LEGISLATIVE BULLETIN | October 24, 2007

S. 294, the Passenger Rail Investment and Improvement Act of 2007

Summary and Background 

Congress created the National Railroad Passenger Corporation, also known as Amtrak, in 1970 in order to help spur the use and development of passenger rail. Today, Amtrak serves nearly 26 million riders annually at more than 500 stations in 46 States on approximately 22,000 route miles. The number of riders in Fiscal Year 2007 increased by more than 1.5 million individuals compared to the previous year and set a new record for Amtrak ridership. Similarly, Amtrak's ticket revenues were $1.56 billion in Fiscal Year 2006—nearly 11 percent above Fiscal Year 2005 levels—with total revenues slightly exceeding $2 billion and expenses at roughly $3 billion. 

Amtrak directly owns or operates 730 route miles, primarily between Massachusettsand Washington, D.C., on Amtrak’s Northeast Corridor (NEC) and in the State of Michigan; several station facilities including Pennsylvania Station in New York City, and Chicago Union Station; and several major maintenance and repair facilities. 

Amtrak’s last authorization, the Amtrak Reform and Accountability Act (ARAA), expired in 2002. In recent years, attempts by Congress to improve and modernize Amtrak’s operations were stalled by the Republican-controlled House. During this period, Amtrak has been funded through the annual appropriations process without an authorization guiding the expenditure of funds or providing clear direction for the railroad. The enactment of S. 294, the bipartisan Passenger Rail Investment and Improvement Act of 2007 (PRIIA), would end this stop-gap passenger rail policy and funding process by reauthorizing Amtrak for Fiscal Years 2007 through 2012 and provide Amtrak, the states, and the traveling public with a comprehensive blueprint for the continuing improvement of the nation’s intercity passenger rail system. 

PRIIA authorizes roughly $10 billion in total funding for Amtrak’s capital and operating needs to maintain current operations, upgrade equipment, and return the NEC to a state of good repair. Over the life of the bill, the legislation authorizes a 40 percent reduction in Amtrak’s federal operating subsidy, requiring Amtrak to become more efficient through increased revenue and ridership, cost containment, and management improvements. Simultaneously, the bill authorizes a significant increase in capital funding for Amtrak, averaging $818 million in capital grants per year, to improve infrastructure, facilities, and equipment that would enhance Amtrak’s efficiency and the marketability of its services. The bill also creates a new inter-city passenger rail capital grant program to support state passenger rail development, authorizing $1.4 billion in total grant funding to states for passenger rail capital projects. 

PRIIA also includes Senate Commerce Committee-authored rail security provisions that were passed by the Senate in multiple previous Congresses and finally incorporated into the Implementing Recommendations of the 9/11 Commission Act of 2007, which was enacted on August 3, 2007 (Pub. L. 110-53). During floor consideration of S. 294, Senators Lautenberg and Lott plan to offer a manager’s amendment to remove these provisions from the bill because they have now become law.

 

Major Provisions 

Title I: Authorizations

	6-Year Funding Totals	Average Annual
Amtrak Operating Grants	$3.3 billion	$556 million
Amtrak Capital Grants	$4.9 billion	$818 million
State Grants	$1.4 billion	$230 million
Repayment of Existing Amtrak Debt	$1.7 billion	$287 million
Rail Security	$1.2 billion	$275 million (FY08-FY11)
Total	$12.4 billion	$2.1 billion

 

Title II: Amtrak Reform and Operational Improvements

Amtrak Board of Directors.S. 294would create a new, bipartisan nine-member Board, whose members are required to have either a rail, transportation, or business background. 

Improved financial accounting and financial plan development.S. 294 would require the development of a new Amtrak financial accounting system and Amtrak’s Board of Directors to submit an annual budget and five-year financial plans. The system would be monitored by the Department of Transportation Inspector General (DOT IG). 

The five-year plans would be required to include information on the following issues: 

• Projected revenues and expenditures for Amtrak;
• 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;
• Operational funding needs;
• Projected capital and operating requirements;
• An assessment of the continuing financial stability of Amtrak;
• Estimates of long-term and short-term debt and associated principal and interest payments;
• Annual cash flow forecasts;
• A statement describing methods of estimation and significant assumptions;
• Specific measures that demonstrate measurable improvement; and
• Capital and operating expenditures for anticipated security needs. 

