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99–010

" ! SENATE 107th Congress

2d Session

REPORT

2002

107–157

NATIONAL DEFENSE RAIL ACT

REPORT

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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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

ERNEST F. HOLLINGS, South Carolina, Chairman

DANIEL K. INOUYE, Hawaii

JOHN D. ROCKEFELLER IV, West Virginia

JOHN F. KERRY, Massachusetts

JOHN B. BREAUX, Louisiana

BYRON L. DORGAN, North Dakota

RON WYDEN, Oregon

MAX CLELAND, Georgia

BARBARA BOXER, California

JOHN EDWARDS, North Carolina

JEAN CARNAHAN, Missouri

BILL NELSON, Florida

JOHN MCCAIN, Arizona

TED STEVENS, Alaska

CONRAD BURNS, Montana

TRENT LOTT, Mississippi

KAY BAILEY HUTCHISON, Texas

OLYMPIA SNOWE, Maine

SAM BROWNBACK, Kansas

GORDON SMITH, Oregon

PETER G. FITZGERALD, Illinois

JOHN ENSIGN, Nevada

GEORGE ALLEN, Virginia

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

(II)

107TH CONGRESS REPORT

2d Session " ! SENATE 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

REPORT

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, deVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00003 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
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mand 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 welltraveled 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.

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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. Congestionrelated 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,

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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

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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 corridorstyle 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,

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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 costcompetitive 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 highspeed 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

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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, highspeed trains have the potential to deliver passengers downtown-todowntown almost as fast as airplanes at a fraction of the ticket

price, and can do so in virtually all weather. For example, the MidVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00009 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
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west 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. Highspeed 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 fuelefficient 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 coachclass 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

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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 routemile, 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 steelVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00011 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
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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 highspeed 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

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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

12

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

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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

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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

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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 longerterm 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 instiVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00017 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
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tuted 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 im- proved 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

17

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 highspeed 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,

18

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 cosponsored 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

19

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 conVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00021 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
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tribute, 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.

21

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.

22

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

23

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-ofway 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.

24

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 gradecrossing improvements and eliminations, and acquisition of rightof-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 rulemaking to create procedures for the awarding of implementation

assistance under this section. These procedures must include steps

for application and qualification, competitive bidding requirements,

25

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 inVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00027 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
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cluded 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 nonpassenger 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.

27

• $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 servVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00029 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
28

ice 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

29

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.

30

• 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

31

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:

32

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. Inouye1

Mr. Fitzgerald Mr. Rockefeller

Mr. Ensign Mr. Kerry1

Mr. Allen Mr. Breaux

Mr. Dorgan

Mr. Wyden

Mr. Cleland1

Mrs. Boxer

Mr. Edwards1

Mrs. Carnahan1

Mr. Nelson

Mr. Stevens1

Mr. Burns

Mr. Lott

Mrs. Hutchison

Ms. Snowe

Mr. Smith 1By 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. Stevens1 Mr. Inouye1

Mr. Burns Mr. Rockefeller

Mr. Lott Mr. Kerry1

Mrs. Hutchison Mr. Breaux

Mr. Brownback Mr. Dorgan

Mr. Smith Mr. Wyden

Mr. Fitzgerald Mr. Cleland1

Mr. Ensign1 Mrs. Boxer

Mr. Allen Mr. Edwards1

Mrs. Carnahan1

Mr. Nelson

Ms. Snowe 1By 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. Inouye1 Mr. Brownback

Mr. Rockefeller Mr. Ensign

Mr. Kerry1

33

Mr. Breaux

Mr. Dorgan

Mr. Wyden

Mr. Cleland1

Mrs. Boxer1

Mr. Edwards1

Mrs. Carnahan1

Mr. Nelson

Mr. Stevens1

Mr. Burns

Mr. Lott

Mrs. Hutchison

Ms. Snowe1

Mr. Smith

Mr. Fitzgerald

Mr. Allen1

1By 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

øSEC. 204. SUNSET TRIGGER.

[49 U.S.C. 24101 NT]

ø(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—

ø(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

ø(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.

ø(b) FACTORS CONSIDERED.—In making a finding under subsection (a), the Council shall take into account—

ø(1) Amtrak’s performance;

ø(2) the findings of the independent assessment conducted

under section 202;

ø(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

ø(4) Acts of God, national emergencies, and other events beyond the reasonable control of Amtrak.

34

ø(c) ACTION PLAN.—Within 90 days after the Council makes a

finding under subsection (a)— ø(1) it shall develop and submit to the Congress an action

plan for a restructured and rationalized national intercity rail

passenger system; and

ø(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.

øSEC. 205. SENATE PROCEDURE FOR CONSIDERATION OF RESTRUCTURING AND LIQUIDATION PLANS.

