it has to be done right, and not rushed.
    The FRA's final rule, in many ways, appears to go beyond 
the legislative mandate. For example, the FRA told the freight 
railroads they would have to implement PTC on rail lines where 
hazmat was transported in 2008, even though the railroads may 
not use those lines to transport hazmat in 2015. Nothing in the 
law mentions 2008; the only date is the deadline.
    With respect to the deadline, the law required the 
railroads to submit their implementation plans for PTC within 
18 months of enactment. In these plans, the railroads are 
required to provide information about the extent to which they 
will implement PTC, provide a schedule for progressive 
implementation, and prioritize implementation on the basis of 
risk. Those plans have been submitted.
    But according to GAO, while Amtrak has installed PTC on 
about 250 miles of track, and 2 freight railroads have piloted 
PTC systems, other railroads have not yet begun implementation, 
largely because they are awaiting FRA standards of how the 
differing PTC systems must be interoperable.
    Further, although railroads have worked with suppliers to 
develop PTC systems, some components are not yet available, and 
the software needed to test and operate those components remain 
under development. Once they are developed, then they need to 
go through the testing in the field to make sure the system 
operates safely.
    On top of that, the financial situation for commuter 
railroads is tenuous. These railroads depended on funding from 
the Federal Government and States that are already suffering 
significant physical restraints which make it difficult for 
them to cover the $2 billion in PTC costs or, worst case 
scenario, those railroads could start diverting funding from 
other critical areas such as maintenance, which could lead to 
other accidents, something I am sure the authors of the 
legislation did not envision.
    With that, Mr. Chairman, I thank you for holding these 
hearings, and welcome the witnesses.
    Mr. Shuster. Thank the gentleman. And with that, again, we 
are joined by colleague Elton Gallegly from California's 24th 
District, and Ms. Mackenzie Souser from Camarillo, California. 
Congressman Gallegly represents the Simi Valley of north Los 
Angeles, which includes Chatsworth where, on September 12, 
2008, the tragic train accident resulted in 25 fatalities, and 
135 other individuals were injured.
    My thoughts and prayers certainly went with the victims and 
their families--in particular, Mackenzie, who is the daughter 
of Doyle Souser, who was killed in that tragic accident. And we 
are going to begin with Congressman Gallegly and Mackenzie. And 
then after that we will see what we--if we have votes or not, 
and we will come back after the vote.
    So Mr. Gallegly, proceed.

TESTIMONY OF HON. ELTON GALLEGLY, A REPRESENTATIVE IN CONGRESS 
 FROM THE STATE OF CALIFORNIA; MACKENZIE SOUSER OF CAMARILLO, 
  CALIFORNIA; JO STRANG, ASSOCIATE ADMINISTRATOR FOR RAILROAD 
 SAFETY/CHIEF SAFETY OFFICER, FEDERAL RAILROAD ADMINISTRATION; 
 MARK D. MANION, EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING 
    OFFICER, NORFOLK SOUTHERN RAILWAY; EDWARD R. HAMBERGER, 
PRESIDENT AND CHIEF EXECUTIVE OFFICER, ASSOCIATION OF AMERICAN 
   RAILROADS; JOSEPH J. GIULIETTI, EXECUTIVE DIRECTOR, SOUTH 
    FLORIDA REGIONAL TRANSPORTATION AUTHORITY; PAUL VICTOR, 
  PRESIDENT, ANACOSTIA & PACIFIC RAILROAD COMPANY, INC.; AND 
DENNIS R. PIERCE, NATIONAL PRESIDENT, BROTHERHOOD OF LOCOMOTIVE 
                     ENGINEERS AND TRAINMEN

    Mr. Gallegly. Thank you very much, Chairman Shuster. I want 
to thank Chairman Mica and my good friend, Ranking Member Nick 
Rahall, for inviting me to testify this morning at this 
hearing. I also greatly appreciate the fact that you invited 
one of my constituents, Mackenzie Souser, who will be here to 
testify as well today.
    Mr. Chairman, on September 12, 2008, a Metrolink commuter 
train and a Union Pacific freight train collided near 
Chatsworth, California, resulting in 25 deaths and more than 
150 injuries, 135-plus serious-to-critical injuries, many of 
which were very catastrophic and will be lifelong injuries. 
This was the worst train accident in California history. I use 
the word ``accident'' lightly, because many of us do not 
believe it was an accident, that it was something that clearly 
should have been prevented.
    Although there is going to be litigation relating to this 
matter, an extensive investigation conducted by the NTSB, 
depositions taken as part of the case and interviews with 
Veolia employees, found that the operator of Metrolink system, 
Veolia Transportation, a French company, had a culture of 
ignoring risk and accepting rule-breakings from the locomotive 
engineer who was driving the train.
    Here are some of the relevant facts related to the 
Chatsworth Metrolink tragedy. Robert Sanchez, the engineer who 
was driving the train at the time of the accident, had already 
been cited in 2006 for having his cell phone on while operating 
in a train. This violation of written rules put Veolia on 
notice regarding Sanchez's cell phone usage while he was on 
duty.
    And only one month before the collision, the conductor on 
Mr. Sanchez's train saw Mr. Sanchez using his cell phone, and 
reminded him it was a violation of the rules. The conductor 
reported his violation to the supervisor. However, no formal or 
informal action was taken against Mr. Sanchez to stop his cell 
phone usage.
    On the very day of the crash, just before the afternoon 
train runs began, the same conductor called another conductor, 
asking his advice about stopping Mr. Sanchez from his dangerous 
texting conduct since Veolia management had done nothing to 
stop it. The other conductor advised him to ask a union 
official the next day to intercede with Veolia's management.
    Despite this knowledge of cell phone use by Mr. Sanchez in 
the weeks leading up to the crash, Mr. Sanchez sent as many as 
180 text messages every day he was on duty. Most of these text 
messages were sent by Mr. Sanchez while he was operating the 
train. The poster that we have over here illustrates the number 
of text messages just the week preceding this tragedy. In fact, 
on the day of the crash, Mr. Sanchez had already sent a total 
of 43 text messages. And on the afternoon of the shift, 13 were 
sent prior to the crash. And, if you notice, there were fewer 
text messages on the day of the crash than there had been 
earlier in the week, only because the crash stopped the text 
messages definitely.
    Twenty-two seconds later, in a blind curve, without any 
warning, the Metrolink train hit a freight train traveling 40 
miles per hour head on, derailing the lead locomotives and 
jamming the Metrolink locomotive backwards into most of the 
first passenger car. In an instant, close to 200 people were 
killed or severely injured.
    Mr. Chairman, I refuse, as I said, to call what happened on 
September 12, 2008, an accident. It is a tragedy, but it was 
not an accident. It should have never happened. For the victims 
and many families, this tragedy on September the 12th has been 
compounded by a Federal law that limits damages relating to all 
claims arising from a passenger railroad accident to be capped 
at $200 million.
    The Federal cap on all damages, which was included in the 
Amtrak Reform and Accountability Act of 1997 states that ``the 
aggregate allowable awards to all passengers against all 
defendants for all claims'' arising from a single accident 
cannot exceed $200 million. That was 15 years ago, and there 
was no indexing for the cost of living. And, of course, we all 
know that health care costs have increased significantly in the 
past 15 years.
    Mr. Chairman, the Chatsworth tragedy was devastating to 180 
families in my congressional district. For this reason, I have 
called on the executives of Veolia to step up and at least 
cover the real damages--not the punitive damages, but the real 
damages--caused by this tragedy.
    Veolia, a French company, is the largest transportation 
company in the world. They operate rail systems that are 
subsidized by the taxpayers of this country, and they operate 
throughout the United States. Both public transportation 
entities and the American public at large count on Veolia to 
operate safe transportation systems and act like responsible 
corporate citizens. And they have not done that.
    I, therefore, call on Veolia to take responsibility for the 
devastation they have caused, and do the right thing by the 
people of this country, who have lost so much through no fault 
of their own, only counting on public transportation to get 
them home safely from work.
    Again, I thank you very much for allowing me to testify 
today, and I would yield back the balance of my time.
    Mr. Shuster. I thank the gentleman. And now we will 
recognize Miss Souser. Can I call you Mackenzie? OK. I know you 
have probably got some butterflies in your stomach. That is a 
good thing. That is a good thing. But first thing, make sure 
you turn the mic on, pull it up close to you. It is going to be 
a breeze for you.
    I can tell you that there is only one person in the room 
that has got more nerves going on in their stomach than you, 
and that is your mother. I have been watching her over there. 
So just take your time, do not be rushed. You are going to 
probably hear some bells go off in the middle of your speech, 
and do not panic.
    Ms. Souser. OK.
    Mr. Shuster. It is not going to be a fire alarm.
    Ms. Souser. OK.
    Mr. Shuster. There you go.
    Ms. Souser. Thank you.
    Mr. Shuster. But again, just take your time, take a deep 
breath, and go ahead and proceed whenever you are ready.
    Ms. Souser. My name is Mackenzie Souser, and I am from 
Camarillo, California. And I just wanted to thank you for 
inviting me here today.
    My dad, Doyle Souser, an executive at a manufacturing 
company, left work on the afternoon of Friday, September 12th, 
and boarded the Metrolink 111 train to come home from work. He 
usually took the later train, but was coming home early to cook 
a barbeque dinner for a struggling family in our community. I 
was excited, because my 13th birthday party was scheduled for 
the next day.
    My dad always helped with all the details of our family 
events. After dinner on Friday, we were going to finish the 
rest of the preparations for my party. Instead, on that Friday 
afternoon, my dad's train, which was filled with passengers, 
collided head-on, at full speed, with a freight train on a bend 
in Chatsworth in Los Angeles County. The 80-mile-per-hour force 
caused the Metrolink locomotive to completely enter the first 
passenger car and ignite into flames. Twenty-four hours later, 
we learned that my dad was riding in the front of the first 
car, and was one of the 24 passengers killed.
    The Chatsworth Metrolink collision was the worst ever in 
California's history. In addition to all the people who died, 
more than 135 others were injured, many seriously and 
permanently. The survivors of the crash, which not only include 
those who were injured, but those of us who are trying to make 
it each day without someone we depended on, do not refer to 
this event as an ``accident.'' It really was not just an 
accident.
    According to the National Transportation Safety Board, the 
collision was caused when the engineer of the Metrolink train, 
Robert Sanchez, ran through a red signal while using his 
personal cell phone to send text messages. The NTSB also 
determined that the engineer, an employee of Veolia 
Transportation and Connex, sent and received 43 text messages 
and made 3 phone calls while on duty on the day of the crash.
    Two days before the collision, the Veolia engineer sent or 
received 125 text messages during the time he was responsible 
for operating the train. He would regularly send and receive an 
average of 180 text messages each day. Many of the texts were 
sent to teenage boys he was communicating with. The engineer 
had recently invited a teenager for a ride-along in the cabin 
with him, and allowed him to have contact with the controls. 
The engineer had been planning on letting the same teenager 
actually drive the train on the evening of the collision.
    Within a few minutes and a few text messages, my life was 
changed, my family's life was changed, and over 160 other 
families' lives were changed drastically by this avoidable 
disaster. I am telling you this because I would never want 
anyone to go through the same traumatic losses I have for the 
past 2\1/2\ years. I am simply not a normal teenager any more 
without my dad. The best part of every day was when my dad came 
home from work and our family would have dinner together. I 
struggle every day with the fact that my dad, who was the sole 
breadwinner for our family, is not coming home ever again.
    Mr. Shuster. Take your time.
    Ms. Souser. Sorry.
    Mr. Shuster. It is all right. Take your time. Want some 
water?
    Ms. Souser. Sorry. My dad was my best friend, and a strong 
Christian influence, who helped me become a responsible young 
adult. I miss spending time with him and talking about cars and 
watching cooking TV shows, going to movies, playing in our 
backyard, and discussing many other things. I miss joining him 
at work for father-daughter day, which he would let me do when 
I wanted to spend the day with him.
    I remember observing the great relationship my mom and dad 
shared. It was a wonderful example of a beautiful marriage. I 
hope some day to find a husband that will treat me like my dad 
treated my mom.
    My loss is not only physical, but it is also emotional. My 
dad was also my brother Zach's best friend. It is so hard to 
watch my brother trying to grow up without his best buddy and 
male role model. Others my age get to worry about normal 
teenage concerns while I worry about my mom, our family 
finances, and our future, and how my brother and I will go to 
college. I worry about what we would do if someone broke into 
our home during the night, or if there was ever a fire. And it 
is hard knowing that my dad will not be there to walk my older 
sister, Kelsey, or me down the aisle when we get married, or be 
here for us ever again.
