[Senate Hearing 113-644]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 113-644
 
                            PASSENGER RAIL: 
                    INVESTING IN OUR NATION'S FUTURE

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON SURFACE TRANSPORTATION
                  AND MERCHANT MARINE INFRASTRUCTURE,
                          SAFETY, AND SECURITY

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           DECEMBER 10, 2014

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation
                             
                             
                             
                             
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
BARBARA BOXER, California            JOHN THUNE, South Dakota, Ranking
BILL NELSON, Florida                 ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington           ROY BLUNT, Missouri
MARK PRYOR, Arkansas                 MARCO RUBIO, Florida
CLAIRE McCASKILL, Missouri           KELLY AYOTTE, New Hampshire
AMY KLOBUCHAR, Minnesota             DEAN HELLER, Nevada
MARK BEGICH, Alaska                  DAN COATS, Indiana
RICHARD BLUMENTHAL, Connecticut      TIM SCOTT, South Carolina
BRIAN SCHATZ, Hawaii                 TED CRUZ, Texas
EDWARD MARKEY, Massachusetts         DEB FISCHER, Nebraska
CORY BOOKER, New Jersey              RON JOHNSON, Wisconsin
JOHN E. WALSH, Montana
                    Ellen L. Doneski, Staff Director
                     John Williams, General Counsel
              David Schwietert, Republican Staff Director
              Nick Rossi, Republican Deputy Staff Director
   Rebecca Seidel, Republican General Counsel and Chief Investigator
                                 ------                                

      SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE 
                  INFRASTRUCTURE, SAFETY, AND SECURITY

RICHARD BLUMENTHAL, Connecticut,     ROY BLUNT, Missouri, Ranking 
    Chairman                             Member
BARBARA BOXER, California            ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington           MARCO RUBIO, Florida
MARK PRYOR, Arkansas                 KELLY AYOTTE, New Hampshire
CLAIRE McCASKILL, Missouri           DEAN HELLER, Nevada
AMY KLOBUCHAR, Minnesota             DAN COATS, Indiana
MARK BEGICH, Alaska                  TIM SCOTT, South Carolina
BRIAN SCHATZ, Hawaii                 TED CRUZ, Texas
EDWARD MARKEY, Massachusetts         DEB FISCHER, Nebraska
CORY BOOKER, New Jersey              RON JOHNSON, Wisconsin
JOHN E. WALSH, Montana








                             (II)








                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on December 10, 2014................................     1
Statement of Senator Blumenthal..................................     1
Statement of Senator Blunt.......................................     2
Statement of Senator Ayotte......................................    32
Statement of Senator Booker......................................    34
Statement of Senator Klobuchar...................................    36
Statement of Senator Nelson......................................    40

                               Witnesses

Hon. Peter M. Rogoff, Under Secretary for Policy, U.S. Department 
  of Transportation..............................................     3
    Prepared statement...........................................     5
Hon. Anthony R. Coscia, Chairman, Amtrak Board of Directors......    11
    Prepared statement...........................................    12
John Previsich, President, SMART--Transportation Division........    16
    Prepared statement...........................................    18
Ray B. Chambers, Executive Director, Association of Independent 
  Passenger Rail Operators (AIPRO)...............................    21
    Prepared statement...........................................    22

                                Appendix

James P. Redeker, Commissioner, Connecticut Department of 
  Transportation; Chair, Northeast Corridor Infrastructure and 
  Operations Advisory Commission, prepared statement.............    47
Response to written questions submitted to Hon. Anthony R. Coscia 
  by:
    Hon. John Thune..............................................    49
    Hon. Roy Blunt...............................................    49


                            PASSENGER RAIL: 
                    INVESTING IN OUR NATION'S FUTURE

                              ----------                              


                      WEDNESDAY, DECEMBER 10, 2014

                               U.S. Senate,
         Subcommittee on Surface Transportation and
           Merchant Marine Infrastructure, Safety, and Security,   
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:35 p.m. in 
room SR-253, Russell Senate Office Building, Hon. Richard 
Blumenthal, Chairman of the Subcommittee, presiding.

         OPENING STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. I am very pleased to open this hearing 
of the Subcommittee on Surface Transportation of the Senate 
Commerce, Science, and Transportation Committee.
    And I want to particularly thank Senator Blunt for his very 
hard work, good work over the last couple of years as the 
Ranking Member. This is undoubtedly the last hearing of this 
subcommittee under our leadership, but it has been really our 
leadership. It has been a great partnership and I want to thank 
him. I have appreciated all of our work together.
    And I want to also thank our staff who has done a 
remarkable job of focusing on some of the key issues that 
confront our infrastructure and transportation system around 
the country. It is a challenge that will endure well beyond 
this Congress, but hopefully will be better addressed during 
the next Congress.
    Passenger rail service is a critical link between people, 
jobs, and opportunities. It is vital to economic growth and job 
creation. And that is one of the reasons why it really has to 
be viewed as an urgent and immediate priority of our Nation. 
The benefits are enormous not only economically but rail also 
reduces congestion and takes people off our roads. It connects 
our major metropolitan areas, and it provides an economic 
lifeline that is essential to many communities. Loss of rail 
service would cost the economy $100 million a day. And right 
now, while we have not lost rail service, we are failing to use 
it as well and expansively as we should.
    On the Northeast Corridor, Amtrak and the passenger rail 
network have unmet needs and some estimate those needs at 
nearly $50 billion. That is not just for convenience or luxury 
measures. It is essential to keep our bridges, railroads, 
equipment functioning as they have to do. Some of our bridges 
are more than 100 years old. The Walk Bridge in Norwalk was 
built during the presidency of Grover Cleveland. It regularly 
stalls and is stuck in an open position paralyzing rail traffic 
up and down the East Coast. One bridge built more than 100 
years ago can paralyze the whole eastern corridor. And that is 
why the rail system must be rebuilt and rejuvenated.
    I am hopeful that the Congress will act expeditiously in 
the new year to renew the surface transportation bill. I am 
committed to ensuring that passenger rail is an important part 
of it and included within that legislation. And I am hoping 
also that the reforms that I proposed in the bill that I have 
introduced regarding passenger rail, particularly safety and 
reliability, will be addressed as well.
    I am grateful for the testimony of our witnesses, and I am 
looking forward to their advice as to how we can fix these 
problems. It is not a luxury. It is an essential fact of 
American economic and cultural life that we must rebuild our 
railroads, provide safety and reliability, which is so sorely 
lacking in many parts of the country.
    Senator Blunt?

                 STATEMENT OF HON. ROY BLUNT, 
                   U.S. SENATOR FROM MISSOURI

    Senator Blunt. Well, thank you, Chairman. Thank you for 
this hearing today. And thank you for your aggressive 
leadership of this subcommittee. We have had a number of 
hearings on many issues and particularly on the passenger rail 
issues. You have brought a knowledge and understanding and a 
commitment to these issues that has really defined the 
discussions our committee has had, and hopefully those 
discussions work into more long-term legislation in the future. 
I know we are all frustrated that in recent years, we just 
barely managed to kick the funding bills and the highway bills 
and the transportation bills forward just a little bit rather 
than deal with them as we should so that we can look at a long-
term, integrated system that works in the best possible way.
    Passenger rail in this country worked extraordinarily well 
and served the country well, and then as other means of 
transportation came along, we probably did not pay as much 
attention nationally to passenger rail as we should have. And 
it is turning our attention back to that and the way that, Mr. 
Chairman, you have helped focus this committee I think is a 
really good thing. As we have challenges of people and 
transportation in all systems, the railroad still is an 
incredibly efficient way to move people and to move things 
around and how we meet the balance between passenger needs and 
freight needs, both of which are really important to our 
economy and both of which have a real impact on the way the 
rest of the transportation network works, is particularly 
important.
    Hopefully, we will learn some lessons from these hearings. 
I think the Passenger Rail Investment and Improvement Act of 
2008 created a way for passenger rail competition to be 
introduced into the system with no disrespect for anything 
else. We almost all benefit from competition. State 
transportation agencies have increasingly looked at the 
competitive model as one of their alternatives, and that 
probably is a good thing for passengers as everybody tried to 
think how can we provide a better service at the best possible 
cost.
    The competitive rail market has emerged. The Herzog 
companies, headquartered in St. Joseph, Missouri, were the 
first independent company to enter the competitive passenger 
rail market in the United States. Now they provide services to 
80 million passengers each year. And what they have learned 
that can be shared with Amtrak and other providers and vice 
versa is an important thing. I think that is one of the reasons 
that hearings like this serve a real purpose so that 
information can be shared, that we can understand how we can 
look at better ways to do what we are doing. Competition is a 
good thing, and I am pleased we have a witness on the panel 
today to talk about the competitive model, as well as witnesses 
to talk about the Amtrak model and other models.
    But your leadership here has been important. It has been a 
privilege for me to serve with you as the ranking member on 
this committee. And thanks for having this hearing today.
    Senator Blumenthal. Thanks very much, Senator Blunt.
    Let me introduce the panel and then ask each of you to make 
an opening set of remarks.
    The Honorable Peter Rogoff, the Under Secretary for Policy 
at the United States Department of the Transportation, a wealth 
of experience in this areas who speaks not only for the 
administration but also as a participant in the Northeast 
Corridor Commission. Thank you for being here.
    The Honorable Anthony R. Coscia, who is Chairman of the 
Board, of the National Railroad Passenger Corporation, Amtrak. 
Thank you for a lifetime of public service, Mr. Coscia, and for 
your expertise and experience in this area and for speaking to 
the need for a Federal partnership and the need to invest in 
the system that you so ably head.
    Mr. John Previsich, who is President of SMART 
Transportation Division, S-M-A-R-T, who speaks for tens of 
thousands of very dedicated, honorable, hardworking employees 
in the rail labor workforce. Thank you for so ably representing 
them and for being here with us today.
    And Mr. Ray Chambers, Executive Director of the Association 
of Independent Passenger Rail Operators. The companies that you 
represent I know seek to improve their passenger service and 
offer alternatives, including potentially the Hartford-
Springfield line expanded to accommodate even more passengers. 
So we thank you.
    So, Mr. Rogoff, if you could begin please.

STATEMENT OF HON. PETER M. ROGOFF, UNDER SECRETARY FOR POLICY, 
               U.S. DEPARTMENT OF TRANSPORTATION

    Mr. Rogoff. Thank you, Chairman Blumenthal, and thank you 
for inviting me here today to discuss the future of intercity 
passenger rail service and the GROW AMERICA Act, the Obama 
administration's surface transportation reauthorization plan.
    Secretary Foxx formally transmitted the GROW AMERICA Act to 
Congress in April of this year. It is a 350 page, $302 billion, 
comprehensive, four year surface transportation reauthorization 
proposal. Importantly, the bill includes its own title to 
authorize and fund the improvement and expansion of our 
passenger rail network. That title sits right alongside our 
other titles to rebuild our highway system, expand our bus 
networks, improve highway safety, streamline the environmental 
approval process, and strengthen our Buy America laws.
    This is the first time any administration has transmitted a 
surface transportation bill to Congress that fully integrates 
passenger rail programs and policies into its vision for the 
future. We strongly urge the Congress to follow suit.
    For too long, the debates over passenger rail have centered 
solely around the funding needs of Amtrak while the broader 
debates over highway and transit funding formulas and policies 
have taken place in other committees and during different 
years.
    The GROW AMERICA Act is built around the policy imperatives 
presented by the fact that the decennial census tells us that 
our Nation will see an additional 100 million citizens by the 
year 2050, 100 million citizens who will put dramatically 
increased demands on our surface transportation system both in 
moving people and freight.
    The decisions Congress will make in the next few months 
will determine whether we will have a transportation system 
that allows our economy to grow and employ 100 million 
additional citizens or a transportation system that drags down 
our economy along with our quality of life.
    As we face this challenge, passenger rail must be part of 
the solution. Most states and cities across the country already 
know that they simply cannot solve the problem of increasingly 
punishing congestion by adding highway lanes or building new 
runways. Indeed, most communities do not have the space or the 
resources to do either.
    That is why we are now seeing Governors across the country 
of all political stripes significantly expand their state 
contributions to improve or expand intercity passenger rail. 
Just since 2009, 32 states and their partners have invested 
more than $4 billion through the President's high-speed rail 
initiative. Through this program, states have greatly over-
matched their Federal grants for the purpose of accelerating 
the deployment of new or higher performing service. Governors 
are also putting up additional funding to maintain or improve 
their state-supported Amtrak service. Governor Malloy in 
Connecticut, as the chairman pointed out, is contributing $175 
million for improvements to the New Haven-Hartford-Springfield 
project. Governor Quinn in Illinois has pledged more than $120 
million for the Chicago-St. Louis corridor. And Governors like 
Rick Snyder in Michigan, Mary Fallin in Oklahoma, Tom Corbett 
in Pennsylvania, Nathan Deal in Georgia--they are committing 
millions of their state dollars to maintain or expand passenger 
rail service. They are not doing it simply because they like 
trains. They are doing it because their people need the 
mobility and the continuation or expansion of rail service is 
essential to the future economic prosperity of their states. I 
think it also plays into the efficiency issue that Senator 
Blunt made reference to in his opening remarks.
    For the fiscal year that just ended, Amtrak carried 30.9 
million passengers and served more than 500 cities. The GROW 
AMERICA Act authorizes $19 billion for 4 years to enable us to 
continue to partner with the Governors and grow passenger rail 
ridership as America's population continues to grow.
    At the center of our proposal is the creation of a new rail 
account within the Transportation Trust Fund to provide 
predictable, dedicated funding for rail. Highways, transit, 
aviation, inland waterways, ports, and harbors have all 
benefited from dedicated trust funds. Rail is unique in that it 
lacks a committed source of Federal revenue, and as a result, 
passenger rail capital investments have generally failed to 
keep up with the needs of the fleet or infrastructure.
    The Northeast Corridor alone requires investments of nearly 
$1.5 billion per year over 15 years just to bring the corridor 
into a state of good repair and maintain it in that condition. 
Yet, at the same time that the corridor investments have fallen 
well short of that funding level, the ridership on the 
Northeast Corridor just reached a new record of 11.6 million 
passengers a year.
    Chairman Blumenthal, you talked about the Walk Bridge. You 
could add to that list of decaying infrastructure that needs 
attention that is over 100 years old things like the Portal 
Bridge in New Jersey, which was just featured on a Sunday news 
section. There was a focus also, as we all know, on the demise 
of the Arc Tunnel project, and that also leads to two rail 
tunnels that are absolutely essential to mobility up and down 
the Northeast. That also must be addressed. Those tunnels are 
well over 100 years old.
    By providing predictable and dedicated funding for rail and 
placing rail on par with other modes of transportation, the 
GROW AMERICA Act will give Amtrak states and localities the 
certainty they need to effectively plan and execute the rail 
networks we will need to support our future economic 
prosperity.
    I thank you for the opportunity to appear here this 
afternoon, and I look forward to your questions.
    [The prepared statement of Mr. Rogoff follows:]

Prepared Statement of Hon. Peter M. Rogoff, Under Secretary for Policy, 

                   U.S. Department of Transportation
    Chairman Blumenthal, Ranking Member Blunt, Members of the 
Subcommittee:

    Thank you for inviting me here today to discuss intercity passenger 
rail and our comprehensive multimodal surface transportation 
reauthorization plan--GROW AMERICA.
    The GROW AMERICA Act is a $302 billion, four-year transportation 
reauthorization proposal built around the policy imperatives presented 
by the fact that the decennial census tells us that our Nation will see 
an additional 100 million citizens by the year 2050--100 million 
citizens that will put dramatically increased demands on our surface 
transportation system, both in moving people and freight. The 
legislation was formally transmitted to the House and Senate by 
Secretary Foxx in April of this year.
    The GROW AMERICA Act takes an integrated systems approach to meet 
those transportation challenges facing the country today. As the 
demands presented by this population growth increase every day, our 
transportation system is forced to become more connected--from highways 
and transit, to freight and passenger rail--to adapt.
    Our intercity passenger rail system carries more than 30 million 
passengers to more than 500 American cities each year. Over the last 35 
years, travel by passenger rail alone has increased by 62 percent. In 
forecasting growth over the next 35 years, investment in America's 
passenger rail system is essential. The GROW AMERICA Act authorizes $19 
billion over four years to invest in a National High-Performance Rail 
System. One of the hallmarks of this proposal is the creation of a new 
rail account within the transportation trust fund to provide 
predictable, dedicated funding for rail.
State Support for Passenger Rail
    Supporting the Nation's intercity passenger rail system has not 
just been a solely Federal commitment or Amtrak endeavor, but it is a 
priority that has also ranked high for states in recent years. Since 
2009, 32 states and their partners have invested more than $4 billion 
in matching funds against the FRA's primary intercity passenger 
program, the High-Speed Intercity Passenger Rail (HSIPR) Program, 
including Connecticut DOT contributing $175 million for improvements to 
the New Haven-Hartford-Springfield project and Illinois DOT pledging 
more the $120 million for the Chicago-St. Louis Corridor Program. 
Altogether, 80 percent of the HSIPR Program did not require a state 
match, yet despite the absence of a match requirement, states have 
invested over $3 billion into the system. We have included a detailed 
summary, in the form of an attachment, of these investments, organized 
by state and the supporting governors who applied for these Federal 
dollars.
    Also, 18 states have demonstrated their commitment to intercity 
passenger rail by contributing approximately $280 million annually to 
continue operating Amtrak's 29 state-supported short-distance routes--
services that carry nearly half of Amtrak's annual riders and provide 
viable transportation choices to the communities they serve.
Predictable, Dedicated Funding for Rail
    Highways, transit, aviation, inland waterways, ports and harbors 
all benefit from dedicated trust funds. Rail is unique in that it lacks 
a committed source of Federal revenue. As a result, passenger rail 
capital investments have generally failed to keep up with the needs of 
existing fleet and infrastructure, leading to a backlog of state of 
good repair and other basic infrastructure needs. There is currently a 
multi-billion dollar backlog of projects required to maintain a state 
of good repair on our Nation's rails, as well as a significant deficit 
in the capital funding available for maintaining assets and adding 
capacity for anticipated increases in demand. The Northeast Corridor 
alone requires investments of nearly $2 billion per year to maintain 
good repair.\1\ By providing predicable, dedicated funding for rail and 
placing rail on par with other modes of transportation, GROW AMERICA 
gives states and localities the certainty they need to effectively plan 
and execute projects that will improve transportation infrastructure, 
allow regions and states to achieve their long-term visions for rail 
transportation, provide accessibility to destinations near and far, and 
support economic growth.
---------------------------------------------------------------------------
    \1\ Amtrak. ``Northeast Corridor State of Good Repair Spend Plan.'' 
April 2009
---------------------------------------------------------------------------
National High-Performance Rail System
    Our nation has not shied away from doing big things to move people 
and goods, and our rail system should be the envy of the world. In GROW 
AMERICA, $19 billion is proposed to address the backlog of disrepair, 
as well as maintain, expand and improve America's passenger rail 
network. In addition to making necessary infrastructure investments, 
these programs improve safety and provide accessibility to disabled 
Americans, as well as invest heavily in long distance routes, linking 
Americans in rural and suburban communities to urban areas. Our 
National High-Performance Rail System proposal allocates funds to two 
new programs aimed at promoting market-based investments to enhance and 
grow rail:

