[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
NATIONAL RAIL POLICY: EXAMINING GOALS, OBJECTIVES, AND RESPONSIBILITIES 

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

                                (113-28)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                       RAILROADS, PIPELINES, AND
                          HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 27, 2013

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska                    NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         ELEANOR HOLMES NORTON, District of 
JOHN J. DUNCAN, Jr., Tennessee,          Columbia
  Vice Chair                         JERROLD NADLER, New York
JOHN L. MICA, Florida                CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey        EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California           ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri                 RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan          TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California            MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas  GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas              TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana               STEVE COHEN, Tennessee
BOB GIBBS, Ohio                      ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania         DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York           JOHN GARAMENDI, California
DANIEL WEBSTER, Florida              ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida       JANICE HAHN, California
JEFF DENHAM, California              RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin            ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky              DINA TITUS, Nevada
STEVE DAINES, Montana                SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina             ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma           LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas                CHERI BUSTOS, Illinois
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
MARK SANFORD, South Carolina
                                ------                                7

     Subcommittee on Railroads, Pipelines, and Hazardous Materials

                   JEFF DENHAM, California, Chairman
JOHN J. DUNCAN, Jr., Tennessee       CORRINE BROWN, Florida
JOHN L. MICA, Florida                DANIEL LIPINSKI, Illinois
GARY G. MILLER, California           JERROLD NADLER, New York
SAM GRAVES, Missouri                 ELIJAH E. CUMMINGS, Maryland
SHELLEY MOORE CAPITO, West Virginia  MICHAEL H. MICHAUD, Maine
CANDICE S. MILLER, Michigan          GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana               ALBIO SIRES, New Jersey
BOB GIBBS, Ohio                      ELIZABETH H. ESTY, Connecticut
PATRICK MEEHAN, Pennsylvania         PETER A. DeFAZIO, Oregon
RICHARD L. HANNA, New York, Vice     MICHAEL E. CAPUANO, Massachusetts
    Chair                            STEVE COHEN, Tennessee
DANIEL WEBSTER, Florida              DINA TITUS, Nevada
THOMAS MASSIE, Kentucky              NICK J. RAHALL, II, West Virginia
ROGER WILLIAMS, Texas                  (Ex Officio)
TREY RADEL, Florida
SCOTT PERRY, Pennsylvania
BILL SHUSTER, Pennsylvania (Ex 
    Officio)



                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................     v

                               TESTIMONY

Hon. Joseph C. Szabo, Administrator, Federal Railroad 
  Administration.................................................     4
Michael P. Melaniphy, President, American Public Transportation 
  Association....................................................     4
Edward R. Hamberger, President and Chief Executive Officer, 
  Association of American Railroads..............................     4
Michael P. Lewis, Director, Rhode Island Department of 
  Transportation, on behalf of the American Association of State 
  Highway and Transportation Officials...........................     4
John P. Tolman, Vice President and National Legislative 
  Representative, Brotherhood of Locomotive Engineers and 
  Trainmen.......................................................     4

 PREPARED STATEMENTS AND ANSWERS TO QUESTIONS FOR THE RECORD SUBMITTED 
                              BY WITNESSES

Hon. Joseph C. Szabo:

    Prepared statement...........................................    47
    Answers to questions from the following Representatives:

        Hon. Jeff Denham, of California..........................    57
        Hon. Corrine Brown, of Florida...........................    64
Michael P. Melaniphy:

    Prepared statement...........................................    69
    Answers to questions from Hon. Jeff Denham, of California; 
      includes supplemental material.............................    79
Edward R. Hamberger:

    Prepared statement...........................................   112
    Answers to questions from Hon. Jeff Denham, of California; 
      includes supplemental material.............................   133
Michael P. Lewis:

    Prepared statement...........................................   175
    Answers to questions from Hon. Jeff Denham, of California....   187
John P. Tolman:

    Prepared statement...........................................   193
    Answers to questions from the following Representatives:

        Hon. Jeff Denham, of California..........................   199
        Hon. Corrine Brown, of Florida...........................   200

                       SUBMISSIONS FOR THE RECORD

Hon. Joseph C. Szabo, Administrator, Federal Railroad 
  Administration, responses to requests for information from the 
  following Representatives:

    Hon. Daniel Lipinski, of Illinois, regarding the number of 
      active formal RRIF applications currently in process.......    20
    Hon. Grace F. Napolitano, of California, regarding the status 
      of the 2-year State grade crossing plans that were mandated 
      for the 10 States with the most grade crossing accidents in 
      the 2008 RSIA..............................................    23
    Hon. John L. Mica, of Florida, regarding Amtrak's nonrail 
      annual revenue and the number of RRIF loans given since the 
      inception of the program...................................    32
Hon. John L. Mica, a Representative in Congress from the State of 
  Florida, submission of chart with information detailing 
  Amtrak's long-distance transportation costs per passenger and 
  Auto Train losses..............................................    36
Edward R. Hamberger, President and Chief Executive Officer, 
  Association of American Railroads, submission of the following:

    Association of American Railroads, PTC Implementation: The 
      Railroad Industry Cannot Install PTC on the Entire 
      Nationwide Network by the 2015 Deadline--May 2013 update...   136
    Response to request for information from Hon. Jeff Denham, a 
      Representative in Congress from the State of California, 
      regarding positive train control (PTC) implementation 
      timeline...................................................    41

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

NATIONAL RAIL POLICY: EXAMINING GOALS, OBJECTIVES, AND RESPONSIBILITIES

                              ----------                              


                        THURSDAY, JUNE 27, 2013

                  House of Representatives,
              Subcommittee on Railroads, Pipelines,
                           and Hazardous Materials,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:03 a.m., in 
Room 2167, Rayburn House Office Building, Hon. Jeff Denham 
(Chairman of the subcommittee) presiding.
    Mr. Denham. The subcommittee will come to order.
    First, let me welcome our witnesses and thank them for 
their testimony today. We invited you because each of you 
represents a key stakeholder group involved in our Nation's 
rail industry. As you all know, Chairman Shuster and I are 
committed to rail reauthorization this year. I state that at 
every hearing because I want everybody to know that it is 
coming very, very soon, and we are going to need all of you 
involved and helping to get something that makes sense, 
especially in today's fiscal challenges.
    We have traveled across the country now. We will continue 
to visit different States in the Nation, local and Federal 
officials, and we are discussing the last reauthorization bill 
and how it has affected the railroad industry. We have heard 
suggestions on how we can improve our laws so rail transport 
can expand in a safe and efficient manner. It is clear that the 
current rail authorization has helped improve passenger and 
freight rail service in this country. For example, PRIIA, 
sections 209 and 212 have moved the ball forward with regard to 
Amtrak's State-supported routes in Northeast Corridor 
operations. These lines of business have increased revenue and 
eliminated much of the need for any Federal operating subsidy.
    Our goal is to build on the PRIIA successes and tackle the 
challenges that remain for freight and passenger rail. 
Hopefully, this hearing will inform the committee of what steps 
need to be taken to reach that goal. As I stated earlier this 
year, we need to be pragmatic and transparent, and we will need 
all parties to participate in order to deliver the best 
bipartisan product to the House floor.
    As seen by this week's House and Senate appropriation 
marks, we need to operate within realistic budget constraints, 
and I think we all agree reforms are necessary to ensure and 
leverage every dollar we do have efficiently.
    There is no division between the different services Amtrak 
provides. We need to put a structure in place to allow 
Congress' investment to strengthen passenger rail. We need to 
prioritize our investment. We need a reliable source of funding 
to invest in existing infrastructure in places like California, 
the Midwest and the Northeast Corridor within existing 
resources. This means we might have to take a hard look at the 
pie-in-the-sky visions, such as FRA's multibillion-dollar 
unrealistic budget. We should invest in projects that will 
increase safety, increase reliability and reduce trip times 
without breaking the bank.
    Ideally Prop 1(a) in California should be invested in 
realistic local projects instead of a project that has no 
realistic business plan, no proven ridership and exploding 
costs. For instance, in California, we have got the California 
State Rail Plan, which lists 27 capital investment projects for 
ACE. We have 36 for the San Joaquin line and 42 for the Capitol 
Corridor. Each will benefit existing ridership.
    Taxpayers entrust in this body their hard-earned dollars, 
and we must be sure those dollars finds their way back in the 
form of tangible benefits. Throughout my travels I have heard 
recurring questions that I want to address with today's 
witnesses. How do we focus our limited resources on investments 
that make sense in places like my home State of California? How 
do we improve governance on the Northeast Corridor to ensure 
stakeholders have an equal seat at the decisionmaking table? 
How do we leverage private sector investment and innovative 
financing to enhance our ability to invest in infrastructure 
projects? These issues are just an example of the difficult 
task we must tackle together in the next few months.
    Again, I want to thank all of our witnesses this morning. I 
would now like to recognize Ranking Member Corrine Brown from 
Florida, for 5 minutes to make any opening statement she may 
have.
    Ms. Brown. Thank you, Mr. Chairman.
    As we meet this morning, the House Appropriation Committee 
is considering a bill that will cut funds for Amtrak 2014, 
provide just $950 million for the railroads, including $350 
million for operational grants and $600 million for capital and 
debt service.
    Federal funds of $950 million will not give us a better 
railroad. We know this from experience. What it will do is put 
Amtrak workers out of jobs, cancel replacement and overhaul of 
railcars and locomotives and derail service we demanded from 
Amtrak with the 2008 bill.
    I think that if we are going to focus on national rail 
policy, we ought to be discussing the impact of the constant 
cutting of Federal support for Amtrak while demanding more and 
more reforms. The two issues go hand in hand. How can Amtrak 
improve long-distance routes without funding? How can we expect 
Amtrak to reduce trip time when we fail to make the 
infrastructure investments that are needed to implement these 
reductions?
    Indeed, this committee, on a bipartisan basis, authorized a 
total of $9.8 billion for Amtrak in fiscal 2009 through 2013; 
however, annual appropriations for Amtrak since 2008 has been 
significantly lowered, about $2.5 billion less than what we 
authorized. Just take a look at that chart.
    Where is the chart?
    Now, 5 years later, some Members claim that Amtrak has not 
done enough. Well, I truly believe you get what you pay for. 
Other countries have learned that a long time ago. China, 
Japan, France and the U.K. are all investing billions in their 
passenger rail service. We constantly talk about wanting what 
they have when it comes to passenger rail, but then we are not 
willing to finance it. We look for other people to finance it, 
other people who have time and again told this committee that 
the Federal Government needs to step up to the plate.
    We did this for highway and aviation. From 1947 to 1970, 
when Amtrak was created, the Federal Government spent $11.3 
billion on aviation. At the same time, we spent $52.4 billion 
for the development of an Interstate Highway System. While most 
of the money came from user fees, at least $8 billion was from 
general funds. Today annual Federal spending on highway 
construction exceeds $42 billion. We have not spent that much 
on improving passenger rail in 43 years. We have glossed over 
the fact that funding does not come from user fees. In fact, 
since 2008, a total of $52.3 billion in general funds have been 
transferred to the Highway Trust Fund to keep it solvent.
    I know that the chairman plans to hold a hearing on 
financing, but again, I think if we are going to talk about 
national rail policy, we need to also talk about the hole we 
are digging ourselves into by failing to adequately invest in 
Amtrak.
    Now let me briefly turn to long distance. There has been a 
lot of talk in the press about eliminating long-distance 
routes. I strongly oppose that. These routes literally connect 
our east coast to our west coast. They are what make Amtrak a 
national railroad. Without the long-distance train, over 4 
million people in 23 States and 223 communities will lose all 
passenger rail service. Let me repeat that: 4 million people in 
23 States and 223 communities would lose all passenger rail 
service.
    Finally, a critical component of our reauthorization bill 
includes reauthorizing our Nation's rail safety program. 
Although rail accidents are down, the National Transportation 
Safety Board has been called in to investigate 11 rail 
accidents that have occurred since June 2012. We must keep this 
in mind as we work on our bill to take advantage of the 
opportunities we have before us to eliminate what we need to do 
to make this, a very safe industry, even safer.
    With that, I want to thank all of our participants, and I 
am looking forward to hearing from the panelists today.
    Mr. Denham. Thank you.
    Again, I would like to thank our witnesses today. Our panel 
will include the Honorable Joseph Szabo, Administrator from the 
Federal Railroad Administration; Michael Melaniphy, president 
and CEO of American Public Transportation Association; Ed 
Hamberger, president and CEO of the Association of American 
Railroads; Mike Lewis, director of Rhode Island Department of 
Transportation, on behalf of the American Association of State 
Highway and Transportation Officials; and Mr. John Tolman, vice 
president and national legislative representative for the 
Brotherhood of Locomotive Engineers and Trainmen.
    I ask unanimous consent that our witnesses' full statements 
be included in the record.
    Without objection, so ordered.
    Since your testimony has been made part of the record, the 
subcommittee would request your oral testimony be limited to 5 
minutes.
    Mr. Szabo, you may proceed. Thank you for joining us.

