[Senate Report 107-157]
[From the U.S. Government Publishing Office]
107th Congress Report
SENATE
2d Session 107-157
_______________________________________________________________________
NATIONAL DEFENSE RAIL ACT
__________
R E P O R T
OF THE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 1991
May 29, 2002.--Ordered to be printed
Filed, under authority of the order of the Senate of May 22, 2002
__________
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99-010 WASHINGTON : 2002
______________________________________________________________________
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred seventh congress
second session
ERNEST F. HOLLINGS, South Carolina, Chairman
DANIEL K. INOUYE, Hawaii JOHN MCCAIN, Arizona
JOHN D. ROCKEFELLER IV, West TED STEVENS, Alaska
Virginia CONRAD BURNS, Montana
JOHN F. KERRY, Massachusetts TRENT LOTT, Mississippi
JOHN B. BREAUX, Louisiana KAY BAILEY HUTCHISON, Texas
BYRON L. DORGAN, North Dakota OLYMPIA SNOWE, Maine
RON WYDEN, Oregon SAM BROWNBACK, Kansas
MAX CLELAND, Georgia GORDON SMITH, Oregon
BARBARA BOXER, California PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina JOHN ENSIGN, Nevada
JEAN CARNAHAN, Missouri GEORGE ALLEN, Virginia
BILL NELSON, Florida
Kevin D. Kayes, Staff Director
Moses Boyd, Chief Counsel
Gregg Elias, General Counsel
Jeanne Bumpus, Republican Staff Director and General Counsel
Ann Begeman, Republican Deputy Staff Director
107th Congress Report
SENATE
2d Session 107-157
======================================================================
NATIONAL DEFENSE RAIL ACT
_______
May 29, 2002.--Ordered to be printed
Filed, under authority of the order of the Senate of May 22, 2002
_______
Mr. Hollings, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany S. 1991]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 1991) ``A Bill to establish a
national rail passenger transportation system, reauthorize
Amtrak, improve security and service on Amtrak, and for other
purposes'', having considered the same, reports favorably
thereon with an amendment in the nature of a substitute and
recommends that the bill (as amended) do pass.
Purpose of the Bill
The purposes of this bill are to authorize funds for
development of rail passenger infrastructure; authorize funds
for rail passenger security; authorize capital and operating
funds for intercity rail passenger service expenses; mandate
reforms to accounting, reporting, and business decision-making
practices of the National Passenger Railroad Corporation
(NPRC); repeal the requirement that Amtrak achieve operational
self-sufficiency; expand the Railroad Rehabilitation and
Improvement Financing (RRIF) program.
Background and Needs
Transportation needs in the United States have changed
significantly in the 172 years since the first scheduled
passenger train, the ``Best Friend of Charleston'', carried 141
people six miles on its initial run in 1830. Since the advent
of rail passenger service, demand for rail passenger service
has ebbed and flowed, as our nation has experienced industrial
growth, economic depression, and war. During the past 30 years,
problems with congestion, urban sprawl, and environmental
issues have required focused attention on a balanced system of
transportation in the United States, with priorities on
security, mobility, safety, economic, and transportation
effects. Considering these issues with respect to our future
needs, high-speed rail passenger service is increasingly
identified as an effective transportation solution in some of
our Nation's most well- traveled intercity corridors. A
September 1997 Report to Congress titled ``High-Speed Ground
Transportation for America'' by the Federal Railroad
Administration explains in detail this potential.
The Federal government has historically taken a leadership
role in developing and implementing sound policies which
respond to the changing transportation demands of the country.
The Federal role in developing our national highway system
began in 1938 with the Roosevelt Federal Aid Highway Act, which
mandated the first studies for the construction of a limited
access national highway network. In 1956, the Federal Aid
Highway Act (``1956 Act'') created the blueprint for the
Interstate Highway System as we know it today. This landmark
legislation built upon existing paved roads to establish a
44,000-mile interconnected highway network, and provided $25
billion for construction for fiscal years 1957 to 1969. The
Federal share of project costs was set at 90 percent. The 1956
Act permitted the use of Federal funds to advance acquisition
of rights-of-way and prohibited apportionment of funds to
States that permitted excessively large vehicles. This
legislation also applied provisions of the Davis-Bacon Act to
Interstate construction projects, which had been enacted in the
1930's to require that Federal construction projects pay no
less than prevailing wage rates. Title II of the 1956 Act
contained the 1956 Highway Revenue Act, which increased the
Federal tax on gasoline from 2 to 3 cents per gallon and
imposed a series of other highway user tax charges to help fund
construction of the Interstate Highway System. User fee
receipts were placed in a new Highway Trust Fund to be credited
to the highway program. In FY 2000, the Federal government
spent $29.687 billion on highways from this Fund.
Similarly, the Federal government took a lead role in
developing our commercial aviation system through a variety of
actions, from subsidizing air carriers through postal rates,
building, maintaining, and operating our air traffic control
system, and funding airport development. From the early stages
of the commercial aviation industry, the Federal government
provided funding for airport infrastructure. Beginning in 1946,
the Federal Airport Act established the Federal-aid airport
program, the first peacetime program aimed exclusively at
promoting development of United States civil airports.
Subsequent airport grant programs, such as the Airport
Development Aid Program and the Airport Improvement Program,
significantly increased the level of funding provided for
infrastructure via a dedicated source of funding, the Airport
and Airway Trust Fund. This trust fund receives revenues from
aviation user taxes on such items as airline fares, air
freight, and aviation fuel. Funds are provided not only for
airport planning, runway, and taxiway construction, but also
for aircraft rescue and fire fighting equipment and security
equipment required by regulation.
The present network of airports throughout the country would
not have been possible without Federal aid. In fiscal year (FY)
2001, outlays totaling almost $10 billion were made from the
Airport and Airway Trust Fund for programs benefiting
commercial aviation. Not only do airports such as Los Angeles
International, Atlanta-Hartsfield and Chicago-O'Hare receive
funds to continue improvements, but many small general aviation
airports owe their existence to these grant programs. Without
Federal funds, many airports could not afford today's high cost
of construction and equipment. In addition, the Federal
government is responsible for providing all air traffic control
services--including equipment and personnel. The Federal
Aviation Administration's (FAA's) Air Traffic Services
organization provides a key safety and efficiency role in
managing our air traffic control system 24 hours a day. The
President's Budget proposal for FY 2003 requests over $6
billion to provide this vital service. Authorizations for air
traffic control are included in the Wendell H. Ford Aviation
Investment and Reform Act for the 21st Century (Public Law 106-
181), which authorized $40 billion for aviation programs over
FYs 2001-2003. Finally, in the aftermath of the September 11th
attacks, the United States took over primary responsibility for
security in the nation's airports. On November 19, 2001, the
Aviation Security Act (Public Law 107-71) was signed into law
creating a new security administration within the United States
Department of Transportation (DOT) with an estimated 70,000 new
Federal employees at a cost of $6.8 billion in FY 2002 alone,
including 50,000 airport security personnel.
The Federal government has also provided significant
subsidies to support public transit, including local bus,
commuter rail, light rail, and trolley bus transportation.
Since 1970, the Federal Transit Administration (FTA) has
received $106 billion in Federal funding. Transit ridership has
risen dramatically in recent years, rising to 9.5 billion
commuter trips in calendar year 2001. A recent report by the
United States General Accounting Office (GAO) stated that
``Although the level of New Starts funding is higher than it
has ever been, the demand for these resources is also extremely
high. TEA-21 identified over 190 projects nationwide as
eligible to compete for New Starts funding.'' (Report #GAO-02-
0603)
In effect, Federal transportation policies have promoted the
development of highways, aviation, and transit systems, while
significantly less attention has been paid to the development
of our rail passenger system. Since 1971, the Federal
government has spent over $400 billion of taxpayer funds on the
highway system, over $170 billion on our aviation system, $106
billion on transit, yet, in spite of its critical importance to
our nation's transportation, only $25 billion on rail passenger
service. Notably, however, congestion, security, and
environmental quality issues and the current imbalance in our
national transportation system have given rise to a
reevaluation of Federal transportation spending policies.
Congestion-related economic losses continue to cause loss of
productivity. The costs of highway congestion include delay,
increased travel time, increased fuel consumption, increased
vehicle emissions and reduced air quality, increased cost of
goods transported resulting in increased costs to the consumer,
and increased aggravation to drivers. The Federal Highway
Administration reported on May 21, 2002, that increased traffic
congestion is a growing threat to the nation's economy and to
the quality of life of all Americans: ``Congestion and
bottlenecks damage air quality, slow commerce, increase energy
consumption and threaten our quality of life. They waste
significant time and money, and they reduce productivity.''
States like the Commonwealth of Virginia have congestion
problems ``growing by the hour, particularly in the major
corridors within and between our urban centers,'' as was noted
by Whittington W. Clement, Secretary of Transportation,
Commonwealth of Virginia, in written testimony submitted for
the Record for the United States Committee on Commerce,
Science, and Transportation hearing on S. 1991, the National
Defense Rail Act, held on March 14, 2002 (Clement). A report by
the Texas Transportation Institute states that in 1991, the
total cost of congestion for 50 urban areas studied was
approximately $42.3 billion, with delay accounting for
approximately 89 percent of this amount, and excess fuel
consumption for the remainder. The President's FY 2003 budget
proposal points out that the nationwide cost of wasted time and
extra fuel consumption in 1999 was estimated to be $78 billion.
While strong Federal leadership and funding were essential to
the development of the interstate highway system, our nation's
aviation system, and public transit, intercity rail passenger
service has lacked this same level of Federal initiative. By
1971, the railroad industry had lost billions of dollars
providing passenger service as part of their common carrier
obligation. To relieve the private rail system of the financial
burdens of providing passenger service, Congress created the
National Railroad Passenger Corporation (NRPC), or Amtrak, in
1971. The fact is, however, the investment of $25 billion since
1971 has not been sufficient to build an effective national
rail passenger system; in fact, with the exception of high-
speed service in the Northeast and a small number of corridor
services developed in conjunction with the States, the system
today is virtually the same as it was 30 years ago. Since the
inception of Amtrak, the Federal government has not taken an
active approach to growing our national rail passenger system.
In the end, in order to obtain the potential benefits
associated with rail passenger service, substantial Federal
involvement in the development of rail passenger infrastructure
is imperative, similar to Federal investment policy in the
other modes of transportation.
SECURITY FUNDING
The events of September 11, 2001, require a fundamental
reevaluation of the vulnerabilities inherent in our
transportation system, consistent with the heightened sense of
risk. On October 11, 2001, the Senate approved S. 1447, the
Aviation Security Act (Public Law 107-71) which addressed
airline and airport security. On December 20, 2001, the Senate
unanimously approved S. 1214, which addressed seaport security.
The legislation is currently awaiting House action. On October
17, 2001, the Commerce Committee reported, without amendment,
S. 1550, the Rail Security Act of 2001. The legislation was the
result of bipartisan negotiations with input from Amtrak and
the Administration addressing the immediate safety and security
needs of Amtrak. Title I of S. 1991 substantially incorporates
the text of S. 1550 with additional provisions to specifically
authorize funding for security expenditures, on a line item
basis. It also includes additional provisions, including a
pilot program requiring random screening of passengers and
baggage at some of Amtrak's largest stations, an assessment by
the Secretary of Transportation of the safety and security of
stations served by Amtrak, a DOT study of the safety and
security of blocked grade crossings, and a GAO study of rail
passenger security measures in other countries.
HIGH-SPEED PASSENGER RAIL SERVICE
High-speed rail passenger service has proven effective in
other developed countries, including Japan, France, and
Germany. Historically, these countries developed their highly-
efficient rail passenger systems as national systems. High-
speed train service in each of these countries supplements
conventional rail passenger service, and for the most part,
connects major cities in corridor-style service. Maximum train
speeds range from 155 miles per hour (mph) on Germany's
Intercity Express (ICE) train to 186 mph for the Shinkansen
line in Japan and the trains a grande vitesse (TGV) in France.
In the United States, the Northeast Corridor (NEC) is the
only developed high-speed rail corridor; high-speed trains
provide service at speeds of up to 150 mph between Washington,
DC, and Boston, MA, carrying 36,400 passengers daily. The NEC
is unique for several reasons. First, most of the approximately
440 route miles are owned by Amtrak, allowing it to operate a
vertically-integrated railroad along this corridor. Second, the
corridor connects seven major eastern United States cities with
a combined population of 23.9 million along a mostly linear
route. Third, this corridor was developed through strong
federal leadership, and showcases the types of benefits which
can be realized through development of high-speed rail.
Currently, more travelers take the train on the NEC segment
between New York City, NY, and Washington, DC, than those who
travel by air.
Other corridors throughout the country seek to attain the
benefits of high-speed rail passenger service, including areas
such as the Midwest, California, and Florida, but many of these
corridors lack the funding to see these infrastructure projects
to completion. These high-speed corridor projects are now being
planned and developed by the States, both individually and in
partnership with one another. The Intermodal Surface
Transportation Efficiency Act of 1991 (ISTEA) directed FRA to
designate 5 rail corridors where train speeds will reach at
least 90 miles per hour for the purposes of eliminating grade
crossings along the routes. In 1997, the Transportation Equity
Act for the 21st Century (TEA-21) directed FRA to designate 3
additional corridors and also statutorily designated a Gulf
Coast route, a Keystone route, and an Empire State route.
At the State level, highways and airports have enjoyed
decades of public support, which proponents of high-speed rail
are now pursuing. Although still atypical, State investment in
rail passenger service is increasing as State and regional
transportation officials look for solutions to regional
transportation problems. In fact, over the past 5 years, States
have spent over $1.2 billion on improving intercity passenger
rail. Many of these improvements are incremental in nature and
may lead to eventual high-speed service. In addition, many
States, including California, Oregon, Washington, North
Carolina, New York, Michigan, Illinois, and Virginia, are now
working with Amtrak to provide operating support for increased
levels of service on corridors that primarily benefit travelers
within their respective States. Amtrak's Cascades service in
the Pacific Northwest, which is operated under contract by
Amtrak for the States of Washington and Oregon, has been so
successful that the States are planning to add six additional
train sets to increase the frequency of service. California
spent an estimated $63 million in FY 2001 on increased service
on three trains operated through contracts with Amtrak: the
Capitol Corridor, the Pacific Surfliner and the San Joaquins.
According to the FRA, the State of California has spent $866.8
million over the last five years, excluding matching funds from
Amtrak, the Federal government and freight railroads, for
capital improvements for improved rail passenger service.
The California High-Speed Rail Authority recently completed a
screening report for implementation of a statewide high-speed
train system which will determine the scope of a formal
environmental impact statement. On January 10, 2002, California
Governor Gray Davis proposed $8.46 million for the 2002-3 FY
for the Authority, which, if approved by the legislature, would
make it possible for the Authority to prepare a draft program
environmental impact statement by June 30, 2003.
The Midwest Regional Rail Initiative proposes high-speed rail
passenger service linking major and medium-sized cities in the
States of Illinois, Indiana, Iowa, Michigan, Minnesota,
Missouri, Nebraska, Ohio, and Wisconsin, using Chicago, IL, as
a central hub. According to studies performed for the Midwest
Regional Rail Initiative, this service would be financially
viable, affordable, convenient, comfortable, and more
environmentally friendly than car or plane travel. It proposes
using new passenger equipment on upgraded existing track at
speeds of up to 110 mph to effectively cut train travel times
between the major Midwestern cities to make travel between
downtown business centers both time- and cost-competitive with
air travel on a door-to-door basis. Furthermore, estimated
travel time on high-speed rail in the Midwest professes to be
competitive with all current modes of available transportation.
On November 7, 2000, the Florida voters approved a new
amendment to the Florida Constitution directing the State
Legislature, Governor and Cabinet to proceed with the
development of a high-speed ground transportation system in
Florida. This system is required to use effective and efficient
technologies capable of operating at speeds in excess of 120
miles per hour and must consist of dedicated rails or guideways
separated from motor vehicular traffic. This amendment also
dictates that the system must ultimately link the five largest
urban areas of the State and that construction must begin by
November 1, 2003.
The Florida Legislature, at the 2001 regular legislative
session, enacted the Florida High Speed Rail Authority Act,
which created a nine-member High Speed Rail Authority charged
with planning, administering and managing the preliminary
engineering and environmental assessment of the intrastate
high-speed rail system. It also required that the first segment
of the system be developed and operated between St. Petersburg,
Tampa and Orlando with future service to Miami. The legislation
provided an appropriation of $4.5 million to the Authority for
the purpose of performing its duties under the Act. On June 1,
2001, Florida Governor Jeb Bush signed this legislation into
law.
The Florida High Speed Rail Authority is currently evaluating
several options for high-speed rail passenger service, not all
of which would involve Amtrak as a carrier. This approach
allows the State to let the ``market'' decide what technologies
and service concepts best suit its own needs. The Authority
will receive proposals from different consortia which may offer
different solutions: one might be maglev, another might be new
high-speed rail on completely separated right-of-way with no
Amtrak involvement, and a third might be operated by Amtrak
over existing freight railroad right-of-way. It is important to
note that although service offered through Amtrak on the
existing freight right-of-way might be cheaper, the return on
investment might be lower. This result would be brought about
because the patronage (particularly from Miami to Orlando)
would be lower since the expected trip times would not be
competitive with air travel. The initial studies for this
project appeared to indicate that 150 mph diesel-electric
technology might have the best return on investment. At this
speed, electrification expenses would be avoided, but trip
times would be almost as good as 180 mph top speed, which could
be achieved through electrification. However, at 150 mph,
operation over the same tracks as freight trains is
problematic. Thus, under this scenario, the advantage of
gaining access to the freight right-of-way through Amtrak's
statutory right of access may be of some value, but would not
be dispositive.
In general, high-speed rail passenger service promises many
potential benefits, including mobility, safety, security,
convenience, environmental, and economic benefits. According to
the DOT, the development of high-speed rail passenger service
would mean reduced congestion for other modes of
transportation, leading to a more balanced system of
transportation. For example, high-speed rail passenger service
is expected to reduce reliance on highway and air travel,
relieving congestion on these important modes of transportation
and allowing them to function more efficiently. The development
of intercity rail passenger service would not only benefit
corridors linking major cities by reducing highway and air
traffic, but it could also potentially benefit those larger
cities linked by corridors through the reduction of commuter
traffic. According to submitted written testimony (Clement), as
part of the Virginia Transportation Act of 2000, the Virginia
General Assembly authorized $65 million for improvements to the
rail infrastructure between Richmond, VA, and Washington, DC;
the development of an extended NEC through Richmond, VA, could
alleviate heavy volumes of commuter traffic from destinations
along the I-95 corridor in Northern Virginia (Clement).
High-speed rail passenger service could mean increased
mobility for a large number of travelers. Passenger rail also
provides a viable alternative to other modes, making them more
competitive and creating choices for passengers. In short-
distance corridors, high-speed trains have the potential to
deliver passengers downtown-to-downtown almost as fast as
airplanes at a fraction of the ticket price, and can do so in
virtually all weather. For example, the Midwest Rapid Rail
Initiative has forecast maximum revenues when fares are set at
approximately \2/3\ the price of airline fares for equivalent
routes. Ultimately, the use of high-speed rail service may
result in the added benefit of relieving congestion at crowded
airports, thereby freeing up slots for longer distance flights.
High-speed trains are reliable, and on-time performance, though
affected by freight railroad operations when operating on
mixed-use track, is generally good. This year, Amtrak trains on
the NEC have been on-time 88.3 percent of the time.
High-speed passenger trains world-wide have excellent safety
records. Many foreign countries operating high-speed rail
systems realize safety benefits associated with operations on
dedicated passenger right-of-way and advanced train control
systems. In the United States, positive train control, which
uses advanced train control technology, has been on the
National Transportation Safety Board's ``Most Wanted'' Safety
Improvements List in one form or another since 1990. According
to Railway Safety, a British rail safety group, British and
European Union transport safety statistics show that rail
travel in the United Kingdom (both conventional and high-speed)
is 9 times safer than car travel, and 2.5 times safer than air
travel. In the United States, high-speed trains have an
excellent safety record. On the NEC, the only corridor in the
country where sustained train speeds reach 90 mph or above,
Acela trains have not had any accidents, passenger injuries, or
passenger fatalities, since the inception of service in
December 2000. Metroliner train service on the NEC has resulted
in only two passenger fatalities since Amtrak's inception in
1970.
The national security of the United States can benefit in at
least two ways from an effective rail passenger system. First,
the tragic events of September 11, 2001, highlighted the need
for a more balanced system of transportation, one which
provides options to travelers and makes efficient use of
infrastructure. Second, not only could a sound rail passenger
system provide travelers a viable alternative to highway and
air travel, but rail passenger system development could have
the added benefits of fostering a more fuel-efficient
transportation system, thereby potentially reducing our
nation's dependence on foreign oil. The United States
Department of Energy states in its report ``Annual Energy
Outlook 2002'' that in 2000 the transportation sector accounted
for fully \2/3\ of total United States petroleum demand,
compared to about 50 percent before 1973. In addition,
projected future increases in total consumption are due mostly
to increases in demand in the transportation sector. According
to initial analyses by the Midwest Regional Rail Initiative,
high-speed rail would reduce energy consumption along the
Chicago-St. Louis corridor by 8 percent per year, the
equivalent of 6.5 million gallons of diesel fuel annually. In
the Northeast, most of the NEC is electrified, meaning no
diesel fuel is consumed for train travel through those
electrified areas.
High-speed passenger trains can also provide more convenience
and comfort to passengers than other modes of transportation,
making rail travel a productive alternative to travel by car or
airplane. For example, Acela trains operating on the NEC have
coach-class seats wider than most airplanes, electrical outlets
for laptop computers, and food service. On the same route from
Washington, DC, to New York, NY, an airline passenger may be
subjected to more stringent security measures, including
remaining in his or her seat throughout the entire flight. In
an automobile, the traveler would now likely be operating the
vehicle, unable to utilize the approximately four hours spent
on the road for sleep, rest or work activities.
Cities facing environmental and air quality problems are
increasingly recognizing the environmental benefits associated
with rail passenger service. Federal law defines a
``nonattainment area'' as a locality where air pollution levels
persistently exceed National Ambient Air Quality Standards (see
Clean Air Act and Amendments of 1990). Designating an area as a
nonattainment area requires a formal rulemaking process, and
EPA normally take this action only after air quality standards
have been exceeded for several consecutive years. Currently,
Los Angeles, CA, Phoenix, AZ, Chicago, IL, Atlanta, GA, and 166
other areas in the country (in 260 counties) are designated as
nonattainment areas. Under revised EPA standards not yet
implemented, 329 counties would be designated as nonattainment
areas. Once cities or counties are classified as
``nonattainment'' areas, States in which they are located are
restricted in their ability to use Federal highway funds for
additional road construction projects. In this case, the State
must show how the proposed highway projects would result in
decreased congestion or improved air quality. As such, these
States are being forced to look for other solutions to satisfy
increased demand for transportation infrastructure. According
to the Environmental Law and Policy Center, a single railroad
track can carry as many passengers as a ten-lane highway at a
fraction of the cost. Recognizing this potential, many areas of
the United States are now considering rail passenger options to
satisfy environmental restrictions on further highway building.
Many potential economic benefits are associated with
development of rail passenger service. For instance, this
development will most certainly create new jobs for the
construction and operation of new passenger train service. It
will also revive the ailing $25 billion, 150,000-employee
domestic rail supply industry. This development can also have
secondary effects, such as spurring economic growth. Many
cities throughout the nation are increasingly looking to
revitalize their urban centers. Train stations with increased
passenger traffic provide incentive for commercial
redevelopment and promote substantial new development in
surrounding areas similar to Union Station in Washington, DC,
making railroad properties attractive sites. Furthermore, new
or increased rail passenger service may reduce the need for the
expansion of or construction of new outlying highways and
airports, which often exacerbate sprawl.
The costs associated with development of high-speed rail
service may vary, but can be competitive with construction
costs for highways. The FRA noted in its September 1997 report,
``High Speed Ground Transportation for America,'' that the
development costs for high-speed rail vary with the type of
technology implemented and the physical location of the
corridor. The report notes that while high-speed corridors
providing passenger service at 90 mph could be developed for
costs as little as $1 million per route-mile, technology using
magnetic levitation technology, or ``maglev,'' can cost between
$20 million and $50 million per route-mile. The report further
notes that the cost of developing advanced steel-wheel-on-rail
high-speed rail passenger service on completely new rights-of-
way could be as low as $10 million per route mile, which can be
competitive with highway construction costs.
Developing high-speed rail corridors is a long-term
initiative that will require significant financial commitments.
GAO has noted that the ultimate cost of developing the high-
speed rail corridors is unknown, but certainly in the many tens
of billions of dollars (Report #GAO-01-480T). The total costs
to develop a national passenger railroad system incorporating
high-speed service cannot be readily determined without making
critical decisions on technology, routing, and intended service
levels at individual corridors.
Currently, corridor projects around the country are in
different stages of planning and development. California has
announced plans for a 20-year, $10 billion program. The Midwest
Regional Rail Initiative has completed detailed project studies
and estimates the cost of infrastructure and equipment for the
midwest high-speed corridor at approximately $4 billion.
Florida is considering several different high-speed
technologies, with an estimated cost of between $5.5 for
conventional high-speed service and $24 billion for maglev.
Virginia and North Carolina have identified a $1.2 billion
program that would reduce travel time between Washington,
Richmond, Raleigh, and Charlotte. The high-speed rail
initiative in the Pacific Northwest Corridor is estimated to
cost $2 billion. And Amtrak has estimated that a total of about
$20 billion is needed over the next 20 years to meet capital
needs on the Northeast Corridor.
In sum, the technology is now available to incrementally
address regional transportation needs through rail passenger
development and to capture some of the numerous benefits of
high-speed rail service in the United States. While a number of
States have, on their own initiative, already undertaken
planning for high-speed rail projects and are ready to begin
construction, others are looking to the Federal government to
provide leadership in developing the infrastructure. Today,
States are constrained in their decision-making regarding rail
service due to what some members of the Committee believe is a
bias in current Federal transportation policy, which provides a
proportionally large share of Federal funding for highway,
transit, and aviation projects, but does not provide a similar
incentive for States pursuing the development of rail passenger
infrastructure. The Federal government must reevaluate its
current priorities and establish new policy with respect to
transportation infrastructure development for this believed
bias against rail passenger service to be eliminated.