ø(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.

ø(b) CONSIDERATION IN THE SENATE.— ø(1) REFERRAL AND REPORTING.—A liquidation disapproval

resolution introduced in the Senate shall be placed directly and

immediately on the Calendar.

ø(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.

ø(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.

ø(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.

ø(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.

ø(6) LIMIT ON CONSIDERATION.—

ø(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 disposiVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00036 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
35

tion thereof to the exclusion of all amendments not then

pending and to the exclusion of all motions, except a motion to reconsider or table.

ø(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.

ø(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.

ø(8) NO MOTION TO RECOMMIT.—A motion to recommit a liquidation disapproval resolution shall not be in order.

ø(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.

ø(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.

ø(c) CONSIDERATION IN CONFERENCE.— ø(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.

ø(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.

ø(d) DEFINITIONS.—For purposes of this section—

ø(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.

36

ø(2) RESTRUCTURING PLAN.—The term ’restructuring plan’

means a plan to provide for a restructured and rationalized national intercity rail passenger transportation system.

ø(e) RULES OF SENATE.—This section is enacted by the

Congress—

ø(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

ø(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:

‘‘§ 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.’’.

ø(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.

37

* * * * * * *

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;

ø(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 øSecretary 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); øor¿

(C) to acquire, improve, or rehabilitate rail safety and security equipment and facilities; or

ø(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.

38

(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 ø$3,500,000,000¿

$35,000,000,000 at any one time. Of this amount, not less than

ø$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 øoffered;¿ 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;

øand¿

39

(E) the size and characteristics of the cohort of which the

loan or loan guarantee is a member; and

ø(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—ø(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;

ø(2)¿ (B) will, consistent with its capital resources, maintain

its capital program, equipment, facilities, and operations on a

continuing basis; and

40

ø(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

41

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 secVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00043 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
42

tion 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.

43

(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:

ø(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

ø(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

44

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 Stateowned 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

§ 307. Safety information and intervention in øInterstate

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 øInterstate 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 øCommission.¿ 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 øCommission¿

Board in its proceedings.

(c) When requested by the øCommission,¿ Board, the Secretary

shall—

(1) provide the øCommission¿ 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 øCommission¿ Board for temporary authority to provide transportation;

(3) intervene and present evidence in a proceeding in which

a finding of fitness is required; and

45

(4) make additional safety compliance surveys and inspections the øCommission¿ Board decides are desirable to allow it

to act on an application or to make a finding on the fitness of

a carrier.

* * * * * * *

§ 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 highspeed 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 highspeed 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 highspeed 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;

46

(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 highspeed 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 ConVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00048 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
47

gress 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 highspeed 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;

48

(K) an examination of the role of the National Railroad Passenger Corporation in the development and operation of highspeed 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) øWithin 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 highspeed 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

49

(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

§ 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 uniVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00051 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
50

fication 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 øInterstate 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

øInterstate 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 øCommission,¿ Board, the Secretary may appear in any

proceeding related to the application.

* * * * * * *

SUBCHAPTER III. MISCELLANEOUS

§ 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 øInterstate Commerce Commission¿

Surface Transportation Board to the Secretary under section

6(e)(1)-(4) and (6)(A) of the Act.

51

SUBTITLE V. RAIL PROGRAMS

PART A. SAFETY

CHAPTER 201. GENERAL

SUBCHAPTER I. GENERAL

§ 20103. General authority

(a) REGULATIONS AND ORDERS.—The Secretary of Transportation,

as necessary, shall prescribe regulations and issue orders for every

area of railroad øsafety¿, 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

§ 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.

52

ø(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.¿

ø(3)¿ (2) ‘‘commuter authority’’ means a State, local, or regional entity established to provide, or make a contract providing for, commuter rail passenger transportation.

ø(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.

ø(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 highspeed 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

§ 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.

53

(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;

54

(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. øCommencing 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

§ 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). øIn 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

55

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.

* * * * * * *

ø§ 24302. Board of Directors

ø(a) REFORM BOARD.—

56

ø(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.

ø(2) MEMBERSHIP.—

ø(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.

ø(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.

ø(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.

ø(C) Appointments under subparagraph (A) shall be

made from among individuals who—

ø(i) have technical qualifications, professional standing, and demonstrated expertise in the fields of transportation or corporate or financial management;

ø(ii) are not representatives of rail labor or rail management; and

ø(iii) in the case of 6 of the 7 individuals selected,

are not employees of Amtrak or of the United States.

ø(D) The President of Amtrak shall serve as an ex officio, nonvoting member of the Reform Board.

ø(3) CONFIRMATION PROCEDURE IN SENATE.—

ø(A) This paragraph is enacted by the Congress—

ø(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

ø(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.

ø(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.

57

ø(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.

ø(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.