   Current Passenger Rail Service Program--Over four years, the 
        Act will provide $9.5 billion to maintain the current rail 
        network in a state of good repair and continue existing 
        services. A significant portion of these funds is intended for 
        ``Fix-It First'' projects, a multi-modal GROW AMERICA 
        initiative directed at reducing and eliminating the massive 
        investment backlog caused by years of deferred maintenance on 
        our Nation's transportation infrastructure. The Current 
        Passenger Rail Service Program will also fully fund Amtrak and 
        organizes grants around Amtrak's main lines of business: the 
        Northeast Corridor, State Corridors, Long-Distance Routes, and 
        National Assets. This includes:

     $2.6 billion to bring Northeast Corridor 
            infrastructure and equipment into a state of good repair, 
            thus enabling future growth and service improvements;

     $600 million to replace obsolete equipment on state-
            supported corridors and to facilitate efficient transition 
            to financial control for these corridors to States, as 
            required by Section 209 of the Passenger Rail Investment 
            and Improvement Act of 2008 (PRIIA);

     $3.1 billion to continue operations of the Nation's 
            important long-distance routes, which provide a vital 
            transportation alternative to both urban and rural 
            communities;

     $1.8 billion to improve efficiency of the Nation's 
            ``backbone'' rail facilities, make payments on Amtrak's 
            legacy debt, and implement Positive Train Control (PTC) on 
            Amtrak routes; and

     $1.4 billion to bring stations into compliance with 
            the Americans with Disabilities Act (ADA).

   Rail Service Improvement Program--The Act provides an 
        additional $9.5 billion to expand and improve America's rail 
        network to accommodate growing travel demand, which includes:

     $6.4 billion to develop high-performance passenger 
            rail networks through construction of new corridors, 
            substantial improvements to existing corridors, and 
            mitigation of passenger train congestion at critical 
            chokepoints;

     $2.4 billion to assist commuter rail lines in 
            implementing positive train control (PTC) systems;

     $500 million to help mitigate the negative impacts of 
            rail in local communities through rail line relocation, 
            grade crossing enhancements, and investments in short line 
            railroad infrastructure; and

     $300 million to develop comprehensive plans that will 
            guide future investments in the Nation's rail system and to 
            develop the workforce and technology necessary for 
            advancing America's rail industry.
Transparency, Accountability, and Engagement
    GROW AMERICA proposes additional measures to build upon 
transparency, accountability, and engagement efforts under the 
Passenger Rail Investment and Improvement Act of 2008 (PRIIA). Under 
PRIIA, Congress sought to improve stakeholder collaboration and the 
methods for appropriately allocating costs on the Northeast Corridor 
and state-supported routes, develop standards for the next-generation 
of passenger locomotives and rail cars, and apply Buy America 
requirements to the High-Speed Intercity Passenger Rail (HSIPR) 
Program. In addition to continuing these key initiatives GROW AMERICA 
proposes to undertake new efforts to improve transparency, 
accountability, and engagement, including:

   Amtrak Business Line Structure--As stated, GROW AMERICA 
        organizes financial support for Amtrak's existing passenger 
        rail services by ``business lines.'' This structure improves 
        transparency and accountability for taxpayer investments by 
        aligning costs, revenues, and Federal grants to business lines 
        to better ensure that our investments are advancing the 
        Nation's goals and objectives for rail services.

   Amtrak Business Line Planning--GROW AMERICA also requires 
        Amtrak to engage in annual five-year operating and capital 
        planning to focus on the long-term needs of its business lines. 
        Capital asset plans will describe investment priorities and 
        implementation strategies and identify specific projects to 
        address the backlog of state of good repair needs, 
        recapitalization/ongoing maintenance needs, upgrades to support 
        service enhancements, and business initiatives with a defined 
        return on investment.

   Regional Planning--Planning at regional level facilitates 
        will consider the integration of rail projects with other 
        modes, promotes greater stakeholder involvement, and can yield 
        more cost-effective priorities for a limited pool of Federal 
        dollars. GROW AMERICA authorizes DOT to establish Regional Rail 
        Development Authorities (in consultation with state governors) 
        to undertake and coordinate these important planning 
        initiatives.

   Buy America--GROW AMERICA will strengthen Buy America 
        requirements in current law by ensuring uniform applicability 
        to all of the Federal Railroad Administration's financial 
        assistance programs.

   ADA Compliance--GROW AMERICA authorizes $1.4 billion to 
        bring all Amtrak-served rail stations into compliance with the 
        ADA. The Obama Administration is strongly committed to making 
        the Nation's rail system accessible and comfortable for all 
        Americans.

   Platforms--GROW AMERICA standardizes passenger equipment and 
        platform heights to increase interoperability of services and 
        equipment, as well as better provide for safe boarding and 
        alighting.

   Commuter Rail PTC Implementation--DOT recognizes the 
        significant technical and programmatic challenges facing 
        commuter railroads in meeting the December 31, 2015 deadline 
        for PTC implementation, as well as the limited capital 
        resources available to commuter railroads to fund these costs. 
        GROW AMERICA authorizes $2.4 billion to assist commuter rail 
        lines in implementing PTC systems. Commuter railroads play a 
        vital role in our Nation's transportation network, carrying 
        over 1.7 million passengers per day, and it is important that 
        Congress provide the resources necessary to meet this safety 
        mandate.
Opportunity for Investment
    The programs and policies set forth in the GROW AMERICA Act 
position intercity passenger rail to play a key role in addressing the 
21st century transportation challenges facing the United States, which 
include:

   Population Growth--As stated, an additional 100 million 
        people are projected to reside in the United States by 2050. 
        The vast majority of this growth will be concentrated in a 
        small number of ``megaregions.''

   Congestion and Mobility--Highway and aviation congestion 
        continues to rise, with an estimated economic impact growing 
        from $24 billion in 1982 to $121 billion in 2011 in lost time, 
        productivity, and fuel.\2\ In many places with the worst 
        congestion, expanding airports and highways is difficult, as 
        land is limited and environmental/community impacts are 
        significant.
---------------------------------------------------------------------------
    \2\ Texas Transportation Institute, 2012 Urban Mobility Report, 
December 2012.

   Energy consumption--In 2010, the United States used more 
        than 13 million barrels of oil every day for transportation. 
        U.S. citizens consume nearly twice the oil per capita as 
        citizens of Organization for Economic Cooperation and 
        Development (OECD) member nations.\3\
---------------------------------------------------------------------------
    \3\ U.S. Central Intelligence Agency, World Factbook: United 
States, August 1, 2012.

   Energy costs--The inflation-adjusted cost of oil increased 
        129 percent from 1990 to 2010. As a result, Americans spent 
        $630 million more per day on oil for transportation than they 
        did 20 years earlier--an average annual increase of nearly $750 
        for every American. The Energy Information Administration 
        expects crude oil prices to rise an additional 50 percent 
        between 2011 and 2035.\4\
---------------------------------------------------------------------------
    \4\ U.S. Energy Information Administration, AEO2012 Early Release 
Overview, January 23, 2012.

   Environmental Protection--In April of 2014, the Inventory of 
        U.S. Greenhouse Gas Emissions and Sinks found that the U.S. 
        emitted 7.6 percent more greenhouse gases in 2010 than it did 
        in 1990.\5\ In addition, 27.3 percent of all greenhouse gas 
        emissions are from the transportation sector. Many of these 
        emissions have serious public health implications, which can 
        have substantial impacts on quality of life and the economy.
---------------------------------------------------------------------------
    \5\ U.S. Environmental Protection Agency, Inventory of U.S. 
Greenhouse Gas Emissions and Sinks: 1990-2012, April 15, 2014.

    While intercity passenger rail and the GROW AMERICA Act are 
uniquely well-suited to help address these transportation challenges, 
there has also been a clear demonstration that the American people want 
---------------------------------------------------------------------------
rail in their suite of transportation options:

   Ridership--Demand for passenger rail continues to climb 
        across the United States. In FY 2014, Amtrak carried 30.9 
        million passengers and set a new ridership record on the NEC 
        with 11.6 million passengers. These ridership levels are being 
        achieved even before the substantial service improvements 
        funded in recent years begin to come online. Once new trains 
        are added and trip times and delays are reduced, the system 
        will attract even higher levels of ridership.

   Changing Demographics--As the U.S. population grows, it is 
        also changing. A large number of Americans are entering their 
        retirement years and are choosing to drive less often, 
        particularly over longer distances. Only 15 percent of 
        Americans older than 65 drive regularly, and that rate declines 
        to just 6 percent for those older than 75.\6\ At the same time, 
        younger generations of Americans are choosing to drive both 
        less often and for fewer miles than previous generations, and 
        are obtaining driver's licenses at record low rates.\7\ This 
        cohort uses public transportation more frequently than older 
        Americans and has different expectations for the composition of 
        their transportation system.
---------------------------------------------------------------------------
    \6\ AARP, Travel Behavior by Age, 2012.
    \7\ Dutzik, Tony; Inglis, Jeff; Baxandall, Phineas, Millennials in 
Motion, Frontier Group/U.S. PIRG Education Fund, October 2014.

   Funding Demand--Nearly every region in the U.S. has 
        demonstrated demand for investments in passenger rail services. 
        Between August 2009 and April 2011, FRA evaluated nearly 500 
        HSIPR Program applications submitted by 39 States, the District 
        of Columbia, and Amtrak, requesting more than $75 billion for 
        rail projects. In the absence of recent HSIPR appropriations, 
        prospective applicants have also turned to the Transportation 
        Investment Generating Economic Recovery (TIGER) program, which 
        has awarded more than $300 million for intercity passenger rail 
---------------------------------------------------------------------------
        projects since the passage of the Recovery Act.

   Pipeline of Projects--Since 2009, investment among 
        stakeholders has reached approximately $75 million in planning 
        studies to establish a pipeline of much-needed, future rail 
        projects. The GROW AMERICA Act authorizes the funding required 
        to make market-based investments to turn these studies into 
        improved and new services.
Conclusion
    Thank you for inviting me to appear before this committee and 
discuss the future of intercity passenger rail in the United States. 
Between the passage of PRIIA and the Recovery Act, as well as the 
creation of the high-speed program and TIGER programs, the last six 
years have been a busy time for intercity passenger rail. The 
Administration is encouraged that Congress is continuing to contemplate 
how to best advance the next phase of our country's network. Coupled 
with investments in our highways, bridges, transit system and freight 
network, we believe GROW AMERICA represents an opportunity to 
strengthen the safety, efficiency and reliability of intercity 
passenger travel across the country.
    This plan will increase capacity to move people and goods. It will 
connect Americans to centers of employment, education and services, 
supporting millions of well-paying jobs. Finally, it will enable our 
partners to invest in transformative transportation projects that 
improve our global competitiveness, connectivity, and safety for all 
modes of transportation.
    Thank you and I am happy to respond to your questions.
                                 ______
                                 
                               Attachment

                  HSIPR Program Matching Funds By State
------------------------------------------------------------------------
   State         Governor         Affiliation      State/Partner Match
------------------------------------------------------------------------
AL           Robert Bentley    Republican                       $100,000
------------------------------------------------------------------------
CA           Arnold            Republican                 $2,840,490,031
              Schwarzenegger
            ------------------------------------------------------------
             Jerry Brown       Democrat                     $530,773,600
------------------------------------------------------------------------
CO           Bill Ritter       Democrat                        $ 377,848
            ------------------------------------------------------------
             John              Democrat                       $1,500,000
              Hickenlooper
------------------------------------------------------------------------
CT           Dannel Malloy     Democrat                     $174,702,904
------------------------------------------------------------------------
DC           N/A               N/A                            $4,370,500
------------------------------------------------------------------------
DE           Jack Markell      Democrat                       $3,892,942
------------------------------------------------------------------------
GA           George Perdue     Republican                      $ 752,000
            ------------------------------------------------------------
             Nathan Deal       Republican                     $1,025,000
------------------------------------------------------------------------
IA           Terry Branstad    Republican                     $2,325,503
------------------------------------------------------------------------
ID           Butch Otter       Republican                        $50,000
------------------------------------------------------------------------
IL           Pat Quinn         Democrat                     $177,452,082
------------------------------------------------------------------------
KS           Mark Parkinson    Democrat                         $450,000
            ------------------------------------------------------------
             Sam Brownback     Republican                        $25,000
------------------------------------------------------------------------
MA           Deval Patrick     Democrat                      $17,955,423
------------------------------------------------------------------------
MD           Martin O'Malley   Democrat                       $1,500,000
------------------------------------------------------------------------
ME           Paul LePage       Republican                       $150,000
------------------------------------------------------------------------
MI           Rick Snyder       Republican                    $54,873,092
------------------------------------------------------------------------
MN           Mark Dayton       Democrat                     $ 11,600,000
------------------------------------------------------------------------
MO           Jay Nixon         Democrat                      $19,484,835
------------------------------------------------------------------------
NC           Beverly Perdue    Democrat                      $22,878,420
------------------------------------------------------------------------
NH           John Lynch        Democrat                         $500,000
------------------------------------------------------------------------
NJ           Chris Christie    Republican                    $16,500,000
------------------------------------------------------------------------
NM           Bill Richardson   Democrat                         $100,000
------------------------------------------------------------------------
NV           Brian Sandoval    Republican                       $358,631
------------------------------------------------------------------------
NY           David Paterson    Democrat                       $4,100,000
            ------------------------------------------------------------
             Andrew Cuomo      Democrat                     $111,470,610
------------------------------------------------------------------------
OK           Mary Fallin       Republican                     $1,986,359
------------------------------------------------------------------------
OR           Ted Kulongoski    Democrat                           $5,924
            ------------------------------------------------------------
             John Kitzhaber    Democrat                       $6,991,808
------------------------------------------------------------------------
PA           Tom Corbett       Republican                     $4,988,000
------------------------------------------------------------------------
RI           Lincoln Chafee    Independent                      $750,000
------------------------------------------------------------------------
TX           Rick Perry        Republican                     $1,400,000
------------------------------------------------------------------------
VA           Bob McDonnell     Republican                    $11,077,000
------------------------------------------------------------------------
VT           Jim Douglas       Republican                    $20,462,455
------------------------------------------------------------------------
WA           Christine         Democrat                      $74,710,052
              Gregoire
------------------------------------------------------------------------
WV           Earl Ray Tomblin  Democrat                         $666,662
========================================================================
Total                                                     $4,122,796,680
------------------------------------------------------------------------


    Senator Blumenthal. Thanks very much, Mr. Rogoff.
    Mr. Coscia?

