    [House Hearing, 116 Congress]
    [From the U.S. Government Publishing Office]

    EXAMINING THE SURFACE TRANSPORTATION BOARD'S ROLE IN ENSURING A ROBUST
                             PASSENGER RAIL SYSTEM

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

                                    (116-66)

                                 REMOTE HEARING

                                   BEFORE THE

                     SUBCOMMITTEE ON RAILROADS, PIPELINES,
                            AND HAZARDOUS MATERIALS

                                     OF THE

                                  COMMITTEE ON
                       TRANSPORTATION AND INFRASTRUCTURE
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                               NOVEMBER 18, 2020

                                   __________

                           Printed for the use of the
                 Committee on Transportation and Infrastructure

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

         Available online at: https://www.govinfo.gov/committee/house-
         transportation?path=/browsecommittee/chamber/house/committee/
                                 transportation

                   U.S. GOVERNMENT PUBLISHING OFFICE
     43-578 PDF              WASHINGTON : 2021

                 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

      PETER A. DeFAZIO, Oregon, Chair
    SAM GRAVES, Missouri                 ELEANOR HOLMES NORTON,
    DON YOUNG, Alaska                      District of Columbia
    ERIC A. ``RICK'' CRAWFORD, Arkansas  EDDIE BERNICE JOHNSON, Texas
    BOB GIBBS, Ohio                      RICK LARSEN, Washington
    DANIEL WEBSTER, Florida              GRACE F. NAPOLITANO, California
    THOMAS MASSIE, Kentucky              DANIEL LIPINSKI, Illinois
    SCOTT PERRY, Pennsylvania            STEVE COHEN, Tennessee
    RODNEY DAVIS, Illinois               ALBIO SIRES, New Jersey
    ROB WOODALL, Georgia                 JOHN GARAMENDI, California
    JOHN KATKO, New York                 HENRY C. ``HANK'' JOHNSON, Jr.,
    BRIAN BABIN, Texas                   Georgia
    GARRET GRAVES, Louisiana             ANDRE CARSON, Indiana
    DAVID ROUZER, North Carolina         DINA TITUS, Nevada
    MIKE BOST, Illinois                  SEAN PATRICK MALONEY, New York
    RANDY K. WEBER, Sr., Texas           JARED HUFFMAN, California
    DOUG LaMALFA, California             JULIA BROWNLEY, California
    BRUCE WESTERMAN, Arkansas            FREDERICA S. WILSON, Florida
    LLOYD SMUCKER, Pennsylvania          DONALD M. PAYNE, Jr., New Jersey
    PAUL MITCHELL, Michigan              ALAN S. LOWENTHAL, California
    BRIAN J. MAST, Florida               MARK DeSAULNIER, California
    MIKE GALLAGHER, Wisconsin            STACEY E. PLASKETT, Virgin Islands
    GARY J. PALMER, Alabama              STEPHEN F. LYNCH, Massachusetts
    BRIAN K. FITZPATRICK, Pennsylvania   SALUD O. CARBAJAL, California,
    JENNIFFER GONZALEZ-COLON,            Vice Chair
      Puerto Rico                        ANTHONY G. BROWN, Maryland
    TROY BALDERSON, Ohio                 ADRIANO ESPAILLAT, New York
    ROSS SPANO, Florida                  TOM MALINOWSKI, New Jersey
    PETE STAUBER, Minnesota              GREG STANTON, Arizona
    CAROL D. MILLER, West Virginia       DEBBIE MUCARSEL-POWELL, Florida
    GREG PENCE, Indiana                  LIZZIE FLETCHER, Texas
    MIKE GARCIA, California              COLIN Z. ALLRED, Texas
                                         SHARICE DAVIDS, Kansas
                                         ABBY FINKENAUER, Iowa
                                         JESUS G. ``CHUY'' GARCIA, Illinois
                                         ANTONIO DELGADO, New York
                                         CHRIS PAPPAS, New Hampshire
                                         ANGIE CRAIG, Minnesota
                                         HARLEY ROUDA, California
                                         CONOR LAMB, Pennsylvania

         Subcommittee on Railroads, Pipelines, and Hazardous Materials

     DANIEL LIPINSKI, Illinois, Chair
    ERIC A. ``RICK'' CRAWFORD, Arkansas  ALBIO SIRES, New Jersey
    SCOTT PERRY, Pennsylvania            DONALD M. PAYNE, Jr., New Jersey
    RODNEY DAVIS, Illinois               LIZZIE FLETCHER, Texas
    BRIAN BABIN, Texas                   ANDRE CARSON, Indiana
    MIKE BOST, Illinois                  FREDERICA S. WILSON, Florida
    RANDY K. WEBER, Sr., Texas           MARK DeSAULNIER, California
    DOUG LaMALFA, California             STEPHEN F. LYNCH, Massachusetts
    LLOYD SMUCKER, Pennsylvania          TOM MALINOWSKI, New Jersey
    PAUL MITCHELL, Michigan              GRACE F. NAPOLITANO, California
    BRIAN K. FITZPATRICK, Pennsylvania   STEVE COHEN, Tennessee
    TROY BALDERSON, Ohio                 JESUS G. ``CHUY'' GARCIA, Illinois
    ROSS SPANO, Florida                  ELEANOR HOLMES NORTON,
    PETE STAUBER, Minnesota                District of Columbia
    GREG PENCE, Indiana                  EDDIE BERNICE JOHNSON, Texas
    SAM GRAVES, Missouri (Ex Officio)    ALAN S. LOWENTHAL, California
                                         COLIN Z. ALLRED, Texas, Vice Chair
                                         ANGIE CRAIG, Minnesota
                                         CONOR LAMB, Pennsylvania
                                         PETER A. DeFAZIO, Oregon (Ex
                                         Officio)

                                    CONTENTS

                                                                       Page

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

                     STATEMENTS OF MEMBERS OF THE COMMITTEE

    Hon. Daniel Lipinski, a Representative in Congress from the State
      of Illinois, and Chairman, Subcommittee on Railroads,
      Pipelines, and Hazardous Materials:

        Opening statement............................................     1
        Prepared statement...........................................     4
    Hon. Eric A. ``Rick'' Crawford, a Representative in Congress from
      the State of Arkansas, and Ranking Member, Subcommittee on
      Railroads, Pipelines, and Hazardous Materials:

        Opening statement............................................     5
        Prepared statement...........................................     6
    Hon. Peter A. DeFazio, a Representative in Congress from the
      State of Oregon, and Chairman, Committee on Transportation and
      Infrastructure:

        Opening statement............................................     7
        Prepared statement...........................................     8
    Hon. Sam Graves, a Representative in Congress from the State of
      Missouri, and Ranking Member, Committee on Transportation and
      Infrastructure, prepared statement.............................    93
    Hon. Eddie Bernice Johnson, a Representative in Congress from the
      State of Texas, prepared statement.............................    93

                                   WITNESSES

    Ann D. Begeman, Chairman, Surface Transportation Board, oral
      statement......................................................    10
    Martin J. Oberman, Vice Chairman, Surface Transportation Board,
      oral statement.................................................    12

        Prepared joint statement of Chairman Begeman and Vice
          Chairman Oberman...........................................    14
    Romayne C. Brown, Chair, Board of Directors, Metra Commuter Rail:

        Oral statement...............................................    17
        Prepared statement...........................................    18
    Stephen J. Gardner, Senior Executive Vice President, Chief
      Operating and Commercial Officer, National Railroad Passenger
      Corporation (Amtrak):

        Oral statement...............................................    22
        Prepared statement...........................................    24
    Ian N. Jefferies, President and Chief Executive Officer,
      Association of American Railroads:

        Oral statement...............................................    37
        Prepared statement...........................................    39
    Randal O'Toole, Senior Fellow, Cato Institute:

        Oral statement...............................................    47
        Prepared statement...........................................    48
    Paul P. Skoutelas, President and Chief Executive Officer,
      American Public Transportation Association:

        Oral statement...............................................    51
        Prepared statement...........................................    52

                           SUBMISSIONS FOR THE RECORD

    Submissions for the Record by Hon. Daniel Lipinski:

        Statement of Jim Mathews, President and Chief Executive
          Officer, Rail Passengers Association.......................    60
        Statement of Arun Rao, Chair, States for Passenger Rail
          Coalition, Inc.............................................    67
        Statement of the American Train Dispatchers Association et
          al., ``On the 40th Anniversary of the Staggers Act,
          Congress Should Consider the Collateral Damage to the Rail
          Industry, and How To Fix It''..............................    94

                                    APPENDIX

    Questions to Chairman Ann D. Begeman and Vice Chairman Martin J.
      Oberman, Surface Transportation Board, from:

        Hon. Peter A. DeFazio........................................    97
        Hon. Eric A. ``Rick'' Crawford...............................    97
        Hon. Eleanor Holmes Norton...................................    98
    Questions to Stephen J. Gardner, Senior Executive Vice President,
      Chief Operating and Commercial Officer, National Railroad
      Passenger Corporation (Amtrak), from:

        Hon. Peter A. DeFazio........................................    98
        Hon. Eric A. ``Rick'' Crawford...............................   101
        Hon. Lloyd Smucker...........................................   106

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               November 13, 2020

        SUMMARY OF SUBJECT MATTER

        TO:      LMembers, Subcommittee on Railroads, Pipelines,
    and Hazardous Materials
        FROM:  LStaff, Subcommittee on Railroads, Pipelines, and
    Hazardous Materials
        RE:      LSubcommittee Hearing on ``Examining the Surface
    Transportation Board's Role in Ensuring a Robust Passenger Rail
    System''
    _______________________________________________________________________

                                    PURPOSE

        The Subcommittee on Railroads, Pipelines, and Hazardous
    Materials will meet on Wednesday, November 18, 2020, at 10:00
    a.m. in 2167 Rayburn House Office Building and via Cisco WebEx
    to hold a hearing titled ``Examining the Surface Transportation
    Board's Role in Ensuring a Robust Passenger Rail System.'' The
    hearing will explore the role of the Surface Transportation
    Board (STB or Board) in passenger rail. The Subcommittee will
    hear testimony from members of the Surface Transportation
    Board, Amtrak, Metra, the American Public Transportation
    Association, the Association of American Railroads, and the
    Cato Institute.

                                   BACKGROUND

        The STB is a bipartisan, independent agency with
    jurisdiction over the economic regulation of railroads.\1\ The
    STB's predecessor agency, the Interstate Commerce Commission
    (ICC), was responsible for the economic regulation of railroads
    until Congress created the STB with the ICC Termination Act of
    1995 (ICCTA).\2\ Congress last reauthorized the STB in the
    Surface Transportation Board Reauthorization Act of 2015
    through Fiscal Year 2020.\3\
    ---------------------------------------------------------------------------
        \1\ https://prod.stb.gov/about-stb/.
        \2\ Pub. L. No. 104-88. The ICC was the first independent federal
    regulatory agency, created in 1887 to exercise congressional Article I,
    Section 8 Commerce Clause power. Over time, the ICC's jurisdiction
    expanded to include all common carriers except airlines. Starting in
    the mid-1970's, a wave of de-regulation began to strip away the ICC's
    authority as industries were deregulated and the remaining federal
    authority was transferred to other agencies. Dempsey, Paul Stephen. The
    Rise and Fall of the Interstate Commerce Commission: The Tortuous Path
    from Regulation to Deregulation of America's Infrastructure. 95
    Marquette Law Rev. 1152 (2012).
        \3\ Pub. L. No. 114-110.
    ---------------------------------------------------------------------------
        In general, the STB's jurisdiction includes the following:
         Loverseeing and monitoring railroad commercial
    practices nationally;
         Lenforcing freight railroads' common carrier
    obligations;
         Levaluating challenges to the reasonableness of
    rail rates;
         Lreviewing proposed railroad mergers;
         Lensuring rail carriers provide fair employee
    protective arrangements in certain transactions;
         Lmonitoring rail carrier revenue adequacy;
         Linvestigating rail service matters of regional
    and national significance; and
         Lauthorizing construction, operation,
    discontinuance, and abandonment of rail lines and service.

        ICCTA preempts most state laws, with some limited
    exceptions.\4\
    ---------------------------------------------------------------------------
        \4\ Pub. L. No. 104-88; 49 USC 10501(b) & (c). See Green Mountain
    R.R. Corp. v. Vermont, 404 F.3d 638 (2d Cir. 2005) (ICCTA does not
    preempt state and local governments from exercising traditional police
    powers over the development of railroad property such as electrical,
    plumbing and fire codes).
    ---------------------------------------------------------------------------
        The STB's jurisdiction over passenger rail issues--both
    intercity and commuter--is more limited than its jurisdiction
    over freight rail issues. In general, 49 U.S.C. 10501(a)
    provides that STB has jurisdiction over transportation by rail
    carriers [defined in 49 U.S.C. 10102(5) as a person providing
    common carrier railroad transportation for compensation] that
    is part of the interstate rail network. To assert jurisdiction
    over a particular interstate passenger rail project, STB must
    determine that the project has a sufficient nexus to the
    interstate rail network.\5\ The STB has applied this analysis
    to find that it has jurisdiction over projects such as a Los
    Angeles-to-Las Vegas rail connection,\6\ California's High-
    Speed Rail effort to link a number of cities from Los Angeles
    to San Francisco,\7\ and the Texas Central Railroad high speed
    rail project between Houston and Dallas.\8\
    ---------------------------------------------------------------------------
        \5\ See, e.g., DesertXpress Enterprises, Ltd., Petition for
    Declaratory Order, Docket. No. FD 34914 (STB served May 7, 2010). See
    also American Orient Express v. STB, 484 F.3d 554 (D.C. Cir. 2007)
    (establishing that the plain meaning of the term ``jurisdiction over
    transportation by rail carrier'' applies to STB jurisdictional
    determinations).
        \6\ DesertXpress, FD 34914.
        \7\ Cal. High-Speed Rail Auth., Constr. Exemption, Merced, Madera,
    and Fresno Ctnys., Cal., Docket No. 35724 (STB served June 13, 2013).
        \8\ Texas Central Docket R.R. and Infrastructure, Inc. & Texas
    Central R.R., LLC--Petition for Exemption--Passenger Rail Line Between
    Dallas and Houston, Tex., Docket No. FD 36025 (STB Served July 16,
    2020).
    ---------------------------------------------------------------------------

                                 BOARD MEMBERS

        The STB is composed of five Board members appointed by the
    President and confirmed by the Senate.\9\ Each member serves a
    staggered five-year term, and members are permitted to serve up
    to a year after their term's expiration unless a successor is
    appointed. No more than three members may be appointed from the
    same political party. Currently, three of the five members are
    installed (two Republicans and one Democrat), with two nominees
    awaiting confirmation. The Board is assisted by a staff of
    approximately 142, mostly economists and lawyers.\10\
    ---------------------------------------------------------------------------
        \9\ The STB is able to operate with only one Board member.
        \10\ ``Budget Request Fiscal Year 2021.'' Surface Transportation
    Board, available at https://prod.stb.gov/wp-content/uploads/STB-FY-
    2021-Budget.pdf.
    ---------------------------------------------------------------------------
        The Board currently consists of Chairman Ann D. Begeman
    (Republican), Vice Chairman Martin J. Oberman (Democrat), and
    Patrick Fuchs (Republican). Republican Michelle A. Schultz and
    Democrat Robert Primus are awaiting Senate confirmation to fill
    the two vacancies. Chairman Begeman's term expires at the end
    of 2020.

                             PASSENGER RAIL ISSUES

    I. AMTRAK

        Amtrak is the country's national intercity passenger
    railroad. It is a quasi-governmental entity, formed in the
    early 1970's when several major privately-owned railroads were
    in or nearing bankruptcy and Congress enacted legislation to
    relieve the freight railroads of their common carrier
    obligation to transport passengers.\11\ While freight railroads
    no longer had to fulfill their common carrier passenger
    obligation, Congress included provisions requiring them to
    allow Amtrak trains to use rights-of-way for a fee and give
    preference to Amtrak-run trains except in emergencies.\12\
    Amtrak owns 363 miles of the 457-mile rail line that comprises
    the Northeast Corridor (D.C. to Boston), as well as 95.6 miles
    of track in Michigan and Indiana. Amtrak trains providing
    state-supported service and long-distance service largely
    operate over freight-owned rights-of-way.\13\
    ---------------------------------------------------------------------------
        \11\ Rail Passenger Service Act of 1970 (RPSA), Pub. L. No. 91-518,
    (1970); Peterman, David Randall. CRS Report No. R44973, Amtrak: An
    Overview (September 17, 2017).
        \12\ 49 U.S.C. 24308.
        \13\ Amtrak National Fact Sheet 2016-2017, P. 8, available at
    https://www.amtrak.com/content/dam/projects/dotcom/english/public/
    documents/corporate/nationalfactsheets/National-Fact-Sheet-FY2016-
    0717.pdf.
    ---------------------------------------------------------------------------
        Key Amtrak-related statutory provisions within the STB's
    purview include the following:

    GENERAL JURISDICTION:

        Under 49 U.S.C. 24301(c), the STB's jurisdiction over
    Amtrak operations is limited; many STB provisions dealing with
    rates and other economic aspects of freight shipment do not
    apply to Amtrak.\14\
    ---------------------------------------------------------------------------
        \14\ See 49 U.S.C. 24301(c), (stating ``Application of Subtitle
    IV.--Subtitle IV of this title shall not apply to Amtrak, except for
    sections 11123, 11301, 11322(a), 11502, and 11706. Notwithstanding the
    preceding sentence, Amtrak shall continue to be considered an employer
    under the Railroad Retirement Act of 1974, the Railroad Unemployment
    Insurance Act, and the Railroad Retirement Tax Act'').
    ---------------------------------------------------------------------------

    RIGHT OF ACCESS AND PREFERENCE

        Under 49 U.S.C. 24308(a), Amtrak is authorized to make
    agreements with freight railroads to use their facilities for a
    fee, and these agreements must include a penalty for untimely
    performance. Further, if Amtrak and the freight providers
    cannot come to an agreement, the STB has jurisdiction over the
    dispute and authority to prescribe reasonable terms for Amtrak
    to use the freight facilities.\15\ Pursuant to 49 U.S.C.
    24308(c), ``except in an emergency, intercity and commuter rail
    passenger transportation provided by or for Amtrak has
    preference over freight transportation in using a rail line,
    junction, or crossing unless the Board orders otherwise. . .
    .''
    ---------------------------------------------------------------------------
        \15\ 49 U.S.C. 24308(a)(2)(A).
    ---------------------------------------------------------------------------

    DISPUTE MEDIATION FOR AMTRAK NORTHEAST CORRIDOR AND STATE-SUPPORTED
                        ROUTES

        The Fixing America's Surface Transportation Act of 2015
    (FAST) Act included provisions involving cost recovery by
    Amtrak for Amtrak's operation of state-supported routes and for
    the costs allocated to states (including state commuter
    agencies and other entities) on the Northeast Corridor.\16\
    Included was a provision that gave the Board jurisdiction to
    resolve cost allocation and access disputes between Amtrak, the
    states, and potential non-Amtrak operators of intercity
    passenger rail service. The FAST Act also directed the Board to
    establish procedures for the resolution of disputes.\17\ In
    response, the STB promulgated regulations at 49 CFR 1109.5 to
    establish procedures for mediation of these disputes.\18\
    ---------------------------------------------------------------------------
        \16\ Pub. L. No. 114-94.
        \17\ 49 U.S.C. Sec.  24712(c)(2) & 24905(c)(4).
        \18\ Dispute Resolution Procedures under the Fixing America's
    Surface Transportation Act of 2015, Docket No. EP-734 (Served Nov. 29,
    2016); 49 CFR 1109.5.
    ---------------------------------------------------------------------------

    STB'S ROLE IN METRICS AND STANDARDS FOR ON-TIME PERFORMANCE

        The Passenger Rail Investment and Improvement Act of 2008
    (PRIIA) included a provision that requires the Federal Railroad
    Administration (FRA) and Amtrak to jointly develop new or
    improved metrics and minimum standards for measuring the
    performance and service quality of intercity passenger train
    operations, including on-time performance (OTP) and minutes of
    delay.\19\ As part of that process, PRIIA requires Amtrak and
    FRA to ``consult with the Surface Transportation Board, rail
    carriers over whose rail lines Amtrak trains operate, States,
    passenger representatives, and Amtrak employees about the
    appropriate metrics and standards.'' \20\ Congress enacted the
    provision to support the statutory Amtrak preference over
    freight traffic. The STB is the venue for enforcement if the
    OTP of any intercity passenger train averages less than 80% for
    any two consecutive calendar quarters.\21\
    ---------------------------------------------------------------------------
        \19\ Pub. L. No. 110-690 section 207.
        \20\ Id.
        \21\ 49 U.S.C. Sec.  24308(f).
    ---------------------------------------------------------------------------
        FRA first issued final metrics and standards under Section
    207 of PRIIA in May 2010, but these metrics and standards never
    took effect because the Association of American Railroads (AAR)
    launched various legal challenges to the provision that tied it
    up in litigation.\22\ Ultimately, the courts invalidated an
    arbitration clause in section 207(d), but held that without
    this clause, the provision did not unconstitutionally
    facilitate Amtrak to exercise undue coercive power over its
    freight rail competitors.\23\ After the Supreme Court declined
    to consider the case in June 2019, it was remanded for FRA and
    Amtrak to develop new metrics and standards.\24\
    ---------------------------------------------------------------------------
        \22\ Goldman, Ben. CRS Report No. R45783: Improving Intercity
    Passenger Rail Service in the United States (June 25, 2019), P. 11.
        \23\ Association of American Railroads v. DOT, No. 17-5123 (DC Cir.
    2018).
        \24\ Trains Magazine, Supreme Court declines AAR request on Amtrak
    performance standards (updated) (June 3, 2019), available at https://
    trn.trains.com/news/news-wire/2019/06/03-supreme-court-declines-aar-
    request-on-amtrak-performance-standards.
    ---------------------------------------------------------------------------
        Earlier this week, FRA issued a final rule establishing a
    customer OTP metric, which represents the total number of
    customers on an intercity passenger rail train who arrive at
    their destination point within 15 minutes of their published
    scheduled arrival time divided by the total number of customers
    on such intercity passenger rail train.\25\ FRA, with Amtrak,
    set a minimum standard for customer OTP of 80 percent for any
    two consecutive calendar quarters.\26\ This OTP standard will
    be used in cases where STB investigates substandard performance
    under 49 U.S.C. 24308(f).
    ---------------------------------------------------------------------------
        \25\ 85 Fed. Reg. 17835 (March 31, 2020).
        \26\ Id.
    ---------------------------------------------------------------------------
        The Moving Forward Act (H.R. 2), which passed the House on
    July 1, 2020, included provisions related to Amtrak's
    preferential access to freight-owned corridors. Specifically,
    section 9204 provides a means for Amtrak to seek judicial
    enforcement of the statutory right of preference directly in
    Federal court without intermediaries. Section 9205 updates
    existing provisions to allow Amtrak to add additional services
    on host railroads, while providing that any unreasonable
    interference to freight service they would create is mitigated
    by capital investments.

    II. AUTHORITY OVER COMMUTER RAIL PASSENGER TRANSPORTATION

        STB has limited authority over commuter rail
    transportation. STB does not have jurisdiction over public
    transportation provided by a local government.\27\ Some
    commuter rail transportation is provided by public authorities,
    whereas some partner with Amtrak for various commuter rail
    services and others contract out their operations or services
    to the private sector. An entity providing commuter rail
    operations may be under the Board's jurisdiction if STB
    determines the entity to be a ``rail carrier,'' defined as a
    person providing common carrier railroad transportation for
    compensation. However, it does not include street, suburban, or
    interurban electric railways not operated as part of the
    general system of rail transportation.\28\ Also, the STB can
    determine compensation when agreement cannot be reached between
    Amtrak and commuter rail authorities (or other carriers)
    related to certain railroad assets that were acquired under the
    Regional Rail Reorganization Act of 1973 and the Railroad
    Revitalization and Regulatory Reform Act of 1976.\29\
    ---------------------------------------------------------------------------
        \27\ 49 U.S.C. 10501(c)(2).
        \28\ 49 U.S.C. 10102(5).
        \29\ 49 U.S.C. 24903.
    ---------------------------------------------------------------------------
        Additionally, in 2008, PRIIA authorized the STB to conduct
    nonbinding mediation at the request of a public transportation
    authority or a rail carrier.\30\ Either party may apply for
    STB's nonbinding mediation if, after a reasonable period of
    negotiation, the public transportation authority cannot reach
    an agreement with the rail carrier to use trackage of, and have
    related services provided by, the rail carrier for purposes of
    commuter rail transportation. Either party may also apply for
    nonbinding mediation if, after a reasonable period of
    negotiation, the public transportation authority cannot reach
    an agreement with the rail carrier to acquire an interest in a
    railroad right-of-way for the construction and operation of a
    segregated fixed guideway facility to provide commuter rail
    passenger transportation.\31\ This authority is codified at 49
    U.S.C. section 28502 (trackage use) and section 28503 (rights-
    of-way). To date, this process has not been used.
    ---------------------------------------------------------------------------
        \30\ Pub. L. No. 110-432, div. B. title IV, Sec. 401(a).
        \31\ 49 U.S.C. Sec. Sec.  28502 and 28503, respectively.
    ---------------------------------------------------------------------------
        H.R. 2 included provisions that would amend sections 28502
    and 28503 to require that a rail carrier must provide ``good
    faith consideration'' to a ``reasonable request'' from a
    provider of commuter rail passenger transportation for access
    to trackage and provision of related service and to such a
    request for access to rail right-of-way for purposes of
    commuter rail passenger transportation.\32\ Additionally, under
    H.R. 2, in circumstances in which dispatching for the relevant
    trackage is controlled by a rail carrier other than the
    trackage owner or the right-of-way owner, both the controlling
    rail carrier and the owner of the trackage or right-of-way
    would be subject to STB's nonbinding mediation authority and
    included in any mediation process.
    ---------------------------------------------------------------------------
        \32\ Sections 9401 and 9402, Title IV, Division D, H.R. 2, the
    Moving Forward Act, respectively.
    ---------------------------------------------------------------------------

                                   WITNESSES

         LMs. Ann D. Begeman, Chairman, Surface
    Transportation Board
         LMr. Martin J. Oberman, Vice Chairman, Surface
    Transportation Board
         LMs. Romayne C. Brown, Chair of the Board of
    Directors, Metra
         LMr. Stephen Gardner, Senior Executive Vice
    President, Amtrak
         LMr. Ian Jefferies, President and Chief Executive
    Officer, Association of American Railroads
         LMr. Randal O'Toole, Senior Fellow, Cato Institute
         LMr. Paul Skoutelas, President and Chief Executive
    Officer, American Public Transportation Association

    EXAMINING THE SURFACE TRANSPORTATION BOARD'S ROLE IN ENSURING A ROBUST
                             PASSENGER RAIL SYSTEM

                                  ----------

                          WEDNESDAY, NOVEMBER 18, 2020

                      House of Representatives,
    Subcommittee on Railroads, Pipelines, and Hazardous
                                             Materials,
                Committee on Transportation and Infrastructure,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:05 a.m., in
    room 2167 Rayburn House Office Building and via Cisco Webex,
    Hon. Daniel Lipinski (Chairman of the subcommittee) presiding.
        Mr. Lipinski. OK. We will come to order.
        I ask unanimous consent that the chair be authorized to
    declare a recess at any time during today's hearing.
        Without objection, so ordered.
        I also ask unanimous consent that Members not on the
    subcommittee be permitted to sit with the subcommittee at
    today's hearing and ask questions.
        Without objection, so ordered.
        Now, as this is a hybrid hearing, I want to remind Members
    of key regulations in the House Committee on Rules to ensure
    this hearing goes smoothly. Members must be visible onscreen
    for purposes of identification when joining the hearing.
    Members must also continue to use the video function of today's
    software platform, Cisco Webex, for the remainder of the time
    they are attending this hearing unless experiencing
    connectivity issues or other technical problems.
        If a Member experiences any connectivity issues or other
    technical problems, please inform committee staff as soon as
    possible so you can receive assistance. A chat function is
    available for Members on the Cisco Webex platform for this
    purpose. Members can also call the committee's main phone line
    at 202-225-4472 for technical assistance by phone.
        Members may not participate remotely in any other
    proceedings that may be occurring simultaneously.
        It is the responsibility of each Member seeking recognition
    to unmute their microphone prior to speaking. To avoid any
    inadvertent background noise, I would request that every Member
    keep their microphone muted when not seeking recognition to
    speak. If I hear any inadvertent noise, I will ask the Member
    to please mute their microphone.
        Finally, despite this being a hybrid hearing, I want to
    emphasize that all of the standard rules of decorum apply.
        As the chair of today's hearing, I will make a good faith
    effort to provide every Member experiencing connectivity issues
    an opportunity to participate fully in the proceedings.
        Members are allowed their standard 5 minutes to ask
    questions.
        To insert a document into the record, please have your
    staff email it to the committee's clerk, Mike Twinchek.
        This hearing is also being livestreamed for the public to
    view.
        So now that I have gotten all of those formalities taken
    care of, I should say the same applies to the witnesses. If you
    have any connectivity problems, don't be concerned. We will get
    all of those things worked out. So we have been doing this for
    a few months now, and there are always some glitches, but
    hopefully everything will run smoothly today.
        I want to begin by recognizing myself for 5 minutes for an
    opening statement.
        Good morning. I want to first say I will be a little more
    than 5 minutes. This is the last hearing of the subcommittee
    for the year, and there are a few things I want to go over in
    addition to talking about today's hearing.
        I want to first welcome you to the final hearing of the
    Railroads, Pipelines, and Hazardous Materials Subcommittee for
    the 116th Congress.
        During a very tough 2 years, I am very proud of the work
    that this subcommittee has done, along with Chairman DeFazio.
    The House passed an historic surface transportation
    reauthorization bill that includes a robust $60 billion
    investment for rail infrastructure, the highest amount ever.
        As a strong proponent of passenger rail, I am proud that we
    were able to include very significant Amtrak investment and to
    include a top priority of mine in making commuter railroads
    eligible for a greatly expanded CRISI grant program. That
    program, which can fund a wide variety of projects, including
    quiet zones, grade separations, and station improvements, was
    expanded to $7 billion over 5 years.
        The other priority of mine that will improve safety and
    reduce delays was the establishment of a dedicated grade
    separation program.
        Now, I am optimistic that in the Biden administration and
    under the leadership of Chairman DeFazio, this bill will get
    done. As far as other work under the subcommittee for the rest
    of this year, I remain very hopeful that we will complete a
    pipeline safety reauthorization bill and have that signed into
    law.
        Now, in our hearing today, we will be looking at the
    Surface Transportation Board's role in ensuring we have a
    robust national passenger rail system, both intercity and
    commuter. The STB was last reauthorized 5 years ago, and that
    authorization expired October 1st. So this is a good time to be
    talking about this issue.
        I am also hopeful that STB will get its full five confirmed
    Board Members which is authorized in the 2015 bill.
        I am not just a big supporter of passenger rail. I am a
    frequent passenger on both Metra commuter rail at home and on
    Amtrak.
        To achieve a more robust passenger rail system, both
    intercity and commuter, we need to do a few things. First, we
    should significantly increase the amount of public investment
    in rail infrastructure.
        Second, we will have to expand our domestic rail supply
    industry so we can meet the demand.
        Finally, we will need to establish a more balanced and
    efficient process to utilize existing trackage, much of which
    is owned by freight railroads, for expanded passenger rail
    service.
        Trying to expand passenger rail service on a new right-of-
    way is just not feasible from a cost or time perspective in a
    majority of the country. In the places that it is feasible, we
    should have public investment, while also encouraging private
    investment. But where this is not feasible, the expansion on
    current rail lines does not need to be contentious.
        Investments by the public sector to establish or expand
    passenger rail service can also help freight railroads by
    increasing freight capacity when not used by passenger rail
    service. This model in particular has been used to great
    success by the BNSF Railway.
        The Surface Transportation Board is a critical part of this
    future, which is why I wanted to have a hearing focused on the
    STB's role in helping achieve a better and more expansive
    passenger rail system. Congress in recent years has expanded
    STB's jurisdiction on intercity passenger rail but more is
    needed.
        With respect to intercity passenger rail, the STB has
    responsibility for adjudicating any disputes when Amtrak or
    another railroad wants to initiate new rail service on existing
    rail lines.
        In northern Illinois, there has been longstanding interest
    to start new rail service between Chicago and the Quad Cities.
    A significant amount of Federal and State funds has been
    allocated to this project, but it has been caught in continuing
    delays due to a lack of cooperation. We should look more at
    what can be done in situations such as this.
        Beginning in 2008, STB was assigned the task of enforcing
    the Federal Railroad Administration's on-time intercity rail
    performance metrics. The recent publication of the on-time
    performance rule by the FRA makes the STB's role in solving
    Amtrak-freight disputes even more critical.
        First, mentioned in the written testimony, Amtrak may want
    to add more about the agency's desire for the STB to have
    additional authority and expertise to solve Amtrak-freight
    disputes in a timely and cost-effective manner just like the
    STB has done to resolve shipper disputes. Unlike Amtrak, Metra
    and other commuter railroads do not have a statutory Federal
    preference prioritizing commuter trains over freight trains.
        Additionally, commuter railroads generally do not have
    standing to bring cases before the STB. Therefore, commuter
    railroads have very limited leverage when it comes to trying to
    expand their service on freight rail lines or ensuring that
    freight railroads do not delay commuter trains. This is
    oftentimes not a problem, as I have been involved in helping
    Metra work with a number of railroads to successfully expand
    and improve service on their lines in the Chicagoland region.
    An excellent example is when I worked with Norfolk Southern to
    create opportunities to start weekend service through my
    district with the SouthWest Service line.
        So I would like to take note that freight railroads can be
    collaborative partners to help improve commuter service, and
    they have been at many times, but sometimes there are issues.
    For these occasions I believe that Congress should establish a
    dispute resolution process between commuter railroads and
    freight railroads at the STB. If this is not enough to help
    give commuters the type of service they deserve, perhaps
    Congress should take a balanced look at other options that can
    help improve service for commuters.
        With all of these challenges, there must be a better, yet
    still balanced, way it can achieve desirable outcome for public
    and private stakeholders.
        I look forward to hearing from all of our witnesses today
    on the role of the Surface Transportation Board in helping
    achieve better passenger rail system.
        I would like to welcome two witnesses in particular today.
        One is Metra's new chairwoman, Romayne Brown. Chairwoman
    Brown made history this year as the first African-American
    woman to chair Metra. She brings a lifetime of experience in
    public transit in Chicagoland to the position.
        Second we have Marty Oberman, current Vice Chair of STB,
    who I have known for about 45 years, although I hate to admit
    that for either of us. I believe this is the first
    nonconfirmation congressional hearing that he has testified at.
        So a warm welcome to both of you and all of our witnesses.
        With that, I thank everyone for their indulgence for this
    time here, and I am going to yield to Ranking Member Crawford
    for an opening statement.
        [Mr. Lipinski's prepared statement follows:]

        Prepared Statement of Hon. Daniel Lipinski, a Representative in
      Congress from the State of Illinois, and Chairman, Subcommittee on
                 Railroads, Pipelines, and Hazardous Materials
        Good morning. I want to welcome everyone to the final hearing of
    the Railroads, Pipelines and Hazardous Materials Subcommittee for the
    116th Congress. During a very tough two years, I am very proud of the
    work that this Subcommittee has done along with Chairman DeFazio. The
    House passed an historic surface transportation reauthorization bill
    that includes a robust $60 billion investment for rail infrastructure,
    the highest amount ever. As a strong proponent of passenger rail, I'm
    proud that we were able to include very significant Amtrak investment
    and to include a top priority of mine in making commuter railroads
    eligible for a greatly expanded CRISI grant program. That program,
    which can fund a wide variety of projects including quiet zones, grade
    separations, and station improvements, was expanded to $7 billion over
    5 years. Another priority of mine that will improve safety and reduce
    delays was the establishment of a dedicated grade crossing separation
    program. I am optimistic that in a Biden Administration and under the
    leadership of Chairman DeFazio this bill will get done. As far as other
    work under this subcommittee for the rest of the year, I remain very
    hopeful that we can complete a pipeline safety reauthorization bill and
    have that signed into law.
        In our hearing today we will be looking at the Surface
    Transportation Board's role in ensuring we have a robust national
    passenger rail system, both intercity and commuter. The STB was last
    reauthorized 5 years ago and that authorization expired October 1st, so
    this is a good time to be talking about these issues. I'm also hopeful
    that the STB will get its full five confirmed board members, which was
    authorized in the 2015 bill. I'm not just a big supporter of passenger
    rail, I'm a frequent passenger both on Metra commuter rail at home and
    on Amtrak. To achieve a more robust passenger rail system, both
    intercity and commuter, we need to do a few things. First, we should
    significantly increase the amount of public investment in rail
    infrastructure. Second, we will have to expand our domestic rail supply
    industry so we can meet the demand. Finally, we will need to establish
    a more balanced and efficient process to utilize existing trackage,
    much of which is owned by freight railroads, for expanded passenger
    rail service. Trying to expand passenger rail service on new right of
    way is just not feasible from a cost or time perspective in the
    majority of the country. In the places it is, we should have public
    investment while also encouraging private investment. But where this is
    not feasible, the expansion on current rail lines does not need to be
    contentious. Investments by the public sector to establish or expand
    passenger rail service can also help freight railroads by increasing
    freight capacity when not used by passenger rail service. This model in
    particular has been used to great success by the BNSF railroad.
        The Surface Transportation Board (STB) is a critical part of this
    future, which is why I wanted to have a hearing focused on the STB's
    role in helping achieve a better and more expansive passenger rail
    system. Congress in recent years has expanded the STB's jurisdiction on
    intercity passenger rail but more is needed.
        With respect to intercity passenger rail, the STB has the
    responsibility of adjudicating any disputes when Amtrak or another
    railroad wants to initiate new rail service on an existing rail line.
    In northern Illinois, there has been long-standing interest to start
    new rail service between Chicago and the Quad Cities. A significant
    amount of federal and state funds have been allocated to this project,
    but it has been caught in continuing delays due to a lack of
    cooperation. We should look more at what could be done in situations
    such as this.
        Beginning in 2008, STB was assigned the task of enforcing the
    Federal Railroad Administration's on time intercity rail performance
    metrics. The recent publication of the on-time performance rule by the
    FRA makes the STB's role in solving Amtrak-freight disputes even more
    critical. Though it's mentioned in the written testimony, Amtrak may
    want to add more about the agency's desire for the STB to have
    additional authority and expertise to solve Amtrak-freight disputes in
    a timely and cost effective manner just like the STB has done to better
    resolve shipper disputes.
        Unlike Amtrak, Metra and other commuter railroads do not have a
    statutory federal preference prioritizing commuter trains over freight
    trains. Additionally, commuter railroads generally do not have standing
    to bring cases before the STB. Therefore, commuter railroads have very
    limited leverage when it comes to trying to expand their service on
    freight rail lines or ensuring that freight railroads do not delay
    commuter trains. This is oftentimes not a problem, as I have been
    involved in helping Metra work with a number of railroads to
    successfully expand and improve service on their lines. An excellent
    example is when I worked with Norfolk Southern to create opportunities
    to start weekend service through my district for the SouthWest Service
    line. So I would like to take note that freight railroads, NS in this
    case, can be collaborative partners to help improve commuter service.
        But sometimes there are issues. For these occasions, I believe that
    Congress should establish a dispute resolution process between commuter
    railroads and freight railroads at the STB. If this is not enough to
    help give commuters the type of service they deserve, perhaps Congress
    should take a balanced look at other options that can help improve
    service for commuters. With all of these challenges, there must be a
    better, yet still balanced, way that can achieve desirable outcomes for
    public AND private stakeholders.
        I look forward to hearing from all of our witnesses today on the
    role of the Surface Transportation Board in helping achieve a better
    passenger rail system. I would like to welcome two witnesses in
    particular today. One is Metra's new Chairwoman, Romayne Brown.
    Chairwoman Brown made history this year as the first African-American
    woman to chair Metra. She brings a lifetime of experience in public
    transit in Chicagoland to the position. Second, we have Marty Oberman,
    current vice-chair of STB, who I have known for 45 years. I believe
    this is the first non-confirmation Congressional hearing he has
    testified at. So a warm welcome to both of you and all our witnesses.
        With that, I yield to Ranking Member Crawford for an opening
    statement.

        Mr. Crawford. Thank you, Chairman Lipinski, for holding
    this hearing and thanks to our witnesses for being here today.
        I especially want to thank Chairman Lipinski for his
    leadership of this subcommittee and his willingness to operate
    in a bipartisan manner. I appreciate my friend's thoughtful
    approach on rail and pipeline safety issues and will miss
    working with him, and I certainly wish him the best in every
    future endeavor.
        Our hearing today is to review how the Surface
    Transportation Board works to support passenger railroads. The
    COVID-19 pandemic has devastated our Nation's passenger rail
    network. Amtrak has significantly cut its routes, announced
    large cuts to its workforce, and has requested record amounts
    of taxpayer funding for this fiscal year. We must work to
    ensure that Amtrak's services return in a way that offers the
    most benefit to riders and makes responsible use of the
    taxpayer resources required to keep it running.
        We must also balance the needs of passenger rail with the
    most important needs of our Nation's robust and resilient
    freight rail network. We cannot discuss important issues, such
    as preference, on-time performance, and Amtrak schedules,
    without fully considering the needs of the freight railroads
    and their rail network, which have continued to deliver
    essential goods throughout the country during this difficult
    year.
        The Surface Transportation Board, Amtrak, and the FRA have
    addressed these issues recently, including through decisions
    and rulemaking that seek to improve and modernize on-time
    performance metrics and standards.
        Thank you again to all of our witnesses for being here
    today. And I yield back the balance of my time.
        [Mr. Crawford's prepared statement follows:]

    Prepared Statement of Hon. Eric A. ``Rick'' Crawford, a Representative
          in Congress from the State of Arkansas, and Ranking Member,
         Subcommittee on Railroads, Pipelines, and Hazardous Materials
        Thank you, Chair Lipinski, for holding this hearing. And thanks to
    our witnesses for being here today.
        I especially want to thank Chair Lipinski for his leadership of
    this subcommittee and his willingness to operate in a bipartisan
    manner. I appreciated his thoughtful approach on rail and pipeline
    safety issues and will miss working with him. I certainly wish him the
    best in his future endeavors.
        Our hearing today is to review how the Surface Transportation Board
    works to support passenger railroads. The COVID-19 pandemic has
    devastated our nation's passenger rail network.
        Amtrak has significantly cut its routes, announced large cuts to
    its workforce, and has requested record amounts of taxpayer funding for
    this fiscal year. We must work to ensure that Amtrak services return in
    a way that offers the most benefit to riders and makes responsible use
    of the taxpayer money required to keep it running.
        We must also balance the needs of passenger rail with the important
    needs of our Nation's robust and resilient freight rail network. We
    cannot discuss important issues such as preference, on-time
    performance, and Amtrak schedules without fully considering the needs
    of the freight railroads and their rail network, which have continued
    to deliver essential goods throughout the country during this difficult
    year.
        The Surface Transportation Board, Amtrak, and the FRA have
    addressed these issues recently, including through decisions and
    rulemakings that seek to improve and modernize on-time performance
    metrics and standards.
        Thank you again to all of our witnesses for being here today.