    As a teenager, I am very familiar with the popularity of 
text messaging. Every teenager I meet should know that driving 
and texting do not mix. My mom and I relied on the pilot of the 
plane that brought us here today to do his job very carefully. 
In the same way, my dad and all the other passengers relied on 
the Veolia engineer to pay attention to the signals, and drive 
the train according to all the important safety rules. Those 
rules said no cell phones and no unauthorized people in the 
driver's seat.
    The engineer's supervisors knew that he was using his cell 
phone while on duty. It is so hard for me to understand why 
they did not immediately investigate and put a stop to this. We 
learned that the engineer had been reprimanded recently before 
the collision. But then we learned that what he got in trouble 
for had nothing to do with text messaging or allowing kids to 
ride with him. It had to do with not bringing a train into one 
of the stations on time. This means that the company was 
concerned about profits, and not about major safety issues and 
the hundreds and hundreds of safety violations that were going 
on.
    The truth is that the engineer's company took such a big 
gamble with my dad's and all the other passengers' lives. This 
was wrong. It is also wrong that in these unbelievable 
circumstances Veolia is relying on the Federal law that limits 
how much it has to reimburse all of the survivors for their 
injuries.
    My dad always taught me to accept full responsibility under 
any circumstances where I ever hurt someone. He never said, 
``Well, Mackenzie, just try to make things 30 percent or 50 
percent better.'' My dad knew that being 100 percent 
responsible was not only fair to the person I hurt, he also 
knew that if I had to be fully responsible for any harm I 
caused, I would be more careful about my actions in the future.
    My family is so grateful to Congressman Gallegly for trying 
to fix this problem with legislation that would increase the 
damages cap. Congressman Gallegly has provided several 
opportunities for the survivors to meet one another, share our 
stories and suffering, and honor our loved ones.
    My family will appear before the judge soon, and tell him 
about all of our losses. We have been trying to make it for 
2\1/2\ years without my dad's support. And we have a long road 
ahead. If there is no change in the law, or Veolia does not 
offer additional funds, the judge will have to determine some 
fair way to reduce each award so everyone's case fits inside 
the limit. I can only imagine how difficult this will be.
    Thank you for doing anything in the meantime to hold those 
who refuse to follow or enforce important safety rules 100 
percent responsible for the harm they may cause. And also, 
thank you for helping honor my dad, Doyle Souser, and all of 
the others whose lives were taken or forever damaged by this 
tragedy. [Applause.]
    Mr. Shuster. Thank you very much, Mackenzie. You did a 
great job, and your dad would be very, very proud of you today.
    Ms. Souser. Thank you.
    Mr. Shuster. I understand there might be a couple of 
questions from Members. The gentlelady from California.
    Mrs. Napolitano. Thank you, Mr. Chairman. And it is 
certainly--young lady, that took a lot of courage. And thank 
you for being so honest and so forthright.
    There is a couple of things that I have. One of them is 
indicating in the chart--and this is to Mr. Gallegly--is on the 
chart. And can you specifically say what it said about the 
engineer's phone usage while he was actually driving the train?
    By the way, what time was the accident, what time of day?
    Ms. Souser. 4:42.
    Mrs. Napolitano. 4:42? Any idea what time this individual 
started his shift?
    Mr. Gallegly. I'm sorry?
    Mrs. Napolitano. Well, because if it only went to that 
portion, then the rest of it would have been more messages.
    [Chart.]
    Mr. Gallegly. The shift started about 3:30, when Mr. 
Sanchez boarded the train, and the train was on its way from 
the western San Fernando Valley into Ventura County, with the 
first stop in Simi Valley. But if you look at this chart, these 
are the days that Mr. Sanchez was on duty. And by the way, we 
can go back and show charts like this for weeks before that 
Veolia was aware of.
    But just on the week preceding the tragedy, you can see--
this was the day that he worked. Seventy percent of the time 
that he was texting was when he was operating the train. These 
were 2 days that he was not working. These were the only text 
messages he made. Blue indicates the number of text messages, 
which were, like, 10 and 10. But the day he was on the train on 
the previous Friday, 43 text messages. On Monday about 55. On 
Tuesday----
    Mrs. Napolitano. So what does it say, Mr. Gallegly, about 
the man's usage of the cell phone? What are you indicating? 
What does that say?
    Mr. Gallegly. I am sorry?
    Mrs. Napolitano. What does it say? What is it really--where 
you are pointing out to, what is the bottom line?
    Mr. Gallegly. What I am pointing out to is the bottom line 
is the number of text messages that were made on these days. 
This line here is both the morning and afternoon shift, when he 
was driving the train. So you can tell that, clearly, two-
thirds to 75 percent of all the text messages that he was 
making was during the process of time while he was operating 
the train, not when he was at home or away on a day off.
    And on Wednesday of the week 2 days preceding the crash, 
there were 184 text messages made, and about 130 of those text 
messages were made while he was actually operating the train. 
And we move to Friday, prior to 4:42, the time of the 
collision. He had made almost 100 text messages that day, with 
over 45 during the course of the time that he was driving the 
train. His shift would have lasted, I believe, until 8:35 that 
night, or at least another 4 hours, which would have probably 
indicated why there were fewer text messages on the day of the 
crash. It is because he only operated the train up until the 
collision time.
    Mrs. Napolitano. Thank you. And if the actual damages, such 
as those medical expenses we have heard about, we saw from the 
tragedy, exceed the $200 million cap, who will pay for the 
medical bills? What options do the victims have?
    Mr. Gallegly. Obviously, some of the victims have certain 
insurance. But all of the insurances have limitations or caps. 
But obviously, when those caps run out, it is going to be the 
taxpayers and public hospitals and so on that are going to be 
paying this.
    And I might mention that of those 135 people that were 
seriously and critically injured, we have several that already 
have doctor bills over $1 million, have not received anything 
to date. And, in addition to that, many of these folks are 
going to require health care the rest of their natural life, 
many of whom are in their twenties and thirties, and will never 
be able to work another day.
    We did have one person that had just graduated from medical 
school and was ready to start being a doctor. She had half of 
her brain removed and was scarred permanently for life.
    Mrs. Napolitano. Thank you. I have always believed that the 
States should be allowed to regulate railroads in their areas 
where the Federal Government has not acted. We have tried that 
before. As long as it does not hurt interstate commerce. And we 
are still battling on that issue.
    But as you discuss in your statement, the cap is $200 
million. However, Veolia could go beyond the cap and fully 
compensate all victims of the disaster. Do you know whether 
they have insurance coverage that could compensate the victims, 
and what amount the insurance is?
    Mr. Gallegly. My understanding is that they have, at the 
time of the crash, approximately $700 million in insurance for 
an accident like this. When I asked them about the issue of 
$200 million, they felt that $200 million would more than 
adequately cover any potential tragedy. And I asked them if 
that was the case, why did they have $700 million worth of 
insurance. And I still am waiting for the answer to that.
    Mrs. Napolitano. Thank you, Mr. Chairman.
    Mr. Shuster. I recognize Mr. Mica for a question.
    Mr. Mica. Well, just a couple of things. While, first of 
all, someone was not paying attention to the performance of the 
engineer in this case, and that is a shortcoming of our safety 
program, that needs to be corrected. We did put some provisions 
after this crash in for positive train control. I am concerned 
now that we may be spreading some of that money too thin. It 
needs to be where we have the greatest risk, and trying to make 
certain that we get in place that control as soon as possible, 
that technology as soon as possible where, again, there is a 
risk.
    What concerns me is--and I think you alluded to it--is 
the--one, the adequacy of the level of liability 
responsibility. And then, did you tell me that a foreign 
entity--there was some questions as to their responsibility in 
making payments? And does that need to be corrected under 
current law, Mr. Gallegly?
    Mr. Gallegly. I clearly believe that it does. I think that 
this was a--probably an unintended consequence of the 1997 
bill. You know, sometimes we do not understand problems that 
are created--not intentionally, but they are.
    And clearly, the fact that when you have the number of 
people that were critically injured and the number of people 
that perished, the numbers--seems like--$200 million seems like 
a lot of money. But when you start adding it up, when you have 
to start, as Mackenzie alluded to, the judge's task in deciding 
who is going to get what, knowing clearly, clearly, there will 
not be the money to take care of the victims----
    Mr. Mica. But did the foreign entity----
    Mr. Gallegly. Well, the foreign entity here, of course, 
was----
    Mr. Mica. Not--they were not required to be liable? And did 
they have coverage?
    Mr. Gallegly. Well, the issue is that I believe that was an 
unintended consequence. They are, since they were operating a 
public transit system that was covered, they are arguing that, 
as a result of that legislation, their liability is capped at 
$200 million, even though they had multiples of that type of 
coverage because, obviously, you do not go out and buy $600 
million or $700 million worth of insurance, unless you think 
potentially you may have a need for it.
    Mr. Mica. So there is a question, again, in clarifying the 
loss of--when you have an instance like this, that if you do 
have a set cap, and then, say, a responsibility above that, 
that we need to better define, again, those terms.
    Mr. Gallegly. And, clearly, I do not know how that is going 
to affect retroactively to the previous tragedy, but clearly we 
need to fix this in the future.
    We do not have to look too far to see what happened down in 
the Gulf with the BP tragedy. And there were limits of 
liability there. But--and I am not here to defend BP under any 
set of circumstances, but they did step up to the plate and 
offer and have paid many multiples of what their actual legal 
limits were. And I would hope that Veolia, in this case, for 
the victims that we have--not only for the victims, but for the 
American taxpayers as well, because that is where, ultimately, 
the burden is going to lie, at the feet of the American 
taxpayers, for an incident that clearly, clearly was the 
responsibility of the company that is foreign-based.
    Mr. Mica. Thank you.
    Mr. Shuster. There is under 3 minutes to vote. The 
gentleman from New Jersey has a brief question, I believe, and 
then we are going to recess.
    Mr. Sires. I just wonder if, after this accident, have you 
noticed that the company has taken any steps to make sure this 
does not happen, to monitor these engineers to make sure that 
they--that nobody else is doing anything similar to this?
    Mr. Gallegly. Well, you know, of course they lost the 
contract with Metrolink and it was not renewed.
    As it relates--we have changed some of the regulations and 
so on and so forth. But the thing that I think is most 
disturbing is that the leaders of Veolia have said that their 
hearts and prayers are with the victims. However, their 
pocketbooks so far have not been.
    Mr. Sires. Thank you.
    Mr. Shuster. I thank the gentleman. And I thank the 
gentleman from California for being here today, and thank the 
Sousers. Thank you for being here.
    We are going to stand in recess for approximately 15 
minutes.
    Mr. Gallegly. I thank the chairman.
    [Recess.]
    Mr. Shuster. Come to order. I do not think we are going to 
be interrupted by votes again. We are going to be good to go. 
So, smooth sailing.
    Again, thank everybody for coming today to our hearing on 
positive train control. I appreciate all of the witnesses for 
being here today, and look forward to hearing your testimony. 
That certainly was powerful testimony that we heard from Miss 
Mackenzie and, of course, what happened in California, which, I 
believe, is right--it was avoidable, and we have got to do more 
to make sure those types of things do not happen.
    And of course I think we have already taken some action in 
personal responsibility by people who are operating trains, 
planes, automobiles, whatever, heavy equipment. That is where 
safety starts, first and foremost, with the individual. So we 
got to make sure we keep that in mind.
    Throughout our government, I am deeply concerned with the 
regulatory overreach that we have seen. I believe it cripples 
the economy. It stifles job creation, and ties our Nation up 
with red tape. I applaud President Obama for his recent 
comments on reducing the regulatory burden--for calling for a 
government-wide review of burdensome regulations.
    However, it seems like, at every turn, another agency is 
moving forward with new cumbersome expensive rulemakings. There 
is a significant disconnect between what--the President's words 
and the actions of his administration.
    Positive train control is an example of regulatory 
overreach that I would like to focus on here today. PTC 
describes technology designed to automatically stop or slow a 
train before certain accidents caused by human error. Section 
104 of the Rail Safety Improvement Act mandated that Class I 
railroad carriers and inner-city passenger rail and commuter 
rail entities must implement PTC systems by December 31, 2015.
    In January 2010, the FRA published its final rule to 
implement the PTC mandate. The rule has raised great concern 
and strong objections, specifically because the FRA regulations 
appear to have gone beyond the scope of the Rail Safety 
Improvement Act and the PTC mandate.
    FRA's own cost benefit analysis of the final rule 
implementing PTC states that an immediate regulatory mandate 
for PTC could not be justified, based upon the normal cost 
benefit principles, relying on direct safety benefits. The 
safety benefits of PTC systems were relatively small, in 
comparison to the large capital maintenance costs. The FRA 
estimated a cost benefit ratio of 15:1 for installation of PTC 
system when it issued its notice of proposed rulemaking, and an 
even higher cost benefit ratio of 22:1 in its final rule.