        STATEMENT OF HON. ANTHONY R. COSCIA, CHAIRMAN, 
                   AMTRAK BOARD OF DIRECTORS

    Mr. Coscia. Thank you, Chairman Blumenthal. And let me 
start by acknowledging with gratitude your contribution as 
chair of this subcommittee. The Amtrak family has certainly 
benefited from your leadership, but far more importantly our 
millions of riders have benefited from your leadership and 
wisdom. And we are very grateful for that and look forward to 
continuing to work with you in the future.
    Senator Blumenthal. Thank you.
    Mr. Coscia. This is a very interesting and opportune time 
for us to be having this discussion. Amtrak recently finished 
its Fiscal Year reporting for Fiscal Year 2014, and the results 
were extremely positive from an operational standpoint. $3.2 
billion in revenue set a record, 8 record years out of the last 
9. And what is even more noteworthy is that our operating 
deficit, the Federal requirement to cover losses in the system 
dropped to $227 million in Fiscal Year 2014. That is the lowest 
in the company's history in inflation-adjusted dollars, which 
shows you that there is a real opportunity here that is 
important for us all to sort of grab on to. We run a system 
that essentially covers all of its operating costs to the tune 
of almost 93 percent. It is an incredibly enlightening 
statistic which has you asking the primary question of, well, 
why is all of this changing.
    And the reality is that Amtrak certainly has done a number 
of things in the last several years that have made it a 
stronger business. In the absence, candidly, of the kind of 
resources that would give people the opportunity to do whatever 
they want, Amtrak has had to force itself to do more with less, 
and that is something that it has grasped and taken hold of in 
a way of being a good steward of the assets that are given to 
Amtrak to run.
    But just as importantly, America is changing. Its reliance 
on intercity travel is something that is far greater than it 
has ever been. The kind of ridership we are seeing among 
millennials and others shows that there is an increasing 
interest in creating connectivity between cities, and it is 
something that creates an opportunity that I think as a Nation 
we should be embracing.
    There is a broad opportunity available today to create 
intercity travel not just on the Northeast Corridor, but among 
city pairs that exist around the Nation, from Charlotte to 
Atlanta, Tucson to Phoenix, Dallas to Houston. There are 
multiple opportunities throughout the country to create a 
national system that would allow these city pairs to function 
and to function efficiently.
    And we think that our experience in the Northeast Corridor 
is showing us that that is absolutely possible. The kind of 
mobility that we create along the Northeast Corridor, the kind 
of demand that we see is an indication of just how much 
interest there is around the country in passenger rail for a 
whole series of reasons that reflect as much the changing 
demographic of how people live and operate in the Nation as it 
does the system itself.
    But the truth is that as much as we have been able to make 
great, great progress in operating the system, Amtrak as an 
enterprise is seriously undercapitalized. Everyone understands 
this and everyone knows it, but the reality is that we run the 
risk of all the gains that we have achieved in the last decade 
evaporating because of our inability to provide the kind of 
capital investment that the system needs to be truly an 
effective part of the Nation's transportation system.
    Nowhere is that more evident than in the part of the system 
that is the most successful, which is the Northeast Corridor. 
There are a number of points of failure in the Northeast 
Corridor that put the system in great jeopardy, and there are 
things that we need to attack and we need to attack them very 
aggressively.
    There has been mention of the trans-Hudson tunnels. Some of 
us have been working on that process for quite a long period of 
time, and the reality is that the Gateway program that Amtrak 
is proposing represents the kind of solution that has been 
fully embraced by many but where there needs to be a sense of 
leadership now in order to bring this to the next step. And we 
believe that leadership has to come from the Federal 
Government. A national system of intercity transportation that 
connects cities throughout the country is not really possible 
without the kind of Federal commitment that will provide 
multiyear funding to the kind of capital investments that we 
think will provide the level of leadership and bring together 
not just Amtrak but our state partners as stakeholders, private 
sector investors who may be interested, our labor partners. 
Someone has to lead that effort, and it is our view that the 
Federal Government's role in that effort is the level of 
leadership that we believe will give us the kind of system that 
is comparable to the systems that we all hear about in other 
parts of the world where there has been that kind of a focused, 
centralized effort.
    We applaud the administration's proposal in the GROW 
AMERICA Act. We believe it is the right way to start creating 
the right emphasis on passenger rail, and we are hopeful that 
we can play a part in that.
    [The prepared statement of Mr. Coscia follows:]

        Prepared Statement of Hon. Anthony R. Coscia, Chairman, 
                       Amtrak Board of Directors
    Chairman Blumenthal, Ranking Member Blunt, and distinguished 
Members of the Committee, thank you for inviting me to testify on 
Amtrak's behalf about the future of passenger rail in America. Today's 
hearing is timely: Amtrak just completed its fiscal year and the 
results clearly affirm that intercity rail plays an essential role in 
America's transportation landscape. With unaudited annual revenues 
totaling approximately $3.2 billion, Amtrak achieved its fifth 
consecutive year of revenue growth and its eighth year of revenue 
growth in the last nine years. These revenues, coupled with careful 
cost management, have significantly reduced our reliance on taxpayers 
for an operating subsidy: in Fiscal Year 2014, our Federal operating 
funding requirement was $227 million, more than $100 million less than 
in Fiscal Year 2013, and Amtrak's lowest operating requirement ever, in 
inflation-adjusted dollars. Taken as a whole, the Federal operating 
subsidy covers only 7 percent of Amtrak's operating costs, with the 
balance covered by corporate revenue and state support. In recognition 
of our strong financial performance, last month, Moody's Investor 
Service affirmed Amtrak's A1/Stable debt rating.
    The improvements in Amtrak's financial performance are not 
accidental. Amtrak's record financial results have been aided by 
significant ridership growth, particularly along the company's densely 
populated intercity routes. The Northeast Corridor (NEC) experienced 
its highest ridership ever in FY 2014, as did eight other intercity 
routes. This increase in ridership is in turn attributable to 
significant demographic trends, with travelers increasingly turning to 
passenger rail as a way to move between cities quickly and safely, and 
to avoid congestion on other modes. Passenger rail is especially 
popular among members of the millennial generation. Recognition is also 
due to Amtrak's investments in e-ticketing and broadband, all of which 
improve the customer experience and drive revenue growth. Finally, 
Amtrak's management has undertaken a number of initiatives in recent 
years to manage expenses and improve the company's bottom line. We 
understand that the continuity of Federal support for Amtrak is tied to 
our ability to demonstrate that we are using taxpayer funds wisely.
    We are pleased with Amtrak's recent performance but it would be a 
mistake, in my judgment, to rest on our laurels. I believe that 
intercity passenger rail, given financial support commensurate with 
demand and a fundamental rethinking of our Nation's transportation 
strategy, can do so much more for America. Amtrak's growth over the 
past ten years is the tip of the iceberg compared with the true, unmet 
demand for high-quality rail service connecting America's major 
metropolitan areas. The success of many foreign systems, as well as our 
own Northeast Corridor demonstrates that rail is optimally suited to 
serve the needs of those traveling between major cities within 100-500 
miles of each other. Across the globe, high-speed and higher-speed 
trains are not only an essential mode of transportation in such 
corridors, but also a significant driver of local development and 
economic growth. This trend is clearly revealed in Amtrak's own 
ridership results, where well over 85 percent of all trips are for 
journeys less than 250 miles and less than 5 percent of trips are for 
journeys more than 400 miles. Even on Amtrak's long-distance routes of 
750 miles and longer, the vast majority of riders use our trains to 
connect to intermediate destinations rather than the end points.
    And yet America has yet to fully embrace investments in passenger 
rail as a tool to grow our regional and national economies, reduce 
traffic congestion on other modes, and create new travel opportunities. 
Record Amtrak ridership in the country's mega-regions--not only the 
NEC, but also the Chicago Hub area, California and the Pacific 
Northwest--hints at the tremendous opportunity for truly modern 
passenger rail service links between dynamic city pairs. Passenger rail 
could be so much more, our economies could be stronger, and our lives 
better, if trains were faster, more frequent and more reliable in these 
regions. This is to say nothing of the regions around the country where 
little or no high-quality rail connects metropolitan areas--regions 
like Atlanta to Charlotte, Houston to Dallas, Miami to Tampa, 
Pittsburgh to Cleveland, and Tucson to Phoenix. As a nation, we are 
squandering opportunities to improve our economies and quality of life 
by failing to make investments in the type of high-quality rail service 
that Amtrak plans for the NEC and that we see in existence or under 
development in nearly every other major economy in the world.
    As we look ahead to the reauthorization of Amtrak and the Nation's 
intercity passenger rail programs, and the expiration of the Highway 
Trust Fund, I respectfully submit that Congress should focus on ways to 
unlock rail's potential for America's major city pairs. As discussed at 
further length later in my testimony, the development of intercity 
corridors will require Federal leadership, expanded and predictable 
funding, and a new policy framework. At the same time, we at Amtrak 
must expand upon the successes that we've achieved with intercity rail, 
especially in the NEC, to other regions around the country, and to 
orient our business to serving such corridors. In order to achieve 
this, we will have to continue to improve customer service, strengthen 
our operations, rethink various aspects of our network, and improve 
project delivery. We must also think creatively and proactively about 
utilizing and developing our assets, so that we can harvest the latent 
potential found in our stations, right-of-way and infrastructure. 
Moreover, we need to consider opportunities to attract private sector 
participation in order to access its capacity for swift project 
execution and capital formation. I look forward to working with the 
Members of this Committee to prepare Amtrak for this new challenge, so 
that we can deliver the benefits of modern intercity rail to the 
Nation.
    Before turning to how we can realize the great potential for Amtrak 
and intercity rail in our Nation's transportation future, it is 
important to highlight a critical point: Amtrak's operating performance 
in recent years obscures serious and growing capital challenges. To put 
it bluntly, Amtrak does not have sufficient capital to sustain its 
operating successes to date, let alone to build the sort of intercity 
rail system that I described. The Federal investment in Amtrak is 
currently and has always been extremely limited, compared with Federal 
investments in other modes of transportation. To put this in context, 
the Federal Government has authorized roughly the same amount of 
funding for Amtrak, about $44 billion, over the company's entire 43 
year existence, as the Federal Government spends on highways in a 
single year.
    As a result, to the extent Amtrak makes investments in its capital 
assets, these investments tend to be incremental and largely confined 
to repairing decades-old infrastructure and equipment. Amtrak has had 
to defer or delay many capital improvements so that, today, we face 
major challenges in merely sustaining the infrastructure, rolling 
stock, and stations that have supported our performance thus far. 
Unlike other modes of transportation that receive Federal funding, 
passenger rail has never had access to predictable, dedicated, capital 
funding and contract authority that would enable us to develop and 
implement a long-term capital program. Despite the extraordinary growth 
in passenger rail demand in recent years, the Federal Government has 
declined to establish a funding mechanism for rail comparable to the 
trust funds and multi-year authorizations that have supported other 
modes of transportation. This inhibits our ability to take on multiyear 
projects, and forces us to repair infrastructure that really ought to 
be replaced,
    In the absence of a dedicated sustainable funding mechanism, Amtrak 
has made every effort to work with our partners to make incremental 
investments in passenger rail. We have worked with state partners to 
improve existing rights-of-way for higher speed services in places like 
Illinois and Michigan. We have partnered with these states and 
California to support the purchase of new equipment for corridor 
services. And we have been at the forefront of attempts to deal with 
freight rail congestion in the Chicago area--not only by working 
proactively with the freight companies but also by convening a blue 
ribbon panel to examine the problem in its totality and recommend 
solutions.
    In the Northeast Corridor, we have partnered with commuter 
authorities and states to make incremental improvements in the aging 
infrastructure that supports approximately 260 million annual commuter 
and intercity trips. Thanks to one-time actions in 2009 and 2010 to 
increase Federal investment in rail, Amtrak and state partners are now 
undertaking improvements in places like Connecticut, New Jersey, New 
York, Delaware, and Maryland to chip away at the years of deferment and 
pave the way for improved and increased services. The availability of 
meaningful Federal resources to improve the railroad helped create a 
new collaboration and joint sense of responsibility among the 
Corridor's users and beneficiaries. The Passenger Rail Investment and 
Improvement Act (PRIIA), much of which was authored by this Committee, 
has further supported this new partnership by creating the NEC 
Commission as a forum to bring the NEC's stakeholders together, develop 
a new cost allocation method for shared investments, and unite the 
owners and operators of the NEC in a common vision and approach to 
ensuring the future success of this essential corridor. Against this 
backdrop of collaboration, Amtrak is working with our partners in 
Philadelphia, Baltimore and Washington to create and advance plans to 
expand and redevelop our stations in these cities, as well as the 
surrounding neighborhoods. Our aim is to increase rail capacity and 
enhance services for our customers, improve the company's bottom line--
while at the same time fostering development and economic growth in the 
cities we serve.
    All of the corridor-related initiatives I have described are 
important, even essential, but they also reveal the truly incremental 
nature of Amtrak's capital investment program. Without a greater, 
sustained commitment of capital from the Federal Government, Amtrak is 
on a path that will, at best, hold us in our current situation. The 
more likely outcome, however, is a slide backward in our company's 
operating and financial results, as passenger demand further outstrips 
capacity and deferred investment begins to significantly impact 
performance.
    As Amtrak has previously reported to this Committee, our capital 
investment deficit is most profound in the NEC. You have heard before 
about the many major infrastructure assets that are presently at the 
end of their useful lives and in need of immediate replacement, from 
the B&P tunnel to the Connecticut River Bridge. The most urgent 
challenge along the NEC is with the Hudson River tunnel linking New 
Jersey and New York, where limited capacity, heavy congestion and 
overburdened and aging infrastructure all converge. This tunnel--two 
single track tubes built out of cast iron and concrete more than 100 
years ago--handle all passenger rail traffic between the two states and 
form a vital link for the entire Northeast Corridor. Such is the 
deteriorating condition of the Hudson River tunnels that, since about 
1999, Amtrak has closed one every weekend for repairs, on a carefully 
choreographed 55-hour work outage. As a result, for many years, 
transportation planners and officials have stressed the importance of 
building new rail tunnels, together with an expansion of tracks and 
platforms at New York's Penn Station, which is already the Nation's 
busiest transportation facility.
    The need to address this precarious state of affairs suddenly took 
on even greater urgency two years ago, when Super Storm Sandy provided 
us with an illustration of the perils of relying on such century-old 
infrastructure. After Sandy, we discovered that destructive chlorides 
from sea water caused and are continuing to cause extensive damage to 
Amtrak's tunnel under the Hudson River, so major components needs to be 
replaced as soon as possible. In order to perform this work, each of 
the tubes must be closed for one year or longer, presenting Amtrak, the 
states of New York and New Jersey, and passengers along the entire NEC 
who rely on this tunnel a stark choice--either build a new tunnel to 
maintain capacity to handle existing demand or otherwise significantly 
curtail Amtrak and daily commuter rail services, impacting millions of 
passengers every year. Fortunately, Amtrak has already done significant 
planning to advance what we call our Gateway Program--our plan for 
doubling capacity under the Hudson River with new and rebuilt tunnels, 
expanding Penn Station, enhancing reliability and resiliency of this 
essential infrastructure. What's needed now is Federal leadership and 
investment to avert a crisis along the NEC and create the new capacity 
needed to protect today's service and meet the demand for passenger 
rail in the decades ahead. We critically need the support of this 
Committee and Congress to advance the Gateway Program and I ask that 
this be a central focus on your efforts in the coming Congress.
    Projects like Gateway are so vast, and their impacts on people and 
the economy so widespread, that they should not be regarded as ``Amtrak 
projects,'' ``state projects,'' or even ``regional projects.'' Rather, 
they are national projects, which can only be addressed effectively by 
the Federal Government. As I described earlier, there is an enormous 
opportunity in developing new intercity passenger rail services 
throughout the country; if implemented, these services will have 
profound transportation and economic benefits. What is critically 
needed, however, is a Federal funding mechanism that will help us 
achieve these attainable goals.
    One might reasonably ask how Congress should think about designing 
a Federal funding mechanism for passenger rail, alongside existing 
funding programs for other modes of transportation. When the new 
Congress convenes in January, it will need to address the Highway Trust 
Fund authorization. I believe our country needs to fundamentally 
rethink how it funds transportation projects of national significance. 
We need to move away from mode-centric solutions and design a program 
that can fund multi-modal utility designed to address congestion 
challenges and support a competitive economy. A carefully redesigned 
Transportation Trust Fund, acknowledging the Federal responsibility for 
promoting interstate commerce, could at once address our aging 
infrastructure and our growing travel demand, while generating 
employment and long-term economic benefits. This is also the solution 
for Amtrak's capital challenge: We need access to the predictable, 
dedicated funding and contract authority, so that we may undertake 
major multiyear projects to replace outdated, decaying, and 
increasingly obsolete infrastructure with a passenger rail system 
capable of meeting the needs of the 21st Century economy.
    I believe the United States' transportation system is at a 
crossroads, as the investments that brought our Nation into modernity 
in the last century reach the ends of their useful lives. The story is 
the same across our highways, airports, seaports, railways, and transit 
systems. Members of this Committee will be responsible for designing 
the blueprint that determines the transportation priorities for the 
next century. As you undertake this important task, I respectfully urge 
you to abandon any conception of passenger rail as an old and obsolete 
mode of transport. Countries as diverse as China, England, Japan, 
Spain, German, France, India and Brazil are making investments that 
suggest that passenger rail is, in fact, a transportation mode of the 
future. With help from this Committee and across the Federal 
Government, Amtrak can play a vital role in helping America develop and 
deploy a truly modern passenger rail network. The key is capital 
investment--not just to sustain the services that underpin today's 
business, but those that will help us to sustain America's future 
transportation needs. We at Amtrak stand ready to build and operate a 
passenger rail system that will transport our Nation's economy in the 
decades ahead.

    Senator Blumenthal. Thanks very much. You know, I have to 
tell you your remarks about the high and growing ridership in 
the Northeast Corridor is certainly substantiated by my own 
experience. When I ride Amtrak, as I do frequently, often 
seeing my colleague, Senator Booker, we are never able to sit 
together because there are never two seats available. I am not 
sure he would want to sit with me anyway.
    [Laughter.]
    Senator Blumenthal. But it is very heartening to me when I 
ride to see that kind of high usage and demand.
    I also want to mention that I am grateful to Senator Ayotte 
for joining us today. I do not get to ride with her.
    [Laughter.]
    Senator Blumenthal. But I know she is very dedicated to 
improving our rail service.
    Mr. Previsich?

