[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: RAIL STAKEHOLDERS' 
                              PERSPECTIVES

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

                                (115-27)

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON RAILROADS, PIPELINES,
                        AND HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 4, 2017

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure




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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman

DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of 
  Vice Chair                         Columbia
FRANK A. LoBIONDO, New Jersey        JERROLD NADLER, New York
SAM GRAVES, Missouri                 EDDIE BERNICE JOHNSON, Texas
DUNCAN HUNTER, California            ELIJAH E. CUMMINGS, Maryland
ERIC A. ``RICK'' CRAWFORD, Arkansas  RICK LARSEN, Washington
LOU BARLETTA, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
BLAKE FARENTHOLD, Texas              GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio                      DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida              STEVE COHEN, Tennessee
JEFF DENHAM, California              ALBIO SIRES, New Jersey
THOMAS MASSIE, Kentucky              JOHN GARAMENDI, California
MARK MEADOWS, North Carolina         HENRY C. ``HANK'' JOHNSON, Jr., 
SCOTT PERRY, Pennsylvania            Georgia
RODNEY DAVIS, Illinois               ANDRE CARSON, Indiana
MARK SANFORD, South Carolina         RICHARD M. NOLAN, Minnesota
ROB WOODALL, Georgia                 DINA TITUS, Nevada
TODD ROKITA, Indiana                 SEAN PATRICK MALONEY, New York
JOHN KATKO, New York                 ELIZABETH H. ESTY, Connecticut, 
BRIAN BABIN, Texas                   Vice Ranking Member
GARRET GRAVES, Louisiana             LOIS FRANKEL, Florida
BARBARA COMSTOCK, Virginia           CHERI BUSTOS, Illinois
DAVID ROUZER, North Carolina         JARED HUFFMAN, California
MIKE BOST, Illinois                  JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas           FREDERICA S. WILSON, Florida
DOUG LaMALFA, California             DONALD M. PAYNE, Jr., New Jersey
BRUCE WESTERMAN, Arkansas            ALAN S. LOWENTHAL, California
LLOYD SMUCKER, Pennsylvania          BRENDA L. LAWRENCE, Michigan
PAUL MITCHELL, Michigan              MARK DeSAULNIER, California
JOHN J. FASO, New York
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota

                                  (ii)

  


     Subcommittee on Railroads, Pipelines, and Hazardous Materials

                   JEFF DENHAM, California, Chairman

JOHN J. DUNCAN, Jr., Tennessee       MICHAEL E. CAPUANO, Massachusetts
SAM GRAVES, Missouri                 DONALD M. PAYNE, Jr., New Jersey
LOU BARLETTA, Pennsylvania           JERROLD NADLER, New York
BLAKE FARENTHOLD, Texas              ELIJAH E. CUMMINGS, Maryland
DANIEL WEBSTER, Florida              STEVE COHEN, Tennessee
MARK MEADOWS, North Carolina         ALBIO SIRES, New Jersey
SCOTT PERRY, Pennsylvania            JOHN GARAMENDI, California
MARK SANFORD, South Carolina         ANDRE CARSON, Indiana
TODD ROKITA, Indiana                 RICHARD M. NOLAN, Minnesota
JOHN KATKO, New York                 ELIZABETH H. ESTY, Connecticut
BRIAN BABIN, Texas                   CHERI BUSTOS, Illinois
RANDY K. WEBER, Sr., Texas           FREDERICA S. WILSON, Florida
BRUCE WESTERMAN, Arkansas            MARK DeSAULNIER, California
LLOYD SMUCKER, Pennsylvania          DANIEL LIPINSKI, Illinois
PAUL MITCHELL, Michigan              PETER A. DeFAZIO, Oregon (Ex 
JOHN J. FASO, New York, Vice Chair   Officio)
JASON LEWIS, Minnesota
BILL SHUSTER, Pennsylvania (Ex 
Officio)

                                 (iii)






















                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               WITNESSES

Edward R. Hamberger, President and Chief Executive Officer, 
  Association of American Railroads:

    Testimony....................................................     3
    Prepared statement...........................................    40
    Responses to questions for the record from:

        Majority-side subcommittee...............................    55
        Minority-side subcommittee...............................    61
        Supplementary information to responses to questions for 
          the record.............................................    63
Charles ``Wick'' Moorman, Cochief Executive Officer, Amtrak:

    Testimony....................................................     3
    Prepared statement...........................................    82
    Responses to questions for the record from:

        Majority-side subcommittee...............................    87
        Minority-side subcommittee...............................    88
Linda Bauer Darr, President, American Short Line and Regional 
  Railroad Association:

    Testimony....................................................     3
    Prepared statement...........................................    90
    Responses to questions for the record from the minority-side 
      subcommittee...............................................    95
Thomas DeJoseph, Senior Advisor of Industry Relations, Loram 
  Maintenance of Way, on behalf of the Railway Supply Institute:

    Testimony....................................................     3
    Prepared statement...........................................    97
    Responses to questions for the record from the minority-side 
      subcommittee...............................................   105
Larry I. Willis, President, Transportation Trades Department, 
  AFL-CIO:

    Testimony....................................................     3
    Prepared statement...........................................   108
    Responses to questions for the record from the minority-side 
      subcommittee...............................................   118

                       SUBMISSIONS FOR THE RECORD

Letter of October 18, 2017, from James Pollard, Chief Executive 
  Officer, OptaSense, to Hon. Jeff Denham, Chairman, and Hon. 
  Michael E. Capuano, Ranking Member, Subcommittee on Railroads, 
  Pipelines, and Hazardous Materials of the Committee on 
  Transportation and Infrastructure..............................   120
Testimony of Ray B. Chambers, President, Association of 
  Independent Passenger Rail Operators...........................   122
  
 
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BUILDING A 21ST-CENTURY INFRASTRUCTURE FOR AMERICA: RAIL STAKEHOLDERS' 
                              PERSPECTIVES

                              ----------                              


                       WEDNESDAY, OCTOBER 4, 2017

                  House of Representatives,
Subcommittee on Railroads, Pipelines, and Hazardous 
                                         Materials,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:03 a.m. in 
room 2167, Rayburn House Office Building, Hon. Jeff Denham 
(Chairman of the subcommittee) presiding.
    Mr. Denham. Mr. Capuano is already complaining that we are 
a couple minutes behind, so I thought we had better get things 
rolling here.
    Good morning and welcome to the Subcommittee on Railroads, 
Pipelines, and Hazardous Materials. Our hearing today is 
``Building a 21st-Century Infrastructure for America: Rail 
Stakeholders' Perspectives.''
    So, first of all, the committee will come to order. I would 
like to welcome all of you here. We are seeking your input as 
we put together our overall infrastructure package. Our goal is 
to rebuild, expand, and improve our current rail system, and 
make sure that it is a system that is competing or expanding as 
other areas of infrastructure are moving forward, as well.
    And in the process we want to do it very, very quickly. We 
want to make sure that we are unleashing capital so that we can 
actually do the big improvements quick, so that we are not 
talking about 10- or 20-year projects, we are expediting them 
to 2-year projects.
    We also want to build on our past successes. This 
subcommittee has had a number of successes in regulatory 
reform. We want to build upon that and make sure we are able to 
not only deliver these projects quickly, but also have the 
resources to do so, which is making sure that some of our 
current programs actually work and work well.
    One of those would be the RRIF loans, the Railroad 
Rehabilitation and Improvement Financing. We want to make sure 
that those loans are--or that capital is able to get out there 
into the market, and we are able to improve a number of our 
different rail systems.
    We are very proud of our rail system. This is a freight 
rail system that started in 1828. It is the best in the world. 
We--our imports, exports--we are competitive because we are 
able to move goods across the entire country. But we can do 
better.
    We have also seen a big increase in passenger rail, and we 
want to make sure we continue to do the investments to make 
sure that passenger rail is on dedicated track, passenger rail 
is continuing to be more and more competitive, and we are 
continuing to put new technologies in place to create greater 
efficiencies so that more people are excited about riding on 
passenger rail.
    So, this is an opportunity for us to hear from you. We want 
to learn not only best practices, but, more importantly, we 
want to hear from you the regulatory changes that will help to 
expedite projects, as well as the funding scenarios behind 
those. This is your opportunity to give us the information, 
both in this hearing as well as after the hearing, as we do 
followup to make sure that we are included into the overall 
infrastructure package that we will be seeing in the next month 
or so.
    So, with that, welcome. We look forward to your testimony. 
I now turn it over to Mr. Capuano for as much time as he may 
consume.
    Mr. Capuano. I agree with everything the chairman just 
said. Thanks for coming.
    [Laughter.]
    Mr. Denham. All right. Well, let me start with our panel.
    Mr. DeFazio? Yes, sir.
    Mr. DeFazio. Thank you. Since Mr. Capuano went on for so 
long, I will keep my remarks brief.
    [Laughter.]
    Mr. DeFazio. You know, I think this is our third hearing in 
this subcommittee, and we have also held hearings in other 
subcommittees on infrastructure initiatives, the trillion 
dollars that the President promised during the campaign, and 
yet we have seen nothing concrete--not to make a bad pun--from 
this administration or the White House.
    I started a clock, which is based on estimates of the Texas 
Transportation Institute, of the costs of congestion in 
America. And that clock, since the inauguration, has run up 
$110 billion of wasted time for individuals and businesses 
because of congestion. Yet we don't have a proposal.
    The most substantive thing we have heard was from the 
President's chief economic advisor, Gary Cohn, who talked about 
so-called asset recycling. That is, bribing States to sell 
their assets to private interests who would then presumably 
toll them. And there are a lot of problems with that proposal.
    We also saw that they started talking about, well, we are 
going to put up $200 billion, source unknown, of Federal money. 
And the other $800 billion will come from the private sector 
and the States. Well, the problem is 24 States, including mine, 
have already acted to increase gas taxes or wholesale rack 
taxes and license fees and all sorts of other things, but they 
don't have a willing Federal partner to help deal with their 
huge infrastructure needs.
    If we do want to incent States, it should also have a look-
back provision to say, well, for States within the last number 
of years--2 years or so--you know, should also get the same 
sort of matching payments that Mr. Cohn was talking about. It 
wouldn't--because there are quite a number of States that 
haven't raised their user fees or gas taxes in more than two 
decades. We don't want to reward that sort of behavior, while 
penalizing those who actually felt a little pain and went out 
and did something about it.
    Obviously, rail definitely needs more focus. It is way more 
efficient than trucking. You know, I used to say it was the 
most efficient in moving freight until a gentleman who owns a 
large towboat company in my district, Dale Sause, reminded me 
that barges are more efficient. But it is a great way to be 
moving freight and facilitating our economy. And it is also a 
good way to move people, also very efficient.
    And so, you know, I was sad to see that the President 
basically proposed to kill Amtrak yet again. We have been 
through that debate. Congress has acted longer term on a 
minimal bill to keep Amtrak on life support, and we shouldn't 
back away from that.
    So with that, Mr. Chairman, I thank you for convening this 
hearing and look forward to hearing from the witnesses.
    Mr. Denham. Thank you, Mr. DeFazio. Now I would like to 
welcome our panel of witnesses.
    First, Mr. Ed Hamberger, president and chief executive 
officer of the Association of American Railroads; Mr. Wick 
Moorman, cochief executive officer of Amtrak; Ms. Linda Darr, 
president of the American Short Line and Regional Railroad 
Association; Tom DeJoseph, senior advisor of industry relations 
for Loram Maintenance of Way; and Mr. Larry Willis, president, 
Transportation Trades Department, AFL-CIO.
    I ask unanimous consent that our witnesses' full statements 
be included in the record. Without objection, so ordered. Since 
your written testimony has been made part of the record today, 
the committee requests that you limit your summary to 5 
minutes.
    Mr. Hamberger, you may proceed.