    The 20-year costs are estimated to be a whopping $13.2 
billion. Notably, the PTC rule has been targeted by the Obama 
administration's regulatory review task force. Earlier this 
year at an Energy and Commerce Committee hearing, Cass Sunstein 
the administrator of the Office of Information and Regulatory 
Affairs, made note of this same point.
    When asked to identify an example of a regulation that 
benefits had not justified the cost, Sunstein highlighted 
positive train control. And I quote, ``The only big one that 
comes to mind is positive train control. The monetarizable 
benefits were lower than the monetarized costs. There are not a 
lot like that.'' So it is the poster child of a regulation that 
has been mandated that does not have a benefit, or does have a 
very, very small benefit to cost--cost benefit ratio.
    Another issue is the base year used for PTC route 
determination. In its final rule, the FRA orders railroads to 
install PTC on rail lines that carry toxic inhalation, or TIH 
materials, in 2008. Yet nothing in the Rail Safety Improvement 
Act calls for using 2008 as the base year. Only 2015 is 
mentioned in the statute.
    Using 2008 as the base year makes little sense, because the 
TIH traffic patterns in 2015 will be vastly different than they 
were in 2008. If left unchanged, the 2008 baseline year will 
mean railroads will have to spend hundreds of millions of 
dollars to deploy PTC on thousands of miles of rail lines on 
which neither passengers nor TIH materials will be moved in 
2015.
    Commuter rails also have serious concern regarding the PTC 
mandate, particularly given the dire financial straits that 
many of these public agencies face during our current economic 
recession. The additional $2 billion price tag for 
implementation of PTC on commuter rail systems is out of reach 
for almost all commuter rail agencies. Commuter rails argue 
that PTC mandate would have the unintended consequences of 
degrading safety by requiring the deferral of needed state-of-
good repair projects in order to fund initial phases of PTC.
    Finally, although short line and regional railroads are not 
explicitly required to install PTC equipment on their lines, 
under the Rail Safety Improvement Act the PTC mandate affects 
them in the case of interchanges of freight between short lines 
and Class I's that take place on Class I track. In many cases, 
such interchanges will occur on sections of track that are PTC-
equipped. There has not been a cost analysis of the impact of 
PTC requirements in the short line and regional railroads. But 
industry representatives estimate as many as 140 smaller 
railroads will be required to upgrade their equipment to be 
PTC-compatible.
    Again, I look forward to hearing from all our witnesses 
today. And with that, I would like to yield to the ranking 
member for her opening statement.
    Ms. Brown. Thank you, Mr. Chairman. And I am pleased to be 
at this subcommittee meeting to see how the Federal Railroad 
Administration is implementing the Rail Safety Improvement Act 
of 2008. Rail safety is an extremely important issue that 
affects the lives of many.
    When I was chair of the subcommittee in 2007, rail safety 
was my top priority, and we tackled that issue first. We 
started out with 2 days of hearing, and then followed up with 
additional hearings, including one field hearing, over the 
course of several months before developing legislation. We 
invited all of the interested parties to participate in the 
discussion: the FRA, the railroad labor, safety groups, and 
families involved in rail accidents, and the National 
Transportation Safety Board.
    I asked that the National Transportation Safety Board be 
invited to this hearing, but the request was denied. However, I 
discussed that with Mr. Mica, and he indicated to me that at 
the end of this month we are going to have a series of 
hearings, and we will have an opportunity to invite 
participants that was not able to participate in this hearing 
and other hearings that we have had throughout the country.
    So, I am looking forward to getting some of the other 
stakeholders to the table so we can have these in-depth 
discussions. And those hearings--I do not know whether we have 
scheduled those dates, but I understand, Mr. Shuster, it is 
going to be at the end of the month we are going to have 2 days 
of hearings here in Washington.
    Mr. Shuster. Yes. The last week of March? Yes, the last 
week.
    Ms. Brown. The last week in March we are going to have 2 
days of hearings. So we will get an opportunity to invite some 
of our other stakeholders who we have not been able to get 
before the committee. Because I think it is very important that 
we get all of the stakeholders in the room, and be able to 
discuss how we move forward.
    Prior to the Rail Safety Improvement Act, our Nation's rail 
safety program had not been authorized in over a decade. As a 
result, we did a lot of good things to help improve rail 
safety. We reformed hours of service standard for rail workers 
to allow them to rest between work shifts. We required that one 
railroad that still had camp cars to retrofit them or replace 
them, and we are still waiting on an update on that. We 
required more training for workers and ensured that injured 
workers have access to prompt medical attention. We improved 
track and crossing, and we required installation of positive 
train control on main lines where passengers and certain 
hazardous materials was transported.
    I support the PTC requirements in law. But I do have some 
major concerns with how FRA is implementing it. With that said, 
I think that the committee needs to be careful about weakening 
rail safety. Serious accidents, injuries, and fatalities 
continue to occur. In fact, human error remains one of the 
leading causes of rail incidents. And, according to the 
Government Accounting Office, the number of fatalities have 
spiked over the years as a result of specific incidents, 
including one in South Carolina, another in North Dakota, 
several in Texas, and, of course, the tragic accident that 
occurred in California. I would hate for another tragedy to 
occur like this one in California.
    As the economy grows in high-speed, and intercity passenger 
rails are developed in this country, we have to stay focused on 
improving safety, and we all really have to work together.
    Before I close, I have a question for--I think I have 
already asked the question about when we was going to have the 
hearing. And I want to thank again the chairman for having this 
hearing.
    Mr. Shuster. I thank the gentlelady from Florida. And your 
question, to be very specific, surface transportation 
reauthorization stakeholders hearings on March 30th and 31st, 
and Member hearings will be the first week of April.
    Ms. Brown. Thank you very much.
    Mr. Shuster. Thank you. I ask unanimous consent for 
testimony to be placed in the record from the American 
Chemistry Council, from Metrolink, and from Veolia.
    [No response.]
    Mr. Shuster. Without objection, so ordered.
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    Mr. Shuster. Now we will turn to our witnesses. I will 
introduce all of you across the board, and then I will let you 
go one at a time, obviously.
    First, Jo Strang, who is the associate administrator, 
office of safety, Federal Highway Administration; Mark Manion, 
who is the executive vice president and chief operating officer 
of Norfolk Southern, accompanied by Ed Hamberger from the 
Association of American Railroads; Joseph Giulietti, the 
executive director of the South Florida Regional Transportation 
Authority; Paul Victor, the president of the Anacostia and 
Pacific Railroad Company; and Dennis Pierce, the national 
president of the Brotherhood of Locomotive Engineers and 
Trainmen. Again, thank all of you for being here. And before I 
recognize our first witness, Mr. Meehan would like to make a 
comment.
    Mr. Meehan. Yes. Mr. Chairman, for the record, may I ask as 
well--you asked for unanimous consent to submit statements, and 
I would like to ask if I could have a statement submitted by 
the Southeastern Pennsylvania Transportation Authority on the 
same issue of PTC.
    Mr. Shuster. Without objection, so ordered.
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    Mr. Meehan. Thank you.
    Mr. Shuster. Thank you. And with that, Ms. Strang, you may 
proceed. And I ask you to all adhere to the 5-minute timeframe. 
I have been enforcing it. I know there has been a special 
request by Mr. Manion and Mr. Hamberger to show a 1-minute 
tape. As long as it is just 1 minute--got it.
    So, adhere to 5 minutes, please.
    Ms. Strang. OK, thank you very much. Good morning, Chairman 
Shuster, Ranking Member Brown, and members of the subcommittee. 
I am honored to appear before you today on behalf of Secretary 
LaHood and Administrator Szabo to discuss the implementation of 
the Rail Safety Improvement Act of 2008, commonly referred to 
as RSIA.
    RSIA is the most sweeping piece of safety legislation ever 
passed by Congress, requiring more than 40 final rules, 
guidance documents, model laws, reports, and studies. By 
requiring the installation of positive train control (PTC) 
systems, it addresses the risks of carrying certain toxic 
chemicals and also prevents collisions involving passenger 
trains, such as the one that was one of the worst passenger 
train collisions in recent history in California.
    FRA has been working hard to implement RSIA, and I am 
pleased to report that FRA has issued final rules for PTC, 
bridge inspection, State-specific action plans, and updates to 
hours of service recordkeeping and reporting regulations. We 
have issued five notices of proposed rulemaking and one advance 
notice of proposed rulemaking. We have also completed seven 
reports to Congress, as well as the model State law for sight 
distance at passive crossings.
    The most complex requirement, in terms of technical 
complexity and breadth of undertaking, is PTC. PTC is designed 
to prevent four types of catastrophic events: train-to-train 
collisions; overspeed derailments; movement over misaligned 
switches; and incursions into roadway work zones.
    RSIA requires the installation of PTC on intercity 
passenger and commuter routes and on routes over which certain 
toxic materials are carried. The deadline for installation, as 
set by the statute, is December 31, 2015. By early 2010, FRA 
had published the final regulations necessary to provide 
guidance to railroads required to install PTC.
    We undertook a number of efforts to reduce the cost through 
the Railroad Safety Advisory Committee process, and provided in 
the final rules several exceptions and exclusions, such as 
passenger yard and terminal exceptions, limited passenger 
operations, some exclusions for Class II and III railroads--
both for locomotives operating on the host railroad's PTC 
territory and for Class II and III railroad lines carrying 
limited amounts of passenger and freight traffic.
    Total PTC route miles, without any exceptions, would have 
been 82,000, and the total actually being implemented by 
approval of those allowances that we have received by request 
so far will be around 73,000 route miles, thus providing 
significant cost savings to the industry.
    FRA and the AAR have reached a settlement agreement to hold 
AAR's lawsuit challenging portions of the PTC rule in abeyance 
while FRA issues two notices of proposed rulemaking. The first 
would propose eliminating the two tests that would potentially 
require PTC to be installed on track segments not specifically 
required to be equipped by Congress. The other will address 
other PTC concerns that are not involved in the litigation.
    The two NPRMs will allow FRA to solicit the input of 
stakeholders and the general public in making decisions on 
whether safety can be better served by amendments to the rule. 
This approach is consistent with the President's recently 
issued Executive Order 13563, requiring agencies to review 
their significant regulations and ensure that the safety 
benefits justify the costs imposed by the rules.
    FRA has worked tirelessly to implement the requirements of 
the Act, and will diligently complete the remainder of the 
rulemakings, reports, and guidance documents required by the 
Rail Safety Improvement Act of 2008. I thank you for your time.
    Mr. Shuster. Thank you very much. You came in way under the 
1 minute. Mr. Hamberger can utilize that time.
    [Laughter.]
    Mr. Shuster. With that, Mr. Manion, please proceed.
    Mr. Manion. Thank you, Chairman Shuster, Ranking Member 
Brown, and other Members of the Committee, for the opportunity 
to discuss the Rail Safety Improvement Act of 2008 on behalf of 
Norfolk Southern and other members of the Association of 
American Railroads.
    For Norfolk Southern and America's other freight and 
passenger railroads, safe operations are an imperative. From 
1980 to 2010, the U.S. train accident rate has improved 77 
percent, and the grade crossing collision rate has improved 81 
percent. 2010 was the American railroad industry's safest year 
ever. Our employees are remarkably safe, too. In that time 
period, the employee injury rate has been reduced 82 percent. 
It is safer to work for us than it is to work in a grocery 
story. We demonstrate that safety is the right thing to do, and 
safety is good business.
    The Rail Safety Improvement Act of 2008 addresses a range 
of provisions. One of those involves positive train control, or 
PTC, technologies designed to automatically slow or stop a 
train before certain accidents caused by human error. While PTC 
is the most expensive and far-reaching mandate in railroad 
history, let me make it clear we are not seeking changes in the 
PTC mandate for passenger trains.
    However, there are problematic issues with regard to PTC 
deployment. One such problematic requirement centers on the 
complexity of PTC systems required to comply with a 2015 
deadline. As the GAO has indicated, implementing PTC without 
the full benefit of solid sound engineering principles and 
practices commonly used in development of technology of similar 
complexity and scope has the potential of significantly slowing 
the rail network, and may not produce expected safety benefits 
due to reliability issues.
    A second issue centers on costs. According to FRA's own 
estimates, PTC will cost railroads up to $13.2 billion to 
install and maintain over 20 years. But it will return only $1 
in safety benefits for every $20 spent. Yes, you heard 
correctly. This is money that could otherwise be invested in 
the economic recovery and in safe, environmentally friendly and 
fuel-efficient railroad infrastructure.
