Since Amtrak started operations in 1971, federal involvement in funding intercity passenger rail has mainly consisted of capital and operating subsidies to Amtrak annually appropriated from general funds. However, recent legislation has vastly increased the federal role in and federal funds for developing intercity passenger rail service, making the federal government a major investor with state governments in passenger rail service. The Passenger Rail Investment and Improvement Act (PRIIA), enacted in October 2008, authorized over $3.7 billion for three different federal programs for high speed rail, intercity passenger rail congestion, and capital grants. PRIIA required that projects funded through two of these three programs be included in a state rail plan. A state rail transportation authority would develop a statewide rail plan coordinated with other state transportation planning programs that, among other things, must include an explanation of the state’s passenger rail service objectives; an analysis of rail’s transportation, economic, and environmental impacts in the state; and a long-range investment program for current and future freight and passenger infrastructure in the state. PRIIA also called for the Department of Transportation to establish minimum standards for the preparation and periodic revision of state rail plans. It also called for FRA to create a preliminary national rail plan within 1 year of passage of the law as well as a long-range national rail plan that is consistent with approved state rail plans. FRA released a preliminary national rail plan in October 2009. The Recovery Act appropriated $8 billion for the three PRIIA-established intercity passenger rail programs. This funding represented a dramatic increase in federal funding for intercity passenger rail projects. The Recovery Act provided up to 100 percent federal funding available for expenditure until 2017 and exempted projects from having to be included in a state rail plan; however, it did require, by incorporating the programs and the requirements of PRIIA, that the funds be competitively awarded and that the Department of Transportation develop a strategic plan to use these funds. The department released its strategic plan to use these funds in April 2009. In December 2009, the Department of Transportation’s fiscal year 2010 appropriation also included $2.5 billion for high speed rai and intercity passenger rail projects. These funds are subject to a 20 percent nonfederal matching requirement and the law also exempte d these projects from having to be included in a state rail plan. The fiscal year 2011 budget proposal includes another $1 billion in intercity passenger rail funding. Amtrak, the nation’s only intercity passenger rail operator, currently carries about 28 million passengers per year, which amounts to less than 1 percent of the country’s total intercity passenger miles, although Amtrak’s market share when compared to air service is higher in certain corridors. Amtrak operates long and short distance routes, as well as provides some commuter rail service through contracts with transit providers. Most of the nation’s railroad network is owned by private, for-profit freight railroads with the primary exception of the Amtrak and state-owned Northeast Corridor from Washington, D.C., to Boston and almost 100 miles in southwest Michigan. As a result, about 70 percent of Amtrak’s train miles are over tracks owned by other railroads. Top speeds are limited by track conditions. Amtrak’s trains are generally limited to top speeds of 79 miles per hour off the Northeast Corridor and up to 150 miles per hour on the corridor. States provide financial support to certain intercity passenger rail corridors. In fiscal year 2010, 14 states funded short distance service in their states or between states by contract with Amtrak. Between 1995 and 2009, states initiated six new services and improved or increased the speed on seven existing intercity passenger rail services. (See table 1.) Domestic passenger rail car manufacturing capacity has been in decline, along with the decline in intercity passenger rail service, since the 1950s. Foreign passenger rail car manufacturers have established factories in the United States—although mainly for the domestic rail transit market as Amtrak has not made a large capital purchase of passenger rail cars since the Acela trains in the late 1990s. FRA is the primary federal agency responsible for formulating and enforcing railroad safety regulations and for distributing federal funds for intercity passenger rail service. The agency sets regulations for railroad safety, including rail car maintenance standards and track standards for operating passenger and freight trains at various speeds. Through grant agreements, FRA administers federal operational and capital grants to Amtrak, which have averaged between $1 billion and $1.3 billion per year since fiscal year 2003. FRA also approves Railroad Rehabilitation and Improvement Financing loans and Rail Line Relocation and Improvement Capital Grants, and is the granting agency for the $120 million in fiscal year 2008 and fiscal year 2009 capital funds to states for intercity passenger rail projects. In addition to the increase in federal funds, PRIIA and the Recovery Act have created new responsibilities for FRA to plan, award, and oversee the use of federal funds for intercity passenger rail. After passage of the Recovery Act, FRA officials said that they set their priorities to meet these responsibilities. According to these officials, FRA’s immediate