TESTIMONY OF EDWARD R. HAMBERGER, PRESIDENT AND CHIEF EXECUTIVE 
 OFFICER, ASSOCIATION OF AMERICAN RAILROADS; CHARLES ``WICK'' 
 MOORMAN, COCHIEF EXECUTIVE OFFICER, AMTRAK; LINDA BAUER DARR, 
     PRESIDENT, AMERICAN SHORT LINE AND REGIONAL RAILROAD 
   ASSOCIATION; THOMAS DEJOSEPH, SENIOR ADVISOR OF INDUSTRY 
 RELATIONS, LORAM MAINTENANCE OF WAY, ON BEHALF OF THE RAILWAY 
       SUPPLY INSTITUTE; AND LARRY I. WILLIS, PRESIDENT, 
           TRANSPORTATION TRADES DEPARTMENT, AFL-CIO

    Mr. Hamberger. Thank you, Mr. Chairman, Ranking Member 
Capuano, Ranking Member DeFazio. On behalf of the members of 
the AAR, thank you for the opportunity to discuss railroad 
infrastructure with you today.
    If I might, Mr. Chairman, I would ask your indulgence to 
make two personal comments that might extend my comment beyond 
the 5 minutes. This is the first opportunity I have had to 
appear before the committee since Mr. Duncan has announced his 
retirement, and I just wanted to thank him on the record for 
his many terms of leadership on transportation writ large, but 
certainly for his support of the rail industry in this country.
    So thank you, Mr. Duncan.
    [Applause.]
    Mr. Hamberger. Secondly, this is the first opportunity I 
have had to appear with Mr. Willis since he has achieved his 
new position at the Transportation Trades Department. This 
hearing was scheduled 2 weeks ago, and was postponed because of 
two devastating hurricanes. And I just wanted to say thank you 
to Mr. Willis and his members for the work they did under 
impossible conditions to get ready for those hurricanes.
    And then, in the rebuilding that they did, the response 
that they did, the cooperation that management had, and the 
working relationship with labor got us up and running again 
within 7 to 10 days following both of those hurricanes, many 
times waiting, unfortunately, for our customers themselves to 
be able to get up and running. And it is all due to the 
dedication, the courage, and hard work of our employees, and I 
just wanted that to be on the record, as well.
    Freight railroads operating in the United States are the 
best in the world, and provide tremendous benefits. They are 
safe and getting safer. In 2016 the train accident rate was the 
lowest ever. And they are efficient. A single train can carry 
the freight of several hundred trucks. And, on average, 
railroads are four times more fuel efficient than trucks.
    This means moving freight by rail helps our environment, 
cuts highway gridlock, and reduces the high cost of highway 
construction and maintenance. And, as you know, the demand for 
freight movement will only grow. DOT studies predict a 41-
percent growth in freight demand by the year 2040.
    I respectfully suggest that it is in our Nation's best 
interest that the benefits of freight rail continue to accrue. 
And that cannot happen unless the amount and quality of 
railroad infrastructure is up to the task. Railroads know this, 
which is why they have been spending more in recent years on 
their infrastructure and equipment than ever before: $135 
billion, to be precise, from 2012 to 2016, or $74 million a 
day.
    America's freight railroads are privately owned and 
operated almost exclusively on infrastructure that they own, 
build, maintain, and pay for themselves. When railroads invest 
in their networks, it means taxpayers don't have to.
    As an aside, I would note that a reduction in the corporate 
tax would enable railroads to invest even more in their 
infrastructure, and would, just as importantly, allow our 
customers to compete on world markets.
    Thanks to their massive investments, freight rail 
infrastructure today is in its best overall condition ever. The 
challenge for railroads and policymakers is to ensure this 
continues. And you have a crucial role to play in this regard.
    First, you should resist calls to once again give 
Government regulators control over crucial areas of rail 
operations. Economic re-regulation, in whatever form, would 
mean rail spending on infrastructure would shrink, the 
industry's physical plant would deteriorate, and rail service 
would become slower and less reliable, outcomes that are in no 
one's best interest. The 2015 STB [Surface Transportation 
Board] authorization bill you passed struck the right balance.
    Second, promote more public-private partnerships under 
which Governments pay only for the public benefits of a 
project, and railroads pay for the benefits they receive. As a 
result of these partnerships, the universe of projects that can 
be undertaken to the benefit of all parties is significantly 
expanded. It is the so-called win-win for everyone involved. Of 
course I would be remiss not to point out that the Chicago 
CREATE [Chicago Region Environmental and Transportation 
Efficiency] program with which you are all familiar is our 
industry's premier poster child for public-private 
partnerships.
    Grade crossings are also an important element of rail 
infrastructure that often involves a public-private cooperative 
approach through the Federal section 130 program. Section 130 
provides Federal funds to States for installing new grade 
crossing warning devices and other purposes. The 2015 FAST Act 
[Fixing America's Surface Transportation Act] included 
dedicated funding for this vital program, and we urge you to 
continue to support it.
    Yet another variant of public-private partnerships, in my 
view, is the 45G short line tax credit, which is one of the 
more successful provisions in the tax code, and which I am sure 
you will hear more about in just a few minutes from my 
colleague, Ms. Darr.
    Third, continue efforts to reform outdated and unnecessary 
regulations. Railroads often face long permitting delays from 
Federal agencies, unnecessarily adding to the time and expense 
of getting infrastructure projects from the drawing board to 
completion. We applaud the recent efforts by Congress and the 
administration to address the permitting process, but more can 
and should be done. I want to emphasize, however, that this is 
not to adversely affect the quality of the reviews, but merely 
to make sure they get done in a timely way.
    Fourth, policymakers should address modal inequities. As I 
mentioned earlier, freight railroads operate overwhelmingly on 
infrastructure they own, build, maintain, and pay for 
themselves. By contrast, most other modes operate on 
infrastructure that is publicly funded. Unfortunately, public 
policies relating to the funding of other modes have become 
misaligned.
    Regarding highways specifically, the traditional user-pay 
model has been eroded as Highway Trust Fund revenues have not 
kept up with highway investment needs, and so have had to be 
supplemented with $143 billion of general taxpayer dollars 
either already paid or scheduled to be paid by 2020 under 
current law.
    We applaud this committee for being in the forefront in 
reaffirming the user pays policy, and suggest one method to do 
so would be by moving forward on a weight distance tax for 
trucks, a policy that is already in place in the State of 
Oregon.
    Finally, fund Amtrak so that its infrastructure can be 
improved to a state of good repair. Commuter railroads too need 
Federal support, specifically to cover the costs of 
implementing federally mandated Positive Train Control on their 
systems.
    Thank you for your attention, and thank you, Mr. Chairman, 
for your allowing me to extend my time.
    Mr. Denham. Thank you, Mr. Hamberger.
    Mr. Moorman, you are recognized for 5 minutes.
    Mr. Moorman. Thank you, Mr. Chairman. Good morning to all 
the members of the committee. It is my pleasure to be here 
today on behalf of Amtrak's employees, our board of directors, 
and my cochief executive officer and Amtrak's president, 
Richard Anderson, who is looking forward to working with you.
    I think, as all of you know, Richard and I have both joined 
Amtrak to help position the company for the future, and I can 
tell you that, as a lifelong railroader who started out as a 
track engineer, I have a long-term interest in rail 
infrastructure.
    At Amtrak, as all of you know, we are focused on 
transforming the company by three basic things: first, 
strengthening our safety culture; second, improving our 
operational effectiveness and efficiency; and third, enhancing 
our customers' experience by improving our product for 
reliability and its delivery. All of those elements depend upon 
a sound, modern, reliable infrastructure to meet the growing 
demand for rail passenger transportation in this country and 
the 21st century.
    Amtrak has been in business for 46 years now, and we have 
been the Nation's sole intercity passenger rail operator. We 
are a proven industry leader, not only in the U.S. but around 
the world, for the delivery of rail passenger services, both in 
our own right and in partnership with our many diverse 
stakeholders.
    Over the past decade, we have achieved a succession of 
record years in ridership and revenue growth, driven primarily 
through our State services and the Northeast Corridor. All of 
these are important steps, but the major challenge that 
threatens our ability to continue to improve and grow is 
investment.
    Passenger rail, as you know, is a vital part of our 
Nation's infrastructure, but capital funding is not keeping 
pace with the risks that face us from the standpoint of our 
infrastructure and fleet, both to maintain a state of good 
repair and to answer the demand for additional growth and 
capacity. And you need look no further for an example than the 
Northeast Corridor, where we have an extensive array of 100-
plus-year-old assets that now handle 2,200 trains a day, double 
the number from when Amtrak took over operations of the 
corridor in 1976.
    We are here today to endorse the development of a 
comprehensive infrastructure plan which features significant 
rail investments to support what I think is a generational 
investment in our Nation's transportation infrastructure that 
is needed to keep the economy growing, our Nation competitive, 
and the quality of life in this country improving. We need the 
additional resources to carry that out.
    So, what are our primary capital needs for the upcoming 
century and the upcoming years? Broadly speaking, we think that 
there are four crucial elements of any infrastructure package 
that we need to move forward aggressively, and we can move 
forward aggressively if funding is available.
    First and foremost, rebuild and expand the Northeast 
Corridor. All of you, I think, are familiar with the Gateway 
Program, which includes a number of projects to replace 
critical assets, such as the Hudson River Tunnels, which were 
flooded by Hurricane Sandy, and which have a clock running. At 
some point they will not be able to be maintained reliably, 
thereby shutting off effective rail transportation for the 
200,000 commuters that move into and out of Manhattan from New 
Jersey every day.
    Second, we need to expand and improve on our State-
supported corridors. That is the business that is growing, that 
is where we see the opportunity. These are short-distance, 
auto-competitive routes that carry almost half of our ridership 
and generate more than half a billion dollars in revenues. We 
have 21 partners in 19 States. We all want to grow ridership 
and ticket revenue, but we can't do that without strong 
financial participation from the Federal Government.
    Third, our long-distance services, they connect important 
city pairs and serve communities large and small across the 
Nation. We are in the process of relooking at our entire long-
distance network to make sure it is effectively doing what it 
is supposed to do for the most number of citizens that we can.
    But a key issue to that, and to that service's viability, 
is on-time performance over the freight railroads. And we need 
your help to make sure that those railroads have the dollars to 
invest in capacity, because quite often we run into capacity 
constraints, as well as helping us to work with the host to 
make sure that on-time performance of Amtrak trains is a 
priority for them.
    And then, finally, equipment replacement. We have a lot of 
aging equipment. We are engaging in self-help to fix that 
equipment, but it is old. We have new Acela sets, we have new 
locomotives, but we are going to need help over the next 10 
years in replacing some of this equipment.
    If we can get all of this investment I have highlighted, we 
will continue to improve and modernize the passenger rail 
network. We have a new ready-to-build campaign with videos of 
our major infrastructure needs. We have shown, with this 
summer's work in New York, that we are capable of doing these 
projects.
    There is a great opportunity, a historic opportunity out 
there, to invest in our passenger rail infrastructure, and all 
of us at Amtrak look forward to working with you to accomplish 
that.
    Mr. Denham. Thank you, Mr. Moorman.
    Ms. Darr, you may proceed.
    Ms. Darr. Thank you, Chairman Denham, Ranking Member 
Capuano, and Ranking Member DeFazio, and all the other members 
of the committee. I am with the Short Line Railroad 
Association. We do a great job of serving our customers and 
arriving on time, so I will make it my goal to finish my 
testimony before the red light comes on.
    My name is Linda Darr, and I am president of the American 
Short Line and Regional Railroad Association. We are the 
national trade organization representing the Nation's 600 class 
II and class III railroads, operating just under 50,000 miles 
of track, and that is nearly one-third of the national rail 
network.
    Short lines operate in 49 States and handle in origin or 
destination one out of every four railcars moving on the 
national rail network. Short lines share four defining 
characteristics. They are small businesses with combined annual 
revenues that equal less than the annual revenues of any one of 
the four largest class I railroads. The average short line 
employs 30 people or less. For large areas of the country, and 
particularly for small-town and rural America, short line 
service is the only connection to the national railroad 
network.
    Because their task was to bring back to life 
undermaintained class I branch lines that were headed for 
abandonment, they invest, on average, from 25 to 33 percent of 
annual revenues in rehabilitating their infrastructure. This 
makes short line railroading one of the most capital-intensive 
industries in the country. Without infrastructure upgrades, 
short line customers face competitive disadvantages associated 
with the short line's inability to handle the modern, heavier 
weight freight cars increasingly utilized by our class I 
connections.
    To help short lines sustain heavy capital investment, 
Congress enacted the short line rehabilitation tax credit in 
2004, and has renewed it five times since. The credit expired 
at the end of 2016. This credit, known as 45G, has been a major 
factor in maximizing our infrastructure investment. And we 
believe making the credit permanent is the most important thing 
Congress can do to improve the infrastructure in the areas of 
the country that we serve.
    I know the tax legislation is not the purview of the 
committee, and I appreciate that there are other grant and loan 
programs that deal with infrastructure improvements. We support 
full funding for competitive programs such as TIGER and INFRA. 
INFRA has a 10-percent set-aside for small projects like ours, 
and TIGER provides support to several short lines each year. 
But we have 600 short lines that need help.
    We are hopeful that DOT will soon make funds available for 
the CRISI [Consolidated Rail Infrastructure and Safety 
Improvements] program, which has a rural set-aside that will 
benefit short line railroads, as well. All of these programs 
are tools in the effort to rebuild all kinds of infrastructure, 
and some short lines will benefit from that.
    But the 45G credit is the most economical and effective way 
to maximize investment in our portion of the national rail 
system. And if it is not extended, we fear the growth of our 
industry will be stymied. As the committee that is the most 
knowledgeable when it comes to railroad infrastructure matters, 
I urge you to take that message to your colleagues whenever and 
however the subject of infrastructure is addressed in this 
Congress.
    We know and appreciate that your subcommittee has led on 
this effort: 28 of your 34 members are cosponsors of H.R. 721, 
the stand-alone bill that would make the credit permanent, 
including the chairmen and ranking members of both this 
subcommittee and the full T&I committee. Today the legislation 
has 247 cosponsors, the third most cosponsored House bill in 
this session of Congress. And thank you to every Member in the 
Chamber today, because all of you have cosponsored that bill. 
In the Senate we are the number-one tax bill when it comes to 
cosponsors: 55 total to date.
    My written testimony details the reasons that 45G has been 
so successful, and provides data that quantifies that success. 
The data shows that the credit has allowed short lines to spend 
more than they would have to maintain high levels of investment 
in the worst of recessionary times, and leverage significant 
amounts of private investment by our customers. This must be 
continued if we are to preserve rail access in rural and small-
town America. We estimate the total need to upgrade our track 
and bridges to $10 billion to enable us to handle the modern 
286,000-pound railcars across our system. It costs roughly 