 STATEMENT OF JOHN PREVISICH, PRESIDENT, SMART--TRANSPORTATION 
                            DIVISION

    Mr. Previsich. Thank you.
    First, I will take this opportunity to thank you, Chairman 
Blumenthal and Ranking Member Blunt and the members of the 
Senate Commerce Subcommittee on Surface Transportation, first 
for your service and leadership on this committee and also for 
the opportunity to testify here today.
    This hearing could not be more aptly titled. Public 
investment in our Nation's passenger rail system is truly an 
investment in our Nation's future. Passenger rail is a critical 
part of our national transportation infrastructure, an 
important driver of our national and regional economies, and is 
a middle-class job creator.
    I speak to this matter from personal experience. In my 
capacity as a union representative, I have been involved on 
passenger rail operations from coast to coast that have 
leveraged various forms of public funding to provide excellent 
service to the communities through which they operate. In my 
home state of California, I have watched Caltrain in the San 
Francisco Bay area leverage a combination of local and Federal 
funding to revitalize the service from a low of 5,500 boardings 
per day when operated by a private operator to today's figure 
of over 53,000 in a public-private partnership.
    In my home county of Santa Cruz, California, a planning 
process is already underway that will identify transit 
corridors for the purpose of leveraging Federal and local 
funding to improve transportation, regionally reduce greenhouse 
emissions, cut down on auto trips, and promote affordable 
housing, a very important part of our community.
    All of this cuts the use of fossil fuels and increases the 
value to America of the funds that are invested. They get 
leveraged locally and come back to the community and to the 
country, much more than was ever invested in the first place.
    All across America, communities are relying on transit 
funding to invest in strategic planning. The investment will 
pay itself back many times over through an increased tax base, 
better utilization of local resources, community stimulus, and 
again, job creation.
    It is important to note for this conversation that for more 
than 100 years prior to the creation of Amtrak, passenger rail 
service was provided by private railroads. For at least 40 
years prior to public funding, the private rail carriers were 
unable to provide passenger rail service without sustaining 
significant financial losses. It was because private operators 
were unable to continue to provide that service without 
sustaining huge losses that Amtrak was formed initially. Amtrak 
was created to save rail passenger service, but it is important 
to note that Amtrak was also created to save America's freight 
rail industry. America's railroads were losing $1 billion per 
year providing passenger service just prior to the creation of 
Amtrak. That is $10 billion in today's dollars. Had Amtrak not 
been established, America's rail system would have financially 
collapsed.
    Today Americans support and want more passenger rail. 
Amtrak has set ridership records in 10 of the last 11 years, 
and polling that our union has commissioned throughout the 
country shows overwhelming support for more service and 
increased funding for Amtrak. This is not a partisan issue. Our 
polls show that Democrats and Republicans in red states and 
blue all strongly support continued and improved Amtrak 
service.
    Unfortunately, this comes at a time when inadequate Federal 
funding has allowed our Nation's passenger system to age and 
deteriorate. As Amtrak's annual budget requests have 
established, its aging fleet needs replacing and the system 
needs significant renovations to tracks, bridges, tunnels, and 
other infrastructure. Meanwhile, the rest of the world, China 
most notably, is investing heavily in modern and efficient 
passenger rail infrastructure, leaving American competitiveness 
and American workers further and further behind.
    Earlier this year, the House Transportation and 
Infrastructure Committee reported out the Passenger Rail Reform 
and Investment Act of 2014. My union, as well as other rail 
labor unions, supported this measure and applauded the 
bipartisan nature of the proposal. The 4-year bill does many 
important things that will help strengthen our national 
passenger rail network. However, it does not provide Amtrak 
with the funding levels required to meet the needs of an aging 
system. Most of all, it does not establish a predictable, 
dedicated funding source so Amtrak and our communities can 
adequately plan for future investments.
    The last passenger rail reauthorization, PRIIA, signed into 
law by President Bush in 2008 was bipartisan and provided 
realistic multiyear funding levels for Amtrak and resisted 
efforts to recklessly privatize the commuter industry. In fact, 
the privatization pilot projects that were included in PRIIA 
received virtually no private sector interest. Permitting 
private companies to seize routes is a recipe for ending Amtrak 
service across the country and would give investors the green 
light to profit from assets paid for and invested in for over 
decades by the American taxpayer and rail passengers.
    The next passenger rail reauthorization bill should build 
on the framework established by PRIIA in 2008. It should 
include dedicated and adequate funding to upgrade and operate 
the Northeast Corridor and to operate the regional and long-
distance trains that make up our national system.
    I do want to emphasize that our union is not opposed to 
private enterprise. The bulk of our membership works for 
private freight railroads, and we have very good relationships 
with those companies. But it is important that any Federal 
funding also include an adequate level of protection for the 
rail workers involved and a level playing field so that all 
competitors in the industry will compete based on equal 
standards, equal requirements, and that includes employee 
protections and coverage under Federal laws, such as the 
Federal Employers Liability Act, the Railroad Retirement Act, 
and others.
    Passenger rail reauthorization is an opportunity to make 
needed investments in a critical segment of our transportation 
system. And I look forward to working with the members of this 
committee on the timely passage of a bill that establishes 
dedicated, long-term passenger rail funding, supports the jobs 
and rights of America's skilled and dedicated railroad 
employees, and rejects unwanted and ill-advised privatization 
proposals, and lays out a national rail policy that is 
integrated with America's multimodal transportation needs.
    Thank you for the opportunity to appear today.
    [The prepared statement of Mr. Previsich follows:]

           Prepared Statement of John Previsich, President, 
                     SMART--Transportation Division
    Chairman Blumenthal, Ranking Member Blunt and members of the Senate 
Commerce Subcommittee on Surface Transportation, thank you for the 
opportunity to testify today on the future of passenger rail.
    My name is John Previsich. I serve as the President of the 
Transportation Division of the Sheet Metal, Air, Rail, Transportation 
Workers. We were formerly the United Transportation Union before we 
completed our merger with the Sheet Metal Workers in 2011. We represent 
tens of thousands of men and women railroad, bus and airline workers 
across America.
    This hearing could not be more aptly titled. Public investment in 
our Nation's passenger rail system is truly an investment in our 
Nation's future. Passenger rail is a critical part of our national 
transportation infrastructure, an important driver of our national and 
regional economies, and is a middle-class job creator. Amtrak is 
America's passenger railroad, rising up from the ashes of a cadre of 
bankrupt private service providers and charged with providing vital 
rail passenger service across America.
    I can speak to this matter from personal experience. I have been 
involved on passenger rail properties from coast to coast that have 
leveraged various forms of public funding to provide excellent quality 
service to the communities through which they operate. In my home state 
of California I have watched Caltrain in the San Francisco Bay Area use 
a combination of local and Federal funding to revitalize the service 
and move from a low of 5,500 boarding's per day when operated by a 
private enterprise to the current figure of over 53,000 boarding's per 
day. In my home county of Santa Cruz, CA a planning process is already 
underway to identify transit corridors that will reduce the number of 
daily auto trips, decrease our use of fossil fuels and promote more 
affordable housing. All across America, communities are relying on 
transit funding to invest in strategic planning that will pay back the 
investment many times over through job creation, community stimulus, an 
increased tax base and better utilization of local resources.
    The value of passenger rail to travelers has been increasingly 
shown at the fare box, and has been reinforced by polling that our 
union has commissioned throughout the country. In every state and 
district polled, voters overwhelming want increased funding for Amtrak 
and want more service. Fare box number's back this up. Amtrak carried a 
record number of passengers in FY 2013, and has set ridership records 
in 10 of the last 11 years. Unfortunately, this comes at a time when 
bare-bones Federal appropriations have allowed the system to age and 
deteriorate. As Amtrak's annual budget requests have established, its 
aging fleet needs replacing and the system faces significant and 
disruptive renovations to tracks, bridges, tunnels, and other 
infrastructure in the coming years. Meanwhile the rest of the world--
most notably China--is investing heavily in modern and efficient 
passenger rail infrastructure, leaving American competitiveness, and 
American workers, further and further behind.
    It is with this backdrop that this committee and Congress as a 
whole must consider passenger rail reauthorization and lay out a long-
term vision for Amtrak that includes a predictable dedicated source of 
funding.
    Congress has a choice between those who believe that we should end 
the decades-long underinvestment in our passenger rail system, and 
those who would pursue misguided attempts to dismantle Amtrak and run a 
fire sale on its high-value assets. I firmly believe that the latter 
would result in the destruction of passenger rail in this country and 
threaten the 20,000 existing Amtrak jobs.
    The last passenger rail reauthorization--PRIIA, signed into law by 
President Bush in 2008--was an important milestone for passenger rail 
in this country. This bipartisan law provided realistic, multi-year 
funding levels for Amtrak, and resisted efforts to recklessly 
privatize. In fact, the privatization pilot projects that were included 
in PRIIA received virtually no private sector interest.
    The next passenger rail reauthorization should build on the 
framework established by PRIIA, and at the same time advance needed 
reforms. First, Amtrak needs adequate funding to upgrade and operate 
the Northeast Corridor (NEC) and to operate the regional and long-
distance trains that make up our national system. Too often Congress 
has failed to actually appropriate the funds authorized by PRIIA, 
making it difficult for Amtrak to complete major capital improvements 
and modernize its network and equipment. More importantly, the rewrite 
of PRIIA must recognize that the capital needs of the passenger rail 
system are enormous and can no longer be ignored or deferred.
    The urgency of these capital needs was put front and center in 
October when Amtrak released an infrastructure report detailing that 
the four one hundred year old tunnels leading into and out of Manhattan 
were severely damaged during Superstorm Sandy. With extensive repairs 
needed, service along the NEC will be badly curtailed, negatively 
affecting hundreds of thousands of daily commuters and travelers.
    It is critically important that Amtrak's proposed Gateway project 
is funded immediately. Gateway would build new tunnels that would 
provide the redundancy needed to repair existing tunnels without 
serious service disruptions, and also build capacity at the busiest 
commuter and passenger rail section in the country. It will also create 
hundreds of new jobs. For too long, this looming infrastructure crisis 
has been a political football. It is time for Congress to make the 
investments needed to keep the NEC and commuter lines that millions of 
people count on moving.
    I also recognize that the investment needs of our passenger rail 
system must be met in partnership with individual states and, where 
appropriate, leveraged with private sector sources. However, states and 
the private sector will not be reliable investors into passenger rail 
without adequate Federal funding. The Federal role in investing in our 
rail passenger system must be strong, committed and well-defined in 
order to produce reliable regional partnerships.
    PRIIA reauthorization must also reaffirm the national Amtrak system 
as part of America's interconnected transportation infrastructure and 
reject risky attempts to privatize Amtrak's NEC operations and long-
distance routes. Fortunately, the ideologically-driven privatization 
agenda that has been pushed by some in recent years has not gained 
momentum. Permitting private companies to seize those routes is a 
recipe for ending Amtrak service across the country and would give 
investors the green light to extract profits from assets paid for over 
many decades by the American taxpayer and rail passengers. Further, 
Congress should not micromanage Amtrak and arbitrarily pick and choose 
which routes will survive.
    I'll be clear on one point. Our union is not opposed to private 
enterprises. The bulk of our membership work for privately held freight 
railroads and we have good relationships with those companies.
    But the facts are Amtrak has partnered with our private freight 
railroads, and has negotiated operating agreements with them for more 
than 40 years. Amtrak's employees, many of whom are federally 
certified, know and understand the complex operating rules that govern 
freight railroads, making Amtrak the right fit to operate this vital 
nation-wide service.
    We know the history of passenger rail in America because we and our 
members have lived it.
    Prior to the creation of Amtrak passenger rail service was provided 
by private railroads for more than one hundred years. Private railroads 
were unable to provide passenger rail service without sustaining 
significant financial losses for at least 40 years prior to Amtrak's 
founding. It was because private operators were unable to continue to 
provide that service without sustaining huge losses that Amtrak was 
created. Amtrak was created to save rail passenger service in America, 
but more importantly Amtrak was created to save our freight industry 
from economic ruin. America's railroads were losing $1 billion a year 
providing passenger service just prior to the creation of Amtrak ($10 
billion) in today's dollars. Had Amtrak not been established America's 
rail system would have financially collapsed.
    Congress must also reject previously offered proposals that would 
force Amtrak to contract out food and beverage service. In fact, some 
in Congress actually declared that Amtrak charges too much for 
cheeseburgers. Amtrak should be permitted to run its business, sell its 
services and concession items, and decide how to staff the railroad's 
operations. Federal outsourcing mandates ignore the role of these 
front-line employees, who not only serve food and beverage but act as 
first responders during on-board incidents and emergencies. Those 
attempts are another example of the kind of congressional meddling that 
only interferes with Amtrak's ability to maintain a qualified workforce 
and meet customers' expectations.
    As Congress seeks to update and expand passenger rail, the 
reauthorization must safeguard the rights, jobs and wages of front-line 
workers. For rail workers, labor protections provided for in PRIIA 
should be updated to ensure they apply to all rail workers when Federal 
funds are used to create new services, or to add or transfer 
infrastructure and equipment to a new entity. The PRIIA protections 
should also apply when rail lines are sold to states but are still used 
for interstate rail transportation. In addition, it must be ensured 
that rail workers performing traditional rail work are covered under 
the appropriate rail and labor statutes including the Railroad 
Retirement Act, the Railway Labor Act and Federal Employee Liability 
Act. Allowing employers, oftentimes foreign corporations, to circumvent 
U.S. labor laws or to undercut wages and benefits and then claim the 
private sector is more efficient or profitable is a game that must not 
be played if we are serious about having a first-class rail system and 
one that creates and sustains middle class jobs.
    Additionally, Congress must resist attempts to cut workers' 
overtime pay or limit pension payments as a condition of receiving 
Federal funds. Overtime payments are an unavoidable aspect of a 24 hour 
a day transportation network. Capping overtime pay or excluding it from 
pension calculations would constitute an assault on the living 
standards and rights of rail workers while making no worthwhile 
improvement to passenger rail customer service or performance 
efficiency.
    PRIIA's investment in passenger rail is an opportunity to boost 
U.S. manufacturing capacity and jobs. The next reauthorization must 
uphold strong Buy America laws and emphasize smart procurement 
policies. This will ensure that Federal investments are leveraged to 
achieve the greatest possible economic impact and job growth. Amtrak 
has already made strong efforts to increase the efficiency and 
productivity of its procurement process through the work of the Next 
Generation Corridor Equipment Pool Committee and a partnership with the 
California High-Speed Rail Authority. Amtrak has also adopted a U.S. 
employment plan as part of its bidding requirements for manufacturers 
seeking to win the procurement for the next fleet of NEC high-speed 
trains. This reauthorization must build upon these efforts to 
incentivize the use of American made products throughout the production 
process. Not only will this put more Americans to work faster, it will 
ensure that we have a robust manufacturing sector able to supply the 
products needed by the passenger rail industry for years to come.
    Earlier this year the House Transportation and Infrastructure 
Committee reported out the Passenger Rail Reform and Investment Act 
(PRRIA) of 2014. My union, as well as the other rail labor unions 
supported this measure and applauded the bipartisan nature of the 
proposal. The four-year bill does many important things that will help 
strengthen our national passenger rail network and create more diverse 
and reliable options for the public. It also rejects the types of 
reckless privatization measures that I spoke of earlier. However, it 
does not provide Amtrak with the funding levels required to meet the 
needs of an aging system and the increasing demands of passengers. Most 
of all it does not establish a predictable dedicated funding source so 
Amtrak can adequately plan for future investments.
    As Amtrak's annual budget requests and recent infrastructure 
reports have established, its aging fleet needs replacing and the 
system faces significant and disruptive renovations to tracks, bridges, 
tunnels, and other infrastructure in the coming years. The 
authorization levels set in the House bill--which would level out 
funding at current appropriations levels--do not provide the funds 
needed for these long term improvements. Until these funding levels are 
met, we cannot achieve the level of passenger service, reliability and 
job creation that our Nation needs and deserves.
    Passenger rail reauthorization is an opportunity to make a much 
needed investments in a critical segment of our transportation system. 
I look forward to working with the members of this Committee on the 
timely passage of a bill that establishes dedicated long-term Amtrak 
funding, supports the jobs and rights of Amtrak's skilled and dedicated 
employees, rejects unwanted and ill-advised privatization proposals and 
lays out a national rail policy that is integrated with America's 
multi-modal transportation system needs.
    Thank you for the opportunity to appear here today.

    Senator Blumenthal. Thanks very much.
    Mr. Chambers?