   TESTIMONY OF HON. JOSEPH C. SZABO, ADMINISTRATOR, FEDERAL 
   RAILROAD ADMINISTRATION; MICHAEL P. MELANIPHY, PRESIDENT, 
     AMERICAN PUBLIC TRANSPORTATION ASSOCIATION; EDWARD R. 
 HAMBERGER, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ASSOCIATION 
OF AMERICAN RAILROADS; MICHAEL P. LEWIS, DIRECTOR, RHODE ISLAND 
    DEPARTMENT OF TRANSPORTATION, ON BEHALF OF THE AMERICAN 
ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS; AND 
    JOHN P. TOLMAN, VICE PRESIDENT AND NATIONAL LEGISLATIVE 
    REPRESENTATIVE, BROTHERHOOD OF LOCOMOTIVE ENGINEERS AND 
                            TRAINMEN

    Mr. Szabo. Thank you, Chairman Denham, Ranking Member Brown 
and members of the subcommittee. I appreciate the opportunity 
to testify.
    The Passenger Rail Investment and Improvement Act and the 
Rail Safety Improvement Act, both passed in 2008, were 
bipartisan game-changing pieces of legislation. 2012 was the 
safest year in railroading history. Amtrak's on-time 
performance, its ridership and its revenues are now at all-time 
highs, and the freight rail industry has never been stronger.
    Today, 6,000 corridor miles are being improved, 40 stations 
are being upgraded, hundreds of new passenger cars and 
locomotives are being procured, and States are competing--or 
completing more than 100 different environmental, engineering 
and planning projects, but we still have a long way to go to 
make up for decades of underinvestment in rail and be ready for 
the challenges ahead.
    Soon America's transportation network will need to move 100 
million additional people and 4 billion more tons of freight 
annually, and it will need to do it safely, reliably and 
efficiently.
    Our airports and highways are stretched to their limits. 
Congestion costs our economy more than $120 billion per year. 
Rail is the clear mode of opportunity. It is extremely safe, 
cost-effective and the least oil-reliant, most environmentally 
friendly mode to move people and freight.
    Citizens are showing us the way. Recent studies by U.S. 
PIRG and the Frontier Group have painted a clear picture of 
American's shifting travel habits. In 2011, the average 
American drove 6 percent fewer miles than in 2004. In just 10 
years, Amtrak's ridership is up more than 40 percent and 
growing faster than any other mode of travel.
    Population growth, mobility challenges, shifting travel 
patterns, these are the reasons why it is essential for us to 
work together to provide rail with the sustained source of 
funding that will put it on par with other modes.
    The 5-year, $40 billion rail reauthorization proposed in 
our fiscal year 2014 budget builds on the core principles of 
our previous authorizations. And we propose to fund our budget 
with a new rail account within the transportation trust fund.
    Our vision is for a National High-Performance Rail System 
that builds on today's progress, enhancing the Nation's rail 
system by addressing safety concerns, by providing funding for 
passenger and freight rail improvements and by promoting strong 
planning.
    Our vision is a state of good repair for Amtrak, improving 
safety, efficiency and reliability. With your support, we can 
develop new passenger rail services and substantially upgrade 
existing corridors, and we can fund freight rail projects 
critical to our Nation's economic competitiveness, including 
ones to improve safety by eliminating or upgrading public 
highway rail grade crossings. We envision a world-leading 
domestic rail industry, and we will manage our investments 
through a transparent process.
    Four years ago, when we started our high-speed and 
intercity passenger rail program, FRA evaluated nearly 500 
applications submitted by 39 States, the District of Columbia 
and Amtrak. The applications requested more than seven times 
the available funding, illustrating the enormous pent-up 
demand. And in the past 4 years, the pipeline of rail projects 
has only grown stronger.
    Making large-scale investments on a year-to-year basis is 
both difficult and inefficient. No rail system in the world has 
ever been successfully planned and developed in this fashion. 
Funding predictability is a necessity to empower our partners, 
the States, local governments and the private sector so they 
can plan for and invest in the rail network our economy needs 
and our people deserve.
    So now is the time for a new bipartisan game-changing 
vision for American rail, and we look forward to working with 
you to make it happen. Thank you very much.
    Mr. Denham. Thank you, Mr. Szabo.
    Mr. Melaniphy.
    Mr. Melaniphy. Good morning, Chairman Denham, Congresswoman 
Brown, members of the subcommittee. We thank you for this 
opportunity to testify on our priorities for rail policy in 
this country. I have to believe that the Nation needs an 
integrated network of passenger rail services, including high-
speed rail, where appropriate, that connects with the existing 
Amtrak system and with commuter rail, transit operations and 
other intermodal connections.
    Travelers should be able to make seamless connections 
between modes, between major metropolitan regions linked by 
rail service. As the Nation's population swells by nearly 150 
million people by 2050, we need to make investments in our 
transportation infrastructure, including intercity passenger 
rail, which provides transportation choices and achieves 
national goals.
    We support dedicated revenues for such a program, other 
than those currently supporting the Highway Trust Fund. We also 
support a streamlined NEPA review process for projects. 
Moreover, both private and public sector participation should 
be considered in the development of new rail service and the 
planning, construction and financing of new rail 
infrastructure.
    We recognize the current fiscal pressures that the Nation 
faces and the challenges for Congress in providing fiscal 
resources and setting priorities within the Federal budget. 
However, we believe the investments in infrastructure, 
including passenger rail, are among the highest value 
investments the Nation can make. These investments will provide 
benefits to the Nation for hundreds of years. We know this 
committee recognizes the importance of transportation 
investment to the Nation's economic competitiveness and 
prosperity.
    Expansion and improvement of the our current intercity 
passenger rail system will require a commitment of Federal, 
State, local and private resources, a combination of funding 
and financing strategies that will not only pay for projects, 
but also speed their planning, design and construction.
    APTA recommends an authorization of $50 billion over 6 
years to facilitate the development of high-speed intercity 
passenger rail funded by a dedicated and indexed Federal 
revenue source and complemented by the use of public-private 
partnerships.
    With regard to rail safety, APTA is unequivocally committed 
to safety, with passenger and employee safety being the number 
one priority for our Nation's commuter railroads. Since its 
inception, APTA has been an advocate for safety improvements, 
and we are always working to make our industry safer. APTA's 
standards program and safety audit program are examples of the 
ways the industry promotes safety, and I have described both in 
my written testimony.
    With regard to positive train control, APTA has 
consistently supported the concept of PTC, provided that proven 
technology, resources and radio spectrum, where available, a 
position that predates the Rail Safety Improvement Act.
    APTA is working with its member railroads to meet the law's 
requirements that all of the Nation's commuter railroads have 
federally approved systems to help protect against accidents. 
We want to work with this committee on how to get PTC systems 
installed on commuter railroads in an optimized fashion. Some 
commuter railroads already have collision avoidance systems, 
some of which have been in place for years, but there is still 
no off-the-shelf technology which is capable of achieving all 
of the law's safety objectives today. Key components of PTC 
systems, such as back office software, upgrades and revisions, 
roadway worker protection, are still in the development stage. 
It requires newly designed of radios and large amounts of radio 
spectrum to deliver information to trains and achieve 
interoperability between carriers. And it requires testing in 
the actual commuter rail operating environment. And above all, 
implementation costs are challenging, especially for publicly 
operated commuter railroads trying to deal with hundreds of 
state-of-good-repair projects unrelated to PTC, many of which 
also impact directly on the safety of operations.
    Implementation costs for commuter railroads exceed $2 
billion, not including operating and spectrum costs. This is on 
top of many costs the railroads are incurring on the east coast 
as they deal with the issues of repair and rehabilitation 
related to Hurricane Sandy.
    We have told Congress for several years that we are 
concerned about the ability to implement PTC on all of the 
Nation's commuter railroads by the 2015 deadline, and we sought 
Federal funding to help commuter railroads pay for the costs of 
PTC implementation.
    We have also asked the FCC and Congress to provide radio 
spectrum without cost on the basis of public safety. And given 
all these challenges, we recommended the deadline for 
implementation be extended from 2015 to 2018 to allow for 
complete and orderly system integration.
    APTA appreciates the opportunity to testify today. We will 
be happy to try and answer any questions that you may have. 
Thank you.
    Mr. Denham. Thank you. Mr. Hamberger.
    Mr. Hamberger. Thank you, Mr. Chairman, Ranking Member 
Brown and members of the subcommittee. Thank you for the 
opportunity to be here today to discuss reauthorization of 
PRIIA.
    All of us want passenger railroads that are safe, efficient 
and responsive to the transportation needs of the country. At 
the same time, America cannot prosper in an increasingly 
competitive global marketplace without a best-in-the-world 
freight rail system. We think our Nation can have both: a safe 
and effective passenger rail service and a safe, productive 
world best freight rail system.
    Freight railroads want passenger railroads to succeed. We 
work cooperatively with passenger and commuter railroads to 
help make this happen, and we support Government efforts to 
grow passenger rail in ways that complement freight rail 
growth.
    As Mr. Szabo has said on more than one occasion, yes, 
America deserves a world-class passenger rail system, but not 
if it comes at the expense of what is already the world's best 
freight rail system.
    As I have said more than once before, our Nation's freight 
railroads are overwhelmingly privately owned and operate almost 
exclusively on infrastructure that they own, build, maintain 
and pay for themselves. In fact, this year alone, $25 billion 
private capital will go back into the infrastructure. That's 40 
cents on every dollar, to grow, maintain and expand our 
infrastructure.
    But I draw your attention to the fact it is not that way 
for passenger rail either here or anywhere else in the world. I 
respectfully suggest that once you as policymakers agree on the 
nature and scope of passenger railroading in this country, you 
must be willing to commit public funds on a long-term basis 
commensurate with that determination. Moreover, Amtrak cannot 
plan, build and maintain adequate infrastructure that provides 
optimal transportation mobility and connectivity when there is 
so much uncertainty regarding what its capital and operating 
funding will be from one year to the next.
    Having said that, the establishment and management of 
schedules and on-time performance between Amtrak and the host 
freight railroads should be undertaken jointly by those parties 
on a contractual basis. It should be governed by private, 
bilateral contracts and the facts and circumstances of 
particular routes, not by one-size-fits-all legislative 
mandates.
    As you take a look at reauthorization of PRIIA, we have 
five principles that we think could help guide your 
considerations. First, safety has to take priority over 
anything else. Under certain conditions, passenger rail can 
operate on freight rail tracks at more than 79 miles an hour. 
In general, however, we believe that more than 79 miles an hour 
requires a separate track. Where there is a separate track for 
passenger rail, we think it should be far enough away so that 
if there is an accident, that it does not foul the adjacent 
track, having even more tragic consequences.
    Second, capacity issues must be properly addressed. 
Additional passenger train operations should both preserve the 
ability to operate freight trains as needed today and the 
opportunity to expand further freight service as our customers 
require in the future.
    Third, if passenger trains use freight railroad assets and 
property, it is reasonable for the freight railroad to expect 
full and fair compensation.
    Fourth, freight railroads must be adequately protected from 
liability that would not have resulted but for the added 
presence of the passenger rail service.
    Finally, there can be no one-size-fits-all approach. Each 
project involving passenger rail in general or high-speed rail 
projects in particular has its own unique challenges and 
circumstances and should be dealt with on a case-by-case basis.
    In my final minute, I would just like to draw your 
attention to my written testimony, where we go into great 
detail, as Mr. Melaniphy just has, on the challenges of 
implementing positive train control. We join APTA in calling 
for an extension of the deadline. Our proposal is for at least 
a 3-year extension plus an additional 2 years at the 
Secretary's discretion because of the unknown challenges that 
are out there.
    And let me make it very clear. We are not looking for a 
repeal of this mandate. We are committed. We have spent over $3 
billion already. We have thousands of employees working on it. 
There are challenges as we try to develop the technology, as we 
try to develop the new radios, as we try to develop and install 
the equipment on 22,000 locomotives, and over 60,000 miles of 
track. Much of it will be installed by 2015, but not all.
    We want to work with this committee to see if we can work 
through an extension that allows this to be done, but you have 
our commitment that we are committed to doing it and we will 
get it done. Thank you.
    Mr. Denham. Thank you, Mr. Hamberger.
    Mr. Lewis.
    Mr. Lewis. Chairman Denham, Ranking Member Brown and 
distinguished members of the committee, thank you for inviting 
me to participate in today's hearing. My name is Mike Lewis. I 
am the director of the Rhode Island Department of 
Transportation, but today I am testifying on behalf of AASHTO, 
as its current president. I also serve as a member of the 
Northeast Corridor Commission.
    AASHTO's position on national rail policy has evolved 
through many years of State experience with delivering 
passenger rail service and working with and supporting large 
and small freight railroads. Dating back to AASHTO's 2002 
Freight Rail Bottom Line Report, we have highlighted public-
private partnerships as a model for investment in freight rail 
projects.
    Rail must be a part of a balance of transportation--a 
balanced mix of transportation alternatives available to our 
Nation's freight trippers and the traveling public. Making 
increased levels of investment and realizing the public 
benefits of a strong freight rail system will require 
partnerships among the railroads, the States and the Federal 
Government. The Heartland Corridor and the National Gateway 
Corridor are major intermodal connector projects resulting from 
shifting patterns of freight demand. These and similar projects 
make it clear that we must constantly adapt to changing global 
economics and logistics and that rail is an essential element 
of our overall national transportation system.
    Continued Federal investment is essential. Without it, the 
resulting--an increased reliance on the highway system would 
greatly increase highway congestion and maintenance costs, 
driving up overall costs of goods movements in the U.S.
    The recently formed National Freight Advisory Committee 
will provide a forum for integrating freight within all modes. 
Two AASHTO board members have been selected to serve on the 
committee, Secretary Ann Schneider of Illinois and Mike Tooley 
of the Montana DOT.
    Having spent my career in transportation first in 
Massachusetts and now in Rhode Island, I am most familiar with 
rail service in the Northeast. Demand on the NEC is at record 
levels. The NEC, however, cannot continue to accommodate rising 
demand, due to infrastructure that is highly congested and in 
need of repair. With more than 2,000 trains per day and major 
segments at or near capacity, operating the NEC leaves little 