$500,000 to $1 million to rehabilitate a track mile, and north 
of $10 million per bridge, of which there are thousands.
    I appreciate the opportunity to appear before you today, 
and I am happy to answer any questions.
    Mr. Denham. Thank you, Ms. Darr.
    Mr. DeJoseph, you are recognized for 5 minutes.
    Mr. DeJoseph. Thank you, Mr. Chairman and distinguished 
members of the subcommittee. My name is Tom DeJoseph, and I am 
senior advisor of industry relations at Loram Maintenance of 
Way, and honorary chairman of the Railway Supply Institute. I 
am from Danbury, Connecticut, and I traveled down here 
yesterday on Amtrak.
    RSI is an international trade association representing more 
than 260 companies involved in the manufacture of products and 
services in the freight car, tank car, locomotive, maintenance 
of way, communications and signaling, and passenger rail 
industries. Our members represent more than 756 rail supply 
locations in 44 States and 281 congressional districts. 
Collectively, railroad suppliers contribute over $28 billion 
annually to the U.S. economy.
    Our members seek dedicated investment and infrastructure, 
sensible tax reform, and balanced economic regulation, as well 
as increased support and promotion of domestic manufacturing 
and American innovation. We are encouraged by the interest 
shown by the administration and the Congress to bring America's 
transportation systems into the 21st century, and with the 
administration's effort to scrutinize existing and proposed 
regulations to ensure that they do not unduly burden industry 
and economic growth. FRA's CFR part 243 is a particularly 
onerous regulation.
    Investing in rail will bolster industry competitiveness, 
promote job creation, improve our Nation's mobility, and have a 
profound, long-term effect, economic impact on the railway 
supply industry. To ensure that the rail sector can continue to 
provide good employment opportunities to American workers, 
public and private investment could relieve major bottlenecks 
and choke points that will increase track, tunnel, bridge, and 
station capacity across the passenger and freight rail system. 
It is high time for the Federal Government to provide 
predictable, dedicated, and meaningful funding for capital 
investment in our intercity passenger rail system, along with 
investment, to improve the efficient movement of freight 
through private-public partnerships.
    Furthermore, continued investment in rail safety, such as 
providing funds to the section 130 highway rail crossing safety 
program, and Operation Lifesaver is a proven way to save lives 
and should be supported.
    As suppliers, we are in a unique position to focus on both 
passenger and freight rail, and believe that there are several 
areas of new investment that would vastly improve the 
efficiency and productivity of our rail systems. The FAST Act 
authorized several rail programs, as well as important changes 
to certain loan programs, and we commend you for that. RSI 
urges that these programs be funded at a level commensurate 
with the need, and urge that they receive the same priority as 
other FAST Act-funded modes.
    I should also note that RSI supports the 45G tax credit 
that expands freight rail capacity and helps short lines remain 
competitive.
    The Buy America program was designed to promote U.S. 
manufacturing and encourage new industry to help the domestic 
economy and create jobs for Americans. U.S. DOT should apply 
Buy America provisions strictly, consistently, and enforce the 
statute accordingly. Our suggestion is not to change the law, 
but to make sure that current laws are being enforced.
    I would also like to point out that there has been an 
increase in State-owned foreign involvement in U.S. passenger 
and freight rail market. It has the potential to change the 
entire dynamic of the multimillion-dollar business. Current 
American rail supply manufacturers are concerned that more 
State-owned enterprise involvement could lead to cut-throat 
pricing, resource dumping, and a reduction in American jobs. 
Allowing a foreign, State-backed entity to increase direct 
investment in our Nation's critical infrastructure without 
appropriate review creates significant economic and national 
security concerns.
    It is important that Congress and the administration 
continue to enact and promulgate fair and balanced regulations 
that recognize the benefits of moving freight by rail, and not 
punish rail by enacting poorly thought-out public policy.
    Finally, I would like to address two regulations which RSI 
was intimately involved with through its Committee on Tank 
Cars: HM-251, the Enhanced Tank Car Standards and Operational 
Controls for High-Hazard Flammable Trains. The RSI Committee on 
Tank Cars comprises six companies that build virtually all tank 
cars operating in North America and that own and provide for 
lease of almost 70 percent of railroad tank cars. The DOT-111 
tank cars have essentially been removed from crude oil service, 
and members of the committee are committed to meeting the FAST 
Act deadlines.
    Secondly, prevailing wages required on Government-funded 
projects can increase labor costs by up to three times for the 
contractors that do this kind of work. That money ultimately 
gets billed back to the taxpayer.
    Thank you again for this opportunity to testify on behalf 
of Railway Supply Institute. We look forward to working with 
the subcommittee to help establish more balance in the Nation's 
transportation system, and address the critical needs of the 
freight and passenger railroad industry and its suppliers.
    Mr. Denham. Thank you, Mr. DeJoseph.
    Mr. Willis, you are recognized for 5 minutes.
    Mr. Willis. Thank you, Chairman Denham and Ranking Member 
Capuano, for inviting me to testify this morning. I also want 
to thank Ed Hamberger for those kind words about our front-line 
rail workers responding to the hurricanes and other 
emergencies. And I should note that our other unions are also 
likewise involved in various ways.
    By way of quick background, TTD consists of 32 unions in 
all modes and areas of transportation. For purposes of today's 
hearing, that includes workers on the freight rail side, 
Amtrak, and commuter rail.
    TTD believes that significant investments in freight and 
passenger rail must be included as part of any broad 
infrastructure bill considered by this committee. In 2015, as 
part of the FAST Act, Congress wisely chose to fund Amtrak and 
create and expand important freight transportation programs. As 
important and necessary as those investments were, they 
represent only the tip of the iceberg of what is needed to 
reverse decades of neglect inflicted on our transportation 
network.
    With strong support from the public, a promise from our 
President, and bipartisan interest in Congress, the time to end 
the lost generation of infrastructure investment, we believe, 
is now. Failing to act to date has idled millions of good jobs, 
stifled economic expansion, and worsened wage inequality.
    Voters wonder why the richest country in the world no 
longer places a premium on high-quality, modern transportation 
infrastructure, and too many working families have been left 
behind. When made strategically and paired with the right 
policies, the investments that we are discussing today can grow 
our middle class.
    These investments are linked with good jobs and economic 
growth because workers in rail specifically and transportation 
more broadly benefit from collective bargaining and generally 
high union density. We know that workers who belong to a union 
earn higher wages, enjoy better benefits, are safer on the job 
than their non-union counterparts. As this committee considers 
transportation and rail investments, it would be a mistake--and 
one that we would vigorously oppose--to weaken the application 
of longstanding labor protections or to undermine collective 
bargaining.
    Strong and enforceable Buy America rules must also be 
included in any infrastructure package to maximize job creation 
in manufacturing, and to create a sustainable market for U.S. 
companies. It would make little sense to invest the kind of 
dollars that we are talking about to remake our infrastructure 
only to ship good manufacturing jobs overseas.
    For freight rail we would urge the committee to expand on 
the funding programs in the FAST Act, and to leverage the 
significant private financing the industry already provides, as 
Ed has outlined. The investment that rail carriers make in 
their networks and in their workers is premised on a balanced 
economic regulatory framework that we join the industry in 
supporting.
    We agree with and support the immediate and long-term needs 
of Amtrak, as outlined by Wick Moorman, including funding for 
Amtrak's long-distance routes. And as part of its commitment to 
Amtrak and passenger rail more broadly, Congress must ensure 
funding to complete the Gateway Program. Failing to fund this 
critical project will cost thousands of construction and 
transportation jobs, and will cripple our Nation's busiest rail 
corridor.
    The same is true in California, where high-speed rail is 
currently under construction. This project has the potential to 
transform the economy and mobility in California. Already the 
project has created 1,400 good-paying construction jobs and 
generated nearly $4 billion in economic activity, and could 
pave the way for high-speed rail in other parts of the country.
    Finally, any investment package must not be used as a 
vehicle to attack critical safety or labor regulations in the 
name of fast-tracking infrastructure projects. We agree with 
the desire and the need to complete projects in a timely 
fashion, and support reasonable permitting and environmental 
reforms. But we do not believe that some of the safety and 
labor rules that have been talked about interfere in project 
delivery. We are also opposed to any effort to undermine the 
authority of the Federal Railroad Administration to issue 
needed safety rules to protect our members and the public.
    The most pressing challenge to enacting a broader 
infrastructure program is how to fund it. In addition to the 
needed investments for passenger and freight rail I discussed 
earlier, we believe that the Highway Trust Fund must be put on 
stable financial footing to meet our surface transportation 
needs. We were pleased earlier this year when 253 Members of 
the House from both parties took this same position and called 
on Congress to fix this problem as part of any rewrite of the 
U.S. tax code.
    And while there have been many ideas offered to shore up 
the trust fund--and we can support different approaches--we 
continue to believe that the best approach, the most efficient 
and straightforward, is to raise the gas tax and index it for 
inflation. This is a user fee that has not been raised since 
1993, and has simply not kept up with construction costs or the 
needs of our surface transportation system.
    Thank you again for allowing me to testify, and I look 
forward to your questions.
    Mr. Denham. Thank you, Mr. Willis.
    Let me start with each of our panel members. What are some 
of the biggest rail infrastructure projects that you foresee on 
the horizon? And what are some of the ways that a Government 
can assist in their completion?
    Mr. Hamberger?
    Mr. Hamberger. Clearly, one of the ways, one of the biggest 
ones--and Mr. Lipinski is gone--is a joint public-private 
partnership. In Chicago we will be submitting an application 
for the INFRA grant on November 2nd. It is a partnership of 
Cook County, the city of Chicago, Amtrak, Metra, and the 
freight railroads to begin a rebuilding of what is called the 
75th Street CIP running through Chicago.
    Secondly, you passed in the FAST Act requirements to 
improve the permitting of rail projects, and I would just draw 
your attention to the Virginia Avenue tunnel, which you can see 
from this building, which started out as a $140 million 
project. Seven years later it was finally opened on December 
24th of 2016, cost $210 million. And not one penny of Federal 
dollars involved, but it took 6\1/2\, 7 years to get it built.
    So that is the kind of delay and waste that is out there, 
and so we appreciate what you did in the FAST Act, and we are 
working with the administration. The Vice President just had an 
event earlier this week talking about cutting redtape, and we 
are certainly supportive of that, as well.
    Mr. Denham. Thank you, Mr. Hamberger. And we will follow up 
after this hearing to hear about some of those specific ways 
that we can get rid of some of this redtape and expedite these 
projects.
    Mr. Moorman, Amtrak?
    Mr. Moorman. Let me first say, in terms of redtape, there 
have been, actually, in Amtrak's perspective, a few effective 
things done. We completed the environmental impact statement 
for the Hudson River Tunnels in about 2 years. The original 
estimate was 4 years. So there has been some streamlining done, 
but there is always more that can be done.
    From the Amtrak perspective, there are a lot of capital 
requirements. But clearly, the most pressing is the Gateway 
projects. The Hudson River Tunnels, the Portal North Bridge, 
eventually a series of projects that leads to the expansion of 
Penn Station, these are assets that were open for business in 
1910. They are a little past their sell-by date.
    But in addition to those Gateway projects, we have other 
significant projects on the corridor: The B&P Tunnel south of 
Baltimore, which was opened, I believe, in 1874; the 
Susquehanna River Bridge, a series of bridges. And in terms of 
the Federal Government's involvement, particularly in Gateway, 
it is clearly recognized by all concerned that the States have 
to play a major role in funding that, as well. But we can't do 
it without Federal involvement.
    There is possibly a place for some user fees. I, as you 
know, come from the private world and believe in private 
capital. But there needs to be a formula derived at which 
includes both State and Federal funding to get that done 
because, unlike a lot of assets which are suitable for public-
private partnership, we just can't toll in the same way that 
the highways can.
    Mr. Denham. Thank you.
    Ms. Darr?
    Ms. Darr. I would say, Mr. Chairman, that the projects 
aren't large and specific. Our projects are truly many. There 
are thousands in the queue across the country for our short 
line railroads, railroads that are waiting for 45G to be 
extended. It has been proven that 45G has spurred investment. 
As a matter of fact, $4 billion has been invested since the tax 
credit was enacted in 2004.
    Our challenge is to rehab abandoned track, so that is 
usually what we are going to be spending that money on. And our 
goal is to become able to handle 286,000-pound railcars across 
the network, to be better partners with our class I railroads, 
and to be able to work more closely with the shippers and help 
to meet their needs in taking freight off of the highway and 
putting it on the rails.
    Mr. Denham. Thank you. And my time is about to expire, so I 
will pass it on to Mr. Capuano.
    Mr. Capuano. Pass it on to Mr. Sires.
    Mr. Denham. Mr. Sires, you are recognized for 5 minutes.
    Mr. Sires. Thank you very much, Chairman, and thank you to 
our panel for being here today.
    You know, I come to these meetings, and every time I come 
all the panelists agree that we have to do something about 
infrastructure, especially in the rail. I have been working on 
rail for a long time. From light rail to passenger rail to 
freight rail, it has always been my opinion that that is the 
way to go, in terms of alleviating traffic, especially in the 
region I represent.
    I understand that the private sector has a role. I 
understand that the State has a role. But I think that the 
Federal Government certainly has to have a bigger role, because 
without the support of the Federal Government, I don't think 
these projects can be done.
    You know, I travel the Northeast Corridor every week. It is 
the busiest passenger line in the country. And yet it is in 
need of so much infrastructure. And it is frustrating to me to 
come here and listen every week, or every month, when we have 
one of these hearings, and people tell me the same thing, and 
we don't seem to do anything.
    I look at the budget, 28 percent of the budget has been cut 
for the Northeast Corridor. I mean this is the busiest line, 
passenger line, in the country.
    I want to talk about the Portal Bridge. We have a guy with 
a sledgehammer that, every time the bridge closes and opens, we 
have to have a guy out there to sledge the track back in line. 
And obviously, you know, the tunnels. I predict that if one of 
those tunnels goes because it was damaged by Sandy, the country 
is going to suffer, the economy of the country is going to 
suffer. It is not just my district, it is the entire country.
    And those are States that send money to the Federal 
Government. We are not takers. New York, New Jersey, we send a 
lot of money to the Federal Government. We are not one of these 
States that says, hey, give me money. So we have to somehow 
find a formula to really work this issue out. I am sorry I am a 
little frustrated because I have been on this committee and I 
hear it all the time, and everybody agrees: We need 
infrastructure work.
    You know, our country is--we are the greatest country in 
the world, and we have the lousiest rail in the world. And I 
travel to some of these countries and they have beautiful stuff 
and it works. But does anyone here believe that the private 