       STATEMENT OF RAY B. CHAMBERS, EXECUTIVE DIRECTOR,

  ASSOCIATION OF INDEPENDENT PASSENGER RAIL OPERATORS (AIPRO)

    Mr. Chambers. Thank you. I am very pleased to be testifying 
on behalf of the relatively new Association of Independent 
Passenger Rail Operators, or AIPRO. Our five members operate 
passenger service in the United States and around the world. 
Internationally we carry more than a billion passengers each 
year. In the United States, Herzog and the other members are 
contracted by commuter authorities and carry approximately 80 
million passengers each year on a quarter of a million trains. 
Our members compete vigorously against each other and against 
Amtrak to get that business. We submit that the commuter model 
represents the best practice for a growing, first-class network 
of high-performance passenger rail in America.
    For the last 45 years, Amtrak has held a monopoly on 
intercity passenger service. Amtrak should be commended for its 
stewardship of maintaining a basic national passenger network 
against some very difficult odds. Yet, despite their best 
efforts, the underfunded Government structure operated by 
Amtrak is in serious difficulty, and I hope in the next 
Congress we can find together the ways and means to fix that.
    The Northeast Corridor, by any accounting practices, 
operates at a loss if the underlying structure is included in 
the ledger. The NEC subsidizes the long-distance routes that 
also operate at a significant loss. For the 27 state-supported 
routes of fewer than 750 miles, Congress and Amtrak have pushed 
the entire operating subsidy over to the states. But it is 
these state-supported routes that are now showing the greatest 
growth, largely thanks to state investment. These routes 
represent about 50 percent of intercity ridership.
    We believe it is time for Congress to enact a new 
legislative paradigm that will restructure intercity passenger 
service, that the time is ripe for such action. To accomplish 
this passenger reform, we must bring rail to the investment 
table with highways and transit. The next Congress should 
address passenger rail legislation not as a standalone bill but 
in the context of the highway/transit trust fund 
reauthorization.
    As a little aside here, I have known Peter Rogoff for a 
very long time, and I think he and the administration have done 
a good job with their proposal. And I hope that some serious 
consideration will be given to the administration's funding 
proposals for passenger service.
    In our view, Congress should establish a unified funding 
program that includes highway, transit, and rail.
    We suggest Congress should establish a long-term vision for 
the future growth of urban and passenger rail.
    Now, for the rest of this testimony, as requested by the 
letter from Chairman Rockefeller, I am going to focus on our 
area of primary interest, which is the need to build the state-
supported corridors.
    We believe that Congress should create a new approach to 
these corridors through reforms of the existing PRIIA law. 
These reforms should promote competition and private sector 
participation under Government authority. The bipartisan 2008 
law which, I agree, was a good step forward, was signed by 
President Bush, and it opened state-supported intercity routes 
to competition. Sadly, many of those provisions were ignored. 
The exception was section 209 that resulted in the states 
assuming full responsibility for operating subsidies, which in 
turn greatly raised the state costs. But nonetheless, the 
states are now looking at the competitive option to build their 
corridors in order to reduce costs and improve service. PRIIA 
reform should build on the 2008 bill in a way that is going to 
make these reform provisions workable. And that is the 
challenge you face.
    Specifically, we think that there should be clear 
responsibility given to the states for the corridors. We think 
there should be access to a robust capital program of grants 
and innovative finance to help the states with the task that 
they have. We talked about the PRIIA pilot project. It did not 
work, but we think it could be streamlined and made to work 
with full protection of the type that you are talking about for 
employees in the event of a transfer.
    We believe that the future of intercity passenger rail 
service should be based on commercial negotiations to the 
maximum possible extent. The hosting freight railroads have got 
to be treated as full partners. On a similar note, rail labor 
and construction labor are strong partners in the building and 
the operation of American railroads, and their legitimate 
interests must not be diminished in an effort to achieve a 
high-performance network. And our organization has been working 
very hard to achieve that goal.
    We have specified, detailed recommendations for each of 
these proposals, and I ask your permission that once we get 
them together a little bit better, that we can include them in 
this record.
    Senator Blumenthal. Without objection.
    Mr. Chambers. Thank you.
    Well, our focus today has been on the vision for the future 
and the importance of the state-supported routes, but I want to 
be clear. I hear all of you. We hear all of you. AIPRO is 
concerned that Amtrak has adequate funding. The long-distance 
routes are very important. We need new ways to develop the 
Northeast Corridor. The National Association of Railroad 
Passengers, NARP, is submitting testimony on Amtrak funding, as 
well as long-distance requirements, and we generally endorse 
the NARP approach and will be working with them to craft 
specific legislative recommendations, as well as we are going 
to be working with labor and the class I railroads and Amtrak 
to try to find the kind of solution I think we are all 
struggling to get to.
    So we look forward to working with you in the next Congress 
in the effort to bring America a high-performance, integrated, 
urban and intercity passenger rail network that we can be proud 
of as Americans when we travel in Europe and Asia.
    Thank you.
    [The prepared statement of Mr. Chambers follows:]

Prepared Statement of Ray B. Chambers, Executive Director, Association 
            of Independent Passenger Rail Operators (AIPRO)
    I am pleased to testify on behalf of the Association of Independent 
Passenger Rail Operators (AIPRO). As I understand it this is not a 
legislative hearing on a specific proposal, but rather a forum entitled 
``Passenger Rail: Investing in our Nation's Future.''
    Our five members, listed in an attachment, operate passenger 
service in the United States and around the world. Internationally 
these companies carry more than a billion passengers a year. In the 
United States the independent operators are contracted by commuter 
authorities to carry more than 80 million passengers on a quarter of a 
million trains. Our members compete vigorously against each other and 
Amtrak to get that business. Competition in the American commuter rail 
marketplace has allowed for rapid expansion and innovation of urban 
passenger rail service. We submit this commuter model represents the 
best practice for investing in Passenger Rail for America's Future.
    For the last nearly 45 years Amtrak has held a monopoly on 
intercity passenger service. Indeed when it was created there weren't 
alternatives available, and Amtrak should be commended for its 
stewardship of maintaining a basic national passenger network against 
very difficult odds. Yet, despite their best effort, the underfunded 
government mandated structure operated by Amtrak is broken and our 
passenger system has almost become an embarrassment around the world.
    The Northeast Corridor, by any standard accounting practice 
operates at a large loss when the underlying infrastructure is included 
on the ledger. The NEC reportedly subsidizes the long distance routes 
that also operate at a significant loss. For the 27 state-supported 
routes of fewer than 750 miles, Congress and Amtrak have pushed the 
entire operating subsidy to the states. It is these state-supported 
routes that are now showing the greatest growth thanks to state 
investment. They represent nearly 50 percent of intercity ridership 
while the NEC and long distance routes are stagnant. Clearly change is 
in order.
    Some supporters of the current system in this country submit the 
only way to operate an interconnected national network is through a 
sole-sourced monopoly. Yet, pre-Amtrak multiple rail carriers regularly 
interfaced before being driven down by overregulation and bad 
economics. Domestically, the aviation industry allows for competing 
operators with clear rules for interconnectivity. In Europe competition 
has resulted in vastly increased ridership and equipment renewal. As a 
result recent European Union law requires competition for the operation 
of rail passenger service.
    Thus, Congress should enact a new legislative paradigm that will 
restructure intercity passenger rail service through a clarification of 
Federal and state roles, a restructured base for capital financing, 
increased transparency and the introduction of competition.
    The time is ripe for such action. The two basic Federal laws that 
impact passenger rail have expired. They are MAP-21 that authorized the 
highway/transit trust fund and the Passenger Rail Investment and 
Improvement Act of 2008 (PRIIA) that authorized Amtrak and intercity 
passenger rail service. AIPRO recommends four primary objectives for 
the next passenger rail program:

  1.  Congress should address passenger rail legislation not as a 
        stand-alone bill but in the context of the highway/transit 
        trust fund reauthorization.

  2.  Congress should establish a long-term vision for the future 
        growth of rail passenger service.

  3.  Congress should create a new approach to state-supported 
        corridors.

  4.  Congress should establish a unified funding program that includes 
        highway, transit and rail.

    Our first recommendation is that the intercity rail passenger 
authorization should not be a stand-alone bill, but a Rail Title to 
next year's MAP-21 reauthorization.

    A question before Congress is whether PRIIA should move as a stand-
alone bill as has been suggested in the House. Our view is that in the 
face of population and other demographic trends, enlargement of the 
rail mode can serve a major public interest. Thus when future Federal 
surface transportation investment is considered rail should be at the 
same table with highways and transit. Thus instead of a stand-alone 
rail bill, there should be a Senate Commerce Committee Rail Title as a 
part of next year's MAP-21 reauthorization.

    Our second recommendation is that Congress should adopt A New 
Vision for Passenger Rail Service

    The new Rail Title should make a commitment to establish a High 
Performance urban and intercity passenger network over time. The Vision 
should call for infrastructure investment that will achieve a High 
Performance passenger network that will continuously improve with clean 
attractive equipment, travel times that rival auto travel in any given 
corridor and on time performance. The integrated network should include 
high-speed trains, long distance and corridor trains commuter passenger 
service right down to the streetcar level. The Vision should clarify 
the Federal role in assuring safety and interconnectivity. The Vision 
should clearly define the state role in the operation of intercity 
routes.

    Our third recommendation is that Congress should create A New 
Approach to State Supported Intercity Passenger Rail Service

    AIPRO is concerned that Amtrak have an adequate funding 
authorization for its long distance services and for development of the 
Northeast Corridor. However, as requested in the invitation letter by 
Chairman Rockefeller we will focus on our area of primary interest, 
which is the future of the state, supported corridors. The National 
Association of Railroad Passengers (NARP) is submitting testimony on 
Amtrak funding as well as long distance and NEC requirements. We 
generally endorse the NARP approach and will be working with them to 
craft specific legislative recommendations.
    The specific goal put forward by AIPRO is to improve the 
performance of intercity passenger rail corridors through competition 
and expanded capital investment. The bipartisan 2008 PRIIA law, signed 
by President Bush, did a good job of opening state-supported intercity 
passenger routes to competition. Unfortunately, key provisions of that 
law, which promote competition, were simply ignored. The exception was 
Section 209 that resulted in the states assuming full responsibility 
for operating subsidies. As a result the cost to states has gone up 
dramatically and many states are now looking at the competitive option 
to build their corridors. Rail Title PRIIA reform should build on the 
2008 bill in a way that will make the reform provisions workable. We 
make the following recommendations for PRIIA reform:

        States Should Be Given Clear Responsibility for the Corridors. 
        The result of PRIIA section 209 is that 19 states have 
        essentially taken on the responsibility for 100 percent of the 
        operating subsidy in 27 corridors under 750 miles. Together 
        with the primary stakeholders, states should be responsible for 
        the governance of passenger operations in those corridors. The 
        states together with key stakeholders, including host 
        railroads, labor and selected operators should set standards 
        and metrics for corridor service.

        The Federal Railroad Administration should continue 
        responsibility for safety and interconnectivity.

        The States Should Have Access to a Robust Capital Program of 
        Grants and Innovative Finance. The Federal shift of financial 
        responsibility for intercity corridor service under 750 miles 
        is a clear unfunded mandate on the states. In return, using the 
        model of the highway program, the states should have access to 
        grant funding to build state management and planning capability 
        as well as construction of capital projects. This was the exact 
        purpose of the PRIIA Section 301 program now on the books. 
        Unfortunately, the High Speed Rail Stimulus program that spread 
        $11 billion all over the country bypassed the PRIIA mechanism. 
        The PRIIA Section 301 program should be reauthorized and funded 
        at a minimum of $1 billion per year. In addition a special 
        program of innovative finance based on RRIF loans should be 
        authorized. As a part of this program Section 301 grants should 
        be available to expand RRIF loan viability.

        Sec. 301 Grants should continue to be tied to High Performance 
        Passenger Reform including a requirement for competition. PRIIA 
        301 requires that any state receiving capital assistance would 
        select the operator competitively. This was ignored because the 
        Sec 301 program was ignored in favor of the Stimulus High Speed 
        Rail grants that had no such provision. This mandate should be 
        strengthened. Similarly, when a state selects an alternative 
        carrier, PRIIA Sec. 217 provides a dispute resolution process 
        at the Surface Transportation Board to give the states smooth 
        access to Amtrak equipment facilities and services. Section 217 
        is essential to fair competition.

        The PRIIA Alternative Pilot Program Should be Streamlined. The 
        2008 PRIIA contains a Pilot for Alternative Operations to 
        Amtrak. It was far too complex with unrealistic timeframes and 
        a lack of interest by FRA. Essentially it was designed to fail. 
        Despite that, over 120 expressions of interest were submitted 
        to FRA on how to make the program work. There is no role for 
        the states in the statute. The states in combination should be 
        encouraged to participate in the design of long distance 
        corridors. Independent Operators, such as those represented by 
        AIPRO, should explicitly be authorized to participate in the 
        Pilot Program with approval of the host railroads. AIPRO is 
        working on changes needed in order to make the Pilot Program 
        viable.

        The New Law Should Establish a Commission to advise on the 
        creation of a Competitive Intercity Passenger Service. We 
        believe such a panel would serve a strong public interest in 
        refining issues that must be addressed if the Nation is to 
        embark on a new paradigm that will result in a High Performance 
        Passenger Rail Network of which Americans can be proud. Primary 
        stakeholders should serve on the panel. State participants 
        should be nominated by AASHTO, and there should be 
        representatives of Labor, Host Railroads, Amtrak as well as 
        Alternative Operators. The Commission should address issues 
        such as rail funding, minimal standards to qualify as an 
        intercity passenger rail operator and the critical issue of 
        insurance and liability. The 2012 Senate Rail Title to the MAP-
        21 bill contained a useful provision on liability. It suggested 
        guidelines that increased the liability cap by inflation but 
        cut off any potential for third party liability above the cap. 
        Taken together such efforts will drive down costs for operating 
        rail passenger service to the benefit of all stakeholders, 
        taxpayers and riders.

    There are several additional principles that we would like to see 
established:

   The future of intercity passenger rail service should be 
        based on commercial negotiations to the maximum possible 
        extent. The goal of High Performance Passenger Service can only 
        be achieved if the hosting freight railroads are treated as 
        full partners in a market environment and have access to 
        capital funding that will assure freight throughput is not 
        diminished as passenger traffic increases. On a similar note 
        labor is a strong partner in the building and operation of 
        American railroads. The legitimate interests of railroad 
        workers as we open the system to competition and of 
        construction workers as we improve the system must not be 
        diminished in the effort to achieve a High Performance urban 
        and intercity passenger network.

   Except for a Federal subsidy for long distance routes and 
        the right of forced access on host railroads, Amtrak should not 
        enjoy any special statutory privileges unavailable to 
        alternative passenger operators selected by state authorities. 
        Amtrak should evolve into a true private sector operator that 
        can compete fairly with the independent passenger rail 
        operators represented by AIPRO.

    Our fourth recommendation is that Congress should adopt a New 
Program for MAP-21 Sustainable Funding that includes creation of an 
Urban and Intercity High Performance Passenger Rail Network that we can 
look to with pride as we travel in Europe and Asia.

    A primary objective of the MAP-21 reauthorization should be to 
permit greater parity between highway and rail modes in state 
infrastructure investment decisions. We understand this will take 
coordination between the Senate Commerce, Environment & Public Works as 
well as the Banking Committee. We urge Senate Commerce to take the 
lead.
    For the last 50 years rail freight and passenger infrastructure 
investment has not been at the table along with highways, waterways and 
airports in any significant fashion. Yet, we have reached a point in 
time where solid rail construction projects will do more than many 
alternative transportation projects to rebuild America's transportation 
network and assure our future competitiveness. This is the time to 
bring it all together.
    Specific goals for MAP-21 Reauthorization are:

        MAP-21 Goal #1 Increase state/local flexibility in all existing 
        trust fund programs to include public interest rail projects. 
        This should include the Surface Transportation Program (STP).

        MAP-21 Goal #2 Establish a National Multi-modal Freight 
        Program.

        MAP-21 Goal #3 Create a Unified Transportation Trust Fund that 
        includes corridor capital funding available for the states for 
        improving designated High Performance Passenger Rail Corridors.
                               Attachment
                               