room for error, as we saw with recent closures of parts of the 
corridor due to the commuter rail accident in Connecticut and 
as recently as Tuesday with the derailment of Amtrak 
construction equipment in Rhode Island.
    By bringing key stakeholders to the table, the NEC 
Commission is making a difference. For the first time, all the 
stakeholders are joining together to develop a corridorwide 5-
year capital program. The fundamental tenet of the capital 
program is that funds generated by increased State and Amtrak 
financial contributions will not supplant existing Federal 
funding, but be used to leverage higher levels of overall 
Federal and State investment. The NEC Commission is a model for 
collaboration that can be used on other corridors across the 
U.S.
    The States have been providing funding assistance to Amtrak 
outside the Northeast Corridor as well. In 2013, 15 States 
either partially or completely supported Amtrak service. Under 
the provisions of PRIIA section 209, all short-distance Amtrak 
corridors must become State-supported routes and States must 
pay the proportional costs associated with their respective 
corridor.
    States continue to work cooperatively with Amtrak and are 
now in the process of contract negotiations looking at the list 
of items provided under the 209 pricing policy to determine the 
best use of State resources.
    So what should be included? National rail policy must be 
just that: a national policy. As AASHTO policy states, a robust 
national rail transportation network that moves both passenger 
and freight effectively and efficiently across international 
borders, State lines and within regional and State boundaries 
is essential to this Nation's continued growth and vitality.
    Safety continues to be our first priority. We must look at 
corridor-specific measures that will reduce fatalities and 
injuries and allow States the flexibility to use new 
technology, combine resources and partner with the private 
sector in innovative approaches that will lead to zero deaths, 
including those at rail-highway grade crossings.
    As called for PRIIA, a national rail plan should be the 
vision for both freight and passenger. To implement this plan, 
Congress must provide a long-term, stable funding for intercity 
passenger rail. Federal investment for intercity passenger rail 
in the Northeast Corridor and State corridors and improving the 
national network of intercity passenger rail, including long-
distance trains, should follow a model similar to that proposed 
by the FRA, which consolidates rail programs to focus on 
existing passenger service state of good repair and expand and 
improve passenger and freight networks in order to accommodate 
growing demand.
    In addition, the MAP-21 project delivery streamlining 
measures should be extended to rail projects, both freight and 
passenger. The amount of time that it takes for a rail project 
to move from planning to actual construction could be reduced 
by half, saving millions in construction costs.
    The journey to defining and executing a national rail 
policy will be a long one, but today is a good day to start.
    I appreciate the opportunity to testify before the 
committee and will be happy to answer any questions you may 
have.
    Mr. Denham. Thank you, Mr. Lewis.
    Mr. Tolman.
    Mr. Tolman. Good morning, Chairman Denham and Ranking 
Member Brown, members of the subcommittee. I appreciate the 
opportunity to speak here today. On behalf of the 37,000 active 
Brotherhood of Locomotive Engineers and Trainmen members and 
over 70,000 rail conference members, I want to thank the 
committee.
    The BLET supports the concept of a unified national plan 
for our Nation's passenger and freight railroads. It is 
consistent with our desire for long-term planning and financing 
of rail. It is also imperative that any national rail policy 
would protect the interests of the men and women who work in 
the railroad industry today.
    In order for our Nation to meet the economic and 
environmental challenges that we face, we must continue to 
invest in the infrastructure and to develop and plan for new 
means to get goods and people from place to place in the most 
fuel-efficient means possible. Rail clearly is the best means 
of doing this.
    On the passenger side, Amtrak and the intercity commuter 
railroads and their employees have the knowledge, skills and 
abilities to develop, implement and grow passenger rail systems 
throughout this country. They have done great work and continue 
to set record riderships across the country. Passenger rail is 
a great example of the old quote in the ``Field of Dreams'': 
``If you build it, they will come.''
    On the Amtrak side, this cycle of underfunding must end. 
They desperately need long-term funding and predictability. 
Most troubling currently of all labor is the recent proposed 
House appropriations budget for fiscal year 2014. The bill 
would cut the FRA by 40 percent.
    On the freight side and for its professional skilled 
railroad employees, intermodal freight transportation is the 
way of the future, with goods moving from ship to truck to 
train on a seamless network.
    To continue this, we need to ensure that we continue to 
invest in our infrastructure. Unfortunately, the House 
Appropriations spending leaves TIGER grants out entirely; it 
also tries to cut this year's awards in half by rescinding $237 
million before the DOT can get the already awarded grants out 
the door.
    Railroads have improved their fuel efficiency by 23 percent 
in the last two decades. As stated by Ed Hamberger, the freight 
side in the industry is investing billions annually in its 
infrastructure and is well positioned to handle any additional 
freight that comes its way, but we must also ensure that 
continued investments are not only to expand the capacity but 
also to improve safety.
    Along these lines of safety, PTC will save lives, and the 
BLET strongly supports the implementation of PTC on our 
Nation's railroads. This technology will prevent the most 
egregious and catastrophic accidents throughout our Nation. All 
too often, cost-benefit analysis is used as the sole objection 
against moving ahead on rail safety projects. If we could 
rewind the time and freeze the movement before any fatal 
accident, such as Macdona, Texas, or Graniteville, South 
Carolina, occurred and talk to the train crew or talk to the 
residents, who among us would like to explain to them that they 
would die of an accident not from the accident itself, but from 
the smoke or hazardous materials inhalation because the 
congressionally mandated emergency escape apparatus--breathing 
apparatus and switch points indicators failed a cost-benefit 
analysis.
    Let's work together to implement feasible protective safety 
opportunities for the public and for its employees. As Ed 
Hamberger testified last week in front of the Senate, and he 
stated, job safety is the number one issue for the industry. So 
let's walk the walk and talk the talk and get things done 
together. A national rail policy must take all factors into 
account, including connectivity to provide service nationwide. 
Now is the time to stimulate the economy and to invest in jobs, 
the number one issue in the last national election, jobs.
    Through the creation of good passenger rail system 
throughout the Nation, for every $1 billion invested in high-
speed rail or rail passenger, it could create 47,000 jobs, 
based on a DOT study and a Federal Transit Administration 
study.
    The workers currently employed by our Nation's railroads 
are among the highly skilled employees in the world. They are 
entitled to a safe work environment, and any comprehensive rail 
plan should not interfere with their ability to keep and expand 
their work.
    In conclusion, we would like to reinforce the need for 
Amtrak long-term funding and continued need for cooperation 
between the freight railroads and labor to provide a stimulus 
to our industry, to the economy, and we need to do this while 
making critical strides to enhance safety.
    Once again, thank you very much for the opportunity to be 
here.
    Mr. Denham. Thank you, Mr. Tolman.
    Thank you all of our witnesses. As always, we will be doing 
the 5-minute rule. We will plan on at least two rounds of 
questioning, with such a large panel.
    I am going to start things off with Mr. Szabo.
    We have gone round and round a couple times on budgets. I 
imagine that we will go round and round several more times on 
it, especially with the House Appropriations Committee recently 
making their plans known, but I want to get a realistic view 
from a committee standpoint on what our priorities for PRIIA 
reauthorization are; what are realistic projects we can 
actually accomplish, given a bipartisan effort between the two 
Houses? You start with your budget at $2.7 billion. The Senate 
budget is current funding, which is $1.45 billion, and then the 
House now at $.95 billion.
    Best-case scenario, I think, is current funding. I mean, 
that is the Senate's starting point and the House is lower, I 
imagine we are going to ultimately get somewhere in between 
there. Going much higher, without some new funding source, 
which I would be encouraged to hear any efficiencies or new 
funding sources that the administration is looking at, but best 
case right now today looks like would be that $1.4 billion or 
the current level of funding.
    What are some of the top programmatic reforms that you 
think will ensure the most efficient use of those Federal 
dollars?
    Mr. Szabo. Well, I think if you take a look at our budget 
submission, it really clearly spells that out. Our mission is 
to ensure the safe, reliable and efficient movement of people 
and goods.
    When you start taking a look at the state of our 
transportation network today, the congestion costs in loss of 
productivity that our transportation network is already facing, 
and then when you take a look at the decades of underinvestment 
in rail, combine that with the efficiencies that rail can 
generate in moving people and goods, the enhanced productivity, 
the enhanced safety, the improved environmental sustainability 
that the rail offers, we believe that our budget proposal is 
not only realistic, but certainly appropriate, that it is time 
that we truly put rail on parity with the other transportation 
modes, that we no longer treat it like a forgotten stepchild. 
And because of these decades of underinvestment, there is 
clearly this need to advance the vision forward of real 
commitment of dollars and a reliable and sustainable funding 
pool out of a rail account in the trust fund.
    Mr. Denham. Outside of the whole budget debate, because 
that debate is going to continue to go on, assuming we have 
extra money, we are going to need to put significant 
infrastructure repairs, not only some that safety repairs that 
should have been done decades ago, but certainly areas that we 
can create greater efficiencies, but in the PRIIA bill itself, 
we are looking for reforms that help us to create greater 
efficiencies or greater use of taxpayer dollars. Do you think 
State-supported routes is working well and would you propose 
doing that in other areas? Are there other types of reforms 
that you need to be looking at?
    Mr. Szabo. You know, I think if you take a look at our 
budget proposal, one of our key changes there is the fact that 
we start breaking Amtrak down into the business lines, which 
allows us greater transparency. We call for the preparation of 
a 5-year plan according to each business line, which will allow 
us at FRA to be much more aggressive in overseeing their 
implementation of each of those business lines, and looking for 
continuous improvement in financial viability.
    We do have to start the discussion by acknowledging the 
fact that Amtrak's financial performance last year was the best 
in its 42-year history and has, in fact, improved each of the 
last 4 years. But we also have to say that that is not good 
enough and that we need to continue to drive that continuous 
improvement in their financial stability and reducing the 
support on Federal tax dollars.
    Mr. Denham. In your testimony, you state that reorganizing 
Amtrak grants structure will not work at the current levels. 
Amtrak's already putting together business lines. If it is 
working now, why would that not be something that could work at 
current levels?
    Mr. Szabo. We really did our due diligence in putting 
together the plan to understand what it is really going to take 
to ensure that safety, efficiency and reliability of each of 
those business lines, and we absolutely believe that each of 
those business lines are important to meeting the 
transportation needs of the traveling public. And to go at any 
level less than that, particularly, particularly the level that 
the House came out with would negatively affect safety, it 
would negatively affect reliability and the efficiency of the 
network, and would likely increase costs for the States under 
section 209 as well as increase costs for the commuters under 
section 212.
    Mr. Denham. Thank you. I realize, again, we are going to 
have this ongoing debate on budget, but we have to be able to 
figure out something in realistic reforms, and that is why I 
will continue to answer this question about business lines. It 
is working. Amtrak is working on business lines today under 
current budget scenarios. We want to take all of the good 
things that are happening today under the previous PRIIA bill 
and, regardless of where we end up on this budget debate, make 
sure we have got a good package to move forward that continues 
to improve efficiencies and safety throughout.
    I am out of time. Ms. Brown.
    Ms. Brown. Thank you, Mr. Chairman.
    And I want to also thank you for the field trips that we 
have had. The one that we took up to the Northeast Corridor was 
extremely educational for everybody on the committee.
    And one of the things with Sandy, what happened, Mr. Lewis, 
with the tunnels, what is it that we need to do to make sure 
that these natural disasters, that we harden those situations?
    Mr. Lewis. Short of raising the level of the continent----
    Ms. Brown. Yes, sir.
    Mr. Lewis [continuing]. We have--first of all, we have to 
recognize, as you have, the vulnerability of the existing 
infrastructure that we have and to be able to address through a 
series of prioritization of projects, how do we protect that 
infrastructure and its exposure?
    I mean, we all recognize, just taking the NEC, Northeast 
Corridor, for example, the numbers of trips, over 2,000 train 
trips a day on the corridor, and the numbers of people that are 
served by that, as well as freight, the value to the Nation's 
economy of those trips, they are absolutely vital that we 
protect those interests.
    So in our planning and prioritization of infrastructure 
improvements, we need to take into account these more recent 
risks that we have in front of us.
    Ms. Brown. Some of my colleagues want to require that the 
States pay for long-distance service. What is your opinion on 
that?
    Mr. Lewis. As I said in my testimony, I think there is a 
role for all parties. The States certainly have a role to play; 
the Federal Government is a necessary component of that. The 
States have stepped up, as they are under 209 and under PRIIA 
and under 212, for greater investment.
    We do need to be sure, if the States are going to step up, 
and all of you know how difficult State budgets are and the 
challenges in front of many States, and if we are going to go 
and sell increased investment to our State legislators, we need 
to be able to show them where that money is going and the value 
it brings to that State. So I think that is a challenge we 
have, but I think there is a willingness on the part of the 
States that we are partners in this challenge.
    Ms. Brown. Thank you.
    Mr. Szabo, would you answer that question. And also what is 
your opinion of the House proposed funding level for Amtrak?
    Mr. Szabo. No. I find the House proposed level both 
concerning and a bit perplexing. At a time when passenger rail, 
when Amtrak is the fastest growing transportation mode in the 
Nation, as vehicle miles driven by Americans continue to 
decline, and it has been on a downward trend over the past 
decade, that we wouldn't be making the investments that are 
necessary to truly make intercity passenger rail a viable part 
of a balanced transportation network.
    And as I said in the answer to my previous question to the 
Chair, it really is time that we take a look at how we enhance 
productivity, how we eliminate the cost of congestion, make 
sure that we allow States to plan out and build transportation 
that will allow people and goods to use the mode that is most 
efficient for a journey. And for too long, rail has been, 
particularly passenger rail, the forgotten mode.
    Ms. Brown. It is clear that the House is behind the 