sector is the sole answer to this? If you do, please tell me 
because I don't believe it.
    Mr. Hamberger? I know you pour a lot of money into your 
business to fixing up the rails, but----
    Mr. Hamberger. You are talking about a much broader topic 
than just the investment in freight rail. What you are talking 
about clearly goes beyond what the private sector at this point 
is prepared to do. Certainly our members invest to respond to 
the marketplace and provide freight capacity where the market 
says it is needed. But obviously--I think Mr. Moorman's needs 
go far beyond what the private sector can do, and I think that 
you are talking about investment that is needed beyond what the 
freight rails can put into our system.
    Mr. Sires. Mr. Moorman?
    Mr. Moorman. Well, I couldn't agree with you more. You 
know, the simple fact is that the Northeast accounts for about 
20 percent of the Nation's GDP. And the Northeast Corridor is 
the vital link in this part of the country, particularly for 
business.
    If you look at the Acela ridership, 60-plus percent of the 
ridership is business, the highest percentage of business 
ridership on any rail corridor in the world. So it is 
absolutely essential for the economic vitality of the region. 
And if we don't invest in these critical, huge infrastructure 
projects--and it will take Federal investment--at some point 
the system runs out.
    With what we are doing today, we can do a lot of work on 
state of good repair, we can improve the way we spend money, we 
can become much better project executors. We are already, I 
think, a long way down that path. But I agree completely it is 
going to take a lot of Federal investment, and the States and 
the Federal Government need to figure out the formula and get 
the work started.
    I will give you a great example. The environmental impact 
statement for the Hudson River Tunnels will be done first 
quarter of 2018. We have been working on that process, but once 
we get that statement we are waiting for money. It is just that 
simple.
    Mr. Sires. You know, we had a meeting with the President. 
It was very hopeful. And yet I look at these budgets, and they 
slashed the budgets. So I mean it is like one thing is said, 
and then there is another action that really just destroyed 
what he said.
    Thank you, Mr. Chairman.
    Mr. Denham. Thank you, Mr. Sires.
    Mr. Duncan, you are recognized for 5 minutes.
    Mr. Duncan. Well, Mr. Chairman, thank you very much.
    And first of all, Mr. Hamberger, thank you for your kind 
comments about my work on this committee. After the 1994 
elections, we had 10 openings on the Ways and Means Committee. 
Speaker Gingrich offered me one of those openings, but I was 
going to get to chair the Aviation Subcommittee at that point 
and I decided--and I think surprised many people--but I chose 
to stay on this committee, and I have never regretted that. But 
you have been a very effective leader for the railroad industry 
during most of the time that I have been here, so I have great 
respect for you, as well.
    Let me ask you this, though. I chaired a panel, a special 
panel in the last Congress on public-private partnerships. And 
one of our many hearings was held on Wall Street, where we had 
several of the top leaders of some of the big Wall Street firms 
tell us that there was a lot of money out there that companies 
wanted to invest in public-private infrastructure projects. Yet 
I noticed a few days ago that President Trump expressed some 
great skepticism about public-private partnerships.
    Did you see that? And have you or will you tell your story? 
You sounded very favorable towards public-private partnerships 
in your testimony. So have you expressed that, or will you 
express that to the people at the White House?
    Mr. Hamberger. Yes. Yes, indeed. That was part of--and I 
should have mentioned it specifically, Mr. Sires, of--
obviously, that is evidence of the fact that we believe that 
there needs to be a role for Government. I mentioned in my 
testimony this morning public-private partnerships, it was part 
of our material that we gave to the transition team.
    I have to admit, somewhat surprised by reading that because 
I know that Secretary Chao, Gary Cohn, and the folks who work 
for him have been talking both publicly and privately about the 
need to encourage private-sector investment in infrastructure. 
And I think that that was, at least some of the early plans I 
saw, one of the ways that they were going to get to the 
trillion dollars was by encouraging private-sector investment.
    But I think--to go back to Mr. Sires's point--it will take 
both the private sector and the public sector stepping up.
    Mr. Duncan. Also, on another topic, you mentioned that the 
industry is one of the safest in the country, and is becoming 
safer. You know that some of us had some doubts about whether 
the Positive Train Control was really worth the amount of money 
that was going to be spent on it, but we crossed that bridge a 
long time ago.
    Would you tell us where we stand on that? Now, how much 
have your members spent on that so far? And how close to 
completion is all that?
    Mr. Hamberger. Well, I appreciate that question. We have 
spent, as of last year, the end of last year, a little over $7 
billion. It will be another $1 billion this year. By the time 
it is fully implemented, it will be around $10 billion.
    And you are right, we have crossed that bridge, we are 
moving forward aggressively. We will meet the deadlines in the 
FAST Act. That is to say we will be 100 percent installed by 
the end of 2018, and at least 51 percent operational. That 
then, under the law, allows for a potential additional 2 years 
of testing and validation to make sure it works. If you are 
going to rely on a safety system, you want it to be working.
    In 2015, when Congress saw fit to extend the deadline, we 
were at about a 70-percent success rate. That is to say, put in 
the negative, the system wasn't working 30 percent of the time. 
And, you know, you don't want to get on an airplane when the 
air traffic control system is not working 30 percent of the 
time. I am pleased to say we are now at a success rate up in 
the high eighties, but that is still not there. We are 
continuing to run into technical problems.
    Someone said to me the other day if there is a solar flare 
and it interferes with the communication, how do you deal with 
that? And so we are dealing with all sorts of challenges as we 
try to install PTC on a 60,000-mile network, but we will have 
it installed, we will meet at least 51 percent operational. And 
I am confident we will meet the 2020 deadline, as well.
    Mr. Duncan. My time has run out by I do want to tell Mr. 
Moorman that I am bringing one of my grandsons up to go to the 
Navy-Air Force football game Saturday, and then I, just before 
I came here, bought two tickets for me and him on Amtrak to go 
to Philadelphia to see the Eagles game on Sunday.
    But I do want to say that I am very pleased that you 
mentioned that we had allowed an expedited environmental 
process for the Hudson Tunnel Project because I have sat here 
for all these years, and we used to just hear that every 
infrastructure project of every type took three times as long 
and cost three times as much because of all the environmental 
rules and regulations and redtape. And finally we are making, I 
think, a little bit of progress on that. But I think you did 
save some time and money, as well, because of that expedited 
process.
    Mr. Moorman. That is correct. And I think it is a very 
positive thing for the future. And I will just take 2 seconds 
also to congratulate you on your retirement and thank you for 
your friendship and support of our industry, and certainly----
    Mr. Duncan. Well, thank you.
    Mr. Moorman [continuing]. In both the companies that I have 
had the good fortune to be with.
    Mr. Duncan. Thank you very much.
    Mr. Moorman. Thank you.
    Mr. Denham. Thank you, Mr. Duncan.
    Mrs. Bustos, you are recognized for 5 minutes.
    Mrs. Bustos. Thank you, Mr. Chairman, and also our ranking 
member. And thanks to all of you for being here with us today.
    About 2\1/2\ years ago we had a train derailment in my 
congressional district in a town called Galena, Illinois, which 
is in the far northwest corner of the State of Illinois. And 
these were tank cars that had left North Dakota filled with the 
Bakken crude. When they hit the Galena area there was a 
derailment that happened to have been right along a slew that 
led to the Mississippi River, so potentially a terrible 
situation. The BNSF Railway handled it very well. Our first 
responders handled it well. And everything is back in a good 
place again.
    But it is a reminder that folks in my area are curious 
about. In the highway bill there were the requirements that the 
tankers carrying flammable liquids, especially something like 
crude oil, that those be upgraded, and especially those that 
are the oldest. I think there is a deadline, the fast-
approaching deadline of January 1st, for the oldest and maybe 
the more dangerous tank cars.
    So I think this question would be for Mr. Hamberger or Ms. 
Darr and Mr. DeJoseph about what is happening in the industry 
as far as upgrading those. And maybe give us a progress report 
on that and what you see ahead, as far as meeting those 
deadlines that are coming up.
    Mr. Hamberger. Let me jump in, I guess. Thank you for that 
question. This is a good news story. The DOT-111, as the old 
tank car was referred to--in 2013 there were 21,340 of those 
tank cars moving crude oil. In the first quarter and second 
quarter of this year there are exactly 156. So more than a 99-
percent decline in the DOT-111s moving crude oil. And so, given 
that, I am quite certain that we will meet the January 1, 2018, 
statutory deadline to have those tank cars out of service 
moving crude oil.
    Ms. Darr. I should probably defer in large part to Ed and 
to my colleague, Mr. DeJoseph, on the freight rail side and on 
the supplier side. But I will say, from the short line 
perspective, that we have been very pleased with progress that 
has been made over the last 3 years with the establishment of 
our Short Line Safety Institute that is specifically focused on 
raising up the safety culture of our industry with a particular 
focus on those railroads that do move hazmat.
    And we recently received a $500,000 grant from FMCSA to 
create a hazmat training academy. We are very excited about 
using that to make sure that everyone in our industry is, you 
know, at a level of knowledge and compliance that they need to 
be to operate safely when they move hazmat on the network.
    Mrs. Bustos. Thank you.
    Mr. DeJoseph, is there anything that you wanted to add to 
that?
    Mr. DeJoseph. I would go along with Mr. Hamberger, 
basically saying that the DOT-111 cars have essentially been 
removed from crude oil service. There are 16,000 new DOT-117s, 
and--I can't quite read this note--6,000 retrofitted to meet 
the new standard. So we will meet the FAST requirements from 
the supply industry.
    Mrs. Bustos. OK. All right, thank you.
    Shifting gears to Amtrak for a second, Mr. Moorman, you had 
mentioned that there is an opportunity for expanding passenger 
rail service in your opening comments. With the help of a 
Federal grant, the Illinois Department of Transportation is 
working on upgrades that are necessary to return passenger rail 
for a Chicago-to-Moline route. Moline is in my congressional 
district, so something that our people back home are anxiously 
waiting for.
    So in the FAST Act, Congress created the restoration and 
enhancement grant program to help initiate, restore, and 
enhance passenger rail service. Can you talk a little bit about 
how the program can ensure that investments that go into 
infrastructure upgrades for passenger rail translate into 
successful service for a route like I just mentioned?
    Mr. Moorman. Well, I think it is an essential part of 
restoring routes like that, and something, obviously, that we 
are very interested in, because we believe that the real growth 
opportunity for passenger rail are corridors like that to 
Moline. That is where you have a lot of ridership that wants to 
go into a congested area, and passenger rail just makes all the 
sense in the world.
    So it is incumbent upon Amtrak to work with the State 
authorities to make sure that the service is well thought-out, 
that we have the right equipment, and that our projections are 
such that the State has confidence that the service can be 
provided on the economic terms. But given the assistance that 
you have talked about--and I think there is even more that can 
be done--I would tell you that I think State-supported 
corridors like that are really where passenger rail needs to go 
in the future.
    Mrs. Bustos. That is good to hear.
    All right, Mr. Chairman, my time has expired and I yield 
back.
    Mr. Denham. Thank you, Mrs. Bustos.
    Mr. Faso, you are recognized for 5 minutes.
    Mr. Faso. Thank you, Mr. Chairman. I appreciate the panel 
being here today.
    Mr. Moorman, I am wondering if you could update the 
committee on the work that Amtrak performed in Penn Station 
this past summer and what other improvements you are 
contemplating in that regard. As you know, I live on the Empire 
State Corridor, and the service in and out of Penn Station is 
vitally important to people in upstate New York, as well as 
people in the general metropolitan area.
    Mr. Moorman. Thank you for the question. As you know, it 
was billed by those in the media and some politicians as, 
prospectively, the summer of hell. I am happy to say that, 
thanks to our execution and really great work by a lot of the 
folks that Mr. Willis represents down there, it turned out to 
be no more than the summer of mild inconvenience.
    And it really set the stage, I think, for us to do at 
Amtrak--and particularly in the Penn Station area--a lot of 
work that needs to be done, and to do it in a thoughtful way, 
working with our partners, but in a way, quite frankly, that 
will at times impact the service into the station. Not in the 
same way that this summer did, but we will need to take tracks 
out of service for a longer period of time.
    We have a schedule which actually goes through next summer. 
We are working with New Jersey Transit, Long Island Rail Road, 
and now Metro-North, because, as you know, to accommodate the 
work this past summer we took about half of the--all of the 
peak trains into Grand Central. And as we look at work to be 
done at particular parts of Penn, we are going to be starting 
conversations with Metro-North to do that again at times.
    So I think it was a great project for us. I think it 
established that we can do that kind of work. And it set the 
stage for us to do a lot more important work up there.
    Mr. Willis. Let me just add quickly. You know, there were 
some proposals that we needed to sell off or privatize Penn 
Station because Amtrak and its workforce couldn't handle that. 
You know, I think, as Wick said, that turned out not to be the 
case. I think our members worked very directly and closely with 
Amtrak and their management team to get that project done.
    And you know, again, there was a live debate leading up to 
the FAST Act of whether the solution for Amtrak was to 
privatize the carrier or defund it. Those debates were 
considered and rejected. And we hope that as an infrastructure 
package is considered by this committee, that we don't need to 
relitigate those type of issues. And I think Amtrak has built 
up some trust in this area that they can handle this kind of 
work and really be the type of carrier that we need, if given 
the funding and support.
    So I think it was successful up there in Penn Station and 
can be a real model and a template for other projects, going 
forward.
    Mr. Faso. Thank you. And, Mr. Willis, I agree with what you 
are saying about the way the workforce responded. It was truly 
excellent. And I congratulate you and Mr. Moorman for that 
effort. And Mr. Moorman knows I have some particular interest, 
as well, on that Empire State Corridor, so I know----
    Mr. Moorman. I know that well.
    Mr. Faso. He is paying close attention to that.
    Mr. DeJoseph, I know often we have testimony that is 
somewhat sanitized in a way to ameliorate or smooth over some 
difficult issues. But one in particular caught my eye when I 
read your testimony. You spoke about these sticky issues of the 
Buy America provisions. And I am wondering if you could perhaps 
elaborate a little more in terms of the stickiness, so that we 
can fully understand what you are getting at when you mention 
that.
    Mr. DeJoseph. Without getting too far indepth, there is 
definitely concern from a lot of our members about foreign 
involvement. The Buy America provisions must be adhered to and 
strictly enforced. We are very concerned about foreign 
investment in the United States, where we have companies that 
are bidding on new production projects at upwards of 30 percent 
of anyone else that has been in business in the United States 
since the 1980s.
    So I think that we, our membership, wants to ensure that 
all of the Buy America provisions are strictly enforced. There 
are continuing questions about raw materials that are being 
brought in that would constitute in some areas dumping.
    Mr. Faso. Thank you. Mr. DeJoseph, my time has expired, but 
perhaps you could provide greater detail to the committee in 
writing on this issue expressing your concerns in that regard.
    Mr. DeJoseph. Yes, we will.

