By Ron Thaniel
May 9, 2005

Amtrak Policy Meeting Wednesday, May 11, 2005

Bipartisan Amtrak legislation was approved April 27 by the House Transportation and Infrastructure Committee that would authorize annual funding of $2 billion over the next three years to finance Amtrak's capital and operating expenses.

The Amtrak Authorization Act of 2005 (HR 1630) was introduced by Representative Don Young (AK), Chairman, Transportation and Infrastructure Committee, Representative James Oberstar (MN), Ranking Members, Transportation Committee, Representative Steven LaTourette (OH), Chairman, Subcommittee on Railroads and Representative Corrine Brown (FL), Ranking Member, Railroads Subcommittee.

H.R. 1630 would authorize $2 billion per year for each of the fiscal years 2006 through 2008 to the Secretary of Transportation for the benefit of Amtrak capital and operating expenses, and Amtrak excess railroad retirement expense.

The Secretary would be required to set aside a reserve to ensure that Amtrak meets all of its contractual obligations related to commuter rail and state supported rail services. Amtrak would be required to submit to the Secretary comprehensive business plans and follow-up reports with a separate accounting for its various lines of business, and reports related to capital projects expenditures.

According to Amtrak, this level of funding would be sufficient to begin to address critical needs outlined in its five year capital plan, which is geared to restore the Amtrak system, including the Northeast Corridor, to a state of repair.

Amtrak Chairman David Laney and President and CEO David L. Gunn announced April 21 the Amtrak strategic reform initiative. This bill seeks to transform the funding and development of passenger rail service, and introduce competition, efficiency and cost savings. Key points in the reform initiative are:

• Development of passenger rail corridors utilizing a federal/state matching approach common to all other modes (generally 80/20). States, not Amtrak, would lead the development of the corridors, a number of which have already been federally designated, and Amtrak may, among others, competitively bid to provide the service.
• Return of the Northeast Corridor infrastructure to a state-of-good repair and operational reliability, with phased-in financial responsibility for capital and operating costs assumed on a proportionate basis by all users, including Amtrak, freight and commuter railroads.
• Establishment of phased-in financial performance thresholds for Amtrak's existing 15 long-distance trains and any future similar proposed service. Amtrak is initiating a series of actions to improve the financial performance of these trains. Services falling below the thresholds could be continued through support by states or other authorities, reconfigured or eliminated.
• Creation of markets for competition, private commercial participation and industrial reforms in various rail functions. This includes competition among operators, including Amtrak, for new corridor routes.

Federal and state legislative changes are needed to accomplish the reform objectives in the Amtrak initiative:

• Establishment of a federal/state capital match program for passenger rail development, comparable to other modes of transportation. This long-proven federal transportation funding mechanism through which the U.S. Department of Transportation annually provides more than $40 billion for highway and transit projects.
• Designation of a federal agency to oversee the transition to a competitive passenger rail environment, including the distribution of federal funding, selected assets and rights of access.
• Revisions allowing the transition to a method by which all users of the NEC fund their proportionate share of its costs.
• Ultimately, extension of Amtrak access rights on freight railroads to qualified competitors for state-managed services.
• Targeted revisions to allow labor agreements to terminate at the conclusion of the term of their agreement.

The White House sent to Congress April 14 the Passenger Rail Investment Reform Act featuring privatization, competition, a federal'state partnership and an inter state compact to maintain the heavily used Northeast Corridor Service.

The Administration's reform principles include:

• Establish a long-term partnership between states and the federal government to support intercity passenger rail. The plan calls for a 50-50 federal'state partnership. The proposal would shift responsibility for maintaining and improving rail and supporting infrastructure to regional authorities or states. The federal government would offer matching grants on an equal share basis to states for passenger-rail infrastructure improvements.
• Require that Amtrak transition to a pure operating company. Amtrak would split into a private infrastructure company and train operating company, effectively separating the Northeast Corridor (NEC) infrastructure from long-distance train operations.
• Create a system driven by sound economics. Outside the Northeast where Amtrak does not own track, individual states and interstate compacts could negotiate with the freight rail companies to develop new routes.
• Introduce carefully managed competition to provide higher quality rail services at reasonable prices. After a transition period, states would bid contracts for infrastructure maintenance and train operations among the former Amtrak companies and other private companies.
• Create an effective public partnership, after a reasonable transition, to manage the capital assets of the Northeast Corridor. The U.S. Department of Transportation would lease the NEC infrastructure to a compact of states that would be responsible for managing the infrastructure and train operations along the corridor.