[Congressional Record Volume 147, Number 103 (Monday, July 23, 2001)]
[Senate]
[Pages S8066-S8067]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BREAUX (for himself, Mr. Smith of Oregon, Mr. Schumer, Mr. 
        Specter, and Mr. Durbin):
  S. 1220. A bill to authorize the Secretary of Transportation to 
establish a grant program for the rehabilitation, preservation or 
improvement of railroad track; to the Committee on Commerce, Science, 
and Transportation.
  Mr. BREAUX. Mr. President, today my colleague Senator Smith of Oregon 
and I have introduced the Railroad Track Modernization Act. As chairman 
and ranking member of the Surface Transportation and Merchant Marine 
Subcommittee of the Senate Commerce, Science, and Transportation 
Committee, the needs of the Nation's small railroads have been brought 
to our attention by railroad experts during hearings concerning the 
state of the railroad industry. Our colleagues Senators Schumer, 
Durbin, and Specter join us in introducing this legislation.
  Short line railroads have saved tens of thousands of miles of light 
density rail line from abandonment. In 1980, there were 220 short line 
railroads in the U.S. Today there are over 500 short line railroads, 
due in part to the mergers and streamlining of Class I operations which 
encouraged the larger companies to sell off their little-used or 
abandoned branch lines. Short line and regional railroads are an 
important and growing component of the railroad industry. Today they 
operate and maintain 20 percent of the American railroad industry's 
route mileage and account for 9 percent of the rail industry's freight 
revenue and 11 percent of railroad employment.
  These line railroads employ approximately 25,000 individuals, serve 
thousands of local and rural shippers and are often the only connection 
these shippers have to the national rail network. To survive, this 
infrastructure needs to be upgraded in order to move the heavier cars 
that are currently being moved by the Class I railroads. The revenues 
of the smaller railroads are not sufficient to get the job done.
  Since 1982, the short lines and regional have maintained the track in 
rural areas where rail service would have been abandoned by the Class I 
railroad. Because of their relatively low traffic levels, the Class I 
railroads could not afford to invest in this infrastructure and, as a 
result, allowed these lines to slowly deteriorate. With a lower cost 
structure and more flexible service, short line companies that both the 
track have been able to keep them going. However, the revenue is still 
not high enough to make up for past years of neglect.
  Today, two factors have combined to bring this situation to a head. 
First, the advent of the heavier 286,000-pound cars that are becoming 
the standard of the Class I industry puts a greater premium on speed 
and precisely scheduled operations, the short line railroads must meet 
these higher standards or be cut off from the national system.
  This legislation does not create a long term program to fix this 
problem, but instead it creates a one time fix for this problem. While 
these small railroads have enough traffic to operate profitably on an 
ongoing basis, they do not earn enough to make the large capital 
investment required by the advent of the 286,000-pound cars or the need 
to significantly increase speed. This legislation would authorize a 
program which could provide grants to the nation's smaller railroads to 
help them make the improvements needed to stay in business and continue 
to serve small shippers.
  This legislation is of vital importance to the economy of Louisiana 
and the Nation. Louisiana is home to ten

[[Page S8067]]

small freight railroads that maintain rail service on over 500 miles of 
track. Without these small railroads, dozens of Louisiana communities 
and hundreds of employees would be cut off from our national rail 
network.
  In addition, small railroads are vital to the safety of our highways. 
Every loaded rail car keeps as many as four trucks off to our nation's 
roads. At a time when we face record congestion and unprecedented 
delays we can ill afford the influx of trucks caused by the failure of 
the small freight railroad system. Millions of additional trucks per 
year is not only bad for our interstate highways, but also for the 
state rural roads in Louisiana. These roads will bear the brunt of 
damage caused by the trucks, while dramatically increasing our highway 
costs.
  The Timber Rock Railroad, TIBR, serves Beauregard Parrish and handles 
15,000 carloads of freight per year, of which lumber and coal are the 
major commodities. Without the existence of TIBR, many major employers 
in western Louisiana such as Boise Cascade, Louisiana Pacific and 
Energy Gulf States would be without any rail service at all. The New 
Orleans and Gulf Coast Railway runs for 24 miles from Gouldsboro Yard 
in New Orleans through Orleans, Jefferson, and Plaquemine Parishes to 
Myrtle Grove. New Orleans and Gulf Coast, NOGC, serves shippers such as 
Chevron Chemical's Oak Point Plant, Harvest States' Myrtle Grove Grain 
Export Terminal, and TOSCO Petroleum's refinery at Alliance. Rail is 
the safest mode of transportation for hazardous materials, and by 
transporting hazardous materials by rail NOGC keeps hundreds of 
truckloads of dangerous cargoes off of Highway 23 and the streets of 
New Orleans. The Louisiana & Delta Railroad, L&D, is headquartered in 
New Iberia, LA and operates 114 miles of track carrying 12,000 carloads 
of carbon black, sugar, molasses, pipe, rice and paper products. The 
railroad serves dozens of customers in Lafayette, St. Martin, 
Vermilion, Iberia, St. Mary, Assumption, and Lafourche Parishes. In 
order to upgrade the infrastructure of Louisiana's short lines and 
those around the nation who provide the same kind of local service as 
the TIER, NOGC, and L&D, the Railroad Track Modernization Act should be 
passed.
  I look forward to working with my colleagues on this legislation. I 
ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1220

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION. 1. SHORT TITLE.