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Senator Blumenthal. Thanks, Mr. Chambers. I think you and 
Mr. Coscia and Mr. Rogoff and Mr. Previsich have all raised one 
of the key challenges here. In a way it is kind of the elephant 
in the room: not how to spend money but how to raise it. And 
the need for capital investment is clear to everyone. There is 
a consensus that we need to invest and we need to make the 
capital investment in our rails, our equipment, our training 
for workers, the spectrum of needs for a 21st century rail 
transportation strategy. The question is how to raise the 
money.
    I have proposed a rail trust fund. I am grateful that the 
administration has included rail in its legislative proposal. 
We have other models like RRIF, which has proved to be 
cumbersome and inefficient. There is the TIFIA program. The 
Transportation Infrastructure, Finance, and Innovation Act may 
be a helpful model, as has been suggested.
    But let me begin with you, Mr. Coscia. You are an attorney. 
You are a finance expert. You are a transportation expert. And 
perhaps you can address what you see as the ways to provide the 
financing maybe through a financing authority. My colleague, 
Senator Blunt, and I have made such a proposal. I am a 
supporter. What do you see as the best way to raise the capital 
from private as well as public sectors?
    Mr. Coscia. Thank you for that introduction to the question 
although I have to admit with some level of humility that given 
the lack of investment in passenger rail infrastructure for the 
past 40 years, I am not sure that my level of expertise really 
is sufficient.
    But having said that, I will, first of all, applaud you for 
the efforts you have made because your proposals get to the 
heart of the issue, which is that absent some kind of a 
multiyear funding, contract authority obligation that allows 
someone to create an efficient financing structure that will 
permit capital to come into the system not in year 1 or year 2 
but over an extended period of time, we are always going to 
sub-optimize investments because we will be managing the way 
those capital investments are made and the way we fund them 
will always be less than efficient because there will be a 
level of uncertainty relative to where the funding comes from 
in the out-years.
    Having said that, our belief--and the reason why in my 
opening statement I focused on the operational success at 
Amtrak--is because we think we have proven that an 
operationally sustainable model is possible in passenger rail. 
We think there is demand for this product. We just have to be 
able to put the right product into place. And so the system 
allows for sort of redefining where the public sector and 
private sector come together, and we believe that some kind of 
a funding mechanism that combines Federal grants along with 
credit advancement from the Federal Government will create the 
right kind of system to allow the operating successes that we 
have seen in the system to turn into a stable, long-term 
funding source. We think anything that does not create a long-
term funding source is not going to be effective. So our view 
is that the likely answer to this will be a hybrid of some kind 
of Federal grant program supported by contributions from our 
state stakeholders, but with a level of credit enhancement from 
the Federal Government that will allow that transaction to be 
structured more efficiently.
    Senator Blumenthal. Perhaps some financing authority that 
makes use of the Federal Government's----
    Mr. Coscia. Guarantee capacity. Yes, that is correct.
    Senator Blumenthal. Thank you.
    Mr. Rogoff and others on the panel, if you have anything to 
add on that point.
    Mr. Rogoff. Well, I will, first, point out obviously that 
the President has put forward a funding proposal and 
transitional revenues from pro-growth business tax reform and 
identified three specific tax proposals in our submissions to 
the Finance and Ways and Means Committees on how that money 
could be found.
    We have also said that we are open to other alternatives 
and would welcome a dialogue with Congress on them.
    I think importantly I want to echo something that Tony 
Coscia said. Uncertainty is going in the wrong direction. He 
pointed out that rail and especially passenger rail and the 
Amtrak system has always suffered from the uncertainty of 
future funding, and therefore, we have fallen increasingly 
behind in part because of the inability to plan and the 
inability to take on or, frankly, garner enough cash to take on 
some of these bigger projects that have to happen both in the 
Northeast Corridor and elsewhere.
    Well, that is frankly what we are now seeing happening on 
the highway and transit side by the fact that we keep kicking 
down the road the need to get an authorization on highways and 
transit. One of the concerns that Secretary Foxx as a former 
mayor has been very articulate about is sort of the loss of 
vision and the unwillingness of both State DOT's, MPO's, cities 
and communities to really start planning those bigger projects 
when they are told that they should be grateful for just 9 more 
months of funding, which is one of the reasons why we think it 
is absolutely imperative with this deadline coming up at the 
end of May that we take this on in earnest. We need to do a 
comprehensive multiyear bill, pay for it, and not only provide 
some certainty for Amtrak, but of course our highway and 
transit planners and service providers across the country.
    Senator Blumenthal. Thank you.
    My time has expired. So I am going to yield to Senator 
Blunt.
    Senator Blunt. Thank you, Chairman.
    Mr. Chambers, would you explain a little further how the 
private sector competition model has worked and what has been 
successful and maybe where things have happened that did not 
work out and if that is the case, why they did not work as well 
as they might have?
    Mr. Chambers. Yes. We have a lot of examples of both 
successes and failures. One of the biggest failures was in 
Britain early on when they tried to go whole-hog by taking the 
entire rail network and putting it into complete privatization 
without sufficient resources and that failed. They fixed that 
problem.
    Since that time, in England and in Germany and a lot of 
other places, they have begun to experiment with the 
competition model. It has become very prevalent, and in almost 
all circumstances--I can provide you some material for this, 
but in almost all circumstances, you will see that ridership is 
growing dramatically. Equipment is being renewed, and it has 
been quite a good success to the point that the EU has now 
mandated that all European services, including those that are 
like Amtrak that are basically government-owned and subsidized, 
will have to yield to competition in a period of time.
    In the United States, it has been a little bit different. 
It is absolutely correct that when Amtrak was created, there 
was no alternative. The first to jump into that, as you pointed 
out, Senator, and into competition was Herzog that bid in 
Florida on a line and won it to operate it. Since that time, 
several other actors have become involved which form my 
association, and now it has become kind of the standard in the 
commuter operations around the country that most of the new 
ones are going to the competitive model and it is very 
successful. One of the most recent ones is in California, the 
Caltrain operation, where Herzog was the victor in that 
competition.
    And in all these cases my members have worked out, I think, 
very good relationships with the unions in the transition. That 
is the model.
    Now, in the states, you have the 27 corridors----
    Senator Blunt. I am running out of time here in just a 
second.
    Mr. Chambers. I am saying that is basically the model, and 
I think that model can be applied to State authorities on the 
27 corridors.
    Senator Blunt. Mr. Previsich, if I have time, I am going to 
come back to you and just let you talk a little more about your 
concern about recklessly moving toward competition I think was 
the term you used. And of course, the good thing about a term 
like that is nobody wants to recklessly move toward it. So it 
is hard to argue with that. But I would like to think about 
what you mean by that.
    Mr. Coscia, the Missouri River Runner runs from St. Louis 
to Kansas City, and I have a concern there that I want you to 
look into for me. And if you can talk about it today, that 
would even be better. The concern is about who is going to pay 
for positive train control on that line. Your agency wrote the 
State of Missouri on November 14 saying that there would be 
potential discontinuance of this service unless the state 
agreed by December 1 to cover the cost of the positive train 
control. I have been told--and you can verify that or not--that 
this was the first formal communication between Amtrak and 
Missouri on this issue. And it seems like a pretty quick 
deadline to set.
    Do you want to talk to me about that and what you think the 
state should do as opposed to the people that own the rail line 
and Amtrak is the operator?
    Mr. Coscia. Of course, Senator, I would.
    I am very much aware of the issue. The letter that you are 
referencing I will admit I only became aware of probably 
earlier this morning, anticipating to some degree that we might 
be having this discussion, not surprisingly.
    Let me speak to the larger issue first, and then I will get 
to the specific issue related to the letter.
    The larger issue raises a concern that I think we all have, 
which is that positive train control is an important 
initiative, one that Amtrak embraced very early on and became a 
leader in the Northeast Corridor and other places where our 
system operates. And for obvious reasons, it is something that 
needs to be taken very seriously, and we take that obligation 
very seriously.
    Having said that, the facts and circumstances surrounding 
the impact on the installation of positive train control around 
the terminal company operations that you are referring to in 
Missouri we believe is an obligation that falls to either 
Amtrak or the state users of that system. It is not something 
that we are comfortable with, and it is something we are 
addressing with the freights directly.
    We think that positive train control is something that is 
an important part of the system, but it needs to be 
intelligently implemented. And certainly we believe that it 
should not be a deterrent to use of the system by either Amtrak 
or the states because of what we view as anomalies in the law 
that permitted the freight companies to seek an effort to avoid 
their responsibility for whatever financial contribution that 
needs to be made to install positive train control.
    Having said that, I can certainly empathize with the State 
of Missouri and the users of that system for having this 
expense be something that is put toward them. We are working 
with the State of Missouri and we are working with our partners 
there to try to find a solution to the issue. The letter that 
you referred to--I will tell you that, no, that is not enough 
time to respond to a question like that. And it was my 
understanding that there might have been prior conversations, 
but be that as it may, I would agree with you that our partners 
are very important to us and this is a hurdle we both have to 
overcome together. And I will commit to you that we will make 
every effort to do exactly that.
    Senator Blunt. Do you have other states that have any 
obligations similar to that?
    Mr. Coscia. We do. We do.
    Senator Blunt. Have they got PTC in place?
    Mr. Coscia. The timeliness for that to happen has not quite 
gotten there, but it will shortly.
    Senator Blunt. Have you sent any similar letters to other 
states?
    Mr. Coscia. I will tell you I asked that exact same 
question not long ago, and I do not have the answer for you yet 
but I will find that out.
    Senator Blunt. I would like to know the answer to that.
    Mr. Coscia. Let me address, though, the sort of broader 
issue, which is that our State partners are absolutely critical 
to us. And I cannot sit here today and tell you that everything 
we have done with our State partners previously is something 
that we should be completely proud of. But I will tell you that 
the board and current leadership at Amtrak is very committed to 
recognizing that the only way we can build this national system 
that I spoke about in my opening comments where we are 
connecting cities is not for Amtrak to somehow think it can do 
this completely on its own. The states are our partners, as 
well as our partners in the private sector, they are incredibly 
important to that entire process, but we as a company have to 
prove to them that we are competent partners and reliable 
partners to do that. And part of this is an effort to get to 
that point.
    Senator Blunt. I may have some more positive train control 
questions and others later if we have a second round. But thank 
you, Mr. Chairman.
    Senator Blumenthal. Thank you.
    Senator Ayotte?

                STATEMENT OF HON. KELLY AYOTTE, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Ayotte. I want to thank the Chairman and the 
Ranking Member and thank all of you for being here today.
    Currently in New Hampshire, there is actually a study that 
is being conducted, part of which has been released but there 
is some additional review being done, to look at the 
possibility of using rail to connect Concord, New Hampshire, 
which is our capital, through Manchester, and Nashua, which is 
in the southern part of the state, to Boston. As you know, many 
people in New Hampshire do commute to Boston from areas of 
Nashua and Manchester to Boston and Concord.
    So I wanted to talk to you about--some of the options that 
are being looked at such as a possible option of extending 
commuter rail from Boston to Nashua or Manchester and then 
Concord, as well, which would be more northern than Manchester, 
or extending Amtrak intercity rail service through Concord.
    How do you link emerging corridors with more established 
lines such as the Northeast Corridor? And what are your 
thoughts on how that happens not only in New Hampshire but how 
do we better serve the transportation needs of our large 
commuter population?
    Mr. Coscia. As I mentioned, we embrace the idea of being 
able to extend our network to cover other city pairs. A large 
part of determining the viability of that is understanding the 
demand that truly exists for passenger rail.
    Senator Ayotte. And that is one of the reasons for the 
study and why the state has commissioned the study as well, to 
understand what the passenger volume would be and who would use 
it and how it would be used.
    Mr. Coscia. But I think the results of that study and 
whatever additional input we could provide to that process 
would be very helpful in informing what options are available 
to us, which lines can be extended and in what form. And then 
obviously that would have to be overlaid in terms of rights-of-
ways that are available to serve those populations and who 
controls those rights-of-way. But that type of analysis is 
something that we are extremely interested in, and we very much 
welcome being a part of and, in fact, happy to join in that 
effort immediately if that is something that is helpful.
    Senator Ayotte. Thank you, I really appreciate that, and we 
will follow up on that.
    As I understand it, the Northeast Corridor, a surplus that 
has been obtained from that corridor--I understand the needs 
that we have been talking about today in terms of maintaining 
the corridor, investments that need to be made. But as I 
understand it, the House of Representatives is also looking at 
some measures that are going to sort of regionalize funding 
based on the viability of how many passengers are using it, 
population. What are your thoughts on it?
    Mr. Coscia. Well, there is no question that we have a very 
sort of mixed issue in the Northeast Corridor in the sense that 
it has become a very, very viable passenger rail system. And in 
Fiscal Year 2014, the net operating income from the Northeast 
Corridor was about a half a billion dollars, which to put that 
in some perspective, that number was zero probably less than a 
decade ago. So it shows you just how much additional 
profitability has been contributed by the Northeast Corridor. 
So on the one hand, it is a very good news story because it is 
a way of generating a significant amount of capital that could 
be used throughout the system.
    Senator Ayotte. But obviously, the challenge is there are 
other parts of the system that are not as strong.
    Mr. Coscia. Well, and the challenge actually becomes more 
complicated than that, Senator, in the sense that what we are 
doing is that we are the beneficiaries of all this demand in 
passenger rail. So there are enormous numbers of people who 
want to move between these cities. There has been a significant 
demographic change in who wants to use passenger rail. We are 
the benefit of all of it. But essentially what we are doing 
with our asset is we are using it much more than we ever did, 
and the asset is getting older. So what is happening is that as 
we are using it to a larger degree, as we are making more money 
from it, it is also deteriorating that much faster.
    So to the extent we take that operating surplus and we do 
not use it to replenish the system, to rebuild it, we are 
basically allowing our asset to deteriorate. So that number 
will come down and it will come down very rapidly. So the 
challenge in taking money off the corridor and using it in 
other places is that we are just adding to the deficit of 
capital expenditures that are necessary to maintain that cash-
flow in the first place.
    So the challenge that we have at Amtrak is finding the 
right way to balance those different needs and yet creating a 
source of capital to reinvest in the system, which is why we 
are so supportive of a notion of creating a recurring, 
sustainable source of capital so that as we get better and we 
are held accountable for operating the system efficiently, we 
are able to have an external source of capital that will allow 
us to maintain it.
    Mr. Rogoff. Can I just add very quickly to that? The key 
word that Tony used in terms of the profitability of the 
Northeast Corridor is the ``operating profits'' because it 
really--it is operating net revenues. But even with that 
additional investment and if they just turned it right back 
into the corridor, we would still be short of the necessary 
investments that we would need in the corridor over the long 
term.
    I did want to quickly go back to your first question, 
though, because I think we can be helpful in other ways.
    The MBTA in Boston has extended commuter rail service into 
other states, specifically Rhode Island. That was the subject 
of considerable work between the states, the Governor's office 
in Providence and others to bring together that funding 
partner. And it was funded in part with funds not from the 
Federal Railroad Administration but from the Federal Transit 
Administration.
    So I think the upshot of your study should really look at 
both options, see which one pencils out, and then kind of pivot 
in terms of where the greatest opportunity is. And the 
administration is certainly happy to help. We have dollars in 
the GROW AMERICA Act specifically for that kind of State-
partnered corridor expansion. So we are interested in helping 
if we can.
    Senator Ayotte. Thank you. And I think one of our 
challenges here also as policymakers is how do we not only look 
at the long-term funding issues, which I appreciate that you 
have identified, but also which areas of this are most viable 
and where are we going to invest in terms of the long-term 
viability where we have the passenger base that is going to use 
it. I think that is an important question for us as well.
    But I really appreciate your insight today on what we are 
looking at in New Hampshire, and we will follow up with you on 
that. Thank you.
    Senator Blumenthal. Thanks, Senator Ayotte.
    Senator Booker?

                STATEMENT OF HON. CORY BOOKER, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Booker. I want to thank the Chairman and the 
Ranking Member for having this hearing. It is very important.
    I also want to thank the Chairman for really asking the 
pointed question that I did about the funding structures that 
we are going to need. And clearly, the response that was given 
about Federal grants, State contributions, credit enhancement 
is one way to go and something we should be exploring.
    Before I ask just really one question, I want to take note 
and give my reverence and respect to a friend, Tony Coscia, who 
has been a longtime advisor of mine and really someone, 
especially for the state of New Jersey--we owe you a lot for 
your service to our region and our state. And I thank you for 
that.
    I want to really focus in real quick. Clearly, as we have 
seen with the Portal Bridge and the most recent CBS expose on 
that and the urgency of infrastructure investment, the common 
sense analysis, that if we are about growing jobs as a country, 
the dollars invested in infrastructure, dollars invested in 
rail produce a tremendous benefit that anybody on Wall Street 
would salivate over, about a buck 70 for every dollar that is 
invested.
    I think that we are, in New Jersey, really being choked by 
an inadequate infrastructure. Clearly, Amtrak is showing that 
this is a very, very high-demand region, and if you build it, 
people will use it and grow their economic activity.
    I am really concerned about the Gateway Project. We have 
the busiest river crossing in the entire United States of 
America, and it is woefully inadequate for the economic, 
commuter, and overall needs of that region. And I see clearly 
that we had a pathway to get there that has failed because of 
the lack of action by the Governor of New Jersey, a decision 
not to go forward with that.
    But I want to drill down on my concerns of the impact or at 
least what we see coming. The tunnels between New York and New 
Jersey that service these thousands and thousands of commuters 
every day have now reached a peak point where they are having 
severe structural challenges. And I know Amtrak has noted that 
one or both of the tunnels is going to have to be closed down 
for repairs in the coming years. This is an immediate concern 
for everyone. It is going to cause a ripple effect that is 
going to affect tens of thousands or hundreds of thousands of 
people in that region.
    And so, Mr. Rogoff, I want to know what role can the DOT 
play in averting what I think is going to be a major commuter 
crisis of monumental proportions in the region and what can 
Congress do to help.
    Mr. Rogoff. Well, Senator Booker, first, thank you for your 
leadership on this particular question. They really are more 
related I think than you know because under the full funding 
grant agreement that we were negotiating and working with New 
Jersey Transit, one of the requirements of New Jersey to pull 
down $3 billion in Federal funds for the Arc Tunnel project 
would be that they also rebuild the Portal Bridge project 
because, frankly, you do not get the efficiency benefits of the 
new tunnels and the additional ridership if you do not fix 
Portal Bridge. It is really one system and one very congested 
and one very old system.
    We have been in conversations through the FRA, and I will 
say we hope and expect to amp up those conversations 
considerably going forward because we are now at a point where 
the states are cooperating at least to the tune of coming 
forward with some money for design work. But we are at a point 
now where we really need to attack the bigger question about 
who is paying how much, when and how.
    And the wake-up call that we recently got from Amtrak 
regarding the greater than known impact of Hurricane Sandy 
flooding on the existing tunnels and the degradation of the 
existing tunnels--that wake-up call I hope is not just being 
heard here in Washington but is also being heard in Trenton and 
Albany because we need to reform the partnership that we 
thought we had for the Arc Tunnel project between a Federal 
partnership that includes both states to make the Gateway 
Project happen.
    We have done and took, I would say, extraordinary measures 
to make sure that at least the option for the Gateway Project 
remained open by transferring Sandy recovery money to the FRA 
to do the Hudson Yards Tunnel project so that that could be 
restored. But that really is not going to be put to its utility 
unless we get a real replacement. And time is running short. 
And the Portal Bridge project is a very good example of why we 
need to get on with this need to do a multiyear authorization 
with real money behind it that lets us do big projects. Amtrak 
has put--I am sorry. Go ahead.
    Senator Booker. No. My time has expired. So I just want to 
say in conclusion I know we have been talking a lot on the 
specifics of what I think is going to be unimaginable 
nightmares for the Hudson River crossing that this is going to 
cause. We have got to start doing more to prevent what is going 
to, I think, be inevitable if these bridges have to go under 
the inevitable repairs that they must have. That is going to 
affect commuters.
    And then in addition to that, to have such a profitable 
region choked by its infrastructure is utterly unacceptable. It 
is the height of irresponsibility. Nobody would run a business 
this way, a household this way. We are wounding ourselves as a 
Nation in one of the most profitable economic regions on the 
globe by how we are conducting ourselves right now, and we have 
to have more dialogue about how we are going to fix this 
problem.
    Thank you.
    Senator Blumenthal. Thanks, Senator Booker.
    Senator Klobuchar?