        Mr. Lipinski. Thank you, Ranking Member Crawford. And you
    saved everyone's time. I guess I used up your time in my
    statement, but thank you. It has been great working with you
    over these past 2 years. So thank you very much for all of your
    cooperation in our work together.
        Mr. Crawford. My privilege. Thank you.
        Mr. Lipinski. With that, I am going to recognize the full
    committee chairman, Peter DeFazio.
        Mr. DeFazio. Thanks, Chairman Lipinski, Ranking Member
    Crawford, for today's hearing on the STB's role in ensuring a
    robust passenger rail system. I would note it is Chairman
    Lipinski's last hearing, and I want to thank him for his years
    of service to this committee and all of the constructive work
    he has done.
        This is obviously a challenging time for Amtrak. Intercity
    and commuter rail has been decimated by the pandemic, and this
    puts additional burdens on both Amtrak's budget and on city and
    State budgets also.
        The House has taken the initiative now, well, three times--
    CARES, Heroes 1, and Heroes 2--to pass a comprehensive COVID
    relief bill that would include support for Amtrak and commuter
    rail. Hopefully, the McConnell-led Senate will see the wisdom
    of providing some additional assistance in this time of
    economic crisis in the pandemic in the near future.
        Passenger rail is an important part of the climate change
    puzzle. It is extremely efficient, fuel efficient, much more so
    than individual passenger vehicles, buses, and airplanes
    obviously. And the commuter systems in particular take cars off
    our congested roadways and reduce short-haul flights.
        I think there is tremendous potential in the city pairs
    that are 100 to 500 miles apart if we have dependable and at
    least higher speed service. I am not even going to talk about
    high speed. You know, Eugene to Portland, 110 miles, supposed
    to be 2 hours, 35 minutes. Last time I took it, it was 3 hours
    and 30 minutes. If they could get it near 2 hours, 2 hours and
    15 minutes regularly, there are hundreds and hundreds of more
    passengers who would take that train every day rather than
    getting on Interstate 5, which is frequently blocked because of
    wrecks and you can't predict how long it is going to take you
    to get to Portland; same to Seattle.
        These kinds of city pairs have tremendous potential to
    displace commuter flights and to displace traffic on our
    highways, but they have to run on time. This has been a
    challenge in Oregon, and as I mentioned, the southbound
    Cascades State-supported route had a 58.3-percent on-time
    performance rate, totally unacceptable, and it is not a way to
    grow passenger rail service.
        Freight delays are a significant source of Amtrak delays.
    Most Amtrak trains outside of the Northeast Corridor run on
    tracks owned by the freight railroads. Freights are legally
    required to give preference to Amtrak when dispatching trains.
    This preference was part of the bargain when Congress many
    years ago created Amtrak and relieved freight rails of their
    common carrier obligations to transport passengers. It was not
    rescinded. It was just transferred to Amtrak.
        But for many years there have been questions about whether
    the freight railroads are holding up their end of the deal by
    giving preference to Amtrak trains. In fact, Congress included
    provisions to fix Amtrak on-time performance in 2008. That is
    when PRIIA added provisions directing the FRA and Amtrak to
    work to develop on-time performance metric standards to be used
    as a basis for an STB investigation.
        Unfortunately, those benefits haven't been realized. It has
    been 12 years since PRIIA was passed. FRA's metrics and
    standards for on-time performance were published this last
    Monday, 12 years later, for the second time, and after this
    long and unacceptable delay, I look forward to seeing an
    improvement on Amtrak's performance both in my State and
    nationwide.
        I do believe that we can have a very healthy and robust
    freight rail system. Today the Amtrak testimony will be
    provided by a former train dispatcher who says that he just
    can't believe that freights say, well, we have got to run one
    train on that route today, therefore, you are going to be
    unnecessarily delayed--that they can't coordinate these things
    better.
        We are willing to partner with the freight railroads. In my
    State we built some additional sidings but now they have
    lengthened the trains to the point where they can't use those
    sidings. There has to be some compromise here, and we have got
    to find a middle ground to have a robust freight system because
    freight rail is the most efficient way to move large amounts of
    freight in this country, much more so than trucks obviously.
    The only thing more efficient is maritime, and that won't get
    us everywhere in the country.
        I want to weigh in on the disputes between Amtrak and
    commuter railroads. Both Amtrak and the commuter railroads
    require the same scarce access to tracks and platforms in major
    urban areas. It is expensive to maintain and expand, modernize
    this infrastructure, but there is no commuter railroad that I
    am aware of that makes money, and Amtrak only claims to make
    money on the NEC. Neither can subsidize the other.
        Worldwide I am not aware of any railroads, passenger
    railroads that make money, although Virgin claims they do in
    England because they don't have to maintain the tracks. Pretty
    easy to make money if all you have to do is put a train set on
    it and run it back and forth. That is not the major expense.
        To say that we shouldn't be subsidizing commuter rail or we
    shouldn't be subsidizing Amtrak is just saying you don't want
    to run trains, because everywhere else in the world they are
    subsidized.
        But my message to commuter rail and to Amtrak is you have
    to work together and resolve the massive challenges you face,
    and this committee will be happy to help play a role in
    facilitating that coordination and cooperation.
        With that, Mr. Chairman, I yield back the balance of my
    time.
        [Mr. DeFazio's prepared statement follows:]

       Prepared Statement of Hon. Peter A. DeFazio, a Representative in
         Congress from the State of Oregon, and Chairman, Committee on
                       Transportation and Infrastructure
        Thank you, Chairman Lipinski and Ranking Member Crawford, for
    calling today's hearing on the Surface Transportation Board's role in
    ensuring a robust passenger rail system. Also, today is Chairman
    Lipinski's last hearing as chairman of the Subcommittee on Railroads,
    Pipelines, and Hazardous Materials--thank you for your dedication and
    service.
        I want to first recognize that this is a challenging time for
    Amtrak and commuter rail systems. Ridership on intercity and commuter
    rail has been decimated by the pandemic. And efforts to forestall the
    continued rise in infections, hospitalizations, and deaths have been
    needlessly politicized and rendered ineffective. Ridership levels are
    going to stay depressed for some time. Unfortunately, this puts
    additional burden on already depleted state and city budgets. The House
    has repeatedly taken the initiative to pass a comprehensive COVID
    relief bill that includes substantial relief for Amtrak and commuter
    rail systems. Hopefully the Senate will come to its senses soon.
        Passenger rail is an important piece of the climate change puzzle.
    Rail's benefits extend far beyond the passengers who take it. By
    serving as an alternative to driving and flying, Amtrak and commuter
    systems help to take cars off our congested roadways and reduce short
    haul flights. This reduces travel times and helps keep the air clear of
    noxious pollutants. If we are serious about stopping climate change, we
    must give travelers more attractive and cleaner options, such as
    reliable and timely passenger rail.
        In my state of Oregon, residents rely on the Oregon Cascades state-
    supported route, the Coast Starlight Amtrak long-distance route, and
    TriMet's commuter train. Each service plays an important part in the
    transportation network, and I want them all to continue to thrive and
    provide more sustainable travel options.
        One thing you need in order to expand rail service and attract
    riders is for the trains to run on time. This has been a challenge in
    Oregon--in 2019, service on the southbound Cascades state-supported
    route had a 58.3 percent on time performance rate. That is totally
    unacceptable, and it is not the way to grow passenger rail service.
        Unfortunately, freight delays are a significant source of Amtrak
    delays systemwide. Most Amtrak trains outside of the Northeast Corridor
    run on tracks owned by the freight railroads. The freights are legally
    required to give preference to Amtrak when dispatching trains--this
    preference was part of the grand bargain when Congress created Amtrak
    and relieved the freight railroads of their common carrier obligations
    to transport passengers. But for many years, there have been questions
    about whether the freight railroads are holding up their end of the
    deal by giving preference to Amtrak trains.
        In fact, Congress included provisions to fix Amtrak on-time
    performance way back in 2008. That is when PRIIA added provisions
    directing the Federal Railroad Administration and Amtrak to work to
    develop ``on-time performance'' metrics and standards to be used as the
    basis for a Surface Transportation Board investigation. Unfortunately,
    these benefits have not been realized. It's been 12 years since PRIIA
    was passed, and FRA's metrics and standards for on-time performance
    were just published on Monday. After the long and unacceptable delay, I
    look forward to the STB overseeing improvement to Amtrak's on-time
    performance--both in my district and nationwide.
        I also want to weigh in on the disputes between Amtrak and commuter
    railroads. Both Amtrak and commuter railroads require the same scarce
    access to tracks and platforms in major urban areas. Maintaining and
    expanding this infrastructure is expensive, but no commuter railroad
    makes money, and Amtrak only makes money along the NEC. Neither can
    subsidize the other. In this pandemic, both are bleeding money and
    slashing service. My message to commuter railroads and Amtrak is: You
    will have more success if you unite and work together to resolve the
    massive challenges you face.
        I look forward to hearing from our witnesses today about how they
    plan to cooperate to address these big challenges.

        Mr. Lipinski. Thank you, Chairman DeFazio. And thank you
    for all of your work and the work you will continue to do. I
    very much enjoyed working with you over all of these years. You
    certainly know the issues very well, and I am glad to see that
    you are continuing on now.
        So with that, I want to welcome our witnesses for our panel
    today. We have Ms. Ann D. Begeman, Chairwoman of the Surface
    Transportation Board; Martin J. Oberman, Vice Chairman of the
    Surface Transportation Board; Ms. Romayne C. Brown, chair of
    the board of directors of Metra; Mr. Stephen Gardner, senior
    executive vice president of Amtrak; Mr. Ian Jefferies,
    president and chief executive officer, Association of American
    Railroads; Mr. Randal O'Toole, senior fellow at the Cato
    Institue; and Mr. Paul Skoutelas, president and chief executive
    officer, American Public Transit Association.
        Thank you all for participating today, and I look forward
    to your testimony.
        Without objection, our witnesses' full statements will be
    included in the record.
        Now, since your written testimony has been made a part of
    the record, the subcommittee requests that you limit your oral
    testimony to 5 minutes.
        And now we are going to proceed with the testimony in the
    order that I read out the names of the witnesses, and we will
    begin with Ms. Begeman.
        You may proceed.

     TESTIMONY OF ANN D. BEGEMAN, CHAIRMAN, SURFACE TRANSPORTATION
    BOARD; MARTIN J. OBERMAN, VICE CHAIRMAN, SURFACE TRANSPORTATION
       BOARD; ROMAYNE C. BROWN, CHAIR, BOARD OF DIRECTORS, METRA
       COMMUTER RAIL; STEPHEN J. GARDNER, SENIOR EXECUTIVE VICE
      PRESIDENT, CHIEF OPERATING AND COMMERCIAL OFFICER, NATIONAL
      RAILROAD PASSENGER CORPORATION (AMTRAK); IAN N. JEFFERIES,
    PRESIDENT AND CHIEF EXECUTIVE OFFICER, ASSOCIATION OF AMERICAN
     RAILROADS; RANDAL O'TOOLE, SENIOR FELLOW, CATO INSTITUTE; AND
       PAUL P. SKOUTELAS, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
               AMERICAN PUBLIC TRANSPORTATION ASSOCIATION

        Ms. Begeman. Good morning. Thank you very much. Mr.
    Lipinski, this is also, I believe, my last hearing as Chairman
    of the STB, so thank you for the opportunity.
        And I also would like to thank Chairman DeFazio and Ranking
    Member Crawford and all of the Members for allowing my
    colleague, Martin, and I to testify before you.
        We greatly appreciate your interest in the Surface
    Transportation Board's work and welcome the opportunity to
    discuss our passenger rail service jurisdiction.
        I will begin by discussing that role, and Marty will then
    discuss the Board's other important work. And I also do want to
    acknowledge our other Board Member colleague, Patrick Fuchs,
    who was not asked to testify today.
        My two colleagues joined the Board in January of 2019, and
    we have worked to timely resolve our cases and whenever
    possible to resolve them by consensus, and I want to thank
    them.
        As you know, the Board's jurisdiction over intercity
    passenger rail carriers is more limited than its jurisdiction
    over freight rail carriers. In general, intercity passenger
    rail operations are subject to Board jurisdiction when they
    provide rail service between two States. An example is
    DesertXpress, which has proposed constructing a high-speed rail
    line between southern California and Las Vegas, Nevada.
        There are also intercity passenger rail projects that
    operate within a single State but still fall within the Board's
    jurisdiction because of their extensive links to the interstate
    rail network, typically through those connections with Amtrak.
        An example is Texas Central's proposed high-speed rail line
    between Dallas and Houston. Initially, in 2016, the Board found
    that it did not have jurisdiction over the project as proposed
    at the time because the line would neither have been part of
    nor sufficiently connected to the interstate rail network.
        However, in July of this year, the Board found that the
    proposed line would be part of the interstate rail network and,
    therefore, subject to the Board's jurisdiction. This finding
    was based on new evidence presented by Texas Central showing
    both a clearly defined through-ticketing arrangement with
    Amtrak and a transfer service that would facilitate the
    movement of passengers in interstate commerce.
        In contrast, an intercity passenger rail service that
    operates within a single State and does not connect with the
    interstate rail network would not fall within the Board's
    jurisdiction. For example, the Board found in 2012 that the All
    Aboard Florida service planned between Miami and Orlando was
    not within the Board's jurisdiction due to its lack of
    connectivity to the national rail network.
        Other examples of such operations include tourist and
    excursion trains which typically operate within a single State
    and do not interchange passengers with the interstate carriers.
    Most intercity passenger rail service is provided by Amtrak,
    which is statutorily excluded from many of the Board's
    regulatory requirements applicable to freight carriers.
        However, with the enactment of the Passenger Rail
    Investment and Improvement Act of 2008, PRIIA, which both
    Chairman Lipinski and Chairman DeFazio have mentioned in their
    opening comments, as well as the Fixing America's Surface
    Transportation Act of 2015, FAST Act, the Board assumed
    additional Amtrak oversight responsibilities, including the
    authority to conduct investigations under certain circumstances
    and, when appropriate, to award relief and identify reasonable
    measures to improve performance on passenger rail routes.
        As you know, lengthy litigation over the constitutionality
    of the PRIIA provision directing the FRA and Amtrak to
    establish on-time performance metrics and standards has
    prevented the Board from fully utilizing this authority before
    now.
        After the constitutional issues were finally resolved last
    year, the FRA issued an ERISA proposed rulemaking on its new
    on-time performance and service metrics and standards. That
    rule, as you have heard, was finalized on Monday, and when it
    becomes effective, the Board expects to be able to fully
    exercise its authority under the law.
        The Board generally does not have jurisdiction over public
    passenger transportation provided by local governments, which
    includes commuter rail passenger transportation and services,
    such as trollies, subways, and light rail lines. Under PRIIA,
    however, the Board is authorized to mediate disputes involving
    commuter rail providers seeking access to freight railroad
    tracks and services.
        The Board also has certain limited jurisdiction over
    matters involving commuter services, including establishing
    appropriate compensation paid by the commuter rail provider to
    Amtrak for use of certain Amtrak facilities when the parties
    cannot reach an agreement on their own.
        The Board is currently handling several pending matters
    involving passenger and commuter services. One involves Metra's
    continued use of Amtrak's Chicago Union Station. In that case,
    which the Vice Chairman has recused himself, the Board required
    Amtrak to continue to provide access to Metra on an interim
    basis while the parties participate in Board-sponsored
    mediation which was recently extended at the parties' joint
    request.
        Similarly, in a petition filed by the Southeastern
    Pennsylvania Transportation Authority, SEPTA, to determine
    compensation for the use of certain Amtrak stations and parking
    facilities, the Board required Amtrak to continue to provide
    access on an interim basis while granting a joint motion to
    hold the proceeding in abeyance while the parties continued
    negotiations.
        In another matter, the Board issued interim findings and
    guidance to Amtrak and the Canadian National Railway and we
    initiated Board-sponsored mediation in an effort to establish
    reasonable terms and conditions for Amtrak's use of CN's
    facilities and services.
        Finally, the Board is also considering a request by
    DesertXpress to modify the route of the previously authorized
    high-speed rail line between California and Nevada.
        As these proceedings are pending, we will not be able to
    comment further on them, but we did want to highlight them for
    the committee.
        While freight matters do comprise the bulk of the work
    before the Board, our passenger rail work is important.
        And I will now turn to Vice Chairman Oberman and thank the
    committee.
        Mr. Lipinski. Thank you, Ms. Begeman, for your testimony.
        And I will now recognize the next speaker, Mr. Oberman. You
    may proceed.
        Mr. Oberman. Thank you.
        Good morning, Chairman DeFazio, Chairman Lipinski, and
    Ranking Member Crawford. I am delighted to be here. As the
    chairman said, it is my first nonconfirmation appearance before
    Congress since I served there in 1959 as a page.
        I will say this: I am a champion of passenger rail, but it
    is my privilege at this hearing to really summarize for the
    committee what our activities have been in the last 2 years
    involving primarily our freight rail responsibilities, and we
    have done a lot.
        Under the very robust leadership of Chairman Begeman, we
    have tackled the congressional mandate to come up with a
    program to reduce the cost, complexity, and duration of rate
    reasonableness cases stemming from the report which Chairman
    Begeman commissioned in 2018 through a Rate Reform Task Force.
        Since that task force report was issued in April of 2019,
    we have done the following: We adopted a new rule creating a
    streamlined process for establishing market dominance, which is
    a prerequisite for any shipper challenging a rate to satisfy
    before the Board.
        Last December we held a 2-day hearing on the subject of
    revenue adequacy, which is quite complicated, and that
    consideration is ongoing.
        We also adopted a rule amending our Waybill Sample data
    collection regulation so we will have a much more thorough
    database that will assist the Board and the stakeholders in
    decisionmaking and analysis.
        And perhaps, most importantly, we have proposed a rule
    establishing a new rate reasonableness method called final
    offer rate review. Because this is such an important
    undertaking, we used our statutory authority to set up a series
    of ex parte discussions with the railroads and shipping sides
    of the industry, and last spring held many, many meetings to
    discuss both the floor proposal and alternatives, including one
    proposed by some of the Class I's to establish a voluntary
    arbitration procedure.
        As the committee may know, the Board lacks the authority to
    mandate arbitration of rate matters; but a proposal has come
    forward to set up a methodology which the railroads propose to
    agree to voluntarily if it is adopted. I should emphasize that
    the rulemaking on final offer is ongoing and remains one of the
    Board's top priorities.
        The other major area of undertaking was to consider issues
    involving demurrage and accessorial charges which began to
    skyrocket back in 2018. In the spring of 2019, we held a 2-day
    hearing on the subject out of which emanated a series of
    actions by the Board, including the adoption of a very lengthy
    policy statement setting forth the principles the Board will
    utilize when we evaluate demurrage claims that come before the
    Board and presumably will be also used by the courts when they
    consider these matters.
        We have also proposed, have a pending rule that will
    greatly enhance the transparence and clarity of demurrage
    invoices providing rail customers with much more detailed
    information about the nature of charges so they can evaluate
    whether to pay them or challenge them.
        We clarified regulations revoking certain exemptions so
    that certain exempt commodities can appear before the Board on
    demurrage matters. And we issued a final rule which clarifies
    the relationship between warehouses and shippers in terms of
    demurrage bills.
        One other additional area to mention is that the Board has
    very vigorously been monitoring and staying in touch with both
    the railroads and the shippers as this pandemic has unfolded
    and monitoring the progress of service, including, very
    importantly, monitoring what has been happening as the economy
    has begun to return, making sure that the railroads are in a
    position to restore crew sizes and equipment that have
    necessarily been furloughed when the economy really went in a
    downward trend last spring.
        And we have had very, very active cooperation with both
    railroads and rail customers and, for the most part I would
    say, we are impressed with the great effort put forward by all
    to try to keep our economy running as much as possible. But it
    is a challenge to gear back up now that rail traffic has begun
    to increase.
        We specifically have asked the railroads, along with the
    FRA, to keep us posted on their efforts to restore their crew
    sizes and the amount of equipment available so that service
    will be adequate.
        Finally, I just want to add on a very personal note, and I
    was going to acknowledge Chairman Lipinski that it was 45 years
    ago that your father and I entered the Chicago City Council on
    the very same day, and I have known you since then. So we have
    a very long history.
        And I wanted to take a personal moment to congratulate you
    on your spectacular service in the Congress on behalf of
    certainly the country but certainly the Chicago area. We really
    have benefitted from the effort you have made in the area of
    transportation, championing not only rail but all
    infrastructure, highways, and aviation as well.
        The list is too long to cite everything you have done, but
    two, which are really of great importance to the railroads,
    particularly in the Midwest, but this affects the Nation, the
    hundreds of millions of dollars that you have helped obtain for
    the CREATE program, which has straightened out the entire North
    American system if we could get things running more smoothly
    through Chicago, and you are adding at least $1\1/2\ billion,
    or nearly that, to the CRISI grant program.
        There are many, many other things, and I, for one, will say
    that the country is going to miss your chairmanship of this
    subcommittee, and the city of Chicago and the Chicago region
    benefitted from your service, and we will miss your being
    around, but I know you are going to be around in some capacity.
    But I wanted to add that as a personal note.
        Thank you.
        [The prepared joint statement of Ms. Begeman and Mr.
    Oberman follows:]

     Prepared Joint Statement of Chairman Ann D. Begeman and Vice Chairman
                Martin J. Oberman, Surface Transportation Board
        Good morning, Chairman DeFazio, Ranking Member Graves, Subcommittee
    Chairman Lipinski, Subcommittee Ranking Member Crawford, and other
    members of the Committee. Thank you for inviting Vice Chairman Martin
    Oberman and me to appear today virtually. We appreciate your interest
    in the Surface Transportation Board's work and welcome this opportunity
    to discuss our jurisdiction and role in ensuring a robust passenger
    rail system. We would also like to give the Committee an update on all
    of the Board's important work.
        As you know, the Board's jurisdiction over intercity passenger rail
    carriers is narrower than its jurisdiction over freight rail carriers.
    The Board's authority over rail transportation is derived from 49
    U.S.C. Sec.  10501, which gives the Board jurisdiction over
    transportation by rail carriers between a place in a state and a place
    in another state, and between a place in a state and another place in
    the same state, as long as that intrastate transportation is carried
    out ``as part of the interstate rail network.''
        In general, intercity passenger rail operations are subject to
    Board jurisdiction when they provide rail service between two states.
    An example is DesertXpress (also known as Brightline West), which has
    proposed building a high-speed rail line between Southern California
    and Las Vegas, Nevada.
        There are also intercity passenger rail projects, such as
    California High Speed Rail, that operate within a single state but
    nevertheless fall within the Board's jurisdiction because of their
    extensive links to the interstate rail network. Among other things,
    California High Speed's through-ticketing arrangements and shared
    stations with Amtrak brought that project under the Board's
    jurisdiction. More recently, the Board considered whether it has
    jurisdiction over Texas Central's proposed high-speed rail line project
    between Dallas and Houston. Initially, in July 2016, the Board found
    that it did not have jurisdiction over the project, as proposed at the
    time, because the proposed line would neither have been part of nor
    sufficiently connected to the interstate rail network. However, in July
    2020, the Board granted a petition to reopen filed by Texas Central. In
    light of evidence presented on reopening showing a clearly defined
    through-ticketing arrangement with Amtrak and a transfer service that
    would facilitate the practical and continuous movement of passengers in
    interstate commerce, the Board found that the proposed line would be
    part of the interstate rail network and therefore subject to the
    Board's jurisdiction.
        In contrast, an intercity passenger rail service that operates
    within a single state and does not connect with an interstate passenger
    rail carrier normally falls outside the Board's jurisdiction. For
    example, the Board found that the All Aboard Florida service--a 230-
    mile rail line between Miami and Orlando--was not within its
    jurisdiction due to its lack of connectivity to the national network.
    Other examples of such operations include tourist and excursion trains,
    which typically operate within a single state and do not interchange
    passengers with interstate carriers.
        Although some private businesses provide regulated intercity
    passenger rail operations, most passenger rail service is provided by
    Amtrak, which is statutorily excluded from many of the Board's
    regulatory requirements applicable to freight carriers. However, with
    the enactment of the Passenger Rail Investment and Improvement Act of
    2008 (PRIIA) and the Fixing America's Surface Transportation Act of
    2015 (FAST Act), the Board assumed additional Amtrak oversight
    responsibilities, including the authority to institute investigatory
    action under certain circumstances and, if appropriate, to award relief
    and identify reasonable measures to improve performance on passenger
    rail routes. Lengthy litigation over the constitutionality of the PRIIA
    provision directing the Federal Railroad Administration (FRA) and
    Amtrak to establish on-time performance metrics and standards has
    prevented the Board from fully utilizing this authority before now.
    After the constitutional issues were finally resolved last year, the
    FRA issued a notice of proposed rulemaking pertaining to its new on-
    time performance and service metrics and standards. Once the rule has
    been finalized, the Board should be able to exercise its investigative
    authority under PRIIA.
        The Board generally does not have jurisdiction over public
    passenger transportation provided by local governments, which includes
    commuter rail passenger transportation and services, such as trolley,
    subway, and light rail lines. Commuter rail transportation is
    understood to mean short-haul passenger rail transportation in
    metropolitan and suburban areas usually having reduced fare, multiple-
    ride, and commuter tickets and morning and evening peak period
    operations. Under PRIIA, the Board is authorized to mediate disputes
    involving commuter rail providers seeking access to freight railroad
    tracks and services. The Board also has certain limited jurisdiction
    over matters involving commuter services, including establishing
    appropriate compensation paid by commuter rail providers to Amtrak for
    use of certain facilities if the parties cannot reach agreement among
    themselves.
        The Board is currently handling several pending matters involving
    passenger and commuter services. One is a petition filed by Amtrak
    regarding the continued use by Metra of Chicago Union Station. In this
    case, the Board required Amtrak to continue to provide access to Metra
    on an interim basis while the parties participate in Board-sponsored
    mediation. Similarly, in a petition filed by the Southeastern
    Pennsylvania Transportation Authority (SEPTA) to determine compensation
    for the use of certain Amtrak passenger rail stations and parking
    facilities, the Board required Amtrak to continue to provide access to
    the stations and facilities on an interim basis while granting a joint
    motion to hold the proceeding in abeyance while the parties continue
    negotiations. In another matter, the Board issued interim findings and
    guidance to Amtrak and subsidiaries of the Canadian National Railway
    and initiated Board-sponsored mediation in an effort to establish
    reasonable terms and compensation for Amtrak's use of the rail
    facilities and services. The Board is also considering a request by
    DesertXpress regarding the authorized construction of a high-speed rail
    line between Southern California and Las Vegas, Nevada. As these
    proceedings are pending matters, we cannot comment further.
        While freight rail matters comprise the bulk of work before the
    Board, we take our passenger rail work very seriously, keeping informed
    of the latest issues and maintaining positive working relationships
    with Amtrak, FRA, and other passenger rail stakeholders.
        Speaking of the Board's freight rail work, we have many important
    issues on that front, in particular, reform of rate review procedures,
    oversight of rail demurrage and accessorial charges, and monitoring
    rail service during the pandemic.
        The Board is actively working to reduce the cost, complexity, and
    duration of rate reasonableness cases, particularly for smaller
    disputes. In 2018, the Board established the Rate Reform Task Force so
    that our stakeholders could share their views and offer constructive
    suggestions to improve our rate review processes and make them more
    accessible. Based on the report from the Task Force, which was issued
    in April 2019, the Board has adopted a rule creating a streamlined
    process for pleading market dominance; held a two-day public hearing on
    revenue adequacy issues; amended its Waybill Sample data collection
    regulations to provide a more robust dataset for decision-making and
    analyses; and proposed a new procedure for challenging the
    reasonableness of railroad rates in smaller cases, called ``Final Offer
    Rate Review'' (FORR).
        To allow for additional stakeholder input in the FORR rulemaking
    proceeding, in May 2020, the Board waived its general prohibition on ex
    parte communications to permit post-comment period discussions with
    outside parties, including railroad and shipper interests, about the
    FORR proposal and possible supplements or alternatives to it, including
    the potential use of voluntary arbitration to resolve smaller rate
    disputes. Summaries of these meetings are posted on the Board's
    website. This rulemaking proceeding is ongoing and remains one of the
    Board's top priorities.
        The Board also remains focused on Class I railroad demurrage and
    accessorial charges. In late 2018, when some Class I carriers announced
    plans to implement new rules related to demurrage and accessorial
    charges, the Board requested that Class I railroads report their
    revenues on a quarterly basis starting with 2018. In May 2019, we held
    a two-day public oversight hearing on this issue. Since that hearing,
    the Board has taken several important actions, including:
          Issuing a policy statement on principles the Board will
    apply in evaluating the reasonableness of demurrage and accessorial
    charges;
          Proposing rules to enhance the transparency and clarity
    of demurrage invoices;
          Clarifying certain regulatory exemptions and revoking
    others in order to ensure that the Board can exercise oversight over
    the reasonableness of demurrage and accessorial charges; and
          Issuing a final rule that permits warehousemen and
    shippers to specify which party should be billed for demurrage.

        Finally, we would like to highlight the Board's on-going monitoring
    of rail service across the freight rail network. Since March, we have
    focused much attention on the disruptive impact of COVID-19 on rail
    service. During the initial phase of the pandemic, as many state and
    local jurisdictions implemented lockdowns, the Board engaged in daily
    and weekly communications with key railroad and shipper stakeholders to
    discuss the reliability of the freight rail network, especially in
    critical supply chains. These communications included weekly (now bi-
    weekly) conference calls with the Railroad-Shipper Transportation
    Advisory Council (RSTAC) and daily (later weekly) calls, hosted by FRA,
    with the Class I's and representatives of the short lines and Amtrak.
    The Board was also in frequent contact with senior management at the
    Class I railroads.
        In April, the Board issued a statement in support of rail service
    to provide informal guidance to state and local governments in
    implementing public health and safety measures in response to COVID-19
    that might negatively impact freight rail operations, such as travel
    and lodging restrictions that could impair railroad crew and
    maintenance operations. The Board also monitored the imposition of
    railroad embargoes related to COVID-19.
        As shippers ramped up production, we requested information from
    each Class I railroad about its plans to meet the increased rail
    service demand, including the availability of employee and equipment
    resources and enhanced railroad communication with shipper and other
    stakeholders. In August, the Board and the FRA reemphasized in a letter
    to all Class I railroads the importance of safe, dependable rail
    service as the nation works to restore jobs and promote economic
    recovery. All of these communications can be found on our website.
        Finally, the Board's Rail Customer and Public Assistance (RCPA)
    office continues its frequent and regular communications with shipper
    and railroad stakeholders, including holding monthly calls with all
    Class I railroads to monitor rail service and operational developments.
    RCPA is available to assist interested stakeholders and the public by
    answering questions pertaining to Board regulations and procedures and
    facilitating informal private-sector dispute resolution of rail
    operational and service-related issues and other matters wherever
    possible. They can be reached at 202-245-0238 or RCPA@stb.gov.
        Again, we thank the Committee for the opportunity to testify before
    you today. We look forward to answering any questions that you have for
    us.

        Mr. Lipinski. Thank you very much for that.
        The Chair will now recognize Ms. Brown for 5 minutes.
        You may proceed.
        Ms. Brown. Thank you, Chairman Lipinski.
        Good morning, Chairman Lipinski, Ranking Member Crawford,
    and members of this esteemed subcommittee. First, I want to
    thank Chairman Lipinski for all that he has done for
    transportation in his district and Chicagoland. His advocacy in
    Congress has meant so much to me in the Chicago region.
        I also wanted to extend my sincere appreciation to
    Congressman Garcia, from the Chicago City Council to the
    Illinois General Assembly, to the Cook County Board of
    Commissioners and now the U.S. Congress. He has been a
    tremendous advocate for social equity and infrastructure, and
    his efforts have made a real difference to so many in
    meaningful ways, especially for the underserved and minority
    communities.
        I am also pleased to be on this panel with my former
    colleague and friend, STB Chair Marty Oberman. My name is
    Romayne Brown, and I am the chair of Metra's board of
    directors. I was elected in September. I have served on the
    board since 2013 representing Cook County. I have worked for
    over 30 years as professional transit manager at the Chicago
    Transit Authority, ending my career as vice president of rail
    operations.
        This includes focusing on a strong relationship with our
    unionized employees, creating a safe, efficient, and
    pleasurable experience for our customers. I am particularly
    proud about the Fair Transit South Cook project, a 3-year pilot
    program that will lower Metra fares and provide new transit
    options for south suburban Cook County and Chicago residents,
    some of the most underserved communities in our region.
        Metra operates the most complex commuter railroad network
    in the United States. We share infrastructure with six Class I
    railroads and Amtrak. The density of the Chicago network
    provides us a unique insight into the appropriate role the STB
    could and should take in passenger railroad policy.
        However, before discussing the role with STB, I would be
    remiss to not mention the difficult times all Americans are
    facing due to the COVID-19 pandemic. Like many families and
    small businesses around the country, the transit industry is
    facing unique financial and safety challenges.
        We appreciate Congress' support in passing the $25 billion
    in emergency relief through the CARES Act. It has been critical
    to the continued safe operation of our commuter service in
    Chicago and ensures we maintain and pay our dedicated unionized
    workforce.
        Yet, we continue to face financial challenges. On November
    13, Metra approved our budget for 2021. We are projected at
    least a $70 million budget gap in 2021 due to our extremely low
    ridership.
        We join our colleagues at the APTA and the many hardworking
    and dedicated rail labor unions in calling for this Congress to
    enact at least another $32 billion in emergency transit relief
    immediately.
        Simultaneously, the commuter rail industry faces
    significant operating and capital funding challenges that the
    Federal Government should address. The transit investment
    contained in this committee's INVEST Act represents significant
    progress for our agency, but more must be done, like creating
    commuter rail-only funding streams.
        We are a highly regulated, capital-intense commuter
    railroad. We are a passenger railroad without full standing at
    the STB. The STB is traditionally known as the economic
    regulator of the rail industry, focused on freight rail and
    shipper concern; but it also must play an informed role in
    passenger rail policy. Yet, in its founding charter, it
    excluded public transportation provided by local government
    authorities from its jurisdiction.
        We believe that Congress should correct this situation and
    ensure parity and a level playing field amongst all publicly
    subsidized passenger railroads. Since Congress created Amtrak
    in 1970, the growth of the commuter rail industry has been
    stunning. In the years of Amtrak's founding, there was only one
    commuter railroad. Today there are over 30, and in 2019 our
    industry served nearly 500 million passengers.
        Over the last 50 years as all of these new commuter
    railroads were created, it was clear that commuter operators
    should have the same rights and privileges as freight railroads
    and Amtrak. This is not an indictment of our freight railroad
    partners. As an operator in Chicago, we have developed close
    and reliable partnerships with freight railroads as we work
    together to deliver service to the Nation's most congested rail
    corridor. In fact, our region owes much for the freight
    railroad industry through our successful partnership in the
    CREATE program.
        However, even great partnerships can be challenging. Yet,
    unlike Amtrak, we lack the same ability to resolve disputes
    over right-of-way, on-time performance, and track access at the
    STB.
        Metra looks forward to working with Congress as it debates
    surface transportation reauthorization, emergency COVID-19
    relief, and, of course, reauthorization of the STB.
        On behalf of Metra, I thank you for providing me with the
    opportunity to testify today, and I look forward to answering
    any questions you may have.
        Thank you.
        [Ms. Brown's prepared statement follows:]

      Prepared Statement of Romayne C. Brown, Chair, Board of Directors,
                              Metra Commuter Rail
                                  Introduction
        Good morning, Chairman Lipinski, Ranking Member Crawford, and
    Members of this esteemed Subcommittee. My name is Romayne C. Brown and
    I am the Chair of Metra's Board of Directors. I was recently elected to
    this position and I am greatly looking forward to continuing to
    advocate for Northeastern Illinois' commuter railroad and its riders,
    especially during these unprecedented and trying times. I am pleased to
    have this opportunity to speak to you today.
        Let me first begin by commending the tremendous leadership that
    Chairman Lipinski and Congressman Garcia have brought in advancing
    transportation and infrastructure in our region and our nation. On
    behalf of Metra and Chicago's commuters, we thank you for all that you
    do and will continue to do for us.
        Metra was created to run Chicago's commuter rail system by the
    Illinois General Assembly in 1983. Our creation followed a tumultuous
    period in which the private railroads that had been operating the
    service experienced major financial problems and bankruptcies. We have
    since grown to be the largest commuter railroad in the country based on
    track miles, and the fourth largest based on pre-COVID-19 ridership.
        The Metra system has 11 separate lines with 242 stations and nearly
    1,200 miles of track throughout the Northeastern Illinois region. Metra
    owns and operates four of those lines, has trackage-rights or lease
    agreements to operate Metra trains over freight railroads on three
    lines, and has purchase of service agreements with two freight
    railroads, which operate commuter service on four other Metra lines.
        We are also not the only transit service provider in our region.
    Working through the Regional Transportation Authority (RTA), we
    coordinate closely with the Chicago Transit Authority and the Pace
    commuter bus. Together, our three agencies are dedicated to providing
    Chicagoans of all means and backgrounds a safe, affordable trip to
    school, work, or a medical appointment. We are pleased to partner with
    Cook County to advance the Fair Transit South Cook pilot, a three-year
    project that will improve transit service and lower fares for south
    suburban and Chicago residents. The pilot will provide lower Metra
    fares on two of our south lines and also provide for new Pace services.
    We are extremely pleased and excited to partner with our sister
    agencies on this pilot.
        Clearly, our operating environment in Chicago--the most congested
    railroad region in the nation--provides us with unique insights into
    the importance of freight and passenger railroad relationships and the
    role of the Surface Transportation Board (STB) in overseeing passenger
    rail.
                        COVID-19 Pandemic and Operations
        However, as every Member of this panel knows, the COVID-19 pandemic
    has brought unprecedented hardship on families, essential workers, and
    small businesses across the United States. Transit agencies like ours
    have been no exception and I would be remiss if I did not address the
    COVID-19 crisis and its impact on commuters before you here today.
        In March, Congress passed the CARES Act which provided $25 billion
    in emergency funding for transit agencies around the United States.
    This funding has been critical to the continued, safe operation of our
    commuter services in the Chicagoland region and ensured we could
    maintain well-paying rail union jobs throughout the pandemic up to this
    point. I must commend the commitment of our employees on the front
    lines as well as union leadership as they have been strong and loud
    advocates for additional COVID-19 emergency relief.
        However, while we appreciate the necessity of the CARES Act, our
    agency is still facing a difficult reality as we await further action
    from Congress.
        On October 6, Metra released its proposed $700 million 2021 budget.
    The proposed budget was presented on November 13 to the Metra Board of
    Directors. Like our peers around the country, our budget made many
    assumptions about ridership, fare revenues, and operating costs, all of
    which have been severely impacted by the COVID-19 pandemic. Our
    proposed budget estimates our ridership will be about 20% of pre-COVID-
    19 levels by the end of 2020 and normalize around 50% by the end of
    2021. However, at our current service and spending levels, we are
    currently projecting a $70 million gap in our budget, which may grow if
    ridership does not return to projected levels.
        One of the biggest conundrums of the coronavirus pandemic has been
    how to effectively maintain services that Chicago's essential workers
    rely on, while facing increased costs to maintain these services.
    Transit agencies like Metra are facing a new operating reality as we
    respond to the virus. We work daily to ensure our trains and crew
    facilities are stocked with sanitizer and PPE, we utilize additional
    maintenance vehicles and rolling stock to allow for social distancing
    for employees and riders, and we have expanded our human resource
    services to assist our employees impacted by the virus. While we are
    committed to safely serving the public and supporting our workforce
    during these unprecedented times, these are added costs that simply did
    not exist before the pandemic.
        If we continued to run service at normal levels, we would spend
    $2.65 billion over the 2021-23 period. However, our available operating
    funds over that same period in 2021-2023 (CARES, diminished fare
    revenues and diminished tax revenues) will only amount to $2.080
    billion, a gap of $570 million. This $570 million shortfall is largely
    due to lower ridership and given the pain many Chicagoans are
    experiencing, fare increases are not practical at this time for our
    Board.
        Over the 2021-23 period, we are anticipating millions in additional
    costs for cleaning, PPE, cleaning materials, and adding extra vehicles
    for social distancing. Yet, we cannot spend more than we have
    available, unlike the federal government. Without additional financial
    assistance from Congress, we will face some extremely difficult
    decisions, including potential cuts in service, to overcome this $570
    million shortfall.
        At our present ``burn rate'' we project that our CARES Act funding
    will run out sometime in the second half of 2021. While we will
    continue to step up to safely provide services to essential workers and
    those who lack access to a car, we are facing increases in costs to
    provide the same level of pre-pandemic service.
        We must also operate with the goal of regaining riders and
    attracting new customers. This requires us to continue consistent
    service levels and provide innovative schedules, as we have done to
    accommodate many Chicagoland essential workers. Providing our
    passengers and Chicago's workforce flexibility and reliability is
    something we take pride in. However, continuing to provide an
    attractive level of service to encourage riders to return is not
    without risks. If these riders do not return, we will be under further
    budgetary pressure.
        I request your support in Congress for enacting at least another
    $32 billion in emergency transit relief. This additional assistance
    would ensure essential transit services can continue around Chicago and
    our nation, and help transit prepare to drive the economic recovery as
    the nation returns to a more normal travel pattern. We appreciate the
    continued leadership and advocacy from the American Public
    Transportation Association (APTA), who we are pleased to be on this
    panel with today. Their work has been critical in uniting the nation's
    transit agencies and speaking with one, urgent voice on this pressing
    issue.
                             Commuter Rail Funding
        While we are desperate for additional emergency funding to deal
    with COVID-19, structural funding challenges also remain for Metra and
    the commuter rail industry.
        Throughout the United States, commuter rail systems receive a
    combination of funding from federal, state, and local government
    sources, though not all receive federal funds. Our industry has been
    working diligently to install and implement Positive Train Control
    (PTC), but the federal safety mandate has put great strain on our
    limited dollars for state of good repair and capital projects. I am
    pleased to report that Metra will meet its 2020 Alternative Schedule
    and be fully compliant with the PTC deadline for implementation on all
    11 lines. Further, legacy commuter railroads, like Metra, face unique
    capital challenges as we work to maintain and upgrade aging track
    infrastructure and rolling stock.
        Since 1985, Metra has invested more than $6 billion to rebuild,
    maintain and expand Chicagoland's passenger rail network. Operating
    funding is provided through system-generated revenues--primarily
    fares--and subsidized in large part through a regional sales tax.
    Capital funding is provided through a variety of federal programs,
    state and local funding sources, and a small amount of fare revenue.
        Capital funding to maintain and improve our aging system remains a
    constant challenge. Metra's capital program is mostly funded through
    federal formula funds (Sec. 5307 and 5337) totaling $173.6 million for
    Fiscal Year (FY) 2019. However, our needs far exceed the level of
    funding available. In fact, the RTA, our region's transit funding and
    oversight agency, estimates that Metra needs to invest $1.2 billion
    annually over the next decade to achieve and maintain a state of good
    repair.
        While we must reinvest in our network to continue to safely and
    efficiently move our customers, our complete PTC system is expected to
    cost Metra more than $400 million, equal to the amount of federal
    formula funding Metra receives every 2\1/2\ years. Further, based on
    our own estimates and discussions with our freight railroad partners,
    PTC operation and maintenance costs are expected to be between 5-10% of
    the total installation cost per year, or $15-$20 million per year.
        I wanted to take this opportunity to thank this Committee for its
    work on the INVEST in America Act, which was passed by this House as a
    part of the Moving Forward Act (H.R. 2). H.R. 2 contained many
    visionary provisions and funding levels that we have not seen before at
    Metra. For example, the INVEST Act authorized $105 billion for public
    transportation programs funded by federal formulas. Compared to the
    FAST Act, this represents over a 50% increase in funding for public
    transit.
        Additionally, we appreciate that Congress and the Federal Railroad
    Administration for allowing commuter railroads, including Metra, to
    access the Consolidated Rail Infrastructure and Safety Improvement
    (CRISI) grant program for PTC installation projects. Importantly, the
    INVEST Act builds on this important progress by increasing funding for
    the program by over 300%, compared to the FAST Act, and makes a wide
    array of commuter railroad projects eligible for funding. This would
    potentially include support for operating and maintaining PTC systems,
    a potential funding deficit for many commuter rail agencies around the
    country.
        We were also pleased to see continued Congressional support for
    U.S. DOT discretionary grant programs, as well as the development of
    new, innovative funding programs for intercity passenger rail across
    the United States.
        However, despite the important progress made in the INVEST Act, we
    remain concerned about the state of federal commuter rail funding.
    Creating a new grant program specifically for commuter railroads would
    provide much needed additional relief to public agencies, like ours,
    struggling to respond to the COVID-19 pandemic while ensuring our long-
    term capital projects are addressed.
        The federal formula funding that Metra receives annually is the
    bedrock of our capital program. However, because our needs are great
    and state funding has been inconsistent, it has been nearly impossible
    to effectively budget and plan a capital renewal program. We believe
    Congress should also consider creating a dedicated formula funding
    stream for commuter railroads to ensure the numerous commuter rail
    systems across the country are no longer forced to rely on sporadic
    discretionary grants and can effectively plan for both safety and
    capital expenditures.
        Metra, like other publicly funded railroads, is a highly regulated,
    capital-intensive entity. It requires a substantial annual investment
    to maintain its own rights-of-way and track structure. Metra's capital
    assets are diverse and extensive: locomotives, passenger cars, track
    signal and communications equipment, yard and maintenance facilities,
    station buildings, platforms, parking lots and headquarters. Each day,
    the delivery of safe, reliable, efficient train service depends on
    these assets. Constant maintenance, rehabilitation, required COVID-19
    cleanings and asset replacement, requires significant and predictable
    funding.
                         The STB and Commuter Railroads
        The STB plays an important role as the economic regulator of the
    freight railroad industry, as well as an important adjudicating body on
    railroad policy related issues. It maintains a limited jurisdiction
    over passenger railroads, primarily focused on intercity passenger
    railroads. Specifically, ``public transportation provided by a local
    government authority,'' is excluded from its jurisdiction, with minor
    exceptions.\1\ However, unlike some of our commuter agency peers, Metra
    maintains status as a rail carrier, which provides for greater standing
    at the Board.
    ---------------------------------------------------------------------------
        \1\ 49 USC 10501
    ---------------------------------------------------------------------------
        We believe that Congress should create parity amongst all publicly
    subsidized passenger rail operations, which includes standing at the
    STB. Since Congress created Amtrak as the nation's preeminent intercity
    and long-distance passenger rail carrier in 1970, the growth of
    commuter rail services has been stunning. At the time of Amtrak's
    creation, there was one publicly owned commuter railroad. Today, there
    are now over 30 active commuter rail systems in the United States that
    deliver over 490 million passenger trips annually and provide the
    safest form of surface transportation for commuters. By comparison, in
    FY 2018, Amtrak served approximately 32 million passengers.
        This rapid growth has placed an incredible demand on our limited
    railroad infrastructure capacity. Commuter rail agencies must
    coordinate with both the freight railroads and Amtrak in order to
    operate, especially in Chicago where we must deal with more than 700
    freight and Amtrak trains each weekday. While in general, we all work
    collaboratively in trying to solve issues and move goods and people in
    a capacity constrained system, like in all partnerships, there are
    sometimes challenges.
        Commuter railroads and Amtrak operate with one another over some of
    the most congested and complex areas in the United States, including
    the Northeast Corridor (NEC) and the greater Chicagoland region. Since
    we operate together in some of the most congested regions with limited
    available trackage for passenger rail operations, commuter railroads,
    Amtrak, and other passenger transportation services often share rail
    terminals, yard, and stations. While Amtrak often owns many of the rail
    assets and stations, it is no longer necessarily the only major
    passenger operator in the area. In fact, in certain instances, there
    are stations in which commuter railroad operations are responsible for
    over 50%, in some cases even 60%, or 70%, of the train movements, but
    do not own the underlying assets or infrastructure.
        Under federal law certain preferences have been given to Amtrak,
    including greater standing at the Surface Transportation Board;
    however, those preferences have not been extended to publicly funded
    commuter railroads even though, in many cases, Amtrak, freight
    railroads and commuter railroads share the same tracks. As an example,
    Amtrak enjoys access to freight infrastructure at incremental costs,
    Amtrak charges commuter railroads a market rate to utilize their
    infrastructure, treating state and local taxpayer dollars differently
    than federally provided ones.
        Our current passenger rail system has not kept up with the pace of
    growth in commuter rail operations. Short-trip and commuter passenger
    services have increased dramatically yet lack parity with our intercity
    and long-distance passenger rail counterparts. We believe the Congress
    in its reauthorization of the STB should consider mechanisms that level
    the playing field between Amtrak and publicly-funded commuter rail
    agencies.
        In addition to the passenger rail congestion in our region, freight
    trains from six Class I railroads also interact and share tracks with
    passenger trains from both Amtrak and our commuter trains. Because of
    this, Metra has developed strong working relationships with freight
    railroads as we work together to effectively move passengers and
    freight across Chicagoland.
        Our partnerships are further enhanced by the landmark Chicago
    Region Environmental & Transportation Efficiency (CREATE) program led
    by Chairman Lipinski and others in our congressional delegation. This
    program continues to be a positive example of the federal government,
    rail operators, and local and state governments coming together to
    tackle a major challenge. Expanding capacity in Chicago, removing
    bottlenecks, and bringing the network to a state-of-good-repair will
    enhance passenger train speeds and ensure our freight partners can
    continue to effectively serve their customers. We continue to
    appreciate the Chairman's leadership on CREATE and would strongly
    support Congress and this Subcommittee as it considers other changes to
    ensure we have a modern passenger rail system that provides for a level
    playing field amongst all passenger rail operators.
        However, even great partnerships can be challenged. Yet, unlike
    Amtrak, we lack the same ability to resolve disputes over right of way,
    on-time performance, and track access at the STB. Despite the
    tremendous growth of commuter rail services nationally, federal law
    still only provides preference to the federally subsidized passenger
    rail services while state and local taxpayer subsidized passenger
    operations are excluded from full standing at the STB. Worse, Amtrak
    continues this malpractice with its access rates.
        Metra looks forward to working with Congress as its debates
    authorizing new surface transportation programs, the Surface
    Transportation Board, and further emergency COVID-19 relief. Our
    current financial outlook is bleak, as we struggle to provide the same
    levels of pre-pandemic service while experiencing new and increased
    costs. In the long-term, while we appreciate the Committee's efforts in
    the INVEST Act, we continue to call on Congress to create long-term,
    predictable funding steams exclusively for commuter rail agencies.
    Lastly, we would support federal efforts to modernize the passenger
    rail system and create a more level playing field between all passenger
    rail operators.
        Metra thanks Congress for its continued support of public
    transportation and systems like ours and appreciates the opportunity to
    update this committee on our operations and challenges. Thank you for
    inviting me to testify and I look forward to answering any questions
    you may have.