priorities included quickly awarding the funds responsibly and getting all of the Recovery Act funds obligated within 2 years. They also stated that their intermediate and long-term priorities included helping states advance their corridors and projects and gauging the effectiveness of the federal investments, respectively. FRA staff and management worked to meet these priorities by releasing a notice of funding availability and interim guidance on the high speed rail program, creating an overall strategic plan for implementing federal grants for high speed rail and releasing a preliminary national rail plan. FRA staff and management held informational sessions with states and other stakeholders across the country and worked with state applicants to answer questions, evaluate, and provide feedback on preapplications for these funds. In the 5 months between the application deadlines and the grant award announcement, FRA and other department staff used criteria such as public return on investment, economic recovery benefits, and timeliness to completion to evaluate 259 grant applications from 37 states and the District of Columbia. In January 2010, FRA announced that 62 projects in 23 states and the District of Columbia would receive approximately $8 billion in Recovery Act funds. (See fig. 1.) The announced awards went to several types of intercity passenger rail projects—including almost $2.3 billion for initial investments in the planned over 200 miles per hour service between Los Angeles and San Francisco and, eventually, Sacramento and San Diego; $1.1 billion to increase top speeds to 110 miles per hour for existing service between Chicago and St. Louis; $400 million for new service with a top speed of 79 miles per hour between Cincinnati and Cleveland; and $4 million for signal timing improvements in Texas to benefit Amtrak’s existing Heartland Flyer service. All of the states that have initiated or improved services over the last 15 years were awarded about 62 percent of all Recovery Act high speed rail funds (about $4.9 billion of the $8 billion available). Officials from states that initiated or improved intercity passenger rail services in the recent past told us that their ability to start or upgrade their services largely hinged on their ability to resolve a number of issues. First, public and political support and funding provided a foundation for initiating and improving their services. Second, states acquired equipment for their services through collaborative and cost-saving approaches. States also built consensus with stakeholders, borrowed expertise, and developed state capacity to effectively manage their rail services. The activities that helped states initiate and improve their services will be important for states seeking to initiate or improve services in the future— including developing conventional passenger rail, higher speed passenger rail, and high speed rail. Learning ways to build support, secure funding, obtain equipment, and effectively manage rail services will be even more crucial to states developing high speed rail because they will face long time frames, high costs, and a lack of experience in the U.S. passenger rail market for all stages of developing and managing these new passenger rail services. While other countries have experience with high speed passenger rail service, no state currently supports high speed intercity passenger rail service. While there are differences between conventional passenger and high speed passenger rail services, some of the lessons learned by states apply to both. As such, our review of state experiences with conventional passenger rail service could provide some insight into how states might accomplish both initiating and improving conventional passenger rail services, as well as developing higher and high speed passenger rail services. State officials favoring investment in intercity passenger rail services secured funding to initiate or expand such services by achieving public and political support and by using innovative approaches for funding both capital and operating costs. Support from passenger rail proponents including governors, state legislators, passenger rail advocacy groups, and communities helped develop public and political support for committing state funds to capital and operating costs of passenger rail services. For example, corridor coalitions of grassroots supporters, advocates, and elected officials aided Illinois’ efforts to gain support for making improvements and operating a new service. Infrastructure improvements for these services required significant investments from states to upgrade track, signals, crossings, and stations. The costs of these improvements varied, from small individual projects costing several million dollars to more extensive projects totaling more than $100 million. States drew upon a range of sources to supplement limited general funding available for capital improvements. Four states we interviewed established dedicated funding sources for capital improvements or acquired flexible federal funds to develop infrastructure. For example, Virginia used its rail enhancement fund, funded in part from a state rental car tax, in cooperation with a freight railroad to make $33 million in capacity improvements to initiate a new service. North Carolina used a combination of federal transportation enhancement funds, congressional directives (commonly called earmarks), and the state’s share of a federal Congestion Mitigation and Air Quality Improvement Program grant for investments in capital improvements.