    A third concern relates to PTC effectiveness. Only 4 
percent of mainline accidents over the last 7 years might have 
been prevented by PTC. By contrast, track and equipment-caused 
accidents accounted for 60 percent. It would be more effective 
to focus our resources on reducing those track and equipment-
caused accidents.
    Railroads are aware that some of the accidents that PTC 
systems are designed to prevent can be serious, with 
significant injuries and loss of life. However, there are less 
costly and less complicated technologies and operating 
practices that can provide greater overall safety improvements 
for railroad operations.
    A fourth issue is that FRA is requiring PTC installation 
based on 2008 traffic levels, even though 2015 is the deadline 
that is cited in the statute. This is not logical. Freight 
movement patterns are dynamic. They change, based on customer 
demand and other factors. By our calculation, we will have to 
spend more than $500 million to deploy PTC on more than 10,000 
miles of track where it will not even be required by the time 
2015 arrives.
    While we have agreed to hold the litigation over the 2008 
baseline issue and second display in abeyance, the industry 
awaits final action over the issues to be addressed in the new 
rulemaking proceedings.
    My last perspective involves the so-called business 
benefits, supposedly totaling billions of dollars, to be 
achieved through PTC. Those benefits simply will not happen. 
PTC will not allow us to run more trains, reduce delays, save 
fuel, or improve fleet utilization. And it should not be touted 
as being able to do so. Fortunately, we already have systems 
that do those things.
    To conclude, the railroad industry is safe and getting 
safer. We are fully dedicated and engaged in meeting the 
requirements and deadlines placed upon us, and in working with 
FRA, Congress, and all safety stakeholders to ensure the best 
outcomes. We are, however, concerned that the final rules 
implementing the Rail Safety Improvement Act of 2008 do not 
support continuation of the beneficial long-term safety trend. 
Thank you, sir.
    Mr. Shuster. Thank you.
    And, without objection, AAR has a 1-minute?
    Mr. Hamberger. Thank you, Mr. Chairman. We talk in our 
written testimony about alternative risk reduction strategies 
for TIH-only lines, not for passenger lines. And I have, 
literally, a 1-minute clip of some of those technologies to 
give the subcommittee an idea of what we are working on, in 
partnership with the FRA, at the Transportation Technology 
Center in Pueblo, Colorado. And if I have any luck, it will 
work right now.
    [Video shown.]
    Mr. Shuster. Thank you for that. And with that, Mr. 
Giulietti, you may proceed. I pronounced it correctly?
    Mr. Giulietti. Yes, you did. Thank you, Chairman.
    Good morning, Chairman Shuster, Ranking Member Brown, and 
members of the Railroads, Pipelines and Hazardous Materials 
Subcommittee. My name is Joe Giulietti, and I am appearing 
before you today on behalf of the American Public 
Transportation Association, APTA, and more than 1,500 
organizations, as well as the South Florida Regional 
Transportation Authority, where I serve as the executive 
director and oversee the Tri-Rail commuter railroad. I thank 
you for the opportunity to testify today to discuss the Rail 
Safety Improvement Act, and offer insights to the very 
important matters related to the implementation of positive 
train control, or PTC. A copy of my full testimony has been 
submitted to the subcommittee. I will summarize my testimony, 
and will be pleased to answer any questions you may have.
    First, let me take a moment to tell you about my background 
and why I was asked by my colleagues to speak with you this 
morning on behalf of our industry on this very important 
subject. I am in my 40th year in this industry, and I have had 
a wide range of experience in both passenger and freight 
railroad operations.
    I started as a brakeman, worked in both passenger and 
freight railroad operations. I have worked as a locomotive 
engineer, a railroad foreman or a transportation manager. I 
have worked for Penn Central, Amtrak, Conrail, Metro North 
Commuter Railroad in New York, and now Tri-Rail. I have worked 
in New Haven, Boston, New York, New Jersey, Philadelphia, and 
Florida. And I have worked closely during my career with the 
Federal Railroad Administration, the Federal Transit 
Administration, as well as the National Transportation Safety 
Board.
    Additionally, I taught the engineers school, trained 
engineers and conductors, and worked as a manager of operating 
rules, where I co-authored at least two operating rulebooks, 
qualified train dispatchers, and served as a superintendent of 
the New Haven and Harlem lines into New York.
    Currently, I am the co-chair on the commuter and intercity 
rail legislative subcommittee. I am the immediate past chair of 
all commuter rail CEOs at APTA and the vice chair for commuter 
and intercity rail.
    The main message I want to leave with you today is that the 
commuter rail CEOs across the country are committed to the goal 
of installing positive train control, PTC, for our systems as 
soon as possible. We all believe that PTC will add an 
additional layer of safety to our systems that will greatly 
enhance the level of safety. We are committed to PTC being 
operational at all systems as quickly as possible.
    But I am here to report to you we have encountered 
obstacles that will have to be addressed to ensure the success 
in this endeavor. And if we are to have success, it has become 
apparent that we will need more time than has been allowed 
under the law.
    Ensuring that the system will work, currently there is no 
system market-ready that meets this mandate for commuter rail. 
There are indeed PTC systems that have been developed and will 
likely be deployed on freight lines, but none have been fully 
vetted in a commuter rail environment. And because the lead 
time necessary to purchase and install and test even well-known 
existing signal systems can be a multi-year process, we are 
concerned that the PTC technology we know of is untested in the 
commuter rail environment.
    As you may have heard, our colleagues with Metrolink 
Commuter Rail system in Los Angeles are committed to having 
their PTC operational as early as 2012. We applaud their 
efforts in Los Angeles. As an industry, we all have a stake in 
their success. We are closely monitoring their progress and 
experience, because their success will determine whether a 
system can be manufactured that will meet our industry needs.
    We need your help with spectrum, the new technology that 
requires that radio frequency be utilized to ensure the safety 
of operations. To date, no spectrum has been set aside by the 
FCC for this safety-critical operation.
    Some of our systems have utilized--or have unfulfilled 
applications to the FCC, while others are desperately trying to 
negotiate bandwidth, when we do not know for sure we can 
achieve the spectrum necessary to ensure the integration of 
this system. Please have the FCC make bandwidth available to 
this industry for this system.
    And, three, we need additional Federal funding assistance. 
We need additional targeted funding arrangements from the 
Department of Transportation that provides sufficient resources 
to afford this safety-critical system, and allocate our 
resources to it. We also fully support sending immediate 
available funding to Los Angeles to ensure Metrolink and North 
County Transit District's success, so that we can learn and 
hopefully model our systems around what they learn.
    Research funding from the Federal Government has already 
provided $20 million to a software company that is developing 
the radio system to make this technology work. That company has 
been purchased by four of the Class I railroads in their 
efforts to ensure that they can get the system implemented.
    We support their efforts at compliance. We ask you to 
ensure that they make this technology available to our systems 
for public purpose. Not only are we striving with the freight 
railroads to jointly meet this standard, but we also operate 
over each other's trackage. And therefore, we are together in 
this. And all technological advances must be fully available.
    We are in tough financial times, and we recognize that 
commuter railroads, like so many other public transportation 
agencies, have tough choices and challenges to keep them 
viable.
    Again, let me reiterate that we begin first with ensuring 
safety to the best of our collective abilities, and the 
introduction of PTC will significantly increase our industry's 
safety and operations. Thank you.
    Mr. Shuster. Thank you, Mr. Giulietti.
    And with that, Mr. Paul Victor, please proceed.
    Mr. Victor. Good morning. I am Paul Victor, president of 
the New York and Atlantic Railway, a 250-mile short line that 
operates freight service over the Long Island Railroad. We 
carry approximately 22,000 carloads annually, including 350 
cars a year of hazmat LPG gas. This means we take approximately 
180,000 one-way truck trips off the highways of New York City 
and Long Island, annually.
    New York and Atlantic is one of five short lines owned by 
Anacostia Rail Holdings. And of these, four railroads would be 
required to install PTC. Because the New York and Atlantic 
Railway operates over one of the busiest passenger corridors in 
the country, I have been heavily involved in the positive train 
control issue, and our railroad is heavily impacted by this 
mandate.
    I am also appearing here on behalf of the American Short 
Line and Regional Rail Association, which represents the 
Nation's 550 Class II and Class III railroads. As you know, 
short line railroads are not, in practice, required to install 
PTC. However, the PTC mandate, due to the integrated network of 
North American rail operations, joint facility matters 
including track rights interchange and reciprocal switching, 
blur the line of the short line exemption.
    In addition, short line operations and routes that are 
shared with passenger and/or commuter services will also 
require short lines to come on stream with PTC-equipped 
locomotives.
    PTC will be costly. Looking just at Anacostia Rail 
Holdings, the company I work for, we own or lease 36 
locomotives on the 4 railroads that will require PTC. Twenty-
seven will need to be equipped. The estimated cost is currently 
estimated at $2.2 million. This cost includes both equipping 
eight units with an Amtrak-compatible system, as well as 19 
units to be equipped with a GPS-based nationwide system.
    This cost equals about 92 percent of the combined annual 
capital expenditure budget, literally. We must reallocate our 
dollars for installation of PTC in lieu of almost all other 
infrastructure and equipment improvements. Ultimately, we would 
end up with PTC-equipped locomotives, but a less safe railroad 
network to run them on.
    I have worked in the railroad industry my entire adult 
life, and understand that even a single injury or fatality is 
something to be avoided. But surely it is reasonable for public 
policymakers to balance the need for action and the cost of 
that action. PTC will be an enormous financial burden on our 
small businesses with very little impact on the safety of our 
railroad operations. Indeed, it is likely to have an adverse 
impact on our short line safety. Implementing the PTC mandate 
will take millions of dollars away from short line track and 
bridge rehabilitation that does more to improve railroad safety 
than any other expenditure we can make.
    Short line railroads tend to serve light-density customers 
with a cost benefit ratio of adding new services, often a very 
close call. One of the key factors in making that call is the 
cost of installing and/or maintaining the so-called switch into 
the customer's facility. This is the equivalent of connecting a 
house to the electrical grid. In this case, the electrical 
meter has become the controversial and needed switch to connect 
the potential shipper to the network.
    Future switch installation costs will be much higher in PTC 
territory. This added cost could drive potential customers away 
from rail by changing their tipping point. Where will the 
traffic go then? It will end up on our already overcrowded 
highway system.
    PTC will impact all new shippers and receivers, large and 
small, to the extent that it will drive traffic from rail to 
truck, it will increase the truck traffic and the highway 
congestion associated with that traffic.
    I know that the PTC mandate will remain. I am not here to 
suggest that New York and Atlantic be exempt from that mandate. 
We operate in a highly dense passenger corridor, and we want to 
do so safely, and want to utilize every available tool to do 
so. We understand the valuable of PTC. One, it is prudently 
developed and installed. I am suggesting that the Federal 
Government has imposed an enormously expensive mandate that 
cannot be afforded by most short lines, and will dramatically 
reduce the short line's ability to invest in other more 
directly beneficial safety improvements.
    Presumably, the government believes this mandate is in the 
public interest. And, if that is the case, I would hope that 
the government will provide public monies to help pay for the 
cost.
    I appreciate the opportunity to present these thoughts, and 
will welcome any questions. Thank you.
    Mr. Shuster. Thank you, Mr. Victor.
    And now, Mr. Dennis Pierce.
    Mr. Pierce. Good morning, Chairman Shuster, Ranking Member 
Brown, and other committee members. My name is Dennis Pierce, I 
am national president of the Brotherhood of Locomotive 
Engineers and Trainmen organization. I am also president of the 
Teamsters Rail Conference. I appreciate the opportunity to 
address the subcommittee today on behalf of the BLET and the 
Teamster Rail Conference, and with the endorsements of the 
Brotherhood of Railroad Signalmen and the United Transportation 
Union.
    The Rail Safety Improvement Act of 2008 was a 
comprehensive, wide-ranging, far-reaching piece of legislation, 
and it was the first rail safety act in 14 years. When Congress 
felt compelled to act in the aftermath of the Chatsworth 
tragedy, stakeholders were still fine-tuning the bill. BLET, 
UTU, and AAR were still discussing adjustments to the hours of 
service, but none of those adjustments were adopted. Thus, the 
bill that Congress passed contains some flaws that have since 
come to light.
    FRA was given a massive but imperfect bill that included an 
extraordinary number of statutory mandates with short 
deadlines. The agency's resources and personnel were not 
increased sufficiently to fulfill the tasks that were assigned. 
The Railroad Safety Advisory Committee, which has shepherded 
nearly every significant safety rulemaking for the past 15 
years has been working non-stop for almost 2\1/2\ years 
handling RSI mandates. So we do disagree with the criticism of 
how FRA has handled PTC implementation.