AMTRAK
Amtrak was created in 1970 to ensure the continuation of
intercity rail passenger service as a component of the national
transportation system. In addition, as a result of railroad
bankruptcies and consolidation in the 1970's, Amtrak was given
title to and responsibility for the NEC, which has since been
significantly improved. In exchange for relieving the railroads
of their obligation to carry passengers, Amtrak inherited some
passenger cars and equipment and was granted statutory access
to the freight railroads' tracks on an incremental cost basis
and with operating priority. Amtrak now owns 730 route miles of
track (mostly on the NEC), which is about 3 percent of its
nationwide network. The other 22,000 route miles of track over
which Amtrak conducts operations are owned by the major freight
rail carriers.
In FY 2001, Amtrak employed almost 25,000 people and served
23.5 million passengers at over 500 stations in 46 States. The
States not served by Amtrak are Alaska, Hawaii, South Dakota
and Wyoming, although Wyoming is served by Amtrak Thruway
Motorcoaches. In addition, Amtrak is the nation's largest
provider of contract-commuter service for State and regional
authorities and serves an additional 61.1 million commuter
passengers.
Amtrak's operations are split into 5 business units: (1)
Northeast Corridor service; (2) Amtrak West Business Unit; (3)
Intercity Business Unit; (4) Mail and Express Unit; and (5)
Corporate and Service Center Business Unit. The Northeast
Corridor group manages operations in the NEC as well as the NEC
infrastructure. Amtrak offers high-speed service on its Acela
trains, which can operate at speeds of up to 150 mph. These
trains currently operate from Washington, D.C., to New York
City, NY, in as little as 2 hours, 43 minutes. The Amtrak West
Business Unit handles long-distance and short-distance routes
primarily in the western United States. The Intercity Business
Unit manages the remainder of Amtrak's operations, including
both long and short distance train service. Mail and express is
a new strategic business unit created last year to focus on its
ongoing mail and express freight operations. Amtrak Corporate
is the non-operations business unit, which accounts for much of
the railroad's overhead and management functions. Amtrak
operates approximately 260 trains per day.
No national rail passenger system in the world operates
without some form of subsidy, either operating or capital
funding, or both. Amtrak is no exception. Although Congress has
appropriated an average of $833 million per year, many would
argue that the railroad has been seriously undercapitalized
from its inception. Moreover, Amtrak's funding has actually
been provided in a very erratic fashion making it very
difficult to plan effectively and implement the most beneficial
major capital expenditures on a system-wide basis. For
instance, since 1998, Amtrak has been appropriated only $2.8
billion of the $5.3 billion it has been authorized to receive
through the annual appropriations process, however an
additional $2.2 billion was provided for capital projects
through the Taxpayer Relief Act in 1997. Further, Amtrak's
subsidies have never been sufficient to allow it to operate
``in the black.'' The impact of the undercapitalization
continues today, and even Amtrak's most popular routes
historically have not covered Amtrak's costs. The DOT Office of
Inspector General found in its January 2002 report that under-
funding of infrastructure and capital expenses has resulted in
deferred maintenance on many projects, leading to increased
delays in service and safety and security concerns. A national
rail passenger system, in any form, must have sufficient
funding to support capital investment.
Amtrak's major categories of expenses consist of: capital
expenses, operating costs, mandatory excess Railroad Retirement
Trust Account (RRTA) payments (approximately $160 million in
2003, which cover the retirement costs of former railroad
employees beyond the benefits received by Amtrak retirees),
principal and interest payments on debt, one-time security and
life-safety improvements, and compliance with other regulations
such as those promulgated under the Americans with Disabilities
Act (ADA) and environmental regulations.
Calls for reform of Amtrak focus prominently upon Amtrak's
expenses and its lack of transparent accounting. The DOT
Inspector General found that since December, 1997, for every
additional dollar earned in revenue, cash expenses increased by
$1.05. Amtrak suffered its largest operating loss in its
history last year, losing over $1.1 billion and its long-term
debt and capital lease obligations have tripled to over $3.6
billion, approximately one-fourth of which is defeased. Due to
the increase in debt, Amtrak's interest expense will rise from
$85 million in FY 2001 to $225 million in FY 2005, primarily
attributable to interest expense associated with external
financing of the Acela train sets, according to the DOT
Inspector General. Last summer, short on cash, Amtrak mortgaged
a portion of New York's Penn Station to raise $300 million to
cover operating expenses. Proper funding of Amtrak's capital
needs would help to reduce Amtrak's operating expenses,
obviating the need for short-term borrowing to cover operating
expenses.
The hiring of independent auditors has been viewed as one way
to address the concerns raised about the methods and reporting
of Amtrak financial information. For example, since it was
created in 1971, Amtrak has used certified public accounting
firms for its annual financial audit which is prepared in a
manner similar to other large public corporations. In addition,
increased oversight by the DOT Inspector General has also been
utilized as a tool to try to improve financial accountability
and reporting to Congress. For example, the Amtrak Reform and
Accountability Act of 1997 (ARAA) (Public Law 105-134) required
a one-time independent financial assessment of the financial
requirements of Amtrak through FY 2002, overseen by the DOT
Inspector General. It also directed the DOT Inspector General
to conduct annual reviews of Amtrak's operations and conduct an
assessment of the financial requirements of Amtrak during any
year Amtrak requests Federal assistance.
In the past, Federal funding for Amtrak has been authorized
in lump sums for capital expenditures and operating expenses.
An alternative to this funding approach which would provided
greater detail and more accountability and transparency would
be legislation which specifically authorizes on a line-item
basis funding for Amtrak's various functions. Historically and
currently, all money Congress appropriates for specific capital
improvements for Amtrak flows through grant agreements
administered by the DOT. Under these grant agreements, the DOT
reimburses Amtrak's obligations (as opposed to expenditures)
for project activities covered by the agreement. Such
reimbursable agreements are the norm for government financing
and have been used successfully between Amtrak and DOT for such
undertakings as the Northeast Corridor Improvement Project, the
Westside Connector, and painting of the Hell Gate Bridge. Funds
for general capital grants are not covered by such agreements.
AMTRAK REFORM AND ACCOUNTABILITY ACT OF 1997
On December 2, 1997, the Amtrak Reform and Accountability Act
of 1997 (ARAA) was signed into law. The legislation authorized
funding for Amtrak through 2002 and triggered the release of a
$2.2 billion tax refund provided to Amtrak in the Taxpayer
Relief Act of 1997. Passage of the legislation was achieved in
large part due to the fact that Amtrak, the GAO, and others,
estimated that Amtrak would be bankrupt within a year. The
legislation included statutory operational, procurement, labor
and liability reforms, so Amtrak could operate more like a
private business. This funding provided Amtrak with badly
needed capital to improve their equipment, tracks, and to
provide for general modernization which helps to reduce its
operating expenditures.
One of the main features of the ARAA requires that Amtrak
operate without Federal operating grant funds five years after
the date of enactment of the Act (December 2, 2002).
Furthermore, in addition to replacing the previous Board of
Directors with a new Amtrak Reform Board, the Act also
established a politically-appointed 11-member Amtrak Reform
Council (ARC) charged with developing recommendations for
improving Amtrak, as well as monitoring Amtrak's progress in
achieving the goals of the ARAA. Finally, the Act required the
DOT Inspector General to conduct annual reviews of Amtrak's
operations and conduct an assessment of the financial
requirements of Amtrak during any year Amtrak requests Federal
assistance.that an independent assessment of Amtrak's finances
be conducted annually by the DOT's Inspector General (DOT IG).
The ARAA provided that, if the ARC found at anytime after two
years after the date of enactment that Amtrak would not meet
its mandate for operational self-sufficiency, it must develop
and submit to Congress an action plan for a restructured
intercity passenger system within 90 days. The ARC made such a
finding on November 9, 2001, and on February 7, 2002, submitted
its restructuring plan to Congress. Within the same time
period, the law directed Amtrak to prepare a plan for its
complete liquidation; however this requirement was repealed in
January, 2002, by an amendment contained in Section 1102 of the
Department of Defense and Emergency Supplemental Appropriations
for Recovery from and Response to Terrorist Attacks on the
United States Act, 2002 (P.L. 107-117) that prohibits the use
of Federal funds or funds generated by Amtrak to be used to
prepare a liquidation plan until Congress passes an Amtrak
reauthorization Act.
In February, 2002, the ARC released a report detailing its
final recommendations. The report concludes that Amtrak's
business structure should be fundamentally changed. The ARC
recommendations would:
1. Restructure the National Railroad Passenger
Corporation as the Federal Program Management Agency.
The National Railroad Passenger Corporation would
survive as a small government corporation responsible
for overseeing franchising of train operations, seeking
Federal funding for infrastructure, and planning future
service.
2. Create a separate corporation to conduct train
operations: Amtrak's operations would be placed into a
separate, train-operating government corporation, with
business units such as: corridor and intercity train
service, mail and express service, equipment
maintenance, ownership and leasing of equipment, and
commuter service. After a transition period of 2 to 5
years, the ARC plan would permit each of these business
units to be franchised through a competitive bidding
process. This train operating company could ultimately
be privatized.
3. Create a regionally-directed company to operate,
maintain, and improve the Northeast Corridor
infrastructure: Ownership of the Northeast Corridor
infrastructure would be held by a separate government
corporation. This corporation would be responsible for
maintaining, acquiring, and transferring assets, as
needed. This corporation would be overseen by and
Federally-funded through the NRPC. Management of the
Northeast Corridor infrastructure could be contracted
out to a private contractor after a transition period
of 2 to 5 years.
The ARC report also identified a number of options as
potential principal means for financing capital for
infrastructure and equipment, including (1) Federal
appropriations, (2) a dedicated rail passenger transportation
fund, perhaps funded by a penny a gallon excise tax at both the
Federal and State level (estimated at raising $3.2 billion
annually), and (3) through the sale of tax-exempt bonds.
The ARAA further required an annual assessment by the DOT
Inspector General of Amtrak's annual financial performance and
needs. On January 24, 2002, the DOT IG published its 2001
Assessment of Amtrak's Financial Performance and Requirements
(Report Number CR-2002-075). While the DOT IG found that Amtrak
will not meet its 2002 goal of operating self-sufficiency
without drastic unadvisable measures, it also found that
Amtrak's focus on self-sufficiency has detracted it from making
badly-needed infrastructure improvements.
The following are excerpts from the DOT IG's 2001 Annual
Report:
Amtrak does not have sufficient time to
achieve self-sufficiency through meaningful and
sustainable improvements.
Remaining options for achieving self-
sufficiency by 2003 are not advisable.
Amtrak will likely need additional funds in
2002 to meet cash liabilities.
Amtrak's needs exceed available capital
funding.
Amtrak's focus on self-sufficiency has
detracted from basic system reinvestment.
Amtrak's long-term funding requirements will
need to be determined.
Amtrak's infrastructure needs are $1 billion
to $1.5 billion annually over the next 20 years.
IMMEDIATE FINANCIAL CONCERNS FACING AMTRAK
Amtrak announced on February 1, 2002, that if it does not
receive its funding request of $1.2 billion for FY 2003, it
will be forced to make system-wide cuts in service. It also
announced on that day that it would be forced to reduce by 10
percent the number of management positions and 3 percent of its
labor workforce, resulting in an overall cut of about 1000
positions in order to sustain itself.
The President's FY 2003 Budget Request agrees with former
Amtrak President George Warrington's assessment that ``Amtrak
could not continue indefinitely under current circumstances.''
However, the President included only $521 million for Amtrak in
the FY 2003 Budget, the same level of funding as last year
noting that the request ``serves as a placeholder pending the
development of a new pardigm for intercity passenger rail
service.'' This amount is significantly below Amtrak's $955
million authorization for FY 2002. Although the Administration
has recognized that Amtrak's current authorization expires this
year and has only provided a placeholder in its budget request,
the Administration has failed to submit a proposal to Congress
as it debates the re-authorization of Amtrak.
On March 19, 2002, 51 Senators wrote Chairman Conrad and
Ranking Member Domenici of the Senate Budget Committee to
request that $1.2 billion for Amtrak be included in the
transportation 400 function of the FY 2003 budget, recognizing
that no comparable national rail passenger system in the world
has succeeded without operating subsidies; and certainly no
system has ever succeeded without substantial public capital
investment. They point out in the letter points out that
funding for America's passenger railroad has barely been enough
to keep the system operating on a year-to-year basis, but it
has been insufficient to meet its longer-term public service
mission much less its capital needs. The letter concluded that
if Amtrak continues to be underfunded, it will ultimately
result in even greater costs to this country as the rail
passenger network deteriorates due to short-term budget
constraints.
The FY 2003 budget resolution (S. Con. Res. 100) reported by
the Senate Budget Committee on March 21, 2002, provides $1.2
billion for Amtrak for FY 2003.
RAILROAD REHABILITATION AND IMPROVEMENT FINANCING
Another major issue facing railroad development in the United
States is the maintenance and repair of existing track for both
passenger and freight railroad needs. The RRIF program
authorizes loans for the improvement of rail infrastructure.
Under the program, the Secretary may provide direct loans and
loan guarantees for terms up to 25 years to State and local
governments, government sponsored authorities and corporations,
railroads, and joint ventures that include at least one
railroad. These funds may be used: to acquire, improve, or
rehabilitate intermodal or rail equipment or facilities,
including track, components of track, bridges, yards,
buildings, and shops; to refinance existing debt incurred for
the previous purposes; and to develop and establish new
intermodal or railroad facilities. Since enactment of TEA-21,
there is a statutory cap of $3.5 billion for outstanding unpaid
principal at any point in time. Of this, $1 billion is reserved
for projects primarily benefiting short line and regional
railroads. The interest rate charged is that for Treasury
securities of comparable maturities.
The RRIF program was created in 1998 pursuant to TEA-21 as a
modification to the existing railroad infrastructure financing
program contained in title V of the Railroad Revitalization and
Regulatory Reform Act of 1976 (45 U.S.C. 821 et seq.) to bring
it in line with the Credit Reform Act of 1990. Since the RRIF
program's amendment in 1998, 23 applicants have sought RRIF
funds for 30 projects totaling $569.33 million, but to date,
only two loans have been approved totalling $110 million.
Neither of these approvals has resulted in an executed loan
agreement; therefore, no funds or guarantees have been
disbursed under the program. Critics of the current program
argue that unwieldy program requirements instituted by the
Administration have created insurmountable program impediments
and made the program unworkable. For instance, under the
existing requirements for the RRIF program, short lines are
required to fully collateralize the loan, causing the railroads
who tend to be smaller business entities not to have adequate
collateral to go to the bank to get a loan to cover the credit
risk premium. The credit risk premium is a cash payment
provided to DOT by a non-Federal ``infrastructure partner'' to
cover the estimated long-term cost to the Federal government of
a loan or loan guarantee, taking into consideration estimated
defaults, delinquencies, penalties, and prepayments. It must be
paid, pursuant to the Credit Reform Act of 1990, in advance of
funds being disbursed. The amount of the credit risk premium
required is determined by the specifics of the proposed
transaction and the risks of the undertaking. The pledging of
collateral lowers the required risk premium since the greater
the value of the collateral, the higher recovery rate in the
event of a default. In many instances, railroads cannot afford
the credit risk premium, and important infrastructure
improvements, many of which have public benefits, are not
accomplished. While some of the requirements of the program
reduce the risk to the Federal government, they may be
hindering the execution of the program and its purpose to
promote growth of railroad infrastructure and to help smaller
railroads access capital. Reforms to the existing program may
achieve both of these goals.
Many infrastructure upgrades are needed specifically for
improved passenger service. Currently, Amtrak has identified
$4.17 billion in infrastructure needs outside of the Northeast
Corridor to improve passenger service (including infrastructure
upgrades along high-speed corridors) in the following States:
Alabama, California, Florida, Illinois, Louisiana, Michigan,
Minnesota, Mississippi, New York, North Carolina, Ohio,
Oklahoma, Oregon, Pennsylvania, South Carolina, Texas,
Virginia, Washington, and Wisconsin. Financing through the RRIF
program could provide much-needed capital, as Amtrak, the
States and freight railroads work together to increase capacity
or track speeds, as needed, for these projects.
RRIF funds could also be used to address freight rail
capacity concerns, including relieving congestion in port and
urban areas. An example of one such project is the Alameda
Corridor project in California which was financed through a
Federal, State, and private partnership, including the use of
Federal loans provided through the DOT. This multi-year, $2.4
billion project involved infrastructure upgrades on rail right-
of-way from downtown Los Angeles to its port areas. Ninety
miles of railroad lines were consolidated to increase freight
capacity, eliminate over 200 railroad grade crossings, and
improve the movement of freight from the ports of Los Angeles
and Long Beach. The DOT Inspector General has cited this
project as one of several large projects that stand as examples
of good project management.
As the rail freight industry moves toward the use of rail
cars loaded to 286,000 pounds, many miles of track need to be
improved to handle the heavier loads, including track owned by
short lines and regional railroads. The short line industry has
approximately $7 billion in existing needs to bring their
50,000 miles of track up to ``286K standards.'' As identified
in a study by the consulting firm Zeta Tech in testimony before
the Senate Commerce, Science, and Transportation Committee last
year, there is strong public policy justification to keep this
50,000 miles of track from being disconnected from the national
rail network and enable all United States shippers to take
advantage of the efficiencies of heavier rail.
Summary of Major Provisions
S. 1991 provides a comprehensive approach to developing and
maintaining rail passenger service in the United States. The
bill's focus is on developing high-speed rail corridors, but at
the same time also provides funding to preserve long-distance
routes and ensures that we will continue to have a national
system connecting with high-speed corridors. Continuation of a
national system will provide service for those communities that
do not have the population densities to support air service and
the bill's funding will also help preserve Amtrak's valuable
assets, including the Northeast Corridor. Finally, S. 1991
addresses reform and control over Amtrak's financial accounting
and service-related management decisions.
Title I of S. 1991 authorizes $1.4 billion in emergency
spending for Amtrak's security and tunnel life safety needs.
Similar language was included in the Rail Security Act, S.
1550, which was favorably reported by the Committee on October
17, 2001. In that legislation, funds were authorized for
immediate rail security needs, such as hiring more police
officers across the entire Amtrak system and modernizing the
safety infrastructure of tunnels in New York, Baltimore, and
Washington. Title I of S. 1991 adjusts the funding amounts
provided by S. 1550 to reflect $105 million provided in the
Department of Defense and Emergency Supplemental Appropriations
for Recovery from and Response to Terrorist Attacks on the
United States Act, 2002 (P.L. 107-117), incorporates certain
additional measures, and requires that 50 percent of the funds
be spent outside of the NEC, and specifically authorizes how
such funds shall be expended where.
Title II of S. 1991 authorizes $1.55 billion annually for
high-speed rail corridor planning and development and builds on
the Swift Rail Development Act of 1994 to implement high-speed
rail service. The Swift Rail Development Act of 1994 provided
funds for planning, but it did not authorize funds for actual
development of high-speed rail infrastructure. These funds are
needed for infrastructure acquisition, highway-rail grade
crossing improvement/elimination, acquisition of rolling stock,
and track and signal improvements. The bill would permit, but
not require, any State contribution in order to receive Federal
funds, and preference would be given to projects having right-
of-way dedicated to rail passenger service, involving high-
speed passenger service of 125 mph (although operations of 90
mph speeds or more would be eligible for funding), and projects
connecting to other modes of passenger transportation,
including airports and bus terminals. The DOT would be directed
to conduct a rulemaking to provide for competitive bidding on
high-speed rail projects and the use of full funding grant
agreements for such projects.
Title III of S. 1991 fully funds Amtrak's current operational
and capital needs, including the capital backlog on the
Northeast Corridor, estimated by the DOT IG to be $5 billion.
This bill authorizes funds to enable Amtrak to eliminate its
capital backlog of projects, maintain ongoing projects to
capital infrastructure, and improve capacity to accommodate
projected growth in ridership. This title also repeals the
operating self-sufficiency requirements of the Amtrak Reform
and Accountability Act of 1997. It authorizes funding for
compliance with environmental standards and the ADA. This title
makes several changes to require Amtrak to operate more
efficiently, including: requiring Amtrak to develop a new, more
detailed financial accounting system; requiring Amtrak to
develop a new methodology to be used when preparing its route
profitability report; requiring Amtrak to prepare annually a
five-year financial plan, to be reviewed by the DOT Inspector
General, and submitted to Congress; and requiring Amtrak to
develop (through the use of an independent auditor) and adhere
to objective criteria to be used when making decisions
affecting levels of service.
Title IV of S. 1991 increases the aggregate unpaid principle
amount of obligations under the RRIF program from $3.5 billion
to $35 billion. This money will dramatically expand the current
Railroad Rehabilitation and Infrastructure Financing loan and
loan guarantee program. Since being revised in 1998 as part of
TEA-21 bill, the program has processed only a few loans because
of rigid program requirements and constraints. S. 1991 revises
the qualification procedures in place for the current program;
these revisions are designed to make it easier for applicants
to actually obtain the funds authorized for the program, and to
stimulate the construction and rehabilitation of our railroad
network.
Legislative History
Senator Hollings introduced S. 1991 on March 6, 2002. The
legislation was referred to the Committee. The bill was
originally co-sponsored by Senators Biden, Breaux, Carper,
Cleland, Clinton, Corzine, Durbin, Hutchison, Jeffords,
Kennedy, Kerry, Leahy, Mikulski, Rockefeller, Schumer, Stevens,
Torricelli, Reid, and Feinstein. Senators Baucus, Snowe,
Sarbanes, Boxer, Inouye, Specter, Dorgan, Burns, Lieberman,
Collins, Ben Nelson, Dodd, Chafee, and Cochran, were
subsequently added as co-sponsors.
On March 14, 2001, the Committee held a full Committee
hearing on S. 1991. Testimony was provided by Senators Joseph
R. Biden, Jr. (D-DE) and Thomas R. Carper (D-DE); Amtrak
President George D. Warrington; Deputy Secretary of
Transportation Michael P. Jackson; DOT Inspector General
Kenneth Mead; North Carolina Deputy Secretary of Transportation
David D. King; Charles Moneypenny, Transport Workers Union of
America; Gilbert Carmichael, Chairman, Amtrak Reform Council;
William J. Rennicke, Vice President, Mercer Management
Consulting; Edward Hamberger, President, Association of
American Railroads; and Marc Morial, Mayor of New Orleans,
Louisiana, and President of the United States Conference of
Mayors. Virginia Secretary of Transportation Whittington W.
Clement and others provided written statements for the record
for this hearing.
On April 18, 2002, the Committee ordered S. 1991 to be
reported favorably with an amendment in the nature of a
substitute, and eighteen amendments thereto. The substitute
amendment was offered by the Chairman and contained the
following changes: (i) it amended title I to reflect total
security needs of $515 million, 50 percent of which will be
dedicated to security requirements outside of the Northeast
Corridor; (ii) it amended title II to require a greater amount
of coordination at the State/regional level and ensure that the
high-speed rail project receiving Federal funds is recognized
in state- and region-wide transportation plans; (iii) it
amended title II to apply current Amtrak Buy America
requirements (49 U.S.C. 24305(f)) to any entity receiving funds
for high-speed rail operation, and to provide that persons
conducting high-speed rail operations funded under the Act are
deemed rail carriers and subject to the Railway Labor Act, the
Railroad Retirement Act, and other applicable railroad laws;
(iv) it amended title II to ensure that this legislation will
not affect the level of any labor protections currently in
place throughout the industry; (v) it amended title III to
require that Amtrak apply any net revenues from non-passenger
operations into maintaining sufficient working capital; (vi) it
amended title III to require a greater amount of fiscal
accountability by Amtrak, providing for new financial
accounting methods to be developed and implemented, and
requiring Amtrak to develop a 5-year financial plan annually,
to be reviewed by the DOT Inspector General and reported to
Congress; and (vii) it amended title III to require that Amtrak
be operated as a national system, and that, aside from
mandatory contributions to the Railroad Retirement Trust
Account and expenditures for Northeast Corridor tunnel life
safety needs, amounts appropriated to Amtrak under title III
(if less than the full amount authorized) must be spent in the
same proportions as authorized.
Nine amendments by Senator John McCain were adopted en bloc
by voice vote. These modifications include technical
corrections; require that high-speed rail projects be covered
by full funding grant agreements; give the Secretary of
Transportation the flexibility to be represented on the Board
by his or her designee; require that a new methodology be
developed for the preparation of Amtrak's route profitability
report; require that Amtrak remain subject to the D.C.
Corporations Act; and further refine the bill's provisions
aimed at making Amtrak's financial accounting more transparent.
Two amendments offered at the executive session by Senator
McCain were defeated. The first would have required the
creation of an Amtrak Control Board to monitor and control
financial and management decisions made by Amtrak. The second
would have required Amtrak to obtain permission from the
Secretary of Transportation before assuming any additional
debt.
Two additional amendments offered by Senator McCain were
adopted, with modifications. The first amendment requires that
all high-speed rail services be competitively bid. Based on
discussions at the executive session, the amendment has been
modified to clarify that rail operators would be subject to the
Railway Labor Act and other applicable railroad laws and that a
State or group of States, as a condition of receiving funding,
has provided for competitive bidding for the project in
accordance with the Uniform Administrative Requirements for
Grants and Cooperative Agreements to State and Local
Governments. The second amendment would have lowered the
maximum Federal share for high-speed rail projects from 100
percent of project costs to 80 percent of project costs. Based
on discussions at the executive session, the amendment has been
modified to clarify that States may voluntarily contribute,
although they would not be required to contribute, to the cost
of these projects.
The Committee adopted three amendments by Senator Gordon
Smith: one requiring Amtrak to evaluate security needs at
stations it serves but does not own (incorporated in section
105), another clarifying that nothing in this legislation will
affect Amtrak's ability to pursue additional long-distance
service (incorporated in section 301), and a third which adds
Portland, OR, as a priority location for receipt of high-speed
corridor planning and implementation assistance in sections 202
and 203.