        Mr. Lipinski. Thank you, Chairwoman Brown.
        I now recognize Mr. Gardner.
        You may proceed.
        Mr. Gardner. Good morning, Chairman Lipinski, Chairman
    DeFazio, and Ranking Member Crawford, members of the
    subcommittee, and my fellow witnesses. Thank you for the
    opportunity to testify today about the Surface Transportation
    Board's key role enabling Amtrak to effectively serve the
    Nation.
        We strongly support the STB and believe the Board needs
    updated authority and additional resources for passenger rail
    so we can achieve the service levels and on-time performance
    your constituents deserve.
        Congress created Amtrak in 1970 to take on a job that
    today's freight railroads no longer wanted. In exchange for
    Amtrak's assumption of these private railroads' common carrier
    obligation for passengers and the associated operating losses
    for passenger service, the freights agreed to allow Amtrak to
    operate wherever and whenever it wanted over their lines, to
    provide Amtrak trains with dispatching preference over freight,
    and to empower what is now the STB to ensure Amtrak's access to
    the rail network.
        It has been nearly 50 years since freight railroads agreed
    eagerly to this bargain, and yet today, many of our host
    railroads fall short in fulfilling some of these key
    obligations----
        Mr. Lipinski. Mr. Gardner, if you will suspend. We can't
    see you, and we need to be able--we need to have your video on
    so we can see you for you to be able to testify.
        Mr. Gardner. Absolutely.
        Is that better?
        Mr. Lipinski. We see you now.
        Mr. Gardner. All right. Sorry.
        Mr. Lipinski. You can continue.
        Mr. Gardner. Great. Thank you.
        Since our founding, Congress has had to clarify and amend
    the law to try and ensure host compliance. For example, by
    1973, the freights had begun delaying Amtrak trains so severely
    that Congress enshrined this promise of Amtrak preference into
    Federal law. And in 2008, delays had gotten so bad that
    Congress created a new process to set Amtrak on-time
    performance and provided the STB with the authority to
    investigate poor OTP.
        But for several reasons these efforts haven't remedied the
    problems. For Amtrak and your constituents, that has meant
    millions of delayed passengers and years of impediment as we
    try to add trains or start new routes to keep up with changing
    markets and demand.
        As the AAR made clear in its litigation opposing the PRIIA
    metrics and standards rule, many hosts see supporting our
    operation not as their obligation to the public but as
    competition for the use of their infrastructure. But Amtrak
    wasn't created to relieve host railroads of their requirements
    to support passenger trains. It was created to help them reduce
    financial losses and ensure that passenger trains could still
    serve the country.
        We need this committee's help to restore your original deal
    with the freights. For example, you can provide us, as you have
    in the Moving Forward Act, a way to enforce our existing rights
    of preference. You can make real Amtrak's statutory ability to
    start new routes and add additional trains without arbitrary
    barriers.
        You can create an Office of Passenger Rail within the STB
    and require them to use their investigative powers to pursue
    significant instances of poor OTP. And you can require more
    efficient STB processes to grant Amtrak access to hosts and
    fairly set any compensation capital investment requirements.
        To be clear, Amtrak strongly supports our freight
    railroads. We want the whole rail network to grow and succeed,
    and we have some great host railroad partners who deliver very
    good service to Amtrak. But today many freights seem to
    essentially view us and our millions of passengers as an
    imposition to be minimized instead of a valuable public service
    to be supported. And this is why we and the STB must have clear
    and appropriate authority to support our mission.
        I am pleased to say that just this week FRA and Amtrak took
    an important step in this direction with the publication of the
    PRIIA metrics and standards rule. This rule will empower the
    STB to investigate poor performance and help enforce Amtrak's
    preference rights, which could make a huge difference in train
    performance.
        As our CEO, Bill Flynn, recently testified, we are hopeful
    that with COVID relief funding and your support, we can quickly
    restore service and recover from this pandemic, setting in
    motion a new era of growth and a chance for Amtrak to play a
    significant role in helping reduce carbon emissions across the
    country.
        A rarely heralded fact is that the U.S. has the largest
    rail network in the world, and yet we use so little of it for
    intercity passenger rail service. The fundamental reason for
    this is our inability to gain quick, reasonable access to the
    network and receive reliable service that we are owed under
    law.
        This has effectively blocked our growth and left much of
    our Nation underserved. City pairs like Los Angeles and Phoenix
    or Atlanta to Nashville could clearly benefit from Amtrak
    service. Existing rail lines already connect them. Shouldn't
    Amtrak trains be serving these and many other similar corridors
    nationwide?
        With your help, we can answer this question with a yes, by
    gaining strengthened rights and proper STB enforcement, coupled
    with a long-term dedicated source of funding for both Amtrak
    and intercity passenger rail expansion. With these, we can
    provide the type of modern and reliable intercity passenger
    rail service that nearly every other developed nation now takes
    for granted.
        I want to thank you particularly, Chairman Lipinski, for
    your longstanding support of Amtrak, for your leadership role
    throughout many issues affecting Amtrak and for your time with
    the committee. We have always appreciated your support. Thank
    you very much for it.
        And I look forward to answering any of the questions from
    the committee.
        Thanks very much.
        [Mr. Gardner's prepared statement follows:]

        Prepared Statement of Stephen J. Gardner, Senior Executive Vice
     President, Chief Operating and Commercial Officer, National Railroad
                         Passenger Corporation (Amtrak)
                                  Introduction
        Good morning Chairman Lipinski, Ranking Member Crawford, and all
    the members of this subcommittee. My name is Stephen Gardner and I
    serve as Senior Executive Vice President and Chief Operating and
    Commercial Officer for Amtrak. It is my pleasure to testify here today
    on behalf of Amtrak's many dedicated employees. Despite the challenges
    faced by our nation this year, thousands of our employees continue to
    further Amtrak's mission and provide a valuable service to the American
    public. I would like to thank them for their dedication and recognize
    the support Amtrak has also received from our state partners, labor
    unions, host railroads, and commuter colleagues as we navigate these
    difficult times.
        I would like to thank this subcommittee for convening today's
    hearing to discuss a topic of great importance to Amtrak. A well-
    functioning Surface Transportation Board (STB) is essential to Amtrak's
    mission and core to the future of our company. With the strong backstop
    of an empowered STB, we can better connect communities across this
    nation with efficient, sustainable, modern service, and create
    thousands of new, good-paying jobs in the process as part of a vital
    effort to help this nation recover from the pandemic.
        The STB has a central role to play in many issues critical to
    Amtrak including our ability to run trains in a timely fashion and
    efficiently expand and improve our network and the enforcement of
    Amtrak's statutory right to preference over freight trains. Amtrak's
    ability to grow and to reliably operate trains in an efficient manner
    without delay while traveling on tracks owned by host railroads lies at
    the heart of the company's ability to fulfill its congressional
    mandate. In each case, the STB is the forum that can help to ensure our
    success.
        I would like to begin my testimony with a brief history of the
    STB's jurisdiction over various Amtrak matters before narrowing the
    focus of my remarks to emphasize three issues of particular importance
    to today's discussion.
         A Brief History of Amtrak and the Surface Transportation Board
        Prior to Amtrak's creation, private railroads--today commonly
    called ``freight railroads''--were required to provide intercity
    passenger rail service pursuant to what is known as their ``common
    carrier obligation.'' This obligation, for both passenger and freight
    transport, ensured that in return for giving railroads the right to
    construct, operate and generate profits from railroad networks--which,
    like other infrastructure-based network industries whose assets cannot
    easily be replicated, give the infrastructure owner a de facto
    monopoly--there would be adequate rail service to meet public demand.
        By the late 1960s, public investment in the highway and aviation
    industries had crushed the privately-funded intercity passenger rail
    business, and these losses--which amounted to over $1.4 billion
    annually adjusted for inflation--threatened the financial viability of
    the entire railroad industry.
        Recognizing the need to protect simultaneously the core intercity
    passenger rail network for the public and the viability of the private
    railroads, Congress enacted, and the Nixon Administration signed, the
    Rail Passenger Service Act (RPSA) of 1970. The RPSA created Amtrak to
    relieve the private railroads of their intercity passenger rail service
    obligation in return for making their tracks, facilities and services
    available to Amtrak on reasonable terms. As the Interstate Commerce
    Commission (ICC), the predecessor of the STB, stated, the RPSA

            represents a public bargain that was struck with the nation's
            freight railroads, whereby the freight railroads were relieved
            of any duty to provide passenger service in exchange for making
            their tracks available to Amtrak at incremental costs.\1\
    ---------------------------------------------------------------------------
        \1\ Interstate Commerce Commission, ``Study of Interstate Commerce
    Commission Regulatory Responsibilities,'' October 25, 1994, p. 62.

        Since the enactment of the RPSA 50 years ago last month, the ICC/
    STB have been tasked with effectuating this public bargain by ensuring,
    and resolving disputes over, Amtrak's access to the railroads and
    regional transportation authorities over which it operates or seeks to
    operate, which are referred to as ``host railroads.'' The RPSA
    provisions governing Amtrak's access to its host railroads, codified at
    49 U.S.C. 24308, provide that if Amtrak and a host railroad are unable
    to reach agreement on matters pertaining to Amtrak's operations, Amtrak
    may seek an STB order requiring that access be provided and
    establishing terms.
        Under the RPSA's access provisions, Amtrak has the right to operate
    over all rail lines of any railroad or regional transportation
    authority whenever that is necessary for Amtrak to carry out the broad
    purposes of the RPSA. If Amtrak and a railroad or authority cannot
    agree upon terms, Amtrak may petition the STB to order that the
    railroad or authority's rail lines, facilities, and/or services be made
    available for Amtrak's operations, and to determine all terms governing
    Amtrak's access, including compensation, in some circumstances train
    schedules and speeds, and any capital investments by Amtrak or a state
    partner that may be required for new or expanded Amtrak service. The
    RPSA specifies that the compensation Amtrak pays shall be limited to
    the incremental costs that such a host railroad incurs as a result of
    Amtrak's operations; any additional payments (typically called
    ``performance payments'') must take into account the quality of service
    (e.g., on time performance) the host railroad provides to Amtrak.
        The RPSA's access provisions also give the STB the authority, upon
    application by Amtrak and satisfaction of applicable statutory
    requirements, to require host railroads:
          To allow Amtrak to operate additional trains on a
    schedule based on legally permissible operating times, with the host
    railroad having the burden of proof if it asserts that the new trains
    would unreasonably impair freight transportation;
          To allow Amtrak trains to operate in an emergency; and
          To allow Amtrak trains to operate at accelerated speeds.

        The Supreme Court has characterized the railroads' ``ongoing
    regulatory obligations'' under the RPSA to ``provide operational
    assistance and facilities'' for Amtrak under terms determined by the
    ICC/STB as ``consistent with the railroads' continuing obligations as
    common carriers.'' \2\ The RPSA also empowers the STB to convey
    interests in real property, including rail lines, to Amtrak, and to
    determine the compensation Amtrak should pay for such property
    interests.\3\
    ---------------------------------------------------------------------------
        \2\ National Railroad Passenger Corp. v. Atchison, T. & S. F. Ry.,
    470 U.S. 451, 468-469, n. 23 (1985).
        \3\ 49 U.S.C. 24311(c).
    ---------------------------------------------------------------------------
        In order to appreciate the importance of the RPSA's access
    provisions, it bears noting that 97% of Amtrak's 22,300 route-mile
    network and over 70% of Amtrak's train-miles in 2019 were on rail lines
    owned by freight railroads and regional transportation authorities.
    While the vast majority of the terms governing Amtrak's operations over
    host railroads are negotiated without STB involvement, those
    negotiations take place against the backdrop of an STB that is
    empowered to resolve disputes and impose reasonable terms if the
    parties are unable to agree. In every case in which Amtrak has sought
    access to a host railroad's lines, facilities, or services under these
    provisions, the ICC/STB have found that the access Amtrak requested was
    necessary to carry out the RPSA. Were it not for these access
    provisions, the fulfillment of Amtrak's statutory goals, the continued
    operation of nearly every Amtrak route, the expansion of Amtrak's
    routes and services, and the compensation and terms applicable to
    Amtrak's operations on host railroads would be subject to the whims of
    individual host railroads who could demand unreasonable compensation
    and other terms or simply refuse to accommodate Amtrak's operations.
        For example, Amtrak has temporarily reduced the frequencies of
    certain long distance trains. Our right to restore service is firmly
    grounded in statute, but that may not stop some host railroads from
    seeking to prevent these important trains from resuming daily service.
    This is why the STB's enforcement authority is essential.
        The RPSA also requires railroads to give Amtrak trains preference
    over freight trains, but Amtrak had no means of achieving enforcement
    of this statutory obligation until enactment of Section 213 of the
    Passenger Rail Investment and Improvement Act of 2008 (PRIIA). This
    provision, codified at 49 U.S.C. 24308(f), authorizes the STB to
    conduct investigations of poor on time performance of Amtrak trains,
    and if it finds that the poor performance was attributable to failure
    to provide preference, to award damages and other relief. Section 213
    also transferred authority for determining, upon application by a
    railroad, whether providing preference to Amtrak would materially
    lessen the quality of transportation for freight shippers from the
    Secretary of Transportation to the STB. As I will discuss in a moment,
    more than twelve years after the enactment of PRIIA the STB continues
    to be precluded from carrying out its responsibilities under PRIIA 213
    due to litigation brought by the AAR.
        In addition to its jurisdiction over disputes between Amtrak and
    its host railroads, the STB also has authority:
          To require continuation of, and determine compensation
    for, certain commuter and freight rail operations on the portions of
    the Boston-to-Washington Northeast Corridor and other rail lines that
    Amtrak acquired pursuant to the Railroad Revitalization and Regulatory
    Reform Act of 1976; \4\
    ---------------------------------------------------------------------------
        \4\ 49 U.S.C. 24903(c).
    ---------------------------------------------------------------------------
          To resolve, or assist in resolution of, disputes
    regarding the implementation of or compliance with the Northeast
    Corridor (NEC) Cost Allocation Policy developed pursuant to Section 212
    of PRIIA to allocate NEC costs among Amtrak and commuter railroads; \5\
    ---------------------------------------------------------------------------
        \5\ 49 U.S.C. 24905(c).
    ---------------------------------------------------------------------------
          To resolve, or assist in resolving, certain types of
    disputes arising under the Cost Methodology Policy for State Supported
    Services operated by Amtrak in partnership with states that was
    developed pursuant to Section 209 of PRIIA; \6\ and
    ---------------------------------------------------------------------------
        \6\ 49 U.S.C. 24712(c).
    ---------------------------------------------------------------------------
          To require, if certain conditions are met, that Amtrak
    provide facilities, equipment or services to a state that has selected
    an entity other than Amtrak to provide services for the operation of a
    state-supported route.\7\
    ---------------------------------------------------------------------------
        \7\ 49 U.S.C. 24702 note.

        I would like to focus my testimony on three of the issues regarding
    Amtrak and its host railroads over which the STB has jurisdiction:
    Amtrak's preference rights; the schedules of Amtrak trains; and
    resolution of disputes regarding the operation of additional Amtrak
    trains.
         On Time Performance and Preference Over Freight Transportation
        The public bargain with the freight railroads that relieved them of
    the obligation to operate unprofitable intercity passenger rail service
    and created Amtrak included an important condition: freight railroads
    would provide Amtrak passengers traveling over their rail lines with
    ``preference'' over freight transportation. This was not a new concept
    at the time. When freight railroads operated their own passenger trains
    before Amtrak, they recognized that prioritizing trains carrying
    passengers over slower freight trains carrying cargo was critical to
    providing a viable passenger service. Pity the dispatcher that delayed
    the 20th Century Limited or the Super Chief for a freight train. As the
    AAR has stated, when Amtrak was established freight railroads'
    assurances that they would ``grant Amtrak trains preference over their
    own freight trains'' comprised an important part of the deal.\8\ The
    commitment was short-lived. Some railroads quickly backtracked on their
    promise and customers suffered: on time performance (OTP) of Amtrak's
    long distance trains plummeted from 70% in 1972 to 35% in 1973. This
    led Congress to enact a 1973 amendment to the Rail Passenger Service
    Act specifically providing that ``[e]xcept in an emergency . . . Amtrak
    has preference over freight transportation . . .'' which remains the
    law today.
    ---------------------------------------------------------------------------
        \8\ Statement of Edward R. Hamberger, President & CEO of the AAR,
    at Hearing on Passenger Rail Financing, Subcommittee on Surface
    Transportation and Merchant Marine of the U.S. Senate Committee on
    Science, Commerce, and Transportation, June 5, 2003, p. 5.
    ---------------------------------------------------------------------------
        Amtrak's right to preference over freight transportation under the
    law is clear but often ignored, most likely because of a lack of
    enforcement, as I will cover later. The largest cause of delay to our
    customers is ``freight train interference,'' typically caused by a
    freight railroad requiring an Amtrak passenger train to wait so that
    its freight trains can operate on the tracks ahead. On the U.S. rail
    network, rail line owners control the dispatching of trains that
    operate on their lines, which means the freight railroads have
    substantial control over the on-time delivery of Amtrak customers
    traveling on freight-owned rail lines. An analogy to air travel puts
    this reality in perspective. What if air cargo carriers were
    responsible for air traffic control? I would posit that planeloads of
    travelers would be left circling above airports while cargo jets landed
    first unless an effective regulatory regime existed to ensure the
    opposite.
        When freight railroads ignore the law, our customers and your
    constituents suffer. Amtrak rigorously tracks all delays on every train
    to the minute and categorizes them according to the cause of delay.
    Freight train interference delays amounted to one million minutes in FY
    2019--equivalent to nearly two years of passengers waiting for freight
    trains to operate first. As a result of these delays, the on time
    performance of nearly all long distance services, and many state-
    supported trains, is unacceptably low. In FY 2019, only 42% of long
    distance customers and 75% of state-supported customers arrived at
    their destination on time, and a complete listing of the on time
    performance for each Amtrak route is included in the Appendix. The
    disregard of Amtrak's right to preference set forth in law is a
    fundamental challenge to Amtrak's survival and our ability to provide
    reliable service to the nation, including to many of your home
    districts. This is not fair to your constituents and they deserve
    better service than they are receiving from many host railroads.
        Moreover, while the law allows the STB to grant relief to a freight
    railroad from the obligation to provide preference in the event that
    doing so would materially lessen the quality of freight transportation
    provided to shippers, no railroad has ever sought such relief. Why? We
    believe this is because the presence of a few daily passenger trains on
    freight railroad mainlines is no threat to the quality and growth of
    freight transportation. For comparison, Amtrak's mostly two-track
    Northeast Corridor mainline between Newark and New York Penn Station
    hosts up to 48 trains an hour. On most host railroad mileage, Amtrak
    operates two trains a day.
        The experience of VIA Rail Canada, Canada's intercity passenger
    rail operator, clearly demonstrates the dire consequences when there is
    not even the pretense of the right to preference over freight
    transportation. As noted in a 2016 Special Examination Report of VIA
    Rail by Canada's auditor general, ``in Canada, passenger trains do not
    have the right of way. Therefore, VIA's trains are frequently required
    to yield to freight traffic, which sometimes results in significant
    delays.'' \9\ These delays due to lack of preference have decimated the
    performance of VIA's principal long distance train, the Toronto-
    Vancouver Canadian. In 2009, VIA added an extra night to the Canadian's
    schedule with the expectation that this would improve its poor on time
    performance. Instead, on time performance plummeted to just 8% in 2018
    and some trains operated as much as 43 hours late.\10\ In that year,
    VIA added an additional 12 hours to the Canadian's schedule, but on
    time performance continued to deteriorate.\11\ VIA's recently released
    five-year plan states that operation of the Canadian ``is not
    sustainable'' due to a ``combination of poor OTP'' and ``significant
    increases to the schedule.'' \12\
    ---------------------------------------------------------------------------
        \9\ VIA Rail Canada, Special Examination Report--2016, March 16,
    2016, p. 12 (https://www.viarail.ca/sites/all/files/media/pdfs/
    About_VIA/2016_OAG_Special_Exam_VIARail_
    Canada_ENG.pdf).
        \10\ VIA Rail Canada, Summary of the 2019-2023 Corporate Plan and
    2019 Operating and Capital Budgets, July 26, 2019, p. 9 (https://
    www.viarail.ca/sites/all/files/media/pdfs/About_VIA/our-company/
    corporate-plan/Corporate_Plan2019.pdf).
        \11\ VIA Rail Canada, Second Quarter Report 2019, p. 37 (https://
    media.viarail.ca/sites/default/files/publications/
    VIA_Q2_2019_EN_1.pdf).
        \12\ VIA Rail Canada, Summary of the 2020-2024 Corporate Plan and
    2020 Operating and Capital Budgets, September 30, 2020, pp. 19-20
    (https://www.viarail.ca/sites/all/files/media/pdfs/About_VIA/our-
    company/corporate-plan/Summary_2020-2024_Corporate_Plan.pdf).
    ---------------------------------------------------------------------------
        One of the reasons why freight railroads can delay our passengers
    while facing essentially no consequences is because Amtrak's ability to
    enforce our right to preference is limited. Only the U.S. Attorney
    General is presently allowed to bring a case to enforce provisions of
    the RPSA, and in the 47 years since the preference law was enacted, the
    U.S. Department of Justice (DOJ) has only initiated one case to enforce
    Amtrak's preference rights. That was in 1979, in a case against what
    was then the Southern Pacific (since merged into Union Pacific). The
    D.C. District Court entered a Consent Order under which Southern
    Pacific was ordered to ``accord to the operations of the Sunset Limited
    between New Orleans and Houston a preference over freight trains in the
    use of Southern Pacific's rail lines in accordance with'' the
    preference law, as well as other requirements to support that order.
    Because DOJ does not represent Amtrak, it has no obligation to enforce
    Amtrak's preference rights and has not done so for over 40 years.
        That is why Amtrak is particularly appreciative of the work of this
    Committee to include a provision in the Moving Forward Act that would
    allow Amtrak itself to seek enforcement of its right to preference, a
    vital step toward improving Amtrak on time performance. Simply put--if
    this provision is enacted, we believe host railroads will stop ignoring
    the law and your constituents will receive the service that they
    deserve.
        More than ten years ago, Congress recognized the challenges that
    Amtrak faces regarding freight railroad noncompliance with the
    statutory right to preference and passed two provisions in the
    Passenger Rail Investment and Improvement Act of 2008 (PRIIA): Section
    207, which directed Amtrak and the Federal Railroad Administration
    (FRA) together to develop metrics and minimum standards for measuring
    the performance and service quality of intercity passenger train
    operations, and Section 213, which set forth a new process for the STB
    to investigate the causes of substandard on time performance. Section
    213 provides that the STB may initiate an investigation, or ``Amtrak,
    an intercity passenger rail operator, a host freight railroad over
    which Amtrak operates, or an entity for which Amtrak operates intercity
    passenger rail service'' may require the STB to initiate an
    investigation, when ``the on time performance of any intercity
    passenger train averages less than 80 percent for any 2 consecutive
    calendar quarters, or the service quality of intercity passenger train
    operations for which minimum standards are established under section
    207 of the Passenger Rail Investment and Improvement Act of 2008 fails
    to meet those standards for 2 consecutive calendar quarters . . .'' The
    STB would then determine whether the failure to achieve the minimum
    standards ``are attributable to a rail carrier's failure to provide
    preference to Amtrak over freight transportation'' and potentially
    award damages or prescribe other relief to Amtrak.
        Unfortunately, shortly after the metrics and minimum standards rule
    was issued in 2010, the AAR filed suit, spending nearly a decade and
    millions of dollars fighting to prevent the implementation of the
    minimum standards. When the litigation finally concluded in 2019,
    Amtrak and FRA once again developed metrics and minimum standards,
    publishing a proposed rule in March of this year.
        Just this week, the final metrics and standards were issued once
    again. This landmark rule fulfills the intent of Congress to create a
    framework to help ensure that your constituents traveling on Amtrak
    arrive at their destination on time, and if they do not, the
    responsible parties are held accountable. The establishment of an 80%
    customer on time performance standard grounds the regulatory framework
    in the experience of our passengers. That is, for a given train, a
    minimum of 80% of our customers must arrive at their destination within
    15 minutes of the scheduled time for two consecutive quarters. If the
    standard is not met, the STB can investigate in accordance with the
    terms of Section 213. We appreciate the hard work and leadership of
    Administrator Batory and the FRA to progress the rule and reach this
    critical milestone in the pursuit of a reliable intercity passenger
    rail network.
        While the final rule has been issued, Amtrak remains concerned that
    the AAR will pursue additional legal challenges to prevent the rule's
    implementation. Last year, the AAR testified to Congress that while the
    devil is in the details, the federal government should ``move forward
    in its development of metrics and standards . . . [and that the] STB is
    the appropriate authority to evaluate and investigate those situations
    once the metrics and standards are in place.'' The AAR stated further
    that the metrics and standards represented ``a path forward that can be
    workable.'' Now that the final metrics and standards have been
    published, more than a decade after Congress first directed the
    development of these standards in PRIIA, the important question is:
    will the AAR once again try to block the implementation of these
    minimum standards? Riders need more on time trains, not more
    litigation. Another protracted legal fight would simply not be fair to
    our customers and your constituents.
        The metrics and standards form just one of two potential triggers
    for an STB investigation. The second is ostensibly more
    straightforward: 80% on time performance. Here, the AAR and some
    freight railroads spent more money and energy in litigation to strike
    down the STB's definition of on time performance. The result was to
    make it impossible for Amtrak to appeal to the STB to investigate poor
    on time performance and preference violations.
        Freight railroads' and AAR's history of using their tremendous
    resources to thwart the intent of Congress to give Amtrak a remedy for
    their violations of federal law demonstrates the need for Congress to
    make crystal clear that the 80% on time performance standard is
    measured by the arrival of an Amtrak train at each station, no later
    than 15 minutes from the time in the published schedule. This is
    consistent with the statutory goals for on time performance of Amtrak
    trains that have been in force for 39 years. Performance below this
    standard would permit Amtrak to appeal to the STB for relief, as
    originally envisioned by Congress.
        Amtrak would prefer not to litigate to redress preference
    violations, but history has proven that the only times when Amtrak is
    provided with reliable service across the system is when a real threat
    of preference enforcement has existed. Around 2008, with the looming
    passage of Sections 207 and 213 of PRIIA, the average on time
    performance of Amtrak long distance trains increased 45 percentage
    points to 75%. After AAR launched its legal challenge to Section 207,
    the average on time performance of these same trains fell a full 22
    percentage points within one year. An annotated chart presenting the on
    time performance of long distance trains since Amtrak's inception is
    included in the Appendix.
        Preference violations--and the absence of preference enforcement--
    have also meant that public investment in freight railroad
    infrastructure to improve passenger rail performance has not yielded
    promised returns for passengers or state funding partners. For example,
    after nearly $500 million were invested in the freight railroad line
    used by the State of North Carolina-supported Piedmont service, host
    railroad delays actually increased in the year after completion of the
    project, up to twice the level they were prior to the investment. Host
    railroad delays eventually fell somewhat, but there is still much room
    for improvement. On the route into Chicago used by three train services
    supported by the State of Michigan, as well as our Capitol Limited and
    Lake Shore Limited long-distance trains, $200 million of public funds
    were invested into the Englewood Flyover and Indiana Gateway projects.
    Today, however, passengers traveling on this line regularly encounter
    severe--and eminently avoidable--host railroad delays. Taxpayers and
    passengers deserve a better return on their investment.
        Even freight railroads' own initiatives to improve operating
    efficiency have sometimes resulted in more delays to Amtrak customers.
    Most of the major freight railroads have recently adopted new operating
    practices, called ``Precision Scheduled Railroading,'' that they claim
    have made their operations more reliable. However, passengers traveling
    over lines owned by railroads that have deployed Precision Scheduled
    Railroading principles have experienced severe delays, in part driven
    by the operation of trains too long to fit into the existing sidings on
    the line. In recent months, passengers on Amtrak Cascades and Missouri
    River Runner trains have been forced to follow freight trains for
    miles, at a slower speed, because the freight train ahead could not fit
    into a siding to allow the Amtrak train to pass. Passengers have also
    been stuck on trains for hours while freight trains experience
    mechanical issues, inherent to the operation of extremely long and
    heavy freight trains, that effectively shut down the line. We
    appreciate that the Committee has recognized the potential adverse
    effects of certain Precision Scheduled Railroading practices and
    included in the Moving Forward Act a Government Accountability Office
    study on the impact of the implementation of Precision Scheduled
    Railroading on Amtrak and other stakeholders, as well as a National
    Academies study of the safety impacts of freight trains that are longer
    than 7,500 feet.
        Some freight railroads claim that providing passenger trains with
    preference is an unreasonable standard that limits the efficiency of
    the rail network and service provided to shippers, or that it will
    bring freight movement to a standstill. These inflated claims do not
    withstand any level of scrutiny. First, freight railroads can seek
    relief from the STB if they truly believe that providing Amtrak with
    preference materially lessens the quality of freight transportation
    provided to shippers. The fact that not one railroad has sought such
    relief suggests that either railroads do not believe providing
    preference affects the quality of service provided to shippers or the
    railroads are not providing Amtrak with preference in the first place.
    Second, there is no correlation between freight volumes and freight
    train interference delays on most rail lines, which means dispatching
    decisions unrelated to the level of freight traffic drive Amtrak on
    time performance. Simply stated, freight railroads cannot show that
    compliance with federal law on preference leads to a detrimental impact
    on their freight transportation business. When freight leadership has
    decided to dispatch Amtrak trains according to the law, we have seen
    Amtrak's on time performance improve literally overnight. During these
    times, there was no evidence of negative impacts to the overall
    fluidity of America's rail network. In fact, it has been reported by
    some freight railroad leaders that efficient Amtrak service is a strong
    indicator that their own operations are running efficiently.
        The disparate levels of service experienced by passengers traveling
    over each host rail line can be stark. Canadian Pacific, which received
    an ``A'' on Amtrak's 2019 Host Railroad Report Card (a copy of which is
    included in the Appendix) dispatches Amtrak trains with minimal delay,
    which has led to on time performance of the Hiawatha consistently above
    90% each year. At the other end of the class is Norfolk Southern, which
    received an ``F'' on the last Host Railroad Report Card. Customers
    traveling on Norfolk Southern often encountered severe delays. On the
    Crescent, which primarily operates over Norfolk Southern, nearly 70% of
    customers were an average of an hour and a half late to their
    destination in 2019. Host railroads can quickly improve the passenger
    experience if they elect to do so. CSX reduced freight train
    interference delays to passengers by nearly 50% in a matter of months
    in late 2018, improving its overall performance to the equivalent of a
    ``B+'' on the report card.
        There is absolutely no reason why this nation cannot have both a
    world class freight rail network and modern intercity passenger rail
    service. Amtrak wants both freight and passenger rail to succeed, and
    it appears that individual freight railroads agree with us to widely
    varying degrees depending on the railroad and sometimes on the
    individuals making decisions.
        The law is perfectly clear: passenger trains have preference over
    freight trains. This was the promise that the freight railroads made to
    convince Congress to relieve them of their passenger obligations; and
    when that promise was broken, it was the intent of Congress in passing
    the preference law. Clarifying the statute would empower the STB to
    investigate violations of that law. Until then, your constituents
    ultimately face the consequences in the form of hours-late trains,
    missed business meetings and family events, and the lost opportunity to
    travel reliably by rail across the country.
               Schedules Must Serve the Needs of Amtrak Customers
        The train schedule is one of the fundamental attributes of Amtrak
    travel that determines whether a trip is attractive to customers and
    provides a valuable transportation option for communities. The AAR and
    some freight host railroads claim that schedules are outdated and never
    change. This is incorrect. It is important to note that all schedules
    in operation have been agreed on with every host railroad and state
    partner associated with each train. Amtrak and host railroads discuss
    schedules frequently--every week, in the case of some host railroads--
    and schedule accuracy is also regularly tested using statistical
    analysis and ride study programs.
        The importance of schedules was recognized at Amtrak's founding and
    is embedded into law. The RPSA directs Amtrak to offer ``efficient and
    effective intercity passenger rail mobility consisting of high-quality
    service that is trip-time competitive with other intercity travel
    options.'' Congress also provided that Amtrak should ``operate Amtrak
    trains, to the maximum extent feasible, to all station stops within 15
    minutes of the time established in public timetables'' and ``implement
    schedules based on a systemwide average speed of at least 60 miles an
    hour that can be achieved with a degree of reliability and passenger
    comfort.'' Unfortunately, for too many trains these standards are not
    met, with limited trip-time competitiveness compared to alternative
    travel modes and an effective speed much lower than 60 miles per hour.
        Schedules are designed based on the amount of time it takes to
    travel between two points without delay, plus recovery time or ``pad''
    to help a train maintain the published schedule in the event delays are
    encountered during the trip. There are often several hours built into a
    long distance train's schedule to absorb delays. For example, on the
    Coast Starlight, which operates between Los Angeles and Seattle, it
    would take 27 hours to travel the route by train without delay.
    However, the published schedule includes five hours of recovery time to
    absorb en route delays. Even with this pad, only 50% of customers
    arrived within 15 minutes of their scheduled time in FY 2019, and 64%
    arrived on time in FY 2020.
        Schedule modifications are regularly implemented, often at a host
    railroad's request. For example, in recent years Amtrak has not
    operated the Crescent between Atlanta and New Orleans for over a month
    at Norfolk Southern's request. This year, the schedule of the Illini/
    Saluki between Chicago and Carbondale, Illinois was temporarily
    modified many times, adjusting the departure times by as much as three
    hours and adding half an hour to the schedule at Canadian National's
    request; several trains were also canceled in their entirety. Note that
    these changes can have a severe impact on your constituents; at the
    host railroad's insistence, the train may operate at a time that is no
    longer convenient or attractive to a potential customer.
        The proposed rulemaking for Metrics and Minimum Standards for
    Intercity Passenger Rail Service that the FRA published in March of
    this year included guidance on schedules, stating that the recovery
    time should be redistributed within each schedule--with no time added--
    to align the schedule with the proposed customer OTP metric and improve
    the likelihood that a customer will arrive on time by putting the pad
    in the ``right'' place. Amtrak and host railroads have redoubled our
    efforts to assess schedules and determine whether any changes are
    necessary in light of the proposed metric. Customer OTP has been
    Amtrak's internal measure of reliability for several years, so many
    schedules have already been designed or modified to align with the
    customer OTP metric, such as the San Joaquin service in California and
    Northeast Regional trains that operate in Virginia. For other routes,
    we are nearing agreement on potential modifications.
        What is often lost in the negotiations with host railroads and AAR
    talking points is that schedules must serve the needs of passengers. In
    fact, there seems to be a general indifference to the competitiveness
    of Amtrak's service relative to driving or flying by most hosts, as if
    the trip times of a hundred years ago--many of which we currently
    cannot even meet owing to the slow-speed design of our now freight-
    biased system--are all we should hope for. Congress expects Amtrak to
    offer intercity passenger rail as a viable alternative to other modes
    as codified in Amtrak's mission. In the 21st century, that means
    achieving highway-like average speeds and reliable service, on
    schedules optimized for the needs of the traveling public.
        While some host railroads assert there is a trade-off between
    longer schedules and on time performance, that is a false choice.
    Current schedules already include plenty of time to absorb delays and
    lengthening schedules provides more opportunity to delay passengers.
    Further, what some host railroads deem to be a ``modest'' schedule
    change has historically included the addition of as many as several
    hours to the schedule--drastic and unnecessary schedule changes when
    OTP could be improved by simply reducing delays and enforcing Amtrak's
    right to preference. Lengthening the schedule allows for additional
    time to delay the train and inconveniences our passengers who would
    otherwise be able to arrive at their destination sooner. Additionally,
    lengthening the schedule costs Amtrak and any state that funds the
    service.
        For many of Amtrak's trains, schedules already reflect an average
    speed that is far below 60 miles per hour and offer limited trip-time
    competitiveness. Even with the substantial pad in the existing
    schedules, host railroads regularly ask Amtrak to lengthen schedules
    further--sometimes by several hours--to absorb additional host railroad
    delays. The question we must ask is why should your constituents bear
    the burden of a host railroad's inability to manage their own
    operations effectively?
        Communities and passengers across the country deserve intercity
    passenger rail service that meets their needs, and the standards set
    forth under law and schedules must be designed accordingly. If we are
    to provide compelling, trip-time competitive transportation services,
    we need cooperation from host railroads to offer attractive schedules
    to customers that are dispatched on time according to the law.
        Resolving Disputes Over Amtrak's Operation of Additional Trains
        One of Amtrak's most important rights administered by the STB is
    the ability to add additional trains and routes on any rail line
    whenever that is necessary to advance the broad purposes of the RPSA.
    When Amtrak was created, Congress anticipated that it would expand
    beyond its original route network and operate faster trains to attract
    passengers away from congested highway and aviation systems. In
    testimony urging the enactment of the RPSA of 1970, the president of
    the AAR assured Congress that private railroads stood ready to
    accommodate new high-speed Amtrak services on their tracks:

            If the passenger trains run 150 miles an hour and we are still
            to run heavy coal trains over them, from my experience we will
            have a little problem of maintenance, but we can do it and the
            costs can be fairly shared.\13\
    ---------------------------------------------------------------------------
        \13\ Testimony by Thomas M. Goodfellow, President of the AAR, at
    Passenger Train Service--Supplemental Hearings, Subcommittee on
    Transportation and Aeronautics of the U.S. House of Representatives
    Committee on Interstate and Foreign Commerce (June 3, 1970), p. 111.

        However, after Amtrak began operations, some freight railroads did
    not fulfill their obligation to allow Amtrak to operate additional
    trains, even those that would operate at conventional speeds. Finding
    that railroads were impeding additional Amtrak services by demanding
    ``inordinate capital investments'' before they would allow them,
    Congress enacted in 1980 the Additional Trains Provision of the Rail
    Passenger Service Act (RPSA). That provision, now codified at 49 U.S.C.
    24308(e), was intended to provide an ``expedited procedure,''
    supplementing Amtrak's existing legal remedies, for Amtrak to obtain an
    order from the Secretary of Transportation allowing it to operate
    additional trains, with the railroad having the burden of proof if it
    claimed that the additional trains would impair freight operations.
        The problem of host railroad intransigence the Additional Trains
    Provision was intended to address remains today. Rail freight traffic
    has been declining--down 10% from 2006 to 2019--and railroads that have
    embraced Precision Schedule Railroading claim that it has produced
    excess rail line capacity. Nevertheless when Amtrak seeks to add
    additional trains--often at the request of state agencies who will be
    funding the additional service--many host railroads continue to demand
    exorbitant capital investments that clearly are not necessary to
    accommodate limited new operations or modest increases in service on
    existing routes. Some host railroads have refused to engage in joint
    planning using objective, agreed-upon, criteria to determine whether,
    and if so what, capital investments are required. Instead, they insist
    that Amtrak or its state partners fund capacity modeling studies
    performed by the railroad or consultants it controls, using assumptions
    and criteria unilaterally chosen by the railroad and data not shared
    with Amtrak.
        Host railroad demands have delayed, and in some cases thwarted
    entirely, efforts by Amtrak and its state partners to add additional
    trains and routes to serve growing regions and corridors that are
    underserved or not served at all by Amtrak's existing network. Despite
    the substantial time and resources expended by Amtrak and state
    partners, efforts to expand Amtrak service take far too long. Even with
    nearly five years of joint planning and negotiations, we still do not
    have an agreement to restore passenger service to the Gulf Coast. It
    simply should not take five years to determine what needs to be done to
    enable the operation of two daily round trips. Amtrak and its partners
    have also struggled for years to pursue growth opportunities for the
    Hiawatha and Pennsylvanian services, preventing potential customers and
    communities from benefitting from increased connectivity and attractive
    transportation alternatives. Efforts with the host railroad just to add
    temporary trains to improve Pacific Northwest service during the World
    Athletics Championships in Eugene, Oregon (now scheduled for 2022) have
    been persistently challenged.
        At the heart of these tactics appears to be a concerted effort to
    alter Amtrak's right of access by fiat. The law is clear that Amtrak
    has a right to use host railroad infrastructure at incremental cost,
    and to add additional trains to meet increased demand. We do this, in
    essence, to fulfill the railroads' former common carrier passenger
    service obligation. As the Supreme Court has stated, the railroads have
    ``ongoing regulatory obligations'' under the RPSA to ``provide
    operational assistance and facilities'' for Amtrak under terms
    determined by the STB that are ``consistent with the railroads'
    continuing obligations as common carriers.'' \14\
    ---------------------------------------------------------------------------
        \14\ National Railroad Passenger Corp. v. Atchison, T. & S. F. Ry.,
    470 U.S. 451, 468-469, n. 23 (1985).
    ---------------------------------------------------------------------------
        Amtrak should not be required to undertake years-long studies, or
    provide massive capital investment to increase capacity, every time we
    seek to add an additional train. Yet, today, these are the demands of
    many of our hosts for new or additional service. They have effectively
    inverted the logic of the law, denying us the additional use of their
    rail lines we need and forcing us to the STB to gain access, as opposed
    to providing us access as a matter of course and seeking relief
    themselves before the Board if they felt real harm to freight
    transportation was the likely outcome of our additional service.
    Imagine what it would be like if a company with a government-granted
    monopoly over an essential telecommunications network limited access to
    the level of use in 1971? Or if Amtrak demanded exorbitant capital
    investments each time one of the Class I railroads that provide freight
    service on the Northeast Corridor and other Amtrak-owned rail lines
    sought to operate an additional freight train to serve growing port
    traffic or new industries?
        To address this problem, the Additional Trains Provision needs to
    be updated and clarified to provide a fair, well-defined, and
    expeditious process for resolving disputes over adding Amtrak services.
    Crucially, the current language does not take into account that, while
    some rail lines will require investments to increase capacity, others
    have the capacity to accommodate additional Amtrak trains on existing
    infrastructure.\15\ Nor does it require that assumptions, criteria, and
    processes used to decide upon any necessary capital investments be
    determined impartially, and not unilaterally by the host railroad.
    ---------------------------------------------------------------------------
        \15\ See Statement of Ian Jefferies, President & Chief Executive
    Officer, Association of American Railroads Before the Senate Committee
    on Commerce, Science & Transportation, ``Hearing on Amtrak: Next Steps
    for Passenger Rail,'' June 26, 2019, p. 4 (``[M]any freight corridors
    lack spare capacity . . . When existing or potential future freight
    traffic levels are so high that there is no spare capacity for
    passenger trains, new infrastructure might be needed . . .'').
    ---------------------------------------------------------------------------
        Amtrak is gratified that the Moving Forward Act that originated in
    this Committee and the House adopted includes, in Section 9205,
    amendments to the Additional Trains Provision that address these
    issues. I have appended to my testimony the language of that provision
    as amended by the Moving Forward Act and have noted several additional
    minor changes that Amtrak recommends be incorporated. One of the
    cornerstones of Amtrak's reauthorization proposals is to develop new
    routes, and increase service frequency on existing routes, to reflect
    demographic changes, population increases, and growing demand for
    passenger rail services since Amtrak's largely unchanged route system
    was developed a half century ago. These goals directly correlate with
    Congress's vision for Amtrak to bring service to underserved
    communities and regions, provide a viable, energy-efficient, low-carbon
    alternative to flying or driving, and work with its state partners to
    provide additional service in fast growing corridors. An expedited,
    fair, and impartial process for resolving disputes over Amtrak's
    operation of additional trains is essential to making that happen.
                          Additional STB Improvements
        In addition to the nuanced policy matters discussed earlier in my
    testimony, there are a number of practical measures Congress can take
    that will help to maximize the effectiveness of the STB in ensuring a
    thriving passenger rail system that meets the needs of the American
    public. The STB requested a total of $37.5 million for FY 2021 in
    furtherance of its statutory responsibilities and in support of its
    efforts to continue investing in personnel and modernizing workflow
    processes and data capabilities. Amtrak supports this request and urges
    Congress to make every effort to meet the Board's desired funding
    level, and in fact, Amtrak supports additional resources for the STB to
    allow it to acquire staff with specific expertise in passenger rail
    issues in recognition of the central role the Board plays in various
    matters involving passenger railroads, despite the Board's more common
    focus on freight rail issues.
        Adequate staffing--in terms of both staff-size and dedicated
    passenger rail staff--would also increase the Board's capacity to
    handle disputes between Amtrak and freight railroads in the
    investigatory manner Congress intended, as noted in PRIIA 213. When
    Congress passed PRIIA, it recognized that additional STB staff would be
    required to carry out its new role in investigating poor on time
    performance and preference violations, and provided that 15 additional
    staff members should be added for this purpose. Yet to date, sufficient
    funding has not been provided for this additional passenger rail staff,
    and we believe this has seriously hampered the Board's ability to carry
    out the robust statutory role envisioned for it by Congress.
        For example, when Amtrak brought two proceedings under PRIIA 213,
    the Board declined to carry out any investigatory functions--even
    though the statute explicitly provides for the Board to investigate--
    and instead treated the proceeding as an adversary adjudication,
    complete with the private discovery efforts and the disputes and delays
    that process typically entails. The STB should be adequately staffed so
    that it can effectively perform its fact-finding role and ensure that
    actions to resolve on time performance issues can proceed in an
    efficient and focused manner. In light of these considerations, we ask
    that Congress's FY 2021 funding for the STB include the resources
    required to hire the 15 additional staff members identified in PRIIA
    and include funding that is specifically dedicated to the acquisition
    and retention of passenger rail staff.
        Of course, there was another factor that paralyzed the Board's
    ability to investigate properly poor on time performance, and that was
    the series of legal challenges brought by the AAR and several freight
    railroads to insulate themselves effectively from the Board's scrutiny
    under PRIIA 213.
        Despite these challenges and decade-long delays, the PRIIA 207
    final rule has now been finalized with OMB, which would serve as the
    basis for the STB to investigate poor on time performance. Strong
    congressional funding and a dedicated passenger rail staff will ensure
    that the STB is well-equipped to step into this much needed function in
    order to protect your constituents and our customers from host railroad
    delays. As I noted earlier, the aims of ensuring a world class freight
    rail network and promoting a modern intercity passenger rail service
    are not mutually exclusive. We strongly support our freight railroad
    partners and believe that both passenger and freight rail service have
    a bigger role to play in meeting the mobility needs of our nation.
    Amtrak looks forward to collaborating with this subcommittee and the
    organizations present on today's panel to continue working toward that
    goal.
        I thank you again for inviting me to speak here today. I appreciate
    your time and your support of Amtrak, and I look forward to your
    questions.
                                    appendix
             Additional Trains Provision as Modified by INVEST Act
                   (with Amtrak Proposed Changes in Redline)
    SEC. 9205. USE OF FACILITIES AND PROVIDING SERVICES TO AMTRAK.