American people, because the ridership is up about, what, 40 
percent?
    Mr. Hamberger, my last question. With respect to the PTC 
and the spectrum issue, what can Congress do to assist you all, 
because I understand there are some challenges there?
    Mr. Hamberger. Thank you for that question. With respect to 
spectrum, the freight railroads were able to get out quickly 
and procure enough spectrum. I think the question on spectrum 
is really more for APTA and Mr. Melaniphy. But while you have 
raised the FCC, let me just put on your radar an issue that has 
just bubbled up in May of this year. The Federal Communications 
Commission has advised us to stop installing any more antennas. 
We have about 22,000 more radio antennas to install, over 95 
percent of which will be located on our right-of-way. The FCC 
is now requesting that we perform an environmental assessment 
on each of those 22,000 antennas.
    We have had some meetings with them. They understand that 
such reviews might take a few years and add even further to the 
delay. We are having meetings with them at the commissioner 
level on down, and we hope, with the good assistance of Mr. 
Szabo and his staff, to come to a more streamlined solution 
over at the FCC. If that doesn't happen, we might be back 
asking for some relief of that.
    But having taken Mr. Melaniphy's time, let me turn the 
spectrum issue over to him.
    Mr. Melaniphy. No. We just--we want to reiterate that 
spectrum is a critical piece. And this is a safety issue here, 
and it is very important that the public agencies have access 
to spectrum. So that we appreciate the opportunity to work with 
Mr. Hamberger's members on access to spectrum and leasing 
spectrum where it is available, but it is critical that we have 
access to that spectrum, and that we are recommending that it 
be given at no cost to the public sector operators so they can 
provide this safety service to their members.
    Ms. Brown. Thank you.
    Thank you, Mr. Chairman.
    Mr. Denham. Thank you.
    Mr. Barletta.
    Mr. Barletta. Thank you, Mr. Chair.
    Mr. Szabo, you talked a lot about the underinvestment of 
the Government, of the Federal Government. I would like to talk 
about the RRIF program, something that is very interesting to 
me. Being a former businessman and understanding how important 
it is to make the capital investments back into the industry, I 
thought this is a great program.
    Now, the RRIF program has been on the books since 2000, it 
has an authorization of $35 billion for investment in rail 
infrastructure, which we all agree is critical. Yet as I 
understand it, the Federal Rail Administration has only 
approved $1.7 billion in loans since 2000. Why is the RRIF 
program so underutilized when our rail infrastructure needs 
such investment?
    Mr. Szabo. Yeah. I think as we start talking through 
greater specifics for reauthorization, this is an area that we 
would like to have some additional conversation with the 
committee on how we do make RRIF more useable for the industry, 
in particular the short lines. To a great extent over the past 
decade, through some statutory change, the program has kind of 
lost its initial focus on trying to make sure that capital 
dollars are available for these smaller short line railroads 
that are so capitally starved. And there is no question that 
short lines have a more difficult time getting through the 
process to be deemed eligible for a loan. The Class I's can get 
through. They have got all their financials in order. You know, 
it is relatively routine process for them. For the mom and 
pops, it is more of a struggle.
    So a couple of things that we are doing now as well as one 
thing that we have proposed in our budget, to help mom and pops 
get through the RRIF process more expeditiously and to better 
understand what it is, we started forming some joint 
partnerships with States. And the State of Ohio, their 
development commission was actually the first that we were able 
to partner with to where they take the leadership in becoming 
the RRIF experts for all of the short lines in the State of 
Ohio in providing that early upfront guidance to them and 
helping them through the process much more quickly.
    Mr. Barletta. What is the average time from start to finish 
for the loans that you have completed?
    Mr. Szabo. We are required that once an application is 
complete, to have it through the process in 90 days, and we 
meet that goal. The challenge has always been getting all of 
the information in up front to make that application complete. 
And so with programs like the one that we have put together in 
Ohio, we are going to enhance the applicant's ability to have a 
full application, to understand everything that is needed of 
them, and get it through the process that much more quickly.
    But also going back to our budget, you will notice that we 
talk about the need for grants for freight rail infrastructure 
improvements, and short lines would clearly be eligible here. 
What we have found is that so often, there are short lines that 
are desperate for capital, but they cannot qualify for a loan. 
And we believe, in these cases, particularly for safety 
enhancements, bridges, track improvements, that grants would be 
a more appropriate tool.
    Mr. Barletta. Deputy Secretary Porcari pledged to improve 
the RRIF program. What was it that he was trying to accomplish? 
I mean, he admitted that it needed to be improved.
    Mr. Szabo. Yep.
    Mr. Barletta. So I don't put the focus all on the short 
lines or the rail industry. I think there is a problem in the 
program in it being administered and I think there is--people 
have admitted that. So this has been 13 years, $35 billion 
authorized, but only $1.7 billion actually utilized. What was 
it that he was trying to accomplish?
    Mr. Szabo. Actually, what we have accomplished, going out 
and working with the States now is going to dramatically reduce 
the time to get a loan through the process and make sure that 
better information is provided up front, which will allow us to 
start that 90-day clock sooner and make sure that we continue 
to hit our 90-day deadline for all of those applications, but I 
think there are other things that can be done. And, again, as 
we get into reauthorization, some conversations that we might 
be able to have on how we might be able to better simplify the 
process for those mom and pops to get that capital in their 
hands.
    Mr. Barletta. Quick question, Mr. Melaniphy. Do you think 
there have been any improvements to the RRIF program since the 
deputy secretary pledged to improve it in 2011?
    Mr. Melaniphy. First I think the key here is that, unlike 
the TIFIA program, there are no funds appropriated for the 
credit subsidy of the RRIF loans and each loan applicant must 
pay the credit subsidy cost to their own loan, and while they 
can pledge capital against the program, it adds to the cost of 
the overall project.
    I think we need to look at how the TIFIA program is 
structured and look to see if there are ways to align the RRIF 
program to be more in alignment how the TIFIA program is 
structured without respect to buying down the risk of the 
project.
    Mr. Barletta. Thank you, Mr. Chair.
    Mr. Denham. Mr. Sires.
    Mr. Sires. Thank you, Mr. Chairman.
    And thank the panelists for being here.
    You know, ridership along the Northeast Corridor is strong, 
is growing. We obviously face urgent need on investment of the 
infrastructure. In the past few years, all we seem to talk 
about is how to privatize this, yet we are performing rather 
well instead of talking about investments that they need.
    Can the panelists provide me with their perspective on how 
privatizing the Northeast Corridor will affect both the cost of 
riders and the level of service that they will be provided, and 
whether or not the privatization will affect the kind of long-
term investment in infrastructure that the Northeast Corridor 
will require in the next 20 or 30 years? Can somebody take a 
shot at that?
    Mr. Hamberger. You can start. The questions move to the 
right.
    Mr. Szabo. We can either start with Mike and finish with me 
or vice versa.
    Mr. Lewis. You take it.
    Mr. Szabo. The most important thing we can do for the 
future of the Northeast Corridor is to allow the good work of 
the Northeast Corridor Commission to continue moving forward, 
as well as making investments that we are proposing in our 
budget proposal and ensure the certainty, the predictability 
and reliability of funding to make those necessary state-of-
good-repair improvements as well as investing in the corridor 
for the next generation of service.
    This is clearly one the best markets in the world, and with 
the limited resources, some remarkable things have been done. 
Over the past 15 years, a majority of passengers flew between 
New York and DC, and since the introduction of the Acela 
service, that has been completely turned around to where it is 
pushing close to, I think, 80 percent now that are traveling by 
train----
    Mr. Sires. One----
    Mr. Szabo. Yeah. And then just 20 percent that are shared 
by all of the airlines put together. But when you start talking 
about what role privatization has, there certainly is likely 
going to be an opportunity for private capital in the corridor, 
but I really think that the Commission is the one that needs to 
be able to determine what is the appropriate role and when that 
role takes place to ensure the capital comes into the corridor.
    Mr. Sires. Would you care to speculate how it will affect 
the price for the customers and investment in infrastructure?
    Mr. Szabo. Well, we don't advocate the privatization of the 
service. To go back to what I said, I think there may be the 
opportunity for private capital into the infrastructure, but 
ultimately it is about the safe, efficient reliability of the 
service for the passengers for the costs that they have to pay. 
And, we believe that the approach that is taken today with 
appropriate investment is the approach that needs to continue.
    Mr. Sires. You know, I know the question was raised before 
about natural disasters. I had a firsthand look at what 
happened with Sandy. You talk about predictability. There is 
really no predictability when it comes to, how do you deal 
with, when you do capital budgets, and then all of a sudden, 
you get hit with a storm like Sandy, that throws your capital 
budget all out of whack?
    Mr. Szabo. Well, I think the biggest thing that we have to 
ensure moving forward, and this is not just from a rail 
standpoint, but from all of our infrastructure, is that we are 
now designing resiliency as well as potential recovery into the 
design of all transportation projects.
    In my mind, there is just no question that weather patterns 
are going to continue to become more and more uncertain and 
more and more severe, and so we have to have redundancy as well 
as resiliency built into our transportation network.
    Mr. Sires. Because I know the ports by me, Port of Newark, 
obviously, they are looking at the same thing. But, you know, 
if the ports don't work or they are shut down or you are shut 
down, you know, 80 percent of the merchandise that comes from 
those ports is consumer to region, and you can't move it. You 
know, people--you know, it is just--I don't know how we can be 
predictable on anything like that.
    Mr. Szabo. Yeah. One of the first calls that I made after 
Sandy hit was to Ed Hamberger, just to better understand how we 
could divert freight and keep freight flowing to those ports 
that weren't affected and understanding what rail 
infrastructure had not been harmed and how we try and keep 
those goods flowing.
    Mr. Sires. Yeah. The port was shut down for just about a 
week----
    Mr. Szabo. Yeah.
    Mr. Sires [continuing]. Basically, so no matter how many 
railroad cars he brings down, you are not going to get--thank 
you very much.
    Thank you, Mr. Chairman.
    Mr. Denham. Thank you.
    Mr. Webster.
    Mr. Webster. Thank you, Mr. Chairman, for bringing this 
panel together.
    I have a question of Mr. Lewis. You mentioned having a 
national freight policy. And we can't do earmarks, OK, so that 
would be the easiest way to do it. So now we can't do that. So 
does AASHTO have any sort of recommendations how we can 
maintain the States' flexibility, which we give a lot of 
flexibility in much of the planning from, you know, highways 
and other means of transportation? We give you lots of 
flexibility. And yet with this, if we are going to do something 
regionally, we might be squeezing down on that flexibility. So 
my thought is, do you have any recommendations?
    Mr. Lewis. Sure. Congressman, I think it is a great 
question. I think, first of all, we can't talk about a national 
policy unless we are all talking collectively with all modes. 
And I think the Northeast Corridor Commission that Mr. Szabo 
talked to, it is a good model; smaller scale, but it is all of 
the States in the Northeast Corridor getting together, 
recognizing that working together, each of their interests are 
being served, that working with the freight railroads, working 
with USDOT, working with Amtrak, we have a common interest. 
There are different areas, each one of us have our own 
concerns, but there is a common interest, and it doesn't work 
unless we are all working on those common interests.
    I think on a Federal level, we at AASHTO do espouse 
greatest flexibility for decisionmaking of transportation of 
States, but we all recognize that we all work as an overall 
system. The Interstate Highway System only works because there 
is connectivity, so that you can take goods that come in from 
the Port of Long Beach and they can drive across Wyoming and 
end up in Providence, Rhode Island. That is the system, that is 
how the system works.
    We view the freight policy needs to be the same. It needs 
to incorporate the ports, it needs to incorporate inland 
waterways, it needs to incorporate the highways and railroad. 
It is all part of the system, and I think that is what we are 
supporting.
    Mr. Webster. OK. So should that be formalized in that, OK, 
they have--what they have done is somewhat voluntary. Should we 
formalize that as Federal policy? I mean, we require 
metropolitan planning organizations to build from a local-up 
plan. Should we engage ourselves in doing some sort of 
requirement for regional compacts of some sort----
    Mr. Lewis. Requirements, I am not sure. On behalf of 
AASHTO----
    Mr. Webster [continuing]. Versus voluntary. I mean, but 
voluntary is a little risky.
    Mr. Lewis. But voluntary, it is--going to the NEC 
Commission, the Commission is requirement, the outcome is not. 
We have to voluntarily work together to get a result.
    I think that there is an opportunity. I think there is a 
recognition across the country that we need to work as systems, 
as a system. I think the States recognize that. The States 
recognize that there is interdependency. And so I am loathe to 
say I am supporting requirements in that vein, but I wouldn't 
rule it out if we don't reach success.
    Mr. Webster. Somebody else want to----
    Mr. Szabo. Congressman, if I may add. Again, if you go back 
and look at our proposal, one of the key things we talk about 
in there is enhancing regional planning for passenger and 
freight rail projects, and that, in essence, we would like to 
see some kind of duplication of the Northeast Corridor 
Commission in other key regions, understanding that whether we 
are talking about moving people or goods, in most cases it 
doesn't stop at the State lines and that it needs to be looked 
at regionally.
    Mr. Webster. So do you think, though, that should be a more 
formal request by us through legislation or is that something 
that could be done voluntarily?
    Mr. Szabo. It is kind of hard. I think we have to talk 
about that a little bit. I think it needs to be strongly 
encouraged. I am not sure it is appropriate to mandate it. As 
Director Lewis said, the NEC works----
    Mr. Webster. Let me ask you this, what if we funded those 
that decided to do it?
    Mr. Szabo. Yeah. And I think those are the parts of the way 
that you encourage it. Good planning has to be the foundation 
of everything that we do. And so, yes, to be eligible for 
funding, having a regional entity that is doing the appropriate 
planning and coordinating the project I think would be 
appropriate.
    Mr. Webster. Thank you very much.
    Mr. Denham. Mr. Lipinski.
    Mr. Lipinski. Thank you, Mr. Chairman.
    I want to start by following up on Mr. Barletta's questions 
about RRIF because I think RRIF could be of much greater value 
if we are able to get more of that money out to the railroads. 
A couple of things I would like to ask Mr. Szabo, do you know 
how many active formal applications are currently being worked 
on?
    Mr. Szabo. I can get you that for the record.
    [The information follows:]