Senators Byron L. Dorgan and John D. Rockefeller, IV offered
an amendment which permits entities other than railroads to be
eligible for funds under the Railroad Rehabilitation and
Improvement Financing loan program, incorporated in section
401. The amendment was approved by the committee by voice vote.
Senator Ron Wyden offered two amendments: one which applies
Federal conflict of interest standards to Amtrak Board members
and officers (section 309), and one which requires Amtrak,
through the use of an independent auditor selected by the DOT
Inspector General, to develop objective criteria for use in
decisions affecting levels of service (section 314). These
amendments were approved by the committee by voice vote.
An amendment offered by Senator Bill Nelson adds Orlando, FL,
as a priority location for receipt of high-speed corridor
planning and implementation assistance in sections 202 and 203.
The amendment was approved by the committee by voice vote.
Estimated Costs
In compliance with subsection (a)(3) of paragraph 11 of rule
XXVI of the Standing Rules of the Senate, the Committee states
that, in its opinion, it is necessary to dispense with the
requirements of paragraphs (1) and (2) of that subsection in
order to expedite the business of the Senate.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
S. 1991 authorizes funding to be administered by the DOT.
Although this funding will not result in any additional
regulatory or reporting requirements for businesses or
individuals, efforts will be required to ensure that this
funding is being used in accordance with Federal requirements.
The legislation will have no further effect on the number or
types of individuals and businesses regulated, the economic
impact of such regulation, the personal privacy of affected
individuals, or the paperwork required from such individuals
and businesses.
number of persons covered
S. 1991 is intended to develop and maintain rail passenger
service in the United States. The number of persons covered
should be, in addition to current levels of individuals
affected, those affected by development of new high-speed rail
corridors, including rail construction and rail operations
industries.
economic impact
S. 1991 is intended to develop new rail passenger
infrastructure and services, as well as maintain existing
levels of long-distance passenger train and corridor service.
It should have a beneficial impact on the economy of the United
States.
privacy
S. 1991 will not have an adverse effect on the personal
privacy of any individuals that will be impacted by this
legislation.
paperwork
S. 1991 does not create any new reporting requirements, and
any impact on paperwork will be consistent with current levels.
While the legislation does require the production of some
reports, the total impact on paperwork should not be
significant.
Section-by-section Analysis
SEC. 1. SHORT TITLE.
This Act may be cited as the ``National Defense Rail Act.''
SEC. 2. FINDINGS.
This section cites findings by Congress concerning rail
passenger service in the United States.
Title I--Rail Transportation Security
SEC. 101. AMTRAK SECURITY ASSISTANCE.
This section would authorize approximately $515 million for
Amtrak security. Slightly over 50 percent of these funds must
be spent outside of the Northeast Corridor. These funds are to
be used as follows:
$417 million for infrastructure security,
including the protection of tunnels, bridges,
interlockings, towers on the Northeast Corridor,
electric traction facilities on the Northeast Corridor,
equipment, yard, and terminal facilities, mail and
express facilities, and stations. These funds would be
used for surveillance cameras, lighting, fencing,
vehicle barriers, incident tracking systems, passenger
information retrieval systems, incident command
systems, train location and tracking systems, incident
notification systems, mail and express tracking and
tender software development, bomb-resistant trash
containers, and employee identification systems.
$37 million for equipment security,
including crew communications devices, mobile emergency
command and communications units, radioactive material
detectors, bomb detectors, express package screeners,
secure locking devices on mail and express cars, video
surveillance systems on head-end units, upgrades of
radio repeaters, high-rail vehicle rescue equipment,
and remote-based emergency shut-off units for
locomotives.
$61 million for system-wide security
operations, including hiring and training additional
security and patrol officers, intelligence-gathering
specialists, canine-assisted bomb-detection teams,
leased vehicles, expansion of Amtrak's aviation unit,
application investigation expenses, rapid response team
equipment, and infrastructure security inspectors.
The amounts appropriated shall remain available until
expended. This section would also forbid employers from using
security cameras for employee discipline or monitoring purposes
unrelated to security.
SEC. 102. STUDY OF FOREIGN RAIL TRANSPORT SECURITY PROGRAMS.
This section requires the Comptroller General to conduct a
survey of rail security programs in several foreign countries.
The survey would identify effective measures and then assess
the feasibility of implementing those measures in the United
States.
SEC. 103. PASSENGER, BAGGAGE, AND CARGO SCREENING.
This section would require the Secretary of Transportation to
conduct a study and report on the cost and feasibility of
requiring security screening for all passengers, baggage, and
mail, express and other cargo on Amtrak trains. It would also
require the Secretary to conduct a pilot program of random
passenger security screening at 5 of Amtrak's 10 busiest
stations and at up to 5 additional stations selected by the
Secretary.
SEC. 104. RAIL SECURITY.
This section would clarify that the Secretary of
Transportation has the authority to issue regulations and
orders governing railroad ``security'' in addition to safety.
The section would permit railroad officers, under regulations
issued by the Secretary, to enforce laws on the property of
other railroads. Current law only allows railroad police to
enforce laws protecting their own employer's operations.
This section would also require within 180 days of enactment,
the Secretary, in consultation with the Federal Railroad
Administration's Rail Safety Advisory Committee, and the
Transportation Research Board of the National Academy of
Sciences, to review existing rail regulations of the DOT and
identify potential revisions to improve rail safety and
security.
SEC. 105. RAIL TRANSPORTATION SECURITY RISK ASSESSMENT.
This section would direct the Secretary of Transportation to
assess the security risks associated with rail transportation
by developing prioritized recommendations for: (1) improving
the security of rail tunnels, rail bridges, rail switching
areas, stations serviced but not owned by Amtrak, and other
areas identified by the Secretary as posing significant rail-
related risks to public safety and the movement of interstate
commerce; (2) deploying chemical and biological weapon
detection equipment; (3) dealing with the immediate and long-
term economic impact of measures that may be required to
address those risks; and (4) training employees in terrorism
response activities. The assessment must take into account any
actions already taken to address security issues by both public
and private entities, and it must include an analysis of the
risks to public safety and security that are associated with
long delays in the movement of trains stopped at highway-rail
grade crossings.
While preparing the assessment, the Secretary would be
directed to consult with rail management, rail labor, public
safety officials, the Federal Railroad Administration's
Railroad Safety Advisory Committee, and the Transportation
Research Board of the National Academy of Sciences. This
section would require a final report on the assessment to be
submitted to the Committee and the House Committee on
Transportation and Infrastructure within 180 days after the
bill's enactment. The Secretary would be able to submit the
report in both classified and redacted formats.
The section would require that the report include prioritized
recommendations and proposals for providing Federal financial,
technological, or research and development assistance to
railroads to improve security and reduce the likelihood of
crime or terrorist attacks. The Secretary would also be
required to conduct a study of the security and safety
improvements that may be needed at stations served but not
owned by Amtrak. Within 180 days after the date of enactment,
the Secretary would be required to submit a report to the
Congress on the number of stations served but not owned by
Amtrak, the estimated costs of security and station
enhancements, and any additional recommendations the Secretary
deems appropriate. This section would authorize $5 million for
carrying out these assessments.
SEC. 106. OFFSET FOR EMERGENCY SUPPLEMENTAL APPROPRIATIONS.
This section would require that any amounts authorized by
this title be reduced by the amounts appropriated under the
Department of Defense and Emergency Supplemental Appropriations
for Recovery from and Response to Terrorist Attacks on the
United States Act, 2002 (P.L. 107-117), once they are used by
Amtrak. These amounts are included in title I of this Act
because it is not clear where they will be spent.
Title II--Interstate Railroad Passenger High-speed Transportation
System
SEC. 201. INTERSTATE RAILROAD PASSENGER HIGH-SPEED TRANSPORTATION
POLICY.
This section would require completion of a national high-
speed ground transportation policy, as required by 49 U.S.C.
309(e)(1). The amended completion date would be December 31,
2002.
SEC. 202. HIGH-SPEED RAIL CORRIDOR PLANNING.
This section would provide further authority to the Secretary
of Transportation to provide planning assistance in the form of
direct assistance, or financial assistance to entities
promoting the development of designated high-speed rail
corridors. It would further allow for up to a 100 percent
Federal subsidy of those planning costs (no State match
required), and give preference to projects undertaken in
Chicago, IL, Atlanta, GA, Dallas, TX, Orlando, FL, and
Portland, OR.
This section also would add to the criteria used by the
Secretary to allocate planning funds. In addition to current
criteria, the bill directs the Secretary to consider the extent
to which the planning involves a project with dedicated rail
passenger service rights-of-way and designed to reach sustained
speeds of 125 miles per hour or greater. However, any project
involving rail passenger systems capable of reaching sustained
speeds of 90 miles per hour or more would be eligible for
funding under this chapter. Finally, this section would allow
for financial assistance to take the form of loans and loan
guarantees, in addition to other funding mechanisms.
Finally, this section would also specify that persons
conducting rail operations funded under the Act will be deemed
rail carriers and be subject to the Railway Labor Act and other
applicable railroad laws.
SEC. 203. IMPLEMENTATION ASSISTANCE.
This section would create a separate scheme for providing
assistance, either direct technical assistance or financial
assistance, to aid implementation of high-speed corridor plans.
The Secretary of Transportation would create procedures for on-
the-record approval of applicants receiving assistance for
these projects. The section would further allow for up to 100
percent Federal funding of those implementation costs (no State
match required). Projects undertaken in Chicago, IL, Atlanta,
GA, Dallas, TX, Tampa-Orlando, FL, and Portland, OR, would
receive preference under this section.
This section requires the Secretary of Transportation to set
aside an appropriate amount of funds to provide assistance to
any State which does not have physical access to the general
system of railroad transportation in the continental United
States, Alaska, and Hawaii, or to any State which has unique
geographical characteristics or on the basis of other relevant
considerations as determined by the Secretary.
This section would allow use of these funds for security
planning, operating expenses, infrastructure acquisition,
highway-rail grade-crossing improvements and eliminations, and
acquisition of right-of-way, locomotives, rolling stock, track,
and signal equipment. In selecting recipients of assistance,
the Secretary is to encourage the use of positive train control
technologies, give preference to projects that have
particularly high levels of safety, encourage intermodal
passenger connectivity transportation, and ensure there will
exist a regional balance in the provision of assistance so as
to avoid the concentration of disproportionate assistance in
one single project or region of the country. The Secretary is
also to ensure that the project is compatible with State and
regional transportation plans developed under title 23, United
States Code.
The section would specify that any persons conducting rail
operations funded under the Act will be deemed rail carriers
and be subject to the Railway Labor Act and other applicable
railroad laws.
This section would require a recipient of funds under this
section to comply with domestic buying preference, or ``Buy
America,'' standards. These standards require that, for any
purchase over $1,000,000, unmanufactured articles be purchased
in the United States, and manufactured articles be purchased
only if substantially made from articles, material, and
supplies mined, produced, or manufactured in the United States.
Exceptions would exist for instances where the Secretary finds
that costs would be unreasonable, the articles are not
reasonably available, or it would be inconsistent with the
public interest.
This section would require the Secretary to initiate a rule-
making within 90 days after enactment to create an application
and qualification process on providing funding assistance. This
process would provide guidance as to when and whether a project
is eligible for implementation assistance under this section,
rather than planning assistance.
This section would also require the Secretary to initiate a
rule-making to create procedures for the awarding of
implementation assistance under this section. These procedures
must include steps for application and qualification,
competitive bidding requirements, and the use of a full-funding
grant agreement between the government and the applicant.
SEC. 204. DESIGNATED HIGH-SPEED RAIL CORRIDORS.
This section would identify in statute law existing
designated high-speed rail corridors, add a new Southwest
Corridor from Los Angeles, CA, to Las Vegas, NV, and extend the
currently designated Southeast Corridor to Charleston, SC,
Savannah, GA, and other points.
SEC. 205. LABOR STANDARDS.
This section would clarify that nothing in this Act will
affect the level of employee protection provided to freight
rail, Amtrak, or mass transit employees as existed on the day
before the date of enactment of this Act. This section would
also require that any project financed in whole or in part by
funds authorized by this title be conducted in a manner that
provides for fair labor standards, including the payment of
prevailing wages (per 40 U.S.C. 276a et. seq., the Davis-Bacon
Act) and the allowance of collective bargaining over wage
rates. The section would also require that employees affected
by high-speed rail projects be entitled to labor protection at
least as protective as arrangements reached under section 141
of the ARAA (49 U.S.C. 24706 nt).
SEC. 206. RAILWAY-HIGHWAY CROSSINGS IN HIGH-SPEED RAIL CORRIDORS.
This section would reserve a minimum of $150 million of the
corridor implementation funds for the improvement or
elimination of highway-rail grade crossings in high-speed
corridors. This funding would be available under conditions
similar to current grade crossing elimination/improvement
programs identified in section 130 of title 23, United States
Code, and would be coordinated with such current programs. This
section also directs the Secretary to give priority to
eliminating, rather than upgrading, grade crossings along high-
speed rail routes.
SEC. 207. AUTHORIZATION OF APPROPRIATIONS.
This section would authorize annual funding through FY 2007
for high-speed rail corridors as follows:
$25 million for corridor planning purposes.
$1.5 billion for implementation purposes.
$25 million for research and development
purposes.
These funds would remain available until expended, and could
not be used for projects on the Northeast Corridor, so long as
the NEC receives separate Federal funds for capital and
operating expenses.
Title III--National Railroad Passenger Corporation
SEC. 301. NATIONAL RAILROAD PASSENGER TRANSPORTATION SYSTEM DEFINED.
This section would statutorily designate the national rail
passenger transportation system. The system would consist of
the Northeast Corridor, high-speed rail corridors designated by
the Secretary of Transportation (after they have been improved
to permit operation of high-speed service), long-distance
routes of 750 miles or more currently operated by Amtrak, and
short distance routes currently operated by Amtrak.
This section would also allow Amtrak to enter into contracts
with State or local entities to provide service in routes not
currently included in the national system. Such service could
be discontinued upon the termination or expiration, or
cessation of funding, of Amtrak's contract to operate such
services.
This section would further clarify that nothing in this Act
is intended to preclude Amtrak from restoring, improving, or
developing non-high-speed intercity rail passenger service.
SEC. 302. AMTRAK AUTHORIZATIONS.
This section would repeal the operating self-sufficiency
requirements imposed by the Amtrak Reform and Accountability
Act of 1997 (ARAA). Second, it would eliminate the ARAA
requirement for Amtrak to redeem all common stock for fair
market value by October 1, 2002. Third, this section would
authorize Amtrak to obtain lease arrangement services from the
Administrator of General Services. Fourth, this section would
help clarify Amtrak's right to bring claims under the False
Claims Act.
SEC. 303. ADDITIONAL AMTRAK AUTHORIZATIONS.
This section contains several 5-year funding authorizations.
First, this section would authorize appropriations as needed by
Amtrak for the amount it must pay in excess mandatory
contributions to the Railroad Retirement Trust Account (RRTA)
under section 3221 of the Internal Revenue Code of 1986.
Second, this section would authorize payments on debt service,
including both principal and interest, totaling $1.334 billion
over the five year period. Third, this section would authorize
$30 million annually for compliance with environmental
requirements, one third of which must be spent on the Northeast
Corridor. Fourth, this section would authorize $43 million
annually for facilities improvements in order to comply with
the ADA, of which $10 million would have to be spent on the NEC
and $33 million outside of the NEC. Under this section, Amtrak
would further be given a postponement to the compliance date of
the ADA if the Secretary of Transportation finds that Amtrak
has made substantial progress towards meeting the ADA's
requirements despite insufficient appropriations of funds. If
the Secretary makes such a finding, Amtrak would be provided a
reasonable time to complete construction of improvements after
sufficient funds have been appropriated to enable Amtrak to
comply with ADA requirements. Finally, this section would
require Amtrak to apply net revenues from non-passenger
operations to the railroad's working capital to satisfy current
liabilities. Once Amtrak's working capital has improved to the
point that Amtrak's liquid assets are sufficient to satisfy
short-term liabilities, excess net non-passenger revenues are
to be invested in high priority capital projects.
SEC. 304. NORTHEAST CORRIDOR AUTHORIZATIONS.
This section would authorize an average of $1.3 billion
annually plus a one-time authorization of $895 million for
tunnel life-safety projects for FYs 2003 through 2007 for
infrastructure improvements on the Northeast Corridor:
$370 million to address the capital backlog
and bring the infrastructure up to a state-of-good-
repair, including renewal of South End electric
traction system and improvements on bridges, tunnels,
and interlockings.
$60 million for the capital backlogs on
fleet infrastructure.
$40 million for the capital backlog on
stations and facilities, including improvements to Penn
Station and maintenance of way facilities.
$350 million for ongoing capital
infrastructure improvements, including replacement of
assets on a life-cycle basis to ensure a state-of-good
repair is maintained and current service requirements
can be met.
$40 million for ongoing capital fleet
investment to sustain regularly scheduled maintenance.
$30 million for ongoing capital improvements
to stations and facilities.
$20 million for ongoing technology upgrades
of reservation, distribution, financial, and operating
systems.
$895 million to complete New York tunnel
life-safety projects and to rehabilitate tunnels in
Washington, D.C. and Baltimore, Maryland.
$3 million for the preliminary design of
options for a new tunnel on a different alignment to
augment the capacity of the existing Baltimore tunnels,
such sums to remain available until expended.
$200 million for corridor growth investments
in FY 2003.
$300 million for corridor growth investments
in FY 2004.
$400 million for corridor growth investments
in FY 2005.
$500 million for corridor growth investments
in FY 2006.
$600 million for corridor growth investments
in FY 2007.
This section would authorize the Secretary to obtain
financial contributions (on projects involving life-safety
improvements), from other rail carriers who use the Northeast
Corridor. All funds authorized under this section would remain
available until fully expended.
Under this section, Amtrak would be required to invest net
revenues from core passenger operations in the Northeast
Corridor into capital needs in the Northeast Corridor until
such time as the backlog of capital needs is eliminated.
SEC. 305. LONG DISTANCE TRAINS.
This section would authorize $580 million annually for each
of FYs 2003 through 2007 for Amtrak's long-distance passenger
train service, as follows:
$360 million for operating costs associated
with long-distance train service.
$70 million for capital backlog
improvements, to bring the existing fleet into a state
of good repair to meet current service commitments.
$80 million for ongoing capital
infrastructure improvements to replace assets on a
life-cycle basis, ensure a good state of repair for
equipment, meet current service commitments, and allow
certain funds to be used for investment in non-Amtrak-
Owned right-of-way, and other railroad-owned
infrastructure, and to permit continued Amtrak
operations.
$50 million for ongoing capital fleet needs
to meet a regularly scheduled maintenance, including
preventative maintenance.
$10 million for ongoing capital improvements
to stations and facilities to provide regular upgrades
to meet current service needs, and regular improvements
to maintenance-of-way equipment and facilities.
$10 million for ongoing technology upgrades
to reservation, distribution, financial, and operating
systems.
SEC. 306. SHORT-DISTANCE TRAINS; STATE-SUPPORTED ROUTES.
This section would authorize $270 million annually in each of
FYs 2003 through 2007 for Amtrak's short-distance (less than
750-mile) corridor routes outside of the Northeast Corridor, as
follows:
$20 million for needed capital improvements
on infrastructure such as improvements on bridges,
tunnels, interlockings and signal systems.
$10 million for the capital backlog on fleet
capital improvements.
$170 million for ongoing capital
infrastructure improvements to replace assets on a
life-cycle basis, ensure a good state of repair for
equipment, meet current service commitments, and allow
certain funds to be used for investment in non-Amtrak-
Owned right-of-way, and other railroad-owned
infrastructure, and to permit continued Amtrak
operations.
$40 million for ongoing capital fleet needs
to meet a regularly scheduled maintenance, including
preventative maintenance.
$10 million for ongoing capital improvements
to stations and facilities to provide regular upgrades
to meet current service needs, and regular improvements
to maintenance-of-way equipment and facilities.
$20 million for ongoing technology upgrades
to reservation, distribution, financial, and operating
systems.
SEC. 307. RE-ESTABLISHMENT OF NORTHEAST CORRIDOR SAFETY COMMITTEE.
This section would reauthorize the Northeast Corridor Safety
Committee, which is administered by the DOT and consists of
users of the Northeast Corridor.
SEC. 308. ON-TIME PERFORMANCE.
This section would allow Amtrak to request that the Surface
Transportation Board (STB) investigate recurring delay problems
when on-time performance on any of its trains falls below 80
percent over a consecutive 3-month period. The STB would
investigate whether and to what extent the delays are due to
causes that could be addressed by freight carriers using the
track or commuter authorities. The STB then would be able to
make recommendations regarding reasonable measures which could
be taken to improve the on-time performance of such train.
SEC. 309. AMTRAK BOARD OF DIRECTORS.
This section would authorize the appointment of a new Board
of Directors for Amtrak. The Board would be made up of the
President of Amtrak, the Secretary of Transportation (who may
be represented at Board meetings by the Secretary's designee),
and 7 presidential appointees with experience in the railroad,
travel, or hospitality industry. Each appointment would be for
a term of 5 years. No more than 4 appointees may be from the
same political party. This section would further provide for
the compensation of such board members at a rate of not more
than $300 per day when performing board duties and reimburse
board members for necessary travel, subsistence, and staff
support reimbursements.
This section would require vacancies on the board to be
filled within 120 days in the same way as original
appointments, except that in such case, the appointee may only
serve until the end of the original term. This section would
further allow for the board to adopt bylaws and make the
effective date of all of these changes October 1, 2003.
This section would apply Federal executive branch employee
conflict of interest standards to Amtrak officers and members
of the Amtrak Board of Directors while in office.
SEC. 310. ESTABLISHMENT OF FINANCIAL ACCOUNTING SYSTEM FOR AMTRAK
OPERATIONS BY INDEPENDENT AUDITOR.
This section would require Amtrak to employ an independent
financial consultant to assess its financial accounting and
reporting system and practices. Based on the results of that
assessment, the consultant would design and implement a modern
financial accounting and reporting system capable of producing
accurate and timely financial information in sufficient detail
to enable Amtrak to appropriately assign revenues and expenses
to each of Amtrak's lines of business activity (cost centers).
At a minimum, the system should be able to segregate the
expenses and revenues related to infrastructure from those
attributable to train operations. It should also be able to
identify expenses and revenues associated with the major
functions within each business group, including train
operations, equipment maintenance, ticketing, and reservations.
The Inspector General would review the system and report to
Congress. This section further would authorize $2.5 million for
FY 2003 for this one-time initiative.
SEC. 311. DEVELOPMENT OF A 5-YEAR FINANCIAL PLAN AND BUDGET FOR AMTRAK
OPERATIONS BY INDEPENDENT AUDITOR.
This section would require Amtrak to develop a 5-year
financial plan that includes a detailed budget for the first
year and financial plans for the subsequent four years. The 5-
year plan would contain:
All projected revenues and expenditures for
Amtrak, including governmental funding sources.
Projected ridership levels for all Amtrak
passenger operations.
Revenue and expenditure forecasts for non-
passenger operations.
Capital funding requirements and
expenditures necessary to maintain passenger service
which will accommodate predicted ridership levels and
predicted sources of capital funding.
Operations funding needs, if any, to
maintain current and projected levels of passenger
service, including State-supported routes and predicted
funding sources.
An assessment of the continuing financial
stability of Amtrak, as indicated by factors such as:
the ability of the Federal government to adequately
meet capital and operating requirements, Amtrak's
access to long-term and short-term capital markets,
Amtrak's ability to efficiently manage its workforce,
and Amtrak's ability to effectively provide passenger
train service.
Lump sum expenditures of $10 million or more
and sources of funding.
Estimates of long-term and short-term debt
(both outstanding and anticipated).
Annual cash flow forecasts.
A statement describing methods of estimation
and significant assumptions.
This section would require Amtrak to apply sound budgetary
practices, and, when available, use the categories specified in
the financial accounting and reporting system developed under
Section 310 in preparing its 5-year financial plan.
Under this section, Amtrak would be required to submit its 5-
year financial plan to the Secretary of Transportation and the
DOT Inspector General no later than the first day of each
fiscal year, or within 60 days of enactment of an appropriation
act for the fiscal year, if later. The IG would be required to
assess the financial plans and report to the appropriate
Congressional authorizing and appropriating committees.
SEC. 312. REVISED REPORTING METHODOLOGY REQUIRED.
This section would require Amtrak, in consultation with the
Amtrak Comptroller General, to develop a revised reporting
methodology for use in preparing annual operations reports
(more commonly known as the Route Profitability System report)
required by 49 U.S.C. 24315(a), beginning with FY 2002. The new
methodology will specifically exclude non-core profits in
calculating the financial performance of Amtrak trains.
SEC. 313. APPROPRIATED AMOUNTS TO BE SPENT PROPORTIONATELY.
This section would require that, if Amtrak is appropriated a
sum less than the total amount authorized in this Act, then,
after first allocating the full amount for mandatory excess
Railroad Retirement Trust Account contributions, the remainder,
excluding amounts authorized for Northeast Corridor tunnel life
safety needs and Northeast Corridor growth in sections 304(b)
and (d) of this Act, shall be spent in direct proportion to the
remaining authorizations in this Act.
SEC. 314. INDEPENDENT AUDITOR TO ESTABLISH CRITERIA FOR AMTRAK ROUTE
AND SERVICE PLANNING DECISIONS.
This section would require the DOT Inspector General (IG) to
contract with an independent auditor to establish objective
criteria for determining appropriate changes in Amtrak service,
including establishing new routes, eliminating existing routes,
and contracting or expanding existing services. The IG would
review the criteria developed and, if approved, transmit them
to the Amtrak Board of Directors. The Amtrak Board of Directors
would be required to incorporate the criteria in its route and
service planning and decision-making process, as well as its
financial plans and budgets. If Amtrak makes a decision
regarding a change in service which does not comport with the
established decision-making criteria, the Amtrak Board of
Directors would be required to notify the appropriate
Congressional authorizing committees at least 30 days in
advance of such change.
Title IV--Miscellaneous
SEC. 401. REHABILITATION, IMPROVEMENT, AND SECURITY FINANCING.