        [Mr. DeJoseph elaborates on Buy America provisions on pages 
        105-106 in response to a post-hearing question for the record.]

    Mr. Faso. Mr. Chairman, I yield back.
    Mr. Denham. Thank you, Mr. Faso.
    Mr. Lipinski, you are recognized for 5 minutes.
    Mr. Lipinski. Thank you, Mr. Chairman.
    Mr. Hamberger mentioned a couple of times already CREATE, 
the rail modernization program in the Chicago region which--we 
talk about--the Gateway has been brought up also, but I think 
it is very important that people understand how important 
CREATE is for freight traffic for the entire country, in 
addition to Amtrak and commuter rail.
    We have moved along well, although more slowly than we 
would like in getting CREATE projects done. I can't pass up the 
opportunity again to talk about grade separations. Those are 
lagging far behind, and those are very important. I would like 
to see more funding, Federal funding, and railroad funding on 
grade separations.
    But right now the big project that we are looking at is 
75th Street. And I was very happy to hear you say earlier, Mr. 
Hamberger--when I had stepped out, unfortunately--that the 
railroads are in for the application for an INFRA grant. Is 
this going to be similar to the application--do you believe it 
would be similar to what was put in at the end of last year?
    Mr. Hamberger. Yes, sir. Each of the partners has 
reaffirmed their commitment exactly in the same proportion as 
last year.
    Mr. Lipinski. That is great to hear. I think this fits very 
well in exactly what the administration is talking about when 
it comes to infrastructure in general, the private capital 
going in, also the State, Cook County, city of Chicago, I think 
Metra and Amtrak also on board. So this is exactly the type of 
project that should be funded if the administration follows 
through on what they have said they would like to see. So very 
happy that the railroads are on board on this.
    Mr. Hamberger. Yes, sir. And it actually refers back to the 
question Mr. Duncan asked about the involvement of the private 
sector, and one of the main metrics that the DOT has announced 
in analyzing the INFRA grants is what is the private sector 
involvement. So I think that that indicates at least that the 
Department--that they are committed to the public-private 
partners approach.
    Mr. Lipinski. Very good. The other question I wanted to ask 
Ms. Darr, I want to talk about the RRIF loan program, which, 
unfortunately, has been undersubscribed. And part of that is a 
result of the confusing loan repayment policies, the issue of 
the credit risk premium that the RRIF loan recipients are 
required to pay.
    You know, DOT has not repaid nearly $76 million in CRPs 
that they have collected to date. I want to know what would the 
impact be if those CRPs were paid back, in terms of 
infrastructure that would be able to be financed with that.
    Ms. Darr. Thank you for your question, and I think that 
that would be an excellent outcome, is if we could get DOT to 
pay back the credit risk premium. And going forward, I think 
that also needs to be considered.
    The RRIF program really stands out to our industry as a 
massive wasted opportunity at this point. Maybe two or three 
loans have been processed per year, and only a few of those 
have gone to the short lines. There is a number of reasons for 
that. One of them is the credit risk premium. But additionally, 
it is just truly too complex and costly for our small 
businesses. There is a high cost to the transaction for 
financial advisors and legal advisors that runs in the 
neighborhood of up to $500,000.
    You know, we believe the solution is to fund the credit 
risk premium to help cover application costs and to do whatever 
you can to speed up the process, because we can't wait the year 
or more that it takes for those loans to be improved to get 
started on some of these projects. Again, that is why 45G is 
more of an immediate solution for us.
    Mr. Lipinski. I think this, again, fits in with what the 
administration has been talking about, and I am hopeful that 
they take a look at the RRIF program and the credit risk 
premium, and that we can get the RRIF program really working, 
because I think it can be highly valuable, and is very 
important for short line railroads.
    So that--I would yield back.
    Mr. Denham. Thank you, Mr. Lipinski.
    Mr. Weber, you are recognized for 5 minutes.
    Mr. Weber. Thank you, Mr. Chairman. A little bit of a 
different question for the panel, if you will.
    Have you all been watching the discussion about tax reform?
    Mr. Hamberger. Yes, sir.
    Mr. Weber. Just one out of five? That is not very 
encouraging.
    [Laughter.]
    Mr. Weber. OK, I see some nodding heads.
    Did you all take a position on the BAT tax? I will start 
with you, Mr. Hamberger.
    Mr. Hamberger. We did not take a formal position. Some of 
our members did oppose the BAT tax, and we are founding members 
of an organization called RATE. It is a great acronym: 
Reforming America's Taxes Equitably, I believe it stands for.
    And we are a very high effective tax rate industry, right 
around 33 percent, so we are very open to getting that rate 
down. And if that means interest deductions aren't deductible, 
or if that means that accelerated depreciation goes away, if we 
can get it down to what the Big 6 are talking about, in the 20-
percent range, we think that that would not only spur 
investment by us, but would really make our customers more 
competitive.
    Mr. Weber. So you are against the 15-percent range.
    Mr. Hamberger. We would love to see 15 percent, but I see 
20 percent on the table, so we are good at 20 percent.
    Mr. Weber. Mr. Moorman?
    Mr. Moorman. Well, I have certainly been following it from 
a personal standpoint, but Amtrak is not a taxpayer.
    Mr. Weber. That is right.
    Mr. Moorman. Yes. And we are striving to get it to that 
point, where we can, but right now it is not a corporate issue 
for us.
    Mr. Weber. OK. And Ms. Darr?
    Ms. Darr. We are, of course, supportive of comprehensive 
tax reform, and we are hopeful that the Chamber will be able to 
get that done. 45G, as you know, is our main focus when it 
comes to a tax program. That is certainly our priority. And 
when it comes to lowering the corporate tax rate, again, we are 
supportive. But our businesses are not profitable enough that 
we believe it would have the same impact as 45G would.
    Mr. Weber. So do you have a white paper? Can you get my 
staff a background on 45G for me, please?
    Ms. Darr. I would be thrilled to do that.
    Mr. Weber. OK.
    Ms. Darr. Thank you.
    Mr. Weber. Mr. DeJoseph?
    Mr. DeJoseph. The Railway Supply Institute did not take a 
position on the tax program. I can speak from my own company's 
point of view that we would support 20 percent, 15 percent----
    Mr. Weber. Nothing on BAT, you didn't engage in the BAT 
conversation?
    Mr. DeJoseph. That is correct.
    Mr. Weber. OK. And Mr. Willis, I take it that would be the 
same for you all?
    Mr. Willis. We have not taken a position. I think some of 
our unions are going to play in that space and the broader AFL-
CIO definitely will. But we have not been engaged in that.
    Mr. Weber. OK. I am going to ask you kind of a broader 
question. I will start with you, Mr. Hamberger, again. What is 
the worst thing Congress could do to you all in this coming 
session?
    [Laughter.]
    Mr. Hamberger. I know I shouldn't say this, but it does 
remind me of a Will Rogers line. But I won't say it.
    Mr. Weber. We will talk offline.
    [Laughter.]
    Mr. Weber. We will think about that.
    Mr. Moorman, I will jump over----
    Mr. Hamberger. For us the biggest issue continues to be the 
economic regulation of the industry. In 2015 you passed the STB 
reauthorization which continued the balanced economic 
regulatory system that is there.
    The worst thing you could do, because everything we do is 
private sector, where you have to earn capital to reinvest it, 
so if you did anything that would in any way change that 
balance to send a signal to the railroads to disinvest, that 
would be the worst thing you could do.
    Mr. Weber. Mr. Moorman?
    Mr. Moorman. I only say this because I was in the freight 
industry for a long, long time. I thought Ed was struggling 
because he was going to say that Congress would make the 
freight railroads run Amtrak trains on time.
    [Laughter.]
    Mr. Weber. We are talking about in realms of possibility.
    [Laughter.]
    Mr. Moorman. Not fund the capital that we need to keep the 
rail infrastructure, and particularly the Northeast Corridor, 
moving ahead. That is absolutely critical, I think, not only 
for Amtrak but for the country.
    Mr. Weber. I think Mr. Sires had that conversation.
    Ms. Darr?
    Ms. Darr. You probably can guess what my answer is going to 
be. But if 45G was not extended, that would be an enormous 
problem for our industry. So we urge you to support 45G.
    Mr. Weber. Mr. DeJoseph?
    Mr. DeJoseph. I would think any attempt to do any form of 
re-regulation would be the worst thing that Congress could do 
at this time.
    Mr. Weber. Especially without your input.
    Mr. DeJoseph. Correct.
    Mr. Weber. Mr. Willis?
    Mr. Willis. Well, I will limit my comments to what is in 
front of this committee, because there is a lot of things that 
could happen to labor and the unions that I represent.
    But, you know, I think devolving the Federal role back to 
the States would be a real mistake. We have got real funding 
challenges. The States need to be partners. But to devolve it 
back to the States and--as a way that--you know, we just can't 
figure out how to fund it. Or over-reliance on private 
financing. There is a role for private financing, but to turn 
it over to those two entities, we think, would be a real step 
backward from positive moves made in the FAST Act.
    Mr. Weber. Well, and the Constitution says something about 
interstate commerce. I am not sure, but I think that is what 
you are getting to.
    But thank you, Mr. Chairman, I yield back.
    Mr. Denham. Thank you, Mr. Weber.
    Mr. Garamendi, you are recognized for 5 minutes.
    Mr. Garamendi. Thank you, Mr. Chairman. The corporate tax 
issue is one that we need to be very, very careful about. I 
appreciate the gentleman raising the issue.
    The evidence over the last 15 years indicates that those 
companies that have successfully reduced their corporate tax 
rate into the 1-digit and maybe the 10-percent rate have done 
so--the result of having done so is to lay off thousands or 
tens of thousands of American workers, and to use that reduced 
tax rate, or the revenue from the reduced tax rate, to buy back 
stock and corporate pay, corporate executive pay.
    So we need to be very, very careful as we approach this. 
Clearly, a lower tax rate for corporations could be, properly 
structured, a significant economic boon. But presently, if you 
take a look, AT&T, for example, GE, and a couple of other major 
corporations--including Apple--that have very, very low tax 
rates are not creating jobs in America. So just a heads up on 
that.
    Also, the Buy America provisions, all of you talked about 
that, extremely important. If you want to build jobs in 
America, make it in America. The President talks about it. Good 
for him. Good for us, if we actually cause it to happen. So be 
careful. All of you gentlemen discussed this.
    Also there is a horrible disconnect and a very, very 
serious problem and a disconnect between the rhetoric--in this 
case, infrastructure, building infrastructure, funding 
infrastructure--and what is actually happening in Congress.
    This week we will pass a budget--well, some of us will vote 
for a budget, and it will pass--that has the potential of 
significantly reducing by $2.5 trillion, maybe as much as $5 
trillion, revenue for the Federal Government. If we are going 
to build infrastructure, these very extraordinary revenue 
reductions that are embedded in the budget that will pass the 
House this week will not happen. There will be no money for 
infrastructure investment.
    So let's be very, very careful here as we talk about tax 
reform, as we talk about budgets, and all of the witnesses 
today--and this is not the first panel that has been in this 
room saying we need more money. There is a serious, serious 
disconnect between our political statements of building 
infrastructure and the reality of what the tax reform and the 
budget that will pass the House this week will do to funding 
availability.
    Secondly, it has been suggested that we increase the excise 
tax on fuel. Good idea. However, in today's press, General 
Motors, within the next decade, will be out of the internal 
combustion engine business. So tell me how that works. We need 
to move beyond the excise tax on fuel, as we raise revenue fees 
from the motoring public, whether that is commercial or private 
automobile. We simply cannot rely upon the excise tax on fuel 
as a funding source for the highway programs.
    Also note that about 30 percent, 25 percent of the total 
highway funding is general fund, which is scheduled to be 
reduced in the tax reform programs.
    So my point here--and this is not to, I guess, sort of 
preaching, hopefully to the sinners, or not to the choir--but 
the reality is that there is a very serious disconnect between 
what we talk about doing in this infrastructure committee and 
what we are doing in the tax committees. They simply do not 
work together.
    My final point is Buy America is extremely important. Make 
it in American is extremely important, the testimony we have 
received today about ways in which foreign, State-owned 
companies can dramatically alter the ability of American 
companies and American workers. Also, the issue of waivers and 
inconsistencies, all of which you have talked about in one way 
or another.
    I am particularly interested, Mr. Moorman, in your point, 
which you say in your testimony about the Buy America. I am not 
sure that you like it or dislike it, but I will tell you you 
must have it. The Siemens operation in Sacramento is a 
marvelous example of where some $700 million was spent on 
Amtrak locomotives, all 100 percent American made. I assume 
that is continuing to be your position.
    Mr. Moorman. Absolutely.
    Mr. Garamendi. Perfect.
    Mr. Moorman. We certainly support Buy American. And in 
addition to the Siemens locomotives, we have a commitment for 
over $2 billion for new Acela train sets, all of which will be 
built by Alstom in upstate New York, so----
    Mr. Garamendi. Which raises the question of the Siemens-