        Nine RRIF applications are currently in process.

    Mr. Lipinski. OK. And you are saying that once everything 
is in, that it is meeting the 90 days?
    Mr. Szabo. That is correct.
    Mr. Lipinski. So I wanted to ask, how much of a role does 
OMB play here? Does the role of OMB lead to any delays in this 
process?
    Mr. Szabo. It is a complex process. I mean, obviously there 
is the work and due diligence my staff has to do. And then 
there is a process through OST. And then there is a process 
with OMB for ultimate approval. And obviously, all of them are 
trying to ensure that we do not place the Federal taxpayers in 
a position of any undue risk and to make sure that it is a loan 
that can reach the determination of repayability, which is 
statutorily required. And so it is a multiple step process.
    Mr. Lipinski. Well, I am looking forward to having a 
discussion about what we can do, especially legislatively here 
to make the program more functional, get more of that money out 
the door, more of those loans out the door. And I certainly do 
like the idea of a grant program, although you know, as we all 
know, how difficult that is these days.
    Mr. Szabo. And what, Congressman, I would offer is that in 
some of these cases, we see these apps come in from some of 
these small railroads, and they desperately need the money, and 
yet they can't qualify for the loan. So if we don't find them 
way to get them capital, we run the risk of losing that 
service.
    Mr. Lipinski. I would 100 percent agree with you on that. 
It is something that we need to be working on further.
    I want to move on to Mr. Hamberger. We were sitting here 
less than 24 hours ago in these same places. At that point, you 
were testifying for the Panel on 21st-Century Freight 
Transportation. And we talked about at the time the CREATE 
program in northeast Illinois and how important it is to the 
freight network of the country. I am not sure how many times we 
have sat in these seats and have talked about CREATE. But I am 
very happy that CREATE has been moving forward, although not as 
quickly as any of us would like to see. But $1.2 billion has 
been committed to the program that contains about 70 projects.
    What I have been more concerned about, recently, the bigger 
projects are not getting done. And these are projects that 
really impact two of the things that we are talking about here, 
passenger rail and safety. The rail flyovers are--you know, one 
of them, Englewood flyover, has received funding. It is in the 
process of construction now. So rail flyovers really help for 
passenger rail, especially freight also. But I want to focus 
more on a safety aspect, which is the highway-rail grade 
separations. We have made tremendous progress on the rail 
corridor but only two of the 25 grade separations are complete. 
There are three or four others that have the funding, but that 
is not too far along with the 25.
    So I want to ask, because these are important for safety, 
obviously, how high of a priority are these projects for the 
railroads? And how do we move better, more quickly in getting 
these projects done?
    Mr. Hamberger. I am not sure I have an answer to the second 
part. The first part is a very high priority. We have committed 
in a letter from me to Illinois DOT Secretary Ann Schneider 
additional funding for all of the grade crossings consistent 
with State and Federal law that are part of CREATE. We have 
also committed additional money for the 75th Street CIP. So we 
see these as high priorities. We want to continue to work with 
the city and the State. And I go back to Mr. Webster's question 
about planning. This is a very great example of voluntary 
planning among a variety of parties--the Federal Government, 
the State, the city of Chicago, and the private sector. So it 
is working on a voluntary basis.
    Mr. Lipinski. Well, I would just like to add, I appreciate 
that, but I would certainly like to see my constituents and the 
people--the area would like to see more committed to those 
grade separations, and we can continue to talk about that.
    Mr. Hamberger. Well, as you know, Congressman, all of those 
projects have been put on a chart and are planned in 
cooperative fashion with Secretary Schneider and her staff, the 
Commissioner of Chicago, and the freight railroads and Amtrak 
and Metra. So we appreciate knowing you are there.
    Mr. Denham. Mr. Williams.
    Mr. Williams. Yes. Thank you, Mr. Chairman.
    I wanted to thank all of you for being here today. You 
represent a great industry and one where, in my house, we still 
run Lionel trains for 60 years. And also, Mr. Tolman, I 
appreciate your comment about jobs. I am from the private 
sector. I am from Texas. And I am all about jobs and business. 
So thank you for those comments.
    What I would like to ask--I guess Mr. Hamberger touched on 
it earlier--Mr. Szabo, and we talked about, in 2008, Congress 
enacted the posit train control mandate, which it is an 
unfunded mandate that makes freight railroads and passenger 
railroads comply, such as that in my district, Austin's Capital 
Metro system. It sounds to me, from what I have heard and seen, 
that nobody but possibly BNSF will achieve implementation of 
this on an on-time basis. And in Austin, the commuter rail 
system was started entirely with private funding just a few 
years ago. And the cost to deploy this technology is going to 
be about one-third of the cost to build the entire line.
    So my concerns are that unfunded mandates discourage both 
private and local infrastructure investment. And I understand 
there has been efforts to delay the implementation. We have 
heard about this today from some of the others, up to 2018. And 
my question is, would you support that? And is it realistic? Is 
2018 a realistic date?
    Mr. Szabo. Our goal is to ensure that PTC is implemented as 
timely as possible while understanding the complexities of that 
timely implementation. The report that we provided to Congress 
last year clearly indicates that the industry will achieve 
partial deployment by the congressionally mandated deadline of 
December 2015. But that full deployment is virtually impossible 
for most of the carriers.
    The approach that FRA recommended in our report to you--
ultimately this decision belongs to Congress--but we think that 
there has to be a balance between ensuring that due diligence 
is maintained to implement as timely as possible while also 
recognizing those very real technological and programmatic 
challenges that most carriers are facing. That is why we 
recommend, rather than a blanket extension, that you grant to 
us authority to work with each carrier to amend their 
implementation plan. So, on a case-by-case basis, we can 
understand both the due diligence that that particular railroad 
has made in their good-faith effort as well as the legitimacy 
of all of those challenges that are out there, and then 
customize an implementation plan for each railroad.
    Mr. Williams. All right.
    I guess the next question I have will be to you, Mr. 
Hamberger. You talked about safety concerns with attempting on 
the implementation of PTC by 2015. On the safety concerns, is 
2018 achievable? Does that give us enough time?
    Mr. Hamberger. We believe, by 2018, we will be 
substantially--85 to 90 percent implemented. We say that with a 
70-percent degree of confidence because there are still some 
unknowns. The major challenge right now is the back office 
software which will allow the dispatch centers of each of the 
railroads to talk to everybody else's dispatch center and 
everybody else's locomotive, as locomotives traverse over other 
rails. We have to make sure that we are interoperable with all 
APTA members, with Amtrak. And that back office software has 
not yet been delivered. We hope to see it some time this 
summer, test it in the labs, and then get it out on the road 
for testing hopefully by the end of this year.
    You may find this hard to believe, but not all software 
that is first written is 100 percent reliable. So we are 
concerned--and I would draw your attention to the GAO, which 
submitted testimony to the Senate Commerce Committee last week. 
They drew the Senate Commerce Committee's attention to the fact 
that we are striving so much to meet that 2015 deadline that 
they are concerned that some of this may be deployed without 
adequate testing. They believe that could be a safety issue. We 
think that, unlike the Administrator, there needs to be some 
certainty; there needs to be an extension of the deadline by at 
least 3 years; and in that regard, we also believe that there 
needs to be some regulatory forbearance until the entire system 
is certified as up and safe.
    Mr. Williams. Thank you for your testimony. I yield back.
    Mr. Denham. Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chair.
    Mr. Szabo, in the 2008 rail safety bill, there was a 
requirement that the 10 States with the most grade crossing 
accidents develop and submit their 2-year department or agency 
action plans for reducing the accidents. Do we have a status of 
that? And how is your agency monitoring the implementation of 
the plans?
    Mr. Szabo. We will give you a full status report for the 
record. But let me say this, we continue to execute that. We 
think it is very important. Some of the States have had their 
plans submitted and approved. Others have submitted and were 
still working with them on approval. But if you take a look at 
the safety risk that is out there, while we have seen 
continuous improvement in the rail industry over the past 
decade, a better than 40-percent reduction in accidents and 
injuries for the industry as a whole, grade crossing safety and 
pedestrian safety continues to be a vexing challenge. There 
have been improvements, but we have got a lot more work to do.
    Mrs. Napolitano. And I understand. But certainly we would 
like to see what States are supporting. And I would like for 
this committee to get a copy of those replies from the States 
and what States are moving up the line to get it implemented.
    Mr. Szabo. We will get you a full and complete status 
report on that for the record.
    Mrs. Napolitano. Mr. Chairman, for the record, a copy of 
the action plan of the 2008 requirements, the report for the 
States that have the highest accident rates to this committee 
and what is happening with the action plan. And he has that.
    Mr. Denham. We would ask that that be submitted for the 
record.
    Mr. Szabo. Yes, Mr. Chair.
    [The information follows:]