This section would increase the aggregate unpaid principle
amount of obligations allowed under the RRIF program from $3.5
billion to $35 billion in the form of loans or loan guarantee
coverage for infrastructure rehabilitation, improvement and
security enhancements. A minimum of $7 billion would be set
aside for projects benefiting short line and regional
railroads. This section would require the Secretary to provide
guidance on conditions of assistance, procedures for requesting
and approving assistance, and substantive approval criteria for
receipt of assistance. An estimated 10 percent of the credit
risk premium is estimated at $350 million annually to cover the
Federal costs to issue loan guarantees. The Secretary would be
prohibited from limiting the amount of available loans or loan
guarantees that may be dedicated to a single project. The
section would also specify that a cohort may include a loan or
loan guarantee. The Secretary would also be prohibited from
requiring any applicants to provide collateral, and could not
require that the applicant have previously sought and been
denied financial assistance from another source. The Secretary
would be required to approve or disapprove applications for
RRIF funding within 180 days after an application is filed.
Within 30 days after enactment, the Secretary would be required
to publish the criteria and standards to be used in determining
whether to approve an application. The section would also
provide that persons conducting rail operations funded with
RRIF loans or loan guarantees would be deemed rail carriers and
subject to all applicable railroad laws. Entities other than
railroad companies would be eligible to receive assistance
under this section.
SEC. 402. RAIL PASSENGER COOPERATIVE RESEARCH PROGRAM.
This section would require the Secretary of Transportation to
establish a cooperative research program which conducts
research on rail passenger issues. It would further require the
Secretary to establish an advisory board made up of the rail
passenger community and other interested parties which makes
recommendations concerning rail passenger research issues.
Finally, this section would authorize funding of $5 million for
grants to the National Academy of Sciences to carry our
research in conjunction with the cooperative research program.
SEC. 403. CONFORMING AMENDMENTS TO TITLE 49 REFLECTING ICC TERMINATION
ACT.
This section makes technical amendments in title 49, United
States Code, acknowledging the supplanting of duties of the
Interstate Commerce Commission by the Surface Transportation
Board.
SEC. 404. APPLICABILITY OF REVERSION TO ALASKA RAILROAD RIGHT-OF-WAY
PROPERTY.
This section would serve as a technical amendment to allow
the Alaska Railroad to swap property with landowners along its
existing right-of-way. This would result in allowing Alaska
Railroad to pursue the straightening of its route, which will
remedy safety concerns and allow for the safer and more
efficient movement of passengers and freight. Nothing in this
Act is intended to supersede section 608(a) of the Alaska
Railroad Transfer Act of 1982 (45 U.S.C. 1207(a)).
Rollcall Votes in Committee
In accordance with paragraph 7(c) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following description of the record votes during its
consideration of S. 1991:
Senator McCain offered an amendment to provide for the
establishment of an Amtrak Control Board, and for other
purposes, to the amendment (in the nature of a substitute)
offered by Senator Hollings. By rollcall vote of 5 yeas and 18
nays as follows, the amendment was defeated:
YEAS--5 NAYS--18
Mr. McCain Mr. Hollings
Mr. Brownback Mr. Inouye\1\
Mr. Fitzgerald Mr. Rockefeller
Mr. Ensign Mr. Kerry\1\
Mr. Allen Mr. Breaux
Mr. Dorgan
Mr. Wyden
Mr. Cleland\1\
Mrs. Boxer
Mr. Edwards\1\
Mrs. Carnahan\1\
Mr. Nelson
Mr. Stevens\1\
Mr. Burns
Mr. Lott
Mrs. Hutchison
Ms. Snowe
Mr. Smith
\1\By proxy
Senator McCain offered an amendment to require the approval
of the Secretary of Transportation in order for Amtrak to
assume additional debt to the amendment (in the nature of a
substitute) offered by Senator Hollings. By rollcall vote of 10
yeas and 13 nays as follows, the amendment was defeated:
YEAS--10 NAYS--13
Mr. McCain Mr. Hollings
Mr. Stevens\1\ Mr. Inouye\1\
Mr. Burns Mr. Rockefeller
Mr. Lott Mr. Kerry\1\
Mrs. Hutchison Mr. Breaux
Mr. Brownback Mr. Dorgan
Mr. Smith Mr. Wyden
Mr. Fitzgerald Mr. Cleland\1\
Mr. Ensign\1\ Mrs. Boxer
Mr. Allen Mr. Edwards\1\
Mrs. Carnahan\1\
Mr. Nelson
Ms. Snowe
\1\By proxy
By rollcall vote of 20 yeas and 3 nays as follows, the bill
was ordered reported with an amendment in the nature of a
substitute:
YEAS--20 NAYS--3
Mr. Hollings Mr. McCain
Mr. Inouye\1\ Mr. Brownback
Mr. Rockefeller Mr. Ensign
Mr. Kerry\1\
Mr. Breaux
Mr. Dorgan
Mr. Wyden
Mr. Cleland\1\
Mrs. Boxer\1\
Mr. Edwards\1\
Mrs. Carnahan\1\
Mr. Nelson
Mr. Stevens\1\
Mr. Burns
Mr. Lott
Mrs. Hutchison
Ms. Snowe\1\
Mr. Smith
Mr. Fitzgerald
Mr. Allen\1\
\1\By proxy
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the Standing
Rules of the Senate, changes in existing law made by the bill,
as reported, are shown as follows (existing law proposed to be
omitted is enclosed in black brackets, new material is printed
in italic, existing law in which no change is proposed is shown
in roman):
AMTRAK REFORM AND ACCOUNTABILITY ACT OF 1997
[SEC. 204. SUNSET TRIGGER.
[49 U.S.C. 24101 nt]
[(a) In general.--If at any time more than 2 years after the
date of enactment of this Act and implementation of the
financial plan referred to in section 24104(d) of title 49,
United States Code, as amended by section 201 of this Act, the
Amtrak Reform Council finds that--
[(1) Amtrak's business performance will prevent it
from meeting the financial goals set forth in section
24104(d) of title 49, United States Code, as amended by
section 201 of this Act; or
[(2) Amtrak will require operating grant funds after
the fifth anniversary of the date of enactment of this
Act, then the Council shall immediately notify the
President, the Committee on Commerce, Science, and
Transportation of the United States Senate, and the
Committee on Transportation and Infrastructure of the
United States House of Representatives.
[(b) Factors considered.--In making a finding under
subsection (a), the Council shall take into account--
[(1) Amtrak's performance;
[(2) the findings of the independent assessment
conducted under section 202;
[(3) the level of Federal funds made available for
carrying out the financial plan referred to in section
24104(d) of title 49, United States Code, as amended by
section 201 of this Act; and
[(4) Acts of God, national emergencies, and other
events beyond the reasonable control of Amtrak.
[(c) Action plan.--Within 90 days after the Council makes a
finding under subsection (a)--
[(1) it shall develop and submit to the Congress an
action plan for a restructured and rationalized
national intercity rail passenger system; and
[(2) Amtrak shall develop and submit to the Congress
an action plan for the complete liquidation of Amtrak,
after having the plan reviewed by the Inspector General
of the Department of Transportation and the General
Accounting Office for accuracy and reasonableness.
[SEC. 205. SENATE PROCEDURE FOR CONSIDERATION OF RESTRUCTURING AND
LIQUIDATION PLANS.
[(a) In general.--If, within 90 days (not counting any day on
which either House is not in session) after a restructuring
plan is submitted to the House of Representatives and the
Senate by the Amtrak Reform Council under section 204 of this
Act, an implementing Act with respect to a restructuring plan
(without regard to whether it is the plan submitted) has not
been passed by the Congress, then a liquidation disapproval
resolution shall be introduced in the Senate by the Majority
Leader of the Senate, for himself and the Minority Leader of
the Senate, or by Members of the Senate designated by the
Majority Leader and Minority Leader of the Senate. The
liquidation disapproval resolution shall be held at the desk at
the request of the Presiding Officer.
[(b) Consideration in the Senate.--
[(1) Referral and reporting.--A liquidation
disapproval resolution introduced in the Senate shall
be placed directly and immediately on the Calendar.
[(2) Implementing resolution from House.--When the
Senate receives from the House of Representatives a
liquidation disapproval resolution, the resolution
shall not be referred to committee and shall be placed
on the Calendar.
[(3) Consideration of single liquidation disapproval
resolution.--After the Senate has proceeded to the
consideration of a liquidation disapproval resolution
under this subsection, then no other liquidation
disapproval resolution originating in that same House
shall be subject to the procedures set forth in this
section.
[(4) Amendments.--No amendment to the resolution is
in order except an amendment that is relevant to
liquidation of Amtrak. Consideration of the resolution
for amendment shall not exceed one hour excluding time
for recorded votes and quorum calls. No amendment shall
be subject to further amendment, except for perfecting
amendments.
[(5) Motion nondebatable.--A motion to proceed to
consideration of a liquidation disapproval resolution
under this subsection shall not be debatable. It shall
not be in order to move to reconsider the vote by which
the motion to proceed was adopted or rejected, although
subsequent motions to proceed may be made under this
paragraph.
[(6) Limit on consideration.--
[(A) After no more than 20 hours of
consideration of a liquidation disapproval
resolution, the Senate shall proceed, without
intervening action or debate (except as
permitted under paragraph (9)), to vote on the
final disposition thereof to the exclusion of
all amendments not then pending and to the
exclusion of all motions, except a motion to
reconsider or table.
[(B) The time for debate on the liquidation
disapproval resolution shall be equally divided
between the Majority Leader and the Minority
Leader or their designees.
[(7) Debate of amendments.--Debate on any amendment
to a liquidation disapproval resolution shall be
limited to one hour, equally divided and controlled by
the Senator proposing the amendment and the majority
manager, unless the majority manager is in favor of the
amendment, in which case the minority manager shall be
in control of the time in opposition.
[(8) No motion to recommit.--A motion to recommit a
liquidation disapproval resolution shall not be in
order.
[(9) Disposition of Senate resolution.--If the Senate
has read for the third time a liquidation disapproval
resolution that originated in the Senate, then it shall
be in order at any time thereafter to move to proceed
to the consideration of a liquidation disapproval
resolution for the same special message received from
the House of Representatives and placed on the Calendar
pursuant to paragraph (2), strike all after the
enacting clause, substitute the text of the Senate
liquidation disapproval resolution, agree to the Senate
amendment, and vote on final disposition of the House
liquidation disapproval resolution, all without any
intervening action or debate.
[(10) Consideration of House message.--Consideration
in the Senate of all motions, amendments, or appeals
necessary to dispose of a message from the House of
Representatives on a liquidation disapproval resolution
shall be limited to not more than 4 hours. Debate on
each motion or amendment shall be limited to 30
minutes. Debate on any appeal or point of order that is
submitted in connection with the disposition of the
House message shall be limited to 20 minutes. Any time
for debate shall be equally divided and controlled by
the proponent and the majority manager, unless the
majority manager is a proponent of the motion,
amendment, appeal, or point of order, in which case the
minority manager shall be in control of the time in
opposition.
[(c) Consideration in conference.--
[(1) Convening of conference.--In the case of
disagreement between the two Houses of Congress with
respect to a liquidation disapproval resolution passed
by both Houses, conferees should be promptly appointed
and a conference promptly convened, if necessary.
[(2) Senate consideration.--Consideration in the
Senate of the conference report and any amendments in
disagreement on a liquidation disapproval resolution
shall be limited to not more than 4 hours equally
divided and controlled by the Majority Leader and the
Minority Leader or their designees. A motion to
recommit the conference report is not in order.
[(d) Definitions.--For purposes of this section--
[(1) Liquidation disapproval resolution.--The term
'liquidation disapproval resolution' means only a
resolution of either House of Congress which is
introduced as provided in subsection (a) with respect
to the liquidation of Amtrak.
[(2) Restructuring plan.--The term 'restructuring
plan' means a plan to provide for a restructured and
rationalized national intercity rail passenger
transportation system.
[(e) Rules of Senate.--This section is enacted by the
Congress--
[(1) as an exercise of the rulemaking power of the
Senate, and as such they are deemed a part of the rules
of the Senate, but applicable only with respect to the
procedure to be followed in the Senate in the case of a
liquidation disapproval resolution; and they supersede
other rules only to the extent that they are
inconsistent therewith; and
[(2) with full recognition of the constitutional
right of the Senate to change the rules (so far as
relating to the procedure of the Senate) at any time,
in the same manner and to the same extent as in the
case of any other rule of the Senate.]
* * * * * * *
SEC. 415. FINANCIAL POWERS.
[49 U.S.C. 24304 nt]
(a) Capitalization.--(1) Section 24304 is amended to read as
follows:
``Sec. 24304. EMPLOYEE STOCK OWNERSHIP PLANS
``In issuing stock pursuant to applicable corporate law,
Amtrak is encouraged to include employee stock ownership
plans.''.
``(2) The item relating to section 24304 in the table of
sections of chapter 243 is amended to read as follows:
``24304. Employee stock ownerhsip plans.''.
[(b) Redemption of common stock.--Amtrak shall, before
October 1, 2002, redeem all common stock previously issued, for
the fair market value of such stock.]
(c) Elimination of liquidation preference and voting rights
of preferred stock.--
(1)(A) Preferred stock of Amtrak held by the
Secretary of Transportation shall confer no liquidation
preference.
(B) Subparagraph (A) shall take effect 90 days after
the date of the enactment of this Act.
(2)(A) Preferred stock of Amtrak held by the
Secretary of Transportation shall confer no voting
rights.
(B) Subparagraph (A) shall take effect 60 days after
the date of the enactment of this Act.
(d) Status and Applicable Laws.--(1) Section 24301(a)(3) is
amended by inserting ``, and shall not be subject to title 31''
after ``United States Government''.
(2) Section 9101(2) of title 31, United States Code, relating
to Government corporations, is amended by striking subparagraph
(A) and redesignating subparagraphs (B) through (L) as
subparagraphs (A) through (K), respectively.
(3) This section does not affect the applicability of section
3729 of title 31, United States Code, to claims made against
Amtrak.
* * * * * * *
RAILROAD REVITALIZATION AND REGULATORY REFORM ACT OF 1976
SEC. 102. DEFINITIONS.
[45 U.S.C. 802]
As used in this Act, unless the context otherwise indicates,
the term--
(1) ``Association'' means the United States Railway
Association;
(2) ``Commission'' means the Interstate Commerce
Commission;
(3) ``Corporation'' means the Consolidated Rail
Corporation;
(4) ``final system plan'' means the final system plan
and any additions thereto adopted by the Association
pursuant to the Regional Rail Reorganization Act of
1973 (45 U.S.C. 701 et seq.);
(5) ``includes'' and variants thereof should be read
as if the phrase ``but is not limited to'' were also
set forth;
(6) ``Office'' means the Rail Services Planning
Office of the Commission;
[(7) ``railroad'' means a rail carrier subject to
part A of subtitle IV of title 49, United States Code,
and includes the National Railroad Passenger
Corporation; and]
(7) ``railroad'' has the meaning given that term in
section 20102 of title 49, United States Code; and
(8) ``Secretary'' means the Secretary of
Transportation or his designated representative.
SEC. 502. DIRECT LOANS AND LOAN GUARANTEES.
[45 U.S.C. 822]
(a) General authority.--The [Secretary may provide direct
loans and loan guarantees to State and local governments,]
Secretary shall provide direct loans and loan guarantees to
State and local governments, interstate compacts entered into
under section 410 of the Amtrak Reform and Accountability Act
of 1997 (49 U.S.C 24101 nt), government sponsored authorities
and corporations, railroads, and joint ventures that include at
least 1 railroad.
(b) Eligible purposes.--
(1) In general.--Direct loans and loan guarantees
under this section shall be used to--
(A) acquire, improve, or rehabilitate
intermodal or rail equipment or facilities,
including track, components of track, bridges,
yards, buildings, and shops;
(B) refinance outstanding debt incurred for
the purposes described in subparagraph (A);
[or]
(C) to acquire, improve, or rehabilitate rail
safety and security equipment and facilities;
or
[(C)] (D) develop or establish new intermodal
or railroad facilities.
(2) Operating expenses not eligible.--Direct loans
and loan guarantees under this section shall not be
used for railroad operating expenses.
(c) Priority projects.--In granting applications for direct
loans or guaranteed loans under this section, the Secretary
shall give priority to projects that--
(1) enhance public safety;
(2) enhance the environment;
(3) promote economic development;
(4) enable United States companies to be more
competitive in international markets;
(5) are endorsed by the plans prepared under section
135 of title 23, United States Code, by the State or
States in which they are located; or
(6) preserve or enhance rail or intermodal service to
small communities or rural areas.
(d) Extent of authority.--The aggregate unpaid principal
amounts of obligations under direct loans and loan guarantees
made under this section shall not exceed [$3,500,000,000]
$35,000,000,000 at any one time. Of this amount, not less than
[$1,000,000,000] $7,000,000,000 shall be available solely for
projects primarily benefiting freight railroads other than
Class I carriers. The Secretary shall not establish any limit
on the proportion of the unused amount authorized under this
subsection that may be used for 1 loan or loan guarantee.
(e) Rates of iterest.--
(1) Direct loans.--The Secretary shall require
interest to be paid on a direct loan made under this
section at a rate not less than that necessary to
recover the cost of making the loan.
(2) Loan guarantees.--The Secretary shall not make a
loan guarantee under this section if the interest rate
for the loan exceeds that which the Secretary
determines to be reasonable, taking into consideration
the prevailing interest rates and customary fees
incurred under similar obligations in the private
capital market.
(f) Infrastructure partners.--
(1) Authority of Secretary.--In lieu of or in
combination with appropriations of budget authority to
cover the costs of direct loans and loan guarantees as
required under section 504(b)(1) of the Federal Credit
Reform Act of 1990, the Secretary may accept on behalf
of an applicant for assistance under this section a
commitment from a non-Federal source to fund in whole
or in part credit risk premiums with respect to the
loan that is the subject of the application. In no
event shall the aggregate of appropriations of budget
authority and credit risk premiums described in this
paragraph with respect to a direct loan or loan
guarantee be less than the cost of that direct loan or
loan guarantee.
(2) Credit risk premium amount.--The Secretary shall
determine the amount required for credit risk premiums
under this subsection on the basis of--
(A) the circumstances of the applicant,
including the amount of collateral [offered;]
offered, if any;
(B) the proposed schedule of loan
disbursements;
(C) historical data on the repayment history
of similar borrowers;
(D) consultation with the Congressional
Budget Office; [and]
(E) the size and characteristics of the
cohort of which the loan or loan guarantee is a
member; and
[(E)] (F) any other factors the Secretary
considers relevant.
(3) Payment of premiums.--Credit risk premiums under
this subsection shall be paid to the Secretary before
the disbursement of loan amounts.
(4) Cohorts of loans.--In order to maintain
sufficient balances of credit risk premiums to
adequately protect the Federal Government from risk of
default, while minimizing the length of time the
Government retains possession of those balances, the
Secretary shall establish cohorts of loans. When all
obligations attached to a cohort of loans have been
satisfied, credit risk premiums paid for the cohort,
and interest accrued thereon, which were not used to
mitigate losses shall be returned to the original
source on a pro rata basis. A cohort may include loans
and loan guarantees. The Secretary shall not establish
any limit on the proportion of a cohort that may be
used for 1 loan or loan guarantee.
(g) Prerequisites for assistance.--The Secretary shall not
make a direct loan or loan guarantee under this section unless
the Secretary has made a finding in writing that--
(1) repayment of the obligation is required to be
made within a term of not more than 25 years from the
date of its execution;
(2) the direct loan or loan guarantee is justified by
the present and probable future demand for rail
services or intermodal facilities;
(3) the applicant has given reasonable assurances
that the facilities or equipment to be acquired,
rehabilitated, improved, developed, or established with
the proceeds of the obligation will be economically and
efficiently utilized;
(4) the obligation can reasonably be repaid, using an
appropriate combination of credit risk premiums and
collateral offered by the applicant to protect the
Federal Government; and
(5) the purposes of the direct loan or loan guarantee
are consistent with subsection (b).
(h) Conditions of assistance.--(1) The Secretary shall,
before granting assistance under this section, require the
applicant to agree to such terms and conditions as are
sufficient, in the judgment of the Secretary, to ensure that,
as long as any principal or interest is due and payable on such
obligation, the applicant, and any railroad or railroad partner
for whose benefit the assistance is intended--
[(1)] (A) will not use any funds or assets from
railroad or intermodal operations for purposes not
related to such operations, if such use would impair
the ability of the applicant, railroad, or railroad
partner to provide rail or intermodal services in an
efficient and economic manner, or would adversely
affect the ability of the applicant, railroad, or
railroad partner to perform any obligation entered into
by the applicant under this section;
[(2)] (B) will, consistent with its capital
resources, maintain its capital program, equipment,
facilities, and operations on a continuing basis; and
[(3)] (C) will not make any discretionary dividend
payments that unreasonably conflict with the purposes
stated.
(2) The Secretary shall not require an applicant for a direct
loan or loan guarantee under this section to provide
collateral.
(3) The Secretary shall not require that an applicant for a
direct loan or loan guarantee under this section have
previously sought the financial assistance requested from
another source.
(4) The Secretary shall require recipients of direct loans or
loan guarantees under this section to apply the standards of
section 22301(b) and (c) of title 49, United States Code, to
their projects.
(i) Time Limit for Approval or Disapproval.--Not later than
180 days after receiving a complete application for a direct
loan or loan guarantee under this section, the Secretary shall
approve or disapprove the application.
(j) Operators Deemed Rail Carriers.--A person that conducts
rail operations funded or otherwise receiving assistance under
this section is deemed to be a rail carrier for purposes of
part A of subtitle IV of title 49, United States Code, when so
operating or performing such services.
(k) Loan and Loan Guarantees for Non-Railroad Entities.--
Nothwithstanding any other provision of law, entities other
than rail companies shall be eligible for loans and loan
guarantees under this section.
SEC. 503. ADMINISTRATION OF DIRECT LOANS AND LOAN GUARANTEES.
[45 U.S.C. 823]
(a) Applications.--The Secretary shall prescribe the form and
contents required of applications for assistance under section
502, to enable the Secretary to determine the eligibility of
the applicant's proposal, and shall establish terms and
conditions for direct loans and loan guarantees made under that
section.
(b) Full faith and credit.--All guarantees entered into by
the Secretary under section 502 shall constitute general
obligations of the United States of America backed by the full
faith and credit of the United States of America.
(c) Assignment of loan guarantees.--The holder of a loan
guarantee made under section 502 may assign the loan guarantee
in whole or in part, subject to such requirements as the
Secretary may prescribe.
(d) Modifications.--The Secretary may approve the
modification of any term or condition of a direct loan, loan
guarantee, direct loan obligation, or loan guarantee
commitment, including the rate of interest, time of payment of
interest or principal, or security requirements, if the
Secretary finds in writing that--
(1) the modification is equitable and is in the
overall best interests of the United States; and
(2) consent has been obtained from the applicant and,
in the case of a loan guarantee or loan guarantee
commitment, the holder of the obligation.
(e) Compliance.--The Secretary shall assure compliance, by an
applicant, any other party to the loan, and any railroad or
railroad partner for whose benefit assistance is intended, with
the provisions of this title , regulations issued hereunder,
and the terms and conditions of the direct loan or loan
guarantee, including through regular periodic inspections.
(f) Commercial validity.--For purposes of claims by any party
other than the Secretary, a loan guarantee or loan guarantee
commitment shall be conclusive evidence that the underlying
obligation is in compliance with the provisions of this title,
and that such obligation has been approved and is legal as to
principal, interest, and other terms. Such a guarantee or
commitment shall be valid and incontestable in the hands of a
holder thereof, including the original lender or any other
holder, as of the date when the Secretary granted the
application therefor, except as to fraud or material
misrepresentation by such holder.
(g) Default.--The Secretary shall prescribe regulations
setting forth procedures in the event of default on a loan made
or guaranteed under section 502. The Secretary shall ensure
that each loan guarantee made under that section contains terms
and conditions that provide that--
(1) if a payment of principal or interest under the
loan is in default for more than 30 days, the Secretary
shall pay to the holder of the obligation, or the
holder's agent, the amount of unpaid guaranteed
interest;
(2) if the default has continued for more than 90
days, the Secretary shall pay to the holder of the
obligation, or the holder's agent, 90 percent of the
unpaid guaranteed principal;
(3) after final resolution of the default, through
liquidation or otherwise, the Secretary shall pay to
the holder of the obligation, or the holder's agent,
any remaining amounts guaranteed but which were not
recovered through the default's resolution;
(4) the Secretary shall not be required to make any
payment under paragraphs (1) through (3) if the
Secretary finds, before the expiration of the periods
described in such paragraphs, that the default has been
remedied; and
(5) the holder of the obligation shall not receive
payment or be entitled to retain payment in a total
amount which, together with all other recoveries
(including any recovery based upon a security interest
in equipment or facilities) exceeds the actual loss of
such holder.
(h) Rights of the Secretary.--
(1) Subrogation.--If the Secretary makes payment to a
holder, or a holder's agent, under subsection (g) in
connection with a loan guarantee made under section
502, the Secretary shall be subrogated to all of the
rights of the holder with respect to the obligor under
the loan.
(2) Disposition of property.--The Secretary may
complete, recondition, reconstruct, renovate, repair,
maintain, operate, charter, rent, sell, or otherwise
dispose of any property or other interests obtained
pursuant to this section. The Secretary shall not be
subject to any Federal or State regulatory requirements
when carrying out this paragraph.
(i) Action against obligor.--The Secretary may bring a civil
action in an appropriate Federal court in the name of the
United States in the event of a default on a direct loan made
under section 502, or in the name of the United States or of
the holder of the obligation in the event of a default on a
loan guaranteed under section 502. The holder of a guarantee
shall make available to the Secretary all records and evidence
necessary to prosecute the civil action. The Secretary may
accept property in full or partial satisfaction of any sums
owed as a result of a default. If the Secretary receives,
through the sale or other disposition of such property, an
amount greater than the aggregate of--
(1) the amount paid to the holder of a guarantee
under subsection (g) of this section; and
(2) any other cost to the United States of remedying
the default, the Secretary shall pay such excess to the
obligor.