    Section 24308(e) of title 49, United States Code, is amended--
        (1) Lby striking paragraph (1) and inserting the following:
          ``(1)(A) LWhen a rail carrier does not agree to allow
    Amtrak to operate additional trains in accordance with proposed
    schedules over any rail line of the carrier on which Amtrak is
    operating or seeks to operate, Amtrak may submit an application
    to the Board for an order requiring the carrier to allow for
    the operation of the requested trains. Within 90 days of
    receipt of such application, the Board shall determine whether
    the additional trains would unreasonably impair freight
    transportation and--
              ``(i) Lfor upon a determination that such trains do
    not unreasonably impair freight transportation, order the rail
    carrier to allow for the operation of such trains on a schedule
    established by the Board; or
              ``(ii) Lfor upon a determination that such trains do
    unreasonably impair freight transportation, initiate a
    proceeding to determine any a remedy for such impairment, such
    as additional infrastructure investments required to be made
    by, or on behalf of, Amtrak. or operational or scheduling
    changes, as a condition for permitting the operation of such
    additional Amtrak trains,
              ``(B) LIf Amtrak seeks to resume operation of a train
    that Amtrak operated during the 5-year period preceding an
    application described in subparagraph (A), the Board shall
    apply a presumption that the resumed operation of such train
    will not unreasonably impair freight transportation unless the
    Board finds that there are substantially changed
    circumstances.'';
        (2) Lin paragraph (2)--
          (A) Lby striking ``The Board shall consider'' and
    inserting ``The Board shall'';
          (B) Lby striking subparagraph (A) and inserting the
    following:
            ``(A) Lin making the determination under paragraph (1),
    take into account any infrastructure investments previously
    made by, or on behalf of, Amtrak or proposed in Amtrak's
    application, with the rail carrier having the burden of
    demonstrating that the additional trains will unreasonably
    impair the freight transportation; and''; and
          (C) Lin subparagraph (B) by inserting ``consider
    investments described in subparagraph (A) and'' after
    ``times,''; and
        (3) by adding at the end the following:
          ``(4) LIn a proceeding initiated by the Board under
    paragraph (1)(BA)(ii), the Board shall solicit the views of the
    parties and require the parties to provide any necessary data
    or information. Not later than 180 days after the date on which
    the Board makes a determination under paragraph (1)(BA)(ii),
    the Board shall issue an order requiring the rail carrier to
    allow for the operation of the requested trains conditioned
    upon additional infrastructure or other investments needed to
    mitigate the unreasonable interference. In determining the
    necessary level of any additional infrastructure or other
    investments, the Board shall use any reasonable criteria,
    assumptions, and processes it considers appropriate.
          ``(5) LThe provisions of this subsection shall be in
    addition to any other statutory or contractual rights or
    remedies Amtrak may have to obtain the right with respect to
    operatinge the additional trains.''
             Historical On Time Performance of Long Distance Trains

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                 FY 2019 Customer On-Time Performance by Service
    ------------------------------------------------------------------------
                                                                    FY 2019
                               Service                              Customer
                                                                      OTP
    ------------------------------------------------------------------------
    Amtrak System................................................       74%
    ------------------------------------------------------------------------
    Northeast Corridor...........................................       83%
    ------------------------------------------------------------------------
      Acela Express..............................................       83%
      Northeast Regional.........................................       83%
        On Spine Northeast Regional..............................       89%
        Richmond / Newport News / Norfolk........................       75%
        Roanoke..................................................       70%
        Springfield Shuttles.....................................       89%
    ------------------------------------------------------------------------
    State Supported..............................................       75%
    ------------------------------------------------------------------------
      Capitol Corridor...........................................       87%
      Carolinian.................................................       56%
      Cascades...................................................       58%
      Downeaster.................................................       81%
      Empire.....................................................       79%
        Adirondack...............................................       69%
        Ethan Allen Express......................................       85%
        Maple Leaf...............................................       67%
        New York-Albany..........................................       90%
        New York-Niagara Falls...................................       66%
      Heartland Flyer............................................       47%
      Hiawatha...................................................       92%
      Hoosier....................................................       77%
      Illinois...................................................       61%
        Carl Sandburg / Illinois Zephyr..........................       78%
        Illini / Saluki..........................................       26%
        Lincoln Service..........................................       71%
      Keystone...................................................       93%
      Michigan...................................................       40%
        Blue Water...............................................       45%
        Pere Marquette...........................................       64%
        Wolverine................................................       34%
      Missouri River Runner......................................       67%
      Pacific Surfliner..........................................       71%
      Pennsylvanian..............................................       66%
      Piedmont...................................................       71%
      San Joaquins...............................................       61%
      Vermonter..................................................       83%
    ------------------------------------------------------------------------
    Long Distance................................................       42%
    ------------------------------------------------------------------------
      Auto Train.................................................       59%
      California Zephyr..........................................       34%
      Capitol Limited............................................       28%
      Cardinal...................................................       53%
      City Of New Orleans........................................       70%
      Coast Starlight............................................       50%
      Crescent...................................................       29%
      Empire Builder.............................................       46%
      Lake Shore Limited.........................................       44%
      Palmetto...................................................       62%
      Silver Meteor..............................................       42%
      Silver Star................................................       29%
      Southwest Chief............................................       32%
      Sunset Limited.............................................       20%
      Texas Eagle................................................       25%
    ------------------------------------------------------------------------

                     Amtrak Host Railroad Report Card 2019

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Lipinski. Thank you, Mr. Gardner.
        Mr. Jefferies, you may proceed.
        Mr. Jefferies. Thank you.
        Chairman Lipinski, Chairman DeFazio, and Ranking Member
    Crawford, members of the committee, thank you for the
    opportunity to be here today representing America's freight
    railroads.
        As America continues to navigate the ongoing challenges
    related to the COVID-19 pandemic, railroads are diligently
    focused on the task at hand, safely and reliably delivering
    essential goods to businesses and communities across the U.S.
        While the railroad value proposition to the American public
    has many sides, I want to highlight three specific areas.
        First, railroads have taken extensive steps to protect
    their employees from coronavirus throughout the pandemic, which
    required PPE use, strict social distancing policies, and
    rigorous cleaning procedures. Our industry is fortunate to have
    employees whose adherence to myriad safety measures is a
    constant, and they deserve our gratitude for their dedication.
        Second, railroads continue to provide safe and reliable
    service for customers across the economy. As a result of
    sustained investment and nimble operations, railroad service
    levels have remained strong this year, a reality that has been
    highlighted by Federal officials and prominent customers alike,
    and broad safety measures are also encouraging, with the
    overall employee injury rate down 12 percent so far from 2019,
    while the train accident rate is down 11 percent.
        Third, railroads are playing a key role in helping support
    the Nation's economic recovery. As businesses and consumer
    behavior have seen dramatic swings this year, such as the
    booming e-commerce or the aggressive ramp up in auto
    manufacturing or even the strong uptick in grain shipments,
    railroads have flexed operations to meet these challenges.
        Turning to passenger rail, freight railroads continued to
    work closely with Amtrak and other passenger partners,
    adjusting to meet changing needs in the face of unprecedented
    ridership challenges. While some passenger service offerings
    have been suspended in recent months, freight railroads stand
    ready to work with their partners to restore preexisting
    service when appropriate.
        Looking ahead, discussions regarding expansion of passenger
    rail must recognize Amtrak's unique position and not confuse
    growth of commuter rail with any perception of access rights.
    Voluntary agreements with privately owned freight railroads
    govern such arrangements and have proven extremely successful.
        Regarding on-time performance, the Federal Railroad
    Administration's final rule recognizes that schedules must be
    updated and aligned. Even regardless of the rule, though, host
    railroads have been engaged and remain committed to working
    towards scheduled modernization with Amtrak. If agreed upon
    schedules are in place and true causes of delay are accurately
    identified by transparent data, OTP metrics can be a meaningful
    tool.
        As an independent subject matter expert that adjudicates
    disputes between Amtrak and its hosts, the Surface
    Transportation Board does have a productive role to play in
    this process. But, more broadly, the STB has been active on
    numerous fronts regarding economic regulation of freight rail,
    many of which you heard about with our prior witness.
    Regardless of the specifics of any regulatory proposal, it is
    critical that the Board proceed in a manner that is data driven
    and fully grounded in sound economic principles. A regulatory
    environment that promotes investment versus one that dissuades
    is at stake.
        In closing, while our Nation is currently facing complex
    challenges, freight railroads stand ready to work towards
    solutions. From helping drive economic recovery, fostering
    infrastructure investment, or addressing environmental
    concerns, railroads will play a central role, and public policy
    set forth by Congress and Federal regulators plays an important
    role in the continuity of robust rail operations throughout the
    country.
        As this committee reexamines surface transportation
    reauthorization next Congress, divisive policy measures should
    be cast aside, and the laser focus should be robust investment
    into the Nation's integrated infrastructure network that all
    stakeholders can support.
        Thank you. And I am happy to address any questions that you
    may have.
        [Mr. Jefferies' prepared statement follows:]

     Prepared Statement of Ian N. Jefferies, President and Chief Executive
                   Officer, Association of American Railroads
                                  Introduction
        On behalf of the members of the Association of American Railroads
    (AAR), thank you for the opportunity to testify. The AAR's freight
    railroad members account for the vast majority of U.S. freight rail
    mileage, employees, and traffic. The AAR's passenger railroad members,
    which include Amtrak and various commuter railroads, account for more
    than 80 percent of U.S. passenger railroad trips.
        The U.S. freight transportation market is intensely competitive,
    and shippers choose to use rail because of the superior value that
    railroads offer. Railroads know they must continue to earn their
    customers' business. For railroads, this takes many forms, including:
          Focusing on safety. Railroads are a safe way to move
    people and freight, and the past decade has been the safest in rail
    history. Railroads are working with policymakers, their employees,
    suppliers, and customers to identify new technologies, operational
    enhancements, training techniques, and other ways to make railroads
    even safer.
          Recognizing capacity is key. The U.S. freight rail
    network today is in its best condition ever. Unlike trucks, barges, and
    airlines, America's privately-owned freight railroads operate
    overwhelmingly on infrastructure that they own, build, maintain, and
    pay for themselves. Railroads have poured more than $710 billion back
    into their networks since 1980, including an average of more than $26
    billion per year over the past five years. These investments will help
    ensure America's freight rail infrastructure remains world-class and
    that adequate rail capacity exists to meet our freight transportation
    needs.
          Emphasizing customer service. Railroads know their
    customers operate in intensely competitive markets and demand fast,
    reliable, and cost-effective service. In response, railroads are
    continually launching new initiatives to improve customer service.
          Enhancing sustainability. Freight railroads have a much
    smaller carbon footprint than other modes of transportation. Freight
    railroads today account for only 2.1 percent of transportation-related
    greenhouse gas emissions while accounting for 40 percent or more of
    long-distance freight volume. Today's railroads continue to leverage
    technology and modernize their operations to further improve their
    sustainability.
          Advocating for sound public policy. Key policies that are
    essential for maintaining and enhancing the safe, reliable service that
    freight railroads provide include:
          1.  Maintaining the existing balanced regulatory structure
    covering rail rates and service;
          2.  Replacing the outdated regulatory framework regarding the
    incorporation of new technologies with one that continues to protect
    the public but also fosters innovation and does not ``lock in''
    inferior technologies and processes;
          3.  Addressing modal equity, so that the marketplace--not the
    government--picks winners and losers among transportation modes and so
    that infrastructure financing is equitable across transportation modes;
    and
          4.  Undertaking more rail-related public-private partnerships.
                             Railroads and COVID-19
        When I testified to this committee on March 4 of this year, none of
    us knew how profoundly COVID-19 would impact our nation and the world.
        I am proud of the men and women of the railroads and other
    transportation industries who have been working tirelessly with skill
    and determination, day-in and day-out, behind the scenes. It is
    remarkable how well our supply chains have functioned over the past
    eight months, maintaining the flow of goods needed to preserve public
    health, sustain families, and keep essential businesses in operation.
        Early on, America's freight railroads established three main goals
    in their response to the pandemic. First and foremost: keep their
    employees safe. Teleworking is now widely available for employees able
    to work remotely, while social distancing, rigorous cleaning protocols,
    and the use of protective devices are now ubiquitous to protect
    employees who work on-site. My understanding is that the number of
    COVID-19 cases among rail employees has remained relatively low.
        The railroads' second imperative has been to continue to provide
    high levels of safe, reliable service. I am aware of no instances in
    which Class I railroads have had meaningful business interruptions due
    to pandemic-related crew shortages. Railroads' efforts have not gone
    unnoticed. For example, in a joint letter from the Federal Railroad
    Administration (FRA) and Surface Transportation Board (STB) to each
    Class I railroad, the agencies noted that ``[w]e . . . appreciate
    efforts to provide reliable service and enhanced communication to rail
    shippers and note that . . . we have received many positive reports
    from across the country.'' \1\
    ---------------------------------------------------------------------------
        \1\ Letter dated Aug. 24, 2020, from Ronald Batory, Administrator,
    Federal Railroad Administration, et al., to Jean-Jacques Ruest,
    President and Chief Executive Officer, Canadian National Railway
    Company. The same letter was sent to each Class I railroad.
    ---------------------------------------------------------------------------
        Railroads' third imperative is to continue to preserve their
    financial stability so they are able to meet our nation's freight
    transportation demands into the future. One way railroads have done
    this, starting before the pandemic, has been to re-examine and
    continually focus on improving their operating practices. The result
    has been a more resilient rail network that is better able to adapt to
    market changes. This is one reason why Class I freight railroads have
    neither requested, nor received, pandemic-related financial assistance
    from Congress.
        When much of the economy shut down during the second half of March
    2020, U.S. GDP, consumer spending, and industrial output all plunged.
    U.S. rail volumes followed suit. Total U.S. rail carloads fell 25
    percent in the second quarter of 2020 compared to the same quarter in
    2019, the biggest quarterly decline on record. Rail intermodal volume
    fell 13 percent.
        However, rail volumes have been improving in recent months as the
    economy has reopened. On the intermodal side, volumes are now well
    above pre-pandemic levels, thanks to surging activity at ports and
    robust consumer spending on goods. On the carload side, rail volumes
    are significantly higher than they were in the second quarter and in
    many cases are close to, or even above, where they were prior to the
    pandemic.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                    Freight and Passenger Rail Partnerships
        Today, freight railroads provide the infrastructure over which many
    of our nation's passenger railroads operate. The vast majority of the
    nearly 22,000 miles on which Amtrak operates are on track owned by
    freight railroads. In addition, hundreds of millions of trips occur
    each year on commuter rail systems that operate at least partially over
    tracks or right-of-way owned by freight railroads.
        Freight railroads want passenger railroads to succeed. This is more
    likely to happen if four overarching principles are followed.
        First and foremost, safety is always most important. Railroads are
    an extremely safe way to move people and freight, and we must keep it
    that way.
        Second, passenger rail use of freight rail corridors must be
    balanced with freight railroads' need to provide safe, reliable service
    to present and future customers. Current as well as future capacity
    needs of freight railroads must be protected.
        Third, policymakers should provide passenger railroads with the
    dedicated funding they need to operate safely and effectively, and to
    pay for expanded capacity when required. Freight railroads should not
    be expected to subsidize passenger operations.
        Fourth, preference for Amtrak's trains does not mean there will
    never be delays to Amtrak trains. We all know that when we set out
    driving somewhere or book an airline flight, delays might happen
    because of congestion, weather, accidents, or other reasons. It's no
    different for passenger trains on freight rail tracks. Transparency and
    good data shared by Amtrak with the host freight railroad can help
    identify causation and potentially assist in avoiding a similar
    situation in the future. This is discussed in further detail below.
                          On-Time Performance Metrics
        As members of this committee know, Section 207 of the Passenger
    Rail Investment and Improvement Act of 2008 (PRIIA) requires FRA and
    Amtrak to jointly develop metrics and minimum standards to measure
    performance, including on-time performance (OTP), of Amtrak's intercity
    passenger trains. Section 213 of PRIIA authorizes interested parties to
    initiate an investigation at the STB if the average OTP of a train is
    less than 80 percent for two consecutive calendar quarters. The FRA
    first issued its metrics and standards rule in 2009, but numerous
    courts, including the Supreme Court, found it to be unconstitutional or
    otherwise problematic. The administrative process to finalize a new
    ruling on metrics and standards is near completion, given that the
    Office of Management and Budget last week completed its review.
        Keeping both Amtrak and freight trains running on time is a
    tremendously complex issue, but bringing finality to the statutory
    mandate with an appropriate metric measured against accurate and
    attainable schedules will create certainty for Amtrak, the host
    railroads, and, most importantly, the traveling public. The AAR, on
    behalf of its freight railroad members, has been participating in the
    FRA rulemaking process since its inception to help ensure this
    desirable outcome is achieved.
        While the proposed rule uses published schedules to measure the
    customer on-time performance of an Amtrak train, unless the schedules
    are updated to reflect current conditions and the new metric proposed
    by FRA, they will give rise to misleading OTP measurements, create
    unrealistic expectations, and lead to unnecessary litigation at the
    STB--something the STB expressed concern about in its comments on the
    proposed rule. More broadly, none of the Amtrak schedules in use today
    were designed around FRA's proposed metric, something FRA acknowledged
    in its proposed rule. If underperforming trains (from an on-time point
    of view) are to be identified based on an OTP metric, their schedules--
    against which the metric is measured--must be revised and updated as
    necessary to ensure the metric is reasonably achievable. This may
    require a modest lengthening of total Amtrak schedules, but that would
    result in greater certainty for the traveling public and improved OTP
    for Amtrak. Several passenger rail advocates, including the Southern
    Rail Commission and Transportation for America, have noted that ``many
    riders would accept slight schedule adjustments if it meant their train
    could run on time more often.'' We hope Amtrak will work with our host
    freight railroad members to do so where needed.
        The proposed rule also fails to adequately assess the performance
    of each individual host railroad on a route with multiple hosts.
    Therefore, if one host continually delivers a train late to another
    host, the OTP metric would not be satisfied, and the receiving host
    could be subject to an STB investigation. Indeed, the FRA acknowledges
    in the rule that any individual Amtrak customer may travel over the
    lines of multiple individual host railroads, and that ``the customer
    OTP metric does not easily distinguish performance on individual host
    railroads.'' Although the proposed rule includes other metrics that
    more directly focus on host-specific performance, such as measuring
    minutes of delay, it is the OTP standard that determines when hosts may
    be subjected to an STB investigation. Other factors come into play too
    in evaluating proposed OTP metrics. For example, when track conditions
    require it, freight railroads temporarily reduce allowable operating
    speeds for safety reasons. These ``slow orders'' can delay trains of
    all types, but safety must take precedence over everything else.
    Similarly, railroads must devote sufficient time to track and signal
    maintenance. This often produces unavoidable delays in the short term
    for freight and passenger trains, but enhances safety and improves
    reliability in the long term. Freight railroads should not be penalized
    for making sure their tracks are safe. Put another way, delays caused
    by what in one way or another are safety enhancements should not count
    against host freight railroads under an OTP metric. In addition, Amtrak
    delays are often caused by factors completely outside freight railroad
    control, including delays caused by Amtrak's own actions. Freight
    railroads should not be penalized for delays they did not cause and
    cannot alleviate.
        Finally, for host railroads to monitor their performance against an
    OTP metric, identify improvement opportunities, and take corresponding
    corrective action, they need a close-to-real-time electronic feed of
    recent, current, and forecasted station-specific ridership data, as
    well as historical data for analyzing schedules.
        Freight railroads will continue to work cooperatively with the FRA,
    Amtrak, and others in the rulemaking process to ensure that the new
    metrics and standards are appropriate, realistic, and fair to all
    parties.
                       Amtrak and Private Right to Action
        Amtrak's relationship with host railroads is governed, first and
    foremost, by bilateral operating agreements that are negotiated between
    Amtrak and a host freight railroad. Key terms, such as train schedules,
    metrics for evaluating performance, and related incentives and
    penalties, are included in those agreements. Some of the bilateral
    agreements are decades old and are showing their age, as the schedule
    issue discussed above makes clear.
        When Amtrak and a host freight railroad are unable to agree on
    terms for a new operating agreement, either railroad can ask the STB to
    resolve the matter. Furthermore, if there are disagreements about the
    operation of additional trains by Amtrak over the hosts' rail line, the
    statute provides that the STB may resolve that dispute. This is
    consistent with the intent of Congress that disputes in this area be
    resolved by the agency with relevant expertise.
        Once an operating agreement between a host railroad and Amtrak is
    in place, disagreements over the interpretation and application of
    those terms are resolved through binding arbitration before a standing
    panel of qualified arbitrators. The process works: nearly 100 of these
    disputes have been filed and resolved by arbitrators in the 50 years
    since Amtrak was created.
        Congress has granted Amtrak additional enforcement rights related
    specifically to OTP. As noted, if OTP falls below a certain statutory
    threshold, Amtrak has the right to file a complaint at the STB against
    the host railroad and to seek relief. Moreover, if the STB determines
    that poor OTP was due to the freight railroad's failure to give Amtrak
    trains preference, damages can be awarded to Amtrak. In recent years,
    Amtrak has filed two such cases against three host railroads.
    Congress's choice of the STB, rather than the courts, to resolve such
    questions was intentional. The STB's broad understanding of how the
    freight rail network operates gives it a unique ability to understand
    and properly weigh the operational and other evidence each railroad
    presents.
        In addition to being able to pursue relief from the STB, Amtrak,
    like other government entities, can also bring complaints to the
    Department of Justice (DOJ) when Amtrak thinks freight railroads are
    not affording it proper preference. In its history, only one such case
    has been brought by DOJ.
        Amtrak believes it should have a third means of redress beyond the
    STB and DOJ: a private right of action--that is, filing suit against a
    host freight railroad in a court of law.
        Freight railroads strongly oppose granting Amtrak a private right
    of action, for several reasons. First, as discussed above, Amtrak
    already has other options to enforce its rights. Second, it would be
    premature, given that the metrics and standards rulemaking has not yet
    been completed by the FRA and ample time has not been provided to allow
    for implantation and operation of the new standard. Third, it would
    give Amtrak the freedom to ignore the terms of its negotiated contracts
    and evade the expert eye of the STB.
        Fourth, granting Amtrak a private right of action would open the
    door to wildly inconsistent decisions by district courts (which, unlike
    the STB, are not experts on rail transportation policy), as each court
    would apply its own assessment of how freight and passenger interests
    should be balanced. The result would likely be an unworkable patchwork
    of differing standards across different judicial districts and host
    railroad obligations that varied by jurisdiction. Such a confusing
    outcome would harm passenger and freight railroads alike.
        Amtrak, the host railroads, and the public all have the same goals:
    efficient, on-time passenger service coupled with efficient, reliable
    freight service. The best way to achieve these goals is not by creating
    a third option for legal enforcement, but to focus on enforcement of
    negotiated service obligations with the option for expert rail agency
    review as a backstop, and, when needed, access to courts through the
    Department of Justice.
                            Current STB Rulemakings
        The global superiority of U.S. freight railroads is the direct
    result of a balanced regulatory system that emanates from the Staggers
    Act, a bill passed with overwhelming bipartisan support by Congress and
    signed by President Carter 40 years ago. Today, thanks to the Staggers
    Act, railroads are able to base nearly all of their rates and service
    offerings on the dictates of the market and are far more responsive to
    customer needs than they were previously permitted to be.
        Importantly, the Staggers Act did not completely deregulate
    railroads. The STB has the authority to set maximum rates if a railroad
    is found to have ``market dominance'' over a particular movement and
    the rate is determined to be unreasonable. The STB also retains the
    ability to take other actions if a railroad engages in anticompetitive
    behavior.
        The success of the Staggers Act was reaffirmed a few weeks ago when
    more than 1,000 people, of all political persuasions, signed a letter
    in support of protecting the current balanced regulatory framework.
    Signatories include eight former U.S. Secretaries of Transportation,
    more than 550 state and local officials, more than 200 business
    leaders, representatives of nearly 90 think tanks, and 25 former
    administration officials and congressional leaders. (The letter is
    included with this testimony as a separate document.)
        The freight rail industry is not complacent, though. Looking ahead,
    our nation's recovery from the pandemic in the short term and our
    economic prosperity in the long term will depend on the viability and
    effectiveness of our freight railroads.
        That's why freight railroads are troubled by several proceedings
    underway at the STB that could derail many of the tremendous gains that
    have accrued to railroads, rail customers, and the broader economy
    since Staggers was passed.
        First, decades ago, as part of a Staggers-inspired effort to
    reinvigorate railroads, rail regulators exempted certain rail
    commodities from rate regulation on the grounds that, because these
    commodities could easily move by truck or barges, railroads would
    always face pervasive competition for their movement.
        Unfortunately, the STB is considering revoking existing exemptions
    for some of these products. The STB instituted this proceeding on its
    own--not because Congress asked it to, but because firms producing or
    using these commodities asked the STB for it, despite the fact that
    there's no evidence that railroads even possess meaningful market
    power, much less have abused such power, in their transportation of
    these commodities. Revoking the exemptions would conflict with the
    clear directive from Congress that rail regulators should regulate
    railroad rates and service only when market forces are not up to the
    task.
        Another second proceeding before the STB involves what the STB
    calls ``final offer rate review'' (FORR). It's complicated, but in a
    nutshell the STB is proposing a new rate-resolution process for small
    cases in which both a railroad and a low-volume rail customer would
    submit a rail rate--a ``final offer''--to the STB, which would then
    choose one of the two offers. Railroads are sensitive to the desire to
    make the STB more accessible to rail customers, but FORR is not an
    appropriate way to accomplish that goal. To our knowledge, no other
    regulatory agency uses an arbitration process similar to what the STB
    proposes, and FORR conflicts in numerous serious ways with statutes
    that govern the STB. The AAR has offered the STB ideas regarding ways
    to ensure small shippers have access to the existing rate
    reasonableness processes in ways that are practical and consistent with
    existing law.
        A third STB proceeding currently underway involves railroad revenue
    adequacy. A railroad is deemed ``revenue adequate'' by the STB when the
    railroad's rate of return on net investment (ROI) equals or exceeds the
    rail industry's cost of capital (COC). The concept of revenue adequacy
    is consistent with the unassailable point that, in our economy, firms
    and industries must produce sufficient earnings over the long term or
    capital will not flow to them. The subject of the STB proceeding is
    what, if anything, revenue adequacy means in terms of rail rates.
        Some rail industry critics say that a finding of revenue adequacy
    is evidence that the railroad is already earning as much revenue as it
    needs. According to this view, when a rail customer challenges a
    railroad's rate as too high, if the railroad is revenue adequate, the
    railroad's rates should be subject to more stringent regulation than
    they otherwise would be, possibly up to and including a hard cap. Put
    another way, this view says that once a railroad is revenue adequate,
    it can longer raise rates and may have to lower them.
        That's wrong. Revenue adequacy should not be seen as a ceiling for
    rail earnings; if anything, it's better seen as a floor. The statute's
    plain meaning intends for the STB to assist railroads in achieving
    revenue adequacy, not to cap their revenues or more aggressively
    regulate rates once the railroads become revenue adequate.
        Finally, a fourth proceeding underway at the STB involves
    ``mandated switching.'' Mandated switching is when a railroad that can
    carry freight all the way from origin to destination by itself is
    ordered to switch, or interchange, traffic with another railroad that
    has replaced the incumbent for part of the move. Under established law
    and regulatory policy, the STB must first find that a railroad engaged
    in anti-competitive conduct before the STB can order the railroad to
    switch traffic to another railroad. However, the proposal being
    considered by the STB would allow it to order mandated switching
    without showing that the incumbent railroad did anything anti-
    competitive at all.
        Mandated switching is a short-sighted attempt to obtain lower rail
    rates for a group of favored rail customers at the expense of all other
    rail customers. It would lead to sharp reductions in rail operational
    efficiency and in the quality of rail service. It would mean an
    incumbent railroad that invested in infrastructure and other assets
    needed to serve a customer could be forced to use those assets for the
    benefit of another railroad who is taking the customer away--like
    forcing UPS to use its fleet of local delivery trucks to deliver
    packages for FedEx. And it would likely mean sharply lower rail revenue
    caused not by fair competition in the marketplace but by unpredictable
    and arbitrary regulatory dictates.
                               Moving Forward Act
        Back on July 1 of this year, the U.S. House of Representatives
    passed H.R. 2, the ``Moving Forward Act.'' The railroad industry wants
    to help find solutions to genuine problems that are out there.
    Regrettably, H.R. 2 includes many provisions that would undermine
    freight railroads' ability to offer the safe, reliable, and
    environmentally-friendly service that their tens of thousands of
    customers require--and in so doing would also negatively affect
    passenger rail service.
        For example, the bill mandates two-person railroad crews in most
    rail operations. Yet FRA data show no correlation between train safety
    and the number of crew members in a locomotive cab. A two-person crew
    mandate would stifle the adoption of new technologies that would
    enhance safety and reduce the need for a second crew member in many
    circumstances. Railroads and rail unions should have the option--as
    they always have in the past--to negotiate crew sizes as part of the
    collective bargaining process.
        Another provision of H.R. 2 that freight railroads oppose would
    mandate STB mediation when a commuter railroad wants access to a
    freight railroad's right of way and the two parties cannot come to
    terms on that access.
        Many existing and proposed commuter railroads in the United States
    operate (or hope to operate) at least partially on tracks or corridors
    owned by freight railroads. Before it can operate on freight-owned
    property though, a commuter railroad must first reach voluntary
    agreement with the freight railroad on various issues, such as hours of
    passenger operations, the number of commuter trains, access fees,
    liability protections, track modifications, and more. These issues can
    often be resolved, as the significant growth in commuter rail over the
    years shows. Sometimes, though, an agreement is not reached.
        Mandated STB mediation in these cases creates the misperception
    that there is mandated commuter rail access to freight rail facilities.
    Absent voluntary agreement, private freight railroads should not be
    forced to allow commuter trains to use freight rail assets any more
    than any other private business should be forced to grant another
    company use of its assets without its consent and without just
    compensation. That said, freight railroads will continue to engage in
    good faith with commuter railroads whenever there is a credible
    proposal that involves commuter rail access to freight facilities.
        The recently-passed one-year extension of the FAST Act provides
    Congress with time to forge a longer-term reauthorization addressing
    critical transportation issues. With total freight traffic expected to
    grow by close to 40 percent by 2045, the challenges of operating a rail
    system capable of meeting future needs is daunting and will require the
    benefit of effective public policy. We believe it's possible to craft a
    bill that meets Congress's objective without compromising the safe and
    reliable freight railroad network our nation depends on. Freight
    railroads look forward to working with this committee and others in
    Congress to develop a surface transportation reauthorization which best
    meets this country's transportation needs.
                      Positive Train Control (PTC) Update
        Finally, I'm proud to say that each Class I freight railroad has
    100 percent of required PTC route-miles in operation, 100 percent of
    required PTC-related hardware installed, 100 percent of their PTC-
    related spectrum in place, and 100 percent of required employee
    training completed. They are continuing to work to ensure full
    interoperability by the end of this year.
                                   attachment
                                                GoRail,
                                      425 3rd St. SW, Ste. 940,
                                Washington, DC 20024, October 14, 2020.
    Ann D. Begeman, Chairman,
    Martin J. Oberman, Vice Chairman,
    Patrick J. Fuchs, Board Member,
    Surface Transportation Board,
    395 E Street SW, Washington, DC 20423.
        Dear Chairman Begeman, Vice Chairman Oberman and Board Member
    Fuchs:
        This year marks the 40th anniversary of the enactment of the
    Staggers Rail Act. We write to urge the Board to maintain the balanced
    underlying economic framework that has been the bedrock of your
    decisions and ensure that no actions you take undermine the ability of
    freight railroads to reinvest in the rail network.
        Any action inhibiting freight rail investment would threaten
    economic development and quality of life in our communities,
    precipitate job losses in the rail supply and contracting sectors, and
    undercut safety, efficiency and productivity across the rail network,
    affecting all railroads, small and large.
        As you know, the Staggers Act established a visionary approach to
    regulation that sparked a freight rail renaissance and continues to
    provide measurable benefits to businesses, consumers, taxpayers and our
    economy.
        This landmark, bipartisan legislation was necessary because decades
    of rigidly prescriptive federal overregulation had decimated the U.S.
    freight rail network. Bankruptcies were commonplace, rail rates were
    rising, safety was deteriorating, and rail infrastructure and equipment
    were in increasingly poor condition because railroads simply could not
    earn enough to pay for basic upkeep, let alone innovation and
    improvements.
        Since the implementation of a balanced system of economic
    regulation under the Staggers Act, which protects rail customers while
    allowing railroads to manage their assets and pricing, U.S. freight
    railroads have invested hundreds of billions of dollars in the rail
    network. Rail traffic has doubled, rail productivity has more than
    doubled, rail rates are down more than 40 percent, and recent years
    have been the safest on record.
        Freight railroads' massive, post-Staggers investments in
    infrastructure, equipment and technology transformed a failing rail
    system into a high-tech, highly efficient, interconnected network that
    links American communities, businesses and consumers to markets across
    the country and around the world.
        This is important to us and to our country. Every ton of freight
    moved by rail promotes economic development, mitigates pollution, eases
    worsening highway congestion and saves taxpayers money. Railroads are
    four times as fuel efficient as other modes of transport and emit 75
    percent fewer greenhouse gases. Additionally, railroads do not require
    the significant public spending that subsidizes other modes.
        Railroads are in the midst of revolutionary technological
    innovation as they adapt to meet changing customer demands and maintain
    their status as the safest, most efficient way to move freight over
    land.
        We implore the Surface Transportation Board to preserve the
    delicate regulatory balance created by the Staggers Act, allowing
    freight railroads to innovate, adapt and reinvest in the rail network.
    Our communities, our businesses and our employees depend on it.
            Sincerely,

    [Editor's note: The 57-page list of 1,000+ signatures is retained in
    committee files and is also available online at https://gorail.org/
    content/uploads/Staggers-Anniversay-Letter-to-STB.pdf.]

        Mr. Lipinski. Thank you, Mr. Jefferies.
        We now move on to Mr. O'Toole.
        Mr. O'Toole, you may proceed.
        Mr. O'Toole. Good morning, Mr. Chairman and members of the
    committee.
        Chairman Lipinski, I appreciate the picture behind you,
    which I am sure Chairman DeFazio knows is the Southern Pacific
    Railroad's Shasta Daylight passing Odell Lake in the Oregon
    Cascades. I once rode that train when I was a boy and more
    recently have been on the Amtrak Coast Starlight past that very
    same lake.
        Now, last year the average American traveled more than
    15,000 miles by automobile, flew more than 2,000 miles, rode
    several hundred miles on buses, walked more than 100 miles,
    rode 100 miles by urban rail transit and bicycled 26 miles.
    Meanwhile, Amtrak carried the average American just 19 miles.
    Of course, a few people rode Amtrak a lot more than 19 miles,
    and most didn't ride it at all. In contrast, almost everyone
    relies on the railroads for deliveries of freight.
        When considering the role of the Federal Government in
    general and the Surface Transportation Board in particular in
    supporting Amtrak, we should remember that one-third of freight
    ton-miles go by train, but only one-tenth of 1 percent of
    passenger travel rides Amtrak.
        Now, I love passenger trains, but I say Amtrak's creation
    was a mistake based on erroneous assumptions about the value of
    passenger trains and the problems faced by the private
    railroads. In 1970, the railroads' main problem was not money-
    losing passenger trains, but overregulation by the Federal and
    State governments. Regulation or not, passenger trains are
    unable to compete against airlines and automobiles.
        A 1958 Interstate Commerce Commission report concluded
    there was no way to make passenger trains profitable. Yet, some
    passenger train advocates believe that passenger train losses
    were imaginary and the railroads simply preferred freight
    trains over passenger trains. In fact, in the 1960s, railroads
    had a huge surplus in capacity and would have welcomed any kind
    of train that covered its basic operating costs.
        In 1969, Anthony Haswell, founder of the National
    Association of Railroad Passengers, made it clear in a
    congressional hearing that he believed passenger trains could
    be profitable, and he specifically objected to Government
    subsidies to passenger train operations, noting that such
    subsidies would protect inefficiencies in the rail industry and
    give operators little or no incentive to reduce expenses or
    increase revenues on their own initiative. He predicted that
    such subsidies have the risk of becoming permanent drains on
    Government revenues without commensurate public benefits.
        The 1970 collapse of Penn Central shook the industry.
    Congress should have responded by eliminating the
    overregulation that was stifling the railroads. Instead, it
    created Amtrak with the expectation that it would be a for-
    profit corporation and that taking passenger trains off the
    railroads' hands would save them from bankruptcy.
        Fifty years and more than $50 billion in operating
    subsidies later, we know that Amtrak isn't and never will be
    profitable. Anthony Haswell is sometimes called the father of
    Amtrak, yet he has called Amtrak a legendary boondoggle and
    admitted that he is personally embarrassed by the organization
    he helped created. His prediction that operating subsidies to
    passenger trains would eliminate any incentive to reduce
    expenses or increase revenues has proven correct.
        When Amtrak was created, average rail fares per passenger-
    mile were two-thirds of average airfares. Thanks to airline
    deregulation since then, inflation-adjusted airfares have
    fallen by 60 percent, even as Amtrak fares per passenger-mile
    have doubled. Average Amtrak fares had exceeded airfares by the
    1990s despite huge operating subsidies or perhaps, as Haswell
    predicted, because those subsidies encouraged inefficiencies.
        Today, counting all subsidies to both Amtrak and the
    airlines, Amtrak spends more than four times as much as the
    airlines moving someone a passenger-mile. The airlines have
    made themselves so efficient that they attract well over 100
    times as much domestic travel as Amtrak.
        The creation of Amtrak didn't particularly help railroads,
    such as the Milwaukee Road, which went out of business after
    Amtrak took over. Instead, railroads revived only when Congress
    passed the Staggers Act in 1980.
        One of the effects of deregulation was that railroads shed
    the surplus capacity that they once had that would have been
    available to passenger trains. Today, thanks to more efficient
    operations, railroads that once saw only a handful of trains
    per day support 60, 70, or 80 or more freight trains a day.
    This sometimes leaves little room for Amtrak.
        Displacing a moneymaking freight train with a money-losing
    passenger train is especially unfair considering that so few
    people use the passenger trains while so many rely on freight.
    Passenger trains are pretty, but they are an obsolete form of
    transportation. Efforts to give passenger trains preferences
    over freight will harm more people than it will help.
        I believe the Federal Government should end its support of
    Amtrak and allow passenger trains to operate unhindered where
    they are viable and disappear where they are not.
        Thank you very much.
        [Mr. O'Toole's prepared statement follows:]

      Prepared Statement of Randal O'Toole, Senior Fellow, Cato Institute
        Amtrak is the gnat's eyelash of American transportation. Americans
    travel an average of more than 15,000 miles per year by automobile.
    They fly an average of more than 2,000 miles a year. They travel an
    average of several hundred miles a year by bus, a hundred miles a year
    on foot, and 26 miles a year by bicycle. They travel an average of just
    19 miles a year by Amtrak.
        Yes, we bicycle more than we ride intercity passenger trains. But
    this travel isn't evenly distributed. Just as a few people ride
    bicycles a lot and most not at all, a few people ride Amtrak a lot, a
    few more occasionally, and most never ride it at all. Given Amtrak s
    irrelevance from a transportation viewpoint, it receives undue
    attention and subsidies from both the federal and state governments.
        At the same time, everyone relies on railroads for delivery of
    freight. Railroads send fuels to electrical power plants, deliver
    automobiles to auto dealers, produce to markets, and consumer goods to
    people all across the country. At least a third of all freight ton-
    miles in the United States are carried by rail while just one-tenth of
    one percent of passenger-miles are on intercity passenger trains.
        James J. Hill, the founder and builder of the rail empire that is
    today known as BNSF, made this point more than 130 years ago. Contrary
    to popular belief, there is no evidence that he thought that passenger
    trains were ``neither useful nor ornamental.'' Why would he when those
    trains produced 20 percent of his railroads' revenues, a percentage
    that steadily increased during his lifetime?
        He did note, however, that ``the so-called [rail] travelling public
    forms in reality but a small, and the more fortuitous class of the
    community'' whereas those who depend on freight, ``direct and indirect,
    include all. Hence,'' he continued, ``justice requires that railway
    systems should be cautious not to favor passenger traffic at the
    necessary expense of freight payers.''
        We should remember this when considering the role of the Surface
    Transportation Board in supporting Amtrak. Those who argue that the
    Surface Transportation Board or any part of the federal government
    should give Amtrak any kind of special priority should remember these
    two numbers: only one-tenth of one percent of passenger travel but one-
    third of freight goes by train.
        Personally, I love passenger trains. I once purchased five railroad
    passenger cars and have written several articles about the history of
    passenger rail for various journals including Minnesota History.
        Yet when I look closely at the history of Amtrak, I realize that
    its creation was a mistake. That mistake was based on erroneous beliefs
    about the potential value of passenger trains and problems faced by the
    private railroads.
        From the 1910s to the 1960s, the government heavily overregulated
    the railroad industry. The rates railroads could charge, the services
    they could provide, and where they could provide them were all ruled by
    the federal government and most state governments. This regulation
    stifled innovation and prevented the railroads from effectively
    competing with other forms of transportation.
        Both Greyhound and Trailways were essentially the creation of the
    railroads, but by 1960 the railroads were no longer allowed to invest
    in potentially profitable services such as buses or airlines. Yet at
    the same time they were required to operate money-losing services
    including most passenger trains.
        In 1958, a report issued by the Interstate Commerce Commission
    concluded that passenger trains lost money and there was no way to make
    them profitable. The report predicted that private intercity passenger
    trains would disappear by 1970. It was off by only one year.
        Yet a small number of passenger train advocates disagreed with this
    conclusion. They believed that passenger train losses were imaginary
    and that the railroads simply preferred freight trains over passenger
    trains. Transportation economist George Hilton demolished this
    argument, pointing out that the railroads in the 1960s had a huge
    surplus in capacity and that they would have welcomed any kind of train
    that covered its basic operating costs. Still, true believers led by
    Anthony Haswell, founder of the National Association of Railroad
    Passengers, persuaded Congress to hold hearings in 1969 on proposals
    for the federal government to rescue passenger trains.
        Haswell's testimony in that hearing made it clear that he believed
    passenger trains could and should be profitable. In fact, he
    specifically objected to government subsidies to passenger train
    operations, noting that such subsidies would protect inefficiencies in
    the railroad industry and give operators ``little or no incentive to
    reduce expenses or increase revenues on their own initiative.'' He
    accurately predicted that such subsidies ``have the risk of becoming
    permanent drains on Government revenues without commensurate public
    benefits.''
        The 1970 collapse of Penn Central, which up to that point was the
    largest bankruptcy in American history, shook the industry and forced
    Congress to take action. The action Congress should have taken would
    have been to eliminate the overregulation that was stifling railroad
    innovation and profitability. Instead, it created the National Railroad
    Passenger Corporation--Amtrak--with the expectation that it would be a
    ``for-profit corporation.''
        Fifty years and more than $50 billion in operating subsidies later,
    we know that Amtrak isn't and never will be profitable. Anthony Haswell
    is sometimes called the father of Amtrak, yet he calls Amtrak a
    ``legendary boondoggle'' and admits that he is ``personally
    embarrassed'' by the organization he helped create.
        If Haswell was wrong about the potential profitability of passenger
    trains, he was absolutely correct that operating subsidies to those
    trains would eliminate any incentive to reduce expenses or increase
    revenues. When Amtrak was created, average rail fares per passenger-
    mile were two-thirds of average air fares. By 1990, Amtrak fares had
    grown to be more than air fares despite huge operating subsidies--or
    because those operating subsidies encouraged inefficiencies, as Haswell
    predicted.
        Today, roughly half of Amtrak's costs are subsidized by federal and
    state governments. Amtrak fares per passenger-mile are double average
    air fares and, counting all subsidies to both Amtrak and the airlines,
    Amtrak spends more than four times as much moving a passenger-mile than
    the airlines. Since deregulation, the airlines have made themselves so
    efficient that they attract well over 100 times as much domestic travel
    as Amtrak.
        The creation of Amtrak didn't particularly help the railroads,
    which languished under heavy regulatory burdens for another ten years
    until the Staggers Act was passed in 1980. Conrail, the company that
    replaced Penn Central, became profitable only after passage of the
    Staggers Act, proving that deregulation, not Amtrak, was what the
    railroads needed in 1970.
        One of the effects of the Staggers Act was that the railroads shed
    the surplus capacity that in the 1960s would have allowed passenger
    trains to survive so long as they covered their basic operating costs.
    Reducing that capacity has allowed the railroads to reduce their costs
    and attract more business at reasonable rates. Today, thanks to more
    efficient operations, rail routes that once saw only a handful of
    trains per day are now supporting 60, 70, 80, or more freight trains
    per day.
        This sometimes leaves little room for Amtrak. Displacing a single
    money-making freight train with a money-losing passenger train is
    especially unfair considering that so few people use the passenger
    trains while so many rely on the freight trains.
        Passenger train advocates want the railroads to give preference to
    passenger trains or government spending to increase rail capacities.
    The 2009 stimulus bill, which provided $8 billion in high-speed rail
    funds (plus another $1.4 billion the next year) showed what happens
    when the government gets involved in railroads.
        Those funds, along with $7 billion in state funds, were spent on
    ten rail corridors with the intention of increasing the frequencies and
    speeds of passenger trains in those corridors as well as increasing
    capacities for freight. Ten years later, in 2019, passenger train
    frequencies were increased in just one of those corridors and very
    minor speed increases--typically 1 or 2 miles per hour--were gained in
    three corridors while speeds actually declined in three other
    corridors. In essence, this money was entirely wasted.
        For example, federal and state taxpayers spent almost $1.4 billion
    increasing the capacity of a Union Pacific corridor between Chicago and
    St. Louis. Ostensibly, the purpose was to speed up and increase the
    frequency of passenger trains. In fact, the increase in speeds would
    have been small and as of 2019 there had been no increase in either
    passenger train speeds or frequencies. I am sure Union Pacific
    appreciates the fact that it can run more freight trains in the
    corridor, but it should have paid for those improvements itself.
        Another corridor was the Northeast Corridor, where Amtrak proudly
    claims to carry more passengers than the airlines. Yet it admits that
    it carries only 6 percent of intercity travel in the corridor while
    highways carry almost 90 percent. Amtrak claims that its Northeast
    Corridor trains earn an operating profit, but when it calculates those
    profits it neglects to include depreciation even though depreciation is
    Amtrak's second-largest operating cost on its annual financial
    statements.
        Depreciation is not just an accounting fiction but a real cost
    reflecting the amount that needs to be spent to keep infrastructure in
    a state of good repair. Amtrak's fantasy that depreciation doesn't
    count reflects its failure to maintain the Northeast Corridor, which
    now has around a $50 billion maintenance backlog. More than $1.6
    billion of stimulus funds were given to Amtrak for the Northeast
    Corridor, but this wasn't enough to restore the lines and the average
    speed of trains actually declined. In fact, Amtrak's fastest New York-
    Washington trains today are slower than Penn Central trains on the same
    route in 1969.
        Amtrak also uses accounting tricks when it claims that fell just
    $29 million short of making a profit in 2019 and would have made a
    profit in 2020 were it not for the pandemic. To make that claim, Amtrak
    not only ignored depreciation, it counted state subsidies to Amtrak
    trains as ``passenger revenues.'' After correcting these two fictions,
    Amtrak actually lost well over $1 billion in 2019.
        The lessons for the Surface Transportation Board and the federal
    government in general are clear.
          Railroads and other transportation industries are
    healthiest when government gets out of their way.
          Passenger trains, while pretty, are an obsolete form of
    transportation that are not even viable in the Northeast Corridor, much
    less elsewhere.
          Efforts to give passenger trains preferences over freight
    trains will harm more people than it will help.
          The federal government should end its support of Amtrak
    and allow passenger trains to operate unhindered where they are viable
    and to disappear where they are not.