        Nine of ten States have completed action plans for 
        grade crossing safety. Alabama is in the process of 
        completing their plan, in conjunction with our staff.

    Mrs. Napolitano. Thank you, sir.
    And then there is an issue of the safety. As you know, we 
have had the Alameda Corridor-East through my former district 
that has--well, 54 grade crossings and only about 20 have been 
separated or half of them are separated. One of my cities 
requested the quiet zone at a great expense. Other communities 
are looking at that and are wanting it implemented, but they 
cannot bear the cost. Do we have any idea of how we are going 
to be able to help those communities be able to protect the 
residents? And partly, some of them are concerned with the rail 
horns going right through. As you know, California is separated 
by streets, the cities, so that some of these rail crossings go 
right through either commercial, industrial, city halls, et 
cetera.
    And then some of the communities who have some of those 
safety concerns are worried about their children if the quiet 
zone is established, and they don't have a warning for crossing 
pedestrians.
    Mr. Szabo. Yes, Congresswoman. Let me start by saying I 
understand this firsthand. As the former mayor of a community 
that had five railroads slicing through it, including two major 
freight rail yards----
    Mrs. Napolitano. Downtown.
    Mr. Szabo [continuing]. Through the entire community. So if 
you take a look at what we have proposed in our budget 
submission, we explicitly set aside a pot of money for what we 
call community mitigation.
    Mrs. Napolitano. Right. And that includes some of the 
raising of the medians and it includes quad gates and all of 
that.
    Mr. Szabo. Absolutely. Absolutely. So it would help 
communities construct their quiet zones. More importantly, it 
would really help with the sealing of corridors. The safest 
grade crossing is one that doesn't exist at all. So how do we 
work with communities to better design the closing of crossings 
with the strategic placement of overpasses and underpasses that 
are going to enhance rail safety, vehicle safety, and 
pedestrian safety.
    Mrs. Napolitano. How should we address this issue in the 
next railroad safety bill then?
    Mr. Szabo. I am sorry?
    Mrs. Napolitano. How should we address this in our next 
railroad safety bill?
    Mr. Szabo. Approve our budget proposal.
    Mrs. Napolitano. Which includes the funding?
    Mr. Szabo. Yes, ma'am.
    Mrs. Napolitano. Is there any chance to be able consider 
helping communities that cannot afford quad gates or----
    Mr. Szabo. This would be a pot of money that they would be 
eligible to apply for under competitive grants. So it is all 
about the public benefits that would be achieved and the safety 
that would be advanced.
    Mrs. Napolitano. OK. Then the other question, California 
has three of the top five busiest State-supported service roads 
in the country, the Surfliner, the Capitol Corridor, and the 
San Joaquin Corridor. And section 209 requires the State to pay 
for the losses. Although California and other States don't like 
the provision, they have accepted it. But a letter from Amtrak 
recently--and as far back as April--indicated that they would 
have to pay more, $40 million to be exact.
    Do you see this new guidance as a problem to discontinue 
State-supported passenger service routes? And what is the 
assessment, and concerns, and a resolution?
    Mr. Szabo. We need to make sure that the States and Amtrak 
end up in a good place, that there is full transparency of the 
numbers, a clear understanding of the services that the States 
are purchasing. And that is why we have now taken leadership to 
help mediate those discussions between the States and Amtrak. 
In fact, we were with David Kutrosky, who runs one of your 
operations up in California, this week. The feedback David gave 
to me was actually very positive on the progress he believes 
that is being made. But there are issues that we have to help 
the parties work through.
    Mrs. Napolitano. Thank you, Mr. Chair.
    Mr. Denham. Thank you.
    Dr. Bucshon.
    Dr. Bucshon. Thank you, Mr. Chairman.
    First of all, I am going to comment on the overall Federal 
budget. Again, we are at a hearing talking about discretionary 
spending being pinched. And the elephant in the room is that 
this Congress, this Government is not addressing the entire pie 
of Federal spending. We all know it. And as our mandatory 
spending continues to drive our national debt, we are going to 
continue to see discretionary spending programs tightened to 
the point where we have issues like we are talking about today. 
I wanted to make that clear.
    Mr. Hamberger, so I was interested in your comments about 
your tower construction. On one hand, the Government, the 
Congress has mandated PTC, but then you made a comment about 
how, on the other hand, an agency of Government has stopped 
tower construction. That is going to significantly slow the 
process, is it not?
    Mr. Hamberger. We have determined and have advised the FCC 
that if we can get this worked out here in 2013, we think it 
will not slow us down any further. But some of these approvals 
and environmental assessments in the past have taken 2 or 3 
years just for one tower. There are resource issues at the FCC. 
We are hitting them with 22,000 applications. So we are looking 
and working with them, again with the support of DOT and FRA, 
to try to come up with some way to handle them in a more 
batched group, if you will. And what we are trying to get 
across is that for those that are on our rights of way--and 
that is about 95 percent; these are just poles going up on our 
rights of way--maybe there should be some sort of a categorical 
exclusion for those. We have not yet gotten buy-in on that but 
we are working on it.
    Dr. Bucshon. Do you have any idea why the FCC--is this 
something new? I mean, they all of a sudden came out and said, 
we need this review and----
    Mr. Hamberger. No. They have regulations in place which we, 
over the years, have been abiding by in a more informal 
fashion. That is to say, the railroad would go out, hire a 
consultant, who would come back and say, there are some issues 
here that you need to deal with. The major challenge is the 
State Historical Preservation Office and Native American 
tribes. If there are issues that need to be brought to those 
entities, we go to them and work through possible mitigation 
measures. With this big program, the FCC seems to think that 
maybe there should be a more formal role for them which will, 
again, we think slow things down. They understand the issue. 
They are working with us. But I did want to get this on your 
radar in case we need to come back to you for assistance.
    Dr. Bucshon. Well, I mean, this is only just my opinion. I 
mean, it may go along with the major speech that the President 
gave and the overall view I think of these issues as it relates 
to this current administration.
    The other question I have for you is--I mean, it is very 
important to have the interaction between Amtrak and the 
infrastructure of your members. The Amtrak on-time train 
situation and how if there are issues related to that, how that 
works and how that gets resolved in general.
    Mr. Hamberger. In the past, the individual freight host 
railroads and Amtrak negotiated contracts that included both 
penalties and incentives for on-time performance. And the major 
focus is freight train interference in achieving on-time 
performance. There are a lot of reasons an Amtrak train may not 
be on time. And Mr. Sires talked eloquently about scheduling a 
railroad when you have Hurricane Sandy coming your way. There 
are a lot of issues, including Amtrak's own locomotives perhaps 
not performing up to standard.
    There are a lot of reasons for on-time performance not to 
be at 100 percent. Our focus is on delays caused by freight 
train interference.
    So we have negotiated--I say ``we''--the individual 
railroads--have negotiated contracts with Amtrak. We think that 
is the way it should be. Under the 2008 PRIIA Act, Congress 
dictated that there should be a role for Government to mandate 
an 85-percent on-time performance, that the FRA and Amtrak 
should promulgate such regulations, and that the STB should 
enforce them. We have challenged the constitutionality of the 
regulations put out by Amtrak and FRA. That litigation was 
heard earlier this year and we expect a decision on that case 
very soon. Should we not win that litigation, we will probably 
be back here asking you to change that legislation to, again, 
put it back in the category of bilateral discussions between 
Amtrak and the freight railroads. We think that is a much 
better way to go. One of the big issues we have is, what is the 
database for determining the cause of the Amtrak delay? Right 
now, it depends upon conductor delay reports. The conductor is 
back with the passengers punching tickets. It is hard for he or 
she to know exactly the cause for a delay.
    Mr. Denham. Thank you, Mr. Hamberger.
    Mr. Cummings.
    Mr. Cummings. Mr. Tolman, you have referenced several 
safety features and procedures in your testimony that were once 
under fire because of costs and political considerations. Now 
that we are living under sequestration, are there any policies 
or safety measures that you feel are particularly at risk of 
this particular of indiscriminate cost-cutting?
    Mr. Tolman. Off the top of my head, nothing in particular. 
But I would like to comment--everybody has been speaking about 
PTC. I have a lot of heartburn with PTC being pushed back 3 
more years after a 7-year process from 2008 to present not to 
implement PTC. And now they want to go into a 10-year--you 
know, an additional 3 years when we all know that the National 
Transportation Safety Board recommended PTC to be implemented 
as early as the late 1970s. I mean, come on, we knew this was 
coming. We need to respond in a more practical manner to 
address the safety issues. It is very troubling for our members 
to, once again, not to see this being implemented.
    And the big, big question that I have: Amtrak has been 
sorely underfunded for so many years, yet they have had to form 
a PTC in the Northeast Corridor since 1996. It behooves us to 
figure this one out.
    And the other one is, why can one Class I railroad 
implement PTC by the 2015 deadline and the rest of the freight 
railroads can't? And where are they in the process? It troubles 
me, Congressman. Thank you for the question.
    Mr. Cummings. Thank you.
    Mr. Szabo, we all know that the American rail industry was 
once a world leader in innovation and efficiency. Clearly, our 
claim on that title has been lost as a result of decades of 
failure to invest in essential rail infrastructure. In terms of 
planning for the reauthorization of PRIIA, what role should the 
Federal Government play in bringing us back to the forefront of 
this industry? And what can this committee do to support those 
goals?
    Mr. Szabo. I think if you take a look at our budget 
proposal, you will see there is a very heavy element in there 
for research and development. And our goal is to once again 
make ourselves the world leader in exporting both intellectual 
property and talent as well as actual rail supply goods. As we 
take a look at the role we believe rail has to play in meeting 
our Nation's transportation challenges, we know we need to grow 
this expertise just to achieve that here at home. But again, we 
want to be a world leader.
    And, Congressman, if I may, I do want to come back and talk 
about on-time performance just for a second. I think it is very 
important to note that since PRIIA in 2008 and the statute that 
required the establishment of those metrics and standards, that 
on-time performance has improved each year. And this past year 
was the best that it ever has been.
    As an old conductor, I know that the conductor has full 
knowledge of what is going on with his train. You have got the 
radio in your ear. You are hearing all transmissions from the 
dispatcher. You know what is going out there on that railroad. 
Certainly, there may be the opportunity to improve data. We 
think that is an important goal and, in fact, are working with 
the industry as well as Washington State on a pilot project to 
do that. Our goal is to make sure that this is not about 
placing blame but is about doing good root cause analysis to 
understand whatever is causing a particular delay and then 
coming up with fixes.
    Mr. Cummings. And last question, Mr. Szabo.
    Can you comment on the status of the national rail plan? 
And can you specifically address how uncertainty in funding for 
rail may impede the development of the national rail plan?
    Mr. Szabo. We continue to provide a series of rail planning 
documents kind of working off a list that holistically taken 
together would generate a national rail plan. And I think it is 
important to note that it is not one document. It is never 
going to be one document. It will continue to be a series of 
documents that will continue to evolve as our Nation's 
transportation needs also evolve.
    Mr. Cummings. Thank you very much. I yield back.
    Mr. Denham. Mr. Hanna.
    Mr. Hanna. Mr. Szabo, it is not hard to imagine that you 
can approve things in 90 days when something--when actually the 
clock almost never starts ticking because it is so difficult to 
get to that 90-day point. And it is easy to understand that 
grants are easier than loans that are backed by security. It is 
easy to give money away. And I am sure there are plenty of 
people who will take it.
    But as a practical matter, these are private companies that 
arguably supply a public good. And in this environment, it is 
going to be increasingly difficult to justify an out and out 
grant, even though it is nice to talk about. And the fact that 
these companies have to pay such enormous amounts of money 
relative to their cash flow and their worth to get to these 
loans, I mean, you know so much more about this than any of us 
because you have dealt with it directly. What are those things 
that cause the RRIF loan not to be used? Why would you expect 
someone to pay a lot of upfront money for a loan that may never 
happen? And why not clean up that process rather than do 
anything else first? Because it sounds like, you know, we have 
got money to loan, but we have made a process that is a catch-
22. So, with all due respect, what would you do if you were 
that bank?
    Mr. Szabo. Yeah. I think we need to really do all of the 
above. As I said before, there are certain short lines that 
provide important service but are never going to be able to 
qualify for a loan. So in those cases where there are clear 
public benefits, I do believe the grants are important.
    The second thing that we can do--and we are doing now--is 
to help applicants better understand up front what is going to 
be required of them so we can make sure we have that complete 
application much more quickly and get them through the process 
that much more quickly.
    But third, I think as we get into reauthorization, we do 
have to have a conversation on those things statutorily that we 
might be able to do to help in particular the small railroads, 
the short lines get through the process. I know Mr. Melaniphy 
from APTA had some suggestions talking about some of the ways 
that TIFIA works, and perhaps we need to explore some of the 
approaches in TIFIA and see if it may apply to RRIF, 
particularly if we are talking about small loans.
    The big boys can get through the process. The Class I's can 
get through. We put Kansas City Southern through on a loan in 
record time. But they are the ones that less need the program. 
They have other financing options that work for them. The 
challenge really is meeting the needs of the small Class II's 
and Class III's.
    Mr. Hanna. So, just directly then, is it in any way 
realistic this whole RRIF program? And is there anything about 
it that is workable in the real world? And is it in any way 
practical to charge somebody hundreds of thousands of dollars 
potentially for a loan they may never see?
    Mr. Szabo. There are those that have used the program and 
used it well and gotten through the process in a timely manner. 
I am talking about Class II's now. A couple of railroads up in 
Iowa that have used the program several times. Again, they 
understand what the process is, what it takes to get through 
it, and they have been able to use it successfully. They are 
happy borrowers, and they come back. So I think part of our 
goal is to make sure that we can get all the mom and pops to 
that place, so at least if they qualify for a loan, they can 
expeditiously get through the process.
    Mr. Hanna. What are the creditworthiness standards that you 
use? Because it sounds like most of these companies are not 
capable of doing this without this type of law. So isn't that 
also a catch-22? What have you seen in----
    Mr. Szabo. It is a challenge. But certainly you expect me--
you expect me to make sure that when I make a loan that there 
is the statutorily required finding of repayability. And the 
last thing I want to do is be the Administrator sitting here in 
front of this committee talking about defaults. So we have to 
balance every day on these loans trying to get capital to the 
railroads that need them while also protecting the taxpayers of 
America.
    Mr. Hanna. So that basically we have established a system 
of loans that doesn't work to a bureaucracy that has a 
responsibility that, by meeting it, it almost guarantees that 
the system fails. Is it fair to say then that a lot of these 
smaller railroads are just never going to be viable in the 
sense that they meet these loans, but yet we need to have a 
bigger conversation about the overall public good of what they 
do to decide whether or not we are----
    Mr. Szabo. No. I think the record shows that there are 
several short line railroads that can and do, in fact, use this 
program, use it successfully, and are very, very pleased with 
the results. Now, certainly, there is another pool that have 
challenges. So we need to take a look at how we help them with 
all of those challenges. I believe that there are many more 
short lines that we can help successfully get through the 
program in a timely manner. But there are also those that we 
have identified that are never going to achieve that 
repayability requirement. And so if the service is deemed to 
have sufficient public benefits, grants are appropriate.
    Mr. Hanna. Thank you.
    Mr. Denham. Ms. Titus.
    Ms. Titus. Thank you, Mr. Chairman.
    I would like to just shift gears a little bit and address 
this question to Mr. Hamberger, since you do freight rail, but 
also, Mr. Lewis, your insight into this I am sure would be 
valuable.
    We are hearing a lot about inland ports and how they are 
opening up opportunities for economic development by bringing 
all modes of transportation together. I think it worked well in 
Dallas. Well, I represent Las Vegas. And that seems to me an 
area that has potential for developing into an inland port. We 
have the six busiest airports in the country and a lot of 
people in seats coming for tourism. But there is a lot of space 
to haul other things underneath as well. I-11 has been 
designated as an interstate highway. We have got to get it 
funded, but that is moving forward with cooperation from 
Arizona. So I wonder how you see this development of inland 
ports fitting in kind of with the future of railroads, what 
benefits you see might be coming for railroads as well as for 
communities, and what we might be able to do to kind of 
facilitate that process?
    Mr. Lewis. Congresswoman, let me take a first stab at that. 
I think that one of the things that a discussion around a 
national freight policy is going to reveal, the opportunities 
for inland ports and others. Where does it make the most sense 
to use the infrastructure that we have and that we can enhance 
in a most cost-effective way so that we are not overly relying 
on one system, one mode over another? But I think that provides 
a dialogue at a national level among all modes to be able to 
decide where it makes sense and where it doesn't because we all 
know how scarce the resources are and are going to be. We need 
to put it where it makes most sense.
    Ms. Titus. What can we be doing now to move that process 
forward?
    Mr. Lewis. Well, I think first is to engage all of us with 
the national freight dialogue. And I think we just had a 
meeting of the Secretary's committee this week just to kick it 
off. And I think that is a great opportunity along with the 
work that the committee does as well. So I think that is a 
venue to begin that dialogue.
    Mr. Hamberger. I would agree with that. I am not sure I 
understand in my own mind the intricacies of what an inland 
port designation means. But if I could expand it to just 
address, for example, intermodal yards. One of the things that 
we discussed yesterday in Mr. Duncan's committee is the length 
of time it takes to get through the environmental regulatory 
process. And I think you are aware of the 8-year travails of 
one of our members in trying to get a near-dock intermodal yard 
in southern California. It has been 8 years and $50 million in 
legal and environmental studies. And they are now in court for 
probably another couple years. That is a pretty egregious 
example. But that kind of thing happens around the country as 
you try to put in an intermodal yard which takes advantage of 
each mode's strengths. So that kind of streamlining of 
environmental permitting that occurred in MAP-21, we would like 
to see continued in the next rail bill as well.
    Ms. Titus. Well, we are anticipating an expansion on the 
Panama Canal, more goods coming in from Asia. The ports in 
California are getting filled up. They are going to need 
someplace to go kind of as a starting point, and Las Vegas 
would be well suited for that.
    Mr. Szabo, would you----
    Mr. Szabo. If you go back and take a look at our budget 
submission, part of what we are talking about there is 
community mitigation. And it is helping the railroads and the 
communities have the tools that they need. You know, as freight 
rail's role grows, as we try to site these intermodal centers 
that there are dollars that can be provided to mitigate the 
negative impacts, whether it is noise, whether it is traffic 
flow, allow for the construction of overpasses, underpasses and 
you know those things that would just allow the intermodal 
centers to live in harmony with the community.
    Ms. Titus. Thank you, Mr. Chairman.
    Mr. Denham. Thank you. Mr. Mica.
    Mr. Mica. Well, thank you, Mr. Chairman.
    And a couple of questions. Starting out with Mr. Szabo, as 
we rewrite PRIIA, we had some provisions in there for 
developing high-speed rail that need to be updated. I had an 
opportunity to work in authoring that. One of the things that I 
am interested in is opening competition for passenger rail. Do 
you favor that?
    Mr. Szabo. I think the key is, for the public or for the 
private sector to take a look at investing, there needs to be 
certainty. Obviously the private sector is motivated by profit 
motivation and that is fair. It makes our----
    Mr. Mica. You don't have a problem with opening----
    Mr. Szabo. We believe that there are absolutely 
opportunities for privatized operations.
    Mr. Mica [continuing]. Long distance, high speed?
    Mr. Szabo. Not necessarily for long distance, sir. No. I 
think that is a whole different animal.
    Mr. Mica. It is not an animal. It is a dog, and it is 
costing us lots of money.
    You are aware of the increasing losses. Every one of the 
three major long-distance service routes increased their loss 
from the last recorded year to the previous recorded year, you 
are aware of all of those increased losses in long-distance 
service?
    Mr. Szabo. I am aware of the fact that Amtrak's financials 
are the strongest that they have ever been last year.
    Mr. Mica. It has nothing to do with long-distance service. 
And we are still dumping a billion and a half dollars into it. 
And through the Disney Fantasyland map, they will tell you that 
they are making money maybe on the Northeast Corridor. The best 
returns are on the State partnerships. Is that not correct?
    Mr. Szabo. Those returns are on the Northeast Corridor. The 
best returns are on the Northeast Corridor followed by State 
corridor service.
    Mr. Mica. The Northeast Corridor is a joke in the world of 
international high-speed rail service. You are aware of the 
speed from here to New York City, the average speed of Acela?
    Mr. Szabo. I am aware of how our project is continuing to 
improve that speed and reliability.
    Mr. Mica. Eighty-three miles an hour is a dog. And then 
from New York City to Boston, you are aware of the speed, is it 
not 68 miles an hour on average?
    Mr. Szabo. I am aware of how our projects continue to 
improve the speed and reliability of service.
    Mr. Mica. Even I think by our statute, I think we define 
around 110 miles an hour. The world is about 120. But most 
high-speed trains an are going 140 to 150 miles an hour, 
average speed; is that correct?
    Mr. Szabo. Yeah, 186 miles per hour is pretty much the 
international standard. But our good work through the NEC----
    Mr. Mica. Most of the trains travelling in Europe and the 
trains that are built today in Asia are going 140 miles an hour 
on average on the major routes, 120 to 140. I will even give 
you that. It is 68 miles an hour. We don't even begin to 
realize the potential of it. So, please, don't tell me that the 
Northeast Corridor is a success. And again, most of the capital 
money we are dumping into it. The only track that we own, 
really the only substantial track that we own is the Northeast 
Corridor. And I just was made aware of your return on nonrail 
revenue is about $100 million a year, is that right, for the 
Northeast Corridor? The right of way using the return----
    Mr. Szabo. Are you talking about Amtrak's return?
    Mr. Mica. Yes.
    Mr. Szabo. We will provide you an answer for the record.
    Mr. Mica. I will tell you, it is about $100 million. I was 
told by the private sector that they could get a 10 to 12 times 
better return if you could give that up. So, in our national 
policy, we should be looking at turning some of that over to 
the private sector.
    How many RRIF loans have been given so far--well, we will 
say last year?
    Mr. Szabo. We will provide it for the record, Congressman.
    Mr. Mica. Half a dozen? A dozen?
    Mr. Szabo. We will provide it for the record.
    Mr. Mica. How many RRIF--the joke was, there have been more 
FRA Administrators at one point than there were RRIF loans.
    Mr. Szabo. No. That is far from the truth. I am number 12. 
And there have certainly been a lot more RRIF loans than that. 
I would say the number is close to 40.
    [The information follows:]

        Thirty-three RRIF loans have been given in the history 
        of the program. Two were given in 2012.
        Nine RRIF applications are currently in process.
        Amtrak has told FRA that its nonrail revenue in FY 2013 
        was $584.4 million.