       This Act may be cited as the ``Railroad Track Modernization 
     Act of 2001''.

     SEC. 2. CAPITAL GRANTS FOR RAILROAD TRACK.

       (a) Amendment.--Chapter 223 of title 49, United States 
     Code, is amended to read as follows:

            ``CHAPTER 223--CAPITAL GRANTS FOR RAILROAD TRACK

``Sec.
``22301. Capital grants for railroad track.

     ``Sec. 22301. Capital grants for railroad track

       ``(a) Establishment of Program.--
       ``(1) Establishment.--The Secretary of Transportation shall 
     establish a program of capital grants for the rehabilitation, 
     preservation, or improvement of railroad track (including 
     roadbed, bridges, and related track structures) of class II 
     and class III railroads. Such grants shall be for 
     rehabilitating, preserving, or improving track used primarily 
     for freight transportation to a standard ensuring that the 
     track can be operated safely and efficiently, including 
     grants for rehabilitating, preserving, or improving track to 
     handle 286,000 pound rail cars. Grants may be provided under 
     this chapter--
       ``(A) directly to the class II or class III railroad; or
       ``(B) with the concurrence of the class II or class III 
     railroad, to a State or local government.
       ``(2) State cooperation.--Class II and class III railroad 
     applicants for a grant under this chapter are encouraged to 
     utilize the expertise and assistance of State transportation 
     agencies in applying for and administering such grants. State 
     transportation agencies are encouraged to provide such 
     expertise and assistance to such railroads.
       ``(3) Interim regulations.--Not later than December 31, 
     2001, the Secretary shall issue temporary regulations to 
     implement the program under this section. Subchapter II of 
     chapter 5 of title 5 does not apply to a temporary regulation 
     issued under this paragraph or to an amendment to such a 
     temporary regulation.
       ``(4) Final regulations.--Not later than October 1, 2002, 
     the Secretary shall issue final regulations to implement the 
     program under this section.
       ``(b) Maximum Federal Share.--The maximum Federal share for 
     carrying out a project under this section shall be 80 percent 
     of the project cost. The non-Federal share may be provided by 
     any non-Federal source in cash, equipment, or supplies. Other 
     in-kind contributions may be approved by the Secretary on a 
     case by case basis consistent with this chapter.
       ``(c) Project Eligibility.--For a project to be eligible 
     for assistance under this section the track must have been 
     operated or owned by a class II or class III railroad as of 
     the date of the enactment of the Railroad Track Modernization 
     Act of 2001.
       ``(d) Use of Funds.--Grants provided under this section 
     shall be used to implement track capital projects as soon as 
     possible. In no event shall grant funds be contractually 
     obligated for a project later than the end of the third 
     Federal fiscal year following the year in which the grant was 
     awarded. Any funds not so obligated by the end of such fiscal 
     year shall be returned to the Secretary for reallocation.
       ``(e) Additional Purpose.--In addition to making grants for 
     projects as provided in subsection (a), the Secretary may 
     also make grants to supplement direct loans or loan 
     guarantees made under title V of the Railroad Revitalization 
     and Regulatory Reform Act of 1976 (45 U.S.C. 822(d)), for 
     projects described in the last sentence of section 502(d) of 
     such title. Grants made under this subsection may be used, in 
     whole or in part, for paying credit risk premiums, lowering 
     rates of interest, or providing for a holiday on principal 
     payments.
       ``(f) Employee Protection.--The Secretary shall require as 
     a condition of any grant made under this section that the 
     recipient railroad provide a fair arrangement at least as 
     protective of the interests of employees who are affected by 
     the project to be funded with the grant as the terms imposed 
     under section 11326(a), as in effect on the date of the 
     enactment of the Railroad Track Modernization Act of 2001.
       ``(g) Labor Standards.--
       ``(1) Prevailing wages.--The Secretary shall ensure that 
     laborers and mechanics employed by contractors and 
     subcontractors in construction work financed by a grant made 
     under this section will be paid wages not less than those 
     prevailing on similar construction in the locality, as 
     determined by the Secretary of Labor under the Act of March 
     3, 1931 (known as the Davis-Bacon Act; 40 U.S.C. 276a et 
     seq.). The Secretary shall make a grant under this section 
     only after being assured that required labor standards will 
     be maintained on the construction work.
       ``(2) Wage rates.--Wage rates in a collective bargaining 
     agreement negotiated under the Railway Labor Act (45 U.S.C. 
     151 et seq.) are deemed for purposes of this subsection to 
     comply with the Act of March 3, 1931 (known as the Davis-
     Bacon Act; 40 U.S.C. 276a et seq.).
       ``(h) Study.--The Secretary shall conduct a study of the 
     projects carried out with grant assistance under this section 
     to determine the public interest benefits associated with the 
     light density railroad networks in the States and their 
     contribution to a multimodal transportation system. Not later 
     than March 31, 2003, the Secretary shall report to Congress 
     any recommendations the Secretary considers appropriate 
     regarding the eligibility of light density rail networks for 
     Federal infrastructure financing.
       ``(i) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary of 
     Transportation $350,000,000 for each of the fiscal years 2002 
     through 2004 for carrying out this section.''.
       (b) Conforming Amendment.--The item relating to chapter 223 
     in the table of chapters of subtitle V of title 49, United 
     States Code, is amended to read as follows:

``223. CAPITAL GRANTS FOR RAILROAD TRACK.......................22301''.
                                 ______