        Mr. Lipinski. Thank you, Mr. O'Toole.
        Mr. Skoutelas, you may proceed.
        Mr. Skoutelas. Chairman Lipinski, Ranking Member Crawford,
    Chairman DeFazio, Ranking Member Graves, and members of the
    subcommittee, thank you for the opportunity to testify today. I
    am Paul Skoutelas, president and CEO of the American Public
    Transportation Association, also known as APTA.
        At the outset, I want to thank you, Chairman Lipinski, and
    express APTA's deep gratitude for all that you have done for
    passenger rail during your time in Congress. I do not remember
    a previous time when commuter rail issues have been at the
    forefront of the Transportation and Infrastructure Committee's
    agenda than during your tenure, and for that, we thank you.
        Commuter rail is critical to our economy, creating and
    supporting more than 200,000 jobs. Prior to the COVID-19
    pandemic, 32 agencies operating as commuter railroads safely
    carried more than 500 million passenger trips a year, and
    ridership had grown over 9 percent over the last decade.
    Commuter railroads' success in advancing their reaches
    depended, in part, on the Surface Transportation Board and its
    ability to adjudicate service disputes that come before it.
    Commuter rail connects people to jobs and to opportunity each
    and every day.
        For passenger railroads, including commuter rail, higher
    speed rail as well, access to freight railroad rights-of-way is
    essential to expand existing, or to initiate new, service.
        Commuter railroads are often at a disadvantage when seeking
    to utilize freight rail rights-of-way as they have no statutory
    priority for such access. As the committee considers the
    surface transportation bill in the 117th Congress, APTA would
    like to work with you and our rail partners to explore the best
    opportunities to ensure equitable access for all passenger rail
    on freight rail lines.
        That said, APTAis grateful for the inclusion of provisions
    in H.R. 2, the INVEST in America Act, to enhance the STB's
    mediation authority to ensure that commuter rail operators have
    a fair and equitable process for negotiating passenger rail
    access on freight rail lines. In addition, as part of a fair
    and equitable process, we believe that the STB must ensure that
    any unused capacity on freight rail lines is defined, that the
    railroad owner is fairly compensated for available capacity,
    and a process be established to enhance capacity on freight
    railroad lines where there is insufficient capacity.
        To that end, APTA recommends that the STB hold a capacity
    summit to discuss how best to allow for the efficient
    allocation and use of capacity on freight rail lines for
    passenger rail operations.
        Last, we note that the STB is operating without a full
    complement of Board Members, and are hopeful that the Senate
    will approve the pending nominations to the STB without delay.
        Let me turn to safety for a moment. For commuter rail
    operators and the entire public transportation industry, safety
    is a core value. It is a nonnegotiable operating principle and
    a promise to our riders. I am pleased to report that commuter
    railroads are on track to meet the December 2020 deadline for
    installing and implementing Positive Train Control. Our
    commuter rail agencies have devoted tremendous time and
    resources to ensuring the safety of riders through PTC
    implementation, and we are grateful for the support of this
    committee in getting us to the finish line.
        Another issue that I would like to touch upon is commuter
    rail liability insurance. Agencies are facing rapidly
    escalating costs to procure necessary liability insurance for
    their operations with the number of insurers dramatically
    decreasing over the past several years. Despite commuter
    railroads' exceptional safety record, a recent survey about
    these commuter rail agencies reveal that there has been a 60-
    percent increase in premium costs for the last 3 years, which
    is impacting agency operating budgets.
        There are a number of instances where Federal law provides
    a backstop to cover losses above liability limits, or allows
    for Federal intervention in a constrained insurance
    marketplace. APTA plans to propose a Federal liability
    insurance framework for commuter rail in advance of the next
    surface transportation authorization for this committee to
    consider.
        I also want to take this opportunity to discuss public
    transportation's continuing need for additional COVID-19
    emergency relief. The $25 billion in CARES Act funding provided
    a critical lifeline to enable our agencies to serve first
    responders, hospital workers, and grocery store clerks every
    day. According to the Federal Transit Administration, public
    transit agencies have obligated 94 percent of CARES Act funds,
    $23.4 billion of the $25 billion appropriated. APTA estimates
    that the additional need for emergency funds is now at least
    $32 billion. Without additional emergency funding, many
    commuter rail agencies and transit agencies will need to
    consider cutting services, routes, and furloughing workers.
        Federal support is critical to ensure that operating
    agencies, including our commuter rail operators, can reposition
    themselves to survive and to move forward to serve their
    communities. Time is of the essence in securing this additional
    emergency funding. To that end, APTA strongly supports H.R.
    925, the Heroes Act, which provides $32 billion of emergency
    transit funding. We stand ready to work with this committee and
    Congress to ensure that COVID-19 emergency funding for public
    transportation is passed before the end of the year.
        Lastly, APTA is grateful for the robust funding for public
    transportation and passenger rail in the INVEST in America Act,
    and the focus on investing in commuter rail through the
    Consolidated Rail Infrastructure and Safety Improvement program
    known as CRISI. APTA encourages the committee to continue this
    robust funding as it considers the surface transportation
    authorization bill in the 117th Congress.
        On behalf of APTA, thank you for giving me the opportunity
    to testify and to share our thoughts on the Surface
    Transportation Board. I look forward to answering any of your
    questions.
        [Mr. Skoutelas' prepared testimony follows:]

    Prepared Statement of Paul P. Skoutelas, President and Chief Executive
              Officer, American Public Transportation Association
                                  Introduction
        Chairman Lipinski, Ranking Member Crawford, and Members of the
    Subcommittee on Railroads, Pipelines, and Hazardous Materials, on
    behalf of the American Public Transportation Association (APTA) and its
    1,500 public- and private-sector member organizations, thank you for
    the opportunity to testify on ``Examining the Surface Transportation
    Board's Role in Ensuring a Robust Passenger Rail System''.
        My name is Paul Skoutelas, and I am the President and Chief
    Executive Officer (CEO) of APTA, an international association
    representing a $74 billion industry that employs 435,000 people and
    supports millions of private-sector jobs. We are the only association
    in North America that represents all modes of public transportation--
    bus, paratransit, light rail, commuter rail, subways, waterborne
    services, and high-performance intercity passenger rail.\1\
    ---------------------------------------------------------------------------
        \1\ APTA members include public transportation systems; planning,
    design, construction, and finance firms; product and service providers;
    academic institutions; state transit associations; and state
    departments of transportation.
    ---------------------------------------------------------------------------
        Prior to joining APTA in January 2018, I served as national
    director of WSP USA's Transit & Rail Technical Excellence Center where
    I provided strategic direction on public transit and rail projects.
    Earlier in my career, I was CEO at two major public transportation
    agencies: the Port Authority of Allegheny County in Pittsburgh,
    Pennsylvania, and the Central Florida Regional Transportation Authority
    (LYNX) in Orlando, Florida.
               Commuter Rail and The Surface Transportation Board
        Nearly 40 years ago, Congress enacted the Northeast Rail Services
    Act of 1981 (P.L. 97-35) to salvage commuter rail operations from
    Conrail and created six commuter rail authorities.\2\ The state of
    commuter rail at that time suffered from low and declining ridership
    and equipment long beyond its useful life. These agencies and the many
    others across the nation that existed then or have started anew have
    transformed commuter rail into an essential, reliable, growing, safe,
    and affordable mobility option carrying hundreds of millions of
    travelers each year.
    ---------------------------------------------------------------------------
        \2\ The six commuter rail authorities are the: Metropolitan
    Transportation Authority; Connecticut Department of Transportation;
    Maryland Department of Transportation; Southeastern Pennsylvania
    Transportation Authority; New Jersey Transit Corporation; and
    Massachusetts Bay Transportation Authority.
    ---------------------------------------------------------------------------
        Today, there are 32 agencies operating commuter railroads.\3\
    Commuter rail services are higher speed, higher capacity trains with
    less frequent stops. They are traditionally used to connect people from
    suburban areas to city centers. Prior to the coronavirus pandemic, 32
    agencies operating commuter railroads, safely carried passengers on
    more than 500 million trips each year.
    ---------------------------------------------------------------------------
        \3\ A list of commuter railroad agencies can be found in Appendix
    A. APTA's list includes all commuter and hybrid rail agencies that
    receive funding from the Federal Transit Administration (FTA) and
    report data to the National Transit Database.
    ---------------------------------------------------------------------------
        In the last decade, nine new commuter rail systems \4\ have begun
    operation, with the latest--TexRail in Fort Worth, Texas--starting up
    last year. Before the COVID-19 pandemic, commuter rail enjoyed nearly
    constant annual ridership growth--growing by more than 42 million
    passenger trips (9.2 percent) over the last decade. Commuter rail also
    increased fare recovery (fare revenue as a percent of operating costs)
    in the last decade. On average, fares recovered more than one-half (52
    percent) of the operating costs of commuter railroads.
    ---------------------------------------------------------------------------
        \4\ The nine new systems are Portland, OR (Westside Express, 2009);
    Minneapolis, MN (Northstar, 2009); Austin, TX (Capital MetroRail,
    2010); Denton, TX (A Train, 2011); Orlando, FL (SunRail, 2014); Denver,
    CO (A Line, 2016); Marin County, CA (SMART, 2017); Antioch, CA (eBART,
    2018); and Fort Worth, TX (TEXRail, 2019).
    ---------------------------------------------------------------------------
        Commuter railroads' success in advancing their reach is dependent,
    in part, on the Surface Transportation Board (STB) ensuring a robust
    passenger rail system. While the majority of the agency's jurisdiction
    revolves around freight rail, the STB is charged with adjudicating
    service disputes that may arise between commuter rail, freight
    railroads, and Amtrak.
    Commuter Rail Access to Freight Railroad Rights of Way
        Commuter rail connects people to jobs and opportunity each and
    every day. For commuter railroads to expand existing service or
    initiate new service, access to freight railroad rights of way is
    essential. Commuter railroads are often at a disadvantage when seeking
    to utilize freight rail rights of way, as they have no statutory
    priority for such access. Federal policies should encourage the growth
    of both passenger rail and freight rail operations on existing rail
    lines.
        Currently, Amtrak has the statutory right to access the rail lines
    or facilities of a rail carrier or regional transportation authority
    and has preferential use rights over freight railroads when conducting
    intercity or commuter rail passenger transportation.\5\ However, other
    passenger rail services (including commuter rail and high-speed rail)
    do not have the same right of access or preference. As the Committee
    considers the surface transportation authorization bill in the 117th
    Congress, APTA would like to work with you and our rail partners,
    including Amtrak and the freight railroads, to explore the best
    opportunities to ensure equitable access for all passenger rail on
    freight rail lines. A robust passenger rail system is critical to
    ensure our post-pandemic economic recovery.
    ---------------------------------------------------------------------------
        \5\ See 49 U.S.C. Sec. Sec.  24308 (a) and (c).
    ---------------------------------------------------------------------------
        APTA is grateful for the Committee's recognition that commuter rail
    authorities need to have an equitable and fair process for negotiating
    passenger rail operational access on freight railroad trackage and
    rights-of-way. H.R. 2, the INVEST in America Act, included two
    provisions to enhance the STB's role in mediating disputes.\6\ Sections
    9401 and 9402 of H.R. 2 address the STB's authority to mediate disputes
    involving commuter rail track usage and service requests as well as
    rights-of-way usage requests for the construction and operation of a
    segregated fixed guideway facility. Importantly, both provisions in
    H.R. 2 require a rail carrier to provide good faith consideration to
    reasonable access and usage requests. If an agreement cannot be reached
    between the public transportation authority and the rail carrier,
    either party can apply to the STB for nonbinding mediation. If this
    language is passed into law, APTA encourages the STB to ensure that
    rail carriers provide full and fair consideration to commuter rail
    requests for track and right-of-way access and usage.
    ---------------------------------------------------------------------------
        \6\ 49 U.S.C. Sec.  28502 and Sec.  28503 currently provide the STB
    with the authority to mediate disputes between commuter rail
    authorities and the freight railroads.
    ---------------------------------------------------------------------------
        The STB could also be instrumental in ensuring that any unused
    capacity on freight rail lines is defined and the railroad owner is
    fairly compensated for available capacity and, where there is
    insufficient capacity, a fair and equitable process is created to
    enhance capacity. We strongly encourage the STB to conduct a summit on
    capacity to discuss the appropriate parameters to allow for the
    efficient allocation and use of capacity on freight rail lines for
    passenger rail operations. One outcome of the summit could be an
    agreed-upon tool to define capacity. APTA notes that after positive
    train control is fully implemented, additional capacity may become
    available and provide opportunities for passenger rail service
    expansion.
        In addition, after the Federal Railroad Administration (FRA)
    completes its rulemaking on Metrics and Minimum Standards for Intercity
    Passenger Rail Service,\7\ the STB will play a very important role in
    investigating and resolving any disputes that arise after the standards
    are finalized.\8\ It is critically important that any implementation of
    the final rule take into account the individual performance of rail
    carriers, including commuter railroads, on multi-carrier routes so as
    not to unduly subject such carriers to the costs and burdens of
    associated investigations that are unrelated to their service delivery.
    ---------------------------------------------------------------------------
        \7\ See 85 Fed. Reg. 17835, Docket Number FRA-2019-0069 (March 31,
    2020).
        \8\ See 49 U.S.C. Sec.  24308(f).
    ---------------------------------------------------------------------------
        Finally, APTA notes that the STB is currently operating without a
    full complement of Board members. The Board has three confirmed members
    and the Chair's term expires in December 2020. Two nominees are pending
    in the Senate. If the nominations are not approved before the end of
    this Congress, the STB's ability to conduct routine business may be
    impacted. Commuter and passenger railroads need certainty and a strong
    regulatory structure to ensure quick resolution of disputes by the STB.
    APTA is hopeful that the Senate will approve these pending nominations
    to the STB without delay to ensure that the Board is able to conduct
    its business at the beginning of next year.
                       Commuter Rail Liability Insurance
        Commuter rail agencies are facing rapidly escalating costs to
    procure necessary liability insurance for their operations. Railroad
    liability insurance is considered a specialty product by the insurance
    industry. Only a handful of insurers offer this coverage, and a
    significant percentage of the railroad liability insurance marketplace
    is provided by foreign companies. The federally mandated minimum
    liability insurance coverage for commuter railroads is $295 million. In
    addition, some commuter railroads are required to buy additional
    insurance coverage as a result of contractual obligations with the
    freight railroads to operate on their tracks or by state law.
        The number of insurers in the excess market willing to even offer
    potential capacity for this coverage has drastically decreased over the
    past several years. Regardless of cost, it is becoming extremely
    difficult to obtain the needed coverage up to the required limits. Each
    policy is custom-made for the particular commuter rail agency, with
    negotiated terms and premiums. Premiums for these policies, which must
    be paid annually, range from $1 million to $4 million. Given the fact
    that only a small number of insurers provide commuter rail insurance,
    the negotiating power of commuter rail agencies is more limited than it
    would be in the traditional insurance marketplace.
        Despite commuter railroads' exceptional safety record, a recent
    survey of APTA's commuter rail agencies revealed that there has been a
    60 percent increase in premium costs over the last three years and the
    cost of liability insurance is severely impacting the operating budgets
    of many commuter rail agencies. The increase in premiums are largely
    due to factors outside the control of the commuter rail industry,
    including losses in the commercial trucking sector, major forest fires,
    hurricanes, increased jury awards, and insurers exiting the market.
        In advance of the next surface transportation authorization bill,
    APTA is undertaking research to illustrate how liability costs have
    increased for the commuter rail industry and identify the reasons for
    the increases. There are a number of instances where federal law
    provides a backstop to cover losses above liability limits or allows
    for federal intervention where the insurance marketplace has become
    noncompetitive and premiums unaffordable. APTA is developing a proposed
    legislative framework to reduce liability insurance premium costs for
    commuter railroads for the Committee to consider in the next Congress.
               Commuter Rail's Essential Role During the Pandemic
        Commuter rail is essential to our nation's economy. America's
    commuter railroads create and support more than 200,000 public- and
    private-sector jobs. The COVID-19 pandemic has illustrated the
    essential lifeline that transit, including commuter rail, plays in our
    communities--bringing healthcare professionals to the frontlines,
    delivering groceries and medicine to at-risk populations, and
    connecting essential workers to their places of work.
    Public Transportation is Safe
        Public transportation continues to provide the safest and most
    sustainable way to connect people to jobs and opportunity each day.
    COVID-19 and the concomitant shelter-in-place orders, business
    closures, suspension of tourism, and increasing unemployment
    significantly decreased public transit and commuter rail ridership. Our
    commuter rail agencies adapted quickly to protect employees and the
    public through increased cleaning and disinfecting procedures at
    significant direct costs. Combating the public perception that public
    transportation spreads COVID-19 remains a significant barrier as
    transit agencies work to increase ridership.
        APTA recently commissioned a study to compile the latest global
    research on COVID-19 transmission and transit, and successful
    mitigation strategies to protect both employees and the public.\9\ The
    study found that there has been no direct correlation between use of
    urban transit and transmission or contraction of the coronavirus. Thus,
    there is minimal risk from using transit provided specific safeguards
    are in place, such as face coverings, well-functioning ventilation
    systems, and minimal talking by riders.\10\
    ---------------------------------------------------------------------------
        \9\ APTA, Public Transit and COVID-19 Pandemic: Global Research and
    Best Practices (Sam Schwartz Consulting, September 2020).
        \10\ Id. at 4.
    ---------------------------------------------------------------------------
    Transit Agencies Need Additional COVID Relief Funding
        The Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
    funding of $25 billion provided a critical lifeline to enable our
    agencies to serve first responders, hospital workers, and grocery store
    clerks each and every day. We are extremely thankful to Congress for
    recognizing the vital role that public transportation has played
    throughout the pandemic.
        According to the Federal Transit Administration (FTA), as of
    November 11, 2020, public transit agencies have obligated 94 percent of
    CARES Act transit funds through 760 grants totaling nearly $23.4
    billion of the $25 billion appropriated; more than one-half (57
    percent) of these funds have been fully expended. Moreover, FTA is
    currently processing an additional 92 grants, totaling $265 million, of
    CARES Act funds.
        Over the past several months, in many states, things have taken a
    turn for the worse--coronavirus cases are spiking, governors and mayors
    are renewing stay-at-home orders, and businesses are shutting down. Our
    railroads have faced ridership declines of close to 90 percent with a
    corresponding loss in farebox revenues. In addition, agencies across
    the country are gaining a clearer understanding of the impact that the
    pandemic is having on sales taxes, gas taxes, and other state and local
    revenue streams linked to the economy.
        APTA estimates that the shortfall of additional transit COVID-19
    costs and revenue losses is now at least $32 billion. Without
    additional emergency funding, many transit agencies, including commuter
    rail agencies, will need to consider cutting transit services and
    routes and furloughing transit workers.\11\ Transit systems, both large
    and small, are also predicting significant budget shortfalls due to
    declining revenues heading into fiscal year 2021 without additional
    federal support.
    ---------------------------------------------------------------------------
        \11\ APTA Policy Brief, COVID-19 Pandemic Threatens Public Transit
    Jobs and Service (September 2020).
    ---------------------------------------------------------------------------
        As our nation's commuter rail agencies work to maintain and restore
    essential services, federal support is critical to ensure that they can
    reposition themselves to survive and help our communities and nation
    recover from the economic fallout of the pandemic. Time is of the
    essence in securing this additional emergency funding.
        APTA strongly supports H.R. 925, ``The Heroes Act'', which provides
    $32 billion of emergency transit funding. In addition, APTA supports
    Amtrak's request for $4.9 billion in COVID emergency relief. We stand
    ready to work with this Committee and Congress to ensure that
    additional COVID-19 emergency funding for public transportation and
    Amtrak is passed before the end of the year.
                           Passenger Rail Investment
        As commuter railroads begin to recover from the COVID-19 pandemic,
    we strongly urge Congress to increase federal funding for public
    transportation, including commuter rail. The INVEST in America Act
    includes a rail title, the Transforming Rail by Accelerating Investment
    Nationwide (TRAIN) Act, which authorizes $60 billion to address rail
    infrastructure needs, expand intercity passenger rail routes, and
    provides enhanced availability of funding to commuter rail agencies.
    APTA is grateful for the robust funding for passenger rail, and the
    focus on investing in commuter rail through the Consolidated Rail
    Infrastructure and Safety Improvement (CRISI) program. The INVEST Act
    authorized CRISI at $7 billion over five years, and explicitly made
    commuter rail agencies eligible to compete for CRISI funding.
        In addition, the INVEST Act provides $105 billion for public
    transit. Commuter railroads also receive federal funding through FTA,
    namely Section 5307 Urbanized Area Formula grants and Section 5337
    State of Good Repair grants. In addition, commuter railroads are
    eligible for FTA's Section 5309 Capital Investment Grants (CIG)
    program. Since 2000, 17 commuter rail projects have received Full
    Funding Grant Agreements under the CIG program. In addition, five
    commuter rail projects, requesting over $7.5 billion, are in the CIG
    pipeline.\12\
    ---------------------------------------------------------------------------
        \12\ A list of the CIG projects with Full Funding Grant Agreements
    and those in the CIG pipeline is in Appendix B.
    ---------------------------------------------------------------------------
        The economic benefits of these projects reach far beyond the
    railroad's specific region. For example, a commuter rail project in
    California may include parts, materials, or equipment from a supplier
    in Kansas, South Carolina, Utah or Wisconsin. These commuter rail
    projects also represent thousands of construction jobs, manufacturing
    jobs, and other jobs generated by multiplier effects associated with
    spending on parts and materials. Appendix C illustrates the jobs
    created across America in rail car manufacturing.
        APTA strongly supports the funding levels in the INVEST Act and
    encourages the Committee to continue this robust funding for public
    transportation and passenger rail in the surface transportation
    authorization bill in the 117th Congress.
                                   Conclusion
        On behalf of APTA, thank you for giving me the opportunity to
    testify and share our thoughts on ``Examining the Surface
    Transportation Board's Role in Ensuring a Robust Passenger Rail
    System''. We look forward to continuing to work with the Committee on
    Transportation and Infrastructure as it pursues the INVEST in America
    Act in the next Congress. It is imperative that we make meaningful
    investments and enact policy in commuter rail to enable these critical
    services to continue to grow, serve our communities, and contribute to
    the national economy.
                                   Appendix A

                                                32 Commuter Rail Agencies
    ----------------------------------------------------------------------------------------------------------------
                                                                                                          Ridership
                                                                                                             2018
         State        Primary City   Urbanized Area                    Agency                     Year    (Unlinked
                          Name                                                                   Opened   Passenger
                                                                                                            Trips)
    ----------------------------------------------------------------------------------------------------------------
            Alaska       Anchorage       Anchorage         Alaska Railroad Corporation (ARRC)     1923       199,666
        California                Los Angeles     Los AngeleSouthern California Regional Rail     1991    12,523,337
                                                                Authority (SCRRA) (Metrolink)
        California       San Diego       San Diego    North San Diego County Transit District     1995     3,838,002
                                                                  (NCTD) (Coaster & Sprinter)
        California   San Francisco   San Francisco      Peninsula Corridor Joint Powers Board     1992    18,562,763
                                                                           (PCJPB) (CalTrain)
        California   San Francisco   San Francisco       San Francisco Bay Area Rapid Transit     2018     1,316,134
                                                                      District (Bart) (eBART)
        California      San Rafael   San Francisco    Sonoma Marin Area Rail Transit District     2017       714,653
                                                                                      (SMART)
        California        Stockton        San Jose       Altamont Commuter Express (ACE) (ACE     1998     1,479,150
                                                                                        Rail)
          Colorado          Denver          Denver   Regional Transportation District (Denver     2016     7,619,589
                                                                                         RTD)
       Connecticut       New Haven       New Haven   Connecticut Department of Transportation     1990       597,616
                                                                                       Shore Line East (SLE)
           Florida           Miami           Miami      South Florida Regional Transportation     1989     4,414,030
                                                                         Authority (Tri-Rail)
           Florida         Orlando         Orlando                                    SunRail     2014     1,114,859
          Illinois         Chicago         Chicago       Northeast Illinois Regional Commuter     1856    68,446,239
                                                                        Railroad Corp (Metra)
           Indiana         Chicago         Chicago   Northern Indiana Commuter Transportation     1908     3,400,197
                                                               District (NICTD) (South Shore Line)
             Maine        Portland        Portland        Northern New England Passenger Rail     2001       534,058
                                                                           Authority (NNEPRA)
          Maryland       Baltimore       Baltimore     Maryland Area Regional Commuter (MARC)     1830     9,387,801
     Massachusetts          Boston          Boston           Massachusetts Bay Transportation     1931    32,143,251
                                                                             Authority (MBTA)
         Minnesota     Minneapolis     Minneapolis      Metro Transit Northstar Commuter Rail     2009       787,327
                                                                                  (Northstar)
        New Jersey        New York        New York         New Jersey Transit Corporation (NJ     1839    91,170,160
                                                                      TRANSIT) (Rail & River Line)
        New Mexico     Albuquerque     Albuquerque                   New Mexico (Rail Runner)     2006       771,602
          New York        New York        New York      Metro-North Commuter Railroad Company     1832    91,873,366
                                                                                (Metro-North)
          New York        New York        New York                                       MTA Long 1844nd 105,538,101LIRR)
            Oregon        Portland        Portland     Tri-County Metropolitan Transportation     2009       394,708
                                                        District of Oregon (TriMet) (Westside
                                                                                     Express)
      Pennsylvania      Harrisburg    Philadelphia   Pennsylvania Department of Transportation    1980     1,533,055
                                                                                    Keystone Line (Keystone)
      Pennsylvania    Philadelphia    Philadelphia   Southeastern Pennsylvania Transportation     1834    33,318,746
                                                                            Authority (SEPTA)
         Tennessee       Nashville       Nashville   Regional Transportation Authority (Music     2006       298,765
                                                                                   City Star)
             Texas          Austin          Austin        Capital Metropolitan Transportation     2010       807,869
                                                                       Authority (Metro Rail)
             Texas          Dallas          Dallas              Trinity Railway Express (TRE)     1990     2,039,990
             Texas          Denton          Denton   Denton County Transportation Authority (A    2011       409,667
                                                                                       Train)
             Texas      Fort Worth          Dallas                                    TEXRail     2019           N/A
              Utah           Salt Lake City  Salt Lake CUtah Transit Authority (Front Runner)     2008     5,082,168
          Virginia      Washington      Washington             Virginia Railway Express (VRE)     1992     4,529,091
        Washington         Seattle         Seattle       Central Puget Sound Regional Transit     2000     4,631,525
                                                                          Authority (Sounder)
    ----------------------------------------------------------------------------------------------------------------
    APTA's list includes all commuter and hybrid rail agencies that receive funding from the Federal Transit
      Administration and report data to the National Transit Database.
    NNEPRA and Keystone are operated by Amtrak and are counted in the FTA National Transit Database.
    TexRail opened in 2019 and therefore does not have any 2018 ridership.

                                   Appendix B

                                     Commuter Rail Capital Investment Grant Projects
                                                      (Since 2000)
                                                      (in millions)
    ----------------------------------------------------------------------------------------------------------------
                                                                                               Total
       State                Project Sponsor                          Project               Project Cost  CIG Funding
    ----------------------------------------------------------------------------------------------------------------
                                           Projects with FFGAs
          CA         Joint Powers Board (Caltrain)         Caltrain Peninsula Corridor         $1,931         $647
                                                               Electrification Project
          CA       Riverside County Transportation            Riverside-Perris Valley Line       $248          $75
                                        Commission
          CA        Sonoma-Marin Area Rail Transit               SMART-San Raphael to Larkspur    $55          $23
                                          District                 Regional Connection
          CO        Denver Regional Transportation                   Denver--RTD Eagle         $2,043       $1,030
                                          District
           FL               South Florida Regional                               Fort Lauderdale-$334Rail Comm$111
                          Transportation Authority                        Rail Upgrade
           FL    Florida Department of Transportation  Orlando, Central Florida Commuter         $357         $179
                                                                          Rail Transit
           FL    Florida Department of Transportation  Orlando, Central Florida Commuter         $187          $93
                                                            Rail Transit Phase 2 South
           IL    Regional Transportation Authority     Chicago-Metra Southwest Corridor          $198         $103
                                                                         Commuter Rail
           IL    Regional Transportation Authority               Chicago-North Central           $226         $135
           IL    Regional Transportation Authority                    Chicago-UP West Line Extens$135          $81
           IL            Chicago Transit Authority                  Chicago-Ravenswood           $530         $246
          IN             Northern Indiana Commuter                               West Lake Corrid$945         $355
                           Transportation District
          MN                  Metropolitan Council      Minneapolis-Northstar Corridor           $317         $156
                                                                                  Rail
          NY     New York Metropolitan Transportation      New York-East Side Access (LIRR)    $7,386       $2,632
                                         Authority
          OR               Tri-County Metropolitan     Wilsonville to Beaverton, Oregon          $117          $59
                 Transportation District of Oregon                       Commuter Rail
          TX     Fort Worth Transportation Authority                Fort Worth TEXRail         $1,034         $499
          UT                Utah Transit Authority                               Salt Lake-Weber $612ty to Sal$489
                                                                                      Lake City
                                                                                          --------------------------
      Subtotal for Commuter Rail FFGA Projects...........................................     $16,655       $6,912
                                                                                          --------------------------

                                  Projects in the CIG Pipeline
           FL    Florida Department of Transportation  SunRail Connector to the Orlando     $175-$225          $75
                                                                 International Airport
           FL    Florida Department of Transportation           SunRail Phase II North            $69          $34
           IL            Northern Indiana Commuter                        Double Track           $460         $173
                           Transportation District
          NJ           Gateway Program Development         Portal North Bridge Project         $1,716         $811
                                       Corporation
       NY/NJ           Gateway Program Development               Hudson Tunnel Project        $13,702       $6,769
                                       Corporation
                                                                                          --------------------------
      Subtotal for Commuter Rail CIG Pipeline Projects...................................     $15,948       $7,787
                                                                                          --------------------------
        Total Funding for Commuter Rail CIG Projects.....................................     $32,603      $14,700
    ----------------------------------------------------------------------------------------------------------------
    * These totals exclude the SunRail Connector to the Orlando Airport project because amounts have yet to be
      finalized.

                                   Appendix C

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Lipinski. Thank you, Mr. Skoutelas.
        At this time, before we begin questions, I would like to
    ask unanimous consent to enter into the record statements from
    the Rail Passengers Association and the States for Passenger
    Rail Coalition. Without objection, so ordered. Those will be
    entered into the record.
        [The information follows:]

     Statement of Jim Mathews, President and Chief Executive Officer, Rail
        Passengers Association, Submitted for the Record by Hon. Daniel
                                    Lipinski
                                  Introduction
        The Rail Passengers Association would like to thank Chairman
    Lipinski, Ranking Member Crawford, and all of the members of this
    Committee for holding this very important and timely hearing to focus
    attention on the role of the Surface Transportation Board in protecting
    the essential passenger rail service supplied to the Nation's rail
    passengers principally, though not exclusively, by Amtrak.
        A passenger railroad is judged primarily on two key metrics: safety
    and on-time performance. Any railroad unable to satisfactorily meet
    these two criteria will not be able to attract and keep passengers. For
    this reason, we can say without hyperbole that the rampant delays
    affecting Amtrak's trains threaten the railroad's growth and even its
    long-term viability as an operator.
        The Surface Transportation Board is a vitally important forum for
    resolving OTP and access issues that face our country's passenger train
    network. While little known to the traveling public, the STB's actions
    and decisions can have important and lasting impact for millions of
    Americans who rely on rail to travel for work, school or family.
        Just as important are efforts to thwart STB's ability to act, a
    fact that the Association of American Railroads has clearly recognized.
    Unfortunately, millions of Americans have found themselves stranded for
    hours at a time on sidings all across our country. They have had to
    wait for freight trains to pass that have been given priority
    improperly, by railroads who feel free to thumb their noses at a
    preference law that has been on the books for nearly half a century.
    The traveling public sought relief through their representatives in
    Congress, and in 2008 Congress acted by giving Amtrak tools it needed
    to vindicate passengers' right to be on time. The AAR's response was to
    turn to the courts to block any real relief, a fight which dragged on
    for a decade. Meanwhile, our members and the traveling public had to
    sit and watch the freight trains pass while they missed weddings,
    funerals, visits home with deployed servicemen and women, or even
    medical appointments.
        Rail offers solutions to some of our Nation's most pressing
    problems: pandemic-driven economic upheaval, bridging the rural-urban
    divide, mobility for the elderly and disabled and greener ways to move
    a growing population around the country to spur prosperity and a better
    life for Americans everywhere. Resolving the thorny complexities around
    shared-use, schedule and timetable design, preference and on-time
    performance will be vital to unlocking billions of dollars of annual
    economic benefits from expanded passenger rail. And this is why the
    STB's role deserves closer examination as we look to build back better
    in the coming years.
              An Essential Service for 500+ U.S. Cities and Towns
        Amtrak's National Network, with its 15 long-distance routes
    connecting a series of state-supported services, is an essential
    transportation service to the 40 percent of the nation's small and
    rural communities that it serves, establishing a vital link between
    Small Town and Big City America. 62 million people live in this so-
    called ``Flyover Country,'' a quarter of whom are veterans, another
    quarter are senior citizens over the age 65. With few alternatives,
    driving plays an outsized role, and it does so at a cost: despite
    making up only 19% of the population, accidents on rural road networks
    account for 49% of the total number of traffic fatalities nationwide.
        In the era of coronavirus, Amtrak has proven itself to be more
    relevant than ever. The combination of clean indoor air, greater space
    for social-distancing, outdoor platforms and waiting areas and the
    potential on some trains to upgrade to a private compartment has made
    Amtrak an essential travel option for millions of Americans--
    particularly senior citizens and those with compromised immune systems.
        More generally, Amtrak trains are well used and fiercely fought-for
    by the communities served. Millions of Americans rely on passenger
    rail, and millions more have discovered passenger rail during pandemic-
    driven travel disruptions. Before the coronavirus crisis took hold,
    Amtrak enjoyed more than a decade of year-over-year record ridership.
    And that figure has been constrained as much by capacity as it has been
    by demand. In fact, even as overall travel demand in the U.S. has
    remained low during the coronavirus pandemic, many Amtrak trains are
    operating at the equivalent of 80% of capacity or more. There are today
    National Network trains that are sold out weeks in advance.
        Intercity rail plays an important role in these communities; almost
    one-fifth of Amtrak's passengers travel to or from a rural station with
    no access to air service. As the term ``Flyover Country'' suggests,
    private-sector airlines have long ago moved away from these towns, if
    they ever served them to begin with. While this may have been the right
    business decision for those profit-driven companies to make, it has
    come at a cost to the residents of these communities.
        For some rural, elderly and disabled passengers, Amtrak is the only
    plausible or affordable choice. Just consider Fargo to Minneapolis, a
    $37 Amtrak coach fare compared with a $403 flight. Or Cut Bank,
    Montana, to Spokane? Yes, it's a three-hour flight versus an eight-hour
    train ride, but that doesn't include the 88-mile drive from Cut Bank to
    Glacier's airport. And the fares are not even close: $64 for Amtrak,
    $252 to drive and then fly. And that's assuming Grandma can even drive
    on those treacherous roads in the snowy dark winter.
        This isolation from air service is only expected to worsen for
    hundreds of American towns in a post-coronavirus operational
    environment. In an October 8th interview with CNBC, American Airlines
    CEO Doug Parker warned ``there will absolutely be discontinuation of
    service to small communities, and there will be much less service to
    larger communities.''
        Amtrak will continue to serve these towns because its
    Congressionally mandated mission to connect Americans is driven by
    statute, and not by profit.
        The argument that there is not enough demand in small towns and
    rural communities to justify this mandate falls away quickly when you
    look more closely. Just consider the comparison between simply
    measuring the total ridership and looking at the number of riders per
    departure [Fig. 2]--i.e., if the train only runs three days a week,
    normalize the ridership figure to account for the four days that it
    doesn't run. The map included is one I use a lot to tell that story
    when I present to elected and appointed officials.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                     Fig. 1

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                     Fig. 2

        This picture is worth more than a thousand words--you could say
    it's worth between $7 billion and $8 billion per year. The Rail
    Passengers Association team estimates that the existence of Amtrak
    contributes about that much to the U.S. economy year in and year out,
    and this map helps to show why that is. Correcting for the number of
    departures, you can clearly see a National Network that is well-used
    and vital to towns across the country.
        Moreover, Amtrak's inherent energy efficiency makes it an
    environmentally responsible alternative as our Nation looks for ways to
    support travel and mobility for an ever-growing population while taking
    the climate crisis seriously. Amtrak's existing network will play an
    important role as the foundation for new service and increased
    frequencies, expanding access to modern passenger rail service to new
    cities and tens of millions of Americans.
        While there are many prerequisites for upgrading and expanding the
    passenger rail network in the U.S.--notably dedicated and predictable
    funding for Amtrak and passenger rail, similar to what virtually every
    other transportation mode receives from the government--an STB that is
    able to quickly and fairly adjudicate passenger train access to host
    railroad infrastructure tops the list.
      Amtrak is a Publicly Funded Good Deserving of Regulatory Safeguards
        Congress understood the value of a passenger rail that serves all
    Americans when it passed legislation in 1970 that established Amtrak.
    Congress has repeatedly reaffirmed its commitment to supporting Amtrak
    over the years. As recently as this month, the U.S. Senate Committee on
    Appropriations passed language in the Fiscal Year 2020 Transportation,
    Housing and Urban Affairs Department funding bill the stated:

            It is the sense of Congress that--
            (1) long-distance passenger rail routes provide much-needed
            transportation access for 4,700,000 riders in 325 communities
            in 40 States and are particularly important in rural areas; and
            (2) long-distance passenger rail routes and services should be
            sustained to ensure connectivity throughout the National
            Network (as defined in section 24102 of title 49, United States
            Code).