    Mr. Mica. RRIF, which we tried to do in the transportation 
bill with the rail section. And that needs to be done. 
Obviously--Mr. Hamberger, your folks aren't interested so much, 
and they just want the Government basically out of their 
business, has been my take in talking to your executives. The 
big lines don't necessarily use RRIF. And the small lines I 
heard you give some grants to because they don't qualify.
    Mr. Hamberger. I believe KCS is the only Class I that I am 
aware of that has a RRIF loan.
    Mr. Mica. Well, we need to look at that in the future.
    Are we going to go a second round? I am ready.
    Mr. Denham. Absolutely. Thank you.
    Mr. Szabo, going back to the PTC discussion, Ms. Brown and 
I have been going back and forth on our discussions on what we 
feel is a suitable extension or philosophy thereof. But you 
bring up a new point on a case-by-case basis. Certainly, Ms. 
Brown and I, after traveling the United States, we have been 
putting together a pretty good idea of some of the challenges 
with PTC. I think we would like the authority to do it on a 
case-by-case basis. Is that something FRA would support, giving 
this panel the authority to do that on a case-by-case basis?
    Mr. Szabo. This panel? You know, Congressman, I would 
question the wisdom of allowing it to become a political 
decision. I believe that it is best vested with those safety 
experts that clearly can understand----
    Mr. Denham. So the Administration wouldn't look at issues 
like this from a political standpoint?
    Mr. Szabo. Oh, no. Absolutely not. This is about 
understanding the due diligence, the legitimacy of the effort 
that has been made to date while also taking a look at those 
complexities, those very real challenges that are out there 
working together with the carrier to come up with an 
implementation plan. It is a document that is already out 
there. So it is just a matter of amending the implementation 
plans that exist today.
    Mr. Denham. On a case-by-case basis, FRA would like to have 
that authority to be able to pick winners and losers out there 
within freight railroads or even with different metro or 
commuter rails.
    Mr. Szabo. It certainly isn't about winners or losers. It 
is about ensuring--no. It is about ensuring public safety.
    Mr. Denham. Well, there are some that are closer to 
completion than others.
    Mr. Szabo. That is correct.
    Mr. Denham. But those that are closer to completion, if 
they implement in 2015 or 2016 and others are allowed to do it 
in 2018 or 2019, there is certainly a competitive advantage or 
disadvantage depending on what side of the issue you are on. So 
rather than going to a blanket extension in a bipartisan way, 
if we gave that authority to FRA to pick on a case-by-case of 
basis, you would then be picking winners and losers, would you 
not?
    Mr. Szabo. No. We would be assessing very real facts. And 
those facts would be----
    Mr. Denham. It is a real fact though that if one freight 
rail--we will use freight as an example--if one freight rail is 
able to take the burden of extra cost early and every other 
freight rail is then able to do it with a 3-year, 4-year, 5-
year extension, whatever FRA decides is fair, I guess, you 
would be picking winners and losers.
    Mr. Szabo. We would be assessing the facts. And nobody gets 
a free ride out of this. In fact, what we are talking about is 
ensuring full accountability. And to make sure that good-faith 
effort is being met and then assessing the legitimacy of the 
challenges that are out there, and many of them are real. And 
they are actually somewhat different from property to property. 
So this really allows us to make sure it is implemented as 
timely as possible to start achieving those safety benefits for 
the public as soon as is practical.
    Mr. Denham. So if you had a freight rail that was ready to 
implement quicker than the rest of the industry, would they 
reap some type of benefit under your case-by-case scenario?
    Mr. Szabo. Well, they certainly get the safety benefits 
much more quickly, but then the questions that we would have to 
comfortably have answered through the amendment process would 
be the legitimacy of the effort of the other carriers to date 
and making sure that it is well documented, it is clearly 
understood, and that there is no free ride for anybody. The 
challenge, Congressman--listen, ultimately, we execute whatever 
you legislate. But the challenge to a blanket extension is, are 
we going to be sitting here 3 years from now facing the same 
challenge that the people feel they got a little bit you know 
of a breather here and so the intensity of the effort lets up? 
That is the risk. And so there is a lot to balance here.
    Mr. Denham. If FRA was put in charge of PTC, what would 
happen on the other side of the spectrum for some of the 
commuter rails that would not be prepared to enter into 
something like this? We were just in Chicago, for example. Now 
Chicago is having its own challenges financially with 
furloughs. And this may not be an area that they are prepared--
I am not trying to speak for them--but may not be prepared on 
their highest priority level to fund this huge expense. Do you 
fund it for them? Do you bail them out? Do you shut them down? 
What would be your future outlook on a case-by-case basis?
    Mr. Szabo. Two things. Shame on anybody if it hasn't been 
their highest priority since the deadline that the Congress has 
established has been very, very clear, since PRIIA was 
established in 2008. So it has been very, very clear to 
everybody that the deadline is December 31, 2018.
    Mr. Denham. So if somebody doesn't have the money, if they 
don't have it as a priority, if they are looking at their city 
or county or a State in a bankruptcy-type issue, do you shut 
them down?
    Mr. Szabo. First off, if you take a look at our budget 
submission, we are willing to help fund the cost of PTC 
implementation for the commuter railroads as well as Amtrak. We 
believe that there are sufficient public safety benefits to 
warrant public funding.
    Mr. Denham. Not freight rail. Not the private.
    Mr. Szabo. Not private sector. That is correct. That is 
correct. Obviously, if there is a case where somebody is 
failing to meet the deadline, we have to do due diligence to 
determine the facts. And based on those facts, it allows us to 
determine whether we use discretionary enforcement or whether 
we have to take an enforcement action. But the facts lead us 
there.
    Mr. Denham. Thank you. This is an important topic I am 
going to come back to. I know you have got quite a bit to add 
to this, Mr. Hamberger.
    But let me recognize Mr. Mica first for a second round.
    Mr. Mica. Thank you, Mr. Chairman.
    OK. Let's go back. Mr. Hamberger, how fast does the average 
freight train travel in the United States? I heard it was only 
20-some miles or something.
    Mr. Hamberger. That is what we have on the Web site. The 
way that it is calculated, it includes movements through 
terminals as well. But over the line, the maximum speed on a 
Class V track is 79 miles an hour.
    Mr. Mica. Yeah. But the average speed of most freight is 
pretty slow because it goes through urban corridors. Most of 
those corridors were developed some time ago. One of the 
smartest things Florida ever did was some rail relocation. I 
think the PRIIA bill should have--well, first of all to get 
more vehicles and also trucks--trucks do the most damage to our 
highways--off the road and onto rail, that makes sense for us 
as an investment, it makes sense for moving heavy commodities, 
whatever it is or items.
    But the rail relocation in Florida is the kind of model 
that we need to do. Get the freight rail out of the urban 
corridor. So, Mr. Chairman Denham and others, I think a major 
rail relocation effort is going to be something I would like to 
see us push. And that can be done. It was done so wisely. We 
are using now that urban corridor. It is going to be converted 
to passenger, primarily. And the speed I am told will double or 
triple. It will take more trucks off of Interstate 95, 
Interstate 75 and Interstate 4 in the next 50 years and 
probably save us money and, again, reshuffle the deck as far as 
transportation. Has anyone talked about that today?
    Mr. Hamberger. No, sir. You are the first.
    Mr. Mica. OK. Well, I am talking about it. I want to see 
your proposals from your association on how we do that and how 
that is done. We need to get you out of those urban corridors 
where it makes sense and re-use those. So that is one thing. 
Mr. Szabo is living in another era. Again, staff--where is the 
staff? I want them to distribute. Come on. Don't take your 
time. I have a limited amount of time.
    These are the top three money-losing routes or long-
distance routes. They all lost more money year to year. It is 
getting worse than rather than better. And you told me you 
wouldn't want to put that up for private competition; is that 
right?
    Mr. Szabo. First off, Congressman, if I may, take a look at 
our budget proposal. We are in fact proposing dollars for rail 
line relocation. We agree with you that it is an important 
priority.
    Under our proposal and by breaking it down into business 
lines, we believe that through the preparation of 5-year plans 
and our aggressive monitoring of these 5-year plans that----
    Mr. Mica. Long-distance service, when you put it up----
    Mr. Szabo [continuing]. We continue to achieve efficiencies 
for long-distance service.
    Mr. Mica. It is getting worse. And I just got news of the 
chef conclaves that they are holding, preparing gourmet meals.
    Mr. Szabo. The volunteers? You are talking about the 
volunteers?
    Mr. Mica. They are volunteers. But it still adds costs, and 
I am trying to get that. We will investigate that on my other 
subcommittee. Very soon, you will see that. But I am telling 
you that the losses are getting worse rather than better. Even 
in addition to the top three long distance, Auto Train is $122 
a passenger loss, and that has increased. That is in my 
district. That has got to stop.
    That actually was run as a private sector money-making 
proposition. I talked to the guy that set it up. They had two 
crashes. And liability killed them, and that is when you took 
it over. But it needs to go back to the private sector. I would 
like to see a recommendation from you as to how we can help 
with liability for passenger service so that----
    And he shook his head, the record will reflect, in a 
positive manner.
    So here for the record, too, Mr. Chairman, I submit all 
these money losers, including the one to my Auto Train to my 
route.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Mica. I guess tax credits would be one of the things 
that could help you the most for investment, Mr. Hamberger and 
your folks.
    Mr. Hamberger. At one point, as you know, Chairman Mica, we 
were pushing that very aggressively. More recently, it appears 
both in the administration and in Congress that there is a 
desire to broaden the base and lower the rate. So we have 
signed on to the concept of broadening the base and lowering 
the rate. We are one of the highest effective taxpaying 
industries in the country.
    Mr. Mica. But that would help you----
    Mr. Hamberger. We believe that lower rates would be very 
helpful.
    Mr. Mica [continuing]. Not need to rely on Government 
programs.
    Mr. Hamberger. Yes, sir.
    Mr. Mica. Last, Mr. Tolman, you represent the hard 
workers--and there are a great many people who are employed in 
Amtrak and freight rail. It is my understanding that people at 
Amtrak, there are many positions for which they are paid less, 
their benefits are less than the private sector. Do you 
represent both? And is that the truth, the whole truth, and 
nothing but the truth?
    Mr. Tolman. There is a variety of different wages 
throughout the industry.
    Mr. Mica. But the brothers and sisters in passenger rail 
under Amtrak, I am told, in many instances are paid less for 
comparable positions in freight rail.
    Mr. Tolman. In some freight railroads, yes, that is 
absolutely true. In some areas, that is untrue.
    Mr. Mica. That is unfair to them. And we privatized freight 
rail way back in 1970 when we started to do something with 
Amtrak. And we have left it to a monopoly that is a Soviet-
style train operation. And it is a national joke and disgrace. 
It costs the taxpayers a fortune, which has to stop.
    Thank you, Mr. Chairman. I will yield back the balance of 
my time.
    Mr. Denham. Mr. Hamberger, back on PTC.
    Mr. Hamberger. Thank you, Mr. Chair.
    Mr. Denham. Well, first of all, let me ask you, case-by-
case basis, do you think the House and Senate ought to just 
give authority to the FRA on a case-by-case basis, seeing as 
how this Obama administration is not very political in dealing 
with various items like this?
    Mr. Hamberger. Mr. Chairman, with all due respect, I think 
the fewer safety mandates Congress gets involved in, the 
better. Our view with respect to the system--a 3-year extension 
versus a case-by-case basis--you put your finger right on it. 
It would not be a railroad-by-railroad basis. It almost would 
have to be evaluated on a corridor-by-corridor, city-by-city 
basis. I don't understand how it could be done if, for example, 
a freight railroad is equipped, but a Metra train isn't; or one 
freight railroad is equipped and a short line railroad working 
in the Chicago zone is not. Because of the interoperability 
issues, it has to be a blanket extension so that everybody can 
get there.
    Let me make two related points. Number one, I do not for a 
moment impugn the professionalism of the FRA. They are 
dedicated, highly trained professionals interested in safety. 
At the same time, I think this would be an incredible resource 
demand on them. Each of our railroads will have some PTC up and 
running. It would almost have to be corridor by corridor, and I 
think it would just be impossible to do from a practical 
standpoint.
    Secondly, I agree with Mr. Tolman's statement that there 
needs to be transparency, and that is why we presented last 
Wednesday to the Senate Commerce Committee the update of our 
progress report. I did not attach it to this testimony, because 
we were more focused on PRIIA. But let me submit that for the 
record.
    [The progress report, entitled ``PTC Implementation: The 
Railroad Industry Cannot Install PTC on the Entire Nationwide 
Network by the 2015 Deadline--May 2013 Update,'' also appends 
the Association of American Railroads response to a question 
for the record and can be found on page 136.]
    Mr. Hamberger. It details railroad by railroad what each 
has done in terms of progress in a variety of areas and what 
still needs to be done.
    And the last point I would like to make, and I tried to 
head this off in my opening statement, Mr. Chairman, but I am 
sick and tired of people saying: ``we need to keep the pedal to 
the metal,'' or ``we have to make sure that the railroads don't 
walk away from this,'' or ``they are going to be back here in 3 
years asking for another extension.''
    We are committed to this. We are not asking for the 
deadline to be repealed. We are going to get it done. The 
sooner it gets done, the sooner we can begin to reap the safety 
benefits, and begin to see whether or not there are business 
benefits. So we don't need anybody putting their boot on our 
throat. We are committed to getting it done.
    Mr. Denham. Mr. Hamberger, it is my understanding that some 
of the freight rails are further ahead than others----
    Mr. Hamberger. Yes, sir.
    Mr. Denham [continuing]. As well as some of the commuter 
lines, some of them are further ahead than others. From a 
freight perspective, would the freight rails be supportive or 
opposed to doing a--assuming we did some type of extension, 
whether that is a 1-year, 2-year, 3-year or more extension, if 
this body, working with the Senate, agreed to some type of 
extension, would freight rails be able to give an updated 
timeline----
    Mr. Hamberger. Yes, sir.
    Mr. Denham [continuing]. On where we were?
    Mr. Hamberger. Yes, sir. And that is why we submitted this. 
And, again, I apologize for not putting it on as an attachment 
to this, but I will be glad to submit it. It is very detailed, 
getting down to the number of locomotives, for example.
    Mr. Denham. Would that----
    Mr. Hamberger. Wayside interface units, railroad by 
railroad. It does not include the commuter trains represented 
by APTA.
    APTA, I think you did yours last year. I don't know if you 
have updated it for 2013.
    Mr. Denham. And would that not also ensure that if we had a 
timeline and you could see transparency----
    Mr. Hamberger. Yes, sir.
    Mr. Denham [continuing]. On a----
    Mr. Hamberger. I would be glad to be back here every 6 
months, every quarter, every year, whatever--however many times 
you want me here----
    Mr. Denham. So that would ensure that----
    Mr. Hamberger [continuing]. To talk about it, that is 
right.
    Mr. Denham [continuing]. You wouldn't need another 
extension beyond----
    Mr. Hamberger. That is right.
    Mr. Denham [continuing]. Every 2 or 3 years, whatever the 
extension would be----
    Mr. Hamberger. Yes, sir.
    Mr. Denham [continuing]. Necessary.
    Mr. Melaniphy, in your testimony, you mentioned that there 
is a critical state-of-good-repair backlog of over $80 billion. 
The PTC mandate is forcing a choice between critical safety, 
maintenance projects and PTC.
    Can you provide some examples of the choices your members 
are going to have to make or are making today dealing with 
safety upgrades versus PTC?
    Mr. Melaniphy. Mr. Chairman, as you are aware----
    Mr. Denham. As well, what type of extension do you think 
that we ought to see in PTC?
    Mr. Melaniphy. Thank you, Mr. Chairman. As you are aware, 
our members remain committed to safety on all levels. And while 
PTC is an important component of the safety infrastructure, it 
is not the only component of the safety infrastructure. We must 
invest in our rail bed, in our signaling, all the systems that 
go along with making the rail system safe.
    As you may have seen in a Wall Street Journal article, 
SEPTA in Philadelphia had to make a choice in its safety 
systems and is going to have to close one of their bridges 
because they can't afford to replace the bridge and balancing 
the costs of all the safety systems they have to implement. 
Those are some of the choices they have to make.
    We are seeing that across the Nation. And the unknown costs 
for things like spectrum availability and radio system 
availability and testing, it is going to take some times and 
some funds to do that. So there are tough choices they have to 
make each and every day, and that is why we have asked for 80 
percent support on the cost of the PTC implementation and free 
access to the spectrum needed for those public sector entities 
for the safety component.
    And APTA's position with respect to extension is that we 
would support a full 3-year extension for the commuter 
railroads, not in any way letting off on moving forward with 
the railroads that are in a position to move forward more 
quickly, to implement more quickly. We support that. We 
continue to support that and we support that position all the 
way along. We have railroads that are further along than 
others. We want to see all of them implemented as quickly as 
they can, safety systems that enhance the safety and meet the 
spirit and intent of the law.
    Mr. Denham. Let me ask each of you, starting with Mr. 
Szabo: We all want to get PTC done. We want to have the safest 
rail in the world. It is important, but it is also important to 
get it done right and in the process, not only not pick winners 
and losers, but making sure that regionally--I mean, our job 
here is making sure we have got a rail system that is the top 
in the world. We need to make sure we can do that regionally as 
well, and so one of the things that I would ask each of you is 
on a timeline, not just specifically to freight or to APTA, but 
also from a regional perspective, because this is going to be a 
regional issue. There are certain rails that are ready and 
certain that aren't. The region doesn't get it done. So, Mr. 
Szabo, starting with you first, how would we put together a 
timeline based on a regional ability, which would conform not 
only to commuter rails but the freight rails?
    Mr. Szabo. That is part of the reason why we have proposed 
revisiting each individual implementation plan, to be able to 
take into account those differences that do, in fact, exist 
from region to region. I think Ed hit it on the mark that, you 
know, there is going to be different challenges in each region 
based on spectrum availability. And that is more of a regional 
issue, at least for the commuters.
    Mr. Denham. But FRA is well aware of the spectrum issues 
and the variety of different issues----
    Mr. Szabo. Right.
    Mr. Denham [continuing]. That we have by region.
    Mr. Szabo. Right.
    Mr. Denham. Would you put together a timeline?
    Mr. Szabo. On a region-by-region basis?
    Mr. Denham. Or even the capabilities of each region so 
that----
    Mr. Szabo. I mean, certainly, if I dedicate staff resources 
to it, you know, we can better determine the challenges in each 
given region. Now, what I would question, though, is whether 
that is, in fact, the best use of my limited resources for my 
PTC team, whether we should, in fact, continue to dedicate 
those resources towards implementation versus research and 
writing a report.
    Can we? Yes. I am not sure it is the best approach, but if 
you want that information, certainly we will attempt to make it 
available.
    Mr. Denham. Mr. Melaniphy?
    Mr. Melaniphy. Were a report to be put in place to have 
regional discussions, our members would be more than happy to 
participate in that process and provide the information 
available.
    Mr. Denham. Mr. Hamberger?
    Mr. Hamberger. In fact, I have got to give FRA kudos here. 
We are working with them to try to change the implementation 
plan requirements from a railroad-by-railroad implementation 
plan. So much of the railroad traffic is interlined and 
involves commuter traffic as well. Statute and regulations now 
require a railroad-by-railroad implementation plan. But we are 
working with the FRA to try to put together the kind of 
information that I think you are seeking--what is the rollout 
going to be in different areas around the country? That is, 
will the interchange partners be ready together?
    For example, if one railroad--say Norfolk Southern--is 
going to be lit up in Cincinnati, and CSX, their interchange 
partner, is not, well, it doesn't do much good, does it? There 
needs to be a lot more coordination. As this gets rolled out 
and working with FRA staff, we are trying to figure out how 
that will proceed, but that is an ongoing discussion regarding 
the implementation plan. Right, Joe?
    So we will have some taste of that outlook, if you will. I 
don't know how detailed it will be, but I think we can get some 
information back to you in the not-too-distant future.
    [The information follows:]