(j) Breach of conditions.--The Attorney General shall
commence a civil action in an appropriate Federal court to
enjoin any activity which the Secretary finds is in violation
of this title, regulations issued hereunder, or any conditions
which were duly agreed to, and to secure any other appropriate
relief.
(k) Attachment.--No attachment or execution may be issued
against the Secretary, or any property in the control of the
Secretary, prior to the entry of final judgment to such effect
in any State, Federal, or other court. Funds received by the
Secretary under the preceding sentence shall be credited to the
appropriation from which the expenses of making such
appraisals, determinations, and findings were incurred.
(l) Investigation charge.--The Secretary may charge and
collect from each applicant a reasonable charge for appraisal
of the value of the equipment or facilities for which the
direct loan or loan guarantee is sought, and for making
necessary determinations and findings. Such charge shall not
aggregate more than one-half of 1 percent of the principal
amount of the obligation. in subsection (b).
(m) Fees and Charges.--Except as provided in this title, the
Secretary may not assess any fees, including user fees, or
charges in connection with a direct loan or loan guarantee
provided under section 502.
* * * * * * *
ALASKA RAILROAD TRANSFER ACT OF 1982
SEC. 610. REVERSION.
[45 U.S.C. 1209]
(a) Reversion of payment to Federal government for conversion
to use preventing State-owned railroad from continuing to
operate.--If, within ten years after the date of transfer to
the State authorized by section 604 of this title, the
Secretary finds that all or part of the real property
transferred to the State under this title, except that portion
of real property which lies within the boundaries of the Denali
National Park and Preserve, is converted to a use that would
prevent the State-owned railroad from continuing to operate,
that real property (including permanent improvements to the
property) shall revert to the United States Government, or (at
the option of the State) the State shall pay to the United
States Government an amount determined to be the fair market
value of that property at the time its conversion prevents
continued operation of the railroad.
(b) Reversion upon discontinuance by State of use of any land
within right-of-way; criteria for discontinuance.--(1) If,
after the date of transfer pursuant to section 604 of this
title, the State discontinues use of any land within the right-
of-way, the State's interest in such land shall revert to the
United States. The State shall be considered to have
discontinued use within the meaning of this subsection and
subsection (d) of this section when:
[(1)] (A) the Governor of the State of Alaska
delivers to the Secretary of the Interior a notice of
such discontinuance, including a legal description of
the property subject to the notice, and a quitclaim
deed thereto; or
[(2)] (B) the State has made no use of the land for a
continuous period of eighteen years for transportation,
communication, or transmission purposes. Notice of such
discontinuance shall promptly be published in the
Federal Register by the Secretary, the Secretary of the
Interior, or the Secretary of Agriculture, and
reversion shall be effected one year after such notice,
unless within such one-year period the State brings an
appropriate action in the United States District Court
for the District of Alaska to establish that the use
has been continuing without an eighteen-year lapse. Any
such action shall have the effect of staying reversion
until exhaustion of appellate review from the final
judgment in that action or termination of the right to
seek such review, whichever first occurs.
(2)(A) The State-owned railroad may convey all right, title,
and interest of the State in any land within the right-of-way
to a third party in exchange for other land that, in
substitution for the land conveyed, is to be utilized as part
of the right-of-way if the continuity of the right-of-way
corridor for transportation, communications, and transmission
purposes is provided by such use of the substituted land.
(B) The provisions of this section that require reversion
shall apply to the substituted land, as of the effective date
of the exchange of that land in a transaction authorized by
subparagraph (A), as fully as if the substituted land had been
rail properties of the Alaska Railroad as of January 13, 1983.
(C) Upon the conveyance of land in a transaction authorized
by subparagraph (A), any reversionary interest in the land
under this section shall terminate.
(c) Conveyances by United States subsequent to reversion.--
Upon such reversion pursuant to subsection (b) of this section,
the Secretary of the Interior shall immediately convey by
patent to abutting landowners all right, title and interest of
the United States. Where land abutting the reverted right-of-
way is owned by different persons or entities, the conveyance
made pursuant to this subsection shall extend the property of
each abutting owner to the centerline of the right-of-way.
(d) Discontinuance by State of use of national park or forest
lands; jurisdiction upon reversion.--If use is discontinued (as
that term is used in subsection (b) of this section) of all or
part of those properties of the Alaska Railroad transferred to
the State pursuant to this title which lie within the
boundaries of the Denali National Park and Preserve or the
Chugach National Forest, such properties or part thereof
(including permanent improvements to the property) shall revert
to the United States and shall not be subject to subsection (c)
of this section. Upon such reversion, jurisdiction over that
property shall be transferred to the Secretary of the Interior
or the Secretary of Agriculture, as appropriate, for
administration as part of the Denali National Park and Preserve
or the Chugach National Forest.
(e) Payment into Treasury of United States of excess proceeds
from sale or transfer of all or substantially all of State-
owned railroad; limitation.--Except as provided in subsections
(a) through (d) of this section, if, within five years after
the date of transfer to the State pursuant to section 604 of
this title, the State sells or transfers all or substantially
all of the State-owned railroad to an entity other than an
instrumentality of the State, the proceeds from the sale or
transfer that exceed the cost of any rehabilitation and
improvement made by the State for the State-owned railroad and
any net liabilities incurred by the State for the State-owned
railroad shall be paid into the general fund of the Treasury of
the United States.
(f) Enforcement by Attorney General.--The Attorney General,
upon the request of the Secretary, the Secretary of the
Interior, or the Secretary of Agriculture, shall institute
appropriate proceedings to enforce this section in the United
States District Court for the District of Alaska.
TITLE 49. TRANSPORTATION
SUBTITLE I. DEPARTMENT OF TRANSPORTATION
CHAPTER 3. GENERAL DUTIES AND POWERS
SUBCHAPTER I. DUTIES OF THE SECRETARY OF TRANSPORTATION
Sec. 307. Safety information and intervention in [Interstate Commerce
Commission] Surface Transportation Board
proceedings
(a) The Secretary of Transportation shall inspect promptly
the safety compliance record in the Department of
Transportation of each person applying to the [Interstate
Commerce Commission] Surface Transportation Board for authority
to provide transportation or freight forwarder service. The
Secretary shall report the findings of the inspection to the
[Commission.] Board.
(b) When the Secretary is not satisfied with the safety
record of a person applying for permanent authority to provide
transportation or freight forwarder service, or for approval of
a proposed transfer of permanent authority, the Secretary shall
intervene and present evidence of the fitness of the person to
the [Commission] Board in its proceedings.
(c) When requested by the [Commission,] Board, the Secretary
shall--
(1) provide the [Commission] Board with a complete
report on the safety compliance of a carrier providing
transportation or freight forwarder service subject to
its jurisdiction;
(2) provide promptly a statement of the safety record
of a person applying to the [Commission] Board for
temporary authority to provide transportation;
(3) intervene and present evidence in a proceeding in
which a finding of fitness is required; and
(4) make additional safety compliance surveys and
inspections the [Commission] Board decides are
desirable to allow it to act on an application or to
make a finding on the fitness of a carrier.
* * * * * * *
Sec. 309. High-speed ground transportation
(a) The Secretary of Transportation, in consultation with the
Secretaries of Commerce, Energy, and Defense, the Administrator
of the Environmental Protection Agency, the Assistant Secretary
of the Army for Public Works, and the heads of other interested
agencies, shall lead and coordinate Federal efforts in the
research and development of high-speed ground transportation
technologies in order to foster the implementation of magnetic
levitation and high-speed steel wheel on rail transportation
systems as alternatives to existing transportation systems.
(b)(1) The Secretary may award contracts and grants for
demonstrations to determine the contributions that high-speed
ground transportation could make to more efficient, safe, and
economical intercity transportation systems. Such
demonstrations shall be designed to measure and evaluate such
factors as the public response to new equipment, higher speeds,
variations in fares, improved comfort and convenience, and more
frequent service. In connection with grants and contracts for
demonstrations under this section, the Secretary shall provide
for financial participation by private industry to the maximum
extent practicable.
(2)(A) In connection with the authority provided under
paragraph (1), there is established a national high-speed
ground transportation technology demonstration program, which
shall be separate from the national magnetic levitation
prototype development program established under section 1036(b)
of the Intermodal Surface Transportation Efficiency Act of 1991
and shall be managed by the Secretary of Transportation.
(B)(i) Any eligible applicant may submit to the Secretary a
proposal for demonstration of any advancement in a high-speed
ground transportation technology or technologies to be
incorporated as a component, subsystem, or system in any
revenue service high-speed ground transportation project or
system under construction or in operation at the time the
application is made.
(ii) Grants or contracts shall be awarded only to eligible
applicants showing demonstrable benefit to the research and
development, design, construction, or ultimate operation of any
maglev technology or high-speed steel wheel on rail technology.
Criteria to be considered in evaluating the suitability of a
proposal under this paragraph shall include--
(I) feasibility of guideway or track design and
construction;
(II) safety and reliability;
(III) impact on the environment in comparison to
other high-speed ground transportation technologies;
(IV) minimization of land use;
(V) effect on human factors related to high-speed
ground transportation;
(VI) energy and power consumption and cost;
(VII) integration of high-speed ground transportation
systems with other modes of transportation;
(VIII) actual and projected ridership; and
(IX) design of signaling, communications, and control
systems.
(C) For the purposes of this paragraph, the term ``eligible
applicant'' means any United States private business, State
government, local government, organization of State or local
government, or any combination thereof. The term does not
include any business owned in whole or in part by the Federal
Government.
(D) The amount and distribution of grants or contracts made
under this paragraph shall be determined by the Secretary. No
grant or contract may be awarded under this paragraph to
demonstrate a technology to be incorporated into a project or
system located in a State that prohibits under State law the
expenditure of non-Federal public funds or revenues on the
construction or operation of such project or system.
(E) Recipients of grants or contracts made pursuant to this
paragraph shall agree to submit a report to the Secretary
detailing the results and benefits of the technology
demonstration proposed, as required by the Secretary.
(c)(1) In carrying out the responsibilities of the Secretary
under this section, the Secretary is authorized to enter into 1
or more cooperative research and development agreements (as
defined by section 12 of the Stevenson-Wydler Technology
Innovation Act of 1980 (15 U.S.C. 3710a)), and 1 or more
funding agreements (as defined by section 201(b) of title 35,
United States Code), with United States companies for the
purpose of--
(A) conducting research to overcome technical and
other barriers to the development and construction of
practicable high-speed ground transportation systems
and to help advance the basic generic technologies
needed for these systems; and
(B) transferring the research and basic generic
technologies described in subparagraph (A) to industry
in order to help create a viable commercial high-speed
ground transportation industry within the United
States.
(2) In a cooperative agreement or funding agreement under
paragraph (1), the Secretary may agree to provide not more than
80 percent of the cost of any project under the agreement. Not
less than 5 percent of the non-Federal entity's share of the
cost of any such project shall be paid in cash.
(3) The research, development, or utilization of any
technology pursuant to a cooperative agreement under paragraph
(1), including the terms under which such technology may be
licensed and the resulting royalties may be distributed, shall
be subject to the provisions of the Stevenson-Wydler Technology
Innovation Act of 1980 (15 U.S.C. 3701 et seq.).
(4) The research, development, or utilization of any
technology pursuant to a funding agreement under paragraph (1),
including the determination of all licensing and ownership
rights, shall be subject to the provisions of chapter 18 of
title 35, United States Code.
(5) At the conclusion of fiscal year 1993 and again at the
conclusion of fiscal year 1996, the Secretary shall submit
reports to Congress regarding research and technology transfer
activities conducted pursuant to the authorization contained in
paragraph (1).
(d)(1) Not later than June 1, 1995, the Secretary shall
complete and submit to Congress a study of the commercial
feasibility of constructing 1 or more high-speed ground
transportation systems in the United States. Such study shall
consist of--
(A) an economic and financial analysis;
(B) a technical assessment; and
(C) recommendations for model legislation for State
and local governments to facilitate construction of
high-speed ground transportation systems.
(2) The economic and financial analysis referred to in
paragraph (1)(A) shall include--
(A) an examination of the potential market for a
nationwide high-speed ground transportation network,
including a national magnetic levitation ground
transportation system;
(B) an examination of the potential markets for
short-haul high-speed ground transportation systems and
for intercity and long-haul high-speed ground
transportation systems, including an assessment of--
(i) the current transportation practices and
trends in each market; and
(ii) the extent to which high-speed ground
transportation systems would relieve the
current or anticipated congestion on other
modes of transportation;
(C) projections of the costs of designing,
constructing, and operating high-speed ground
transportation systems, the extent to which such
systems can recover their costs (including capital
costs), and the alternative methods available for
private and public financing;
(D) the availability of rights-of-way to serve each
market, including the extent to which average and
maximum speeds would be limited by the curvature of
existing rights-of-way and the prospect of increasing
speeds through the acquisition of additional rights-of-
way without significant relocation of residential,
commercial, or industrial facilities;
(E) a comparison of the projected costs of the
various competing high-speed ground transportation
technologies;
(F) recommendations for funding mechanisms, tax
incentives, liability provisions, and changes in
statutes and regulations necessary to facilitate the
development of individual high-speed ground
transportation systems and the completion of a
nationwide high-speed ground transportation network;
(G) an examination of the effect of the construction
and operation of high-speed ground transportation
systems on regional employment and economic growth;
(H) recommendations for the roles appropriate for
local, regional, and State governments to facilitate
construction of high-speed ground transportation
systems, including the roles of regional economic
development authorities;
(I) an assessment of the potential for a high-speed
ground transportation technology export market;
(J) recommendations regarding the coordination and
centralization of Federal efforts relating to high-
speed ground transportation;
(K) an examination of the role of the National
Railroad Passenger Corporation in the development and
operation of high-speed ground transportation systems;
and
(L) any other economic or financial analyses the
Secretary considers important for carrying out this
section.
(3) The technical assessment referred to in paragraph (1)(B)
shall include--
(A) an examination of the various technologies
developed for use in the transportation of passengers
by high-speed ground transportation, including a
comparison of the safety (including dangers associated
with grade crossings), energy efficiency, operational
efficiencies, and environmental impacts of each system;
(B) an examination of the potential role of a United
States designed maglev system, developed as a prototype
under section 1036(b) of the Intermodal Surface
Transportation Efficiency Act of 1991, in relation to
the implementation of other high-speed ground
transportation technologies and the national
transportation system;
(C) an examination of the work being done to
establish safety standards for high-speed ground
transportation as a result of the enactment of section
7 of the Rail Safety Improvement Act of 1988;
(D) an examination of the need to establish
appropriate technological, quality, and environmental
standards for high-speed ground transportation systems;
(E) an examination of the significant unresolved
technical issues surrounding the design, engineering,
construction, and operation of high-speed ground
transportation systems, including the potential for the
use of existing rights-of-way;
(F) an examination of the effects on air quality,
energy consumption, noise, land use, health, and safety
as a result of the decreases in traffic volume on other
modes of transportation that are expected to result
from the full-scale development of high-speed ground
transportation systems; and
(G) any other technical assessments the Secretary
considers important for carrying out this section.
(e)(1) [Within 12 months after the submission of the study
required by subsection (d),] No later than December 31, 2002,
the Secretary shall establish the national high-speed ground
transportation policy (hereinafter in this section referred to
as the ``Policy'').
(2) The Policy shall include--
(A) provisions to promote the design, construction,
and operation of high-speed ground transportation
systems in the United States;
(B) a determination whether the various competing
high-speed ground transportation technologies can be
effectively integrated into a national network and, if
not, whether 1 or more such technologies should receive
preferential encouragement from the Federal Government
to enable the development of such a national network;
(C) a strategy for prioritizing the markets and
corridors in which the construction of high-speed
ground transportation systems should be encouraged; and
(D) provisions designed to promote American
competitiveness in the market for high-speed ground
transportation technologies.
(3) The Secretary shall solicit comments from the public in
the development of the Policy and may consult with other
Federal agencies as appropriate in drafting the Policy.
* * * * * * *
SUBCHAPTER II. ADMINISTRATIVE
Sec. 333. Responsibility for rail transportation unification and
coordination projects
(a) The Secretary of Transportation may develop and make
available to interested persons any plans, proposals, and
recommendations for mergers, consolidations, reorganizations,
and other unification or coordination projects for rail
transportation (including arrangements for joint use of tracks
and other facilities and acquisition or sale of assets) that
the Secretary believes will result in a rail system that is
more efficient and consistent with the public interest.
(b) To achieve a more efficient, economical, and viable rail
system in the private sector, the Secretary, when requested by
a rail carrier and under this section, may assist in planning,
negotiating, and carrying out a unification or coordination of
operations and facilities of at least 2 rail carriers.
(c)(1) The Secretary may conduct studies to determine the
potential cost savings and possible improvements in the quality
of rail transportation that are likely to result from
unification or coordination of at least 2 rail carriers,
through--
(A) elimination of duplicating or overlapping
operations and facilities;
(B) reducing switching operations;
(C) using the shortest or more efficient and
economical routes;
(D) exchanging trackage rights;
(E) combining trackage and terminal or other
facilities;
(F) upgrading tracks and other facilities used by at
least 2 rail carriers;
(G) reducing administrative and other expenses; and
(H) other measures likely to reduce costs and improve
rail transportation.
(2) When the Secretary requests information for a study under
this section, a rail carrier shall provide the information
requested. In carrying out this section, the Secretary may
designate an officer or employee to get from a rail carrier
information on the kind, quality, origin, destination,
consignor, consignee, and routing of property. This information
may be obtained without the consent of the consignor or
consignee notwithstanding section 11904 of this title. When
appropriate, the designated officer or employee has the powers
described in section 203(c) of the Regional Rail Reorganization
Act of 1973 to carry out this section, but a subpena must be
issued under the signature of the Secretary.
(d)(1) When requested by a rail carrier, the Secretary may
hold conferences on and mediate disputes resulting from a
proposed unification or coordination project. The Secretary may
invite to a conference--
(A) officers and directors of an affected rail
carrier;
(B) representatives of rail carrier employees who may
be affected;
(C) representatives of the [Interstate Commerce
Commission;] Surfrace Transportation Board;
(D) State and local government officials, shippers,
and consumer representatives; and
(E) representatives of the Federal Trade Commission
and the Attorney General.
(2) A person attending or represented at a conference on a
proposed unification or coordination project is not liable
under the antitrust laws of the United States for any
discussion at the conference and for any agreements reached at
the conference, that are entered into with the approval of the
Secretary to achieve or determine a plan of action to carry out
the unification or coordination project.
(e) When the approval of a proposal submitted by a rail
carrier for a merger or other action is subject to the
jurisdiction of the [Interstate Commerce Commission] Surface
Transportation Board under section 11323(a) of this title, the
Secretary may study the proposal to decide whether it satisfies
section 11324(b) of this title. When the proposal is the
subject of an application and proceeding before the
[Commission,] Board, the Secretary may appear in any proceeding
related to the application.
* * * * * * *
SUBCHAPTER III. MISCELLANEOUS
Sec. 351. Judicial review of actions in carrying out certain
transferred duties and powers
(a) Judicial Review.--An action of the Secretary of
Transportation in carrying out a duty or power transferred
under the Department of Transportation Act (Public Law 89-670,
80 Stat. 931), or an action of the Administrator of the Federal
Railroad Administration, the Federal Highway Administration, or
the Federal Aviation Administration in carrying out a duty or
power specifically assigned to the Administrator by that Act,
may be reviewed judicially to the same extent and in the same
way as if the action had been an action by the department,
agency, or instrumentality of the United States Government
carrying out the duty or power immediately before the transfer
or assignment.
(b) Application of Procedural Requirements.--A statutory
requirement related to notice, an opportunity for a hearing,
action on the record, or administrative review that applied to
a duty or power transferred by the Act applies to the Secretary
or Administrator when carrying out the duty or power.
(c) Nonapplication.--This section does not apply to a duty or
power transferred from the [Interstate Commerce Commission]
Surface Transportation Board to the Secretary under section
6(e)(1)-(4) and (6)(A) of the Act.
SUBTITLE V. RAIL PROGRAMS
PART A. SAFETY
CHAPTER 201. GENERAL
SUBCHAPTER I. GENERAL
Sec. 20103. General authority
(a) Regulations and Orders.--The Secretary of Transportation,
as necessary, shall prescribe regulations and issue orders for
every area of railroad [safety], safety, including the security
of railroad operations, supplementing laws and regulations in
effect on October 16, 1970.
(b) Regulations of practice for proceedings.--The Secretary
shall prescribe regulations of practice applicable to each
proceeding under this chapter. The regulations shall reflect
the varying nature of the proceedings and include time limits
for disposition of the proceedings. The time limit for
disposition of a proceeding may not be more than 12 months
after the date it begins.
(c) Consideration of Information and Standards.--In
prescribing regulations and issuing orders under this section,
the Secretary shall consider existing relevant safety
information and standards.
(d) Waivers.--The Secretary may waive compliance with any
part of a regulation prescribed or order issued under this
chapter if the waiver is in the public interest and consistent
with railroad safety. The Secretary shall make public the
reasons for granting the waiver.
(e) Hearings.--The Secretary shall conduct a hearing as
provided by section 553 of title 5 when prescribing a
regulation or issuing an order under this chapter, including a
regulation or order establishing, amending, or waiving
compliance with a railroad safety regulation prescribed or
order issued under this chapter. An opportunity for an oral
presentation shall be provided.
(f) Tourist Railroad Carriers.--In prescribing regulations
that pertain to railroad safety that affect tourist, historic,
scenic, or excursion railroad carriers, the Secretary of
Transportation shall take into consideration any financial,
operational, or other factors that may be unique to such
railroad carriers. The Secretary shall submit a report to
Congress not later than September 30, 1995, on actions taken
under this subsection.
* * * * * * *
PART C. PASSENGER TRANSPORTATION
CHAPTER 241. GENERAL
Sec. 24102. Definitions
In this part--
(1) ``auto-ferry transportation'' means intercity
rail passenger transportation--
(A) of automobiles or recreational vehicles
and their occupants; and
(B) when space is available, of used
unoccupied vehicles.
[(2) ``basic system'' means the system of intercity
rail passenger transportation designated by the
Secretary of Transportation under section 4 of the
Amtrak Improvement Act of 1978 and approved by
Congress, and transportation required to be provided
under section 24705(a) of this title and section 4(g)
of the Act, including changes in the system or
transportation that Amtrak makes using the route and
service criteria.]
[(3)] (2) ``commuter authority'' means a State,
local, or regional entity established to provide, or
make a contract providing for, commuter rail passenger
transportation.
[(4)] (3) ``commuter rail passenger transportation''
means short-haul rail passenger transportation in
metropolitan and suburban areas usually having reduced
fare, multiple-ride, and commuter tickets and morning
and evening peak period operations.
[(5)] (4) ``intercity rail passenger transportation''
means rail passenger transportation, except commuter
rail passenger transportation.
(5) ``national rail passenger transportation system''
means--
(A) the segment of the Northeast Corridor
between Boston, Massachusetts and Washington,
D.C.;
(B) rail corridors that have been designated
by the Secretary of Transportation as high-
speed corridors, but only after they have been
improved to permit operation of high-speed
service;
(C) long-distance routes of more than 750
miles between endpoints operated by Amtrak as
of the date of enactment of the National
Defense Rail Act; and
(D) short-distance corridors or routes
operated as of the date of enactment of the
National Defense Rail Act, unless discontinued
by Amtrak.
(6) ``Northeast Corridor'' means Connecticut,
Delaware, the District of Columbia, Maryland,
Massachusetts, New Jersey, New York, Pennsylvania, and
Rhode Island.
(7) ``rail carrier'' means a person, including a unit
of State or local government, providing rail
transportation for compensation.
(8) ``rate'' means a rate, fare, or charge for rail
transportation.
(9) ``regional transportation authority'' means an
entity established to provide passenger transportation
in a region.
* * * * * * *
CHAPTER 241. GENERAL
Sec. 24101. Findings, purpose, and goals
(a) Findings.--
(1) Public convenience and necessity require that
Amtrak, to the extent its budget allows, provide
modern, cost-efficient, and energy-efficient intercity
rail passenger transportation between crowded urban
areas and in other areas of the United States.
(2) Rail passenger transportation can help alleviate
overcrowding of airways and airports and on highways.
(3) A traveler in the United States should have the
greatest possible choice of transportation most
convenient to the needs of the traveler.
(4) A greater degree of cooperation is necessary
among Amtrak, other rail carriers, State, regional, and
local governments, the private sector, labor
organizations, and suppliers of services and equipment
to Amtrak to achieve a performance level sufficient to
justify expending public money.
(5) Modern and efficient commuter rail passenger
transportation is important to the viability and well-
being of major urban areas and to the energy
conservation and self-sufficiency goals of the United
States.
(6) As a rail passenger transportation entity, Amtrak
should be available to operate commuter rail passenger
transportation through its subsidiary, Amtrak Commuter,
under contract with commuter authorities that do not
provide the transportation themselves as part of the
governmental function of the State.
(7) The Northeast Corridor is a valuable resource of
the United States used by intercity and commuter rail
passenger transportation and freight transportation.
(8) Greater coordination between intercity and
commuter rail passenger transportation is required.
(b) Purpose.--By using innovative operating and marketing
concepts, Amtrak shall provide intercity and commuter rail
passenger transportation that completely develops the potential
of modern rail transportation to meet the intercity and
commuter passenger transportation needs of the United States.
(c) Goals.--Amtrak shall--
(1) use its best business judgment in acting to
minimize United States Government subsidies,
including--
(A) increasing fares;
(B) increasing revenue from the
transportation of mail and express;
(C) reducing losses on food service;
(D) improving its contracts with operating
rail carriers;
(E) reducing management costs; and
(F) increasing employee productivity;
(2) minimize Government subsidies by encouraging
State, regional, and local governments and the private
sector, separately or in combination, to share the cost
of providing rail passenger transportation, including
the cost of operating facilities;
(3) carry out strategies to achieve immediately
maximum productivity and efficiency consistent with
safe and efficient transportation;
(4) operate Amtrak trains, to the maximum extent
feasible, to all station stops within 15 minutes of the
time established in public timetables;
(5) develop transportation on rail corridors
subsidized by States and private parties;
(6) 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;
(7) encourage rail carriers to assist in improving
intercity rail passenger transportation;
(8) improve generally the performance of Amtrak
through comprehensive and systematic operational
programs and employee incentives;
(9) carry out policies that ensure equitable access
to the Northeast Corridor by intercity and commuter
rail passenger transportation;
(10) coordinate the uses of the Northeast Corridor,
particularly intercity and commuter rail passenger
transportation; and
(11) maximize the use of its resources, including the
most cost-effective use of employees, facilities, and
real property.