        This language replicates that of an amendment attached to the
    FY2018 THUD funding bill passed in July of 2018 on the Senate floor--by
    an overwhelming vote of 95-4.
        Given Amtrak's status as a publicly funded service, our Association
    believes that it does a deep disservice to taxpayers when host
    railroads undermine Amtrak's mission to provide a reliable, on-time
    transportation service to the hundreds of communities across its
    network. We also believe any argument that questions Amtrak's right to
    receive this public funding is both dishonest and ahistorical.
        Since 1978, Congress has not required Amtrak to earn a profit. The
    Amtrak Improvement Act of 1978 amended Section 301 of the Rail
    Passenger Service Act to insert the words ``operated and managed as''
    in front of the words ``for-profit corporation.'' Report language
    accompanying that measure explains why (H.R. Rep. No. 1182, 95th
    Congress, Second Session, 15): ``Section 9 amends Section 301 of the
    RPSA . . . to conform the law to reality, providing that Amtrak shall
    be `operated and managed as' a for-profit corporation. This amendment
    recognizes that Amtrak is not a for-profit corporation.''
        A. Daniel O'Neal, who was at the time majority counsel for the
    Senate Transportation Subcommittee, offered this blunt recollection:
    ``We added the `for-profit' clause because we thought this new entity
    should have high aspirations,'' O'Neal is quoted as saying in a 2002
    Congressional Research Service report (http://
    research.policyarchive.org/1446.pdf). ``It would be wonderful if such
    service could be self-sustaining, but nowhere in the world has any
    nation been able to avoid subsidizing rail passengers.''
        In fact, all travel modes are subsidized. Gas taxes pay for less
    than half of what it takes to build and maintain highways. General tax
    revenues pay for the rest. Air travelers' fares have no relation to the
    cost of air-traffic control and weather services supplied to our
    Nation's airlines--as many as 26 air-traffic controllers earning a
    median salary in the six figures touch a single flight between Los
    Angeles and Baltimore. FAA receives generous, and appropriate,
    appropriations to ensure our safety.
        These are not anomalies. They reflect the reality that policymakers
    and the taxpayers they serve have consistently made the judgment that
    it is worthwhile to spend tax dollars to create the preconditions for
    economic growth and the private-sector's success. There are certain
    things that we've just agreed we want to pay for, together, so that we
    can have a community, a state, a Nation. During the past few months of
    hurricane season, families living in the southeastern U.S. have been
    made safer because we have a National Weather Service. The coronavirus
    crisis has put into sharp relief why we have a Centers for Disease
    Control and Prevention. We all benefit from a CDC to fight pandemic
    diseases, as well as from modern roads, safe bridges, air traffic
    control, a strong military, and passenger rail and public
    transportation. We don't demand that those things produce a profit
    because what they produce instead is a public benefit.
        Research by our Association demonstrates the economic value of
    intercity passenger service, which helps our country achieve crucial
    national goals--enabling mobility in increasingly crowded
    ``megaregions'' of metropolitan areas, ensuring mobility and access for
    America's booming senior population and setting at least a base level
    of prosperity for our rural areas by linking them to the larger
    economy. As we've said elsewhere, our Association conservatively
    estimates that the overall value of our roughly $2 billion annual
    Amtrak investment comes to at least $8 billion a year.
        It's not about whether a given route is profitable. It's about who
    the route is profitable for.
        Earlier this Fall, we examined six National Network services--the
    City of New Orleans, the Empire Builder, the combined Silver services,
    the Southwest Chief, the Texas Eagle and the Crescent. Together, these
    six intercity passenger rail routes serve 30 states plus the District
    of Columbia, and Rail Passengers estimates that they produce $2.4
    billion every year in economic benefit. In fact, Amtrak's existing
    group of daily long-distance trains (excluding the Auto Train)
    collectively produce some $4.7 billion in economic benefits which are
    widely distributed throughout America's heartland. That's twice as much
    as Amtrak's entire annual appropriation and an impressive return on
    equity for the taxpayers who invest a little less than a billion
    dollars every year to sustain that service.
        The profit argument for Amtrak is not only legally specious, it's
    bad policy. This is because it misstates the purpose of federal
    investment and overlooks the significant value that Amtrak creates for
    the entire country, cities and rural towns alike. The correct lens for
    assessing our Amtrak investment is not profit, but value. Amtrak's
    routes create value in every community they serve. That they create
    value in the Northeast Corridor is unchallenged. Indeed, with 20% of
    the country's GDP flowing along that corridor, it's fair to describe
    the NEC as the Nation's aorta. But these services also create enormous
    value in smaller communities, places that may not deliver a profit to
    Amtrak but which derive incredible support from the existence of their
    route.
      STB Plays a Necessary Role in Maintaining an Efficient, Sustainable
                           U.S. Passenger Rail System
        Of course, Amtrak already enjoys a statutory right of preference,
    and has for over 45 years. Unfortunately, many host railroads choose to
    not recognize this legal right, subjecting millions of Amtrak
    passengers to excruciating delays. Because while Amtrak has a legal
    right to not have its trains stuck behind slow-moving freight trains
    for hundreds of miles, only the Department of Justice can enforce it--
    which it has done precisely one time since 1979.
        There are, however, key instances demonstrating that in the right
    circumstances regulators can provide effective protections for
    America's passengers. The period between the summer of 2013 and late
    2014 offers the closest thing available to a laboratory experiment to
    demonstrate the practical effect of neutralizing legal preference on
    host railroad behavior. That intervening period began with the DC Court
    of Appeals reversing a lower court ruling and invalidating preference,
    and ended with the Supreme Court restoring it while sending the case
    back down for further review. Host railroad behavior then was
    unmistakable--by the summer of 2014, Amtrak's on-time performance (OTP)
    had dropped by half.
        Under the metrics and standards implemented by the 2008 rail
    reauthorization law, Amtrak was able to achieve a 2012 on-time
    performance rate of 83 percent nationwide, and 71 percent for long
    distance trains. This level of on-time performance played a key part in
    allowing Amtrak to sustain its explosive ridership growth, which has
    led to ridership records in 10 of the past 11 years.
        When the metrics were struck down by the Court of Appeals, reported
    freight interference incidents nearly tripled, and Amtrak's on-time
    performance plummeted to only 42 percent. The long-distance trains were
    hit hardest; in a particularly extreme case, the on-time performance of
    the Capitol Limited plummeted to 1.6% in July of 2014. Amtrak reported
    in April 2014 that, in response to these skyrocketing delays, ridership
    and revenue had fallen by 15% year over year to date.
        It was no coincidence that these delays followed hard on the heels
    of the DC Appeals Court ruling, and it was also no coincidence that the
    result unraveled a decade of record ridership. Our Association found it
    ironic at the time that these delays hurt Amtrak's bottom line and
    increased its dependence on public subsidies, given that those who
    publicly backed the Appeals Court ruling usually cite Amtrak's business
    performance as a reason to argue against intercity passenger rail
    service.
        Equally telling was the rebound that on-time performance enjoyed
    within just days or weeks of the Supreme Court's ruling sending the
    case back to the lower court for review while reversing the Appeals
    court's action. We recognize that there are parts of the U.S. rail
    network where an increased federal role in capacity investment would
    increase network fluidity for passengers and freight, but the dramatic
    change in OTP data during this period suggests that dispatching
    decisions play an outsize role in many of the delays we have seen.
        We've also seen instances of railroads actively trying to undermine
    oversight. In 2016, at the urging of freight railroad representatives,
    the Surface Transportation Board briefly considered issuing a policy
    statement that would have weakened the preference requirement now in
    law for passenger-train dispatching. Under pressure from lawmakers and
    the riding public, STB withdrew that proposed policy statement. It
    never carried the force of regulatory interpretation, was never put
    into practice, and has not guided any decision-making in any
    adjudication before the Board since then.
        Had it gone through, it would have amounted to the STB and its
    staff effectively trying to rewrite legislation by regulatory fiat.
    Behind closed doors, regulators would have fundamentally changed the
    rules of the game for how Amtrak can press host railroads to honor
    their legal obligations, going around the intent of Congress as
    expressed some 30 years ago and consistently reaffirmed in law and
    court rulings.
        Withdrawing that policy statement was both sensible and correct. It
    should not underpin any current discussion of policy.
        Bluntly, experience and actual on-the-rails performance demonstrate
    that passenger trains CAN run on time when the host railroad wants them
    to, or, at least, when the host railroad faces consequences for
    excessive delays. Congress could easily provide effective protections
    for passengers by allowing Amtrak to bring an action in federal court
    to enforce the law.
      The True Cost of Inadequate Enforcement of Amtrak's Statutory Rights
        The decision by host railroads to ignore Amtrak's right of
    preference has quantifiable costs. Reports released by Amtrak this
    month reveal that freight trains caused more than one million minutes
    of delay to Amtrak trains last year--that's the equivalent of being
    stuck behind a freight train for two full years.
        Lost in the statistics, however, is the personal toll on our
    members who rely on--and pay for--timely and regular service on routes
    delayed by freight interference. Many irreplaceable personal moments
    have been disrupted by these delays, with crucial medical transports
    affected, weddings and funerals missed and rare home visits by deployed
    service-members cut short or even cancelled altogether. Each of these
    hundreds of stories--and we supplied more than 1,300 such stories to
    STB in just one month during the deliberations over preference and
    OTP--add up to more than mere temporary inconvenience and in many cases
    impose real dollar costs on vulnerable travelers.
        Delays can cause real emotional pain to those who may already be
    travelling for somber reasons. Joanna Roe, a Washington state resident,
    boarded the Empire Builder at a small station about 45 minutes east of
    Vancouver, Wash., travelling to Boston to attend a funeral, ``so I
    really had to be there,'' Roe told us. After crossing into Montana and
    North Dakota, ``We were pulled off the main line so many times I lost
    count. It kept getting longer and longer. . . . We were delayed so
    often that we had to have two separate crew changes, which delayed us
    EVEN MORE as we waited for the new crews to arrive.'' Joanna ultimately
    missed a connecting train in Chicago, was put up in a hotel in Chicago
    with only $10 food money for the day, cancelled the next day's train
    leg and booked a new, expensive flight from Chicago O'Hare in order to
    attend the funeral.
        Delays impose additional costs on fare-paying passengers. Kathleen
    Newell of Detroit, Mich., points out that freight delays in North
    Dakota make even the short trip from Minneapolis, Minn., to Ann Arbor,
    Mich., impossible to complete in one day as was once possible. ``This
    delay causes a missed Chicago, Ill., to Ann Arbor, Mich., connection.
    In addition I have to stay overnight in Chicago, pay for a hotel and
    shorten my stay in Michigan as a result,'' Newell writes.
        Consider the anger of Walter Dunn, of North Port, Fla., an elderly
    man who had to travel unexpectedly from Florida to New York because his
    91-year-old mother had been admitted to the hospital in critical
    condition. Dunn explains, ``Several times we sat on a siding waiting
    for a freight train, whose schedule I am sure is not critical, to go
    by. When we started getting later and later into stations the general
    comment amongst passengers was `that [is] Amtrak never on time.' I
    think this is disgrace to our country. The trains in some third world
    countries keep a better schedule than those in this country.'' Older
    Americans often find air travel difficult and driving long distances
    impossible, so train travel is a true lifeline for these citizens, who
    deserve better.
        Freight interference delays disrupt business being conducted by our
    members. Elliot Adams of Sharon Springs, N.Y., left Utica for a meeting
    in Detroit. Because the train schedule put Mr. Adams in Detroit early
    in the morning, he planned to arrive at the conference center early and
    scheduled a series of one-on-one meetings in preparation for the larger
    conference. ``But my train was over nine hours late,'' Adams wrote. ``I
    missed all those very important one-on-one meetings and the daytime
    meetings, only arriving in time for an evening meeting.''
        Those with serious health conditions and the disabled are
    disproportionate users of the long-distance network, because of the
    difficulties they have managing air travel and driving. Delays cause
    inhumane problems for patients and impose additional suffering on
    people who are already ill. ``In December of 2013 my wife and I rode
    the Empire Builder from Chicago to Winona, Minn., for an appointment at
    Mayo Clinic,'' explains Gary Lutes of Chicago, Ill. ``Unfortunately,
    the train was so late that we missed our shuttle to Rochester. We were
    fortunate that another shuttle service happened to arrive to take us to
    Rochester. We checked into our hotel at 3:00 a.m. with an 8:00 a.m.
    appointment at Mayo.''
        Coming at a time of record ridership, these delays on freight
    railroads nationwide may well permanently discourage new and first-time
    riders from exercising their choice to travel by rail, a choice more
    Americans each year say that they want. Chronic delays not only hurt
    our members and the rail-riding public but diminish Amtrak's ability to
    generate annual revenue improvements that reduce the amount of subsidy
    that is provided by taxpayers--both a statutory requirement and a
    policy goal at both ends of the political spectrum.
                   Accountability Is a Double Track Railroad
        In many ways, despite all of its challenges and missteps--and there
    have been many--Amtrak has been a public-policy triumph. In 1971,
    Amtrak took the emaciated bones of passenger services battered by
    subsidized air and road competition and slowly breathed life into those
    routes. Some did better than others, and some didn't survive. But today
    even our skeletal and perfunctory Network of intercity passenger trains
    has spent more than a decade setting ridership records, connecting
    America's heartland to its cities, and returning four dollars to the
    economy for every dollar spent. And in recent years Amtrak has done all
    this while recovering some 90% of its costs at the farebox.
        Are rail advocates angry at Amtrak? Yes, often. For all of its
    pleasures and efficiencies, Amtrak can often seem indifferent to the
    needs of its customers. There's Grandma trying to book a ticket over
    the phone without a printed timetable or to find a meal on board that
    she can eat without aggravating her blood pressure or diabetes. Or a
    group of wheelchair-bound Illinois travelers suddenly asked to pay
    $20,000 for a Coach-class ride of less than an hour just for the sake
    of Amtrak's balance sheet. It also includes Amtrak's government
    customers, like a state Department of Transportation trying to
    understand how it's being billed for services Amtrak is supplying
    within its borders or asking to modify its services to better meet the
    needs of its residents.
        These are real issues at Amtrak, and they demand action. This is
    why our Association and others worked closely with you and your
    colleagues to secure improvements at Amtrak addressing the many ways
    that Amtrak still falls short of meeting the public-policy mission in
    which taxpayers are investing. We applaud the hard work this
    Subcommittee and the full T&I Committee did on the bill that eventually
    became the Moving America Forward Act, H.R. 2, which wrote in important
    reforms to Amtrak's Board, the statement of Amtrak's mission, the need
    for preference, food and beverage issues, and many other changes.
                                   Conclusion
        The 2015 STB Reauthorization represented the first substantive
    reform of the Board in nearly 20 years. In a bipartisan and
    uncontroversial fashion, Congress made many important and welcome
    changes to the way STB did business in that measure--expanding the
    Board to five members, setting rate-review timelines, expanding
    voluntary arbitration provisions, granting STB the authority to
    initiate investigations of ``national or regional significance,'' and
    mandating publication of reports and databases to create greater
    transparency for railroads, shippers and the public alike.
        With our country now poised to make substantial investments in rail
    transportation and passenger rail emerging as an important part of
    economic recovery, Rail Passengers believes it is appropriate to use
    this upcoming reauthorization to consider extending and expanding these
    reforms. There are several outcomes our Association would favor.
        We recommend explicit expansion of oversight to other forms of
    passenger rail such as commuter and regional operations. This would
    permit application of the expertise of the STB's members and staff to
    rail-specific challenges that will undoubtedly arise as policymakers
    begin to embrace innovations like regional rail operating authorities
    and central dispatching authorities.
        Rail Passengers would also propose to create clear and explicit
    triggers to let Amtrak and other railroads to seek regulatory relief,
    consistent with the metrics and standards recently published by the
    Federal Railroad Administration.
        Although the 2015 reauthorization made major strides in cutting the
    time required for certain STB actions, we believe more could be done.
    Provisions allowing for a timely resolution of STB mediation and
    broadening those deadlines beyond rate cases to other kinds of
    adjudication would help create certainty as states, regional
    authorities and others begin to rely more on rail as a policy tool to
    address pollution, congestion and economic equity.
        Rail Passengers believes it is absolutely vital to increase
    protections for Amtrak's 45-year-old statutory right of preference--
    including allowing Amtrak to bring an action in federal court to
    enforce the law--and to remove barriers that may inhibit STB from
    protecting this right. Moreover, as growth and expansion plans take
    shape, Rail Passengers believes it is important to revise the Surface
    Transportation Board provisions that govern when Amtrak seeks to
    operate additional trains over rail lines owned by another carrier by
    establishing a process for the STB to determine whether those
    additional trains unreasonably impair freight transportation. STB
    should be permitted to initiate a proceeding to independently evaluate
    what additional investments are required.

      Statement of Arun Rao, Chair, States for Passenger Rail Coalition,
             Inc., Submitted for the Record by Hon. Daniel Lipinski
        The States for Passenger Rail Coalition (SPRC) is an alliance of 23
    State and Regional Transportation Officials and Passenger Rail
    Authorities across the United States. SPRC's mission is to promote the
    development, implementation, and expansion of Intercity Passenger Rail
    as part of an integrated national transportation network.
        SPRC members sponsor a combined 29 intercity passenger rail routes
    serving 296 communities across America. In the year leading up to the
    pandemic, the State Supported trains carried over 15 million
    passengers, representing over 47% of Amtrak's total ridership, the
    largest source of ridership among the three Amtrak business lines. They
    also contributed nearly $750 million to Amtrak, through a combination
    of $521 million in passenger revenue plus $225 million in contract
    payments. We are poised to return to these pre-pandemic levels as the
    Nation's health and economy improve, and the traveling public returns
    to take advantage of the beneficial economic, health, and safety
    aspects of traveling by passenger rail.
        SPRC appreciates this opportunity to provide comments as the House
    Transportation and Infrastructure Committee's Railroads, Pipelines, and
    Hazardous Materials Subcommittee examines the Surface Transportation
    Board's (STB) role in ensuring a robust passenger rail system. The STB
    has regulatory authority that involves multiple Amtrak matters,
    including the authority to ensure that Amtrak may operate over tracks
    owned by other railroads, addressing disputes and setting the terms and
    conditions of shared use if Amtrak and railroads (or regional
    transportation authorities) fail to reach voluntary agreements.
        Additionally, in Section 213 of the Passenger Rail Investment and
    Improvement Act of 2008 (PRIIA), Congress gave STB the authority to
    investigate the reasons for persistent Amtrak train delays if either
    the On Time Performance (OTP) on a route dips below a certain level, or
    if specific metrics and standards, (to be developed jointly by the
    Federal Railroad Administration (FRA) and Amtrak), are not met.
        SPRC members have long recognized that a high degree of reliable
    passenger train OTP is tantamount toward the growth and expansion of
    this essential transportation mode. Although it is written in law that
    ``Amtrak has preference over freight transportation in using a rail
    line, junction, or crossing'' [49 U.S. Code Sec.  24308(c)], intercity
    passenger rail (unfortunately) continues to suffer from freight rail
    interference delays. To return intercity passenger rail to pre-COVID
    ridership levels will require a safe environment and traveler
    assurances of on-time arrivals and departures.
        With the November 16th issuance of the FRA's Final Rule on
    ``Metrics and Minimum Standards for Intercity Passenger Rail Service''
    the STB's investigative authority under PRIIA Section 213 has been
    affirmed and validated. We envision that the STB will continue to fill
    its critical role in monitoring Amtrak's performance issues and has the
    authority to elicit positive change for the passenger rail customer
    through the hearing of cases that involves the statute's preference
    provision.
        Finally, both freight and passenger rail have been well documented
    as energy-efficient and environmentally sustainable transportation
    modes. With the one-year extension of the FAST Act, we encourage
    Congress to take advantage of this additional time to consider further
    steps to advance rails' enhanced role in our Nation's environmental and
    transportation future.
        Thank you for this opportunity and know that we stand ready to
    respond to any questions you may have or to elaborate further on our
    testimony, as you work through the development of long-term surface
    transportation authorization legislation.

