[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
             
             
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     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.
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    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\
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    \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\
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    \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).
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                             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).
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    \25\ 85 Fed. Reg. 17835 (March 31, 2020).
    \26\ Id.
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    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.
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                               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 [email protected].
    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
                 
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    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.

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                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:

------------------------------------------------------------------------
            Version                   Date              Description
------------------------------------------------------------------------
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.