ø(b) BOARD OF DIRECTORS.—Five years after the establishment of

the Reform Board under subsection (a), a Board of Directors shall

be selected—

ø(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

ø(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.

ø(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 InterCity Rail regarding the transfer of Amtrak’s infrastructure assets

and responsibilities to a new separately governed corporation.¿

§ 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.

58

(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).

§ 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.

ø(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).

* * * * * * *

§ 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—

59

(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 øInterstate Commerce Commission¿ Surface Transportation Board from ordering retroactive relief in a proceeding begun or reopened after

October 1, 1981.

§ 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 øInterstate Commerce Commission¿ Surface Transportation Board finds it necessary to carry out this part, the øCommission¿ 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 øCommission¿ 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 øCommission¿ Board shall decide the dispute not

later than 90 days after Amtrak submits the dispute to the

øCommission.¿ Board.

(3) Amtrak’s right to use the facilities or have the services

provided is conditioned on payment of the compensation. If the

60

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 OPER- ATION BY AMTRAK DURING AN EMERGENCY, THE øCOMMISSION,¿

Board, on application by Amtrak, shall require a rail carrier to provide facilities immediately during the emergency. The øCommission¿ 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

61

(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

øCommission¿ 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 ontime performance of the train.

* * * * * * *

§ 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

62

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 øInterstate 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 øCommission,¿

Board, after holding an expedited proceeding and not later

than 120 days after receiving the application, shall order the

interest conveyed unless the øCommission¿ 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

63

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 øCommission¿ 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

§ 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

§ 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.

64

(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 øInterstate 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 øCommission¿

Board finds that approval is necessary to carry out this chapter, the øCommission¿ 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 øInterstate Commerce Commission.¿ Not later

than 90 days after the application, the øCommission¿ Board

shall decide on the terms of an agreement if it decides that

65

doing so is necessary to carry out this chapter. The decision of

the øCommission¿ 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 highspeed 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.

* * * * * * *

§ 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;

66

(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, rightsof-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 RIGHTSOF-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 øInterstate 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 øCommission¿ 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

67

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

øCommission¿ Board makes a decision under this subsection.

§ 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 efVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00069 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
68

forts 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 øJanuary 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.

* * * * * * *

§ 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

69

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

§ 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.

§ 26101. Corridor planning

ø(a) CORRIDOR PLANNING ASSISTANCE.—

ø(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.

ø(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 ASSIST- ANCE.—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.

70

(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-ofway 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 rightof-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;

71

ø(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 highspeed 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 highwayrail 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 øcompleted; and¿

completed.

ø(14) whether the corridor has been designated as a highspeed 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.

§ 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 ASSIST- ANCE.—The Secretary may provide implementation assistance

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ance 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 rightof-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 dediVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00074 Fmt 6659 Sfmt 6603 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
73

cation 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.

* * * * * * *

ø§ 26104. Authorization of appropriations

ø(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).

ø(b) FISCAL YEAR 1996.—

ø(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).

ø(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).

ø(c) FISCAL YEAR 1997.—

74

ø(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).

ø(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).

ø(d) FISCAL YEAR 1998.— ø(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).

ø(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).

ø(e) FISCAL YEAR 1999.— ø(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).

ø(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).

ø(f) FISCAL YEAR 2000.— ø(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).

ø(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).

ø(g) FISCAL YEAR 2001.— ø(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).

ø(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).

ø(h) FUNDS TO REMAIN AVAILABLE.—Funds made available under

this section shall remain available until expended.¿

§ 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.

§ 26105. Definitions For purposes of this chapter—

(1) the term ‘‘financial assistance’’ includes grants, contracts,

loans, loan guarantees, and cooperative agreements;

75

(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

ømore 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

§ 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 øthe 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 øthe rail carrier¿ any

rail carrier;

(2) property, equipment, and facilities owned, leased, operated, or

maintained by øthe rail carrier¿ any rail carrier;

(3) property moving in interstate or foreign commerce in the possession of øthe 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

76

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 highspeed 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

77

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 selfsufficiency.

Until quite recently, Amtrak insisted that it was on a ‘‘glidepath’’ 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 selfsufficiency 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 NovemVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00079 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
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ber 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

79

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 ex- penses. 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 leasebacks) 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

80

1The Kentucky Cardinal is included in the list of long-distance trains since in FY2001 it provided sleeping accommodations for overnight riders.

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.

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.

81

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.

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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 highspeed 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.

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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 highspeed 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

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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 highspeed 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

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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 reVerDate 11-MAY-2000 23:34 May 29, 2002 Jkt 099010 PO 00000 Frm 00087 Fmt 6659 Sfmt 6601 E:\HR\OC\SR157.XXX pfrm01 PsN: SR157
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quiring 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.

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