Alstom merger and what effect that might have on American 
employees.
    Mr. Chairman, I am 30 seconds over time. Please forgive me. 
Thank you.
    Mr. Hamberger. Mr. Chairman, could I answer one of Mr. 
Garamendi's questions? That is how----
    Mr. Denham. Mr. Hamberger, you are recognized for a brief 
response.
    Mr. Hamberger. Thank you, sir. How to fund the Highway 
Trust Fund, given the technology that is coming down the road.
    I mentioned in my opening statement--I don't think you were 
in the room--we recommend a weight-distance tax which is 
already in existence in your neighbor to the north, in Oregon, 
which I think is fair, because it is based upon what is the 
damage that a particular vehicle does to the infrastructure, 
and measured by the vehicle miles traveled. So that would be 
one way to get----
    Mr. Garamendi. But the chairman and I do not travel in the 
right-hand lane of Interstate 5 in California for the very 
reason of destruction of the road bed. By passenger cars? I 
doubt it.
    [Laughter.]
    Mr. Denham. Thank you, Mr. Garamendi.
    Mr. Sanford, you are recognized for 5 minutes.
    Mr. Sanford. I thank the gentleman. Let me follow up just--
I guess with a little bit more in the way of questioning to 
you, Mr. Moorman.
    The operating losses within Amtrak have been perennial, so 
I think you are, if I am not mistaken, down to, it looks like, 
227, which is a record low. I guess last year it was 305. But 
there has been a longstanding run of operating losses on that 
front. If you were to pick the three biggest efficiencies, 
money savers, what would they be, in terms of correcting that 
sort of perennial problem we have going right now?
    Mr. Moorman. Let me first say that the way that I and my 
co-CEO view Amtrak is we are a company, we are a corporation. 
We are effectively a Government contractor. And over the past 
40-some years----
    Mr. Sanford. But in fairness, if you were a business, if--
you would be out of business on that basis. I mean you are 
subsidized by Federal Government, et cetera.
    Mr. Moorman. And what I was going to say is we effectively 
are a Government contractor, and we carry out the wishes of the 
U.S. Government in terms of passenger rail transportation. And 
the Government's position over the past 46 years is that it 
provides an essential service. And someone needs to do it, and 
that is Amtrak.
    But it is inherently--and I have said this many times 
before in many forums--passenger rail around the world is not a 
particularly good business model. So our job is to execute the 
intentions of the Government----
    Mr. Sanford. Understood. But back to what would your 
efficiencies be. If you were to look for three of them, what 
would they be?
    Mr. Moorman. So, therefore, the first thing that we need to 
look at is our route structure, our fare structure, how do we 
better manage yield, how do we put services in places where 
people want to use them, and how to buy them, and that is----
    Mr. Sanford. I got it, but again----
    Mr. Moorman. But----
    Mr. Sanford. I only got a couple minutes, I want to get 
specifically----
    Mr. Moorman. OK, all right.
    Mr. Sanford. So what would you do? I mean those are 
generalities, I understand that.
    Mr. Moorman. Well----
    Mr. Sanford. What would you do?
    Mr. Moorman. Well----
    Mr. Sanford. If you raise fare structure you are probably 
going to lose more money and lose ridership, right? So that is 
probably off the table.
    Mr. Moorman. We are not sure. But let me answer that and 
say we are not sure of that, because Amtrak has not really done 
the kind of job and look at fare structure, looking at revenue 
management, looking at yield management. We actually believe we 
can do a lot there which will raise our revenues without 
impacting our ridership. So that is number one.
    Number two, we are scrubbing everything internally in 
Amtrak, in terms of looking at our organization, our headcount, 
our procurement policies----
    Mr. Sanford. Is that----
    Mr. Moorman. And all of those are----
    Mr. Sanford. But----
    Mr. Moorman. All of those are----
    Mr. Sanford. Yes, but why--I mean you all lose big money, 
for instance, on meal services, as I have seen. If that is the 
case, how is that being scrubbed, yet you, I mean, consistently 
lose----
    Mr. Moorman. Well, all I can answer for is what we are 
doing now.
    The third thing that we are doing, we are bringing in 
outside help to look at how we offer meals. What is the whole 
concept? What is it that we can do, given that the Congress has 
mandated reduce the losses on meal service, but at the same 
time it has mandated you don't--we can't do anything about 
labor costs? So that puts us in a position where we have to be 
very creative.
    Mr. Sanford. What would----
    Mr. Moorman. At this point----
    Mr. Sanford. If you had the choice, what would you do on 
labor cost?
    Mr. Moorman. What would we do on labor cost? We would 
probably try to figure out ways to deliver meals more 
efficiently to more people on the train using the same or less 
labor that we do today.
    But that--all of the--you are asking great questions. And 
all I can tell you is that, since my--in my short time at 
Amtrak--and what we are doing is try to answer exactly what 
those are--but they--but it is like every business. It comes 
back to how----
    Mr. Sanford. Again, I am down to 58 seconds.
    Mr. Moorman [continuing]. And lower costs.
    Mr. Sanford. So if--again, specific measurable and 
achievable, I guess, is the mark of a real goal.
    Mr. Moorman. Yes.
    Mr. Sanford. So what we have talked about is sort of 
generally--these are directions I would go. Are there three 
specific things or two specific things that you would do to get 
your numbers out of the red?
    Mr. Moorman. We are in the process right now of completely 
reviewing procurement. We think we can drive several tens of 
millions of dollars out of our procurement costs. That is 
number one.
    We are looking at our entire organizational structure to 
see where we can probably eliminate over some period of time 
some layers of management. That is one. That will save us 
millions of dollars.
    And I will go back to we think there are substantial things 
we can do to increase revenues without impacting ridership----
    Mr. Sanford. Last question in the last 9 seconds I have. 
What is your least profitable route?
    Mr. Moorman. It would be one of the long-distance routes 
between Chicago and the west coast. And the--again, the 
profitability there is primarily because of losses because of 
allocated costs----
    Mr. Sanford. Got you.
    Mr. Moorman [continuing]. Rather than direct costs.
    Mr. Sanford. Thank you, sir.
    Mr. Denham. Thank you, Mr. Sanford.
    Mr. Carson, you are recognized for 5 minutes.
    Mr. Carson. Thank you, Chairman.
    Mr. Moorman, I am very proud that the largest passenger 
railcar repair and maintenance facility is in our congressional 
district in Beech Grove, Indiana. That is the Amtrak facility. 
But I am also proud of one of Indiana's engine manufacturers, 
which is Cummins.
    I am curious. What is Amtrak doing to reduce emissions and 
increase efficiency for their locomotives at this time?
    Mr. Moorman. So we have an aging--obviously, on the 
Northeast Corridor, we run electric locomotives. We have an 
aging diesel locomotive fleet, quite frankly. And a lot of work 
is done on that fleet at Beech Grove.
    Mr. Carson. Yes.
    Mr. Moorman. And I will be there next week. New diesel 
locomotives are $6 million a copy. So, to replace our fleet 
would be about $1 billion.
    We are right now looking at how to rebuild them. Those 
rebuilds would include reducing emissions, while giving us more 
life on the diesel fleet. And I think we are about to put a 
very good program together that will accomplish both of those 
things.
    Mr. Carson. Are there any obstacles to increasing the use 
of cleaner technologies?
    Mr. Moorman. The biggest obstacle I think I will go back to 
is just a financial obstacle. If you look at the freight 
railroads, which--the new locomotive standards from the FRA are 
the tier 4 standards. We don't have the capital to get to tier 
4 locomotives, as I said. But I think there are ways--and we 
are aggressively pursuing them--to do exactly what you said, 
and extend the life of our assets.
    And I will say, by the way, that we are also looking always 
across the country on how we can be more efficient and emit 
less, in terms of carbon and pollutants.
    Mr. Carson. Yes, sir. Thank you.
    Mr. Hamberger, do you have any thoughts from the freight 
side?
    Mr. Hamberger. Well, I would actually just like to turn it 
over to Mr. DeJoseph in a minute, because we were very 
concerned, several years ago, whether or not the supply side 
would be able to meet the EPA tier 4. And if they did, would 
there be a fuel penalty?
    But I am pleased to say that his members stepped up and we 
now have several manufacturers who meet the standard. But----
    Mr. DeJoseph. As far as I know, all of our locomotive 
manufacturers are now in the position that they will be 
producing tier 4 locomotives, going forward. I am not talking 
about the rebuilt side, I am talking about new locomotives.
    Mr. Carson. Thank you all. I yield back.
    Mr. Denham. Thank you, Mr. Carson.
    Mr. Smucker, you are recognized for 5 minutes.
    Mr. Smucker. Thank you, Mr. Chairman. I would like to thank 
the panel for being here, as well, and I certainly support 
continued investment at the Federal Government level in our 
rail infrastructure for both freight and passenger.
    Today I would like to just--first a comment and then a 
question in regards to passenger. And this is a comment for Mr. 
Moorman and Mr. Willis. I would just like to congratulate you, 
as well, for the work that is done at Penn Station.
    So I live along sort of the Keystone Corridor, which goes 
in and out of Penn Station, of course, multiple times a day, 
and have family--a daughter of mine is in the New York area. 
She spends time going back and forth, and I will occasionally 
do that, as well. And we went through the station several times 
during the course of a major project, expecting more delays 
than what we encountered, and so I think that project was 
coordinated very well, and I would like to thank you for that 
work well done.
    One of the opportunities I think we have in passenger is 
increasing the speeds. Lancaster, Pennsylvania, is the second 
busiest station in Pennsylvania behind 30th Street Station in 
Philadelphia. People use it on a regular basis to go to 
Harrisburg to work or to Philadelphia and, of course, all the 
way to New York. You know, and people are making decisions 
about whether to get in a car or to get in the train. If we can 
increase the speeds, I think we will continue to see ridership, 
which is already growing.
    I will occasionally ride the train from either Aberdeen or 
another station into DC here, and I have taken the Acela and I 
have taken the other train, as well. And it seems to me that, 
you know, the Acela provides additional benefit.
    But we haven't nearly reached the speeds that high-speed 
trains have experienced in other countries. And I believe that 
is because--I think, Mr. Moorman, you briefly mention it in, or 
one of you maybe briefly mentioned the opportunities that we 
have here. Is there an infrastructure--it is tracks, other 
things? Why isn't it that we cannot--what would it take, maybe 
is a better way to put the question, what would it take to 
increase the speeds on lines like the Acela?
    Mr. Moorman. At the end of the day, train speeds are 
determined by geometry. And the essential issue for both the 
corridor itself and parts of the Keystone line is that they 
were built when 80 miles per hour was an aspirational speed. 
And so there is a lot of curvature that just restricts train 
speed.
    What the Japanese and then the Europeans figured out a long 
time ago was hills don't matter, you can put enough horsepower 
to go up and down as fast as you want. You slow down for 
curves.
    So if you look at the corridor, the two things are the 
geometry in a lot of places doesn't permit higher speeds, and 
then we mix a lot of slow commuter trains with the high-speed 
trains.
    If you go to Japan or Europe or anywhere else and you 
experience those great trains, they are segregated from the 
commuters and they are new builds that are dead straight. So 
what stands in the way of the U.S. in terms of high speed is 
just you need that kind of infrastructure.
    Mr. Smucker. So have we reached our speed capacity on the 
Acela trains that we have now?
    Mr. Moorman. The new trains will be able to go slightly 
faster, and we are looking at some--maybe possible improvements 
that might improve some modest speeds. But once you get beyond 
that, every minute of savings is some hundreds of millions of 
dollars of investment.
    Mr. Smucker. Thank you.
    Mr. Willis, any comments on that?
    Mr. Willis. Yes. You know, I think Wick is clearly right, 
that it is--you know, it is the track on the corridor and the--
you know, the new train sets that are being built up in Alstom 
are great, but they are not going to be able to go as fast as 
they otherwise could unless we make real improvements.
    Just to circle back on a conversation that occurred earlier 
about, you know, Amtrak losing money, you know, look--Amtrak is 
a public service. We subsidize other forms of transportation in 
this country, whether it is roads--our local bus, you know, 
outside doesn't ``make money,'' but it is there to provide a 
valuable travel service, just as Amtrak. And if we are going to 
have conversations about figuring out how to speed up trains as 
you want to do, we have to sort of get over that.
    I thought we sort of came over that hump as part of the 
FAST Act and had a debate of whether or not Amtrak needed to be 
privatized or what have you. But, you know, holding Amtrak 
accountable for not making money I think is a little unfair 
when, again, other forms of transportation get subsidized at 
both the Federal and State level.
    Mr. Smucker. Yes. All right, thank you.
    Dr. Babin [presiding]. I would like to call on the 
gentleman from Arkansas, Mr. Westerman.
    Mr. Westerman. Thank you, Mr. Chairman, and thank you----
    Dr. Babin. I am sorry, Mr. Cohen. I apologize.
    Mr. Cohen. Thank you. We can see Arkansas from our patios.
    [Laughter.]
    Mr. Cohen. Thank you, sir.
    Mr. Moorman, you probably are aware of the development in 
Memphis--where we can, in fact, see Arkansas--at the Central 