        Mr. Lipinski. We are now going to move on to Member
    questions. Each Member will be recognized for 5 minutes, and I
    am going to begin by recognizing the chairman of the full
    committee, Mr. DeFazio, for 5 minutes.
        Mr. DeFazio. Thank you, Mr. Chairman. I have to be at
    another modal briefing in 5 minutes, regarding the 737 MAX, so
    I appreciate the opportunity to go first.
        I will just ask one question in the interest of time. Mr.
    Gardner, it has been presented that essentially, it is freight
    or passenger. It is a zero-sum game. In recently conversing
    with you, I found out something I didn't know, that you have a
    history doing dispatch. Would you please give your perspective?
    I mean, is there a way to both have an efficient rail system
    for passengers and not impinge upon the freight industry? Mr.
    Gardner, could you unmute and answer if you are still there?
        Mr. Gardner. Thank you, Chairman DeFazio. Yes. Yeah. Can
    you hear me?
        Mr. DeFazio. Now I can.
        Mr. Gardner. Can you hear me----
        Mr. DeFazio. Yeah.
        Mr. Gardner [continuing]. Chairman DeFazio?
        Mr. DeFazio. Go ahead. Uh-oh.
        Mr. Gardner. Chairman DeFazio, can you hear me?
        Mr. DeFazio. Off and on.
        Mr. Gardner. OK. Thank you. Yes. Absolutely. We can find
    [inaudible].
        Mr. DeFazio. I don't what kind of Wi-Fi or connectivity you
    have got down there, but it is not too good.
        Mr. Gardner. I am sorry, Chairman DeFazio. Can you hear me
    well?
        Mr. DeFazio. On and off. Try again. You know, the House has
    approved Zoom now, haven't they? [Aside.]
        Mr. Gardner. OK. Mr. DeFazio, thank you for the question,
    and we can absolutely make passenger and freight trains work
    together.
        Mr. DeFazio. OK. All right. I guess we will take that as an
    answer to be expanded upon at some future time when you are
    here in person, so thank you.
        Thank you, Mr. Chairman. I have got to go to this other
    briefing.
        Mr. Lipinski. The Chair will now recognize the ranking
    member for 5 minutes. Ranking Member Crawford.
        Mr. Crawford. Thank you, Mr. Chairman. And, again, we see
    what a rousing success these hybrid hearings are with regard to
    their technical efficiency and all those other things. So I am
    going to go to Mr. Gardner again and see if we can possibly
    work around this technology glitch.
        Despite Amtrak's huge losses and potentially slow climb
    back to normal operations, it was reported last month that
    Amtrak was circulating a map showing plans to expand at a
    reported cost of at least $25 billion. Can you please explain
    these plans, including the funding sources and whether Amtrak
    assessed rider demand and the need for these new routes?
        That question is for Mr. Gardner.
        Mr. Gardner. Thank you. Can you hear me OK?
        Mr. Crawford. Again, no. I could hear better if you were
    sitting here in the committee room, but we are doing what we
    can.
        Mr. Gardner. [Inaudible.]
        Mr. Crawford. I am going--I am afraid--in the interest of--
    actually, I am going to ask you, if you would, to please
    suspend. I am going to ask you to submit your comments for the
    record because we can't hear a word you are saying. And, again,
    a stellar example of the efficiency of these hybrid
    proceedings.
        Let me go to Mr. O'Toole. Mr. O'Toole, Amtrak suffered
    record losses this year as a result of the COVID-19 pandemic.
    What are your recommendations for how Amtrak should rebuild or
    restructure to be profitable and attract riders? And, again----
        Mr. O'Toole. I have unmuted now. I think the COVID-19
    pandemic has given us an opportunity to sit back and reevaluate
    our transportation choices. We know, based from this pandemic
    and from past natural disasters and recessions and terrorist
    attacks, that the most resilient form of transportation we have
    is motor vehicles and highways. And, yet, our government policy
    in many States, and to some degree at the Federal level, is to
    deemphasize highways and to emphasize mass transportation,
    particularly rail transit and urban bus transit.
        And the problem is, that these forms of transportation are
    not resilient against natural disasters; they are not resilient
    against recessions; they are not resilient against terrorist
    attacks; they are not resilient against pandemics. And because
    of this, we are essentially digging our own hole here when we
    emphasize these kinds of transportation instead of emphasizing
    motor vehicles and highways.
        Personally, I don't like to drive. I prefer to bicycle or
    take a train, but the fact is, most Americans have made their
    choice; 85 to 90 percent of our travel is by automobile. Almost
    all the rest is by airlines. And Amtrak and urban transit are
    insignificant quantities, and they are not resilient. So we
    need to be resilient, and that means emphasizing kinds of
    transportation that are resilient.
        Mr. Crawford. Thank you, Mr. O'Toole.
        I have--I am going to attempt to get--at least get a
    question on the record. I don't have any faith that it will be
    answered due to technical difficulties, but I am going to
    attempt it again to Mr. Gardner.
        While you are here, I want to follow up on an RFI that
    Congressmen Gibbs, Perry, Smucker, and I sent you several weeks
    ago. Thank you for the response regarding my concerns about
    operating the Biden campaign charter train despite Amtrak's
    severe cutbacks due to the pandemic. I am still concerned,
    however, that you did not answer my question about the total
    cost to Amtrak of providing this service, which is very
    important, given Amtrak's extremely limited resources and
    historic demands for taxpayer money right now.
        I am hopeful, at some point, that you can tell me the total
    cost, which you haven't provided yet, to Amtrak and whether
    Amtrak actually even broke even. I won't expect that Amtrak
    will have made money on that.
        So I am concerned that Amtrak is asking for record amounts
    of taxpayer funding while cutting jobs and services, but not
    being transparent with Americans about its cost and whether its
    service to the Biden campaign cost Amtrak money.
        And so, I have 55 seconds remaining. Let me add this: It
    concerns me that I had to follow up with you to get a
    straightforward answer at this hearing, that you didn't provide
    me that information when I and three of my colleagues on this
    committee asked you in writing. If you expect taxpayers to give
    you record amounts of money to bail you out of the pandemic, we
    should expect full transparency about Amtrak's costs and
    spending.
        Also, if you can make a profit on a specially ordered
    charter train, you should be able to make a profit on your
    normal routes and services. And I would point out that it has
    been brought to my attention that there are two privately run
    metro services in Japan that somehow manage to make a profit.
    So the statement that all public metro rail is subsidized
    around the world is not accurate. I will leave those comments
    for you and expect those answers in writing.
        Thank you, and I yield back.
        Mr. Lipinski. I now will recognize myself for 5 minutes,
    and I want to start with, very quickly, a non-STB question, but
    it was in the news this morning. MTA in New York announced what
    cuts they will have to make if there is not more funding in the
    COVID relief bill for public transit.
        So I want to ask Ms. Brown, Chairwoman Brown, what would be
    the consequences for Metra if there is no further Federal
    relief for Metra?
        Ms. Brown. Thank you, Chairman, for your question. The
    current ridership [inaudible] currently between 8 to 15
    percent, depending on which of the 11 lines that you are riding
    on due to prepandemic ridership. We saw increased [inaudible]
    numbers prior to the latest spike in positivity, and we
    continue to [inaudible] provide service to all lines and have
    put out additional trains and services [inaudible] reduction of
    service in March for social distancing.
        Our employees remain the core of success, including the
    employees of the Union Pacific and the BNSF, operating 4 of the
    11 lines. A testament to our dedicated employees is the fact
    that we have not had to cancel any of our scheduled service due
    to the pandemic. I hope that answers your question.
        Mr. Lipinski. Do you have plans for what you would have to
    do if you do not receive any further funding?
        Ms. Brown. We do have a plan that we are currently
    exploring on what it will cost if we do have to expand our
    service further for the pandemic, and we can get back with you
    in writing with those answers.
        Mr. Lipinski. Thank you very much.
        Mr. Skoutelas. Mr. Chairman, may I make a comment on that
    to address your question as well? This is Paul Skoutelas at
    APTA.
        Mr. Lipinski. Yes. Do it quickly because I have another
    question I want to come back to you on, so----
        Mr. Skoutelas. Thank you. We have conducted at APTA a
    survey of our membership across the board, all commuter rail
    agencies, bus agencies, multimodal, and determined about 60
    days ago that about half of all of the agencies were proposing
    to reduce services, cut back their routes, and lay off
    employees, if no additional resources were made available to
    them.
        Now, on the business side, it is also true that the
    businesses supporting the industry are very much hurt by this
    and impacted with one-third of them, in fact, likely to go out
    of business altogether unless there is some intervention to
    provide some additional resource.
        Thank you for my ability to answer that.
        Mr. Lipinski. Thank you. And I'm going to go quickly. I am
    going to give Mr. Jefferies 1 minute and then Mr. Skoutelas 1
    minute.
        First, Mr. Jefferies, I assume you don't agree with Mr.
    Skoutelas about giving commuter rail any more leverage in terms
    of expanded service on freight rail lines. I can give you 1
    minute and then Mr. Skoutelas 1 minute to respond to you, so--I
    know that is not enough time, but have at it.
        Mr. Jefferies. I will keep it quick. Thank you for the
    question. So, as I mentioned in my opening statement, Amtrak is
    wholly unique in the access rights that it has with regard to
    freight rail lines, and commuters do not have those rights
    inherently. And so, thus, these arrangements have been made
    through voluntary agreements between privately owned freight
    railroads and public commuter railroads.
        We believe that strikes the right balance, and we believe
    the dramatic growth we have seen in commuter rail throughout
    the country since the formation of Amtrak, I think one to well
    over 30, has demonstrated that. And certainly, there are
    challenges that come along, but we have found that when new
    services approach in a proper manner, where both sides get
    together, have skin in the game, identify clear, articulated
    goals from day one, and appropriate resources are made
    available, that often agreements are put in place, and
    successful outcomes emerge. So a very quick answer, but that is
    our position. Thanks.
        Mr. Lipinski. Thank you.
        Mr. Skoutelas.
        Mr. Skoutelas. Yes. I would say, first of all, we all want
    a healthy rail system supporting the freight railroads, but we
    also want to be able to support the needs of our communities
    and the people who rely on these services. We can't be a one-
    dimensional society. Everyone does not want to own and operate
    an automobile. That is a recipe for disaster. We need a
    multimodal network that really looks to the rights of people,
    to their ability to move around with social equity, addressing
    the climate issues, environmental issues that we have. I
    believe that we must look for win-win solutions. Sure, there
    are divergent interests on all sides. We need to get together
    to find out how we can balance those needs and provide for the
    public.
        Mr. Lipinski. Thank you.
        And a very quick question for Chairwoman Begeman and Vice
    Chair Oberman. I take it we now have three members of the
    Board, and Ms. Begeman, your term is ending at the end of the
    year. What does it mean to not have a full complement of five
    members on the Board? How does that hurt?
        Ms. Begeman. The Board is certainly still able to conduct
    business. We do not have a quorum requirement in the statute.
    In fact, years ago, it came down to one serving member,
    business did go on. Now, I will say that there also has not
    been litigation to determine that someone else wanted to have a
    different thought process on that, but at the moment, we don't
    have a quorum requirement, and if we are three, with two, with
    one, business has continued.
        I will say that my colleagues and I have worked very
    effectively together, and I appreciate their collaboration to
    try to be a productive Board. Some of us, and I think Congress,
    are probably disappointed that there still isn't a full
    complement of five members. If that were to happen, the
    Sunshine Act would no longer be preventing a majority from
    speaking to one another and, perhaps deciding certain outcomes.
    But at the moment, the Sunshine Act prohibits members from
    speaking directly in a nonpublic format because you could have
    an outcome-oriented decision, and so, that is not currently
    allowed. Again, I am hopeful that one day there will be five,
    but I am not sure that it will happen on my watch.
        Mr. Lipinski. Mr. Oberman, do you have anything very
    quickly, because I am way over time.
        Mr. Oberman. I would just like to add and echo what
    Chairman Begeman said about the productivity we have with three
    members, but I would also underscore not only the ability to
    interchange with individual Board Members under the Sunshine
    Act [inaudible], but I very much value the contribution that
    each additional person makes, each person brings additional
    insight, additional intelligence, and experience. I think all
    of us at the Board and the industry will benefit from that full
    complement, and I hope we get there. Thank you.
        Mr. Lipinski. Thank you. My time has expired. I will
    recognize, for 5 minutes, Mr. Perry.
        Mr. Perry. Well, thank you, Mr. Chairman. It has been a
    privilege to serve with you.
        My question will be for Mr. O'Toole, and I am going to
    provide some context. So if you can get unmuted while I do
    that, we will be ready to go. Your testimony, supported by
    Amtrak's audited financial reports, directly contradicts what
    many see as a carefully manicured narrative spun by Amtrak's
    leadership that the railroad was ``nearly profitable,'' and I
    put that in quotes, in 2019, and would have been profitable in
    2020 but for the pandemic.
        Now, in September, newly appointed Amtrak CEO and president
    William Flynn testified before this very subcommittee
    projecting what many say is a false narrative that
    profitability was within Amtrak's grasp prior to the pandemic.
    When I confronted him with the concerns similar to those you
    have raised about Amtrak's unusual accounting practices,
    excluding depreciation from expenses, and including State
    subsidies as revenues, he dismissed the concerns.
        According to Mr. Flynn, excluding depreciation from the
    total is merely a result of the decision to report on an
    adjusted operating income basis, rather than on a GAAP basis,
    and counting State subsidies as passenger revenues is an
    acceptable practice because it is a payment for services
    provided by Amtrak.
        However, it is due to the exclusion of depreciation that
    reporting on an adjusted operating income basis is particularly
    misguided for capital-intensive industries such as railroads.
    This concern is amplified by the fact that much of Amtrak's
    fleet is near or beyond its useful life, and as you
    highlighted, that depreciation is the second largest operating
    cost reported in Amtrak's annual financial statement.
        Moreover, Amtrak is still providing the service to the
    States without payment of these subsidies; instead, requesting
    $500 million in Federal money to make up for the lost, and I
    quote, ``revenue,'' which I think is hardly in line with the
    payment for services arrangement described by Mr. Flynn.
        With that, can you expand on the impact of these accounting
    tricks on the public's perception of Amtrak's profitability and
    financial viability, and if there is, what, if anything, can be
    done to force Amtrak to be more transparent with the American
    people that pay for nearly half of every Amtrak cost with their
    Federal and State tax dollars?
        Mr. O'Toole. Yes. Thank you. It is a surprise to me that so
    many people believe that Amtrak's Northeast Corridor actually
    makes a profit, or that it even makes an operating profit. The
    way that Amtrak claims that it makes an operating profit is
    that it doesn't allocate depreciation to the various trains in
    its system. And as a result, most of the depreciation would
    fall in the Northeast Corridor, because that is where Amtrak
    owns most of the infrastructure that it owns. So by failing to
    account for depreciation, they are exaggerating the
    profitability of the Northeast Corridor.
        If, when I sit down and take a look at all the trains in
    the system, State-supported trains, the long-distance trains,
    the Northeast Corridor trains, and I try to allocate
    depreciation, I find all the trains lose about the same amount
    of money per passenger-mile, and I am not the only one. The
    Rail Passengers Association is also critical of Amtrak
    accounting and believes that that accounting is biased towards
    the Northeast Corridor for one reason or another.
        So, I think the biggest effect of Amtrak's accounting
    tricks, as we both call them, is that it makes the Northeast
    Corridor appear more valuable than it really is when, in fact,
    Amtrak only carries about 6 percent of intercity passenger
    travel in that corridor. The vast majority of intercity
    passenger travel is carried on highways in that corridor and in
    every other corridor in the United States.
        Mr. Perry. Thank you, sir.
        One followup. This is for the APTA rep, Paul, if you can be
    prepared. Public transit agencies received $25 billion in CARES
    Act funding, approximately $10 billion more than the annual
    fare box revenue for all transit agencies combined, in addition
    to the $12.8 billion allocated for fiscal year 2020. Despite
    this massive amount of spending, you claim public transit
    agencies need an additional $32 billion in Federal spending.
    Otherwise, they will begin cutting routes and furloughing
    employees. If this request is met, the combined spending
    between the requested amount fiscal year 2020, fiscal year 2021
    in CARES will exceed $82 billion over 2 fiscal years. That
    amount vastly exceeds the 5-year total under the FAST Act,
    $61.1 billion.
        This alleged need cannot be explained by the impact of the
    pandemic, as far as I can tell, nor can COVID explain the 8-
    percent drop in nationwide ridership from 2014 to 2019 and the
    $106 billion in state-of-good-repair backlog that predated the
    pandemic. These demands are a transparent attempt to force the
    taxpayer to bail out the transit sector from a crisis, quite
    honestly, of their own making.
        Do you believe--this is a question--do you believe it
    creates a moral hazard to reward decades of financial
    irresponsibility and mismanagement with over $80 billion in
    taxpayer subsidies? And how can you reassure my constituents,
    my bosses, that transit agencies could be good stewards of
    taxpayer money moving forward when they have failed to do so in
    the past?
        Mr. Skoutelas. Well, thank you for the question. Let me
    begin by sharing with you, first of all, with regards to
    ridership nationally, just leading up to the pandemic, the two
    quarters preceding, national ridership on transit had been up,
    and that was in contrast to the decline that you recognized.
        I will say as well, you have got to really look at the
    finances of how transit organizations function. You mentioned
    the fare box revenue, which is a significant portion of their
    revenue. However, every transit agency also depends on local
    support of some kind, State or local support, for funding their
    operations. In many cases, it is 50 percent or higher. And so,
    what the pandemic has done is not only take away the fare box
    return from ridership, as we saw ridership decline as high as
    90 percent on rail systems and 70 percent overall for bus
    systems, but it also took away the notion that we would
    continue to see increases in sales taxes, payroll taxes,
    property taxes, and the like, which are some of the means of
    which support public transit agencies, and they vary by
    financial structure across the country. It just depends on the
    local circumstances.
        So the need for those funding is not simply the loss of
    fare box revenue; it is the loss of other revenue sources for
    the agencies as well.
        Mr. Perry. Thank you, Mr. Chairman. I yield the balance.
        Mr. Lipinski. Thank you.
        The Chair will now recognize Mr. Payne for 5 minutes.
        Mr. Payne. Thank you, Chairman Lipinski. And let me just
    say that it has been a real honor and a privilege to work with
    you. And your leadership on this committee will sorely be
    missed, but we will try to continue on in the manner in which
    you have led us so ably in the past.
        Let me ask Mr. Skoutelas: The Northeast Corridor rail
    network is critically important to passenger and freight
    transportation. In 2019, Amtrak recorded approximately 12.5
    million passenger trips, the most on record. The Bureau of
    Economic Analysis estimates that the States alone, rail net
    worth produced 20 percent of U.S. GDP. Can you share with the
    committee the national importance of a Northeast Corridor
    network to our passenger rail system?
        Mr. Skoutelas. Mr. Payne, you are directing that to me as
    APTA?
        Mr. Payne. Yes. Mr. Skoutelas.
        Mr. Skoutelas. Yes. Well, certainly it is a critical piece
    of our transportation work, both in terms of mobility, giving
    people the options to travel in that corridor, and as you well
    cited, the economic impact that it has both in that region,
    and, really, across the country. What is not often recognized
    is the business aspects of those services.
        Certainly, the people who ride them every day are of top
    concern, but the benefits derived from many businesses across
    the country who are not located in the corridor derive benefit
    from the economic impact of having that generation of new
    business and income, so it is critically important. It is part
    of an integrated network of services. Urban transit as well as
    the inner-city transit is something that we are strong
    advocates for, and believe that our people and our communities
    need options today. They need mobility options, and mobility is
    a basic freedom that people need to conduct their lives.
        Mr. Payne. Thank you. And to follow up with respect to
    post-COVID. Ridership across the country has been at historic
    lows because of the pandemic. When the pandemic is over, we
    could see a massive uptick in rail ridership with minimal lead
    time.
        Now is the time really to make the necessary investments
    now in the rail infrastructure to prepare for expected levels
    of demand. What investments are needed in our rail network to
    meet this demand, and what is standing in the way of these
    investments?
        Mr. Skoutelas. Well, I would tell you that by the U.S.
    DOT's own accounting, there is over $100 billion of state-of-
    good-repair needs to modernize our urban transit systems that
    has not been addressed. And we would be looking in the next
    authorization that that be addressed in large measure, because
    we need to provide modernized services for people. That takes
    investment in new facilities and rolling stock and expansion of
    service. There is no question in my mind that rail services
    will come back as the economy opens back up again. It should
    not be a surprise to any of us that while we have seen the
    economic downturn and the shelter-in-place orders, that chokes
    off economic activity. Transit, urban transit, intercity rail
    and the like, really are dependent on moving people, and it is
    a function of economic activity.
        So, we need to make these investments now to prepare for
    that time very soon when this economy will begin to be back
    open and running.
        Mr. Payne. Thank you, sir.
        Mr. Gardner, it is no secret that I am a strong proponent
    of the Gateway Program along the Northeast Corridor project,
    ranging from the Portal North Bridge replacement to building a
    new tunnel under the Hudson River, which would bring
    desperately needed upgrades to ensure that passenger operations
    are not impacted by the decaying infrastructure in those
    tunnels. How would Amtrak's nationwide passenger rail
    operations benefit from a full completion of the Gateway
    project?
        Mr. Gardner. Thank you, Congressman Payne. It is a great
    question. People generally know our Gateway Program as an
    improvement program between Newark, New Jersey, and New York's
    Penn Station. But as you point out, it has vast impact across
    our whole network. Roughly, 17 million of the 32 million
    passengers Amtrak had pre-COVID ride somewhere on the Northeast
    Corridor, and two out of every three trips begin or end at Penn
    Station.
        All the routes to the Southeast, of course, begin at Penn
    Station for our long-distance trains and head through this
    area. Loss of mobility underneath the Hudson through our North
    River tunnels would have catastrophic impacts. We don't need to
    wonder about this. We saw it after Sandy, and we see it when we
    do have infrastructure problems that render our current
    crossing disrupted.
        So there is a massive impact across our entire Northeast
    Corridor, because New York really is the epicenter of the rail
    system for passengers. New York's Penn Station is the largest
    and busiest transportation facility in North America and
    450,000 or so riders a day, and they all rely on 1910 era
    infrastructure to deliver, essentially, full-capacity service.
    And we, through the Gateway Program with our partnerships with
    the two States, and with the Department of Transportation, aim
    to upgrade this infrastructure, to make it reliable, to put it
    in a state of good repair, and then begin an expansion program
    so that rail can continue to grow as an important means of
    transportation in the corridor.
        Mr. Payne. Thank you. Absolutely. People don't understand
    if that North Portal Bridge fails, traffic stops between Boston
    and Washington, DC, so it is crucial in the tunnel as well. So
    it is very vital that people understand what that project means
    to the Northeast Corridor vis-a-vis and also the country. Thank
    you, and I yield back.
        Mr. Lipinski. The Chair now recognizes Mr. Davis for 5
    minutes.
        Mr. Davis. Thank you, Chairman Lipinski.
        Dan, it has been great to be on your subcommittee. It has
    been great to serve with you in this great institution. You are
    somebody who just gets things done, and this committee and all
    of us on it from both sides of the aisle are going to miss you.
    I am going to miss you here because you are one of my good
    friends. And to know that you are not going to be a voice I can
    go to on rail issues on a regular basis is difficult, but I
    know that I can still pick up the phone and give you a ring.
        I just appreciate you, and I wanted to make sure that I got
    a chance to say that at this hearing. Also, you have made
    countless friends, some of them sitting at the table, Mr.
    Oberman, unfortunately for both of us, Mr. Jefferies, also, but
    you know, you have made a difference, too. Look at what
    happened with CREATE in Chicago. I see the benefits of that in
    my district downstate, what you have done over your time here
    in this institution.
        You are going to leave a legacy of success when it comes to
    transportation, but you are also going to be leaving a lot of
    friendships that will never go away because you are such a good
    friend, and I thank you for that, sir.
        I do want to say thanks to the witnesses. I appreciate the
    opportunity to talk about issues that affect my district,
    especially with Amtrak, and I wanted to go to Mr. Gardner with
    the time that I have left in regards to the Illini-Saluki
    Service in central Illinois. I spoke with your CEO just a few
    months ago, and I want to know what has been done to further
    address the possible short shunting issues that are causing
    some delays on that line that are just unfathomable, and
    really, impacting my constituents' ability to use your service.
    What can we do? What can we learn from you as to how that is
    being addressed right now, sir?
        Mr. Gardner. Thank you very much for the question,
    Congressman. As you reference, we have a unique condition on
    that line with the Canadian National Railway, where we have had
    some issues with switch shunting. This is shunting of the
    circuits for grade-crossing protection. We have been doing
    cooperative work with CN to try and identify and rectify this
    issue. It is a complicated set of circumstances to try and
    figure out.
        In the immediate period, we have addressed the issue by
    having additional fleet that allows us to operate through this
    section, and current performance with Canadian National has
    actually become quite good. We think they have made dispatching
    improvements, and we are at roughly 80 percent on-time
    performance for the current route as a result of improvements
    that CN has made.
        We continue to work with CN on looking at some
    technological solutions. We have some new technology that is
    coming, a little bit delayed by COVID, and being able to get
    both some equipment and expertise from overseas, relative to
    some technology we are looking at, but we are working
    cooperatively with CN. We have a good relationship there and
    are seeing, in the immediate period, better performance.
        We still aim to adjust the schedules there and get better
    performance as we see today on a current schedule. We think
    there is more to achieve, and we think with the new metrics and
    standards rule and being able to redistribute the schedule time
    for customer OTP, we can get further better performance.
        But right now, we continue to work with CN, and we are
    going to be trying out some new technology here shortly, and we
    are dealing with the immediate issue by having lengthened
    trains. Thank you.
        Mr. Davis. Well, I appreciate that. And as I said, my
    previous questions for your CEO, Mr. Flynn, that we are--now is
    the best time, when ridership is down, to address these
    technological issues. Do you know if the Illinois Department of
    Transportation has been able to place any orders on the
    technology that could be helpful in addressing this short shunt
    issue on that route, since it doesn't seem to affect any other
    Illinois routes?
        Mr. Gardner. As far as I understand it, Amtrak and CN are
    looking at this, and we are out to procure some additional
    equipment here to test this technology in the environment. As
    you say, it is a unique circumstance to this one area, and so,
    we have worked together, and FRA has been part of our
    conversations, to understand what is driving this condition.
    But we are going to test this new technology, and we are
    hopeful that we will find a good solution other than the
    blanket contest we have today.
        And as you pointed out, now is the exact time we want to
    solve this. But as we recover from a pandemic and envision
    serving more passengers, we can do so reliably to your
    district, and with better performance over that route.
        Mr. Davis. Well, as you can tell, until we see some
    solutions, I am going to continue to ask you to address this
    issue, and probably with a little more impatience each and
    every time. I certainly hope we can continue to work together,
    and I appreciate the information, and, also, being here today,
    to answer our questions.
        And with that, Chairman Lipinski, probably for the first
    time ever, I am actually yielding back some time.
        Mr. Lipinski. Well, it looks like you are yielding back
    time, but actually, the clock started late. So thank you for
    the extra time you were given there, but thank you for your
    kind words, and good luck with everything moving forward.
        The Chair will now recognize Mr. Malinowski for 5 minutes.
        Mr. Malinowski. Thank you so much, Mr. Chairman, and thank
    you for your continuing service. It has been such a pleasure
    for me to work with you and learn from you in the last couple
    of years.
        I have a couple of questions, but I first want to respond
    to a point that was made just a little while back. It was a
    question that somehow there is a moral hazard created by the
    Federal Government subsidizing, or investing in, our Nation's
    passenger rail and rail infrastructure. It is a very, very
    strange comment to make, recognizing that, in fact, taxpayers
    subsidize every form of transportation in the United States,
    including all of us who drive cars on our Nation's highways,
    which, after all, are not built or maintained by the private
    sector. And we do it because--not just as a public service, but
    because we recognize that transit of all kinds is absolutely
    critical to keeping our economy moving. I wish that didn't have
    to be said, but here we are.
        I had a couple of questions for Mr. Gardner, building on
    some of the points that my colleague, Mr. Payne, made. Last
    September, we had a hearing with the CEO, Mr. Flynn. And in an
    exchange with me, he told me that he was hopeful that the
    Portal North Bridge, which is a key part of this Northeast
    Corridor work that we have to do, would--the construction on
    the Portal North Bridge could begin as soon as early 2021. And
    Mr. Gardner, I wanted to just ask if you have any updates for
    us on that, any more definitive estimates of when we will see
    work actually beginning on that critical bridge?
        Mr. Gardner. Thank you, Congressman Malinowski. We are
    making good progress on the Portal North Bridge program. As you
    know, the critical next step is to achieve a full funding grant
    agreement between the Federal Transit Administration and New
    Jersey Transit. And, so, I know that New Jersey Transit is
    working very hard with FTA to accomplish that with the goal of
    completing that certainly this year, near the end of this year.
        We have a role in that arrangement by just cementing our
    agreements with New Jersey Transit on their execution of the
    program, and that is going well. If we are able to complete
    that work, then New Jersey Transit, I think, will begin the
    process early next year of going out to market and looking at
    ways to start the full construction next year, so that is the
    critical last piece of the puzzle.
        Amtrak has received additional funding from the FRA through
    a grant program. Amtrak has its dollars in place. New Jersey
    Transit has its dollars in place. And this last piece of the
    Federal Transit Administration CIG program is really the final
    remaining element and we can begin on this project, which we
    have been in planning for and hoping to develop for well over a
    decade at this point.
        Mr. Malinowski. Great. Well, that is good to hear. And
    then, of course, there is the Hudson River Tunnel. And, you
    know, I trust you agree it is promising that on January 20, we
    will be swearing in a guy whose nickname is ``Amtrak Joe'' to
    be President of the United States.
        There have been a number of blockages to proceeding with
    this next critical stage of the Gateway project, and I wonder
    if you could talk a little bit about some of the procedural
    levers that a new administration could pull to allow this
    project to go forward? Specifically, what are some of the early
    steps a new administration committed to completing this project
    could take, should take, to let it get started?
        Mr. Gardner. Thank you. Well, there are really three, I
    think, core steps that immediately need to be taken in order to
    advance the program. First, like the other witnesses here
    today, Amtrak is in dire need of additional support financially
    to get through the COVID pandemic, and we have requested $2.9
    billion in additional funding to be able to fully restore our
    service, recall employees who are furloughed, and keep our
    capital program going. That is important because if we don't do
    that, we don't have the capital dollars at Amtrak that would be
    necessary to undertake some of the elements of the Gateway
    Program, so that is essential.
        Number two. We need the record of decision to be finalized
    for the Hudson Tunnel EIS, Environmental Impact Statement. The
    Department has been reviewing that for several years now, and
    that record decision, final EIS needs to be issued. With that,
    we can begin a whole series of activities to advance the
    program right away.
        Next, we need support from the administration recommending
    that the Hudson Tunnel program be funded through the budget
    process for the CIG program to start to build the financial
    capacity to undertake the project.
        So those are all important early steps, and we are ready to
    go at Amtrak. Even in these very difficult times, just to put
    that in context, we had 13,000 passengers yesterday on the
    Amtrak system instead of the normal 100,000 we would have in a
    day. So very challenging times, but we are continuing to keep
    our capacity to advance an essential project like Gateway, so
    that when we come out of this pandemic, we are there to serve
    America and increase rail's role in the region.
        Mr. Malinowski. Thank you so much. I yield back.
        Mr. Lipinski. The Chair will now recognize Mr. Babin for 5
    minutes.
        Dr. Babin. Thank you, Mr. Chairman. I appreciate it.
        Good morning to you all, and thank you for participating in
    this hearing today.
        As you may all know, the Texas high-speed rail project is
    fairly controversial. Costs have tripled, even though
    construction has not started. There is opposition from local
    officials and landowners, and the company in charge of the
    project, Texas Central, has reneged on their original promise
    that the project would be privately financed.
        Most recently, House Democrats included an earmark for the
    company in their partisan infrastructure package, H.R. 2, that
    would alter the credit risk premium, and make it easier for the
    Texas high-speed railway to get Federal RRIF loans, leaving the
    taxpayers across the country on the hook if the project fails.
        To that, Texas Central claims that they are unable to pay
    for the risk premium upfront for this project, and have
    requested legislators to change Federal law in order to help
    them qualify for a loan that they otherwise would not be able
    to receive under the standard rules. To be frank, I believe
    these decisions should be made at the State and local level,
    but I do have a few questions on the subject.
        Chairwoman Begeman, it is my understanding that Texas
    Central must file, and the Board must approve, a full
    application in order for the company to have the authority to
    construct. Is that correct?
        Ms. Begeman. That is correct, sir.
        Dr. Babin. OK. Thank you. And, again, to you, Chairwoman,
    what role does the financial feasibility play into the Board's
    decision to grant or to deny a full application to the Board
    for construction and operational permits?
        Ms. Begeman. I would say it will have an important role. I
    don't want to prejudge an outcome, so I am going to sort of
    give you more of a historical viewpoint. A few years ago, the
    Board considered a case on an entity that actually wanted to
    develop a very large freight network around the Chicago area.
    As you can imagine, it had quite a bit of attention, and I
    would say controversy, from many communities and leaders and,
    of course, also a lot of proponents. And one of the things that
    the Board asked the applicant to do, or the advocate to do, was
    to disclose what their finance availability was in order to
    complete the project. And we learned roughly that they had
    $113, and that was really all the Board needed to say no.
        Dr. Babin. OK. Thank you very much.
        Mr. O'Toole, does it worry you that Texas Central's project
    costs continue to skyrocket, lacks the necessary land to build
    the train, and that some transportation experts, like the
    Reason Foundation, have noted that the company's ridership
    projections are inflated?
        Mr. O'Toole. Well, even if we accept the ridership
    projections of the Texas Central, at their current estimated
    construction costs, they would have to charge every single
    rider $255 per one-way trip to just cover construction costs
    amortized over 30 years.
        In addition, they would have to charge enough to cover
    operating costs. So the tickets would start at $300. You
    compare that with the cost of flying the same corridor, which
    would be faster. Currently, Southwest and American and other
    airlines are charging about $100 a ticket. There is no way that
    Texas Central can be competitive.
        And the whole problem with high-speed rail is that it
    requires a huge amount of expensive-to-build and expensive-to-
    maintain infrastructure that the airlines don't need.
    Basically, the airlines' infrastructure is the air, so they
    don't need a lot of infrastructure, and so they can be
    extremely competitive.
        The whole idea that airlines are only competitive above
    500-mile, or above 600-mile distances is belied by the fact
    that there are 35 to 45 flights a day in between Dallas and
    Houston. There are [inaudible] flights a day between Portland
    and Seattle, which are only 160 miles apart. There are a lot of
    places where there are a lot of flights that are much shorter
    than 600 miles, and most of the people on those flights are
    just going from point A to point B. They are not using it to
    connect to other places.
        Dr. Babin. OK. Thank you very much. Just a few seconds
    left. Back to Chairwoman Begeman.
        What steps will be taken by the Board to address that the
    serious financial concerns raised by the local landowners and
    officials are adequately addressed?
        Ms. Begeman. Sir, we have a process where anyone is allowed
    to participate in our proceedings, particularly our [inaudible]
    situation involving a proposed high-speed rail project or, you
    know, a [inaudible] freight project. Communities,
    congresspeople, Senators, anyone can submit their views to the
    Board, and they will be posted. The Board will consider them.
    We read all of our filings, and we will certainly, you know,
    take everyone's views into account and try to make the most
    appropriate decision based on the law and the facts.
        Dr. Babin. Thank you very much. I thank both of you.
        And I will yield back, Mr. Chairman.
        Mr. Lipinski. All right. So who do we go to?
        The Chair will now recognize Ms. Johnson for 5 minutes. Is
    Ms. Johnson there right now?
        All right. The Chair will recognize Mr. Garcia for 5
    minutes.
        Mr. Garcia of Illinois. Thank you, Mr. Chairman. And before
    I make my remarks, I also want to note that you will leave a
    great legacy, a second-generation legacy, during your time and
    service on this committee that will speak loudly for itself. I
    want to thank you for all of your service over all of these
    years, and I want to pretty much echo the sentiments expressed
    by my colleague from Illinois, Mr. Davis, earlier.
        Thank you, Mr. Chairman and Ranking Member, for putting
    together this all-important hearing, and thanks to our
    distinguished witnesses. I am always delighted to welcome folks
    from Chicago, and I am glad to have Metra, our commuter rail in
    northeast Illinois, joining us today. A shoutout to both Chair
    Romayne Brown and Vice Chair Marty Oberman.
        Commuter rail, like many of our critical transportation
    modes, like the aviation industry, transit, et cetera, have
    been hit particularly hard by the COVID pandemic. Each of you
    gave us a snapshot of how dire the situation is for your
    organization. Rising cases across the country and the
    reissuance of stay-at-home orders is devastating for the
    transportation sector.
        Behind those numbers are the employees, our frontline
    essential workers, who are on the brink too. Mothers and
    fathers scared to bring COVID-19 home and expose their
    families, but still, they roll up their sleeves, and they head
    to work every day, keeping our economy and many of their
    essential workers, like doctors and nurses, on the move,
    whether it is commuter rail or our public transportation
    agency. We need to get it straight. Keeping our public
    transportation agencies, including commuter rail going, it is
    not just an option. It is a lifeline. It keeps our essential
    workforce going, and now, more than ever, Government must step
    up. That is why I fought hard to build support for $25 billion
    in the CARES Act and additional $32 billion in the Heroes Act.
    This aid cannot wait.
        The chairman has asked questions about COVID and Metra's
    financial fiscal outlook. I want to ask a different question of
    Ms. Brown on the topic of the Surface Transportation Board. In
    your opinion, what role can they play in the short term and
    long term to ensure that we have a robust and thriving commuter
    rail system?
        Ms. Brown?
        Are you able to hear me, Ms. Brown?
        Mr. Lipinski. Can Ms. Brown hear us?
        Perhaps we are having technical difficulties.
        Mr. Garcia of Illinois. Sorry to hear that.
        Ms. Brown. We are experiencing some technical difficulties
    on my end. Is it possible to get the question repeated, please?
        Mr. Garcia of Illinois. Yes. My question, Ms. Brown, is on
    the topic of the Surface Transportation Board, in your opinion,
    what role can it play in the short term and long term to ensure
    we have a robust and thriving commuter rail system?
        Ms. Brown. [Inaudible.]
        Mr. Garcia of Illinois. Is that audible?
        Mr. Lipinski. If Ms. Brown maybe tries turning off the
    video and see if that works better.
        Yeah, your video is going on and off, so if we could get
    Ms. Brown, of if Mr. Garcia wants to decide he wants to move on
    or----
        Mr. Garcia of Illinois. Yeah. Maybe if we can convey that
    question to Ms. Brown if she can get back to me in writing,
    that would be fine.
        Let me proceed to a question for Vice Chair Oberman.
        In the past years when Amtrak established new or expanded
    service, host railroads often sought levels of infrastructure
    investment that were vastly different from Amtrak's estimates.
    The process for resolving disputes around infrastructure
    improvements between Amtrak and its host railroads can take
    years and leads to unreasonably long delays in providing the
    public with passenger rail service they need.
        What tools does the present Surface Transportation Board
    need to expedite the process of adjudicating disputes between
    Amtrak and various host railroads?
        Mr. Oberman. That is an excellent question, Congressman,
    and it is great to see you today, and I am delighted to see so
    many members of the Chicago City Council and Metra
    representatives at this hearing at which I am, you and I are
    both graduates of at least one.
        You know, as Chairman Begeman outlined at the beginning,
    the Board has limited jurisdiction currently over matters
    involving the freight railroads and Amtrak. Of course, there is
    the entirely new proposal that has just been issued by FRA on
    on-time performance which will then allow the Board to begin to
    investigate and adjudicate on-time performance matters. But, to
    my knowledge, we don't have jurisdiction to mandate
    infrastructure improvements by freight railroads in order to
    allow them to better serve Amtrak. If that is an authority that
    the Congress chose to enable the Board to deal with, we would
    then be in a position to investigate matters in that area.
        I would note that presently when freight railroads have
    reduced infrastructure such as after 1970, such as including
    double tracking in certain places, the Commission, the ICC, and
    then the Board had no jurisdiction over regulating the freight
    railroads' decisions to remove that kind of infrastructure. So
    that happened without the Board's oversight in the past and
    still would. There are certain limited kinds of infrastructure,
    which we don't rule on.
        So I don't know if that answers the question, but the
    current authority is very limited. And to the extent
    infrastructure is related to Amtrak's ability to have better
    performance, that would be something that Congress would have
    to deal with.
        Mr. Garcia of Illinois. OK. Well, thank you for your
    answer.
        Mr. Chairman, I yield back. Thank you for your
    consideration.
        Mr. Lipinski. Thank you.
        The Chair will now recognize Mr. Pence for 5 minutes.
        Mr. Pence. Thank you, Chairman Lipinski, and very good
    luck, God speed to you in your next endeavor, and thank Ranking
    Member Crawford for holding this hearing, and thank you to all
    of the witnesses for being here today.
        As a national leader in both passthrough highways and rail
    track mileage, Indiana has earned our nickname as ``the
    crossroads of America.'' With over 940,000 Amtrak riders
    annually and nearly 4,000 miles of total rail trackage, we are
    also significantly invested in the safety and efficiency of
    robust passenger rail systems.
        Last month, Governor Eric Holcomb broke ground on the $945
    million West Lake Corridor South Shore Line. This extension
    project will bring Hoosiers a streamlined connection to the
    Chicago economy. The State's new commuter rail will boost our
    accessibility and encourage prosperity for generations to come.
    We are growing jobs, private investment, and creating new
    opportunities for Hoosiers.
        I was proud to advocate for FTA's CIG program in both the
    fiscal year 2020 and fiscal year 2021 appropriation process. I
    am especially honored to see $355 million in CIG funds awarded
    to the South Shore Lines West Lake Corridor. I applaud Governor
    Holcomb, my fellow Hoosiers in Congress, and all the local
    leaders on this monumental economic development win for my
    State, Indiana. For 30 years, leaders in Indiana have worked
    hand in hand with Washington to put together one of the largest
    bipartisan transit investments in our State.
        I also and especially want to recognize my friend,
    Congressman Visclosky, who has worked tirelessly to see this
    project through over the last 30 years. I say to you,
    Congressman, well done, good and faithful servant. I look
    forward to our continued partnership in bringing infrastructure
    investment to Indiana.
        I thank you, and I yield back.
        Mr. Lipinski. The Chair will now recognize Ms. Norton for 5
    minutes.
        Ms. Norton. Can they see me? I hope you can you hear me,
    Mr. Chairman. I very much appreciate this hearing and have some
    special questions for Amtrak because, of course, not only is
    Amtrak essential to our country, it has its hub here in the
    District of Columbia that I represent.
        And so I have a question for Mr. Gardner. The committee had
    a hearing last September on Amtrak's response to COVID-19.
    Since then, not only has the virus continued, but is more
    vicious and now it is out of control we are told in our
    country.
        Have there been any additional personnel or service changes
    since our last hearing because of your response to COVID-19?
        Mr. Gardner. Thank you, Congresswoman.
        As you noted, the rate of infections have dramatically
    increased, and we are seeing impacts on our network. We have
    seen an increase in positive cases [inaudible] and the
    production [inaudible] in this district. We anticipate these
    problems will make it harder for us to withstand financially
    these next several months.
        As you know, we were hoping that Congress would have
    enacted additional COVID funding and relief for Amtrak, and as
    well as our other partners, our State partners, our commuter
    partners. That has not yet happened. And we have taken a series
    of steps to try to maintain the financial footing of the
    company.
        But the current rise in cases does give us concern about
    additional revenue that we had hoped for and anticipated over
    these next several months and, again, reinforces the really
    urgent need for Congress to provide supplemental support so
    that we can maintain proper [inaudible] and be prepared to
    [inaudible].
        Ms. Norton. Well, I am concerned because Congress itself
    invested in Amtrak when there was concern that we wouldn't have
    any Amtrak. So, in addition to whatever funds that other
    railroads may need, Amtrak is in a perhaps unique position with
    respect to Federal funding.
        So I am very concerned, and hopefully you can keep us
    informed because Mr. O'Toole's testimony, as I have read,
    seemed to suggest that Amtrak's service was only for a small
    population. Of course, that caught my attention here in the
    district because the district has more than 47 million people a
    year pass through Union Station, many of whom, of course, use
    Amtrak.
        Can you speak to the unique role that Amtrak plays in our
    transportation system? We know it's used heavily here on the
    east coast, but it's used around the country. Could you speak
    more generally to Amtrak's role in our transportation system on
    the east coast and nationwide?
        Mr. Gardner. Absolutely. Thank you for the question.
        Mr. O'Toole's testimony seems to, in a way, prove our
    point, which is that Amtrak is an excellent addition to
    mobility in places like the Northeast Corridor where we have
    good infrastructure, multiple frequencies and competitive trip
    times. And we make [inaudible] who provide this, who take our
    service, as you know, and we provide significantly more trips
    between Washington and New York, for instance, than the
    airlines. And this infrastructure does far more than just
    support Amtrak.
        To his point about depreciation, the depreciation
    associated with that infrastructure provides essentially over
    2,000 daily trips pre-COVID of trains up and down the corridor,
    serves 750,000 passengers a day, 260 million trips a year,
    because it covers not only Amtrak but eight commuter users,
    four freight users. It is a national infrastructure that serves
    an entire region, and not any region, a region of more than 50
    million people producing 20 percent of the GDP.
        So that capital investment is one that the Federal
    Government has made through Amtrak and is there producing
    tremendous results. What we aim to do is take this successful
    prototype, and we have other examples in the Midwest and the
    Chicago hub, as the chairman well knows, in our California
    services supported by the State of California and Pacific
    Northwest, examples where passenger rail makes a real
    contribution, and it does so by offering trip-time competitive
    trips, multiple frequencies, and reliable service.
        The reason we aren't doing more in the United States and
    aren't able to provide more value is because we don't have
    great access to the rest of this large network around America.
    There are many areas where passenger rail can provide the kind
    of meaningful service it does in the Northeast, but we need a
    fair and quick way to get access to the infrastructure to
    provide such trips and appropriate funding through both the
    States and the Federal Government.
        Ms. Norton. So when you say you don't have access to the
    rest of the country, what do you mean by that?
        Mr. Gardner. So, Congresswoman, under statute we are given
    the right to use freight railroad infrastructure across the
    network, but the process of doing so is very cumbersome and
    difficult. Not all but some of our freight colleagues really
    look to make it very difficult for us to use their
    infrastructure to add service or start new routes and----
        Ms. Norton. But is there anything that Congress can do
    about that?
        Mr. Gardner. Yes. In fact, already in the surface
    transportation reauthorization bill, you put forward in the
    committee and passed and you made some changes to the statute
    to help speed up our process and give us more rights, help us
    achieve the preference we should get under statute over freight
    transportation.
        We need those provisions to be enacted into law, and we
    could use your support in terms of funding and resources for
    the STB so they can carry out their roles as well.
        Ms. Norton. I appreciate that. When we consider the
    concerns that we have about transportation, this is one of the
    cleanest forms of transportation in the United States or in the
    world.
        If I have time, I have a question for Mr. Skoutelas because
    in his testimony he says that after a commission to study COVID
    transmission on transit, it found no direct correlation between
    the use of urban transit and transmission or contraction of the
    virus. I was impressed by that. And I wondered why so? Is it
    because there are so many rules, because of the enforcement of
    rules, because people are abiding by the rules?
        Could you speak to that sir?
        Mr. Skoutelas. Thank you so much for that question.
        In the weeks following the outbreak of the pandemic, we saw
    quite a bit in the media about the genesis of where these
    contractions were occurring from the pandemic and the virus,
    and a lot was attributed to, I think inappropriately, to public
    transit use.
        And so we looked around the world really to gain experience
    of what has transpired over these many months since the
    pandemic outbreak and have determined both in Asia and in
    Europe, and really here in the United States, the studies that
    have been done found that public transit is not the source of
    that. In fact, oftentimes it is the end points where people are
    starting, perhaps their homes, or some other place of
    destination.
        People are on transit generally for a pretty short period
    of time. And our agencies have all adopted very rigorous
    disinfecting and cleansing protocols that they have put into
    place really since the very beginning of the outbreak in March,
    including----
        Ms. Norton. Excuse me. If there is no correlation--so if
    somebody is infected and they board transit, of course they are
    bringing that on the transit, are you saying that they are
    there for such a short period of time that the virus isn't
    transmitted while on the train?
        Mr. Skoutelas. Well, I think what the studies have shown is
    that with all of the measures that transit has put in place,
    the wearing of face coverings by their own employees, the
    frontline workers, encouraging, if not mandating, et cetera, by
    riders and all of the cleaning provided at the stations and at
    rolling stocks, buses and trains, it really has diminished that
    possibility.
        And, in addition to that, the social distancing that most
    of our agencies have done as well to keep people separated as
    much as possible. Those all have contributed to that. So we
    want to make sure that that message is out.
        We recently convened and concluded a national task force
    looking specifically at these issues and have laid out a whole
    framework of practices that we think are to be followed and in
    large measure are being followed, which I think greatly
    diminishes that possibility.
        Ms. Norton. Well, that is very helpful to hear, and I thank
    you.
        I yield back my time Mr. Chairman.
        Mr. Lipinski. Thank you.
        The Chair now recognizes Mr. LaMalfa for 5 minutes.
        Mr. LaMalfa. Thank you, Chairman Lipinski. I just wanted to
    say it has been a pleasure. You are a true gentleman, and I
    have enjoyed the opportunity to serve with you. So thank you,
    sir.
        Just a couple for Mr. Gardner and also for Mr. O'Toole of
    Cato here.
        In my own district here, talking about Amtrak train
    service, we have a city called Dunsmuir in northern California.
    It is between Redding, on the north side of the northern part
    of California, and I believe the next two stops north of that
    in Oregon would be Medford and/or Klamath Falls, if I am not
    mistaken. Maybe Medford is a bus route, but the threat here is
    that the Dunsmuir stop is going to be closed down.
        And there is, of course, great concern in the local
    community on that because it is, although a small town, it
    really does punch above its weight, so to speak, on its usage
    there. And with the challenges you have in Siskiyou County with
    weather where this location is, is that the train can go when
    the highway cannot. And this station is really the only
    nonroadway transportation link in the area, in that area of
    northern California. So loss of the station would be pretty
    devastating for passenger service and a lot of just local
    transportation concerns in the region.
        So for Mr. Gardner, again, we have on several occasions
    this year because of--you know, during the CARES Act and COVID
    response, taxpayers were pretty generous with Amtrak and expect
    service from that or at least the availability of service. And
    $1.02 billion in March via CARES Act and then requests later
    for $1.475 billion and then--that was in May, and then in
    August a number of $2.05 billion and it got kicked up to $4.8
    billion. So a lot of dollars being pushed around, and I am
    certainly not anti-rail service, but we have great concerns
    that are we getting the bang for the buck to our taxpayers in
    order to keep this alive and viable, especially with the
    closure of stations and the cutback of trains.
        So is this right, Mr. Gardner, for us to be witnessing the
    possible cut back of even more service, especially what we are
    talking about in Dunsmuir, California, which is a really
    important link in a tough transportation situation?
        Mr. Gardner. Thank you very much for the question.
        I have had the pleasure of being in Dunsmuir, a beautiful
    part of California. And, in fact, we fully intend to continue
    to serve Dunsmuir. I think what you--it is part of our Coast
    Starlight route, and probably what you are aware of is that we
    have had to reduce service to three times a week for our long-
    distance network.
        That is actually because we were unable to achieve the
    additional funding we had requested from Congress in order to
    forestall those kind of cuts. And so we fully intend to restore
    that service back to 7 days a week and, of course, serve
    Dunsmuir.
        So that is why we have asked for these additional dollars.
    We do want to continue to serve Dunsmuir and bring both long-
    distance network, including the Coast Starlight, back to its 7
    days a week schedule.
        Mr. LaMalfa. Let me ask a technical question on that then.
    Are the trains traveling through 7 days a week but they just
    don't stop each time, or is it that you are just not running
    trains at all through the entire region 7 days a week?
        Mr. Gardner. The latter, Congressman. So we are only
    running that train three times a week, so it is not running on
    the other 4 days, and we have done that in order to reduce
    expense because we have not been able to receive additional
    funds for fiscal year 2021.
        As you noted, we did receive funds in fiscal year 2020
    under the CARES Act, and that was essential to keeping the
    long-distance network operating at 7 days a week. But without
    additional funding, we have had to take these steps to reduce
    costs and service to meet the very, very low demands. Yesterday
    there were 2,500 passengers on our whole long-distance network.
    But we intend to fully restore that service as soon as we are
    financially able to or when demand returns to other levels.
        Mr. LaMalfa. OK. I can certainly see that.
        So is there a scenario where you would run trains through
    there that don't necessarily stop but keep going? If you are
    running the trains, will you continue to use each of the
    stations that you have in the past, including Dunsmuir?
        Mr. Gardner. Yes. Certainly I am aware of no plans that
    Amtrak has to not service Dunsmuir, and we are--the only reason
    the service is reduced is because the train frequency has been
    reduced. And as we increase that frequency, with Congress'
    support, we would be able to increase service again.
        Mr. LaMalfa. OK. Because when you see service that way,
    then you see people go to other modes if at all possible, so
    you lose that market share, and I think we have seen that in
    the past with others. Once you reduce it, maybe they don't come
    back when they find other ways to do that. But that wouldn't
    necessarily apply to this region here.
        So I wanted to also delve into another thought here too,
    and it was talked about earlier. I am sorry I had to go out of
    the room for yet another Zoom call.
        How would giving Amtrak greater preference over freight
    trains affect Amtrak's ridership? We know freight is an
    extremely important and big part of rail usage, and if this was
    asked earlier, forgive me. But if Amtrak got greater preference
    in order to try and present a better saleability to passengers,
    what kind of payoff would you see in that, do you think, as far
    as greater usage by ridership?
        Mr. Gardner. Yeah, that is a great question.
        We think that the poor on-time performance that many of our
    routes have is a significant impediment to ridership and
    revenue growth. It is quite apparent many of our passengers,
    particularly our other long-distance network that serves
    Dunsmuir, for instance, their routes frequently experience
    significant delays.
        The number one cause of those delays is freight train
    interference. These are delays that Amtrak encounters when
    freight trains run in front of us or otherwise dispatching
    decisions are made that prioritize freight trains instead of
    Amtrak.
        And the reduction in reliability is clearly a problem for
    passengers. We have many-hour delays. Often our whole long-
    distance network is operating at 50 percent or less on-time
    performance if you look at all over the many past years. Even
    right now through this period of COVID where freight traffic
    has been down, we are only at 60 percent over the last 12
    months for on-time performance with the entire long-distance
    network.
        So we see a very difficult struggle to market these trains
    to riders, particularly on the shorter distance because the----
        Mr. LaMalfa. I have to economize my time here. I am sorry.
        So what do you think, can you put your finger on how
    ridership would improve if you could improve those numbers?
        Did we lose you on the link there, Mr. Gardner?
        Let me jump to Mr. O'Toole while that spools back up
    hopefully. Same question, Mr. O'Toole at Cato, would it improve
    Amtrak's ridership, do you think, if we were able to somehow
    accomplish a greater preference over freight? Which isn't
    necessarily my position, but I want to ask the question.
        Mr. O'Toole. Well----
        Mr. Lipinski. Mr. O'Toole, if you could make this a brief
    answer.
        Mr. O'Toole. OK. I am sorry I am longwinded.
        As a resident of Chairman DeFazio's district, I have been
    to Dunsmuir many times, both by train and by automobile, and I
    can tell you fewer than 15 people a day get on or off an Amtrak
    train in Dunsmuir.
        Now, I think it would be great if we had two trains a day
    between Seattle and Los Angeles and one of them was able to
    serve Dunsmuir in daylight and the other one at nighttime
    instead of just one at night as it is today. But, effectively,
    Amtrak's market share in that corridor is indistinguishable
    from zero.
        So even if you had two trains a day, even if they ran on
    time every day, you might be able to double that from zero to
    zero. It is not going to be relevant. It is going to be
    extremely costly but not relevant.
        Mr. LaMalfa. All right.
        Mr. Gardner, are you back?
        Mr. Gardner. Thank you. I am, yes.
        Mr. Lipinski. If you could make this quick.
        Mr. LaMalfa. Yes, please.
        Mr. Gardner. We think there will be a significant increase
    in ridership. We have seen it. At every point of on-time
    performance, it equates to increased ridership and revenue, and
    our costs would significantly be reduced if we didn't incur as
    much delay because we take lots of costs as a result of delay.
        Mr. LaMalfa. When do you anticipate going to four a week or
    five a week up from the three?
        Mr. Lipinski. If we could have this be the last answer
    here.
        Mr. LaMalfa. Thank you.
        Mr. Gardner. If we would receive the funding we have asked
    for, we would restore our service as soon as possible.
        Mr. LaMalfa. Thank you.
        Thank you, Mr. Chairman.
        Mr. Lipinski. Thank you.
        The Chair will now recognize Mr. Weber for 5 minutes.
        Mr. Weber. Thank you, Mr. Chairman.
        Let me say, Dan, we are going to miss you. You are one heck
    of a standup guy. So I just appreciate having served with you.
        I want to go first to Mr. O'Toole if I can.
        Mr. O'Toole, one of our questions is, how does Amtrak
    compare to airlines and motor vehicles in terms of ridership
    and then also demand and profit?
        And then I will expound on that a little bit. How does
    Amtrak compare to airlines and motor vehicles in terms of
    ridership and profit?
        Mr. O'Toole. Well, motor vehicles effectively have 90
    percent of the market share in this country. Airlines have 10
    percent. Amtrak and urban rail transit have less--well, under 1
    percent together. Amtrak's is one-tenth of 1 percent of all
    ridership.
        Mr. Weber. And I am going to be a little brief if I can.
    So, obviously, the profit is going to be way down. And in some
    sense, I think we would all agree that is really not--that is
    almost apples and oranges. It is not a fair comparison per se,
    but it does point out some interesting things.
        The number of jobs, if you know, that Amtrak represents and
    then the freight rails, we are going to focus on just the
    freight companies themselves, what's the difference there in
    jobs? Does Cato know that?
        Mr. O'Toole. I don't have those numbers offhand. Stephen
    Gardner might. But, obviously, the freight rails which move
    one-third of all of the freight moved in this country are going
    to have a lot more jobs; but the interesting thing is they are
    very high worker productivity, whereas Amtrak has extremely low
    worker productivity. For the number of passengers carried, it
    requires a lot of workers.
        So in terms of passengers carried, Amtrak has a lot of
    jobs. Now, that doesn't mean they are actually doing productive
    work in this country.
        Mr. Weber. Right. I get it, and I appreciate that. I am
    trying to keep the answers with brevity as much as possible
    before the departing chairman, who is a standup guy, kicks me
    out, kicks me off.
        So I do want to go to Mr. Gardner, do you know the answer
    to that question?
        Mr. Gardner. Well, Congressman, I believe the freight rail
    industry has about 150,000 employees. We are roughly,
    prepandemic, a little bit shy of 20,000.
        Mr. Weber. OK. Well, thank you for that.
        And then let----
        Mr. Jefferies. Congressman, if I could chime in on that,
    absolutely freight rail employs about 150,000 right now in
    salary and benefits totaling into six figures. When you look at
    the economic impact of freight rail, we are talking about 2.1
    million jobs direct and indirect impact there.
        Mr. Weber. Right. And that is one of the major points in
    this discussion, in my opinion. What kind of money--and I will
    stay with you then, if I can.
        What kind of money has the freight rail companies invested
    in the infrastructure? And then you have to ask the same
    question, what has Amtrak invested? Back to you.
        Mr. Jefferies. Sure. So annually freight railroads are
    investing about $26 billion in private capital back into their
    networks, and then we chart that back to partial deregulation
    in 1980, it well exceeds $700 billion in private capital
    investments.
        Mr. Weber. And, Mr. Gardner, how about Amtrak?
        Mr. Gardner. Amtrak has been investing about $1.2 billion,
    $1.3 billion per year over these last several years in our
    network. Of course, we have a very different network than the
    freight railroads. We primarily only own our infrastructure in
    the Northeast Corridor, and then our rolling stock and some
    station assets.
        So our capital program is very different. But our economic
    impact is quite substantial. We also have enormous multiplier
    effects that occur from our spending, both our payroll and our
    procurement, and from the benefits we create through mobility.
        Mr. Weber. Yeah, but primarily in the Northeast area, I
    would imagine, as you pointed out.
        Interesting question, and I will throw this back to Mr.
    O'Toole, high-speed rail, and I have been overseas, seems to
    work in other countries, but it doesn't work here. Why?
        Mr. O'Toole. Well, I would first of all, question the
    assertion that it works in other countries. It is not really
    working in France or China or even Japan, except for in the
    main corridor between Tokyo and Osaka.
        One thing we have learned from high-speed rail in countries
    all over the world is that they have gone heavily, heavily into
    debt to build it, almost to the point where it creates serious
    problems for their country.
        Japan's 10 years of stagnation, the lost decade in the
    1990s, can be attributed to the debt of building high-speed
    rail. China has a debt of something like $750 billion building
    high-speed rail. There is no end in sight. I don't think it is
    working in those countries.
        Mr. Weber. OK. Well----
        Mr. O'Toole. Its market share is small and not growing.
    Automobile share is growing rapidly in Asia. Airline share is
    growing rapidly in Europe. [Inaudible] is not.
        Mr. Weber. So very quickly, Mr. Gardner, back to you. So,
    according to Mr. O'Toole's response there, he doesn't think it
    is working because they are going in debt. And when passenger
    lines need more access to the rail that freight lines use, how
    do you suppose other countries make that work? Any insight
    there?
        Mr. Gardner. Yeah, absolutely, Congressman. Thank you for
    the question.
        I would first say that, you know, Mr. O'Toole's assertion
    is sort of breathtaking. We have got the major developed
    nations of the world all investing at incredibly robust levels
    because they see passenger rail and high-speed in particular as
    a means of increasing mobility efficiently and addressing
    carbon emissions. So I would say that the broad consensus is
    actually that not only is it working, but it is working and
    worth more investment.
        And the difference between the U.S. system and most of the
    international examples is that the infrastructure is publicly
    owned, publicly owned and developed in all of these nations,
    the nations that Mr. O'Toole mentioned. There is a rail
    infrastructure entity, and they are developing it for both
    passenger and freight, and some of those locations are
    optimized for passenger service primarily. That is for sure the
    case.
        China is a great example of a nation that is investing for
    both, a massive freight system and an incredible amount of
    investment for passenger rail. And, again, they see high speed
    as a means of dealing with their very significant population in
    an efficient way.
        Mr. Weber. Well, thank you.
        Mr. Chairman, I am going to yield back. And, once again,
    best wishes to you going forward into your future.
        Thank you.
        Mr. Lipinski. Thank you.
        The Chair will now recognize Mr. Stauber for 5 minutes.
        Mr. Stauber. Thank you, Mr. Chair and Ranking Member
    Crawford and the witnesses for testifying today.
        I do not have any questions, but I do want to make some
    comments of Chairman Lipinski. Chairman, I am a freshman Member
    on the Republican side and working with you on the
    Transportation and Infrastructure Committee. I just want to say
    it has been a pleasure for me as a freshman Member on the
    Republican side to watch you operate, your moderate views. You
    are going to be missed as a Member of Congress. You are going
    to be missed in the Illinois delegation. You are going to be
    missed in the District.
        I so much appreciate the opportunity to have served these
    past 2 years with you. You are just an unbelievable person, and
    I appreciate everything that you have done, your moderate
    stances and others. And I just want to say thank you very much
    for your service to this Nation, and Congress is better off to
    have Dan Lipinski in it.
        And I yield back.
        Mr. Lipinski. Thank you very much, Mr. Stauber. You waited
    all that time just for that, so I appreciate it.
        And thank you for all of your work and what you have done
    in trying to get some important things done for our country.
        With that, we are going to wrap this up, wrap up this
    hearing. I thank our witnesses for their indulgence. It has
    been 2 hours and 40 minutes. It has been a pretty long hearing.
    I very much appreciate all of the testimony here today.
        And before I finish up the hearing today, I want to make
    sure that I thank the staff of the subcommittee for all of
    their work this year: Andrea Wohleber, Alice Koethe, and
    Katherine Ambrose. We had Liz Hill here as the director until
    she moved on to greener pastures. And I want to thank very much
    Auke Mahar-Piersma. Auke stepped in when Liz left in the middle
    of the year and did an excellent job with the subcommittee. So
    I want to thank all of them for the work that they have done.
        I just was listening to Al Franken's book about his career
    in the Senate, and he said how he learned he was never supposed
    to say that staff did anything, that it is all the Senator.
    And, unfortunately, that is oftentimes the way it is up here on
    the Hill that we, the Representatives and Senators, are
    supposed to take all of the credit for everything. But everyone
    really knows how things operate, knows that the staff does a
    tremendous amount of work and is responsible for most things
    that get done here.
        And I also want to thank Alex Beckmann on my staff who does
    my committee work for the Transportation and Infrastructure
    Committee. I want to thank Alex for all of his great work that
    he did for me.
        So, again, thank you to the witnesses for your testimony.
        I would like to ask unanimous consent that the record for
    today's hearing remain open until such time that the witnesses
    have provided answers to any questions that may be submitted to
    them in writing.
        I also ask unanimous consent that the record remain open
    for 15 days for any additional comments and information
    submitted by Members or witnesses to be included in the record
    of today's hearing.
        Without objection, so ordered.
        If no other Members have anything to add, everyone stay
    safe, and the subcommittee is now adjourned.
        [Whereupon, at 12:43 p.m., the subcommittee was adjourned.]

                           Submissions for the Record

                                  ----------

      Prepared Statement of Hon. Sam Graves, a Representative in Congress
         from the State of Missouri, and Ranking Member, Committee on
                       Transportation and Infrastructure
        I want to thank Chair Lipinski for holding this hearing, and I want
    to thank our witnesses for attending. Today's hearing will focus on how
    the Surface Transportation Board supports our Nation's passenger rail
    system. This is especially important given the challenges the passenger
    railroads have faced this year due to the pandemic. As we start
    preparing for next year's surface transportation reauthorization, there
    are several important issues relevant to our witnesses today.
        We must look at how best to fund Amtrak after their year of record
    losses. Encouraging private contracting and giving states and
    communities more control of their passenger services is a good place to
    start improving operations and saving taxpayer money. We also must
    consider the important role that freight railroads and their rail
    network play in moving goods throughout the country. Issues such as on-
    time performance, preference, and disputes between passenger and
    freight railroads should be addressed in ways that fully recognize the
    value and resiliency of freight railroads.
        And finally, I want to add my thanks to Chair Lipinski for his
    leadership of this Subcommittee. I have appreciated your partnership
    and willingness to seek common ground. I know personally we have worked
    together on several bipartisan bills that have become law including
    small aircraft certification reform and aviation workforce training,
    just to name a few. You have a record of accomplishment that should
    bring you great pride and I wish you well as you begin your next
    chapter.
        Thank you again to everyone.

     Prepared Statement of Hon. Eddie Bernice Johnson, a Representative in
                        Congress from the State of Texas
        Mr. Chairman, please allow me to thank you and the subcommittee for
    focusing on issues surrounding ensuring a robust passenger rail system
    in the United States. Our passenger rail system is in serious need of
    improvement, development and expansion. As I travel to nations around
    the world and ride their national passenger rail lines, I am shocked at
    the advanced development, ease of use and overall satisfaction rates
    and services.
        From Asian countries such as Japan, Mainland China, Taiwan, South
    Korea, and all over South East Asia, to European countries such as the
    U.K., France, Italy, Spain and Germany--all have made significant
    investments in passenger rail systems that have helped improve the
    lives of their people. We must do the same in the U.S. and grow our
    network of passenger rail services. That is where the Surface
    Transportation Board is indeed critical. Exercising proper jurisdiction
    over economic regulation of passenger rail services.
        To assert jurisdiction over a particular interstate passenger rail
    project, STB must determine that the project has a sufficient nexus to
    the interstate rail network. I am pleased that the STB has applied this
    analysis to find that it has jurisdiction over projects such as a Los
    Angeles-to-Las Vegas rail connection, California's High-Speed Rail
    effort to link a number of cities from Los Angeles to San Francisco,
    and the Texas Central Railroad high speed rail project between Houston
    and Dallas. This was decided in the recent decision in Texas Central
    Docket R.R. and Infrastructure, Inc. & Texas Central R.R., LLC--
    Petition for Exemption--Passenger Rail Line Between Dallas and Houston,
    Tex., Docket No. FD 36025 (STB Served July 16, 2020). Now that it is
    well settled that the STB has jurisdiction over Texas Central, we look
    forward to the speedy continuation and completion of this critical
    transportation project.
        The Texas Central High-Speed Rail project will connect Dallas and
    Houston--two of the top five largest metropolitan regions in the
    nation. Unbelievably, these regions are not currently serviced by
    direct passenger rail service.
        Once completed, this high-speed rail system will connect Dallas and
    Houston in less than 90 minutes and at speeds up to 205 mph. Currently,
    travel times along Interstate 45 between North Texas and Houston can
    exceed five hours, and is expected to exceed 6.5 hours by 2035. Texas
    High Speed Rail will provide a new travel option for travelers in this
    corridor and will be a major part of the future of transportation in
    Texas.
        The project has made significant progress over the past few months,
    with the Federal Railroad Administration completing a safety regulation
    and the environmental review process. I want to thank the members and
    staff of the Surface Transportation Board who are with us today, for
    the Board's approval of Texas Central's petition that the STB assert
    jurisdiction over the project. These Federal actions demonstrated the
    U.S. government's commitment to advancing this project and bring this
    important project closer to becoming reality. Again, I want to urge
    that the Board to move expeditiously once Texas Central applies for
    construction and operation authority, which is the last major Federal
    regulatory approval that will be necessary before construction of this
    project can start.
        I also want to thank Chairman DeFazio and Chairman Lipinski for
    working with Congressman Allred, Congresswoman Fletcher and myself to
    include a provision in H.R. 2 that will help advance Railroad
    Rehabilitation & Improvement Financing (RRIF) for projects like Texas
    High Speed Rail. I look forward to continuing to work with you in
    strengthening this provision as we work on the next surface
    transportation reauthorization next Congress. Thank you, Mr. Chairman.

     Statement of the American Train Dispatchers Association et al., ``On
    the 40th Anniversary of the Staggers Act, Congress Should Consider the
    Collateral Damage to the Rail Industry, and How To Fix It,'' Submitted
                     for the Record by Hon. Daniel Lipinski
                                                     November 18, 2020.
     On the 40th Anniversary of the Staggers Act, Congress Should Consider
         the Collateral Damage to the Rail Industry, and How To Fix It
    The Act Had Substantial Adverse Effects on Rail Employees, and Has
            Facilitated the New Rail Business Model that Has Further
            Reduced Employment and Led to Deterioration of Service
        This year is the 40th anniversary of the Staggers Rail Act. The
    major railroads are celebrating this anniversary. That is not
    surprising because deregulation of the railroad industry, along with
    post-Staggers government approval of mergers and control transactions
    that have produced a highly concentrated, but lightly regulated,
    industry, have combined to produce a 20 year run of historic profits
    for the railroads, and record returns for their shareholders. In the
    recent past, shippers had no complaints about Staggers because shipping
    rates declined in real dollars; but they now worry about the quality of
    service and railroad responsiveness to their needs; as a concentrated,
    but deregulated, industry has little need to answer to its customers.
        This is a particularly inopportune time to celebrate passage of the
    Staggers Act because, in recent years, finance interests have led or
    pressured the railroads to exploit the deregulatory regime formulated
    when they were in economic distress to implement so-called ``precision
    scheduled railroading'' and other cost-cutting measures that have
    eroded service and eliminated tens of thousands of good paying railroad
    jobs.
        One group of major industry stakeholders never celebrated the
    Staggers Act: railroad workers. Between the passage of the Act and
    completion of the major merger and control transactions, rail industry
    employment was substantially reduced (from about 500,000 in 1980 to
    about 250,000 in the early 2000s).
        Among other things, the Staggers Act facilitated sales of rail
    lines to smaller railroads that employed fewer workers, paid less and
    had less beneficial work rules. Those sales were accomplished without
    traditional employee protections. At first, the Interstate Commerce
    Commission approved these types of sales after concluding that the
    lines to be sold were likely to be abandoned. But then it began to
    approve sales of what it called ``marginally profitable'' lines (which,
    by definition, were somewhat profitable). The major rail carriers
    protected their own interests in these transactions; they placed
    restrictions on the sales (physical or contractual) so that the
    purchaser railroads could interchange traffic only with the seller
    carriers; that way the major carriers divested themselves of less
    profitable lines which gathered local freight, while ensuring that they
    retained the long haul movement of the freight generated on those
    lines. Rail Labor characterized these as sham transactions, but the ICC
    approved them citing the Staggers Act and the deregulatory spirit of
    the Act. The ICC also allowed companies that owned existing rail
    carriers to acquire new lines that often connected with the lines of
    their existing subsidiaries without employee protections that were
    required when rail carriers acquired lines from other rail carriers by
    using the scheme of creation of new subsidiaries that the ICC treated
    as non-carriers since they were new corporations, even though they were
    commonly owned and controlled with existing carriers.
        In approving the major merger and control transactions of the 1990s
    that reduced the number of Class I carriers to a mere handful, the ICC
    and Surface Transportation Board relied on Staggers Act amendments and
    the deregulatory mandate of the Staggers Act. Those transactions were
    approved based on the notion that shippers and the public would benefit
    from the consolidations. The railroads asserted, and the ICC and STB
    agreed, that mega-carriers would provide better and faster service
    through longer-end-to-end runs, reduced interchanges, and greater
    system velocity; that efficiencies would be achieved that would result
    in savings that would be passed along to shippers and the public in
    general; and that the economies of scale available to larger carriers
    would allow for increased investment in rail infrastructure.
        During the same period that Congress and the ICC and STB
    deregulated the railroads and facilitated and approved consolidations
    as in the public interest, the agencies dramatically increased their
    regulation of Rail Labor by allowing the merging and commonly
    controlled rail carriers to use agency processes to gain dramatic
    changes in rates of pay, rules and working conditions outside the
    procedures of the Railway Labor Act. When the final big control
    transaction had been completed, railroad industry employment had been
    effectively halved, and rates of pay, rules and working conditions were
    forcibly and dramatically changed under the auspices of ICC and STB
    authorizations.
        In the post-Staggers minimal regulation environment, after the big
    merger and control transactions were consummated, the profits of the
    new mega-carriers soared. And for a while, the railroads followed-
    through on their representations that service would improve, and
    infrastructure investments would increase. But several years ago, hedge
    funds and private equity interests took note of railroad profitability
    and the very light nature of the regulatory regime for such a
    concentrated industry. There were attempted hostile takeovers of major
    railroads, and so-called activist investors increased their stakes in
    railroads; these financial interests promised to institute practices to
    reduce operating ratios (costs relative to expenses) and increase
    profits by dramatically cutting costs and service, by focusing on
    easier to serve/high profit ratio customers, eliminating flexibility in
    pick-ups and deliveries of rail cars, requiring customers to conform to
    rigid schedules and lengthening trains (with some as long as 3 miles).
    This was accomplished through the so-called Precision Scheduled
    Railroading operating method. At the same time, capital infrastructure
    work was reduced to further improve operating ratios. As rail carriers
    that pursued this path saw their operating ratios decline, and their
    stock prices increased, other railroads adopted similar business
    models. Shipper complaints escalated. The STB held hearings and
    tinkered with complaint programs, but it generally was of the view that
    there was little it could do under the post-Staggers de-regulatory
    regime. In the meantime, rail employment again took a precipitous
    decline, from about 245,000 in 2015 to under 200,000 in January of
    2020. The profits of the major railroads have skyrocketed over this
    several year period.
        As the 40th anniversary of the Staggers Act approaches, Members of
    Congress, the STB and industry stakeholders should consider whether the
    current regulatory regime, that was developed when the railroads were
    in financial turmoil, and well before agency approval of the big merger
    and control transactions, makes sense today. Consolidation of the
    industry was approved because the transactions were deemed to be in the
    public interest. And with those approvals and the exclusivity that
    flows from holding an operating certificate comes the responsibility to
    provide adequate and responsive service. But the financial interests
    that are currently driving the industry have ignored those aspects of
    the approvals and the certificates. While a return to the heavy
    regulatory scheme developed before railroads had competition from
    aviation and trucking on the federal interstate highway system would
    not be appropriate, a regulatory approach recalibrated to recognize the
    reality of the industry as it is today is warranted. This recalibration
    is necessary to ensure that rail customers receive adequate and
    responsive service, and that the industry continues to provide good
    jobs for railroad workers.

