[Senate Report 107-232]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 540
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-232
_______________________________________________________________________





                        SAFE RAILS ACT OF 2001

                               __________

                              R E P O R T

                                 OF THE

           COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                                    on

                                S. 1871



                                     

                 August 1, 2002.--Ordered to be printed
                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
99-010                    WASHINGTON : 2002

       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 J. 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
                                                       Calendar No. 540
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-232

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



 
                         SAFE RAILS ACT OF 2001

                                _______
                                

                 August 1, 2002.--Ordered to be printed

                                _______
                                

      Mr. Hollings, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                              R E P O R T

                         [To accompany S. 1871]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 1871) to direct the Secretary 
of Transportation to conduct a rail transportation security 
risk assessment, and for other purposes, having considered the 
same, reports favorably thereon with amendments and recommends 
that the bill, as amended, do pass.

                          PURPOSE OF THE BILL

  The purposes of the bill, as reported, are to direct the 
Secretary of Transportation to assess security needs associated 
with the transportation of hazardous materials by rail and to 
provide funding to reimburse freight railroads, eligible 
shippers and tank car owners for costs incurred to improve 
railroad security on or after September 11, 2001.

                          BACKGROUND AND NEEDS

  The terrorist attacks of September 11, 2001, unquestionably 
have changed the paradigm for what constitutes safety in 
transportation. As a consequence, attention has shifted from 
mainly preventing accidents to protecting people and cargo from 
deliberate acts of terrorism. Moreover, as a result of the 
targeting of, and specific attacks on the World Trade Center 
and the Pentagon, several major steps have been taken to 
improve the nation's safety and security overall: a new Office 
of Homeland Security has been created; supplemental 
appropriations have been approved to fight the war on 
terrorism; and U.S. border points of entry have been staffed at 
higher levels. Congress is also considering legislation to 
establish a Departmental agency dedicated to Homeland Security, 
and legislation to improve cargo security.
  With respect to transportation specifically, the terrorist 
attacks of September 11, 2001, have clearly highlighted the 
need for increased security and vulnerability awareness of the 
nation's transportation infrastructure. While those attacks 
were directed at the aviation system, the nation's other 
transportation modes are also vulnerable. In a free and open 
society, surface transportation systems such as transit 
operations, railroad systems, seaports and vessels, bridges and 
tunnels, and vehicles transporting hazardous materials may 
become targets for terrorists. The terrorist attacks involving 
four commercial airliners demonstrate that security concerns 
involve not only passengers, but also the potential risk that 
parts of the national transportation system can be used as 
weapons. Additionally, because of the essential role of 
transportation systems in the movement of goods and people, 
terrorist actions have the potential to harm our economic well-
being, as well as public safety. As these risks are weighed in 
the wake of last September's terrorist attacks, efforts to 
protect the country's transportation infrastructure and to 
reduce these vulnerabilities are essential to our national 
security interests.
  Though perhaps a less obvious target than the nation's air-
passenger system, freight transportation is critical to the 
movement of goods. It is generally recognized, however, that it 
is difficult to police the nation's rail transportation network 
given the miles of rail lines operated throughout the United 
States. As a result, the network could be a relatively easy 
target, penetrating the heart of major cities and tunneling 
beneath sites of national significance.
  Possible industrial transportation targets include railroads, 
highways, and marine vessels, which carry 800,000 shipments of 
hazardous materials each day, and more than 4 billion tons per 
year. The tonnage transported over land is equally divided 
between truck and rail. Experts note that these shipments of 
hazardous materials present significant safety and security 
risks. Bridges and tunnels are also major points of 
vulnerability to attacks that might both take lives and disrupt 
transportation networks.
  Since September 11, 2001, railroads have stepped up 
inspection of tracks, bridges, tunnels, terminals, fuel depots, 
freight cars, locomotives, and communication centers while 
railroad police guard critical facilities. In addition, the 
railroad industry through the Association of American Railroads 
(AAR) undertook a comprehensive evaluation of its security 
needs focusing on all aspects of rail transportation. The 
railroads have maintained a heightened state of alert since 
September 11, 2001, and have worked with national security 
offices to address shipments of sensitive materials during 
times of increased national security threats.

                          LEGISLATIVE HISTORY

  On October 2, 2001, Senator Breaux chaired a hearing on rail 
and maritime security. At the hearing, Rear Admiral James W. 
Underwood, Director of the Office of Intelligence and Security 
of the Department of Transportation, and Mr. Edward R. 
Hamberger, President of the AAR, provided testimony on the 
security risks confronting the industry, actions taken by the 
railroad industry to address security concerns, and newly 
identified needs facing the railroad industry in a post-
September 11 environment.
  Senator John D. Rockefeller IV introduced S. 1871 on December 
20, 2001. It was read twice and referred to the Committee on 
Commerce, Science, and Transportation.
  On April 18, 2002, the Committee on Commerce, Science, and 
Transportation ordered S. 1871 to be reported favorably with 
amendments. The amendments were offered by Senator Rockefeller 
to update the short title of the bill and adjust the fiscal 
years in which security funds would be authorized to be 
appropriated from 2002 and 2003 to 2003 and 2004; an amendment 
also corrected an incorrect section reference.