Station. And I think some of the people on your staff came to 
meet with me--I know they did, and they were very responsive.
    This is a redevelopment of the train station into a 
marvelous downtown hotel by the people that started Holiday 
Inn, the Kemmons Wilson family, a residential area, and it will 
make the station for the customers much, much nicer, and a nice 
attraction.
    There is still a need of a lease that your real estate 
people are working on. Do you know who that might be that would 
be working on a lease with them?
    Mr. Moorman. I know in general who works on leases, and I 
will be talking with them shortly after this hearing.
    Mr. Cohen. Thank you. I appreciate that very much. You 
know, your co-CEO, Mr. Anderson, in this room testified to his 
love for Memphis, to the people he loved, to the Rendezvous, to 
the river. Because of his love, I hope he will understand that 
we would not only like to get that station improved, but 
possibly get a second line from Chicago. I think there is talk 
of a second train to come to Memphis, I guess out of Carbondale 
or somewhere in southern Illinois.
    Do you know, since Delta left Memphis, a lot more people 
have been using the train, so that is a good thing. Do you know 
anything about that second line to Memphis?
    Mr. Moorman. Let me first echo my love for Memphis, as well 
as Mr. Anderson's, and particularly for the Rendezvous.
    Mr. Cohen. John Vergos will appreciate the advertisement.
    Mr. Moorman. But, you know, I am not aware of any effort 
right now that we have internally--we may have done some 
preliminary looking, but there are no eminent plans to add a 
second service. And that would be an issue for us to do right 
now because of limitations around the equipment we have, and 
other, you know, things like that.
    Having said that, that is another thing I will go back and 
see if--to what extent any planning has progressed.
    Mr. Cohen. Thank you. I was a State senator. It has been, 
like, 25, 30 years they have been talking about a second train, 
and--I guess it would be a day train, and it would just come to 
Memphis and then go back. And there are a lot of folks who, I 
think, use that train, and especially poor people who can't 
afford the airlines and----
    Mr. Moorman. We will certainly take a look at it.
    Mr. Cohen. Thank you, sir. I appreciate it.
    Mr. Hamberger, you are aware that there were adjustments 
made in the appropriations process to the President's budget, 
and they made deep cuts to the state of good repair grants--I 
think cut $150 million--and the Consolidated Rail 
Infrastructure and Safety Improvement Grants by close to $200 
million, and the elimination of restoration and enhancement 
grants.
    What can you do or do you think you can do to influence the 
administration and/or Congress to put those monies back to the 
levels they were at?
    Mr. Hamberger. Well, all I can do, I guess, is what I did 
today, is call for the appropriate money for Amtrak that needs 
to be in the state of good repair. I think it should be 
appropriated at the authorized levels.
    Mr. Cohen. I am sorry I missed your earlier testimony, but 
thank you for that.
    I am a big fan of Amtrak, Mr. Moorman, from when I was--I 
guess it is a nostalgic thing, but it is also--it is a nice way 
to travel. And I did the Panama Limited and the City of New 
Orleans, and all that stuff, and I have done all the trains, 
and used a lot of--coming down from New York to Washington.
    Do you by chance know if Mr. Trump has ever been on an 
Amtrak train?
    [Laughter.]
    Mr. Moorman. No, sir. I don't know.
    Mr. Cohen. A lot of people from New York have, and it is a 
good thing, and we need to let him know that we need to help 
Amtrak.
    And I am kind of concerned about your labor cost on the 
food. When I have been on the train there has only been one 
person there putting the sandwich in the microwave. How much 
more labor cost is there?
    Mr. Moorman. The labor cost is more around the full dining 
car service, which we don't have on the Memphis train right 
now, or the Acelas, where we just have one food car.
    Mr. Cohen. Yes.
    Mr. Moorman. There are things we can do to enhance our----
    Mr. Cohen. So it is on the trains, the longer distance 
trains.
    Mr. Moorman. The long-distance trains. But we have work to 
do there. And I will reiterate what I said. There is a lot of 
opportunity at Amtrak to improve our service and at the same 
time reduce our operating losses, and that is our goal.
    I think we have a good team. We have a lot of work 
underway. And my goal and Richard's goal is to run this like a 
highly efficient company doing exactly what you, our 
shareholders, ask us to do.
    Mr. Cohen. Well, don't eliminate any hubs, and don't make 
the seats a lot smaller.
    [Laughter.]
    Mr. Moorman. Yes, sir.
    Mr. Cohen. Thank you, I yield back.
    Dr. Babin. Thank you very much. And I would like to call on 
the gentleman from Arkansas, Mr. Westerman.
    Mr. Westerman. Are you sure this time?
    Dr. Babin. I am positive.
    [Laughter.]
    Mr. Westerman. Thank you, Mr. Chairman. And I remind the 
gentleman from Memphis he is in good company. Even though Moses 
didn't get to go into the Promised Land, he got to go up and 
look in, and he never got to cross the river. But you are 
invited to cross the river and come on over some day.
    Mr. Cohen. DeAngelo Williams came on over to our side.
    Mr. Westerman. Right.
    [Laughter.]
    Mr. Westerman. Moving right along, and I appreciate the 
witnesses being here today, and I appreciate your written 
testimony. I had a markup in another committee so I wasn't here 
to hear your verbal testimony.
    But in my district we have about 18 short line railroads. I 
believe that is the largest number in the country. We also have 
a couple of class I railroads and we got a lot of folks that do 
supplies and materials for railroads. So it is very important 
to my district, as it is to much of the rest of the country.
    So, Ms. Darr and Mr. Hamberger, I wanted to ask you all. 
What, other than Federal funding for discretionary grants, what 
types of policies would help implement the first mile and last 
mile improvements to our rail system?
    Ms. Darr. Well, first, Congressman, I want to congratulate 
you for winning the award for having the most short line 
railroads in your district of any Member of Congress. So you 
are uniquely positioned, so congratulations on that, and thank 
you for your support.
    We talked a little bit about this earlier, but generally, 
when I think of what is needed from my short line small 
business perspective is mindfulness to the fact that the 
average short line has fewer than 30 employees. So when we are 
talking about regulations, when we are talking about grant 
programs, when we are talking about anything that might support 
their operations, we need to keep in mind that we have folks 
running these railroads that have to wear many, many hats.
    And so, you know, the less complicated, the better, whether 
it is the training rule issue that we are debating right now 
with the Department of Transportation, or whether it is all the 
bureaucracy that goes behind the RRIF program, these things are 
costly, expensive, and overly complicated. So the extent to 
which we can simplify all of that, the better it would be for 
our members.
    Mr. Hamberger. Two areas I would focus on, one 
complementary to what Linda just said, and that is regulatory 
reform and having environmental reviews done concurrently and 
not seriatim, for example, so that you can get a project off 
the drawing board and into the ground in a couple of years, 
rather than 7, 8, 9, or 10.
    And secondly, addressing what we have called modal 
inequities, where--as I know you know, we are privately owned, 
maintained. We invest $74 million a day into our network. And 
we compete with our also best customers, the trucking industry. 
And intermodal is now the largest single revenue source for the 
freight railroads, but it is also the biggest competitor.
    And as my testimony points out, I believe it is $143 
billion of general revenue will have gone into the trust fund 
by 2020. And that puts us at a competitive disadvantage. And 
so, we would like to see--and I guess I tried to make the point 
with Mr. Garamendi--some way to have that trust fund funded by 
the user pay policy, and our suggestion would be a weight-
distance tax, which would take into account the vehicle miles 
traveled and the weight of the particular vehicle going over 
the infrastructure.
    Mr. Westerman. Thank you.
    And, Mr. DeJoseph, I have got rail tie producers, I have 
got aggregate producers, and rail producers all in Arkansas, a 
lot of that in my district. I actually had the opportunity, 
back when I was doing engineering work, to design a borate 
pretreatment system for rail ties, so I understand that a 
little bit, and I know there was a shortage of rail ties, and I 
think there is still a shortage.
    But we are about out of time, but do you feel like we have 
got the supplies and the materials and the labor that we can 
update and build new rail systems?
    Mr. DeJoseph. The rail tie folks are not part of our 
organization. I think the rail supply industry is ready and 
able to take on any challenge, any build that is out there for 
us.
    I do think that, from the contracting side, I think we have 
to look at--if there is Government funding involved, I think we 
have to look at this requirement to pay prevailing wage, which 
automatically increases the cost of the project. And I 
obviously think that we have to continue to look at the 
requirements, as Linda noted, about CFR part 243, which is the 
additional requirements on contractors for the Federal 
Government for training.
    Mr. Westerman. Time, Mr. Chairman.
    Dr. Babin. Yes, sir. Thank you. And now I would like to 
call on a gentleman from Massachusetts, Mr. Capuano.
    Mr. Capuano. Thank you, Mr. Chairman. And I want to 
apologize to my colleagues. I usually let all my colleagues go 
before me, but I didn't realize there were going to be so many 
colleagues who wanted to speak today.
    First of all, thank you all for coming. And, as I expected, 
it is a pretty bipartisan hearing. We are all pretty much in 
agreement that rail is important and we would like to be able 
to do something about it. But there are a few things I would 
like to comment on.
    First of all, I didn't know we were going to talk about 
taxes today. But for those of you who want tax cuts, it is 
awfully difficult for me to hear the very same people who want 
tax cuts simultaneously ask me to have more Federal spending on 
their issues. It is virtually impossible. None of you could do 
that with your private businesses, cut your revenues and 
increase your spending.
    What makes you think the Federal Government can do that? 
Unless, of course, you want to tell us what to cut, which, of 
course, gets you into a whole new quagmire that if you have a 
brain in your head you don't want to get involved in, because 
that is a no-win situation.
    So, I am not going to ask about taxes, but since it came 
up, it is critically important to me. Everybody that comes in 
and asks me for things from the Federal Government, every one 
of you has to be willing to pay your fair share in taxes.
    That being said, I also want to comment on the DOT-111s and 
the PTC. When we did the DOT-111 legislation and the PTC 
legislation, I will tell you I had numerous people coming to me 
and saying we can't get it done, it can't be done, it is going 
to take 100 years. And to sit here today and listen to the fact 
that we are pretty much done with the DOT-111s and we are on 
track for the PTC is great. It goes to prove that when any 
industry gets pushed to do something, you know how to do it. 
And when you work with Congress to come up with a reasonable 
timeframe within which to accomplish it, it can work. I want to 
say thank you and congratulations for doing that. They are both 
important to America, they are both important to safety.
    Ms. Darr, I really appreciate your answer, when asked by 
the chairman about prioritizing certain projects, that you have 
a lot of smaller projects. I think that is the answer I 
expected to hear, I am glad to hear it.
    But I also want to warn you--because I agree that we don't 
want to forget the short lines--if you don't find ways to 
prioritize some projects, if not within the national scope, at 
least within the State scope, you run the risk of being 
forgotten. Because I will guarantee you if and when we ever get 
to an infrastructure bill, people will be tripping over 
themselves with project-ready things. We all love to be at 
ribbon cuttings, we all want to make announcements. If you are 
not ready with specific projects, I fear you would be left 
behind, and I think that would be a mistake and a tragedy.
    So I just would ask you to go back to your members and try 
to find some way to prioritize. I know there is no one big one, 
but at least here are the three in this State, and here are the 
three in that State, and work with the State members.
    Before I get to the one question I do have, I will tell you 
that I didn't expect to get into one, but Mr. DeJoseph, in the 
heavy rail there is no, you know, hot line. In light rail there 
is a live line there. And once in a while people step on it and 
they die. And when you talk about prevailing wage, for me--that 
is a live line--the prevailing wage to me is the way that we 
ensure that monies that are spent by the Government actually 
get to working people. And without the prevailing wage, the 
disparities we are seeing today in income across this country 
would be greater.
    So I will guarantee you--though I agree with everything 
else, pretty much, that has been said, if you push prevailing 
wage changes, you will lose--I won't speak for every Democrat, 
but darn close to every Democrat and a whole bunch of 
Republicans. Because, as far as I am concerned, that is a 
direct attack on the middle class.
    Now, I understand that reasonable people can disagree, and 
that is fine. But I would rather take an item like that that is 
a hot button issue and put it aside on a bigger issue where we 
can all find very common ground that we can work on. So, for 
me, that is--I wasn't going to do this, but when I heard the 
words ``prevailing wage,'' I have been burning up here for 
about one-half hour, waiting to talk about it.
    And I love and respect you and what you do, and I am with 
you on everything else, but that one, that is the best way I 
can think of that would divide us, not just down the middle. My 
