By Ron Thaniel
January 13, 2003

Senator Ernest F. Hollings (SC) on January 8 introduced the National Defense Rail Act (S.104), a bill that provides a long-term strategy to build and maintain an effective national passenger railroad system.

The language in S.104 is similar to S.1991, The National Defense Act, with 25 original co-sponsors from the last Congress, except for some technical changes and an update of Title I, the security section, to reflect the creation of the Department of Homeland Security.

The measure authorizes an annual federal investment of $4.6 billion from FY 2004-2008 to develop a world-class, national passenger rail system.

In addition to the $4.6 billion annually, it includes a one-time $1.3 billion authorization in fiscal year 2004 for security needs and assessments. The bill includes an annual authorization of $1.55 billion to develop high-speed corridors outside of the Northeast Corridor. The funding would be used for infrastructure acquisition, highway-rail grade crossing improvement and elimination, and the acquisition of rolling stock and track and signal equipment. The measure also authorizes $270 million annually for the development of short distance corridors between larger urban centers and provides $580 million annually to preserve longer distance routes for communities without the population densities to merit air service.

The bill includes $1.31 billion in annual funding for the repair, maintenance and growth of passenger rail tracks operated in the Northeast Corridor between Washington, D.C. and Boston. These funds will enable Amtrak to eliminate its capital backlog of projects, maintain ongoing projects and improve its capacity to accommodate projected growth in traffic.

The bill also mandates that Amtrak implement several reform measures, including a new cost accounting and reporting system, to be designed by an independent financial consultant; a five-year financial plan which Amtrak will submit on an annual basis to detail categories of projected capital and operating cash flows; the application of any net revenues from non-passenger-related business towards short-term working capital to satisfy current system-wide liabilities; and the application of any net revenues from Northeast Corridor operations towards capital needs in the Northeast Corridor.