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you very much.
    Thank you to all of you.
    I first wanted to mention the important role that Amtrak 
has played in my state. It is critical to moving passengers. 
And this spring an important milestone was reached. Amtrak 
began running service to Union Depot, which as Mr. Rogoff is 
well aware of, has helped us with getting our light rail and 
everything that has been happening in Minnesota. We are really 
excited. This is a 21st century multimodal facility right in 
St. Paul and hooking up with Minneapolis. So I want to thank 
you all for that.
    I had a question first that I know a few people have 
touched on, but we are, of course, seeing delays in Amtrak, Mr. 
Coscia, like we are seeing across the country. But what we are 
seeing with oil, of course, from North Dakota--we are happy 
that we are getting more energy out of North Dakota, both 
natural gas and oil. But it has created some severe rail 
congestion and affected the on-time performance of the Empire 
Builder to the point where the Empire Builder was arriving on 
time only l9.9 percent of the time. So only 20 percent of the 
time is it on time, and you can imagine how that hurts 
ridership.
    Have we seen any improvement since last September when that 
figure was announced, and how is Amtrak working with Burlington 
Northern? Those are the tracks that the Empire Builder runs on.
    Mr. Coscia. Thank you, Senator. In fact, thank you for 
raising the question because I think this is a vital issue that 
we are dealing with at Amtrak.
    There is clearly a confluence of issues that have come up 
between the mobility of people and the mobility of goods. I 
mean, we are sharing infrastructure between two vital things, 
moving people around the country and moving goods around the 
country. And I do not think it is an effective argument to 
argue that one is more or less important than the other. The 
reality is that the Nation needs to somehow find a way to work 
together and cooperate and optimize the system.
    I would submit to you, Senator, that it is a work in 
progress for Amtrak working with the freight industry to try to 
find the point where we are doing all we can do to make those 
numbers better than they are. Those are unacceptable numbers, 
and it is at least step one that Amtrak and the class I freight 
railroads are going to need to work together to try to improve 
their operating performance. We see a lot of this around the 
Chicago hub. In fact, our president, Joe Boardman, has convened 
a group of senior individuals to try to find solutions to that 
problem.
    But in addition to that, there is undoubtedly going to be 
need for investment in the system that creates improvements in 
places where the infrastructure that exists is not adequate for 
the needs of the system overall. Some of that will fall to an 
obligation that we would encourage the freights to undertake 
and some of it will be an obligation that Amtrak will have to 
undertake.
    But the bottom line is that those kinds of on-time 
performance levels are unacceptable and are a negative to the 
system overall, and the solution is something that is going to 
require a re-imagining of the relationship that exists in the 
United States between the freight railroads generally and the 
passenger rail industry. We need to, for a second, put aside 
Amtrak and put aside any of the individual players. There is an 
issue on multiple levels of delivering effective passenger rail 
in the United States. One of those issues is a better alignment 
between the passenger rail industry and the freight rail 
industry, and there is a lot of work that needs to be done on 
that issue.
    Senator Klobuchar. Very good. Thank you.
    Mr. Rogoff, I want to thank you again for your leadership. 
We were so pleased to have you out there for the opening of the 
11-mile line that finally connects downtown Minneapolis and 
downtown St. Paul. It was good to see you there. And could you 
talk about the importance of expanding transportation options?
    And then also I wanted to ask you about the rail inspector 
program? And this came out of a GAO report in 2013 on rail 
safety challenges that found that the FRA inspectors only have 
the capacity to inspect less than 1 percent of all railroad 
activities. And do you think there are enough rail inspectors--
this is, of course, different than light rail--to oversee the 
tens of thousands of railroad tracks in our country?
    Mr. Rogoff. Well, thanks for the question. A couple of 
things.
    To your first point on transportation options, it was not a 
coincidence that when the President went out to announce the 
GROW AMERICA Act, he went to Union Depot in St. Paul. It was 
the coldest Anthony Foxx has ever been in his life. If you ask 
him, he will tell you about it.
    [Laughter.]
    Mr. Rogoff. The Twin Cities, in part because of the 
leadership of several mayors and your leadership and others, 
have really figured out there is the mix of options. Even in a 
community where parking is, as urban centers go, relatively 
inexpensive, folks want to use light rail, and they are 
flocking to it and they are also now increasingly flocking to 
intercity rail. One of the things I said in my opening 
statement really had to do with population growth and how we 
are going to accommodate that growth. And that is why we feel 
it is imperative that rail be part of the solution.
    Senator Klobuchar. You can also add to that now our 
metropolitan area has the lowest unemployment rate of any metro 
area in the country.
    Mr. Rogoff. And they are not unrelated.
    Senator Klobuchar. And we are doing all of this with the 
rail, and I think it is interesting.
    Mr. Rogoff. And I think it even goes beyond that. It 
becomes somewhat of a magnet for people, a magnet for both jobs 
and technological workers because they know the rail is going 
to be there. And increasingly, we are now building rail on 
college campuses, and those graduates leave the campus and want 
to know where they are going to relocate and they want to know 
where the rail is.
    On the rail inspector question, I would like to get back to 
you, consult with the Federal Railroad Administrator, and give 
you a more thorough answer, other than to say that one of the 
things that the Secretary has increasingly been moving us to is 
certainly we need additional resources for safety.
    We are revisiting our budgets for that especially in the 
light of crude by rail. There are some additional dollars 
specifically for the safe movement of energy in the omnibus 
just filed last night. But we also need to move to a more risk-
based inspection regime, and that is not just in rail but 
across all of our safety functions.
    Senator Klobuchar. I hope when you hear this only 20 
percent on time--obviously, we do not have nearly the traffic 
of Connecticut where Senator Blumenthal is, but anyone that 
would have 80 percent of trains late, it is not just a safety 
issue. It feels like we are almost getting cut off.
    Mr. Rogoff. This is a very critical issue that quite 
frankly is getting demonstrably worse.
    Senator Klobuchar. Yes.
    Mr. Rogoff. I happen to have--this is actually Amtrak's 
document, but you may wish to put it in the record. I will 
invite Tony to put it in the record because it is his document. 
But it just compares the on-time performance by train for 
October of last year till October of this year, and on some of 
these trains, the numbers have really plummeted. We are talking 
upwards of 30-40 percent. And it is in part why we need the 
investments that are in GROW AMERICA and that is to de-
conflict--if passenger rail is really going to be successful 
nationally, we need to make the investments to de-conflict, 
where possible, the freight rail operations which we also want 
to grow with the passenger rail operations.
    Senator Klobuchar. Thank you.
    Senator Blumenthal. We will take that document for the 
record, without objection, and call on Senator Nelson.
    [The information referred to follows:]
    
    
                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Mr. Coscia, the Northeast Corridor has been 
very successful, 260 million passengers. You have an operating 
surplus of $500 million. So what is the incentive to really get 
to high-speed rail?
    Mr. Coscia. Well, Senator, there is an enormous amount of 
incentive to get to high-speed rail. In fact, I will tell you 
that I feel as though every day that goes by that we do not 
find a way to make tangible progress on the Northeast 
Corridor--I feel as though we are allowing an opportunity to 
slip through our fingers and one which we may or may not get 
back.
    I do not really see that there is a distinction between the 
Northeast Corridor and any other city pair around the country. 
It is just this is where we have made our initial stand, and 
this is where we have proved that the concept is viable. But to 
the extent that we do not invest in that system, that operating 
surplus will decline for certain because the kind of on-time 
performance statistics that we have on the Northeast Corridor 
will start to look a lot more like the kind of on-time 
performance statistics that we were just talking about relative 
to some of the long-distance lines.
    The reality is that the viability of the Northeast Corridor 
is because there is an enormous amount of demand. We are 
selling a lot of product because there is a lot of demand for 
that product. But that demand will go away to the extent we 
cannot deliver a service that is commensurate with what the 
public needs. If we do not invest in rail to a point where it 
gets better and does not deteriorate, then you will see 
ridership start to decline.
    We are a preferable mode. If you look at the numbers, the 
comparison between those who use aviation as a mode of 
transportation on the corridor and those who use rail, within 
the last 10 years they have essentially flipped. And that is 
something that is important because we are a more efficient 
mode for those kinds of distances, but in order for us to hold 
onto that kind of advantage, we are going to have to invest in 
the system and keep it viable.
    So I think there is plenty of incentive for us to invest in 
the Northeast Corridor, to develop higher-speed programs not 
simply because of the Northeast Corridor because we think it is 
also a model that can be transported to other parts of the 
country. And in fact, we have had an enormous amount of success 
in developing systems around the Chicago hub, in the Northwest, 
and even the success you have seen in connecting cities in 
California.
    Senator Nelson. What is the average speed on the Acela 
between Washington--and if you take all of the stops, what is 
the average speed between there and Penn Station?
    Mr. Coscia. The average speed in the southern half of the 
route is somewhere in the 120 mile an hour range. I would have 
to confirm that for you. But obviously, the system can achieve 
higher speeds, but in multiple places the rail infrastructure 
does not support that.
    Senator Nelson. So overall the average speed is what?
    Mr. Coscia. It is about 110 to 120 miles an hour.
    Senator Nelson. From Washington to New York.
    Mr. Coscia. From Washington to New York.
    Senator Nelson. Including the stops.
    Mr. Coscia. Including the stops, it would be less than 
that. The operating speed is at that level. The time that it 
takes to get from Washington to New York is about 2 hours and 
45 minutes.
    Senator Nelson. OK.
    Now, have I not ridden on some trains in Europe that go in 
excess of 200 miles an hour?
    Mr. Coscia. You have indeed.
    Senator Nelson. Did I not ride on an experimental one 
outside of Shanghai that went up close to 300?
    Mr. Coscia. I think we both may have. Probably not the same 
train, but yes, I am sure you have.
    Senator Nelson. So when can we start getting that kind of 
technology that is available today into the United States? And 
it would seem to me the Northeast Corridor is a good place to 
start. No. Let me amend that. The good place to start was 
between Tampa and Orlando right down the middle of the I-4 
interstate corridor, but our Tea Party Governor would not 
accept the $2.4 billion that we had on the table to build it 4 
years ago. And it would be being completed now, and it would be 
the showcase for the entire country to do it. But since that is 
not the case, what is the case in the Northeast Corridor?
    Mr. Coscia. Well, Senator--and I will not comment on the 
last part of your question because it would require a lot of 
other discussions that we do not have time for.
    Senator Nelson. No. I am just talking about a fact. I am 
talking about a fact.
    Mr. Coscia. But I will tell you that we are paying the 
price for under-investment in the system for the last 40 years. 
So the answer to your question is that I agree with you that we 
should be sprinting. We deserve to sprint. If anyone in the 
world should be sprinting, it should be this country, but we 
are not sprinting because we have to first learn how to walk 
correctly given the fact that we have put so little effort into 
it for the past 40 years.
    So the proper response to your question is that we are 
working very, very hard at Amtrak to make the Northeast 
Corridor the model of what intercity passenger rail service 
should look like and could look like in this country in the 
hope of making the case to the American public generally that 
investment in intercity passenger rail is worth it, that it is 
worth it for us to put significant resources into it because we 
can connect cities that would ultimately have an enormous 
economic and quality-of-life benefit.
    The truth is, Senator, at the end of the day, this is 
really not about the trains and whether they go fast or they go 
slow. It is about the people on the trains. And with every 
delay, we are wasting money, we are wasting time, and we are 
not going to get it back. So the reality is that this is not an 
argument about Amtrak. In fact, Amtrak needs to prove to the 
general public that it is capable of taking on this mission, 
but it is about passenger rail service. And unless we make the 
kind of investments that will upgrade the system on the 
Northeast Corridor to show that we can run at operating speeds 
in excess of 150 miles an hour, then we will never be able to 
actually create the kind of true high-speed network that you 
are referring to not because it is not possible, not because we 
do not know how to build it, but because we sort of lack the 
will to install the system.
    Senator Nelson. Well, what I want to work on is the will.
    Senator Blunt, over 30 years ago when I was a young 
Congressman in the House just before you arrived, Congressman 
Don Fuqua, the Chairman of the Science and Technology Committee 
of the House, took us all to France, and we rode in the 
engineer's compartment on the high-speed rail from Paris to 
Lyon, 180 miles an hour. I remember that. It looked pretty 
fast. That was over 30 years ago, and here we are in America 
without high-speed rail.
    Mr. Rogoff, let me say that there is one bright spot in 
Florida--and you were involved in this and we thank you--and 
that is a commuter rail system for the first time being done in 
the Orlando area called Sun Rail. We need to complete some more 
of that now to take it to the Orlando airport. I sure would 
appreciate you continuing to help. And that Sun Rail, the first 
time in the metropolitan area of Orlando that it has been 
established--hopefully they will get going over in the Tampa 
area, another dense urban area. Of course, they have had it 
thanks to the wisdom of Congressman Bill Lehman, Senator Blunt, 
that you and I had served with, who got that commuter rail 
system in Miami.
    But we need that extension, and it is wildly popular--Sun 
Rail in the Orlando area. Started from scratch. For a couple of 
weeks, they let everybody go out and ride it for free. I mean, 
you could not get on it it was so packed.
    Mr. Rogoff. It is a system that holds great up-side 
potential especially with all the economic dynamism in and 
around Orlando. You have our commitment to continue to work 
with you on it. I know FTA is in regular dialogue with FDOT 
about it. And it was great to see phase one get off the ground, 
but we certainly know that there are more phases to come.
    Senator Blumenthal. Thanks very much. Thanks, Senator 
Nelson.
    Senator Blunt. Mr. Chairman, I would like to note for the 
record that since he has been in a spaceship, Mr. Nelson knows 
a lot more about speed than most of us do. So his speed 
comparisons are much greater than our speed comparisons.
    Senator Blumenthal. He is truly a world traveler.
    [Laughter.]
    Senator Blunt. Intergalactic mode.
    Senator Blumenthal. But speaking of world travel, I am 
hoping that during the next session when I hope Senator Blunt 
will be Chairman of this subcommittee, but whoever is maybe 
will take us on another trip to Paris.
    [Laughter.]
    Senator Blumenthal. I have just a couple of quick 
questions. You have been very patient and very, very helpful 
and informative, and I want to really thank the panel.
    Mr. Coscia, Senator Booker rightly focused on the Northeast 
Corridor, specifically the Gateway Project. And you know, I am 
sure that my constituents in Connecticut are wondering why 
should I care about this tunnel under the Hudson. And of 
course, the tunnel under the Hudson is vital not only to 
Connecticut but to Delaware, Pennsylvania, every state that is 
served by that corridor. My understanding is that this project 
would allow for eventual doubling of passenger trains into 
Manhattan. It would add new tunnels under the Hudson River, 
replace the Portal Bridge east of Newark, New Jersey, and 
expand the station facilities in New York City.
    The cost estimates range from $14 billion to $16 billion, 
which seems like a staggering amount until you consider what it 
costs to put men on the moon or what it costs to put satellites 
into orbit. And by no means am I suggesting that we should not 
continue with that space exploration effort, but in terms of 
getting people safely and reliably to destinations for pleasure 
or work or moving freight, I happen to believe it is well worth 
moving forward.
    I would just ask you and any of the other panelists to 
comment on how its ramifications are so sweeping for our Nation 
and most especially for our economy, job creation, which are a 
priority for me.
    Mr. Coscia. Yes, Senator. Well, I would say at the risk of 
being redundant, your question gives me the perfect opportunity 
to make the point that I have been making in my testimony and 
in a number of the responses here, which is that the Nation 
needs a robust passenger rail system to connect cities not 
because we think it is an interesting idea, but because the 
future of the Nation's economy largely depends on it. The 
Northeast Corridor has given us this perfect opportunity to 
create a system that we can then spread throughout the country 
to city pairs not just in the Northeast of the United States, 
but throughout the country. But we are heavily dependent on the 
success of the Northeast Corridor as being able to sustain that 
system because it is the element that we will use to be able to 
generate the kind of system creation capacity that will allow 
us to go to other parts of the country as well, not to mention 
the fact that the Northeast Corridor obviously represents a 
vitally important part of the entire U.S. economy.
    Now, the project that you speak of, which highlights the 
fact that every opportunity also has its points of failure, is 
that on the Northeast Corridor, which is currently the bulwark 
of the Nation's passenger rail system--once you get to the City 
of Newark, you go from a four-track system to a two-track 
system. You go over a bridge that crosses the Hackensack River 
that was built 120 years ago that is a swing bridge that is 
something that fails on a regular occurrence. It goes under 
tunnels that we built out of concrete and cast iron over 100 
years ago, emerges into Penn Station which is clearly the 
busiest train station in North America and nowhere near able to 
meet the needs that it has, and then emerges from Penn Station 
again in rail infrastructure that was built many generations 
ago.
    The reality is that is just purely unacceptable. That half 
a billion dollars in net operating income that I mentioned is 
coming from the Northeast Corridor is all at risk. But what is 
even at greater risk is shutting down that tunnel for even a 
day has a horrendous impact on New York's economy and the 
Nation's economy.
    So my argument to you on all of this and my argument 
generally on all of this is that we believe that a national 
passenger rail system is heavily dependent on the success of 
the Northeast Corridor. And the Northeast Corridor will not be 
successful unless we do something about this problem and we do 
something about it very quickly.
    Senator Blumenthal. Thank you very much.
    Senator Blunt?
    Senator Blunt. Well, thank you, Chairman. Thanks, panel, 
for your patience. I may submit some questions in writing.
    Let us talk about positive train control just a little bit 
longer. Mr. Coscia, is there any part of the Amtrak system that 
will meet the 2015 deadline? And if there is, what percentage 
of your system would be able to comply with that deadline?
    Mr. Coscia. Senator, I do not think I can give you that 
answer off the top of my head, but I would be happy to get you 
that information.
    Senator Blunt. You could give me the answer but you will 
not be fully----
    Mr. Coscia. I am not certain that I would be 100 percent 
accurate and I would not want to guess at that.
    Senator Blunt. All right.
    Mr. Rogoff, since it is my belief that almost nobody will 
meet that deadline, what is the best way for your Department to 
deal with that? On a case-by-case basis or would you like some 
guidance from the Congress as to a reasonable date that then we 
would try to encourage that people meet that date?
    Mr. Rogoff. Well, I do not want to be cheeky, Senator 
Blunt, but what we would really like is the $6.4 billion we put 
in our request for multiple years to help facilitate the 
installation of PTC.
    But on your specific question on the deadline, we have come 
at this on a case-by-case basis. We do think that is the most 
reasonable. We do think that at least the Metrolink system out 
in California has a fighting chance of meeting the deadline, 
but we are working with everyone individually as it is. If GROW 
AMERICA were to be adopted and we were able to bring in $6.4 
billion over multiple years to help finance that investment, we 
think things will go a lot more quickly.
    As you know well, there are other issues that we are 
working through, including issues with the FCC--on tower 
installation. But I think we are making some progress there 
now, and we feel good about the partnership allowing things to 
move more quickly. But financing is still a challenge.
    And you are correct that a very small portion of the 
universe will comply with the deadline, but we think working 
with each railroad individually is the best way to move them 
forward.
    Senator Blunt. You know, I do have some problem with the 
railroads that have somehow worked to comply being under the 
law without maybe time to try it out, see how it is working. 
Those are the kind of things I want to follow up with you on.
    Mr. Rogoff. We would welcome the inquiries. That is 
precisely among the reasons why we would like to come at this 
from a somewhat--flexible on the installation, recognizing 
other things, flexible somewhat on the enforcement but keeping 
everyone's feet to the fire to move forward quickly. We think 
being able to do this on a case-by-case basis gets us to 
recognize those who have really made an effort and made the 
expense to move out rapidly and also recognize those that have 
perhaps dragged their feet and be able to recognize the 
distinctions between them rather than have sort of a one-size-
fits-all legislative solution.
    Senator Blunt. We will continue to talk.
    Again, Mr. Chairman, thank you for your leadership on these 
issues and for having the hearing today.
    Senator Blumenthal. Well, thank you, Senator Blunt, for 
your partnership and your leadership both here and in the great 
State of Missouri and throughout the Midwest.
    And again, I want to thank our panel. Please convey my 
thanks to Secretary Foxx for his vision and leadership. And to 
all of you, I look forward to working with you as we continue 
this very important work. Thanks so much.
    This hearing is adjourned and the record will be kept open 
for two weeks.
    [Whereupon, at 4 p.m., the hearing was adjourned.]
                            A P P E N D I X