                            ESTIMATED COSTS

  In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 13, 2002.
Hon. Ernest F. Hollings,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1871, the Safe Rails 
Act of 2002.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julie 
Middleton.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 1871--Safe Rails Act of 2002

    Summary: S. 1871 would authorize the establishment of a 
Rail Security Fund that would be used to make grants to freight 
railroads, hazardous materials shippers, and the owners of tank 
cars used to transport hazardous materials for security costs 
incurred on or after September 11, 2001. In addition, the bill 
would authorize the Secretary of Transportation to perform a 
risk assessment and security needs analysis of hazardous 
materials transportation. Assuming appropriation of the 
authorized amounts, CBO estimates that enacting S. 1871 would 
cost $185 million over the 2003-2007 period, and an additional 
$105 million after 2007. S. 1871 would not affect direct 
spending or receipts; therefore, pay-as-you-go procedures would 
not apply.
    S. 1871 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impacts of S. 1871 is shown in the following table. 
The costs of this legislation fall within budget function 400 
(transportation).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2003     2004     2005     2006     2007
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION

Authorization Level................................................      150      150        0        0        0
Estimated Outlays..................................................        7       24       40       51       63
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that S. 
1871 will be enacted early in fiscal year 2003 and the 
necessary funds will be appropriated for each year. The bill 
would authorize $150 million in both fiscal years 2003 and 2004 
for the Rail Security Fund. Outlay estimates are based on 
information from the Department of Transportation, as well as 
historical spending patterns of similar programs.
    In addition, the bill would require the Secretary of 
Transportation to report on risk assessment on security needs 
within six months of enactment. CBO expects that the report 
would cost less than $1 million, subject to the availability of 
appropriated funds.
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: S. 1871 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal Costs: Julie Middleton; 
Impact on State, Local, or Tribal Governments: Susan Sieg 
Tompkins; and Impact on the Private Sector: Cecil McPherson.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      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:
  Because S. 1871 does not create any new programs, the 
legislation will have no additional regulatory impact, and will 
result in no additional reporting requirements. The legislation 
will have no further effect on the number or types of 
individuals and businesses regulated, the economic impact of 
such regulation, or the personal privacy of affected 
individuals. Any impact on paperwork would be dependent on 
application procedures established by the Secretary of 
Transportation.

                      SECTION-BY-SECTION ANALYSIS


Section 1. Short title

  This section would entitle the Bill as ``The Safe Rails Act 
of 2002.''

Section 2. Rail Transportation Security Risk Assessment

  Subsection (a) would require the Secretary of Transportation 
to conduct a comprehensive vulnerability and security needs 
analysis of hazardous materials transportation by rail. The 
Secretary would be required to make recommendations for 
improving the security of rail infrastructure in areas 
identified as posing a significant risk to human health, public 
safety, and interstate commerce, and for dealing with the 
immediate and long-term economic impact of implementing the 
measures required to address those risks.
  Subsection (b) would require that, in conducting the required 
assessments, the Secretary consult with and use materials 
prepared by the railroad, chemical, and tank car leasing 
industries, as well as any relevant security analyses or 
assessments prepared by Federal or State law enforcement, 
public safety, or regulatory agencies.
  Subsection (c) would require that within 180 days of 
enactment of the Act, the Secretary issue a report to the 
Senate Committee on Commerce, Science, and Transportation and 
the House of Representatives Committee on Transportation and 
Infrastructure, without compromising national security. The 
report will include proposals the Secretary feels are 
appropriate for Federal financial, technological, or research 
and development assistance in securing rail infrastructure.
  Subsection (d) would provide that, with the exceptions of the 
required report to Congress and instances when the limited 
disclosure of certain information is required to protect human 
health or public safety, the Secretary may keep the assessment 
and analysis confidential. Such confidential information will 
not be subject to disclosure under 5 U.S.C. 552 (the Freedom of 
Information Act).

Section 3. Rail Security Fund

  Subsection (a) would require that the Secretary of the 
Treasury establish a Rail Security Fund account in the Treasury 
into which the Secretary of Transportation would deposit 
amounts appropriated for the Rail Security Fund.
  Subsection (b) would authorize the Rail Security Fund to be 
appropriated $150,000,000 for each of fiscal years 2003 and 
2004. Amounts would remain available until expended.
  Subsection (c) would prohibit grants in excess of 
$100,000,000 to railroads annually unless the Secretary's risk 
assessment determines that critical rail transportation 
security needs require reimbursement above that amount.
  Subsection (d) would provide that the fund is available for 
the Secretary of Transportation to make grants to freight 
railroads, hazardous materials shippers, or owners of tank cars 
used in the transportation of hazardous materials for full or 
partial reimbursement of the costs incurred on or after 
September 11, 2001, to prevent or respond to acts of terrorism, 
sabotage, or other security threats. Under this subsection, 
activities eligible for full or partial reimbursement would 
include: unanticipated rerouting or switching of trains 
carrying hazardous materials to different routes or locations; 
hiring additional manpower necessary for security; purchasing 
equipment or training needed to enhance hazardous materials 
emergency response operations; improvements in and securing of 
critical communications; developing and deploying secure global 
positioning satellite tracking systems on tank cars carrying 
hazardous materials; investments in physical hardening of rail 
infrastructure; tank car modifications; improved technology for 
sealing rail cars; and research and development supporting 
enhanced security.
  Subsection (e) would require the Secretary of Transportation 
to adopt necessary procedures, including audits, to ensure that 
grants are used for their intended purposes.

                        CHANGES IN EXISTING LAW

  In compliance with paragraph 12 of rule XXVI of the Standing 
Rules of the Senate, the Committee states that the bill as 
reported would make no change to existing law.

                                  
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