    I understand the industry and FRA appear to have settled 
their dispute over the 2008 baseline and in-cab display screen 
aspects of the PTC final rule. So there is no need for me to 
address those issues at this time, except to remind the 
subcommittee that the NTSB supported the baseline language.
    I do also want to address the industry's complaints about 
PTC cost. We have repeatedly appeared before Congress 
concerning the dangers of non-signaled dark territory and 
inexpensive technologies like switch position detectors that 
are readily available to address the risk. Because Congress 
didn't order it, the railroads chose not to widely install it. 
And that choice is one factor that led us to PTC.
    Over the past 19 years, some 70 BLET members were killed in 
the line of duty. And PTC could have prevented nearly 50 of 
those deaths. To me there is no such thing as Federal 
regulatory overreach when it comes to returning our members 
safely to their families. It is appalling to me that profits 
would be placed ahead of our members' lives.
    While I am here I also want to talk about the hot-button 
issue for operating crews, and that is hours of service. 
Tremendous work has been done building a scientific foundation 
for the passenger and commuter rail hours of service 
regulations. But this service, because it is scheduled, the 
studies showed there is significantly less risk of fatigue and 
the regulations will be less strict, less costly, and more 
effective than the laws governing freight operations. Similar 
studies have shown a much lower risk of fatigue on scheduled 
freight service as well, and a number of waivers have been 
granted by FRA for relief from the 6-days-worked/48-hours-off 
provision of the law, so long as no overnight hours are worked. 
We are drafting technical corrections for you to consider, and 
one will be to make scheduled freight assignments subject to 
the passenger/commuter rail regulations.
    Most importantly, the law is not combating fatigue to the 
degree Congress intended in unscheduled freight service. Train 
line-ups are as unreliable as ever, and we believe it is time 
to move to a 10-hour call.
    Further, the AAR agreed with us and the UTU 2\1/2\ years 
ago, that 8 hours off duty was sufficient at the away-from-home 
terminal, and it is time to put that understanding in the law.
    Finally, because it is not based on science, the 6-days-
worked/48-hours-off provision is not mitigating fatigue in 
unscheduled railroad service. The law allows the railroads to 
create a situation where employees who are truly fatigued do 
not qualify for 48 hours off. Conversely, the application of 
the law requires others who are not fatigued to take 48 hours 
off.
    All of these subjects will be addressed in our technical 
corrections that we will be submitting soon. Thank you, 
Chairman. Thank you, Ms. Brown. I will be happy to answer any 
questions the subcommittee may have.
    Mr. Shuster. Thank you, Mr. Pierce. I appreciate that. Now 
we will go to our questions. I am going to start. I am going to 
probably do two rounds, because I have got a number of 
questions. So I will take 5 minutes and then yield to the 
ranking member and the other members.
    The first question I have to the FRA is, what is plan B? I 
mean if we cannot meet this--if the cost is a tremendous 
burden--and I am going to ask you a question about the abeyance 
that--the court challenge. But are you going through a process 
to figure out what plan B is?
    Ms. Strang. Yes. While we cannot get into the specifics, 
because the court case is only in abeyance and it has not been 
dismissed, we plan on issuing two notices of proposed 
rulemaking.
    The first notice would revisit the issue of the two tests 
that were not required by Congress. So it would essentially 
take out the residual risk analysis and the other analysis so 
that those burdens would not necessarily be placed on the 
industry. But we would want to get the advice and comments of 
the public, and make sure that the public agrees that those 
are, you know, wise choices to make.
    Mr. Shuster. And it would be--the court challenge, the 
abeyance, my understanding--I think there is four issues. I 
just want to read off the four issues. My understanding of what 
the abeyance says--and tell me if I understand it correctly--
that it addresses the new proposed rules during the abeyance, 
and the 2008 to the 2015 PTC baseline map issue, de minimis or 
limited train operations, switch movements on main lines in 
rail yards and on non-PTC-equipped locomotives, and failures of 
the PTC-equipped locomotives en route. Those four things that--
--
    Ms. Strang. Right. Essentially, there are two notices. The 
first notice would look at the routing issue, and the second 
notice would deal with the other items that are not part of the 
litigation. But we expect that we will receive a petition for 
rulemaking from the AAR that will outline all of their issues 
that they would like us to reconsider.
    Mr. Shuster. When you say the ``routing,'' is that the map?
    Ms. Strang. That would essentially be the route map issue, 
yes.
    Mr. Shuster. OK. And again, the President stands up almost 
weekly now and says that we are going to reduce regulations. I 
talked with Mr. Szabo a couple weeks ago. And the question I 
have to across the Administration is, do you guys get that 
message?
    I mean, do you hear what he is saying? Because, again, it 
is all across the Administration that the President stands up 
one day, and then you get the Secretary of Transportation, FRA, 
you got other agencies, EPA, coming with new rules and 
regulations that are, you know, a tremendous burden on business 
and, in this case, do not have the cost benefit analysis and, I 
might add--and I am going to go through a line of questioning 
later--that is going to take away from and possibly make it 
less safe out there, because we are not spending the money on 
various things.
    So, again, has it been clear, the message coming from the 
President, to Secretary LaHood and Mr. Szabo?
    Ms. Strang. Yes. In fact, we had a public meeting March 
14th, where the AAR and other organizations presented us with 
views on how we should do a retrospective look-back into all of 
the regulations, and they presented a list of regulations that 
they would like us to revisit.
    Mr. Shuster. OK. Thank you. They did not start the clock, 
so I do not know if I violated the 5-minute rule. So with that 
I will yield to the ranking member, and I am going to come 
around for a second round of questions.
    Ms. Brown. Thank you, thank you. Before I get started with 
my questions, I have a little housekeeping that I need to get 
in order.
    Norfolk Southern, I have a question to you. It is 
pertaining to Carolina, the intercity passenger rail. There are 
some problems, or some rumors, which--I do not like rumors--
that you all are holding up the agreement for North Carolina 
because of Illinois. And I want to know--I want a win with this 
intercity passenger rail, and I want to know when you all are 
going to sign it. But the FRA administrator agreed to have a 
meeting yesterday in Illinois. It was canceled. I was told that 
by the end of yesterday that I would get a call, letting me 
know when it is going to be rescheduled.
    I know most of you all do not know what I am talking about, 
but those two do know. And can you all answer my questions?
    Mr. Manion. Congresswoman Brown, I would be pleased to. 
First of all, as far as the canceling of that meeting, I do not 
believe we had anything to do with that. We are ready, willing, 
and able to discuss the project in North Carolina. It has got a 
lot of good public benefit to it. The project in Illinois, 
specifically at Englewood, outside of Chicago, has got a lot of 
benefit to it, from a public standpoint and from a rail 
standpoint----
    Ms. Brown. And I toured it. I know exactly what you are 
talking about.
    Mr. Manion. Absolutely. And so we are ready to negotiate, 
and we would like to conclude both of those deals, both of 
those projects, and we will be present at the next meeting, as 
scheduled.
    Ms. Brown. Thank you. I need a win. Yes, ma'am?
    Ms. Strang. I am sorry, I am not authorized to----
    Ms. Brown. Can you take a message back?
    Ms. Strang. I absolutely will.
    Ms. Brown. All right, all right. I want an answer today. I 
was told that I would get the answer by yesterday when the 
meeting was going to be rescheduled. I need that answer today. 
And my flight leaves at 8:00, so that gives you all day long. 
From FRA--you all are the ones that are supposedly scheduling 
the meeting. You understand what I am saying.
    Ms. Strang. Yes, I do.
    Ms. Brown. And no one is confused. Let me go on to the 
questioning.
    Ms. Strang. Sure.
    [Following are supplementary remarks submitted by Ms. 
Strang after the hearing:]

        FRA worked collaboratively with the North Carolina 
        Department of Transportation, the North Carolina 
        Railroad, and Amtrak to develop an agreement with the 
        Norfolk Southern Railway (NS) facilitating the 
        construction of improvements on the Piedmont corridor 
        between Raleigh and Charlotte, supported by $520 
        million in funds from the American Reinvestment and 
        Recovery Act of 2009. This process concluded on March 
        21, 2011, after months of negotiation to reach an 
        agreement that protected both the passenger rail 
        investments and preserved the capacity for freight 
        operations on the corridor. FRA continues to work with 
        NS and the State of Illinois to develop a similar 
        agreement to facilitate a $133 million project in 
        Chicago to construct a railroad-to-railroad overpass 
        between Metra commuter tracks and the shared NS and 
        Amtrak corridor.

    Ms. Brown. I guess I am going to start with--I am concerned 
about the loan program, and why is it that we authorize it, we 
funded it, you have awarded funds--this is FRA--but no one has 
received any of those funds, and there are programs that need 
the funds so they can implement the safety controls on those 
particular lines.
    Ms. Strang. For the RRIF loan program?
    Ms. Brown. No, ma'am, not the RRIF loan.
    Ms. Strang. Oh, the technology----
    Ms. Brown. The grants.
    Ms. Strang. OK.
    Ms. Brown. Yes.
    Ms. Strang. We have awarded the $50 million in technology 
grants that we had for 2010. We do not have a future grant 
program envisioned for 2011. It was rescinded in the House 
version of the appropriations. We do have a request for it in 
our 2012 budget request.
    Ms. Brown. I understand. But no one has received any of the 
funds.
    Ms. Strang. The money has all been obligated.
    Ms. Brown. It has been obligated?
    Ms. Strang. Yes, it has. And, in fact, several of the grant 
recipients are here.
    Ms. Brown. Right, but they have not gotten the money. It is 
just like the money is in the bank, but it----
    Ms. Strang. It has been obligated. So I can try to find out 
where the hold-up is.
    Ms. Brown. Yes.
    Ms. Strang. I do know that some of the grant recipients 
have received their funds. But I will check and make sure that 
I get back to you.
    Ms. Brown. And let us be clear. Because the House passed 
something does not mean that the Senate is going to take it up, 
or the President. But it does not mean that the President is 
going to sign it.
    Ms. Strang. I understand.
    [Following are supplementary remarks submitted by Ms. 
Strang after the hearing:]

        Of the $50 million that FRA received in fiscal year 
        2010 for railroad safety technology grants, FRA has 
        obligated approximately $49.3 million to date. 
        Approximately $87,000 was not awarded. All FRA grants 
        are awarded on a reimbursable basis. This means that 
        once FRA has obligated funds for the grantee, the 
        grantee has the ability to spend against those funds 
        immediately. It is the responsibility of the grantee to 
        submit evidence to FRA of its spending (i.e., invoices) 
        for review. Once FRA determines that the costs are 
        appropriate and in line with the grant agreement, FRA 
        will approve the funding, and the accounting system 
        will issue an electronic payment directly into the 
        grantee's specified account.

    Ms. Brown. All right. And I want another round, because I 
did not get a chance to ask my questions. Thank you.
    Mr. Shuster. We will definitely give you another round.
    Ms. Brown. All right.
    Mr. Shuster. And I will tack on that 30 seconds you saved.
    [Laughter.]
    Mr. Shuster. No one on my side. So, Mrs. Napolitano?
    Mrs. Napolitano. Thank you, Mr. Chairman, and thank you 
both for your tireless efforts on the Rail Safety Improvement 
Act.
    Critical in my district. We have 160 trains a day going 
through my district now, and 14,000 containers going through 
my--many of them carrying hazardous material. And they 
transport $400 billion of trade through the rest of the Nation. 
So, to me, it is critical, because it is going to increase. And 
I will have 1 train every 10 minutes going through my whole 
district. So you understand why I have great interest in the 
safety aspect of this.
    The Rail Safety Act did not solve my State regulatory 
issues, but that is another issue for another time. But the 
views and estimates drafted by the Majority, as has been 
pointed out, were approved by this committee yesterday, but 
opposed the proposed increase in funding and staffing for FRA 
included in the President's budget. What impact would this have 
on the safety program?
    And then the second question to the Administration is, can 
FRA shift personnel to accomplish if the cuts remain?
    Ms. Strang. I am sorry, ma'am, I am not sure I understand 
your question. Is the question about our 2012 budget request?
    Mrs. Napolitano. No, this is about----
    Ms. Strang. 2011?
    Mrs. Napolitano [continuing]. Estimates drafted. We 
approved, this committee approved cuts to the specific area of 
assistance that we have been talking about, the----
    Ms. Strang. Right.
    Mrs. Napolitano. And also the 2010 leftover will also be 
removed.
    Ms. Strang. OK. The 2010 grant program has been fully 
obligated, so there is no leftover to be removed.