(d) Minimizing Government Subsidies.--To carry out subsection
(c)(11) of this section, Amtrak is encouraged to make
agreements with the private sector and undertake initiatives
that are consistent with good business judgment and designed to
maximize its revenues and minimize Government subsidies. Amtrak
shall prepare a financial plan to operate within the funding
levels authorized by section 24104 of this chapter, including
budgetary goals for fiscal years 1998 through 2002. [Commencing
no later than the fiscal year following the fifth anniversary
of the Amtrak Reform and Accountability Act of 1997, Amtrak
shall operate without Federal operating grant funds
appropriated for its benefit.]
* * * * * * *
CHAPTER 241. GENERAL
Sec. 24104. Authorization of appropriations
(a) In general.--There are authorized to be appropriated to
the Secretary of Transportation--
(1) $1,138,000,000 for fiscal year 1998;
(2) $1,058,000,000 for fiscal year 1999;
(3) $1,023,000,000 for fiscal year 2000;
(4) $989,000,000 for fiscal year 2001; and
(5) $955,000,000 for fiscal year 2002, for the
benefit of Amtrak for capital expenditures under
chapters 243, 247, and 249 of this title, operating
expenses, and payments described in subsection (c)(1)
(A) through (C). [In fiscal years following the fifth
anniversary of the enactment of the Amtrak Reform and
Accountability Act of 1997 no funds authorized for
Amtrak shall be used for operating expenses other than
those prescribed for tax liabilities under section 3221
of the Internal Revenue Code of 1986 that are more than
the amount needed for benefits of individuals who
retire from Amtrak and for their beneficiaries.]
(b) Operating Expenses.--
(1) Not more than $381,000,000 may be appropriated to
the Secretary for each of the fiscal years ending
September 30, 1993, and September 30, 1994, for the
benefit of Amtrak for operating expenses. Not more than
5 percent of the amounts appropriated for each fiscal
year shall be used to pay operating expenses under
section 24704 of this title for transportation in
operation on September 30, 1992.
(2)(A) Not more than the following amounts may be
appropriated to the Secretary for the benefit of Amtrak
for operating losses under section 24704 of this title
for transportation beginning after September 30, 1992:
(i) $7,500,000 for the fiscal year ending
September 30, 1993.
(ii) $9,500,000 for the fiscal year ending
September 30, 1994.
(B) The expenditure by Amtrak of an amount
appropriated under subparagraph (A) of this paragraph
is deemed not to be an operating expense when
calculating the revenue-to-operating expense ratio of
Amtrak.
(c) Mandatory Payments.--
(1) Not more than $150,000,000 for the fiscal year
ending September 30, 1993, and amounts that may be
necessary for the fiscal year ending September 30,
1994, may be appropriated to the Secretary to pay--
(A) tax liabilities under section 3221 of the
Internal Revenue Code of 1986 (26 U.S.C. 3221)
due in those fiscal years that are more than
the amount needed for benefits for individuals
who retire from Amtrak and for their
beneficiaries;
(B) obligations of Amtrak under section 8(a)
of the Railroad Unemployment Insurance Act (45
U.S.C. 358(a)) due in those fiscal years that
are more than obligations of Amtrak calculated
on an experience-related basis; and
(C) obligations of Amtrak due under section
3321 of the Code (26 U.S.C. 3321).
(2) Amounts appropriated under this subsection are
not a United States Government subsidy of Amtrak.
(d) Payment to Amtrak.--Amounts appropriated under this
section shall be paid to Amtrak under the budget request of the
Secretary as approved or modified by Congress when the amounts
are appropriated. A payment may not be made more frequently
than once every 90 days, unless Amtrak, for good cause,
requests more frequent payment before a 90-day period ends. In
each fiscal year in which amounts are authorized to be
appropriated under this section, amounts appropriated shall be
paid to Amtrak as follows:
(1) 50 percent on October 1.
(2) 25 percent on January 1.
(3) 25 percent on April 1.
(e) Availability of Amounts and Early Appropriations.--
(1) Amounts appropriated under this section remain
available until expended.
(2) Amounts for capital acquisitions and improvements
may be appropriated in a fiscal year before the fiscal
year in which the amounts will be obligated.
(f) Limitations on Use.--Amounts appropriated under this
section may not be used to subsidize operating losses of
commuter rail passenger or rail freight transportation.
* * * * * * *
[Sec. 24302. Board of Directors
[(a) Reform Board.--
[(1) Establishment and duties.--The Reform Board
described in paragraph (2) shall assume the
responsibilities of the Board of Directors of Amtrak by
March 31, 1998, or as soon thereafter as at least 4
members have been appointed and qualified. The Board
appointed under prior law shall be abolished when the
Reform Board assumes such responsibilities.
[(2) Membership.--
[(A)(i) The Reform Board shall consist of 7
voting members appointed by the President, by
and with the advice and consent of the Senate,
for a term of 5 years.
[(ii) Notwithstanding clause (i), if the
Secretary of Transportation is appointed to the
Reform Board, such appointment shall not be
subject to the advice and consent of the
Senate. If appointed, the Secretary may be
represented at Board meetings by his designee.
[(B) In selecting the individuals described
in subparagraph (A) for nominations for
appointments to the Reform Board, the President
should consult with the Speaker of the House of
Representatives, the Minority Leader of the
House of Representatives, the Majority Leader
of the Senate, and the Minority Leader of the
Senate.
[(C) Appointments under subparagraph (A)
shall be made from among individuals who--
[(i) have technical qualifications,
professional standing, and demonstrated
expertise in the fields of
transportation or corporate or
financial management;
[(ii) are not representatives of rail
labor or rail management; and
[(iii) in the case of 6 of the 7
individuals selected, are not employees
of Amtrak or of the United States.
[(D) The President of Amtrak shall serve as
an ex officio, nonvoting member of the Reform
Board.
[(3) Confirmation procedure in Senate.--
[(A) This paragraph is enacted by the
Congress--
[(i) as an exercise of the rulemaking
power of the Senate, and as such it is
deemed a part of the rules of the
Senate, but applicable only with
respect to the procedure to be followed
in the Senate in the case of a motion
to discharge; and it supersedes other
rules only to the extent that it is
inconsistent therewith; and
[(ii) with full recognition of the
constitutional right of the Senate to
change the rules (so far as relating to
the procedure of the Senate) at any
time, in the same manner and to the
same extent as in the case of any other
rule of the Senate.
[(B) If, by the first day of June on which
the Senate is in session after a nomination is
submitted to the Senate under this section, the
committee to which the nomination was referred
has not reported the nomination, then it shall
be discharged from further consideration of the
nomination and the nomination shall be placed
on the Executive Calendar.
[(C) It shall be in order at any time
thereafter to move to proceed to the
consideration of the nomination without any
intervening action or debate.
[(D) After no more than 10 hours of debate on
the nomination, which shall be evenly divided
between, and controlled by, the Majority Leader
and the Minority Leader, the Senate shall
proceed without intervening action to vote on
the nomination.
[(b) Board of Directors.--Five years after the establishment
of the Reform Board under subsection (a), a Board of Directors
shall be selected--
[(1) if Amtrak has, during the then current fiscal
year, received Federal assistance, in accordance with
the procedures set forth in subsection (a)(2); or
[(2) if Amtrak has not, during the then current
fiscal year, received Federal assistance, pursuant to
bylaws adopted by the Reform Board (which shall provide
for employee representation), and the Reform Board
shall be dissolved.
[(c) Authority to Recommend Plan.--The Reform Board shall
have the authority to recommend to the Congress a plan to
implement the recommendations of the 1997 Working Group on
Inter-City Rail regarding the transfer of Amtrak's
infrastructure assets and responsibilities to a new separately
governed corporation.]
Sec. 24302. Board of directors
(a) Composition and Terms.--
(1) The board of directors of Amtrak is composed of
the following 9 directors, each of whom must be a
citizen of the United States:
(A) The President of Amtrak.
(B) The Secretary of Transportation.
(C) 7 individuals appointed by the President
of the United States, by and with the advice
and consent of the Senate, with an interest,
experience, and qualifications in or directly
related to rail transportation, including
representatives of the passenger rail
transportation, travel, hospitality, cruise
line, and passenger air transportation
businesses, and consumers of passenger rail
transportation.
(2) An individual appointed under paragraph (1)(C) of
this subsection serves for 5 years or until the
individual's successor is appointed and qualified. Not
more than 4 individuals appointed under paragraph
(1)(C) may be members of the same political party.
(3) The board shall elect a chairman and a vice
chairman from among its membership. The vice chairman
shall serve as chairman in the absence of the chairman.
(4) The Secretary may be represented at board
meetings by the Secretary's designee.
(b) Pay and Expenses.--Each director not employed by the
United States Government is entitled to $300 a day when
performing board duties and powers. Each director is entitled
to reimbursement for necessary travel, reasonable secretarial
and professional staff support, and subsistence expenses
incurred in attending board meetings.
(c) Vacancies.--A vacancy on the board is filled in the same
way as the original selection, except that an individual
appointed by the President of the United States under
subsection (a)(1)(C) of this section to fill a vacancy
occurring before the end of the term for which the predecessor
of that individual was appointed is appointed for the remainder
of that term. A vacancy required to be filled by appointment
under subsection (a)(1)(C) must be filled not later than 120
days after the vacancy occurs.
(d) Bylaws.--The board may adopt and amend bylaws governing
the operation of Amtrak. The bylaws shall be consistent with
this part and the articles of incorporation.
(e) Conflicts of Interest.--Subparts D, E, and F of part 2635
of title 5, Code of Federal Regulations, shall apply to members
of the board of directors during their term of office in the
same manner as if they were employees of an executive agency
(as defined in section 105 of title 5, United States Code).
Sec. 24303. Officers
(a) Appointment and terms.--Amtrak has a President and other
officers that are named and appointed by the board of directors
of Amtrak. An officer of Amtrak must be a citizen of the United
States. Officers of Amtrak serve at the pleasure of the board.
(b) Pay.--The board may fix the pay of the officers of
Amtrak. An officer may not be paid more than the general level
of pay for officers of rail carriers with comparable
responsibility. The preceding sentence shall not apply for any
fiscal year for which no Federal assistance is provided to
Amtrak.
[(c) Conflicts of interest.--When employed by Amtrak, an
officer may not have a financial or employment relationship
with another rail carrier, except that holding securities
issued by a rail carrier is not deemed to be a violation of
this subsection if the officer holding the securities makes a
complete public disclosure of the holdings and does not
participate in any decision directly affecting the rail
carrier.]
(c) Conflicts of Interest.--Subparts D, E, and F of part 2635
of title 5, Code of Federal Regulations, shall apply to
officers when employed by Amtrak in the same manner as if they
were employees of an executive agency (as defined in section
105 of title 5, United States Code).
* * * * * * *
Sec. 24307. Special transportation
(a) Reduced Fare Program.--Amtrak shall maintain a reduced
fare program for the following:
(1) individuals at least 65 years of age.
(2) individuals (except alcoholics and drug abusers)
who--
(A) have a physical or mental impairment that
substantially limits a major life activity of
the individual;
(B) have a record of an impairment; or
(C) are regarded as having an impairment.
(b) Employee Transportation.--
(1) In this subsection, ``rail carrier employee''
means--
(A) an active full-time employee of a rail
carrier or terminal company and includes an
employee on furlough or leave of absence;
(B) a retired employee of a rail carrier or
terminal company; and
(C) a dependent of an employee referred to in
clause (A) or (B) of this paragraph.
(2) Amtrak shall ensure that a rail carrier employee
eligible for free or reduced-rate rail transportation
on April 30, 1971, under an agreement in effect on that
date is eligible, to the greatest extent practicable,
for free or reduced-rate intercity rail passenger
transportation provided by Amtrak under this par, if
space is available, on terms similar to those available
on that date under the agreement. However, Amtrak may
apply to all rail carrier employees eligible to receive
free or reduced-rate transportation under any agreement
a single systemwide schedule of terms that Amtrak
decides applied to a majority of employees on that date
under all those agreements. Unless Amtrak and a rail
carrier make a different agreement, the carrier shall
reimburse Amtrak at the rate of 25 percent of the
systemwide average monthly yield of each revenue
passenger-mile. The reimbursement is in place of costs
Amtrak incurs related to free or reduced-rate
transportation, including liability related to travel
of a rail carrier employee eligible for free or
reduced-rate transportation.
(3) This subsection does not prohibit the [Interstate
Commerce Commission] Surface Transportation Board from
ordering retroactive relief in a proceeding begun or
reopened after October 1, 1981.
Sec. 24308. Use of facilities and providing services to Amtrak
(a) General Authority.--
(1) Amtrak may make an agreement with a rail carrier
or regional transportation authority to use facilities
of, and have services provided by, the carrier or
authority under terms on which the parties agree. The
terms shall include a penalty for untimely performance.
(2)(A) If the parties cannot agree and if the
[Interstate Commerce Commission] Surface Transportation
Board finds it necessary to carry out this part, the
[Commission] Board shall--
(i) order that the facilities be made
available and the services provided to Amtrak;
and
(ii) prescribe reasonable terms and
compensation for using the facilities and
providing the services.
(B) When prescribing reasonable compensation under
subparagraph (A) of this paragraph, the [Commission]
Board shall consider quality of service as a major
factor when determining whether, and the extent to
which, the amount of compensation shall be greater than
the incremental costs of using the facilities and
providing the services.
(C) The [Commission] Board shall decide the dispute
not later than 90 days after Amtrak submits the dispute
to the [Commission.] Board.
(3) Amtrak's right to use the facilities or have the
services provided is conditioned on payment of the
compensation. If the compensation is not paid promptly,
the rail carrier or authority entitled to it may bring
an action against Amtrak to recover the amount owed.
(4) Amtrak shall seek immediate and appropriate legal
remedies to enforce its contract rights when track
maintenance on a route over which Amtrak operates falls
below the contractual standard.
(b) Operating During EmergenciesK.--To facilitate operation
by Amtrak during an emergency, the [Commission,] Board, on
application by Amtrak, shall require a rail carrier to provide
facilities immediately during the emergency. The [Commission]
Board then shall promptly prescribe reasonable terms, including
indemnification of the carrier by Amtrak against personal
injury risk to which the carrier may be exposed. The rail
carrier shall provide the facilities for the duration of the
emergency.
(c) Preference Over Freight Transportation.--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 Secretary of Transportation orders otherwise under
this subsection. A rail carrier affected by this subsection may
apply to the Secretary for relief. If the Secretary, after an
opportunity for a hearing under section 553 of title 5, decides
that preference for intercity and commuter rail passenger
transportation materially will lessen the quality of freight
transportation provided to shippers, the Secretary shall
establish the rights of the carrier and Amtrak on reasonable
terms.
(d) Accelerated Speeds.--If a rail carrier refuses to allow
accelerated speeds on trains operated by or for Amtrak, Amtrak
may apply to the Secretary for an order requiring the carrier
to allow the accelerated speeds. The Secretary shall decide
whether accelerated speeds are unsafe or impracticable and
which improvements would be required to make accelerated speeds
safe and practicable. After an opportunity for a hearing, the
Secretary shall establish the maximum allowable speeds of
Amtrak trains on terms the Secretary decides are reasonable.
(e) Additional Trains.--
(1) When a rail carrier does not agree to provide, or
allow Amtrak to provide, for the operation of
additional trains over a rail line of the carrier,
Amtrak may apply to the Secretary for an order
requiring the carrier to provide or allow for the
operation of the requested trains. After a hearing on
the record, the Secretary may order the carrier, within
60 days, to provide or allow for the operation of the
requested trains on a schedule based on legally
permissible operating times. However, if the Secretary
decides not to hold a hearing, the Secretary, not later
than 30 days after receiving the application, shall
publish in the Federal Register the reasons for the
decision not to hold the hearing.
(2) The Secretary shall consider--
(A) when conducting a hearing, whether an
order would impair unreasonably freight
transportation of the rail carrier, with the
carrier having the burden of demonstrating that
the additional trains will impair the freight
transportation; and
(B) when establishing scheduled running
times, the statutory goal of Amtrak to
implement schedules that attain a system-wide
average speed of at least 60 miles an hour that
can be adhered to with a high degree of
reliability and passenger comfort.
(3) Unless the parties have an agreement that
establishes the compensation Amtrak will pay the
carrier for additional trains provided under an order
under this subsection, the [Commission] Board shall
decide the dispute under subsection (a) of this
section.
(f) On-time Performance.--If the on-time performance of any
intercity passenger train averages less than 80 percent for any
consecutive 3-month period, Amtrak may petition the Surface
Transportation Board to investigate whether, and to what
extent, delays are due to causes that could reasonably be
addressed by a rail carrier over the tracks of which the
intercity passenger train operates, or by a regional authority
providing commuter service, if any. In carrying out such an
investigation, the Surface Transportation Board shall obtain
information from all parties involved and make recommendations
regarding reasonable measures to improve the on-time
performance of the train.
* * * * * * *
Sec. 24311. Acquiring interests in property by eminent domain
(a) General Authority.--
(1) To the extent financial resources are available,
Amtrak may acquire by eminent domain under subsection
(b) of this section interests in property--
(A) necessary for intercity rail passenger
transportation, except property of a rail
carrier, a State, a political subdivision of a
State, or a governmental authority; or
(B) requested by the Secretary of
Transportation in carrying out the Secretary's
duty to design and build an intermodal
transportation terminal at Union Station in the
District of Columbia if the Secretary assures
Amtrak that the Secretary will reimburse
Amtrak.
(2) Amtrak may exercise the power of eminent domain
only if it cannot--
(A) acquire the interest in the property by
contract; or
(B) agree with the owner on the purchase
price for the interest.
(b) Civil Actions.--
(1) A civil action to acquire an interest in property
by eminent domain under subsection (a) of this section
must be brought in the district court of the United
States for the judicial district in which the property
is located or, if a single piece of property is located
in more than one judicial district, in any judicial
district in which any piece of the property is located.
An interest is condemned and taken by Amtrak for its
use when a declaration of taking is filed under this
subsection and an amount of money estimated in the
declaration to be just compensation for the interest is
deposited in the court. The declaration may be filed
with the complaint in the action or at any time before
judgment. The declaration must contain or be
accompanied by--
(A) a statement of the public use for which
the interest is taken;
(B) a description of the property sufficient
to identify it;
(C) a statement of the interest in the
property taken;
(D) a plan showing the interest taken; and
(E) a statement of the amount of money Amtrak
estimates is just compensation for the
interest.
(2) When the declaration is filed and the deposit is
made under paragraph (1) of this subsection, title to
the property vests in Amtrak in fee simple absolute or
in the lesser interest shown in the declaration, and
the right to the money vests in the person entitled to
the money. When the declaration is filed, the court may
decide--
(A) the time by which, and the terms under
which, possession of the property is given to
Amtrak; and
(B) the disposition of outstanding charges
related to the property.
(3) After a hearing, the court shall make a finding
on the amount that is just compensation for the
interest in the property and enter judgment awarding
that amount and interest on it. The rate of interest is
6 percent a year and is computed on the amount of the
award less the amount deposited in the court from the
date of taking to the date of payment.
(4) On application of a party, the court may order
immediate payment of any part of the amount deposited
in the court for the compensation to be awarded. If the
award is more than the amount received, the court shall
enter judgment against Amtrak for the deficiency.
(c) Authority to Condemn Rail Carrier Property Interests.--
(1) If Amtrak and a rail carrier cannot agree on a
sale to Amtrak of an interest in property of a rail
carrier necessary for intercity rail passenger
transportation, Amtrak may apply to the [Interstate
Commerce Commission] Surfrace Transportation Board for
an order establishing the need of Amtrak for the
interest and requiring the carrier to convey the
interest on reasonable terms, including just
compensation. The need of Amtrak is deemed to be
established, and the [Commission,] Board, after holding
an expedited proceeding and not later than 120 days
after receiving the application, shall order the
interest conveyed unless the [Commission] Board decides
that--
(A) conveyance would impair significantly the
ability of the carrier to carry out its
obligations as a common carrier; and
(B) the obligations of Amtrak to provide
modern, efficient, and economical rail
passenger transportation can be met adequately
by acquiring an interest in other property,
either by sale or by exercising its right of
eminent domain under subsection (a) of this
section.
(2) If the amount of compensation is not determined
by the date of the Commission's order, the order shall
require, as part of the compensation, interest at 6
percent a year from the date prescribed for the
conveyance until the compensation is paid.
(3) Amtrak subsequently may reconvey to a third party
an interest conveyed to Amtrak under this subsection or
prior comparable provision of law if the [Commission]
Board decides that the reconveyance will carry out the
purposes of this part, regardless of when the
proceeding was brought (including a proceeding pending
before a United States court on November 28, 1990).
* * * * * * *
CHAPTER 247. AMTRAK ROUTE SYSTEM
Sec. 24702. Transportation requested by States, authorities, and other
persons
(a) Contracts for Transportation.--Amtrak and a State, a
regional or local authority, or another person may enter into a
contract for Amtrak to operate an intercity rail service or
route not included in the national rail passenger
transportation system upon such terms as the parties thereto
may agree.
(b) Discontinuance.--Upon termination of a contract entered
into under this section, or the cessation of financial support
under such a contract, Amtrak may discontinue such service or
route, notwithstanding any other provision of law.
* * * * * * *
CHAPTER 249. NORTHEAST CORRIDOR IMPROVEMENT PROGRAM
Sec. 24902. GOALS AND REQUIREMENTS
(a) Managing Costs and Revenues.--Amtrak shall manage its
operating costs, pricing policies, and other factors with the
goal of having revenues derived each fiscal year from providing
intercity rail passenger transportation over the Northeast
Corridor route between the District of Columbia and Boston,
Massachusetts, equal at least the operating costs of providing
that transportation in that fiscal year.
(b) Priorities in Selecting and Scheduling Projects.--When
selecting and scheduling specific projects, Amtrak shall apply
the following considerations, in the following order of
priority:
(1) Safety-related items should be completed before
other items because the safety of the passengers and
users of the Northeast Corridor is paramount.
(2) Activities that benefit the greatest number of
passengers should be completed before activities
involving fewer passengers.
(3) Reliability of intercity rail passenger
transportation must be emphasized.
(4) Trip-time requirements of this section must be
achieved to the extent compatible with the priorities
referred to in paragraphs (1)-(3) of this subsection.
(5) Improvements that will pay for the investment by
achieving lower operating or maintenance costs should
be carried out before other improvements.
(6) Construction operations should be scheduled so
that the fewest possible passengers are inconvenienced,
transportation is maintained, and the on-time
performance of Northeast Corridor commuter rail
passenger and rail freight transportation is optimized.
(7) Planning should focus on completing activities
that will provide immediate benefits to users of the
Northeast Corridor.
(c) Compatibility with Future Improvements and Production of
Maximum Labor Benefits.--Improvements under this section shall
be compatible with future improvements in transportation and
shall produce the maximum labor benefit from hiring individuals
presently unemployed.
(d) Automatic Train Control Systems.--A train operating on
the Northeast Corridor main line or between the main line and
Atlantic City shall be equipped with an automatic train control
system designed to slow or stop the train in response to an
external signal.
(e) High-speed Transportation.--If practicable, Amtrak shall
establish intercity rail passenger transportation in the
Northeast Corridor that carries out section 703(1)(E) of the
Railroad Revitalization and Regulatory Reform Act of 1976
(Public Law 94-210, 90 Stat. 121).
(f) Equipment Development.--Amtrak shall develop economical
and reliable equipment compatible with track, operating, and
marketing characteristics of the Northeast Corridor, including
the capability to meet reliable trip times under section
703(1)(E) of the Railroad Revitalization and Regulatory Reform
Act of 1976 (Public Law 94-210, 90 Stat. 121) in regularly
scheduled revenue transportation in the Corridor, when the
Northeast Corridor improvement program is completed. Amtrak
must decide that equipment complies with this subsection before
buying equipment with financial assistance of the Government.
Amtrak shall submit a request for an authorization of
appropriations for production of the equipment.
(g) Agreements for Off-corridor Routing of Rail Freight
Transportation.--
(1) Amtrak may make an agreement with a rail freight
carrier or a regional transportation authority under
which the carrier will carry out an alternate off-
corridor routing of rail freight transportation over
rail lines in the Northeast Corridor between the
District of Columbia and New York metropolitan areas,
including intermediate points. The agreement shall be
for at least 5 years.
(2) Amtrak shall apply to the [Interstate Commerce
Commission] Surface Transportation Board for approval
of the agreement and all related agreements
accompanying the application as soon as the agreement
is made. If the [Commission] Board finds that approval
is necessary to carry out this chapter, the
[Commission] Board, shall approve the application and
related agreements not later than 90 days after
receiving the application.
(3) If an agreement is not made under paragraph (1)
of this subsection, Amtrak, with the consent of the
other parties, may apply to the [Interstate Commerce
Commission.] Not later than 90 days after the
application, the [Commission] Board shall decide on the
terms of an agreement if it decides that doing so is
necessary to carry out this chapter. The decision of
the [Commission] Board is binding on the other parties.
(h) Coordination.--
(1) The Secretary of Transportation shall
coordinate--
(A) transportation programs related to the
Northeast Corridor to ensure that the programs
are integrated and consistent with the
Northeast Corridor improvement program; and
(B) amounts from departments, agencies, and
instrumentalities of the Government to achieve
urban redevelopment and revitalization in the
vicinity of urban rail stations in the
Northeast Corridor served by intercity and
commuter rail passenger transportation.
(2) If the Secretary finds significant noncompliance
with this section, the Secretary may deny financing to
a noncomplying program until the noncompliance is
corrected.