                                American Train Dispatchers Association,
                  Brotherhood of Locomotive Engineers and Trainmen/IBT,
               Brotherhood of Maintenance of Way Employes Division/IBT,
                                     Brotherhood of Railroad Signalmen,
         International Association of Machinists and Aerospace Workers
                                                           District 19,
               International Association of Sheet Metal, Air, Rail and
                           Transportation Workers--Mechanical Division,
                             International Brotherhood of Boilermakers,
                       International Brotherhood of Electrical Workers,
               International Association of Sheet Metal, Air, Rail and
                       Transportation Workers--Transportation Division,
                   National Conference of Firemen and Oilers 32BJ/SEIU,
                         Transportation Communications Union (TCU/IAM),
                                    Transport Workers Union of America.

                                    Appendix

                                  ----------

    Question from Hon. Peter A. DeFazio to Chairman Ann D. Begeman and Vice
            Chairman Martin J. Oberman, Surface Transportation Board

        Question 1. Please explain the STB's role with regard to access to
    freight railroad rights-of-way for passenger service operated by Amtrak
    or by other intercity operators.
        Answer. Our written testimony provides an overview of the agency's
    jurisdiction regarding passenger rail. With respect to access to
    freight railroad rights-of-way, Amtrak has a statutory right to make
    agreements to use the facilities of, and have services provided by,
    freight rail carriers. See 49 U.S.C. Sec.  24308(a)(1). Should Amtrak
    and a freight rail carrier be unable to agree on terms for such use and
    services, the STB may order that facilities be made available and
    service be provided to Amtrak, and may prescribe reasonable terms and
    compensation for the same. See 49 U.S.C. Sec.  24308(a)(2)(A)(i)-(ii).
        Rail passenger transportation provided by Amtrak must also be given
    preference over freight transportation in using a rail line, except in
    an emergency. 49 U.S.C. Sec.  24308(c) (also providing that freight
    carriers can seek relief from the preference requirement from the STB).
    The STB has the authority to decide disputes between Amtrak and freight
    rail carriers concerning Amtrak's operation during emergencies, use of
    accelerated speeds, and addition of trains on a freight railroad's
    line. 49 U.S.C. Sec.  24308(b), (d), (e).
        Under 49 U.S.C. Sec.  24903(6), Amtrak may make agreements with
    other carriers and commuter authorities to grant, acquire, or make
    arrangements for rail freight or commuter rail passenger transportation
    over rights of way and facilities acquired under the Regional Rail
    Reorganization Act of 1973 (45 U.S.C. Sec.  701 et seq.) and the
    Railroad Revitalization and Regulatory Reform Act of 1976 (45 U.S.C.
    Sec.  801 et seq). If the parties to such an agreement cannot agree on
    terms for reimbursement of costs, Sec.  24903(c)(2) gives the Board
    authority to determine compensation.
        The Board generally does not have jurisdiction over public
    passenger transportation provided by local governments, which includes
    commuter rail passenger transportation and services, such as trolley,
    subway, and light rail lines. 49 U.S.C. Sec.  10501(c)(2)(A). Under the
    Passenger Rail Investment and Improvement Act of 2008 (PRIIA), however,
    the Board is authorized to mediate disputes involving commuter rail
    providers seeking access to freight railroad tracks and services. 49
    U.S.C. Sec. Sec.  28502-28503. The Board may also be called upon to
    establish appropriate compensation paid by commuter rail providers to
    Amtrak for use of its facilities if the parties cannot reach agreement
    among themselves. 49 U.S.C. Sec.  24903(c)(2). Additionally, in limited
    situations, the Board has jurisdiction over transportation provided by
    a local government authority for purposes of use of terminal facilities
    and switch connections. 49 U.S.C. Sec. Sec.  11102-11103.

       Questions from Hon. Eric A. ``Rick'' Crawford to Chairman Ann D.
      Begeman and Vice Chairman Martin J. Oberman, Surface Transportation
                                     Board

        Question 1. Several members wrote to you in December 2019 regarding
    the incorporation of a thorough cost-benefit analysis into the STB
    rulemaking process. The STB still has not opened a proceeding to
    incorporate this good-government reform. When can we expect that
    proceeding to be instituted?
        Answer. As you know, in March 2019, the Association of American
    Railroads (AAR) filed in Docket No. EP 752 a petition to institute a
    rulemaking, asking that the STB adopt procedural rules that would
    require cost-benefit analysis in some Board rulemaking proceedings and
    would set certain data requirements. By decision issued in November
    2019, the Board sought input from stakeholders and the public on
    whether and how particular cost-benefit analysis approaches might be
    more formally integrated into its rulemaking process. Those comments
    and replies were submitted, and the Board is reviewing the record,
    giving full and fair consideration to all stakeholder views.

        Question 2. The STB instituted a proceeding regarding the
    preemption of railcars in transit from the Clean Water Act regulations.
    Members of the Committee wrote to the STB about the importance of the
    Interstate Commerce Commission Termination Act of 1995 (ICCTA)
    preempting the applicability of the National Pollution Discharge
    Elimination System permitting program to rail cars in transit. That
    docket closed in May 2020. Given that proceeding is not listed on the
    Board's quarterly reports, when can we expect a decision?
        Answer. In November 2019, the AAR filed in Docket No. FD 36369 a
    petition for declaratory order requesting the Board find that 49 U.S.C.
    Sec.  10501(b) preempts the Clean Water Act's discharge prohibition and
    National Pollutant Discharge Elimination System permitting regime, as
    applied to discharges incidental to the normal operation of rail cars
    in transit. The Board instituted a declaratory order proceeding and
    established a procedural schedule, under which the record closed in May
    2020. The proceeding is under active consideration at the Board, and we
    expect to issue a decision in the matter shortly.

    Question from Hon. Eleanor Holmes Norton to Chairman Ann D. Begeman and
         Vice Chairman Martin J. Oberman, Surface Transportation Board

        Question 1. The FRA just published its final rule establishing
    metrics and a minimum standard to measure on-time performance and
    service quality for Amtrak trains as directed by Section 207 of PRIIA.
    Does the STB plan on issuing implementation guidance for this rule? If
    not, what role does STB plan on having in implementation?
        Answer. The final rule recently issued by the FRA was a
    prerequisite to the STB's exercise of its investigative authority under
    PRIIA. Under section 213 of PRIIA, the Board may institute an
    investigation on its own initiative if (1) on-time performance of any
    intercity passenger train averages less than 80% for any two
    consecutive calendar quarters, or (2) the service quality of intercity
    passenger train operations for which minimum standards are established
    under section 207 fails to meet those standards for two consecutive
    calendar quarters. If a complaint is filed by Amtrak, an intercity
    passenger operator, a host freight railroad over which Amtrak operates,
    or an entity for which Amtrak operates intercity passenger rail
    service, section 213 directs the Board to initiate such an
    investigation. The purpose of a Board investigation is to determine
    whether and to what extent delays or failure to achieve minimum
    standards are due to causes that could reasonably be addressed either
    by the rail carrier over whose tracks the intercity passenger train
    operates or by Amtrak or other intercity passenger rail operators. As
    part of its investigation, the STB may award damages or other
    appropriate relief to Amtrak under certain circumstances.
        At this time, the Board has not determined it necessary to issue
    implementation guidance. Amtrak had previously brought two on-time
    performance cases under PRIIA before the Board. See Nat'l R.R.
    Passenger Corp.--Sec. 213 Investigation of Substandard Performance on
    Rail Lines of Canadian Nat'l Ry., Docket No. NOR 42134; Nat'l R.R.
    Passenger Corp.--Investigation of Substandard Performance of the
    Capitol Ltd., Docket No. NOR 42141. Those cases were ultimately
    dismissed without prejudice at the unopposed request of the defendant
    carriers after the U.S. Court of Appeals for the D.C. Circuit initially
    found section 207 of PRIIA to be unconstitutional. The Board will take
    appropriate action to conduct section 213 investigations as warranted
    by future developments.

      Questions from Hon. Peter A. DeFazio to Stephen J. Gardner, Senior
       Executive Vice President, Chief Operating and Commercial Officer,
                National Railroad Passenger Corporation (Amtrak)

        Question 1. It has been presented that the system essentially works
    in the interest of either freight or passenger rail as a zero-sum game.
    As a former dispatcher yourself, please give your perspective. Is there
    a way to both have an efficient passenger rail system and not impinge
    upon the freight industry?
        Answer. Absolutely. Passenger and freight trains have co-existed
    since railroads began. Trains--whether freight, passenger or both--
    perform well when solid operating plans, reliable infrastructure and
    well-trained staff are in place to support the operation. Today, our
    passenger trains account for only a small share of train operations on
    the vast majority of the freight railroad-owned lines over which Amtrak
    operates. It strains credibility to suggest that most of our
    operations, for instance, one round-trip over a modern, CTC-equipped,
    freight mainline with five to six trains per hour of capacity, have any
    material impact on freight operations or that it is difficult to keep
    such operations on-time. The only way that our highly scheduled and
    predictable operation could have any real impact on most routes is if
    freight operations are so variable, so erratic and so ``unscheduled''--
    despite the buzzwords of today--that conflicts are allowed to regularly
    occur.
        Such cases are fundamentally a train operations management problem.
    Freight railroads have an obligation to support our operation with the
    required discipline, focus and precision--all attributes they claim to
    possess for their freight operations--that are needed for us to produce
    a reliable service for the nation. For well over a century, the
    predecessors of our Class I railroads delivered this level of service,
    treating many passenger trains as ``superior'' trains that must be
    delivered on-time and never delayed. Today's freight railroad
    professionals are no less capable of this feat.
        It is also important to note that on nearly all of Amtrak's routes
    over freight railroads, Amtrak, the federal government and/or our state
    partners have made significant investments, in some cases with
    financial contributions from our freight railroad hosts, that have
    provided increased capacity and upgraded infrastructure that are used
    by both freight and Amtrak trains.
        There are numerous examples of successful collaboration between
    freight and passenger railroads. Descriptions of some of these examples
    can be found on the website of One Rail, the coalition of rail
    stakeholders of which Amtrak and the Association of American Railroads
    are members. (https://www.onerail.org/category/onerail-materials/rail-
    success-stories/) One of the examples described is Amtrak's Downeaster
    service between Boston and Portland, which has been highly successful
    due to a strong partnership among Amtrak, our state partner, the
    Northern New England Passenger Rail Authority and the freight railroad
    for which I was a train dispatcher, and has attracted significant
    federal funding for rehabilitation of an important freight rail line.
        There are also many successful operational partnerships between
    freight and passenger railroads. The Chicago Integrated Rail Operations
    Center, established in 2015, brings together representatives of the
    Class 1 railroads operating in Chicago, Metra and Amtrak to monitor
    train performance throughout the Chicago area and coordinate actions to
    relieve operational and congestion issues. In South Florida, capacity
    and other infrastructure investments on an existing freight railroad-
    owned line between Miami and West Palm Beach that has heavy freight
    traffic comprised primarily of high-priority intermodal trains and the
    establishment of a joint dispatching center have allowed for the
    introduction and successful operation (pre COVID-19) of 34 passenger
    trains a day operated by a private railroad: many times the number of
    trains Amtrak contemplates adding on freight railroad-owned lines as
    part of the corridor development program for which we will seek funding
    in reauthorization.
        In summary, there are many steps Amtrak and our hosts can take to
    achieve good performance and growth for both passenger and freight
    service, but the most fundamental is the recognition by our hosts that
    supporting reliable passenger service is both an obligation to the
    public and the nation.

        Question 2. Mr. O'Toole's testimony states that ``passenger train
    advocates want the railroads to give preference to passenger trains.''
    As history recalls, Congress granted this right of preference for
    Amtrak trains in exchange for relieving the struggling, privately-owned
    freight railroads of their common carrier obligation to provide
    passenger rail transportation by creating Amtrak. That statutory right
    of preference has been codified since President Nixon signed it into
    law five decades ago.
          Can you describe the negative impacts to Amtrak and its
    passengers when its trains are not provided the preference Congress
    specifically granted it 50 years ago?
          Does giving Amtrak trains preference harm the movement of
    freight?
        Answer. In FY 2019, 6.5 million Amtrak passengers were
    significantly late on trains delayed by host railroads, largely as a
    result of some freight railroads ignoring Amtrak's right to preference.
    This resulted in lost time, missed family commitments and business
    meetings, and trips not taken for fear of arriving late. Across the
    Amtrak long distance network, customer on time performance (OTP) in FY
    2019--the percentage of passengers who arrived at their destination on
    time--was only 42%. On one-third of our 15 long distance routes, more
    than seven out of every ten passengers arrived significantly late.
    Several state supported corridor routes were similarly delayed.
        The principal reason for this dismal on time performance is freight
    train interference by host freight railroads. Freight train
    interference is caused by dispatching decisions that prioritize the
    operation of freight trains over passenger trains, either putting
    Amtrak trains behind slow-moving freight trains for miles or relegating
    the passenger train to wait in sidings for freight trains to pass.
    These delays totaled more than one million minutes in FY 2019--
    equivalent to two years of passengers waiting for freight--which
    demonstrates that on many host railroads Amtrak trains are not
    receiving the preference over freight transportation required by law.
        Late trains have a major cost to Amtrak. When trains are regularly
    late, customers choose alternative modes of travel, representing a lost
    opportunity for ticket revenue. Delays also have a direct impact on
    operating costs by increasing overtime and labor expenses, fuel costs,
    additional meals and hotel rooms for passengers that miss connections,
    an increase in the number of locomotives and passenger cars required
    for the operation, among other costs.
        The cumulative financial impact to Amtrak is substantial. The U.S.
    Department of Transportation Office of Inspector General found that
    Amtrak would experience a net annual gain of nearly $140 million if on
    time performance across the network improved to 85%.\1\ The Amtrak
    Office of Inspector General found that improving on time performance by
    just five percentage points would result in short-term financial gains
    of $12 million, and improving on time performance to 75% for a
    sustained period would result in annual savings of $42 million and one-
    time savings of $336 million.\2\
        Preference violations--and the absence of preference enforcement--
    have also meant that public investment in freight railroad
    infrastructure to improve passenger rail performance has not yielded
    promised returns for passengers or state funding partners. For example,
    in the year after nearly $500 million were invested in the freight
    railroad line used by the State of North Carolina-supported Piedmont
    service, host railroad delays actually increased, up to twice the level
    they were prior to the investment. On the route into Chicago used by
    three train services supported by the State of Michigan, as well as the
    Capitol Limited and Lake Shore Limited long distance trains, $200
    million of public funds were invested into the Englewood Flyover and
    Indiana Gateway projects. Today, however, passengers traveling on this
    line regularly encounter severe--and eminently avoidable--host railroad
    delays. Taxpayers and passengers deserve a better return on their
    investment.
        Some freight railroads claim that providing passenger trains with
    preference is an unreasonable standard that limits the efficiency of
    the rail network and service provided to shippers, or that it will
    bring freight movement to a standstill. These inflated claims do not
    withstand any level of scrutiny. First, freight railroads can seek
    relief from the Surface Transportation Board if they truly believe that
    providing Amtrak with preference materially lessens the quality of
    freight transportation provided to shippers. The fact that not one
    railroad has ever sought such relief suggests that either railroads do
    not believe that providing preference affects the quality of service
    provided to shippers or the railroads believe they can ignore the law
    with impunity. Second, there is no correlation between freight volumes
    and freight train interference delays on most rail lines, which means
    dispatching decisions unrelated to freight traffic levels drive Amtrak
    on time performance. Third, the presence of a few daily passenger
    trains on freight railroad mainlines poses no threat to the quality and
    growth of freight transportation. For comparison, Amtrak's mostly two-
    track Northeast Corridor mainline between Newark and New York Penn
    Station hosts up to 48 trains an hour. On most host railroad mileage,
    Amtrak operates two trains a day.
        Simply stated, freight railroads cannot show that compliance with
    federal law on preference leads to a detrimental impact on their
    freight transportation business. When freight carrier leadership has
    decided to dispatch Amtrak trains according to the law, we have seen
    Amtrak's on time performance improve literally overnight. During these
    times, there was no evidence of negative impacts to the overall
    fluidity of America's rail network. In fact, it has been reported by
    some freight railroad leaders that efficient Amtrak service is a strong
    indicator that their own operations are running efficiently.

        Question 3. Over the last several years, the freight railroads have
    adopted a set of operating procedures championed by the late Hunter
    Harrison and known as ``precision scheduled railroading.'' Along with
    other negative outcomes for shippers and employees, this has resulted
    in 3-mile-long trains that are too long for most existing sidings. How
    have the excessively long trains associated with precision scheduled
    railroading impacted Amtrak and its passengers?
        Answer. In theory, tightly-scheduled freight operations could help
    support passenger train performance by ensuring minimal conflicts,
    consistency, and better utilization of existing capacity. In practice,
    however, ``scheduled'' freight operations are often a far cry from what
    we would consider ``scheduled,'' as Amtrak trains operate on schedules
    set, essentially, to the minute-hand while ``scheduled'' freight trains
    operate on schedules set to hour-hand. This mismatch in required
    precision and operating discipline is evident when one looks closely at
    our operation over most hosts, and the much heralded benefits of
    ``precision railroading'' have yet to arrive for our trains on most
    lines.
        Additionally, passengers traveling over lines owned by some
    railroads that have deployed Precision Scheduled Railroading principles
    have experienced severe delays, in part driven by the operation of
    trains too long to fit into the existing sidings on the line. In recent
    months, passengers on Amtrak Cascades and Missouri River Runner trains
    have been forced to follow freight trains for miles, at a slower speed,
    because the freight train ahead could not fit into a siding to allow
    the Amtrak train to pass. Even if the freight railroad eventually
    allows the Amtrak train to pass, maneuvering the Amtrak train ahead of
    such long freight trains typically results in significant additional
    delay.
        Passengers have also been stuck for hours while freight trains
    experience mechanical issues, inherent to the operation of extremely
    long and heavy freight trains, that effectively shut down the rail
    line. For example, just since October, there have been at least 6
    incidents on the Missouri River Runner route that shut down the entire
    rail line, forcing Amtrak passengers to wait for hours and leading to
    several cancellations, including the following incidents:
          On November 8, a freight train stalled twice, causing 4
    hours of delay to passengers and an early termination that required
    busing to customers' final destination.
          On November 6, a freight train broke down, causing an
    hour of delay to passengers.
          On November 3, a freight train broke down, causing 6
    hours of delay to passengers, an early termination, as well as the
    cancellation of the return train.
          On October 28, a freight train broke down, blocking the
    line and causing 3 hours of delay to passengers on one train and a 1-
    hour delay to passengers on the return train.

        We appreciate that the Committee has recognized the potential
    adverse effects of certain Precision Scheduled Railroading practices
    and has included in the Moving Forward Act a Government Accountability
    Office study on the impact of the implementation of Precision Scheduled
    Railroading on Amtrak and other stakeholders, as well as a National
    Academies study of the safety impacts of freight trains that are longer
    than 7,500 feet.
        To ensure passengers do not continue to experience the severe
    delays associated with the operation of these behemoth freight trains,
    host railroads should hold the freight train until the Amtrak train has
    cleared the area.

     Questions from Hon. Eric A. ``Rick'' Crawford to Stephen J. Gardner,
        Senior Executive Vice President, Chief Operating and Commercial
           Officer, National Railroad Passenger Corporation (Amtrak)

        Question 1. Despite Amtrak's huge losses and potentially slow climb
    back to normal operations, it was reported in October that Amtrak was
    circulating a map showing plans to expand at a reported extra cost of
    at least $25 billion (see below from October 21, 2020 Politico Morning
    Transportation).

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

             Amtrak's expansion plans for the next 15 years._Amtrak

        Given these plans:
        a.) Please explain how you arrived at the extra cost of $25
    billion, and whether you expect the cost to exceed that estimate.
        Answer. Amtrak strongly believes that many corridors connecting
    city-pairs around the nation have the right mix of population, density,
    economic growth and congestion to warrant corridor service. Many of
    these locations have seen huge growth since Amtrak was founded in 1971
    and yet, our route map has failed to evolve to serve them, creating
    irrational omissions in our network. These markets deserve, as other
    regions receive, to have frequent and auto-competitive intercity
    passenger rail service as part of a national passenger rail system.
        The cost estimate of $25 billion represents the first one-third of
    investment needed to implement all the routes on the Amtrak System 2035
    map. The approximate $25 billion reflects corridor development that is
    expected to begin during the period of Amtrak's reauthorization
    proposal and Five Year Plan (FY22-FY26). The investment to complete the
    full set of route expansions proposed to be implemented by 2035 is
    approximately $75 billion.
        To develop these costs, we evaluated the current condition of each
    rail line that is a candidate for new or expanded passenger rail
    service. That analysis suggested what the most efficient method would
    be to add capacity to the rail line, such as additional tracks or
    better signaling, that may be required to accommodate the proposed new
    service. Unit cost estimates were applied to these capacity
    improvements to create the final cost estimate for each line. Amtrak
    also estimated the cost of train station improvements and additional
    locomotives and train cars. The cost estimates include contingency
    factors to absorb unexpected cost overruns.

        b.) Please explain these expansion plans in written detail,
    including how these new routes were chosen and the expected funding
    source(s).
        Answer. Amtrak is working on a 15 year vision for the future of
    intercity passenger rail service in the U.S., which will include more
    trains in more markets to serve a growing and changing population,
    reduce carbon emissions, and provide safe, fast, modern, efficient and
    enjoyable rail transportation. We hope to finalize our analysis and
    written report in the coming months and will make this expansion plan
    public as soon as our work is done. Our plans will include specific new
    routes as well as additional frequencies to existing routes. Amtrak
    envisions that any such expansion would require additional federal
    investment under a new authorized Corridor Development Program funded
    as part of Amtrak's National Network grant, and we will also include
    suggested policy proposals for Congress to consider early next year. We
    look forward to sharing this detail with you as soon as it is ready and
    hope to work with Congress to put the funding and tools in place so
    that Amtrak can reach more of your constituents.

        c.) Please state whether Amtrak completed any studies or reports
    that assessed issues including rider demand, viability, expected
    profits, and the need for these new routes.
        Answer. Amtrak analyzed each of the proposed services, which
    included both promising new and expanded corridor routes, addressing
    the following draft analytical elements:
          Developed pro forma train schedules including proposed
    stations with train times and frequency
          Forecast ridership and revenue using models developed in-
    house and by an external consulting firm, applied to the proposed train
    schedules and population around each station
          Estimated operating costs based on train schedules and
    capacity requirements using Amtrak costs for services of similar
    characteristics
          Combined estimated ridership, revenue, and operating
    costs to produce operating and financial measures by route
          Forecast route capital costs by assessing infrastructure
    condition and capacity through already completed studies (when
    available) or assembling route data from various sources and
    quantitatively assessing probable costs
          Assessed equipment and facility requirements for
    individual routes, combining resources when practical on adjoining
    routes

        We continue to refine these analytical details.

        Question 2. The Subcommittee appreciates Amtrak's response to the
    letter me and my colleagues sent regarding operation of the Biden
    presidential campaign charter train despite Amtrak's severe service
    limitations due to the pandemic. However, as Ranking Member of the
    Subcommittee, I'm still concerned that the response failed to answer
    the question about the total cost to Amtrak of providing this service,
    which is very important given Amtrak's extremely limited resources and
    historic demands for taxpayer money right now. Accordingly, please
    provide the Subcommittee with the total costs to Amtrak and whether
    Amtrak made a profit off the Biden charter train.
        Answer. As stated in Amtrak's letter of November 10, 2020, the
    Biden presidential campaign charter train was commercially priced and
    utilized the same costing methodology that Amtrak applies to every
    other charter train customer. This customer received no financial
    discount or rate reductions. The pricing produced a surplus over
    Amtrak's fully allocated costs, which were $209,000.

        Question 3. In 2012, the Surface Transportation Board (STB) found
    Amtrak's state-supported route payment cost methodologies to be
    compliant with the Passenger Rail Investment and Improvement Act. Yet,
    both the Government Accountability Office (GAO) and Amtrak's Inspector
    General (IG) have highlighted a lack of transparency and major
    deficiencies in Amtrak's state cost formulas. A recent Amtrak IG report
    published August 5, 2020 found that Amtrak cannot even identify what
    the cost to a state would be if it added an additional car to a train.
    Please explain what Amtrak doing to address these issues.
        Answer. In 2012, the STB approved Amtrak's petition to adopt a
    Section 209 cost sharing methodology that was developed jointly by
    Amtrak and 18 states affected by Section 209. Since then, Amtrak has
    worked with states to update the methodology and develop reporting
    tools for the states to use in managing their services. We acknowledge
    that, after these several years, some states are not satisfied with the
    current approach.
        The August 5th report mentioned above quotes a state representative
    making the claim that Amtrak ``cannot tell a state how much it would
    cost to add a car to a train.'' We respectfully submit that this
    statement is not entirely accurate, but we acknowledge that forecasting
    the costs of proposed service changes can be a complex undertaking that
    is highly route-specific and can take time. Because total costs for any
    route are a combination of direct costs and overhead costs that are
    allocated pursuant to the Congressionally-directed and DOT Volpe
    center-developed APT allocation system that Amtrak is required to use
    for allocating and assigning costs, what appears to be a simple change
    can have complex ramifications related to allocated charges. These
    challenges were magnified in the beginning of COVID-19, when many
    states were requesting service changes to respond to health and safety
    concerns, along with reduced ridership.
        As a member of the State-Amtrak Intercity Passenger Rail Committee
    (SAIPRC), Amtrak has agreed to work with the other members to revisit
    the Section 209 formula, based on what we have learned to date. One
    important element of this formula is the share of total costs that
    should be covered by Amtrak rather than the states, and, therefore the
    amount that the federal government is investing in these corridor
    services through its funding of our operation. Amtrak believes that it
    is appropriate to revisit the burden placed on states for funding new
    or expanded services initially and to consider the overall funding
    shares from Amtrak and the Federal government and the states that
    support these services. We look forward to any guidance the T&I
    committee may be able to provide as to what level of federal funding
    through Amtrak they would like to see in any future Section 209 cost
    sharing formula.

        Question 4. Since 2012, how many times has the State-Amtrak
    Intercity Passenger Rail Committee adopted changes to the Section 209
    cost formula, as prescribed by the Passenger Rail Investment and
    Improvement Act? Please detail any proposals that were presented by
    states but not approved by Amtrak to the cost formula.
        Answer. Since 2012, after the original policy was approved, SAIPRC
    has approved four rounds of changes to the Section 209 cost formula, as
    shown in page 2 of the current Section 209 policy:

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    ------------------------------------------------------------------------
    v1.00........................  August 13, 2011.  Recommended by the
                                                      State Working Group
                                                      (SWG) and Amtrak
                                                      Staff.
    v2.00........................  October 27, 2015  Revised by the State-
                                                      Amtrak Intercity
                                                      Passenger Rail
                                                      Committee.
    v3.00........................  September 21,     Revised by the State-
                                    2017.             Amtrak Intercity
                                                      Passenger Rail
                                                      Committee.
    v4.00........................  June 13, 2018...  Revised by the State-
                                                      Amtrak Intercity
                                                      Passenger Rail
                                                      Committee.
    v5.00........................  February 20,      Amended by the State-
                                    2020.             Amtrak Intercity
                                                      Passenger Rail
                                                      Committee (SAIPRC).
    ------------------------------------------------------------------------

        No proposals for changes to the cost formula have been presented by
    states and not approved by Amtrak.

        Question 5. Does Amtrak believe that freight railroads are more
    incentivized to provide consistent on-time service when they are
    compensated at a market rate? If Amtrak were to pay a negotiated market
    rate to access host railroad infrastructure, how would Amtrak's budget
    be impacted?
        Answer. On the freight railroad-owned rail lines over which Amtrak
    operates, there is no ``market rate'' because there is not a
    competitive market. In most cases, a single freight railroad has a
    governmentally-granted right to own and operate the only rail line over
    which an Amtrak train can operate--and unlike many freight shippers,
    Amtrak cannot shift its passengers to trucks if the freight railroad
    demands an excessive rate.
        As described in my testimony at the hearing, the incremental cost-
    based rates Amtrak pays freight railroads reflect the public bargain
    the railroads accepted in 1970 in return for relief from their common
    carrier obligation to provide unprofitable intercity passenger rail
    service at their own expense. When Congress transferred the enormous
    financial burden of providing intercity passenger rail service from the
    private railroads to Amtrak, it did not intend to make the railroads'
    continuing obligation to accommodate Amtrak trains a new profit center
    for them, or to make it more costly for Amtrak to operate trains than
    it had been for the railroads themselves. However, in addition to the
    incremental costs Amtrak pays host railroads, those railroads can earn
    significant additional incentive payments for providing good on-time
    performance for Amtrak trains.
        Any additional costs Amtrak might be required to pay to profitable
    freight railroads would necessitate increased congressional
    appropriations, increased payments by Amtrak's state partners who fund
    Amtrak's payments to host railroads pursuant to the methodology adopted
    under Section 209 of the Passenger Rail Investment and Improvement Act
    of 2008, reductions in Amtrak service, and/or diverting funds away from
    critical capital projects.

        Question 6. Amtrak's November 16, 2020 press release following the
    final metrics and standards rule states that ``more must be done'' to
    allow Amtrak to enforce its right to preference. How can Amtrak know
    that ``more must be done'' before it has worked with freight railroads
    to adjust schedules for the new Customer OTP metric, and before the new
    metric goes into effect? What is it about Section 213 of the Passenger
    Rail Investment and Improvement Act that you believe is inadequate?
        Answer. The public bargain with the freight railroads that relieved
    them of the obligation to operate unprofitable intercity passenger rail
    service and created Amtrak included an important condition: freight
    railroads would provide Amtrak passengers traveling over their rail
    lines with ``preference'' over freight transportation. The law has been
    clear for 47 years: except in an emergency, Amtrak must be provided
    with preference over freight transportation.
        One of the reasons why freight railroads can delay our passengers
    while facing essentially no consequences is because Amtrak's ability to
    enforce our right to preference is limited. Only the U.S. Attorney
    General is allowed to bring a case, and in the 47 years since the
    preference law was enacted, the U.S. Department of Justice has brought
    only one case to enforce Amtrak's preference rights, in 1979.
        More than ten years ago, Congress recognized the challenges that
    Amtrak faces regarding freight railroad noncompliance with the
    statutory right to preference and passed two provisions in the
    Passenger Rail Investment and Improvement Act of 2008 (PRIIA): Section
    207, which directed Amtrak and the Federal Railroad Administration
    together to develop metrics and minimum standards for measuring the
    performance and service quality of intercity passenger train
    operations, and Section 213, which set forth a new process for the
    Surface Transportation Board to investigate the causes of substandard
    on time performance.
        Fundamentally, Amtrak's right to preference and PRIIA Sections 207
    and 213 are separately set forth in the law and serve different
    purposes. Amtrak is hopeful that PRIIA Section 213 will be an effective
    mechanism in practice to hold all parties accountable to the on time
    performance standard in the metrics and standards rule. However, the
    standard has not gone into effect yet because the Association of
    American Railroads spent nearly a decade and millions of dollars
    fighting to prevent the implementation of the minimum standard. This is
    why Amtrak, our passengers, and the communities we serve cannot wait
    any longer. The fact is that the existence of the metrics and standards
    does not lessen the need for preference enforcement legislation that
    would allow Amtrak to seek to defend your constituents from being
    delayed by freight trains--an essential element of the bargain that led
    to the creation of Amtrak and not in any way contingent on the
    provisions enacted in PRIIA.
        When freight trains are prioritized ahead of passengers in
    contravention of the law, Amtrak must be able to defend ourselves and
    our passengers, just as any other organization could seek to defend
    itself in the judicial system when rights provided by law are being
    violated. Consider the following analogy: while an individual who has
    been discriminated against may bring a case against their employer to
    the Equal Employment Opportunity Commission, that does not diminish the
    individual's right to bring a case under federal civil rights laws.
        Finally, regarding schedules, customer OTP has been Amtrak's
    internal measure of reliability for several years, so many schedules
    have already been designed or modified to align with the customer OTP
    metric, such as the San Joaquin service in California and Northeast
    Regional trains that operate in Virginia. A number of trains regularly
    meet the standard today. For other routes, Amtrak and host railroads
    are nearing agreement on additional modifications. Amtrak looks forward
    to working with all host railroads on an ongoing basis to ensure that
    schedules offer trip-time competitive and reliable service to
    passengers.

        Question 7. What are the non-freight railroad causes of delays in
    on time performance and how can these delays be fixed?
        Answer. While a variety of factors may contribute to delays, it is
    important to note that host railroads cause the majority of delays to
    Amtrak passengers. In FY 2019 and FY 2020 respectively, host railroads
    caused 61% and 64% of total delays for Amtrak state supported and long
    distance trains. Freight train interference is the leading cause of
    delay and is largely responsible for the poor on time performance
    experienced on many long distance and state supported trains. In FY20
    alone, Amtrak passengers experienced more than two million minutes of
    delay caused by host railroads, including nearly 800,000 minutes of
    delay caused by freight trains.
        Outside of delays attributable to host railroads, a delay may be
    caused by Amtrak or a ``third party,'' which means neither Amtrak nor
    the host railroad is responsible for the delay. Amtrak delays can
    include mechanical issues with the train or holding for additional time
    at a station to finish boarding. There are also numerous ``third
    party'' occurrences that can result in delay, including severe weather,
    issues along the right of way that require local police or fire
    department response, or other unpredictable incidents such as debris
    strikes. Please see Appendix A for additional information on the
    leading causes of delays.
        Amtrak has implemented several initiatives designed to reduce the
    prevalence of Amtrak-caused and third party delay to state supported
    and long distance trains. These include:
          Undertaking a data-driven continuous improvement program.
    When a service or station fails to meet on-time performance targets,
    local managers conduct ``after action reviews'' with staff to identify
    the root causes of the performance issues. Corrective action plans are
    identified to mitigate the impact of the issue in the short term while
    actions to correct the problems for the longer term are developed and
    implemented.
          Increased use of mobile technology between onboard crews
    and station staff to orchestrate the positioning of personnel and
    equipment to expedite boarding and detraining of customers needing
    assistance.
          Targeted visibility improvements at bridges prone to
    vehicular traffic strikes, including clearing obscuring vegetation and
    dramatic use of high-visibility markings.
          Targeted HVAC and door systems to improve over-the-road
    reliability of passenger cars.
          Efforts to reduce PTC-related delays, including onboard
    equipment, signal infrastructure, and transitions between host railroad
    segments.
          Redistributed recovery time in schedules to improve on-
    time performance for customers throughout the route, not just at the
    final destination.
          Procuring ALC42 diesel locomotives to replace the aging
    fleet of P42 diesel locomotives, thereby improving fleet reliability
    across the National Network.
          Collaborating with local law enforcement to release
    trains as soon as it is safe to do so once any police activities along
    the right of way are completed.

        Question 8. Isn't it true that Freight Train Interference (FTI)
    delays occur on portions of the network where Amtrak is the host
    railroad, such as the northeast corridor? Accordingly, isn't it true
    that even when Amtrak controls a line its operating on, Amtrak is
    unable to reduce Freight Train Interference to zero? Please provide the
    Subcommittee with FTI data on the portions of the network where Amtrak
    is the host railroad.
        Answer. In FY 2020, there were 1,951 minutes of freight train
    interference delays on Amtrak-owned rail lines, one-third of which
    involved Amtrak passengers waiting to depart the origin station because
    of freight train derailments on host railroad segments later in the
    route. In contrast, there were more than 790,000 minutes of freight
    train interference delays on host railroad lines--more than 400 times
    the level on Amtrak rail lines.
        Amtrak has never claimed that all delays should be reduced to zero.
    In fact, in Amtrak's annual Host Railroad Report Card, a host railroad
    can receive an ``A'' grade with as many as 900 minutes of delay per
    10,000 train-miles.

        Question from Hon. Lloyd Smucker to Stephen J. Gardner, Senior
       Executive Vice President, Chief Operating and Commercial Officer,
                National Railroad Passenger Corporation (Amtrak)

        Question 1. Mr. Gardner testified that freight and interstate
    passenger rail can work together but he didn't finish because of
    technical issues. Could you identify how Amtrak and commuter agencies,
    like SEPTA, can work together without interfering with one another's
    service or imposing onerous costs and indemnification requirements on
    one another?
        Answer. With respect to commuter and intercity passenger train
    operations over Amtrak-owned infrastructure, Amtrak and the commuter
    agencies have longstanding access and service agreements that address,
    among other things, a clear allocation of liability for injuries and
    damage involving our respective operations. Since establishing the
    Northeast Corridor Commission under PRIIA 212, owners and operators in
    the NEC have considered establishing a common liability approach and
    have agreed to a set of principles to guide development of a corridor-
    wide rubric. We can work together by continuing our efforts within the
    Commission to develop a common, consistent liability arrangement.
        In addition to passenger train operations, NEC commuter agencies
    and Amtrak routinely enter into agreements to advance sole-benefit and/
    or joint benefit improvements to Amtrak-owned or commuter-owned
    infrastructure used in such operations, while protecting the operation
    of freight railroads with access rights to certain territories. Such
    jointly beneficial projects often include a direct financial
    contribution by Amtrak, but can also involve pursuit of federal grants
    via various competitive grant programs. For example, via the
    cooperative efforts of Amtrak, SEPTA and the Pennsylvania Department of
    Transportation (PennDOT), a federal grant of $15.91 million was
    recently awarded for Harrisburg Line signal system upgrades via the FY
    2020 Federal-State Partnership for State of Good Repair grant program;
    Amtrak, SEPTA and PennDOT will split the $6 million local match
    requirement. We endeavor to support commuter projects without
    interfering with the operations of either railroad, however, due to the
    heavy volume of projects, limited field support personnel (due, in
    part, to the lack of a multi-year Federal funding program for Amtrak,
    which undercuts our ability to plan and invest for future years) and
    limited track outages, there is often a need to prioritize among
    projects. We try to give the commuters advance notice as to when we can
    support their projects and have embarked on a regional planning effort
    to provide more certainty. The agreements are typically project-
    specific; however, Amtrak is making an effort to put in place modern,
    streamlined master project agreements with the commuter agencies
    (including SEPTA) so as to expedite the process for commencing
    individual projects.
                                   appendix a
       Total Delay Incurred by Amtrak State Supported and Long Distance
                            Trains: FY2019 & FY2020
                            by Delay Responsibility

    Excludes NOD-coded (waiting for scheduled departure time) minutes.

                                     Top Delay Incurred by Amtrak State Supported and Long Distance Trains: FY2019 & FY2020
                                                                by Delay Responsibility and Code
    --------------------------------------------------------------------------------------------------------------------------------------------------------

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                 Responsibility                                       FY2020
                                                                 FY2019                   Description
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Host Resp (Other RR).....................  Total.......................    2,178,663       100%      2,970,706       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               FTI.........................      774,029        36%      1,027,419        35%    Delays from freight trains.
                                               DSR.........................      469,394        22%        556,834        19%    Temporary slow orders,
                                                                                                                                  except heat or cold
                                                                                                                                  orders.
                                               PTI.........................      328,807        15%        521,042        18%    Delays for meeting or
                                                                                                                                  following other passenger
                                                                                                                                  trains.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................      606,433        28%        865,411        29%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Host Resp (Amtrak).......................  Total.......................       85,526       100%        149,397       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               PTI.........................       17,717        21%         32,477        22%    Delays for meeting or
                                                                                                                                  following other passenger
                                                                                                                                  trains.
                                               DSR.........................       14,362        17%         29,489        20%    Temporary slow orders,
                                                                                                                                  except heat or cold
                                                                                                                                  orders.
                                               DCS.........................       14,023        16%         26,725        18%    Signal failure or other
                                                                                                                                  signal delays.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................       39,424        46%         60,706        41%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Amtrak Resp..............................  Total.......................      852,298       100%      1,389,339       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               SYS.........................      232,297        27%        359,195        26%    Delays related to crews
                                                                                                                                  including lateness, lone-
                                                                                                                                  engineer delays.
                                               ENG.........................      116,762        14%        157,181        11%    Mechanical failure on
                                                                                                                                  engines.
                                               OTH.........................      116,590        14%        143,672        10%    Lost-on-run, heavy trains,
                                                                                                                                  unable to make normal
                                                                                                                                  speed, etc.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................      386,649        45%        729,291        52%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Third Party..............................  Total.......................      277,179       100%        323,099       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               WTR.........................      109,309        39%        126,087        39%    All severe-weather delays.
                                               TRS.........................       65,630        24%         68,898        21%    Trespasser incidents
                                                                                                                                  including road crossing
                                                                                                                                  accidents.
                                               POL.........................       64,035        23%         79,012        24%    Police/fire department
                                                                                                                                  holds on right-of-way or
                                                                                                                                  on-board trains.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................       38,205        14%         49,102        15%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Excludes NOD-coded (waiting for scheduled departure time) minutes.

     Total Delay Incurred by Amtrak State Supported Trains: FY2019 & FY2020
                            by Delay Responsibility

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Excludes NOD-coded (waiting for scheduled departure time) minutes.

                                              Top Delay Incurred by Amtrak State Supported Trains: FY2019 & FY2020
                                                                by Delay Responsibility and Code
    --------------------------------------------------------------------------------------------------------------------------------------------------------

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                 Responsibility                                       FY2020
                                                                 FY2019                   Description
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Host Resp (Other RR).....................  Total.......................      834,618       100%      1,330,829       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               FTI.........................      205,553        25%        331,402        25%    Delays from freight trains.
                                               PTI.........................      171,716        21%        301,471        23%    Delays for meeting or
                                                                                                                                  following other passenger
                                                                                                                                  trains.
                                               DSR.........................      155,375        19%        223,617        17%    Temporary slow orders,
                                                                                                                                  except heat or cold
                                                                                                                                  orders.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................      301,974        36%        474,339        36%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Host Resp (Amtrak).......................  Total.......................       61,209       100%        111,163       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               DSR.........................       12,098        20%         26,871        24%    Temporary slow orders,
                                                                                                                                  except heat or cold
                                                                                                                                  orders.
                                               PTI.........................       11,770        19%         24,482        22%    Delays for meeting or
                                                                                                                                  following other passenger
                                                                                                                                  trains.
                                               DCS.........................        9,437        15%         18,847        17%    Signal failure or other
                                                                                                                                  signal delays.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................       27,904        46%         40,963        37%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Amtrak Resp..............................  Total.......................      333,809       100%        611,505       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               SYS.........................       91,776        27%        153,976        25%    Delays related to crews
                                                                                                                                  including lateness, lone-
                                                                                                                                  engineer delays.
                                               OTH.........................       55,563        17%         79,678        13%    Lost-on-run, heavy trains,
                                                                                                                                  unable to make normal
                                                                                                                                  speed, etc.
                                               ENG.........................       45,185        14%         76,386        12%    Mechanical failure on
                                                                                                                                  engines.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................      141,285        42%        301,465        49%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Third Party..............................  Total.......................      124,596       100%        153,299       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               WTR.........................       39,218        31%         44,697        29%    All severe-weather delays.
                                               TRS.........................       33,900        27%         42,958        28%    Trespasser incidents
                                                                                                                                  including road crossing
                                                                                                                                  accidents.
                                               POL.........................       31,097        25%         34,969        23%    Police/fire department
                                                                                                                                  holds on right-of-way or
                                                                                                                                  on-board trains.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................       20,381        16%         30,675        20%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Excludes NOD-coded (waiting for scheduled departure time) minutes.

      Total Delay Incurred by Amtrak Long Distance Trains: FY2019 & FY2020
                            by Delay Responsibility

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Excludes NOD-coded (waiting for scheduled departure time) minutes.

                                               Top Delay Incurred by Amtrak Long Distance Trains: FY2019 & FY2020
                                                                by Delay Responsibility and Code
    --------------------------------------------------------------------------------------------------------------------------------------------------------

    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                 Responsibility                                       FY2020
                                                                 FY2019                   Description
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Host Resp (Other RR).....................  Total.......................    1,344,045       100%      1,639,877       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               FTI.........................      568,476        42%        696,017        42%    Delays from freight trains.
                                               DSR.........................      314,019        23%        333,217        20%    Temporary slow orders,
                                                                                                                                  except heat or cold
                                                                                                                                  orders.
                                               PTI.........................      157,091        12%        219,571        13%    Delays for meeting or
                                                                                                                                  following other passenger
                                                                                                                                  trains.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................      304,459        23%        391,072        24%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Host Resp (Amtrak).......................  Total.......................       24,317       100%         38,234       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               PTI.........................        5,947        24%          7,995        21%    Delays for meeting or
                                                                                                                                  following other passenger
                                                                                                                                  trains.
                                               DCS.........................        4,586        19%          7,878        21%    Signal failure or other
                                                                                                                                  signal delays.
                                               RTE.........................        3,445        14%          4,737        12%    Routing-dispatching delays
                                                                                                                                  including diversions.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................       10,339        43%         17,624        46%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Amtrak Resp..............................  Total.......................      518,489       100%        777,834       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               SYS.........................      140,521        27%        205,219        26%    Delays related to crews
                                                                                                                                  including lateness, lone-
                                                                                                                                  engineer delays.
                                               SVS.........................       85,875        17%        108,509        14%    All switching and servicing
                                                                                                                                  delays.
                                               ENG.........................       71,577        14%         80,795        10%    Mechanical failure on
                                                                                                                                  engines.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................      220,516        43%        383,311        49%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Third Party..............................  Total.......................      152,583       100%        169,800       100%
                                              --------------------------------------------------------------------------------------------------------------
                                               WTR.........................       70,091        46%         81,390        48%    All severe-weather delays.
                                               TRS.........................       34,533        23%         33,929        20%    Trespasser incidents
                                                                                                                                  including road crossing
                                                                                                                                  accidents.
                                               POL.........................       30,135        20%         36,054        21%    Police/fire department
                                                                                                                                  holds on right-of-way or
                                                                                                                                  on-board trains.
                                              --------------------------------------------------------------------------------------------------------------
                                               All Other...................       17,824        12%         18,427        11%
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Excludes NOD-coded (waiting for scheduled departure time) minutes.