    On the 2011 request for the grant program, FRA will not 
have a negative consequence of the grant program being removed, 
in terms of our personnel. If our funding level remains 
adequate so that we can continue to support the development of 
positive train control, which is a resource-intensive effort--
it requires a lot of technical expertise and the ability to 
test and certify the positive train control systems, so that we 
know that they are safe.
    Mrs. Napolitano. Well, we can go to that later. But there 
is another question that I have for some of the railroad folks. 
And I looked at the charts that Mr. Gallegly earlier, in regard 
to the use of texting, et cetera.
    But in California, if I remember correctly, several years 
ago I got into the issue with the California Public Utilities 
Commission that they were not being given the report on 
accidents in the yard. So, in other words, it was only 
accidents that were outside of the yard, the locomotive yards. 
And to me, that would skew the number of accidents, because 
those accidents are also reportable, or should be reportable, 
to be able to have a better feeling as to where we can begin to 
work with the Administration and the railroads in addressing 
those issues.
    Mr. Manion. Congresswoman Napolitano, I presume you are 
referring to accidents that are caused by some kind of 
electronic cell phone usage, or something like that?
    Mrs. Napolitano. No, no, no. I am talking about any 
accidents, any accidents within the rail yard. The California 
Public Utilities Commission, up to a couple years ago, had no 
idea how many of them were in the yard, whether it is human 
error, infrastructure, whatever.
    Mr. Manion. Yes. We report according to the dollar 
threshold of the accident.
    Now, the fact of the matter is that, just by the nature of 
it, accidents within yards are frequently less expensive than 
accidents out on the main line. But we report equally, whether 
it is a yard accident or whether it is a main line accident. We 
report those to the FRA, according to the threshold.
    Mrs. Napolitano. Do you report those to the State entities, 
also?
    Mr. Manion. That is correct. Where we are required to do 
so, we would----
    Mrs. Napolitano. As of when, sir?
    Mr. Manion. Pardon me?
    Mrs. Napolitano. As of when? Has it been a standing order, 
regulation?
    Mr. Manion. This is--there has been--as far as our 
reporting procedures go, I am not familiar with any change.
    Mrs. Napolitano. I would like to ask Mr. Pierce if he has 
any comment on this.
    Mr. Pierce. On the reporting itself, or----
    Mrs. Napolitano. Yes, sir.
    Mr. Pierce. As far as we know, the reporting are dollar 
threshold-based, and they are equal on the main line and in the 
yard----
    Mrs. Napolitano. Mr. Hamberger?
    Mr. Hamberger. I would just offer that whatever is reported 
to the FRA is public. So there is no hiding the ball here. I do 
not know what the requirement is in California. And Mr. Manion 
here operates out of Norfolk, Virginia. So--but whatever is 
reported to the FRA is public, and I am sure is----
    Mrs. Napolitano. Thank you, Mr. Chair. I would go a second 
round, please.
    Mr. Shuster. Thank you. The gentleman from New Jersey, Mr. 
Sires.
    Mr. Sires. Thank you, Mr. Chairman, and welcome. You know, 
I represent a district that has a lot of lines and a lot of 
everything, trucks--so I am a big proponent of putting a lot of 
the merchandise on rail, so we can get the trucks off the road. 
And I have been a proponent for many years.
    And I am very interested in the safety, especially when it 
comes to commuter rail. You know, we have had a number of 
accidents in my district. And I was just wondering, Mr. Manion, 
and you made a statement before that this has been the safest 
year on record, in terms of rail. Can you give me a--what do 
you give that credit to? What do you attribute it to?
    Mr. Manion. You know, I credit it to a number of things. 
One is we have--the rail industry in general has a relentless 
pursuit of reducing injuries and reducing accidents. And it is 
something that is ingrained in the culture of the industry. So, 
from the standpoint of training and education with our 
employees, that is where we spend a tremendous amount of time.
    And then, in addition to that, there is a lot of emphasis 
placed on improved technology, which also helps with regard to 
reducing accidents and injuries.
    Mr. Sires. Has that suffered because of the downturn in the 
economy? You know, have you made any cutbacks or anything on 
that, you know----
    Mr. Manion. With respect to 2010, we thankfully saw some 
very nice improved volumes. And 2010's performance was the 
result of just continued emphasis on reducing accidents and 
injuries.
    Mr. Sires. Can somebody tell me if PTC is used in other 
countries? You know, how effective is it in other countries?
    Mr. Victor. Yes, I can. It has been in effect in Panama 
since about 2005. And in 2007, representatives of the FRA went 
to Panama to take a look at that system. That is the only one 
that is PTC-based.
    Mr. Sires. I rode the AVE Train in Spain from Madrid to 
Barcelona. And they told me they had these monitors on--they 
actually took us to the cockpit, and they actually had these 
monitors on the rail, in the middle, which works with the 
computer, I guess, in the cockpit. And if a train is coming 
toward the train, it automatically slows this train down. Is 
that what--you know, the technology, is that something similar?
    Mr. Victor. It would be similar. That is a transponder-
based technology. The one in Panama is GPS-based.
    Mr. Sires. There are sensors in the track.
    Mr. Victor. Yes. The transponder one is track-based. The 
one in Panama is GPS-based. Together with track sensors, a 
critical--parts.
    Mr. Sires. OK. Mr. Manion?
    Mr. Manion. Congressman Sires, if I might add to that, in 
Europe, as you say, they do use technology that involves 
transponders. Specifically it is something that they refer to 
as close-gap wireless communications. And in their environment, 
where the shorter, lighter, faster, shorter distance trains--
that is the technology that works for them.
    When we are looking at employing PTC on thousands of miles, 
perhaps as much as 75,000 miles of tracks, that is not feasible 
to use that same type of technology. It is not going to work in 
the U.S. environment. One of the primary reasons it is not 
going to work is because you have got all of these individual 
little components scattered through your railroad track. And 
anything that goes through there, including our maintenance 
gangs, our production work, are going to damage those 
components, those transponders, and all those pieces of 
equipment that are scattered out along the railroad track.
    So, in our case, what we are having to do--and this is one 
of the big challenges for employing PTC throughout the U.S.--we 
have to use wireless communication instead of transponders. 
Employing wireless communication over the size network we have 
got, and doing it in an interoperable way, where railroads have 
to be able to communicate with other railroads, where we have 
to be able to communicate with not only our own dispatching 
centers, but other railroads' dispatching centers, that type of 
widespread wireless communication has never been accomplished 
in this country or successfully in Europe. So this is one of 
the big challenges we have.
    Mr. Sires. Thank you very much. I also want to thank you--
without a question, without a complaint, you respond pretty 
good. Thank you.
    Mr. Shuster. Sorry about that. I am having a rough day. I 
got a cold, if nobody has noticed, so--but I bumped the gavel, 
I did not gavel you down.
    My question is--we will go to the second round of 
questions, it sounds like everybody wants a second crack.
    Ms. Brown. A third----
    Mr. Shuster. We may get that, too, Ms. Brown.
    To the extent that the mandate to implement PTC--how has 
that diverted--and this is to Mr. Manion, Mr. Giulietti, and 
Mr. Victor--has it diverted you away from other safety 
technologies that could be implemented that we could see a cost 
benefit that is going to save--because the focus here is we 
certainly want to be as safe as possible. But if we are 
mandating $13 billion, what is it going to take away from? And 
can you be specific about that in--start with you Mr. Manion.
    Mr. Manion. Well, when we are looking at $13-give-or-take 
billion, we feel like we could spend less money more wisely in 
other ways. And the fact is there are a--there is a myriad of 
technologies out there that we would like to continue to 
pursue, or further develop. You saw evidence of some of this on 
the video that we looked at with TTCI.
    There are things we can do on the rail car side, for 
example, as far as improving design of rail equipment, 
specifically tank cars. There is all sorts of detector 
technologies, detectors, for example, that find problems with 
rail wheels, problems with the axels, problems with the trucks 
that are centered under the cars. There is all kinds of track-
related issues that we have to work on. And we have testing 
equipment, we have geometry cars. We do all those things. But 
we can intensify those efforts with more spending.
    One of the really significant areas that the railroad 
industry has is finding flaws in rail before they become 
accidents or incidents. Rail, broken rails, are a significant 
thing, and have been for years. And we do all sorts of testing 
in order to find problems before they occur. But we need more 
development. We need to put more into rail testing, in order to 
get further ahead of that.
    And the fact of the matter is, Congressman Shuster, if you 
take these issues that involve track-related accidents, and 
issues that involve car, rail car-related accidents, all that 
comprises 60 percent of the accidents we have; 60 percent are 
related to those 2 things. That is where we would like to focus 
the dollars we spend. As troublesome and problematic as the 
PTC-related accidents can be, they only represent 4 percent of 
the accidents that take place.
    Mr. Shuster. So you can save lives and damage to----
    Mr. Manion. That is correct. The fact is those 60 percent 
of accidents, they result in a lot of damage and injury and 
worse.
    Mr. Shuster. Mr. Giulietti?
    Mr. Giulietti. Thank you, Chairman. I would like to answer 
it in two ways. One, because of the fact of the funding and the 
situation that we are in, waiting for an extension, several of 
our properties have had to lock down their capital budgets and 
change what was already in capital programs to go forward.
    Some quick examples, Northern Indiana, who was supposed to 
go into changing out their base rail to 100-pound rail, they 
have got 25 miles they cannot go ahead with. Metro North cannot 
do a change shed, they are looking at renovations of their 
electrical substations that cannot be done if they have to go 
and dedicate the funds now. Long Island Railroad has tracks and 
bridge upgrades that were supposed to be done that are being 
deferred. We have the same thing going on with APTA, and their 
state of good repair.
    And for some of us, the situation and the request for the 
2018 extension is because they already have cab signals in 
place, and they have a safety network that is in place, where 
others of us are not in that same situation, and that is why we 
are all behind the PTC, but you can understand, in order to 
accomplish this, what has to be done or deferred in order to 
meet that.
    Mr. Shuster. Thank you. Mr. Victor?
    Mr. Victor. Within the short line world we have and stand 
together with our friends at APTA, where we operate over 
commuter lines. And, really, we are absolutely in a parallel 
universe. And our ability to pay, considering the size of our 
operations is equally difficult for us to contemplate, as I 
stated before, with 92 percent of our capital budget for PTC 
for a year.
    More broadly speaking, for the short line industry as a 
whole, it becomes equally burdensome, considering the density 
levels and sizes of our operations, typically, across the U.S. 
rail network. So we certainly have the same concerns and issues 
that the commuter agencies will have, as well as companies of 
our size trying to cope with this in lieu of more critical 
investments in equipment and infrastructure.
    Mr. Shuster. Thank you. My 5 minutes have expired, so I 
will yield to the----
    Ms. Brown. Thank you.
    Mr. Shuster. We are probably going to go a third round. I 
am pretty sure of----
    Ms. Brown. OK. I am going to start with Mr. Manion, but 
then I will go to Mr. Pierce. But this question is for the 
entire panel.
    There are hundreds of FRA-reported incidents on the major 
railroad lines since 2010, many of which were trains that 
passed stop signals. Any one of them could result in serious 
accidents. Now, when we had the accident in California and 
South Carolina, the House and the Senate both dealt with PTC. 
We pulled together a bill. All of you all came together and 
supported it. Now it seems like you have a change in heart.
    What would you do differently, or what would you do 
equally, that would protect the passengers, workers, and the 
public from human failures? What would you do? Because you all 
had the opportunity to come to the table prior to us passing 
the bill. We passed this bill with your support, and now, you 
know just like everything else, you know, we want to change.
    Mr. Manion. Well, Congresswoman Brown, you know, we equally 
are concerned about the devastating accidents that can happen 
as a result of passing red signals. And as I stated in my 
opening comments, our position is that we are not opposed to 
PTC with respect to our lines that have got passenger train----
    Ms. Brown. You are talking about the technology, though. 
You said that the technology is not there, and there are other 
things that you could do, other technology----
    Mr. Manion. That is right, that is right. And a couple of 
those----
    Ms. Brown. That would be equal to?
    Mr. Manion. Yes. A couple of those things are this. We can 
operate in a manner where we provide what we will call temporal 
separation, where we keep a safety buffer zone ahead of and 
behind the passenger trains being operated. And, in fact, on 
Norfolk Southern we employ some of that now, where we have what 
we call--separated by signals, we keep a full block ahead and a 
full block behind passenger trains on some of our lines, not 
all of our lines.
    In addition to that, the other technologies that I was 
speaking to earlier with regard to approving technology, as far 
as the railroad track itself and the rail, and the technologies 
that detect problems with the equipment, those are some of the 
most significant things we can do to prevent accidents.