(i) Completion.--Amtrak shall give the highest priority to
completing the program.
(j) Applicable Procedures.--No State or local building,
zoning, subdivision, or similar or related law, nor any other
State or local law from which a project would be exempt if
undertaken by the Federal Government or an agency thereof
within a Federal enclave wherein Federal jurisdiction is
exclusive, including without limitation with respect to all
such laws referenced herein above requirements for permits,
actions, approvals or filings, shall apply in connection with
the construction, ownership, use, operation, financing,
leasing, conveying, mortgaging or enforcing a mortgage of (i)
any improvement undertaken by or for the benefit of Amtrak as
part of, or in furtherance of, the Northeast Corridor
Improvement Project (including without limitation maintenance,
service, inspection or similar facilities acquired, constructed
or used for high-speed trainsets) or chapter 241, 243, or 247
of this title or (ii) any land (and right, title or interest
created with respect thereto) on which such improvement is
located and adjoining, surrounding or any related land. These
exemptions shall remain in effect and be applicable with
respect to such land and improvements for the benefit of any
mortgagee before, upon and after coming into possession of such
improvements or land, any third party purchasers thereof in
foreclosure (or through a deed in lieu of foreclosure), and
their respective successors and assigns, in each case to the
extent the land or improvements are used, or held for use, for
railroad purposes or purposes accessory thereto. This
subsection shall not apply to any improvement or related land
unless Amtrak receives a Federal operating subsidy in the
fiscal year in which Amtrak commits to or initiates such
improvement.
* * * * * * *
Sec. 24904. General authority
(a) General.--To carry out this chapter and the Regional Rail
Reorganization Act of 1973 (45 U.S.C. 701 et seq.), Amtrak
may--
(1) acquire, maintain, and dispose of any interest in
property used to provide improved high-speed rail
transportation under section 24902 of this title;
(2) acquire, by condemnation or otherwise, any
interest in real property that Amtrak considers
necessary to carry out the goals of section 24902;
(3) provide for rail freight, intercity rail
passenger, and commuter rail passenger transportation
over property acquired under this section;
(4) improve rail rights-of-way between Boston,
Massachusetts, and the District of Columbia (including
the route through Springfield, Massachusetts, and
routes to Harrisburg, Pennsylvania, and Albany, New
York, from the Northeast Corridor main line) to achieve
the goals of section 24902 of providing improved high-
speed rail passenger transportation between Boston,
Massachusetts, and the District of Columbia, and
intermediate intercity markets;
(5) acquire, build, improve, and install passenger
stations, communications and electric power facilities
and equipment, public and private highway and
pedestrian crossings, and other facilities and
equipment necessary to provide improved high-speed rail
passenger transportation over rights-of-way improved
under clause (4) of this subsection;
(6) 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. 701
et seq.) and the Railroad Revitalization and Regulatory
Reform Act of 1976 (45 U.S.C. 801 et seq.); and
(7) appoint a general manager of the Northeast
Corridor improvement program.
(b) Compensatory Agreements.--Rail freight and commuter rail
passenger transportation provided under subsection (a)(3) of
this section shall be provided under compensatory agreements
with the responsible carriers.
(c) Compensation for transportation over certain rights-of-
way and facilities.--
(1) An agreement under subsection (a)(6) of this
section shall provide for reasonable reimbursement of
costs but may not cross-subsidize intercity rail
passenger, commuter rail passenger, and rail freight
transportation.
(2) If the parties do not agree, the [Interstate
Commerce Commission] Surface Transportation Board shall
order that the transportation continue over facilities
acquired under the Regional Rail Reorganization Act of
1973 (45 U.S.C. 701 et seq.) and the Railroad
Revitalization and Regulatory Reform Act of 1976 (45
U.S.C. 801 et seq.) and shall determine compensation
(without allowing cross-subsidization between intercity
rail passenger and rail freight transportation) for the
transportation not later than 120 days after the
dispute is submitted. The [Commission] Board shall
assign to a rail freight carrier obtaining
transportation under this subsection the costs Amtrak
incurs only for the benefit of the carrier, plus a
proportionate share of all other costs of providing
transportation under this paragraph incurred for the
common benefit of Amtrak and the carrier. The
proportionate share shall be based on relative measures
of volume of car operations, tonnage, or other factors
that reasonably reflect the relative use of rail
property covered by this subsection.
(3) This subsection does not prevent the parties from
making an agreement under subsection (a)(6) of this
section after the [Commission] Board makes a decision
under this subsection.
Sec. 24905. Coordination board and safety committee
(a) Northeast Corridor Coordination Board.--
(1) The Northeast Corridor Coordination Board is
composed of the following members:
(A) one individual from each commuter
authority (as defined in section 1135(a) of the
Omnibus Budget Reconciliation Act of 1981 (45
U.S.C. 1104)) that provides or makes a contract
to provide commuter rail passenger
transportation over the main line of the
Northeast Corridor.
(B) 2 individuals selected by Amtrak.
(C) one individual selected by the
Consolidated Rail Corporation.
(2) The Board shall recommend to Amtrak--
(A) policies that ensure equitable access to
the Northeast Corridor, considering the need
for equitable access by commuter and intercity
rail passenger transportation and the
requirements of section 24308(c) of this title;
and
(B) equitable policies for the Northeast
Corridor related to--
(i) dispatching;
(ii) public information;
(iii) maintaining equipment and
facilities;
(iv) major capital facility
investments; and
(v) harmonizing equipment
acquisitions, rates, and schedules.
(3) The Board may recommend to the board of directors
and President of Amtrak action necessary to resolve
differences on providing transportation, except for
facilities and transportation matters under section
24308(a) or 24904(a)(5) and (c) of this title.
(b) Northeast Corridor Safety Committee.--
(1) The Northeast Corridor Safety Committee is
composed of members appointed by the Secretary of
Transportation. The members shall be representatives
of--
(A) the Secretary;
(B) Amtrak;
(C) freight carriers operating more than
150,000 train miles a year on the main line of
the Northeast Corridor;
(D) commuter agencies;
(E) rail passengers;
(F) rail labor; and
(G) other individuals and organizations the
Secretary decides have a significant interest
in rail safety.
(2) The Secretary shall consult with the Committee
about safety improvements on the Northeast Corridor
main line. The Committee shall meet at least once every
2 years to consider safety matters on the main line.
(3) At the beginning of the first session of each
Congress, the Secretary shall submit a report to
Congress on the status of efforts to improve safety on
the Northeast Corridor main line. The report shall
include the safety recommendations of the Committee and
the comments of the Secretary on those recommendations.
(4) The Committee shall cease to exist on [January 1,
1999,] January 1, 2008, or on another date the
Secretary decides is appropriate. The Secretary shall
notify Congress in writing of a decision to terminate
the Committee on another date.
* * * * * * *
Sec. 24910. Passenger rail cooperative research program
(a) In General.--The Secretary shall establish and carry out
a rail passenger cooperative research program. The program
shall--
(1) address, among other matters, intercity rail
passenger services, including existing rail passenger
technologies and speeds, incrementally enhanced rail
systems and infrastructure, and new high-speed wheel-
on-rail systems;
(2) give consideration to research on commuter rail,
regional rail, freight rail, and other modes of rail
transportation that may affect rail passenger
transportation due to the interconnectedness of the
rail passenger network with other rail transportation
services; and
(3) give consideration to regional concerns regarding
rail passenger transportation, including meeting
research needs common to designated high-speed
corridors, long-distance rail services, and regional
intercity rail corridors, projects, and entities.
(b) Contents.--The program to be carried out under this
section shall include research designed--
(1) to develop more accurate models for evaluating
the indirect effects of rail passenger service,
including the effects on highway and airport and airway
congestion, environmental quality, and energy
consumption;
(2) to develop a better understanding of modal choice
as it affects rail passenger transportation, including
development of better models to predict ridership;
(3) to recommend priorities for technology
demonstration and development;
(4) to meet additional priorities as determined by
the advisory board established under subsection (c),
including any recommendations made by the National
Research Council;
(5) to explore improvements in management, financing,
and institutional structures;
(6) to address rail capacity constraints that affect
passenger rail service through a wide variety of
options, ranging from operating improvements to
dedicated new infrastructure, taking into account the
impact of such options on freight and commuter rail
operations; and
(7) to improve maintenance, operations, customer
service, or other aspects of existing intercity rail
passenger service existing in 2002.
(c) Advisory Board.--
(1) Establishment.--In consultation with the heads of
appropriate Federal departments and agencies, the
Secretary shall establish an advisory board to
recommend research, technology, and technology transfer
activities related to rail passenger transportation.
(2) Membership.--The advisory board shall include--
(A) representatives of State transportation
agencies;
(B) transportation and environmental
economists, scientists, and engineers; and
(C) representatives of Amtrak, the Alaska
Railroad, transit operating agencies, intercity
rail passenger agencies, railway labor
organizations, and environmental organizations.
(d) National Academy of Sciences.-- The Secretary may make
grants to, and enter into cooperative agreements with, the
National Academy of Sciences to carry out such activities
relating to the research, technology, and technology transfer
activities described in subsection (b) as the Secretary deems
appropriate.
* * * * * * *
PART D. HIGH-SPEED RAIL
CHAPTER 261. HIGH-SPEED RAIL ASSISTANCE
Sec. 26100. Policy.
(a) In General.--The Congress declares that it is the
policy of the United States that designated high-speed railroad
passenger transportation corridors are the building blocks of
an interconnected interstate railroad passenger system that
serves the entire Nation.
(b) Secretary Required To Establish National High-speed
Ground Transportation Policy.--The Secretary of Transportation
shall establish the national high-speed ground transportation
policy required by section 309(e)(1) of this title no later
than December 31, 2002.
Sec. 26101. Corridor planning
[(a) Corridor Planning Assistance.--
[(1) The Secretary may provide under this section
financial assistance to a public agency or group of
public agencies for corridor planning for up to 50
percent of the publicly financed costs associated with
eligible activities.
[(2) No less than 20 percent of the publicly financed
costs associated with eligible activities shall come
from State and local sources, which State and local
sources may not include funds from any Federal
program.]
(a) Planning.--
(1) In general.--The Secretary of Transportation
shall provide planning assistance to States or group of
States and other public agencies promoting the
development of high-speed rail corridors designated by
the Secretary under section 104(d) of title 23.
(2) Secretary may provide direct or financial
assistance.--The Secretary may provide planning
assistance under paragraph (1) directly or by providing
financial assistance to a public agency or group of
public agencies to undertake planning activities
approved by the Secretary.
(3) 100 percent Federal funding.--The Secretary may
permit, but may not require, a portion of the publicly
financed costs associated with eligible activities to
come from non-Federal sources.
(4) Priorities to chicago, atlanta, dallas/fort
worth, portland, and orlando.--In determining projects
to be undertaken pursuant to this paragraph, the
Secretary shall give the highest priorities to
undertaking planning in the vicinity of Union Station
in Chicago, Illinois, in metropolitan Atlanta, Georgia,
in the Dallas/Fort Worth, Texas, area, in the Portland,
Oregon, area, and on the Orlando Corridor in Florida.
(b) Eligible Activities.--
(1) A corridor planning activity is eligible for
financial assistance under subsection (a) if the
Secretary determines that it is necessary to establish
appropriate engineering, operational, financial,
environmental, or socioeconomic projections for the
establishment of high-speed rail service in the
corridor and that it leads toward development of a
prudent financial and institutional plan for
implementation of specific high-speed rail
improvements. Eligible corridor planning activities
include--
(A) environmental assessments;
(B) feasibility studies emphasizing
commercial technology improvements or
applications;
(C) economic analyses, including ridership,
revenue, and operating expense forecasting;
(D) assessing the impact on rail employment
of developing high-speed rail corridors;
(E) assessing community economic impacts;
(F) coordination with State and metropolitan
area transportation planning and corridor
planning with other States;
(G) operational planning;
(H) route selection analyses and purchase of
rights-of-way for proposed high-speed rail
service;
(I) preliminary engineering and design;
(J) identification of specific improvements
to a corridor, including electrification, line
straightening and other right-of-way
improvements, bridge rehabilitation and
replacement, use of advanced locomotives and
rolling stock, ticketing, coordination with
other modes of transportation, parking and
other means of passenger access, track, signal,
station, and other capital work, and use of
intermodal terminals;
(K) preparation of financing plans and
prospectuses; and
(L) creation of public/private partnerships.
(2) No financial assistance shall be provided under
this section for corridor planning with respect to the
main line of the Northeast Corridor, between
Washington, District of Columbia, and Boston,
Massachusetts.
(c) Criteria for determining financial assistance. Selection
by the Secretary of recipients of financial assistance under
this section shall be based on such criteria as the Secretary
considers appropriate, including--
(1) the relationship of the corridor to the
Secretary's national high-speed ground transportation
policy;
[(2) the extent to which the proposed planning
focuses on systems which will achieve sustained speeds
of 125 mph or greater;]
(2) the extent to which the proposed planning focuses
on high-speed rail systems, giving a priority to
systems which will achieve sustained speeds of 125
miles per hour or greater and projects involving
dedicated rail passenger rights-of-way;
(3) the integration of the corridor into metropolitan
area and statewide transportation planning;
(4) the potential interconnection of the corridor
with other parts of the Nation's transportation system,
including the interconnection with other countries;
(5) the anticipated effect of the corridor on the
congestion of other modes of transportation;
(6) whether the work to be funded will aid the
efforts of State and local governments to comply with
the Clean Air Act (42 U.S.C. 7401 et seq.);
(7) the past and proposed financial commitments and
other support of State and local governments and the
private sector to the proposed high-speed rail program,
including the acquisition of rolling stock;
(8) the estimated level of ridership;
(9) the estimated capital cost of corridor
improvements, including the cost of closing, improving,
or separating highway-rail grade crossings;
(10) rail transportation employment impacts;
(11) community economic impacts;
(12) the extent to which the projected revenues of
the proposed high-speed rail service, along with any
financial commitments of State or local governments and
the private sector, are expected to cover capital costs
and operating and maintenance expenses; and
(13) whether a specific route has been selected,
specific improvements identified, and capacity studies
[completed; and] completed.
[(14) whether the corridor has been designated as a
high-speed rail corridor by the Secretary.]
(d) Operators Deemed Rail Carriers.--A person that conducts
rail operations funded or otherwise receiving assistance under
this section is deemed to be a rail carrier for purposes of
part A of subtitle IV, when so operating or performing such
services.
Sec. 26101A. Implementation of corridor plans
(a) Implementation Assistance.--
(1) In general.--The Secretary of Transportation
shall provide implementation assistance to States or
group of States and other public agencies promoting the
development of high-speed rail corridors designated by
the Secretary under section 104(d) of title 23. The
Secretary shall establish an application and
qualification process and, before providing assistance
under this section, make a determination on the record
that the applicant is qualified and eligible for
assistance under this section.
(2) Secretary may provide direct or financial
assistance.--The Secretary may provide implementation
assistance under paragraph (1) directly or by providing
financial assistance to a public agency or group of
public agencies to undertake implementation activities
approved by the Secretary.
(3) 100 percent Federal share.--The Secretary may
permit, but may not require, a portion of the publicly
financed costs associated with eligible activities to
come from non-Federal sources.
(4) Contribution of land.--Notwithstanding paragraph
(3), the Secretary may accept land contributed by a
State for right-of-way, without regard to whether the
State acquired the land directly or indirectly through
the use of Federal funds, including transfers from the
Highway Trust Fund under section 9503 of the Internal
Revenue Code of 1986.
(5) Priorities to chicago, atlanta, dallas/fort
worth, portland, and orlando.--In determining projects
to be undertaken pursuant to this subsection, the
Secretary shall give the highest priorities to
undertaking implementation assistance in the vicinity
of Union Station in Chicago, Illinois, in metropolitan
Atlanta, Georgia, and in the Dallas/Fort Worth, Texas,
area, in the Portland, Oregon, area, and on the Orlando
Corridor in Florida.
(6) Special transportation circumstances.--In
carrying out this section, the Secretary shall allocate
an appropriate portion of the amounts available for
implementation assistance to providing appropriate
related assistance in any State the rail transportation
system of which--
(A) is not physically connected to rail
systems in the continental United States; and
(B) may not otherwise qualify for high-speed
rail implementation assistance due to the
constraints imposed on the railway
infrastructure in that State due to the unique
characteristics of the geography of that State
or other relevant considerations, as determined
by the Secretary.
(b) Eligible Implementation Activities.--The following
activities are eligible for implementation assistance under
subsection (a):
(1) Security planning and the acquisition of security
and emergency response equipment.
(2) Operating expenses.
(3) Infrastructure acquisition and construction of
track and facilities.
(4) Highway-rail grade crossing eliminations and
improvements.
(5) Acquisition of rights-of-way, locomotives,
rolling stock, track, and signal equipment.
(c) Criteria for Determining Assistance for Implementation
Activities.--The Secretary, in selecting recipients of
assistance under subsection (a), shall--
(1) encourage the use of positive train control
technologies;
(2) require that any project meet any existing safety
regulations, and give preference to any project
determined by the Secretary to have particularly high
levels of safety;
(3) encourage intermodal connectivity by locating
train stations in or near airports, bus terminals,
subway stations, ferry ports, and other modes of
transportation;
(4) ensure a general regional balance in providing
such assistance and avoid the concentration of a
disproportionate dedication of available financial
assistance resources to a single project or region of
the country; and
(5) ensure that any project is compatible with, and
operated in conformance with, plans developed pursuant
to the requirements of sections 134 and 135 of title
23, United States Code.
(d) Operators Deemed Rail Carriers.--A person that conducts
rail operations funded or otherwise receiving assistance under
this section is deemed to be a rail carrier for purposes of
part A of subtitle IV, when so operating or performing such
services.
(e) Domestic Buying Preferences.--
(1) In general.--In carrying out a project assisted
under this section, a recipient shall buy only--
(A) unmanufactured articles, material, and
supplies mined or produced in the United
States; or
(B) manufactured articles, material, and
supplies manufactured in the United States
substantially from articles, material, and
supplies mined, produced, or manufactured in
the United States.
(2) De minimis amount.--Paragraph (1) of this
subsection applies only when the cost of those
articles, material, or supplies bought is at least
$1,000,000.
(3) Exemptions.--On application of a recipient, the
Secretary of Transportation may exempt a recipient from
the requirements of this subsection if the Secretary
decides that, for particular articles, material, or
supplies--
(A) the requirements of paragraph (1) of this
subsection are inconsistent with the public
interest;
(B) the cost of imposing those requirements
is unreasonable; or
(C) the articles, material, or supplies, or
the articles, material, or supplies from which
they are manufactured, are not mined, produced,
or manufactured in the United States in
sufficient and reasonably available commercial
quantities and are not of a satisfactory
quality.
(4) United States defined.--In this subsection, the
term ``the United States'' means the States,
territories, and possessions of the United States and
the District of Columbia.
* * * * * * *
[Sec. 26104. Authorization of appropriations
[(a) Fiscal Year 1995.--There are authorized to be
appropriated to the Secretary $29,000,000 for fiscal year 1995,
for carrying out sections 26101 and 26102 (including payment of
administrative expenses related thereto).
[(b) Fiscal Year 1996.--
[(1) There are authorized to be appropriated to the
Secretary $40,000,000 for fiscal year 1996, for
carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the
Secretary $30,000,000 for fiscal year 1996, for
carrying out section 26102 (including payment of
administrative expenses related thereto).
[(c) Fiscal Year 1997.--
[(1) There are authorized to be appropriated to the
Secretary $45,000,000 for fiscal year 1997, for
carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the
Secretary $40,000,000 for fiscal year 1997, for
carrying out section 26102 (including payment of
administrative expenses related thereto).
[(d) Fiscal Year 1998.--
[(1) There are authorized to be appropriated to the
Secretary $10,000,000 for fiscal year 1998, for
carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the
Secretary $25,000,000 for fiscal year 1998, for
carrying out section 26102 (including payment of
administrative expenses related thereto).
[(e) Fiscal Year 1999.--
[(1) There are authorized to be appropriated to the
Secretary $10,000,000 for fiscal year 1999, for
carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the
Secretary $25,000,000 for fiscal year 1999, for
carrying out section 26102 (including payment of
administrative expenses related thereto).
[(f) Fiscal Year 2000.--
[(1) There are authorized to be appropriated to the
Secretary $10,000,000 for fiscal year 2000, for
carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the
Secretary $25,000,000 for fiscal year 2000, for
carrying out section 26102 (including payment of
administrative expenses related thereto).
[(g) Fiscal Year 2001.--
[(1) There are authorized to be appropriated to the
Secretary $10,000,000 for fiscal year 2001, for
carrying out section 26101 (including payment of
administrative expenses related thereto).
[(2) There are authorized to be appropriated to the
Secretary $25,000,000 for fiscal year 2001, for
carrying out section 26102 (including payment of
administrative expenses related thereto).
[(h) Funds to Remain Available.--Funds made available under
this section shall remain available until expended.]
Sec. 26104. Authorization of appropriations
(a) Fiscal Years 2003 through 2007.--There are authorized to
be appropriated to the Secretary for each of fiscal years 2003
through 2007--
(1) $25,000,000 for carrying out section 26101;
(2) $1,500,000,000 for carrying out section 26101A;
and
(3) $25,000,000 for carrying out section 26102.
(b) Funds To Remain Available.--Funds made available under
this section shall remain available until expended.
(c) Special Rule.--Except as specifically provided in section
26101, 26101A, or 26102, no amount authorized by subsection (a)
may be used for obligation or expenditure on the Boston-to-
Washington segment of the Northeast Corridor while that segment
is receiving Federal funds for capital or operating expenses.
Sec. 26105. Definitions For purposes of this chapter--
(1) the term ``financial assistance'' includes
grants, contracts, loans, loan guarantees, and
cooperative agreements;
(2) the term ``high-speed rail'' means all forms of
nonhighway ground transportation that run on rails or
electromagnetic guideways providing transportation
service which is--
(A) reasonably expected to reach sustained
speeds of [more than 125 miles per hour;] 90
miles per hour or more; and
(B) made available to members of the general
public as passengers, but does not include
rapid transit operations within an urban area
that are not connected to the general rail
system of transportation;
(3) the term ``publicly financed costs'' means the
costs funded after April 29, 1993, by Federal, State,
and local governments;
(4) the term ``Secretary'' means the Secretary of
Transportation;
(5) the term ``State'' means any of the several
States, the District of Columbia, Puerto Rico, the
Northern Mariana Islands, the Virgin Islands, Guam,
American Samoa, and any other territory or possession
of the United States; and
(6) the term ``United States private business'' means
a business entity organized under the laws of the
United States, or of a State, and conducting
substantial business operations in the United States.
* * * * * * *
PART E. MISCELLANEOUS
CHAPTER 281. LAW ENFORCEMENT
Sec. 28101. Rail police officers
Under regulations prescribed by the Secretary of
Transportation, a rail police officer who is employed by a rail
carrier and certified or commissioned as a police officer under
the laws of a State may enforce the laws of any jurisdiction in
which [the rail carrier] any rail carrier owns property, to the
extent of the authority of a police officer certified or
commissioned under the laws of that jurisdiction, to protect--
(1) employees, passengers, or patrons of [the rail carrier]
any rail carrier;
(2) property, equipment, and facilities owned, leased,
operated, or maintained by [the rail carrier] any rail carrier;
(3) property moving in interstate or foreign commerce in the
possession of [the rail carrier] any rail carrier; and
(4) personnel, equipment, and material moving by rail that
are vital to the national defense.
MINORITY VIEWS OF SENATOR McCAIN
It appears that once again, the American taxpayers are going
to be railroaded into providing billions of dollars in
subsidies to Amtrak without fixing what ails it. I had hoped
the Senate Commerce Committee would work to confront the
fundamental reasons for Amtrak's failures over the past 31
years because a reevaluation of Amtrak is clearly needed. In
fiscal year (FY) 2001, Amtrak's operating loss was $1.1
billion, its highest ever. Amtrak's debt, now $3.6 billion, is
also at an all-time high, having tripled since Amtrak was last
authorized in 1997. And despite having received over $5 billion
in Federal assistance and another $1.2 billion from a number of
states over the past five years, Amtrak is again on the verge
of bankruptcy.
We have a responsibility to fix a program that has
consistently fallen woefully short of the goals Congress has
set for Amtrak and that Amtrak has set for itself. The solution
is not to throw tens of billions of dollars at the problem.
Money, alone, is not the answer. Yet that is largely the
solution provided by S. 1991 which would increase authorization
levels for the FY2003 through FY2007 period from $5.163 billion
to $14.7 billion for Amtrak; from $225 million to $7.8 billion
for high-speed rail; and from $3.5 billion to $35 billion for
rail project loans and loan guarantees. In total, that is an
increase in authorization levels from $8.8 billion to an
astounding $57.5 billion.
To get rail passenger service on track, we need to address a
number of tough questions. What is the future for intercity
rail passenger transportation? Where does it attract passengers
and where doesn't it? Does rail passenger service have to mean
``Amtrak'' or, after 30 years, is it finally time to find a new
approach? Where might high-speed rail service actually attract
enough passengers to be economically viable? How does rail
passenger service fit into our national transportation system?
And what is the most equitable way for the Federal government,
states and municipalities, and other rail passenger
stakeholders to share the related financial obligations?
Unfortunately, the legislation being reported by the Commerce
Committee avoids addressing any of the tough issues. Perhaps
worse, the Committee did not even attempt to address the many
problems impeding Amtrak's financial and operational
performance, including Amtrak's inability to control expenses.
Rather than holding Amtrak accountable for its continuing poor
performance and management problems as was expected under the
Amtrak Reform and Accountability Act (ARAA) (P.L. 105-134),
Amtrak's failure to achieve operational self-sufficiency as
required by law is instead being rewarded with billions of
dollars in new subsidies to maintain its existing network and
expand into high-speed rail operations.
The bill also ducks the toughest questions of all - whether
we can afford and how we will pay for S. 1991, given the many
competing demands already being placed on the budget,
particularly since the September 11, 2001, terrorist attacks.
Clearly, Amtrak's customers will not be able to foot the bill.
The cost of the Amtrak and high-speed rail provisions alone
would add $190 to the price of every ticket.