        FRA required that each railroad submit a PTC 
        implementation plan by April 16, 2010. The 
        implementation plans contained the railroads' initial 
        views on their sequence for rolling out PTC.

        Since that time, it has become evident that the 
        railroads need to revisit their plans for making PTC 
        operational. A key consideration is that from the 
        perspective of both safety and operational efficiency, 
        it makes sense to roll PTC out first in less complex 
        areas so that system ``bugs'' can be addressed in areas 
        where any problems that develop will pose a 
        comparatively lesser risk of adverse safety and 
        operational consequences. Less complex areas are those 
        where there are comparatively smaller amounts of 
        railroad traffic and fewer railroads operating.

        The railroads will work with FRA on revised 
        implementation plans that provide for PTC to be 
        implemented in areas of less complexity first. 
        Furthermore, the railroads will coordinate their 
        approach to implementation to ensure that the 
        individual implementation plans assign the same 
        priority to each region.

    Mr. Denham. We would ask you for that information. In fact, 
this committee will ask a formal request after this hearing of 
each of you to be able to establish the greatest need as well 
as timeline throughout the Nation regionally.
    Mr. Lewis. Mr. Chairman, I would just add from the States' 
perspective, we would be willing to participate in any way we 
can to help facilitate that discussion on a State-by-State or 
regional basis as well.
    Mr. Denham. Thank you. Mr. Tolman.
    Mr. Tolman. And, Mr. Chairman, we, too, believe that your 
comments about a timeline is absolutely necessary in order to--
if this extension is granted, that is absolutely imperative. If 
it wasn't for Congress, I don't think we would be sitting here 
even discussing PTC. And I applaud Congress in 2008 for pushing 
this forward. And it absolutely needs a timeline, and I would 
say 60 to 90 days, personally.
    Mr. Denham. OK. Thank you.
    Mr. Tolman. Thank you.
    Mr. Denham. Thank you.
    Mr. Lewis, could you please give us some examples from your 
members of issues you all have with FRA environmental reviews?
    And Mr. Melaniphy, I would ask you to follow up after.
    Mr. Lewis. I think from the States' perspective, we, again, 
work very closely with FRA and the rest USDOT modes.
    I think that one of the areas that a sister mode has 
implemented and works very well and we would like to see spread 
across the other modes is Federal Highway Every Day Counts 
initiative. It is a way of getting all agencies together to 
work on expediting project delivery. And I think that there are 
some lessons to be learned from that, from other modes, but I 
think part of it is a resource issue, I think, within the 
agency, but I think that, clearly, Mr. Szabo is there at the 
table when he needs to be. And the willingness is there. I 
think there is a resource issue that is maybe slowing down the 
process.
    Mr. Denham. Mr. Melaniphy.
    Mr. Melaniphy. Mr. Chairman, I want to tag on some of the 
things that Secretary Lewis touched on, and that has to do with 
if there was a commonality of DOT rules across all of DOT, it 
would make limitations more easy to adopt.
    As we look at multimodal facilities, intermodal facilities 
with multiple modes, multiple funding sources, one of the 
challenges with our different regulations from different sub-
areas within DOT, if there was a commonality among the 
rulemaking, it would make it easier for us to create a common 
set of CE's and establish a joint FTA-FHWA set of rules for 
NEPA approvals would certainly simplify and expedite product 
delivery for all service transportation projects and minimize 
duplicative and mode-specific requirements.
    Mr. Denham. Thank you. I just have one final question.
    Do you have anything to add, Mr. Szabo?
    Mr. Szabo. No. Just that to summarize, say we are all for 
it. And certainly we think that not only--there are some good 
things that have been done with the categorical exclusions that 
we have created over the past year, but some good things in 
MAP-21 that can serve a little bit as a pattern. But as we get 
into reauthorization, those things that would expedite project 
delivery, ensure strong planning on the forefront, we are all 
for.
    Mr. Denham. Thank you. Mr. Szabo, you said something 
earlier: We execute what you legislate. What about 208, section 
208 from the last PRIIA bill? That was----
    Mr. Szabo. Historical preservation? Yeah. Report is 
completed and posted on the Internet.
    Ms. Denham. FRA contract with a qualified independent 
entity to develop objective methodologies for Amtrak route 
decisions.
    Mr. Szabo. Yeah.
    Mr. Denham. FRA requested funding in 2010. We have had 
four----
    Mr. Szabo. Right.
    Mr. Denham [continuing]. Budgets since then.
    Mr. Szabo. We requested the funding, and we have written 
Congress three times indicating that funding has not been made 
available. We have got Volpe prepared to move forward. We have 
been prepared to move forward since 2010. If you would supply 
the requested funding, we believe that we can generate a 
document that would provide good value to all of us to make 
sure we are making market-based decisions as we grow our rail 
network.
    Mr. Denham. So you do want to do the study?
    Mr. Szabo. Absolutely.
    Mr. Denham. And why haven't you requested funding over the 
last 4 years?
    Mr. Szabo. We have written Congress three times now 
indicating that funding has not been available, and it was a 
formal part of our 2010 budget request. We have since rewritten 
and reported to Congress the fact that the funds are not 
available. We think it is one more tool that can be helpful in 
doing good planning and ensuring we are making market-based 
decisions.
    Mr. Denham. So you couldn't do it with existing resources?
    Mr. Szabo. That is correct.
    Mr. Denham. But yet you----
    Mr. Szabo. We have asked the resources be provided.
    Mr. Denham [continuing]. Took it out of the 2011 budget.
    Mr. Szabo. I am sorry?
    Mr. Denham. But you took it out of the 2011 budget, the 
request for funding.
    Mr. Szabo. We made the request in 2010. You didn't fund it. 
Like I say, we have written three times. We have written 
Congress three times indicating that the funding has not been 
made available. We have got Volpe engaged and ready to go. 
Provide the money, we will start on the report.
    Mr. Denham. Thank you. I will follow up with that, because 
I am not sure I am getting the response that I am looking for.
    Ms. Brown.
    Ms. Brown. I can tell you that I am not getting the 
responses that I am looking for, either, from my colleagues.
    Mr. Szabo, I mean, and I want all you to answer this 
question, because we are having a serious debate in Congress 
about privatizing or contracting out the services of Amtrak, 
and some people are under the illusion that if we privatize it, 
they are going to run faster. They can't run faster on the 
existing tracks. Contractor services. So can you respond to 
that? And I definitely want Mr. Hamberger to respond to it, 
because you all have the freight lines and the private-owned 
freight lines. What are your views about it? So I would like 
for everyone to respond to it, starting with you, Mr. Szabo.
    Mr. Szabo. Yeah. The key, whether you are talking about 
private or the public sector, the key to success is going to be 
a predictable and sustainable source of funding to make the 
capital investments that are going to be necessary to ensure 
that safe, reliable and efficient service. And without that 
certainty and that predictability, the private sector will 
never consider coming in. The private sector requires absolute 
certainty. If there is, you know, one--the private sector is 
absolutely risk-averse, so whether we are talking about 
improving service through the private sector or through our 
existing public sector, where it is done for the public good, 
there has to be a dedicated, sustainable source of funding.
    Ms. Brown. And that is true with rail, but that is also 
true with aviation. It is also true with highways. Yes, sir.
    Mr. Szabo. Absolutely.
    Mr. Melaniphy. Ms. Brown, certainly long-term funding is 
absolutely critical, no question about that. We also must look 
at competition, as soon as we substitute private sector for 
competition. If we look at in the large basis and as we talk 
about how we compete these services, sometimes the private 
sector and sometimes the public sector is better positioned 
based on the risk availability, and under the enabling 
legislation, Amtrak enjoys some benefits with respect to 
identification of its State partners, who are not available in 
the private sector. So we ask that you look at all of the 
pieces that enable for a level playing field and how a risk is 
balanced for public and private. And there are times when the 
public sector has also shown that it is able to provide an 
equal level of service at a good cost if all the pieces are put 
in place. So that is what you look at on a competition basis as 
opposed to just saying just private sector. It is all about 
balance.
    Ms. Brown. Mr. Hamberger.
    Mr. Hamberger. Obviously, there is a role for the private 
sector. As you so well know in your own State, All Aboard 
Florida is a totally private passenger service that hopefully 
will be opening in the next year or two from Miami to Orlando.
    With respect to the Amtrak intercity long-distance trains, 
we have a 40-year partnership with them, and we support 
continuing that partnership.
    Ms. Brown. Uh-huh. But when you look at All Aboard, it is a 
private----
    Mr. Hamberger. That is correct.
    Ms. Brown. It is also working with public and with other 
stakeholders. Nothing is completely private.
    Yes, sir, Mr. Lewis.
    Mr. Lewis. I think in response to your question, under 
PRIIA 209 and the progress that has been made to date with the 
State support on short-distance routes, I think that provides 
an opportunity on specific areas for the States to privatize 
where it makes sense. And the States have to evaluate that on a 
case-by-case basis. Where is the market there? Is there a 
market available in the private sector? And then when is it 
most cost-effective for them to do so? But I think this is an 
opportunity to enhance that review.
    Ms. Brown. Mr. Tolman.
    Mr. Tolman. Thank you. As we all know, there is no rail 
passenger system in the world that makes money. And I don't 
think that is going to change, and I don't see the private--the 
return on investment when you have to build a new tunnel 
through New York City to increase the speeds or whatever it may 
be. The Government has to stay in the business of the rail 
passenger system. There is no question in my mind that it has 
to stay in there.
    There are many, many--there are many studies that have been 
done in Europe of the failures of privatization of rail 
passenger systems that we all could learn from and should have 
learned from. And I just absolutely disagree with that. It is 
certainly not the way to go, in my eyes. Thank you.
    Ms. Brown. I do want to say that the Senate has just 
confirmed the new Secretary of Transportation, so we have a new 
Secretary of Transportation. And I am looking forward to 
working with him, but clearly, if we are going to move forward, 
as far as this committee is concerned, that will mean working 
together on a very bipartisan basis, and it will not be top 
down. We need to talk with you all, the stakeholders, and we 
need to work together to make sure we can move forward 
together.
    So I am looking forward to working with the chairman. I am 
excited about the hearings that we have had, because we have 
been getting very important feedback that is very important for 
Members that have not been on this committee like I have for 21 
years and understand the nature of what we have had but this 
has broken down in the last couple of years because of some 
leadership problems that we have had on this committee.
    This committee has always been bipartisan, always, and we 
have always worked together. I don't care who the chairman was 
or who the President of the United States was, we have always 
understood that for every billion dollars we invested, we 
generated 44,000 to 47,000 permanent jobs, and I am hoping that 
we can continue to move forward.
    And I want to thank you all for your presentation.
    And I yield back the balance of my time.
    Mr. Denham. Thank you, Ms. Brown.
    And thank you to all of our witnesses this morning. As we 
continue to work in a bipartisan fashion to get this PRIIA 
reauthorization bill done, each of these different hearings 
have been very insightful and helpful. We will follow up with a 
number of different questions, and we certainly appreciate the 
discussion about PTC this morning.
    And as we have traveled around the Nation, we will continue 
to do that, it has been very obvious to us that the Northeast 
Corridor has its challenges with some of the safety upgrades 
and the amount of money that is spent on infrastructure there, 
as well as most recently in Chicago, we would like to see 
higher speed rail there, but we have got to fix the challenges 
with Chicago as well.
    And then in my home State of California, looking at high-
speed rail, we certainly need private investors there to be 
able to get that project moving forward and hopefully 
eventually someday completed.
    So we will continue to travel, because as we have seen, 
whether it is PTC or improving infrastructure, each region is 
different, they have their own different challenges. They have 
their own different freight issues, as well as commuter issues, 
and it is our job to work in a bipartisan fashion to help to 
solve some of those issues as we move forward with the PRIIA 
reauthorization and PTC and a number of other issues.
    So we thank you for your responses this morning. We will 
follow up again with a number of other questions.
    At this time, I would like to ask unanimous consent that 
the record of today's hearing remain open until such time as 
our witnesses have provided the answers to those questions that 
will be submitted to them in writing, and unanimous consent 
that the record remain open for 15 days for any additional 
comments and information submitted by Members or witnesses to 
be included in the record of today's hearing.
    Without objection, so ordered.
    I would like to thank our witnesses again for their 
testimony. And if there are no other Members that have anything 
to add or questions, the committee will stand adjourned.
    [Whereupon, at 12:29 p.m., the subcommittee was adjourned.]
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