    So, the reality of it is those accidents caused by going by 
red signals are a smaller portion of the accidents taking 
place. And while we want to work on those also, we want to work 
on the 60 percent piece that are the bigger part of the 
accidents taking place. And if I may, just very quickly, we 
work very hard on reducing the number of incidents that take 
place where trains go by a red signal. That is through 
education. That is training. That is getting our people to 
focus and be alert.
    And I can say--and I say this with some pride--speaking for 
Norfolk Southern, because I am obviously most familiar with our 
statistics, we have dramatically reduced those number of 
incidents. Over the last 4 years we reduced our incidents by 
about one-half. And we were the industry leader at that point. 
So we take it extremely seriously. Thank you for your question.
    Ms. Brown. Mr. Pierce?
    Mr. Pierce. [No response.]
    Ms. Brown. Did you get the question?
    Mr. Pierce. I am not sure which part of it you are pointing 
at me.
    Ms. Brown. Do you think that other things, other than the--
that can be implemented, other than the PTC, that would have 
safety equivalent?
    Mr. Pierce. OK. There are open switchpoint technologies 
available in non-signaled dark territory that we have been 
advocating for years. The accident at Graniteville would have 
been avoided with such technology.
    When it comes to the actual violations, we are equally 
concerned whenever a violation occurs. As you said, any time an 
authority or red signal violation occurs, it is that close to 
an accident. Remedial training, when it gets into operator 
error or involvement of the employees, we advocate for that. 
But many times the employee is just terminated, and a new 
employee is hired. So there is no learning experience from the 
event.
    So there are steps that we would like to take to try to 
make improvements in those safety numbers. But PTC is the one 
that would prevent people from leaving their authority and 
having these accidents, in our opinion.
    Ms. Brown. So, when you try to negotiate or discuss some of 
those things that the workers would recommend, what happens?
    Mr. Pierce. It varies, railroad by railroad, as to how 
those are greeted. Each railroad handles that side of it 
differently.
    Ms. Brown. Mr. Hamberger, aren't you the center of the 
railroad?
    [Laughter.]
    Mr. Hamberger. I happen to be sitting at the center of the 
desk here, but I would not call myself the center of the 
railroad. I am not quite sure what you are----
    Ms. Brown. Well, I am trying to say what can we do, working 
together, all stakeholders, we all--I hope all of the goals are 
the same.
    Mr. Hamberger. Yes, ma'am. Yes. I would like to correct a 
misimpression that I think you may have. We are not here asking 
for changes in the regulation--in the statute. We are here 
talking about the lawsuit that we filed, and that has now been 
held in abeyance because of the agreement for new regulations 
with the FRA. We believe that the FRA went beyond the statute, 
and that was our concern.
    We are also drawing attention here today, as you take a 
look at new legislation, that you might want to take a look at 
not just PTC-preventable accidents, but when you look at the 
entire risk profile, using an accidental release of a TIH tank 
car, for example, there are other ways that you can reduce that 
risk profile in a much more predictable way, and a much safer 
way, and reduce that profile more than you can with PTC.
    And that is what we are just drawing to your attention 
today. It is something you might want to take a look at, as you 
take a look at this new bill. Should we take a look at not just 
PTC, but instead of that, take a look at how we can reduce the 
risk of an accidental release from a TIH tank car, and take a 
look at the whole panoply of technologies that are out there, 
and not mandate just--say it has to be PTC.
    Mr. Shuster. Go ahead.
    Ms. Brown. Just 30 more seconds. What I am saying--I hear 
what you are saying, but are you hearing what I am saying? 
Because when you all discuss it, then all of the players should 
be in the room. Because I think the workers can give you some 
recommendations that it would be equivalent, it would be safety 
across the board. And I think it makes sense.
    I want the railroads to make money. But, most important, I 
want it to be safe for our communities.
    Mr. Shuster. Mr. Manion, go ahead----
    Mr. Manion. Congresswoman Brown, I would just add that one 
of the great things about this is that we work closely with our 
employees in the BLE and the UTU, our conductors and our 
locomotive engineers.
    One case in point, not to drag it out, we have what is 
called stop signal committees. And they are all over the 
railroad. And this is management and the labor organizations 
working together in order to find ways to reduce the number of 
accidents that result from violating those stop signals. It is 
very much a team effort.
    Mr. Shuster. Thank you, Mr. Manion.
    Ms. Brown. Thank you.
    Mr. Shuster. We are going to do a third round, I think----
    Ms. Brown. OK, thank you.
    Mr. Shuster [continuing]. I have a couple more questions. 
Mrs. Napolitano?
    Mrs. Napolitano. Thank you, Mr. Chairman. And I am glad to 
hear that, because I know a few years ago in the hearing with 
state senators and the assembly and myself, it was indicated to 
us that the training given employees was a CD and a booklet. 
And hopefully things have changed since then. And I am hoping 
that this is--translates to a better safety process within the 
industry.
    Chairman Young was in the office recently, and I need to 
thank them, because they have invested in a lot of 
infrastructure in the Alameda Corridor east, which was long 
overdue, since it is going to have an increase in traffic to 
bring those goods to the rest of the Nation. The new rails, the 
long, long, long, long rail and the new cross ties apparently 
made quite a bit of difference. However, there is not enough 
being invested by railroads in the great separation cost.
    And that, to me, is a great issue, because this would help 
the on-time delivery to the rest of the Nation. I am hoping 
that we begin to look at how do we increase that participation, 
not just 3 percent, but hopefully more than that, and the other 
2 percent in kind. That would be helpful, especially since the 
Class I railroads had been able to garner $12.1 billion in 
revenues, and they are doing well. Hopefully they can invest 
some of that into the new system that we are talking about.
    There is a lot of issues that come to mind. The cracked 
wheel on your video was reminding me of the hairline crack in 
the joints with the epoxy that caused a derailment in my city 
of Whittier a few years back. And that, I believe, went to a 
safer process of welding those rails, rather than just 
providing the epoxy.
    And to our young lady, Ms. Strang, yesterday the 
Administration's proposal of $223 million--this is on page 19 
of the cost estimates provided to this committee--$223 million 
for the FRA safety and operations, representing an increase of 
personnel to do all of the above of regional safety inspectors, 
headquarters, and regulatory safety staff, et cetera, et 
cetera. Committee strongly opposed out-of-control growth in 
government and bureaucracies and rejected the proposal. So you 
need to acquaint yourself that this is now part of what is 
being proposed for this current bill.
    So, to any of you, what can help us translate to our 
constituency--because that is who we need to protect--that the 
railroads are not just interested in making money, but are 
interested in providing safety processes, including worker 
safety of the employees? How do we translate that to telling 
our constituency? Go for it.
    Mr. Hamberger. Well, I am going to defer to Mr. Manion to 
go into a little bit more detail about the culture of this 
industry, and of his company. But you mentioned $12 billion, 
and let me correct you. That is not the revenue of the 
industry. That is the capital expenditure this industry is 
putting back into its infrastructure.
    Mrs. Napolitano. Oh, good.
    Mr. Hamberger. And that is almost--about 20 percent of 
every revenue dollar goes back into capital expenditures, 
another 20 percent back into maintenance. And I did not have a 
chance to answer Mr. Sires's question about why is the accident 
rate going down. The accident rate is going down in no small 
part because the rail is better, the engine--locomotives are 
better, the signaling systems are better. And that is because 
we have not been sitting on the sideline, but we have, in fact, 
been doing what the President has asked corporate America to 
do, get back in the game, creating American jobs, and that is 
what we have been doing.
    Mrs. Napolitano. Thank you for the correction. You are 
right. It was my fault, I misquoted it.
    And so, how--when was the last time you invested in such an 
amount?
    Mr. Hamberger. That is a record amount, as far as 
percentages. For the past decade it has been about 17 percent 
of all revenue back into CAPEX.
    Mrs. Napolitano. Good.
    Mr. Hamberger. About 20 percent back into maintenance. Last 
year, and in 2009, in the depths of the recession, the top 3 
years on record prior to 2011 were 2008, 2009, and 2010, in the 
middle of a recession.
    Mrs. Napolitano. And is there any estimate on how some of 
the investment of the $12.1 billion might be into the area of 
the--this process we are talking about?
    Mr. Hamberger. I have indeed had a chance to go through the 
announcements by the individual railroads. And the number that 
springs to mind is that $960 million of the 2011 capital 
expenditures would be for positive train control.
    Mrs. Napolitano. Thank you, sir. Thank you, Mr. Chairman.
    Mr. Shuster. Thank you. And just to clarify, is 17 
percent--what you have been averaging, you are almost 20 
percent this year--is that the highest of any industry? In the 
utilities we invest quite a bit of the revenue, but I do not 
think it is as high as yours. Is that accurate?
    Mr. Hamberger. That is our read, yes, sir.
    Mr. Shuster. The highest----
    Mr. Hamberger. It is five times higher than the average 
manufacturing industry----
    Mr. Shuster. Right.
    Mr. Hamberger [continuing]. In the country. Yes, sir.
    Mr. Shuster. Thank you. Other problems that I think we have 
talked a little bit about here today with PTC, one is the 
spectrum issue. It is my understanding that the Class I's have 
purchased a big chunk of spectrum already. Is that--you can 
answer that in just a second.
    But the spectrum--Mr. Giulietti, you can talk a little bit 
about that, but I want to also point out to you that this 
committee does not determine what is going to happen with the 
spectrum, it is the Energy and Commerce Committee. We would be 
happy to take that away from them, but I think Fred Upton might 
have something to say about that.
    But could you talk a little bit about the spectrum issue?
    And then the next thing I want to follow up with is the 
interoperability. What is happening there? What are the 
problems with--would you talk--I guess spectrum and 
interoperability probably go sort of hand in hand.
    But, Mr. Giulietti, why don't you start with the spectrum?
    Mr. Giulietti. The spectrum issue actually comes down to--
there is two concerns with it. One is that it is not readily 
available. There is many of our systems, particularly in the 
dense populated areas, that cannot get this spectrum. There 
is--some of our systems have had applications for over a year 
with the FCC, waiting for some spectrum.
    And we are also in a terrible position because--and that is 
why the request for the FCC--had they made available some of 
the spectrum that might be in the safety network, we would be 
able to go and move forward, particularly from a public 
purpose, because this, even though not put in from another 
committee, this is a safety mandate. And we truly wanted to 
push that message forward, that as a safety mandate, we would 
hope there would be support with the FCC to make access to the 
safety network and spectrum, so that we could all be there.
    In terms of the interoperability, a system like mine is 
going to be totally dependent on a freight railroad like CSX, 
and what they are able to procure, and to be able to make it 
work together. So that is why, when I say to you that we are 
hand in hand with this, though the freight railroads have had 
success in some areas, they also are dealing with the same 
issues of trying to get that spectrum, particularly in areas 
where the spectrum is already grabbed.
    Mr. Shuster. And are you working--is APTA working with the 
Energy and Commerce Committee? I do not know what your----
    Mr. Giulietti. The answer would be yes, we have our 
petitions in, and there is a letter that is already in.
    Mr. Shuster. Thank you. Mr. Manion, can you talk about that 
spectrum issue? And is it accurate, that Class I's have 
purchased a chunk and they have what they need?
    Mr. Manion. Congressman Shuster, yes, I would be glad to. 
The four Class I's, the four major Class I's, originally 
purchased spectrum, 220 megahertz spectrum, and it remains to 
be seen how much additional spectrum needs to be purchased. We 
are more than willing to share what we have. And we all 
recognize that, in the end, we all need--we need to have enough 
for everyone to operate, obviously those, in addition to the 
four Class I's.
    So, as we move along--and this is one of the things that 
makes it necessary that we really be guarded about the timeline 
it takes to get all this done. How much spectrum is really 
going to be needed? And then, from an interoperable standpoint, 
how do we develop all that is necessary? How do we make sure 
that we have got all our technology in order to ensure that the 
interoperability actually works?
    Mr. Shuster. Right.
    Mr. Manion. We have got some great plans and ideas, but 
this is something that has not been done. So it puts this very 
much in question, as far as the timeline goes.
    Mr. Shuster. So we were wrong in the cost, we do not know 
how much spectrum we need, and the interoperability, we are not 
sure if it is even going to work when we put it together?
    Mr. Manion. I could not state it better.
    Mr. Shuster. Mr. Victor, question for you on the cost. Has 
anybody done a study on what it would cost the short lines to 
implement this? And I know not all of them necessarily have to 
do it. But has there ever been a study who would have to do it, 
what kind of cost?
    You made a remark that was 92 percent of your capital 
investment would have to go toward PTC.
    Mr. Victor. Yes, 92 percent relates to the 4 roads in our 
group.
    Mr. Shuster. I am sorry, the what?