   Prepared Statement of James P. Redeker, Commissioner, Connecticut 
Department of Transportation; Chair, Northeast Corridor Infrastructure 
                   and Operations Advisory Commission
The Northeast Corridor
    The Northeast Corridor (NEC) is one of the great railroads of the 
world. Its 457-mile main line between Boston, Massachusetts and 
Washington, D.C. carries 710,000 commuter rail riders and 40,000 Amtrak 
riders each day on over 2,000 trains. It supports a workforce that 
contributes $50 billion annually to the United States gross domestic 
product. It provides high capacity and reliable access to core 
employment centers that contain one out of every three jobs in the 
larger NEC Region, whose overall economy is the fifth largest in the 
world. The NEC plays an important role in supporting the broader 
transportation system. An unexpected loss of the NEC for one day alone 
could cost the Nation $100 million in additional highway congestion, 
productivity losses, and other transportation impacts.
    The NEC spans eight states and the District of Columbia, supports 
nine passenger rail operators--including four of the five largest 
commuter rail services in North America--serves four freight railroads, 
and has four separate infrastructure owners. Amtrak owns the railroad 
between Washington, DC and New Rochelle, NY, and between New Haven, CT 
and the Rhode Island-Massachusetts border. The New York Metropolitan 
Transportation Authority (NYMTA) and the Connecticut Department of 
Transportation (CDOT) own their states' respective portions between New 
Rochelle and New Haven. The Massachusetts Bay Transportation Authority 
(MBTA) owns the railroad from the Massachusetts-Rhode Island border to 
Boston South Station.
    Portions of the NEC date back as far as the 1830s. A great number 
of critical assets date back to the period between the Civil War and 
the New Deal. As infrastructure deteriorates and service levels reach 
the NEC's practical capacity, we must choose to cope with declining 
reliability and limited economic growth, or to invest in the next 
generation of the railroad.
    The NEC is at an historic turning point. The decades since 
stewardship of the NEC was placed in public hands have been marked by 
record-breaking commuter and intercity rail ridership growth--and 
insufficient capital investment. But unprecedented collaboration is 
underway to take responsibility for this vital asset and position the 
Northeast for a globally competitive economic future.
The Commission
    I serve as Chair of the Northeast Corridor Infrastructure and 
Operations Advisory Commission (the Commission), established by Section 
212 of the Passenger Rail Investment and Improvement Act of 2008 to 
create a new forum for collaborative planning and decision-making for 
the Northeast Corridor. The Commission is composed of one member from 
each of the NEC states (Massachusetts, Rhode Island, Connecticut, New 
York, New Jersey, Pennsylvania, Delaware, and Maryland) and the 
District of Columbia; four members from Amtrak; and five members from 
the U.S. Department of Transportation (USDOT). The Commission also 
includes non-voting representatives from freight railroads, states with 
connecting corridors, and commuter authorities not directly represented 
by a Commission member.
    The Commission has nearly completed its statutory mandate to 
develop a cost-sharing arrangement for NEC infrastructure used for 
commuter and intercity rail services. The draft agreement contains the 
required cost-sharing methods, policy recommendations to support them, 
and new practices to enhance collaboration on the Corridor.
    Congress will consider authorizing laws for both surface 
transportation and intercity rail in the coming months. Federal policy 
should treat the Northeast Corridor as a single system. The success of 
the Corridor, and passenger rail in general, is possible only through a 
unified vision for the entire network.
    The Commission is part of a regional partnership that has been 
years in the making and is growing stronger. Though far below even the 
bare minimum level of necessary investment, the Northeast states and 
commuter agencies have gone nearly dollar-for-dollar with Amtrak over 
the last ten years with approximately $2.4 billion in NEC capital 
investment, paired with approximately $2.6 billion from Amtrak and $1 
billion in Federal American Recovery and Reinvestment Act (ARRA) and 
High-Speed Intercity Passenger Rail (HSIPR) program grants.
    Coordination is especially strong in planning for the future. In 
2010, the Northeast states, commuter agencies, and Amtrak published the 
Northeast Corridor Infrastructure Master Plan that identified the level 
of investment required by 2030 to restore the Corridor to a state of 
good repair and accommodate modest forecasts of ridership growth. In 
2013, the Commission convened the same group of stakeholders to publish 
a report entitled Critical Infrastructure Needs on the Northeast 
Corridor to highlight the highest priority infrastructure investment 
needs in the region.
    Since then, Commission stakeholders have been at work on the first-
ever Northeast Corridor Five-Year Capital Plan--due for publication in 
spring 2015--which will be a near-term action plan to address the 
investment needs identified in previous reports. Development of the 
Northeast Corridor Five-Year Capital Plan is analyzing how to feasibly 
ramp up investment levels over the next five years to reverse decades 
of deterioration and modernize our shared national asset for future 
economic growth.
    However, funding availability will be the largest obstacle in 
implementing the Northeast Corridor Five-Year Capital Plan. Aggregate 
funding levels from traditional sources are far below those required to 
stabilize the infrastructure's condition and prepare it for the future. 
The Northeast Corridor Five-Year Capital Plan will identify these 
funding gaps and define how additional resources would build a stronger 
railroad.
    Though the draft cost-sharing agreement lays out a framework for 
collaboration, it will not fully address the funding gaps facing the 
NEC. Once it transmits an adopted cost-sharing policy to Congress, the 
Commission looks forward to partnering with Congress to ensure the 
success of these new approaches to collaborative planning, funding, and 
financing of rail services and infrastructure improvements.
    Railroad investments involve complex planning, engineering, 
contracting, and construction activities that take place over a number 
of years--processes that benefit from predictable and stable capital 
funding resources which is generally lacking due to the current 
reliance on annual budgeting and appropriations and one-time 
competitive grants.
    Rail deserves the predictable and sustainable funding offered to 
other modes so it can reach its potential for the American public. A 
long-term Federal capital funding program is needed to advance 
intercity passenger rail service throughout the United States. Funding 
is needed for capital investments in new equipment and infrastructure 
improvements. These capital investments are needed for increased 
frequencies, speeds, and passenger amenities, as well as for improved 
schedule reliability in the face of heavy freight traffic.
    In addition to Federal funding, we will also need to be creative in 
ways to stretch the Federal dollars by leveraging private sector 
funding for passenger rail infrastructure. However, it is worth noting 
that the risk-averse private sector desires a predictable, sustainable 
Federal funding partner prior to investment. All European Governments 
finance railways to provide services beyond those that a stand-alone 
commercial railway would offer, in terms of the geographic coverage of 
the network, the location of stations and the frequency and speed of 
services. They do this on the theoretical economic grounds that the 
long asset lives, lumpy investment patterns and large sunk costs that 
characterize rail prevent purely private provision of an optimally 
dimensioned rail system.
    Such a program must include a mechanism to insure that funding can 
be reliably provided over multiple years. Like other major 
transportation infrastructure projects, passenger rail corridor 
improvements can take several years and new equipment can take up to 
three years from order date to delivery.
    Many public and private sector stakeholders have long advocated for 
improvements to the policy framework and funding models that support 
the NEC. These initiatives have rarely translated into sustained focus 
and action. Now, confronted with aging infrastructure, rising demand, 
and constrained capacity, NEC service providers, Northeast state and 
local governments, and the Federal Government must continue to forge 
this new partnership to modernize the NEC and build a foundation for 
economic growth.
    The Commission has made great strides in bringing the Corridor's 
key stakeholders to the table to develop a framework for greater 
collaboration. We look forward to working with Congress to build upon 
this progress and to develop a stronger federal-state partnership to 
address the Northeast Corridor's significant infrastructure challenges.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Thune to 
                         Hon. Anthony R. Coscia
    Question. It is my understanding that as railroads develop PTC 
systems in response to the 2008 Passenger Railroad Investment and 
Improvement Act Congressional mandate, some freight lines will now 
require PTC only because a passenger rail system shares their tracks 
and therefore is asking the passenger rail systems, most notably 
Amtrak, to cover these costs. It is my understanding that you have now 
decided to pass these costs along to the states that support these 
passenger rail programs and that many states were unaware and 
unprepared for these additional expenses. Can you explain your planning 
and communications efforts?
    Answer. For Amtrak and the states, the most critical PTC-related 
issue has been the installation of PTC on terminal railroad trackage in 
St. Louis and Kansas City. The cost allocation methodology stemming 
from Section 209 of PRIIA requires that allocated costs for PTC on 
state-supported routes must be borne by the states, although a portion 
of these costs will also be borne by Amtrak, as these terminals are 
used by our Southwest Chief and Texas Eagle services. In both cases, 
states would be required to bear both the initial installation cost and 
the annual maintenance costs for the system. Because the scale of the 
cost is significant enough to impact services supported by the states 
of Illinois and Missouri, Amtrak has been in close and continual 
communication with both state departments of transportation on this 
issue. While we don't have agreement yet with Missouri or Illinois on 
this, these states have been made aware of their exposure. We do not 
expect that either installation will be complete by the end of calendar 
year 2015.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Roy Blunt to 
                         Hon. Anthony R. Coscia
    Question 1. I understand you have served as Chairman of the Amtrak 
Finance and Audit Committee since 2011. Both your financial reports and 
your audited financial results are due every year by February 15, as 
required by statute. These documents will be important in considering 
the Amtrak reauthorization. Have these reports been submitted, and if 
not could you please provide explanation?
    Answer. Our Legislative and Grant Request (budget request) is 
required every year on February 15, with some deadline concessions for 
delayed appropriations, and this is a forward looking document. 
However, the financial reports and audits are a separate matter. We 
will not have our FY 2014 audit complete for several more months due to 
a delayed schedule from one-time audits that were finalized just a few 
months ago. On a normal schedule, our audits are finalized by the end 
of January. We expect to get back to the schedule for the FY 2015 final 
audit.

    Question 2. State-supported routes like the St. Louis to Kansas 
City route, the River Runner, carried almost half of Amtrak riders last 
year. Some of these routes are the fastest growing segments for 
ridership. How are you working with the states to continue to improve 
ridership of these routes?
    Answer. Amtrak has been working closely with the states to ensure 
that state-supported ridership continues to grow. To sustain our 
pattern of growth, we are working to address the single most important 
issue for travelers, on-time performance (OTP). OTP has fallen 
significantly in the past two years, and we have engaged the freight 
railroads to address those components of OTP for which they are 
responsible. We have also worked to improve those components for which 
we are responsible, particularly those that have historically hindered 
service in our Chicago hub. We have worked to address the issue of snow 
interference with locomotive traction motors, and snow and ice 
infiltration into cars; we have also pursued the more effective 
installation of heat-tape wrapping on cars, to avoid problems with 
freezing water; all of these have helped us to address this challenge.
    We have worked closely with the states to promote specific state 
marketing initiatives aimed at boosting ridership and cost recovery. 
Collaborative marketing initiatives involving Amtrak and the states 
have aimed to boost both. To ensure that ridership does not drop off 
while we experience service disruptions during the improvement programs 
on the Chicago-Detroit and St. Louis routes, we have worked with the 
states to publicize the improvement program so that passengers can 
understand both the need for delay, and the improvements in OTP and 
trip time that can be expected once the work is done.
    For our sales systems, Amtrak has recently embarked upon a 
modernization of all of our customer-facing sales systems, including 
Amtrak.com, mobile apps, and contact center and station sales systems 
(including Quik-Trak). Building on the momentum of our recently 
launched eTicketing system, these systems will extend the reach and 
improve the ease of purchasing Amtrak services across the system. 
Amtrak will be launching the first wave of these new systems starting 
in late spring of 2016.
    In marketing, in addition to traditional advertising, Amtrak has 
many tools to support growing sales, including promotions, partner 
programs, and our loyalty program, Amtrak Guest Rewards. Amtrak also 
supports pricing and revenue management strategies for state routes 
with advance systems and ad hoc analyses for our state partners.
    Amtrak.com today already supports customization and geo-targeting 
of state services messaging to target markets in support of those 
routes' unique needs, including by utilizing Amtrak marketing and 
communication channels such as home page banners and ``deals'' pages on 
Amtrak.com, Amtrak Guest Rewards member e-mail and website, non-member 
e-mail, and social media channels messaging (Facebook, Instagram, 
Amtrak blog, Twitter). State routes are also integrated into promotion 
of national, system-wide marketing partnerships and programs including: 
AAA, Student Advantage, Veteran's Advantage, Amtrak Vacations, Amtrak 
to Parks, and Amtrak Train Days. Amtrak aggressively promotes state 
routes at consumer trade shows regionally, nationally, and 
internationally and through travel industry partnerships at the local 
and regional level, including convention and visitors' bureaus, travel 
agencies and tour operators, state travel bureaus, and other strategic 
destination and sponsorship promotions.
    Importantly, of course, Amtrak also supports our state partners 
with advertising. This can be part of a state-supported and directed 
program or through Amtrak's own integrated national advertising 
campaigns. These campaigns appear in print, on TV, online, in sports 
venues, and other channels. In 2015, Amtrak is developing a new 
national brand campaign to drive consideration for Amtrak travel across 
all services and within key segments such as millennials and students, 
families, and boomers. This campaign, which will launch mid-year, 
utilizes the tagline ``See Where the Train Can Take You.'' The dual 
message of this tagline speaks to Amtrak's ability to transport its 
customers--both in the physical sense to a specific destination, as 
well as to transport them emotionally during their trip. We plan both 
television and digital platforms for release and expect state-supported 
services to benefit directly.
    Amtrak's communications team also supports daily messaging through 
the media and directed communications to ensure that customers are 
aware of track work, service disruptions, and service development 
programs that could have an adverse impact on services. The goal is to 
ensure that our customers remain informed and ridership does not drop 
off while we experience service disruptions during the improvement 
programs on the Chicago-Detroit and St. Louis routes, for example, our 
communications team has worked with the states to publicize the 
improvement program so that passengers can understand both the need for 
delay, and the improvements in OTP and trip time that can be expected 
once the work is done.
    Together, these programs are designed to drive awareness, 
consideration and trial for new customers, and to increase use by 
existing customers. These actions, coupled with both operational 
actions for improved reliability as well as on-going improvements to 
schedules, frequencies, and services, are designed to ensure the long-
term sustained growth of our state-supported services.

    Question 3. To follow up from my question in the hearing, is there 
any part of the Amtrak system that will meet the 2015 Positive Train 
Control deadline? If so what percentage of your system would be able to 
comply with that deadline?
    Answer. Amtrak's PTC installation program has two components--
installation on our infrastructure, and installation on our equipment. 
PTC systems are currently in service on the 156 mile Amtrak line 
between New Haven and Boston, and the 97 mile Amtrak-owned Michigan 
Line. PTC systems have been installed on the 245 mile segment between 
Washington, D.C. through New York Penn Station to New Rochelle, New 
York, and on the 104 mile line from Philadelphia to Harrisburg; these 
systems have not, however, been turned on, because of issues associated 
with radio frequency that have required installation of new radios in 
locomotives to ensure compatibility. That installation process is 
ongoing, and when it is complete later this year, Amtrak expects to 
have an operable PTC system on 602 route-miles of our system. Work is 
currently ongoing on the 135 mile segment of the Michigan Line between 
Kalamazoo and Dearborn that is owned by the state, but maintained by 
Amtrak. We hope to finish this line by the end of 2015, but our ability 
to turn on the PTC system there will depend on an agreement with the 
freight carrier to turn over dispatching, and at this time that issue 
is unresolved. We expect to complete the installation of PTC systems on 
all Amtrak-owned locomotives that require it for NEC operations by the 
end of the year, and we expect to have the installation of freight-
compatible PTC systems on our diesel fleet completed at the same point. 
We expect to have completed PTC installation on approximately 80 
percent of the route-miles for which Amtrak is responsible by the end 
of the calendar year.
    The exceptions to this will be our 62 mile Springfield Line, which 
is undergoing significant upgrading in partnership with the State of 
Connecticut, and the 86 mile segment of the Empire Corridor between 
Poughkeepsie and Schenectady, New York. In the former case, 
installation has not yet proceeded because of the scale of the ongoing 
construction work on the Springfield Line; in the latter case, design 
work is ongoing, but installation work will not be able to proceed 
without funding from the state.