Hotline #301 - June 27, 2003

There was major movement by House and Senate authorizing committees on Amtrak and on general rail infrastructure investment this week.

The House Transportation and Infrastructure Committee approved on June 25 a three-year Amtrak reauthorization, H.R.2572, which allows up to $2 billion a year for Amtrak for fiscal years 2004, 2005, and 2006. It requires Amtrak to provide an annual business plan for Congress and the DOT with "separate accounting" (including ridership, revenue, and expense targets) for the Northeast Corridor, "commuter" service, long-distance service, state-supported service, and other commercial activities (such as mail and "contract operations"). That all is to be updated every two months. Amtrak is also barred from incurring operating losses on any contract commuter or express contract.

The Senate Commerce Committee also approved a $2-billiion-per-year Amtrak reauthorization, on June 26, for six years. It came as a Hutchison (R.-Tex.) amendment to the Surface Transportation Safety Reauthorization Act of 2003, which the Committee also approved. This bill (no number) contains components of TEA-21 renewal over which the Committee has jurisdiction (such as hazardous materials shipments and highway safety), and will be introduced later as an amendment to the larger TEA-21 renewal legislation.

Chairman John McCain argued for leaving Amtrak out and dealing with it in a separate bill, later, because "everybody knows that Amtrak has to be reformed." But Hutchison presented her amendment as a placeholder in the "must-pass" surface transportation legislation and said that details on Amtrak can be revisited later. An unhappy McCain said its inclusion would cause the bill to bog down on the Senate floor.

The appropriations process -- which will be difficult -- determines how much Amtrak will actually get. But is it is helpful to get both authorizing committees on the record in a positive way. The House appropriations subcommittee chaired by Ernest Istook (R.-Okla.), an outspoken critic of Amtrak, is expected to consider its 2004 DOT funding bill (including Amtrak) on July 10, with possible full committee action the following week.

Also June 25, the House Transportation and Infrastructure Committee approved a ten-year high-speed rail bill, "Railroad Infrastructure Development and Expansion Act for the 21st Century" (RIDE-21, H.R.2571), that lets states issue $12 billion in bonds that are federally tax-exempt, and $12 billion in bonds with federal tax credits, and expands the size of the Railroad Rehabilitation and Infrastructure Financing loan and loan guarantee program to $35 billion. It also reauthorizes the Swift Rail Development Act at $100 million a year (up from about $30 million appropriated this year) and converts that program from technology development to corridor development.

RIDE-21 requires elimination of highway grade crossings where they would interfere with high-speed operation. It also requires overall corridor designs with sustained speeds of 125 mph, although -- once DOT approves a design -- the project can be phased so that 125 mph is years away. RIDE-21 does reduce to 110 mph the threshold for a long- established but as yet unused tax-exempt bond provision for high-speed rail projects. Most states (with the notable exception of California) have been planning 110-mph service with enhanced grade crossings.

Because of its bond provisions, RIDE-21 is likely to be referred to the House Ways and Means Committee, which typically would have 45 days to act to change the bills, if it chooses to.

The sponsors of both House bills are the chairmen and ranking Democrats of both the committee and subcommittee (Young, R.-Alaska; Quinn, R.-N.Y.; Oberstar, D.-Minn.; Brown, D.-Fla.).

The Senate Commerce Committee -- in Hutchison's amendment -- also included a placeholder for rail infrastructure investment, in the form of a "Rail Infrastructure Finance Corporation ... to support rail transportation capital projects through the issuance of rail capital infrastructure bonds." The Railway Supply Institute is a prime supporter of this concept, but NARP also has supported this in its several statements to committees this spring. Negotiations among Senators will continue on the details of this.

The Hutchison amendment, which was also worked on by others (such as Hollings, D.-S.C. and Carper, D.-Del.), is noteworthy also because it correctly establishes rail as a mode worthy of consideration in the context of "surface transportation" legislation.

The need for federal investment in rail infrastructure (passenger and freight) was discussed at a June 26 hearing of the House Transportation and Infrastructure's Railroads Subcommittee, chaired by Jack Quinn (R.-N.Y.). Surface Transportation Board Chairman Roger Nober said, "Freight railroads are unable to make the level of capital investment in their networks that those systems presently need."

Tim Gillespie, speaking for the Railway Supply Institute, advocated creation of a private, federally chartered Rail Finance and Development Corporation (similar to what the Senate Commerce Committee approved the same day) that could issue up to $50 billion in tax-credit bonds for capital investment in rail-related infrastructure not generally eligible for transportation trust fund expenditures under TEA-21. However, speaking for the Bush Administration, Federal Railroad Administrator Allan Rutter opposed such bonds.

House appropriators this week got a letter signed by 219 Representatives asking for full funding ($1.812 billion) for Amtrak in fiscal 2004. Click here to see a list of signers.

High-speed rail funding was vetoed by Florida Gov. Jeb Bush (R.) on June 23. The legislature had provided $7.2 million in the next state budget for high-speed rail. An amendment to the Florida Constitution says that construction on the system must begin by this November. Bush has always opposed high-speed rail and has tried -- unsuccessfully, so far -- to get the legislature to send the matter back to voters, who approved the amendment in 2000.

Bush left in the budget $4.9 million for intermodal terminals in Tampa and Orlando that could be used for high-speed rail. Bush believes that allows him to still comply with the amendment.

A trestle fire in the southern Chicago suburb of Riverdale, Ill., on June 22 caused major disruption all week to Amtrak, Metra, and Canadian National services. The trestle, at 137th St., is on the six-track, partially electrified, former Illinois Central main line. At the time of the fire, a contractor was making repairs to the bridge.

Amtrak and CN have been able to detour their diesel-electric trains around the site (with 60-90 minutes' delay for Amtrak), but Metra's electric service south of Kensington was annulled. Metra runs on a segregated, parallel line, and many of its electric trains are marooned on the south end of the line, beyond the burned trestle. Metra hoped to have the bridge repaired and service restored by July 2, and added service to its Rock Island route to the west. But Amtrak said it could take several weeks for the City of New Orleans and Illini to be restored to their normal route.

While June 30 is the deadline for funding progress for Michigan-supported trains (Pere Marquette and International), we understand that there is, for the moment, adequate funding ($7.1 million) for the trains in the appropriations bill for fiscal 2004, which starts October 1. As we reported June 13, negotiations between Amtrak and the state to continue running the trains in the interim continue.

The Capitol Corridor management in California is planning a test run of a passenger train between Sacramento and Reno, as a way to gauge operating conditions and running times. The goal is twice-daily service to Reno by 2007, and, possibly, some form of seasonal ski train.

Connex, one of Britain's biggest, private rail operators, will lose its South Eastern franchise at the end of this year, two years before it was supposed to. According to BBC, the Strategic Rail Authority blames Connex's poor financial management. The Authority gave Connex $96 million in public funds in December 2002 to keep trains running, with the condition that Connex's finances also improve, but Connex recently asked for another $330 million. Connex is part of a consortium that is set to take over operation of Boston's commuter trains from Amtrak next week.