    Mr. Victor. Relates to the four railroads owned by 
Anacostia Rail Holdings in order to be PTC-compliant. And that 
estimate is based on two component parts: one, kind of the 
broader, freight-based system, which is GPS-based; and the 
other, to be compatible with the northeast corridor, since New 
York and Atlantic operates adjacent to what is northeast 
corridor territory. And we have a cost, really, for just arming 
locomotives. So in our cost is not the fixed network, it is 
just arming locomotives.
    Generally speaking, the figure outside of the northeast 
corridor is somewhere around $40,000 to $60,000 per unit. And, 
in addition, if you are going to install it on physical 
segments of short lines on top of that, you will have the cost 
associated with each physical point you would have to wire in. 
And by the time you get through, right now the CAPEX history of 
PTC expenditures for all short lines is roughly zero. I mean, 
in terms of cash out.
    But yet, the short lines, as an industry, across the board, 
excluding PTC, I just received a note that, industry wide, our 
CAPEX is running about 30 percent of gross revenue. So, we are 
heavily reinvesting in our properties, to make sure--and, 
again, getting back on focus, we have all the physical issues 
that have been discussed.
    But at the end of the day, going forward, in, really, in 
step with a lot of concerns is we need to go forward, but 
ultimately there has to be a source of funding to pay for it.
    Mr. Shuster. All right. Thank you. Ms. Brown?
    Ms. Brown. Thank you. Ms. Strang, you indicated earlier 
that we obligated all of the grant money program. Perhaps you 
need to go back and visit with the agency, because my 
understanding that only a half of it has been awarded, and no 
one has received the funds. And so we need an update.
    And I want to put it in the record, because I think this is 
very important. I mean we are talking--people are talking about 
calling money back, and we really need the money out in the 
fields, doing what we intended--for it to happen.
    Ms. Strang. Yes, ma'am. I will get back to you for the 
record.
    [The information follows:]

        De-obligation of the grant funds would have a 
        significant adverse impact on the resolution of known 
        technical issues that have already been identified. As 
        I indicated earlier, since the grant funds are only 
        actually paid out as reimbursements in response to 
        submitted invoices for grant work accomplished, there 
        will be funds that were awarded, but not actually 
        provided to the grantee. Loss of these funds would 
        automatically preclude completion of the grant tasks, 
        leaving critical technical issues unresolved. Since the 
        grant projects were specifically chosen to address PTC 
        technical issues shared by multiple railroads, the 
        failure to complete the grant projects will affect the 
        ability of multiple railroads to implement PTC in a 
        timely manner, as well as further increase the overall 
        PTC system implementation costs as individual railroads 
        undertake independent and duplicative efforts to 
        resolve the technical issues.

    Ms. Brown. OK. Let me move on. The RRIF loan program. 
Commuter railroads claim that--and this is probably with the 
RRIF loan program, I know that we had a hearing recently on 
it--and has any commuter or short line railroads approached FRA 
about applying for the loan program for the purpose of the PTC?
    Ms. Strang. Yes. We have had pre-application discussions 
with four railroads, with Canadian Pacific, with Denton County, 
and we had some discussions with New York Metropolitan Transit 
Authority. However, they have recently decided that they did 
not want to pursue a loan for PTC. They were going to pursue it 
for the East Side Access project.
    Ms. Brown. Can you give us a status of the retrofit of 
replacement camp cars?
    Ms. Strang. Yes. We have issued a notice of proposed 
rulemaking that covers all of the retrofit issues on camp cars, 
so--including addressing issues such as drinking water, 
showers, toilets, sleeping rooms, placement of the cars so that 
they are not in noisy environments or dangerous environments, 
where people could be exposed to hazardous materials releases 
or other such things.
    The comment period closed on March 4th, and we will be 
issuing a final rule as quickly as we can.
    Ms. Brown. Mr. Manion, do you want to respond to that? 
Because I think your railroad is the only one that still has 
camp cars.
    Mr. Manion. Congresswoman Brown, we still do have camp 
cars. In fact----
    Ms. Brown. And I understand the staff visited the very nice 
ones.
    [Laughter.]
    Mr. Manion. Well, and we appreciate you recognizing that. 
We have gone to a lot of expense to retrofit our camp cars. 
They have essentially all been rebuilt, with the exception of a 
handful. We have got almost 300 active units now, and where 
they were 8-person occupancy cars, they are now 4-person.
    And what we find is that our employees, for the most part--
and we even take surveys on this type of thing--our employees 
prefer to stay in the cars, because it takes--it cuts down on a 
lot of what they would otherwise be traveling long distances to 
get to hotels when they are out on the road, and out in the 
middle of nowhere in many cases. So they work very successfully 
for us. We do not use them exclusively, but we do use them to a 
large degree.
    Ms. Brown. OK. Mr. Pierce, do you want to respond to that?
    Mr. Pierce. I would probably have to defer to my 
maintenance brothers, but the version that I get from them 
would vary from Mr. Manion's comments slightly. And I am not 
sure they are that wild about the camp cars.
    Ms. Brown. OK. Mr. Giulietti, I heard yesterday from 
Metrolink and Metro about your testimony here. They are 
concerned that you are taking the position of delaying the PTC. 
You want to respond to that?
    Mr. Giulietti. Yes, I would. We have 27 commuter rail 
properties, and they are all in various stages of trying to 
implement as many of the safety networks available. What has 
happened is we sat down, as a commuter rail industry, and we 
have been talking this. And that is why I think you heard in my 
testimony that we are extremely supportive of the Metrolink, 
and would like to see any available Federal funds move there, 
because they are trying to not only meet the mandate, but to be 
more aggressive than that and get it in by 2012.
    We need them to be successful. Their success--because what 
we are afraid of is we do not want to be caught in a position 
of investing in unproved technology. We want them to prove that 
the technology will work. And that is why we are asking for a 
little bit of relief in time. We truly appreciate the position 
they are in. They are afraid that asking, as an industry, is 
going to take us out of the PTC request. As you have heard 
here, there is not a freight railroad or, for that matter, a 
public railroad that is asking for any relief from going 
forward with the PTC. It is a matter of trying to rationalize 
it and wait for the technology to get there.
    So, I would like to say that I understand their concern. We 
have listened to their concern. We are on the phone with them. 
We have tried to craft it out so that we are extremely 
supportive of them. But understand that we also have an 
industry issue, in that we cannot afford right now to make 
investments that might not go the right way.
    Ms. Brown. My understanding they have received a grant but 
just have not gotten it yet for safety, to implement the 
program.
    Mr. Giulietti. I am being advised that that was State 
money, it was not Federal money that they had gotten to go 
forward.
    Ms. Brown. OK.
    Mr. Giulietti. I do not know the answer, beyond that.
    Ms. Brown. OK. Well, thank you very much. I think this has 
been a great hearing.
    Mr. Shuster. I have a couple more questions. Mr. Pierce, I 
wanted to get your opinion on PTC, and what is BLET's position 
on PTC, and should we go forward, should we delay it? What are 
your thoughts?
    Mr. Pierce. Thank you, Chairman. We have been advocating 
some form of positive train control for decades. Technology 
that would save a life--we heard a very compelling testimony 
from the child of one of the decedents in the Chatsworth 
accident, and it kind of puts this whole thing into context for 
me, that any time you can save a life--and technology could do 
that--we have to advocate that we get the technology. So, 
sooner than later is what we have been asking for.
    I have actually ridden the ETMS technology on BNSF. I think 
it is a very good product. I think it will prevent what we have 
discussed earlier with the exceeding the authority red signal 
violations. And in doing so, I think it will dramatically make 
it almost avoidable, would be the good word, as far as 
collisions that we are out here actually trying to stop.
    So, we are in favor of it. I know that there are 
discussions with FRA and the carriers on the when and the how--
the how fast and who pays for it. We have been advocating it 
for years, and we are going to continue to.
    Mr. Shuster. Well, and I think everybody that sat here is 
not saying do not do it, they are saying let's do it in a 
reasonable way that we do not take away from other safety 
issues.
    Because, I mean, do you agree with what they had said about 
some of the safety in the rail--making sure that we are 
replacing rail, so it is not broken and cracked, and things 
like that? I mean, doesn't that have an impact on--a 
significant impact on safety, where you are concerned?
    Mr. Pierce. There are many aspects of the safety program, 
and it is obvious that it is all a finance issue. And I 
understand the prioritization of where they put the money. But 
at the same time, the dramatic outcome of the catastrophic 
event of a collision like Chatsworth I think kind of drives it 
toward having a higher priority, in our opinion.
    Mr. Shuster. Thank you. Question on a different subject--
well, I guess the same subject, but--the de minimis exception 
for TIH traffic. What does AAR believe is a meaningful 
exception on that? Ed--or Mr. Hamberger or Mr. Manion?
    Mr. Manion. Well, the de minimis exception is something 
that we would like to see put in place, and we have had 
conversations with FRA about that. And, you know, it will be 
good if we can get to the point where allowance is made so that 
the various portions of the railroad that have much lighter 
density of TIH traffic will be accepted from the PTC 
requirement.
    But the larger issue is that that still represents, even if 
we get those kind of exceptions, even if we get the change on 
the map to a more extended period of time, that still only 
reduces the amount of PTC and the amount of cost by a 
relatively small amount, 20 percent perhaps. So, in our 
estimation, there is a lot that needs to be done beyond that to 
take a more rational look at the scope of PTC that is put out.
    Mr. Hamberger. And to be fair, Mr. Chairman, the FRA did 
have a de minimis provision, both for passenger and for TIH--
they did not call it de minimis for passenger--limited 
operations. And there were some restrictions in the rule with 
respect to TIH that we have been talking with the FRA about, 
and we will be addressing that in our petition, which I am told 
will be ready in about 3 weeks.
    Mr. Shuster. Three weeks. Mr. Giulietti, I see you shaking 
your head. You want to comment on that exception? I know it is 
not----
    Mr. Giulietti. Several of the passenger systems met with 
the AAR and the freight railroads. We understand their position 
on this. We have been very supportive of it. We understand that 
there needed to be an upgrading of that map, so that it indeed 
took that into consideration.
    The focus has been on where the passenger systems are, and 
that is why I wanted to say that, yes, I can say that we are 
very supportive on that issue, because it does require--or it 
does put it in a position that they can focus on those areas 
where the passenger side of it is much more the pressing need.
    Mr. Shuster. All right. Thank you very much. And I would 
ask that Mr. Manion and Mr. Giulietti and Mr. Victor--that is a 
good Irish name, isn't it, Giulietti, it is fitting on Saint 
Patrick's Day----
    Mr. Giulietti. My mother's name is Moran. I would have worn 
a green tie, but you know----
    Mr. Shuster. I would ask that the three representing--Mr. 
Manion, Mr. Giulietti, and Mr. Victor, if you could, supply to 
the committee a detailed safety implementation--things that you 
are--that you believe would add safety to the railroad, to your 
operations. As we talked a little bit about before, the more 
detail I get, the more specifics--I prefer to have specifics, 
because you know, talking about broad safety issues does not 
usually cut it around here.
    The other thing is safety projects that are being delayed 
because of PTC. You know, not something that 5 years ago you 
delayed, but something that you specifically said, ``Look, we 
are not going forward with this, because we have got to put 
money in the bank to make sure we are prepared, as we move 
forward,'' I would appreciate if you could, in the next week or 
so, provide that to the committee.
    And, Ms. Strang, I would urge you to listen to what the 
President is saying. We are going to reduce regulation, 
regulation that is--does not have a cost benefit, that is 
stopping companies--railroads, in this case--from spending 
money on things that would have an impact on safety and moving 
forward. I would encourage you to heed the President's word. 
Every time he says it, I perk up and listen to him. And then I 
wait for another regulatory agency to come forward with some 
type of regulation that is going to cost money and jobs and 
stop this economy from moving forward.
    And, Ms. Strang, I will give you the final word if you want 
to respond to me.
    Ms. Strang. I would be delighted to. We are very committed 
to reviewing our regulations and being consistent with the 
President's Executive order. We have had very good discussions 
with the AAR, and believe that we can find a way forward that 
is acceptable, both to the public and to the railroads, and is 
consistent with safety.
    So, we will be working hard on our notices of proposed 
rulemaking and awaiting a petition.
    Mr. Shuster. I would just like you remind you that Mr. 
Sunstein made this the poster child----
    Ms. Strang. We are very well aware.
    [Laughter.]
    Mr. Shuster. OK. Just wanted to remind you. All right. 
Again, I thank everybody for coming today and participating. I 
thought I lost my gavel again, but thank you very much.
    [Whereupon, at 12:25 p.m., the subcommittee was adjourned.]
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