I think we need a reality check. If S. 1991 is enacted,
authorizations for intercity passenger rail (both Amtrak and
high-speed rail) will rise to approximately $4.5 billion
annually, or almost nine times the level appropriated for
Amtrak in FY2002. Moreover, it is nearly two- thirds the level
of the entire Federal transit program, yet if one considers
ridership levels, transit ridership stands at 9.5 billion trips
per year while Amtrak ridership is just 23.5 million.
High-speed rail development is a very high-cost proposition
and one that no one can accurately predict today. Amtrak has
estimated the cost to develop the 11 existing corridors
designated for high-speed rail development (before the
additional segments designated by S. 1991) at between $50 and
$70 billion. Further, the obligation will not stop with initial
construction. Just like the Northeast Corridor, other high-
speed corridors will have large annual capital requirements to
maintain track and signals and to refurbish and replace
equipment. I am concerned that the $4.5 billion annual subsidy
under S. 1991 will become a permanent Federal obligation. And
the purpose of the subsidies will be to provide competition to
other modes of transportation, including airlines, intercity
buses and automobile, that are largely self-supporting through
user charges.
An underlying theme of S. 1991 and this report is that
intercity passenger rail has been shortchanged relative to
Federal funding for highways and airports. But the reason
hundreds of billions of dollars have been invested for those
modes is that their users are funding these expenditures
through fuel taxes, surcharges on airline tickets and other
fees. This cannot be said of Amtrak. Amtrak appropriations are
a subsidy, pure and simple, for a comparatively small group of
customers -- less than 1 percent of the traveling public.
AMTRAK (TITLE III)
Repeal of Amtrak self-sufficiency requirements
Five years ago, when Amtrak was last reauthorized, Congress,
by an overwhelming majority, adopted the ARAA. The law provided
liability, labor and procurement reforms Amtrak said it needed
to operate more like a private business. With these changes,
that Act required that Amtrak achieve ``operational self-
sufficiency'' no later than the fifth anniversary of enactment,
which is December 2, 2002. Operational self-sufficiency was a
benchmark Amtrak emphatically and repeatedly said it could
meet.
The 1997 Act clearly intended that Amtrak be substantially
reformed or liquidated if Amtrak failed to meet its financial
goals. The Act set up the Amtrak Reform Council (ARC) to
oversee Amtrak's progress and charged the Council with
submitting a plan for a ``restructured and rationalized
national intercity rail passenger system'' if the Council
determined Amtrak would not achieve self-sufficiency.
Until quite recently, Amtrak insisted that it was on a
``glide-path'' to self-sufficiency. What we now know is that
Amtrak was only able to make such claims because it was selling
equipment, borrowing to generate cash, and mortgaging its
assets - including a portion of New York's Penn Station for
$300 million - just to keep operating. I am not alone in
feeling deceived by Amtrak's purposely misleading statements.
Amtrak initially told Congress it would achieve operational
self-sufficiency in FY2002. With the delay in the introduction
of Acela and Amtrak's inability to control the growth of its
expenses, Amtrak presented a more modest plan in FY2001,
forecasting that it would achieve self-sufficiency by FY2003
(see figure 1). But Amtrak made no progress even under its more
modest plan. Losses for purposes of the self-sufficiency test,
which looks at Amtrak's cash loss excluding excess railroad
retirement payments, were $341 million in FY2001, a loss higher
than that recorded in FY1997. In November 2001, the ARC found
that Amtrak would not achieve self-sufficiency and in January
2002, the Department of Transportation (DOT) Inspector General
concluded that ``Amtrak's cash losses have not decreased and
Amtrak is no closer to operating self-sufficiency now than it
was in 1997.''.
Amtrak's latest business plan for FY2002 and FY2003, issued
in January 2002, makes no mention of operational self-
sufficiency even though it is required to meet this financial
goal. The forecasts for both years are lower than those in
previous plans and, even if met, will produce estimated losses
of $179 million in FY2002 and $199 million in FY2003 for
purposes of the self- sufficiency test.
Amtrak's failure to make any progress toward self-sufficiency
does not mean the standard was unfair or unachievable. It means
that more reform and better management decisions are needed. It
means Amtrak officials need to be held accountable to implement
the policies needed to meet its own business plan objectives.
And it means getting ``straight talk'' when it comes to
Amtrak's financial and operating performance.
The ARC submitted its recommendations for restructuring
Amtrak on February 7, 2002. In its report to Congress, the ARC
recommended separating Amtrak's Northeast Corridor
infrastructure from its operations to free Amtrak of the large
capital burden imposed by ownership of the Corridor. It also
recommended that the Federal government take a more active role
in overseeing Amtrak and assume responsibility for policy
issues now largely left up to Amtrak. Most significant was the
ARC's proposal to permit franchising of Amtrak's routes after a
transition period during which Amtrak would ``get its house in
order.'' Competition, the ARC reasoned, would force Amtrak to
operate more efficiently.
S. 1991 fails to give any acknowledgment to any of the
recommendations by this 11- member bipartisan Council. It
simply repeals the self-sufficiency provisions enacted in 1997.
S. 1991 would ensure that once again, Amtrak will not be held
accountable for its financial or management decisions.
Prior to Committee action on S. 1991, I introduced
legislation (S. 1958) to fundamentally alter intercity rail
passenger service in our nation. This legislative proposal
includes placing Amtrak under a Control Board, similar to the
District of Columbia Control Board, to enforce financial and
management discipline. It would also introduce competition for
passenger rail services and, after a transition period,
privatize Amtrak. As evidenced during and since the Commerce
Committee's hearing on March 14, 2002, there are a number of
private interests willing and able to operate train services,
maintain equipment, and perform other passenger- related
services. Thirty-one years after the formation of Amtrak, it is
no longer necessary for the Federal government to sponsor and
own a national passenger rail company to compete with other
privately supported modes. Under the right conditions, better
services can be provided more effectively by the private
sector. After all, we don't have only one national bus carrier
or one national air carrier.
Authorizations to fund principal and interest on Amtrak debt
Over the past five years, Amtrak has more than tripled its
debt to $3.6 billion, including a $300 million mortgage on a
portion of New York's Penn Station. It is this additional debt
that until recently permitted Amtrak to assert that it was on a
glide-path to self sufficiency. To most of us, the idea of
increasing debt obligations to claim we have achieved our
financial objectives would seem counterintuitive to our
intended purpose of an improved financial situation as
statutorily required of Amtrak. Obviously, Amtrak management
does not see it the way most of us do?
Interest on its debt is now one of Amtrak's fastest growing
expenses. In FY2001, interest expense was $85 million and,
according to the DOT Inspector General, will increase to $225
million in FY2005. Unable to fund either the interest or
principal from operating revenues, Amtrak now seeks Federal
assistance to cover these costs. As such, S. 1991 would
authorize a total of $1.3 billion through FY2007 for this
purpose. I am concerned that while the bill relieves Amtrak of
the responsibility to fund its self-incurred debt, it provides
no safeguards or assurances to prevent Amtrak from borrowing
yet more money and further increasing the cost to the
taxpayers.
During the executive session on April 18, 2002, I offered an
amendment to require that Amtrak obtain the approval of the
Secretary of Transportation before assuming any additional debt
obligations. Currently, Amtrak is free to borrow funds for
capital projects -- including equipment acquisitions (or sales
and lease-backs) and infrastructure improvements on property to
which the Federal government does not hold title -- without
Federal approval. The proponents of S. 1991 intend to retain
the status quo in this regard. Moreover, under the provisions
of S. 1991, Amtrak would also be authorized to borrow funds
under the RRIF program to fund high-speed rail projects. And it
is easy to predict based on history who will be expected to pay
for these loans - the taxpayers.
Although my amendment was defeated on a nearly unanimous vote
among party lines, I continue to believe that strict oversight
of future borrowing is needed. The authorizations in S. 1991
for principal and interest payments are not even based on
Amtrak's total debt. Even if Amtrak does not assume any
additional obligations between now and the end of FY2007, the
debt on its books will rise another $400 million to reflect
obligations already incurred that will begin coming due.
Further, the payments that would be required to be made by
taxpayers under S. 1991 will not come close to eliminating
Amtrak's debt. Amtrak has indicated that at the end of FY2007,
the principal balance on outstanding debt will still be $2.8
billion. All the more reason, I believe, to ensure that Amtrak
is prevented from digging an even deeper hole for itself and
the American taxpayers without proper government oversight.
Amtrak Authorizations
S. 1991 would authorize a total of $14.7 billion over five
years for Amtrak to maintain Amtrak's existing network -- about
three times Amtrak's current authorization level. I have a
number of concerns about these provisions.
First, the funding levels are inconsistent with Amtrak's own
funding requests. In its annual grant request to Congress,
dated February 15, 2002, Amtrak requested a total of $1.2
billion for FY2003. While Amtrak stated that this amount is the
minimum necessary to maintain its existing network and will not
allow it to address its capital backlog, S. 1991 provides no
justification for almost doubling the amount requested by
Amtrak to $2.3 billion. Amtrak's grant request includes $200
million to cover operating losses on its long-distance trains.
Yet, S. 1991 authorizes $360 million annually to offset these
losses. Even Amtrak's long-term capital plan does not suggest
that authorizations of the magnitude provided in S. 1991 are
necessary to meet current or projected needs.
The only consistent trend with respect to Amtrak funding is
that whatever Congress authorizes, it will not be enough. Over
the past five years, Amtrak has received $6.3 billion in
subsidies, including $5.1 billion from the Federal government
and $1.2 billion from a number of states. Even so, Amtrak's
operating loss in FY2001 was $1.1 billion, the highest loss in
Amtrak's history.
The real issue is that the American taxpayers are getting so
little value for their investment and are being forced to
continue subsidizing trains that will never even come close to
breaking even. Amtrak's losses are concentrated on, although
not limited to, its long-distance routes, i.e., the 19 routes
with an average rider trip of more than 300 miles. 1
In FY2001, these routes accounted for 75% of Amtrak's operating
losses, excluding depreciation, but carried only 18% of
Amtrak's passengers. For example, the Sunset Limited lost $347
per passenger last year, roughly double the average fare paid
by passengers who rode the train. The Texas Eagle, which is
slated for expansion, lost $258 per passenger, about $100 more
than the average fare.
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\1\ The Kentucky Cardinal is included in the list of long-distance
trains since in FY2001 it provided sleeping accommodations for
overnight riders.
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Most of the trains on the long distant routes have break-even
load factors well above 100%, meaning that they cannot break
even on operating expenses (excluding depreciation) even if
every seat were filled. The Cardinal, for example, which runs
between Chicago, IL, and Washington, DC, had a break-even load
factor of 182% in FY2001. This means that in order to cover its
operating costs, every seat would have had to be occupied by
almost two riders. But of course, it is these very trains that
attract the fewest passengers.
In testimony before Congress on April 11, 2002, the U.S.
General Accounting Office (GAO) reported that in 12 of the 46
states in which Amtrak operates, fewer than 100 passengers on
average board Amtrak trains on a daily basis. In 34 states,
fewer than 1,000 passengers on average board Amtrak trains
daily (see figure 2). In my home state of Arizona, just 116
passengers board Amtrak trains daily, compared to 56,500 daily
airplane boardings in the state.
My view is that the market should decide what train services
are provided. This would likely mean an elimination of service
along many long-distance routes, but could also mean the
initiation of new short-distance corridor services that would
be utilized by passengers. Corridor services are Amtrak's best
financial performers today and are responsible for Amtrak's
recent increases in ridership. Under this approach, if a route
cannot be self-supporting, it would be discontinued unless a
state or states agree to provide a subsidy to maintain service.
This approach would also improve the equity among the states
supporting Amtrak. Today, some states including California,
Illinois, Michigan, Missouri, Washington, Oregon and North
Carolina, make significant contributions to support Amtrak
while others pay nothing. For example, the States of Oregon and
Washington provided operating support of $16.3 million in
FY2001 for the Cascades service. California contributed $63
million in operating support for the San Joaquins, the Capitols
and the Pacific Surfliners. Yet states benefitting from the
long- distance routes, the routes with the highest losses,
contribute no direct assistance and simply get a free ride.
Requiring states to subsidize services has the added benefit
of providing more state involvement and oversight of Amtrak.
Where states presently play a more active role, Amtrak operates
more efficiently and is more accountable. States contributing
financial support pay attention to Amtrak to ensure they are
getting what they are paying to receive. Particularly if Amtrak
is permitted to retain its monopoly, as would certainly be the
case under S. 1991, this kind of involvement by the states is
critical to ensuring Amtrak delivers operating improvements,
not to mention, even its standard level of service.
I strongly support Senator Wyden's amendment, adopted during
the executive session, to require the establishment of
objective criteria for Amtrak service changes, including the
establishment of new routes, the elimination of existing
routes, and the contraction or expansion of existing routes.
Objective criteria are absolutely essential if we are to
succeed in introducing a rational approach to evaluating
Amtrak's network. I am concerned, however, that the amendment
does not go far enough since there would be no consequences if
Amtrak makes decisions inconsistent with the criteria. In order
for route criteria to be an effective tool, a governmental body
such as the DOT must enforce their application; routes that
cannot meet threshold standards should be required to be
discontinued or subsidized at the state level.
Financial accounting provisions
Although S. 1991 would make modest changes to Amtrak's
accounting and planning practices, the changes would hardly be
enough to enforce financial discipline. For the last several
years, we have had the DOT Inspector General, the GAO, the ARC,
and several Congressional committees, reviewing Amtrak's
finances and decision-making on a regular basis. But all of
this oversight has taken the form of audits after the fact and,
as a result, only assess past actions rather than influencing
current and future decisions.
Amtrak has been unable to take necessary actions on its own
to improve its financial and operating situation. More pro-
active oversight is required to help Amtrak succeed. That is
why I believe Amtrak would greatly benefit by the creation of a
Control Board, modeled after the DC Financial Control Board
that so successfully addressed the financial crisis of the
government of the District of Columbia. A Control Board would
be involved upfront, reviewing and approving Amtrak's business
plan and ensuring that Amtrak sticks to its financial plans and
business objectives throughout the year. The Control Board
would oversee the allocation of Federal funds to Amtrak and
would approve any additional borrowing by Amtrak. It would also
seek operating and managerial efficiencies for Amtrak and work
with Amtrak on actions to close the gap between operating
revenues and expenses.
I support the intent of the provisions of S. 1991 aimed at
making Amtrak's accounting more transparent and requiring
Amtrak to submit its business plan to Congress before the start
of each fiscal year. Amtrak's current practice of submitting
its business plan during the second quarter is simply
unacceptable. A business plan is not useful in guiding the
management of an organization if is not put into effect until
the year is a quarter to half over. Nor can it be used
effectively by Congress in setting funding priorities.
Section 312, added by one of my amendments adopted by the
Commerce Committee, would require that Amtrak, in consultation
with the DOT Inspector General, revise the methodology Amtrak
uses to prepare its annual Route Profitability report to
Congress. This report summarizes the financial performance of
each of Amtrak's trains. In recent years, Amtrak has changed
annually the manner in which the report is prepared,
deliberately making it impossible to compare similar data on a
year by year basis. For example, most recently, Amtrak began
subtracting ``non-core'' profits from the reported losses on
train operations to reduce the overall reported loss by about
$200 million. Even though most non-core profits are earned on
the NEC, Amtrak applied the profits to routes in order of the
losses on its routes, i.e. the routes with the largest losses
received the largest allocation of non-core profits. My
amendment would require that Amtrak discontinue this misleading
practice.
HIGH-SPEED RAIL (TITLE II)
High-speed rail planning and implementation
S. 1991 embarks the Federal government on what could be an
endless journey into a bottomless money pit for the development
of high-speed rail. While a number of initiatives regarding
high-speed passenger rail have been advanced in the past
several years, most notable the Acela service on the NEC, this
bill breaks new ground in creating a true pork barrel program.
Sections 202 and 203 would make the Federal share for high-
speed rail projects 100% of project costs. I believe this level
of funding, requiring no state or local match, would be
unprecedented. Federal-aid highway projects require a 10% share
on the Interstate system and a 20% match on other National
Highway System routes. The new starts program for transit
requires a 20% match, although more often, the Federal Transit
Administration (FTA) negotiates a local share of 40% to 50%.
Legislation recently approved by this Committee, S. 1220, to
establish a new grant program for shortline railroads mandates
a 20% railroad match. But S. 1991 would treat high-speed rail
projects in a manner entirely different.
State participation, in addition to helping defray project
costs, helps ensure that frivolous or inadvisable projects are
not proposed. With a stake in the project, states have the
incentive to propose only meritorious projects and to manage
their own funds and Federal funds responsibly. It would be a
serious mistake not to require a state match for high-speed
rail projects. Yet again, S. 1991 imposes no state
participation whatsoever.
S. 1991 is also the first piece of legislation to broach the
issue of the need to provide operating subsidies for high-speed
rail. Under Section 204, operating expenses would be made
eligible for funding, presumably at a 100% Federal share.
Proponents of high-speed rail projects, including the Midwest
Regional Rail Initiative, assert that after an initial ramp-up
period, the train services will show a profit at least on a
cash basis. But this is the self-sufficiency argument all over
again. Given the Amtrak experience, is it reasonable to assume
that high-speed projects will be able to achieve what Amtrak
could not - particularly if Amtrak will be the high-speed
operator? The United States has little experience developing
high-speed rail and I am concerned that we could be creating a
large new Federal liability with this provision. Operating
losses associated with high-speed service could well be a
multiple of Amtrak's current losses. We simply have no way of
knowing at this point what would be the level of exposure. I
strongly urge my colleagues to support an amendment on the
floor to strike this dangerous provision. Operating losses
should be a responsibility of the state or states sponsoring
the project, similar to state funding of conventional new
service on Amtrak's corridors.
Another provision in Title II would reduce the threshold
speed for what is defined as ``high speed'' passenger service
from 125 miles per hour to 90 miles per hour, or just 11 miles
per hour faster than Amtrak's current top speed. It is hard to
imagine that the traveling public will change its travel
patterns and behavior in any significant way with such a small
increase in train speed. At a top speed of 90 miles per hour,
average speed with station stops may only be 55 to 60 miles per
hour, a far cry from the Shinkansen and the TGV.
The corridors themselves are also an issue. The 11 corridors
currently designated for high-speed rail development were not
selected based on an evaluation of where high-speed rail can be
viable or add to the efficiency of the overall transportation
system. The designations are a wish list of projects supported
by the states and largely adopted through political support.
The Christian Science Monitor recently published a report
characterizing the Committee's approach to high-speed rail as
the ``field of dreams'' -- ``build it and they will come.''.
Perhaps even a more accurate statement would be ``build it and
maybe they will come.''.
High-speed projects will be selected for implementation
funding from this pool of 11 candidate corridors (with the
addition of several new high-speed segments statutorily
designated by S. 1991). Yet, S. 1991 would require no cost-
benefit or economic analysis. The only issues to be considered
would be intermodal connectivity, positive train control
technologies, a regional balance in funding allocation, the
level of safety of the project, and whether the project is
compatible with state and local transportation plans.
What a contrast to the existing Federal transit program. The
FTA new starts program follows a structured analysis for
project consideration from concept through preliminary
engineering to final engineering and construction. Projects are
not eligible for any significant funding until they reach the
final design stage. Each project is reviewed by the FTA and
receives a ranking of ``highly recommended'', ``recommended'',
or ``not recommended'' based on a series of evaluations of the
projects benefits. Every new start project must also have a
full funding grant agreement with FTA before construction can
begin.
If S. 1991 is brought before the full Senate, I intend to
offer an amendment that would require a thorough economic
analysis with threshold performance requirements to be applied
to any proposed high-speed rail project. I also favor applying
transit's project development process to intercity high-speed
passenger rail projects. A requirement that I advocated to
ensure that projects have full funding grant agreements similar
to those for transit new starts has already been adopted by the
Committee.
Finally, I am compelled to oppose the designation of specific
projects located in Chicago, Atlanta, Dallas/Fort Worth,
Portland, and Orlando for priority funding of high-speed rail
projects. These projects have obviously been singled out to
generate additional support for S. 1991. All projects should be
required to compete for funding on their merits and project
sponsors should have enough confidence in the value of their
project to be willing to forego special legislative treatment.
Except for the fact that each of these cities happens to be
represented by a member serving on the Senate Commerce
Committee and who voted in support of passage of this bill, the
Committee has received no independent or objective analysis to
support the merits of these proposed projects.
Introducing competition for high-speed rail service
During executive session, the Committee adopted, with
modifications, an amendment I offered to require that all high-
speed rail services be subject to competitive bidding. The
amendment offered provides for exclusive franchises given
concerns about safety and capacity and the fact that the market
is generally not large enough to support more than one
operator. To ensure that there would be ``effective
competition'' for the market, the amendment would grant
competitors the right to access the rights-of-way of the
freight railroads on the same terms as Amtrak, i.e. at
incremental cost and with operating priority. As a result of
discussions among the members, the Committee agreed to modify
the amendment to specify that any entity operating high-speed
rail service must be subject to the Railway Labor Act, the
Railroad Retirement Act and other applicable railroad laws.
Subsequently, however, the majority refused to include in the
reported bill the portion of the amendment that expands access
to entities selected as the provider of high-speed operations
other than Amtrak. I strongly object to the majority's view
that it can unilaterally decide what will and will not be in a
bill, regardless of the opinion clearly reflected in the
transcript. This contravenes the legislative process and sets a
bad precedent for how this Committee will handle controversial
issues.
I will continue to press for full and fair competition for
high-speed rail projects. Introducing competition will drive
Amtrak and competitors to operate efficiently and provide
better service to the traveling public. We see the benefits of
competition in the market everyday. Where competition exits,
prices are lower, companies are more responsive to their
customers, and customers know they are getting real value for
their dollars.
Today, there is no alternative to Amtrak. Amtrak's statutory
monopoly may have been repealed in 1997, but Amtrak is still
the only railroad that can access the right-of-way of the
freight railroads on an incremental cost basis. This puts all
other operators at a significant competitive disadvantage and
effectively prevents any carrier other than Amtrak from
providing service. We should not extend Amtrak's monopoly to
high-speed rail.
Competition for the passenger rail market is feasible and
workable. At the Committee's hearing in March, we heard from
Mercer Management Consulting, which has been involved in rail
privatization initiatives around the world, that if a process
were put in place to privatize Amtrak, there would be a number
of private parties interested in participating in a privately-
operated passenger rail network. In response to Chairman
Holling's invitation to Mercer to ``sell Amtrak'', a draft
blueprint for privatization was prepared by Mercer and
circulated to potential interested parties. To date, Mercer has
received expressions of interest from 16 companies, including
Bombardier Transportation, Connex North America, Deutsche Bahn
AG, and Kawasaki Rail Car. Additional companies have expressed
interest in learning more about the process.
Franchising is not new in the rail industry. Countries around
the world are using franchising to reform their passenger and
freight rail systems. In fact, U.S. freight railroads invested
in new rail entities that won freight franchises in Mexico.
Authorizing franchising does not mean that Amtrak will not
continue to perform the service. But I believe the pressure of
competition will have an immediate and positive effect on
Amtrak's efficiency and quality of service. We have nothing to
lose and everything to gain by introducing competition for the
passenger rail market.
RAILROAD REHABILITATION IMPROVEMENT FINANCING (TITLE IV)
Several proposed changes to the Railroad Rehabilitation
Improvement Financing (RRIF) program concern me. There is no
immediate need to increase the amount of loans and loan
guarantees available under the program from $3.5 billion to $35
billion. This program was last amended as part of the
Transportation Equity Act for the 21st Century (TEA-21), in
which the level was raised from $1 billion to $3.5 billion, and
brought into compliance with the Credit Reform Act of 1990.
Even if all of the loan applications pending today before the
FRA should be approved, the total obligation will be $569
million, far below the current cap. While there have been
stumbling blocks with this program, it does not appear that
demand for loans and loan guarantees comes anywhere close to
exceeding amounts now available. We can consider increasing the
program if and when demand exceeds $3.5 billion.
Further, I am not in favor of making mandatory the
Secretary's authority to issue loans and loan guarantees. The
Secretary should be able to exercise good judgment to protect
the interest of the taxpayers. I am aware of no other loan
guarantee program for the transportation sector that mandates
that the Secretary execute loans. For example, the Title XI
loan guarantee program, the Transportation Infrastructure
Finance and Innovation Act (TIFIA) loan program established by
TEA-21, and the aviation loan program created by the Aviation
Security Act last fall are all discretionary. The RRIF program
should also remain discretionary. Finally, I oppose the
provision that prohibits the Secretary from requiring
collateral. While the RRIF program is specifically intended to
provide financial assistance to shortline and regional
railroads, Class I carriers and (pursuant to an amendment
offered by Senators Dorgan and Rockefeller and adopted by the
Committee, railroad customers and other persons) are also
eligible for RRIF loans. These entities are fully capable of
providing collateral to safeguard the government's investment.
It is regrettable S. 1991 does not do more to effect positive
change for our nation's intercity rail passenger system. S.
1991 requires virtually no reform or restructuring of Amtrak.
In fact, Amtrak would be even less accountable to Congress and
the American taxpayer because the legislation would repeal the
directive that Amtrak achieve operational self-sufficiency.
Amtrak as we know it today would not only be perpetuated but
significantly expanded -- as would the Federal government's
funding obligations. This is opposite the direction that we
should be moving.
In spite of the $25 billion in Federal assistance invested
over the past 31 years, Amtrak only carries 2 million more
passengers now than it did in 1979. It serves less than one
percent of the traveling public. Some argue that Amtrak has
been underfunded compared to highways and airports. But the
infrastructure for those modes is funded through user fees. S.
1991 is silent on how the substantial increase in Federal
obligations provided under this bill would be paid.
The answer to how best to secure a sound future for intercity
passenger rail is not just passing a multi-billion authorizing
bill. Amtrak must be reformed and it must be held accountable
to fulfill its business plan goals. To accomplish this, we must
reassess what value Amtrak adds to our national transportation
system; the role of the Federal government, the states, the
commuter authorities and others in providing financial support;
and how and where the trains can be most efficiently operated
to provide the best service. Until then, we are only
maintaining the status quo and prolonging the inevitable tough
decisions.