side will win. And the problem is if you push it you risk 
bringing down everything else for that, and I don't think we 
want to do that.
    Mr. Hamberger--and it is not just you, but you are the one 
who mentioned it, about streamlining regulations.
    Mr. Hamberger. Yes, sir.
    Mr. Capuano. We are all trying to streamline regulations. 
Everybody wants that. But, you know, we will disagree exactly 
what streamlining is, and what the lack of regulations are. 
That is always a fine line. But to me, part of the problem is a 
lot of it is EPA and other agencies that are involved. It is 
not just streamlining regulations. You have to have somebody in 
place on the other side of the table to actually make those 
decisions.
    In your experience, have some of the cuts that we have made 
in the Government agencies reduced the personnel on the other 
side of the table, or made their jobs harder so that they 
cannot get to all the regulations that they are supposed to 
get? Have we cut it too much? Or is it just no regulation is 
good regulation?
    Mr. Hamberger. It is not no regulation is a good 
regulation. In fact, I want to just emphasize that what we are 
talking about is not doing away with reviews, not doing away 
with making sure that it is done properly, but trying to 
streamline it.
    I am not really in a position to answer your question 
because it is our members who deal directly with the agencies. 
But let me take that question for the record and get back to 
you.
    Mr. Capuano. Fair enough. Thank you.
    Thank you.
    Dr. Babin. Yes, sir, thank you. I now call on myself for a 
couple of questions.
    Mr. Hamberger?
    Mr. Hamberger. Sir?
    Dr. Babin. How are you doing?
    Mr. Hamberger. Doing fine, sir.
    Dr. Babin. What are some of the steps the industry is 
taking to meet the projected increased demand for freight 
shipments over the next 20 years?
    Mr. Hamberger. Well, the biggest, of course, is the 
continued investment that we have been doing over the past--as 
my testimony indicates, it is about $74 million a day. I think 
we have averaged $26 billion, $27 billion a year of private-
sector investment, and that is money that is targeted at where 
the marketplace tells us freight is going to move.
    And sometimes the marketplace can be fickle. It wasn't too 
long ago that I was hauled before Congress wanting to know why 
we weren't investing more building a fourth line into the 
Powder River Basin. Well, we started to do that, and that line, 
of course, is what one might call a stranded asset these days.
    But we nonetheless made that investment. We are making 
investments now to try to respond to the growth of intermodal. 
We are making sure that we have capacity to move grain for 
export. So it really is the investment and, of course, the 
hiring and training of employees to be able to operate on the 
infrastructure, once we have it.
    Dr. Babin. Absolutely. Thank you very much.
    I would like to ask you, Ms. Darr, what is the impact of 
burdensome and duplicative regulations on short line 
infrastructure investments and also the creation of American 
jobs?
    Ms. Darr. I would say--and I think I said in my testimony, 
as well--that our short lines have been overwhelmed in the last 
8 years or so by an enormous amount of regulation, a lot of 
which we don't think is based in sound science or backed up by 
data.
    A big example of that is the CFR part 243 training rule. 
And I came before this committee a few months ago and shared 
with you a telephone-book-sized document that was just 1 
piece--and it would have 25--we would have to replicate it 25 
times to show what the requirement would be for a short line to 
comply with the training rules.
    So we have about 26 crafts in the industry. Each one of 
them would require a detailed training program, training 
manual. It would have to be approved by the FRA. And I added 
that up: 15,600 separate plans would have to be approved--
because we have 600 railroads--by the Federal Railroad 
Administration. It just doesn't make sense.
    So what we have done is spent a lot of money suing the U.S. 
Department of Transportation, money that we didn't have, and 
this was the first time we have done this in 105 years. Our 
railroaders have spent a ton of time working together, trying 
to address this rule. And ultimately, we hope that the rule 
will be turned over and that it will go away. But that was a 
lot of lost time that we could have spent doing things that are 
a lot more productive for our industry.
    Dr. Babin. All right. Thank you very much.
    And then, lastly, for Mr. DeJoseph and Mr. Willis, do you 
face any issues with conflicting safety regulations from 
different agencies? And, if so, what are some of the concerns, 
and what are possible solutions to that?
    Mr. DeJoseph. I would echo Linda's statement about CFR part 
243, for example, which is adding significant additional costs 
to contracting companies that have to do work. We are talking 
about in the neighborhood--at least with our own company--of 
over $5,000 per employee to conform to the CFR part 243 
regulations.
    Dr. Babin. Mr. Willis?
    Mr. Willis. You know, I don't think we have any issues with 
conflicting regulations, as you asked. I think, you know, FRA 
regulates in its space, and Federal transit regulates in their 
space.
    I just think, generally, we have talked a lot about how 
safe this industry is, and I think that is accurate. And there 
is a lot of reasons for it. It is front-line workers, it is 
responsible and good companies that are here at the table. But 
it is also the role of Federal regulators, and I don't think we 
can discount the fact that Federal railroad has been very 
successful in going out there and making sure this industry is 
as safe as possible.
    Not to get into the weeds on each of these regulations, 
but, you know, a lot of these rules are very important, and we 
can't just throw these things out without understanding there 
is an impact there.
    Dr. Babin. OK, thank you very much----
    Mr. Hamberger. Mr. Chairman, could I give you one 
conflict----
    Dr. Babin. You sure can.
    Mr. Hamberger [continuing]. In the environmental arena? We 
have 3 seconds left, sorry.
    But under FRA regulations we, of course, have to have 
appropriate and proper drainage along our right-of-way so that 
the rail maintains its integrity and the ballast maintains its 
integrity. And then, as that drainage occurs into the ditches 
alongside our track, along comes EPA to say that that is a 
navigable water and you may have to get a permit from the Corps 
of Engineers to go out and do some maintenance work.
    So, hopefully, that is one of the ways that EPA could 
interpret it, and that is just an example of where you do have 
a conflict.
    Dr. Babin. Absolutely. I appreciate you adding that. OK. 
Well, the next questioner would be the gentleman from Maryland, 
Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Mr. Moorman, Amtrak is a vital component of our Nation's 
transportation network, and it is past time for us to make 
investments needed to modernize Amtrak's infrastructure. You 
stated in your testimony that Amtrak is working to make the 
best use of its stations.
    And, as you know, I am from Baltimore. You noted that at 
Chicago's Union Station, Amtrak had--and I quote--``recently 
selected a master developer to oversee the commercial 
development of the station's parking garage, concourses, air 
rights, and more than 14 acres of adjacent land.'' Amtrak has 
also been in the process of trying to identify a master 
development for Baltimore's Penn Station.
    I consider it as very personal, something I have been 
working on for many years, trying to make sure that the 
development of Penn Station and that area around Penn Station, 
which is, by the way, a 5-minute drive from my house, takes 
place. Penn Station is an asset and has tremendous potential, 
and has been untapped for too many years. The station is 
obviously a key gateway into and out of Baltimore, serving 
approximately 3 million rail passengers annually.
    Right now, however, Penn Station is simply the place where 
folks come to catch a train. It isn't a destination in itself, 
and it certainly isn't able to support broader redevelopment in 
our community. Now, I must say that there are many developers 
who are coming to Baltimore. They see it as a place to be. And 
Penn Station so happens to be in a prime location.
    So, for many years--more than a decade, in fact--we have 
been working on this project. And I appreciate the modest 
improvements that Amtrak has made in the station's basic 
facilities like the bathrooms, but much of the building still 
sits empty, and it provides almost none of the amenities that 
folks can access at Washington's Union Station, or even 
Philadelphia Station.
    And to show you how serious I take this, it is not unusual 
for me to visit Penn Station once or twice a week, just to make 
sure the bathrooms are clean, to make sure that they are 
functioning properly, because I want people to feel welcome 
when they come to my city. But I also want it to be a place of 
destination, I want it to be a lively place where young people 
can have activities and office buildings, and things of that 
nature can be developed.
    So that is why I was very pleased to join Amtrak officials 
last August to announce that Amtrak was ready to receive 
qualifications from bidders that wanted to partner with Amtrak 
to revitalize Penn Station.
    So I just have two questions. Now, more than 1 year later, 
I want to hear from you what is going on with this process. How 
close are we to announcing the selection of a master developer 
and to learning about the developer's proposals for 
transforming Penn Station?
    I also appreciate that there are limits on what you will be 
able to say here in this public setting. But will you commit to 
calling me as soon as the developer is selected and briefing me 
on the plan for revitalizing this very important station?
    Mr. Moorman. Thank you for the great question, Mr. 
Cummings. The answer is certainly. To the second part of your 
question is we will call you as soon as we have a name and the 
plan in place. We don't have it yet, we have been through a 
couple of iterations on it. It is a fairly complex plan to 
develop, with not only the station itself, but, as you know, a 
couple of adjacent pieces of property that Amtrak controls.
    We have had the RFPs out, we are looking at them and 
reviewing them right now. I would hope that, over the next 60 
to 90 days, we will have the answer for you. But there are 
issues in how to do it best so that it not only accomplishes, 
you know, making it a better train station, which is obviously 
something we are very interested in, but making it a better 
area for the community, which is clearly what you need.
    So, we are in the mid-flight on it. It is one of, as you 
mentioned, several major stations where we are doing the same 
thing--Chicago being one, but certainly we are looking at 
Philadelphia Penn, Washington Union Station. New York Penn is 
its own world. And we are aggressively trying to pursue all of 
them.
    Mr. Cummings. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Denham [presiding]. Thank you, Mr. Cummings.
    As we conclude today's hearing, Mr. Moorman, I would like 
to follow up with just one last question, which you can provide 
greater detail in the future, as we move forward.
    But since our last hearing in June have you publicly 
released your 5-year plan now?
    Mr. Moorman. Yes, sir. Yes. The 5-year plan, along with the 
business line plans, have all been issued.
    Mr. Denham. And can you give us the profits that you are 
projecting for the newly formed Northeast Corridor account 
structure?
    Mr. Moorman. The cash generation on the corridor under the 
FAST structure, which is the new structure that we are 
reporting in, I don't have the number right in front of me. 
Order of magnitude is about $400 million, which, obviously, is 
a significant part of Amtrak's finances. But, as I often say, 
it, itself, doesn't sustain the capital requirements for the 
corridor.
    Mr. Denham. And which projects are detailed out in the 5-
year plan that are going to be utilizing the revenues generated 
from that corridor?
    Mr. Moorman. The basic projects that are detailed are, 
obviously, the Gateway project, starting with Portal North and 
the Hudson Tunnels. In addition, I mentioned earlier the B&P 
Tunnel, the Susquehanna River Bridge. Those are the major 
capital projects.
    But in addition we talk about just all of the work needed 
for the state of good repair, the track work, the work on the 
catenary, and things like that.
    The other thing that we have released, but I think--because 
much of the work was done before I arrived--is the 5-year 
business plans. That is where we are going back and really 
scrubbing to try to develop better strategies for today, in 
terms of what Amtrak can and should be, not only in the 
corridor, but in the long-distance network.
    Mr. Denham. Thank you. Looking forward to seeing greater 
detail on the 5-year plan.
    Mr. Hamberger, final thoughts?
    Mr. Hamberger. Mr. Chairman, I was remiss in answering your 
first question. We have submitted to Deputy Secretary Rosen, 
the designated regulatory reform officer at the Department of 
Transportation, a list of those regulations which we would like 
to see revisited at the Department. So I ask unanimous consent 
to submit that for the record.
    Mr. Denham. Without objection, so ordered.
    Thank you.

        [The information from the Association of American Railroads 
        submitted to Deputy Secretary Rosen is included in response to 
        a post-hearing question for the record and is on pages 63-71.]

    Mr. Denham. Are there any further questions from members of 
the subcommittee?
    Seeing none, I would like to thank each of our witnesses 
for their testimony today. Your contribution to today's hearing 
has been very helpful. I ask unanimous consent that the record 
of today's hearing remain open until such time as our witnesses 
have provided answers to the questions submitted to them in 
writing, and unanimous consent that the record remain open for 
15 days for additional comments and information submitted by 
Members or witnesses included in the record of today's hearing.
    Without objection, so ordered.
    If no other Members have anything to add, the subcommittee 
stands adjourned.
    [Whereupon, at 12:10 p.m., the subcommittee was adjourned.]






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