Grant process improvements.PRIIA would require the Secretary of Transportation to establish “substantive and procedural”requirements for grant requests along with a more expeditious process for dealing with grant requests. S. 294 would also require that the Secretary of Transportation submit copies of its grant schedules to the appropriate House and Senate committees. 

State supported routes and auditing.Under S. 294, Amtrak would have to develop, after consulting the States and the Federal Railroad Administration (FRA), a uniform cost allocation methodology to assign costs and determine compensation for state-supported services. If Amtrak and the states do not implement the proposal developed by the commission, the Surface Transportation Board would be authorized to impose restructured compensation rates. 

PRIIA would also require the FRA to retain an independent auditor or consultant to develop and recommend objective methodologies for determining Amtrak routes and service parameters. Amtrak would be required to consider the adoption of these recommendations.

Passenger service improvements.S. 294 would establish protocols that if the on-time performance record for an individual route falls below 80 percent for two consecutive quarters or fails to meet other requirements set by the FRA, the Surface Transportation Board (STB) may initiate, or Amtrak, another passenger rail operator, or host freight railroad may petition the STB to initiate, an investigation into the cause of delays. Following an investigation, the STB must make recommendations to Amtrak or a freight railroad on ways to improve on-time performance and service quality of the route under investigation. If the STB determines that delays or service failure to passenger trains are the result of host freight railroads not providing priority access to Amtrak, as required under law, the Board may award damages and proscribe other relief to Amtrak. 

Long distance routes.Beginning in 2008, S. 294 would require Amtrak to establish and implement performance improvement plans for its lowest-performing trains. As Amtrak develops these plans, it must consider options to improve the route, including routing and frequency changes, on-board and customer service improvements, and modified amenities such as sleeper car service and food service. In 2009 and 2010, Amtrak must implement plans for the remaining long distance services and the FRA may withhold operating funds for a route if the plan is not implemented by Amtrak. 

Northeast Corridor.Amtrak must develop a capital spending plan to return the NEC to a state of good repair by the end of Fiscal Year 2012. The capital funds authorized in the bill would be used to carry out the plan at a 100 percent federal share. The bill establishes an advisory commission to provide advice and oversight of the NEC’s operations and infrastructure. The commission membership includes Amtrak, the FRA, and each state in the NEC. The commission must develop a proposal for determining the proper costs and access fees for NEC passenger and commuter trains. If Amtrak and the states fail to implement the proposal, the parties shall either submit to binding arbitration or petition the STB to impose restructured fees for the users of the NEC. 

Debt reduction measures.S. 294includesprovisions suggested by the DOT IG that would direct the Secretary of the Treasury, in consultation with the Secretary of Transportation and Amtrak, to negotiate the restructuring of Amtrak’s existing debt, within one year of enactment. If restructuring would result in significant savings to the federal government, the Secretary of Treasury is authorized to assume and repay the restructured debt, with the full faith and credit of the Treasury. If no restructuring is possible, Amtrak remains responsible for repaying the debt, and such debt is solely the responsibility of Amtrak, without any implied federal guarantee. 

Disability compliance requirement study.PRIIA would require Amtrak, in consultation with station owners, to evaluate the improvements necessary to make all existing stations it serves readily accessible to and usable by individuals with disabilities, as required by the Americans with Disabilities Act of 1990. 

Access to Amtrak equipment and services:S. 294would allow states wishing to use operators other than Amtrak for the provision of state-supported services to have access, for reasonable compensation and subject to limitations to preserve current Amtrak services, to Amtrak facilities and equipment for the purpose of operating that particular route. 

On-board service improvements.S. 294 would require that after one year Amtrak take steps to develop and implement plans to improve on-board service. 

Management accountability.PRIIA would require the DOT IG to complete an overall assessment of the progress required by the legislation to include: effectiveness in improving annual financial planning; effectiveness in implementing improved financial accounting; efforts to implement minimum train performance standards; DOT IG shall complete an overall assessment of the progress made by Amtrak management and the Department of Transportation in implementing the provisions of that Act; and progress maximizing revenues and minimizing federal subsidies.

 

Title III: Intercity Passenger Rail Policy

Capital investment grants.S. 294would create a new State Capital Grant program for inter-city passenger rail capital projects. The program would authorize the awarding of grants to a state, or a group of states, to pay for the capital costs of infrastructure, facilities, and equipment necessary to provide new or improved intercity passenger rail. The federal match would be 80 percent. Projects would be selected by the Secretary of Transportation based on economic feasibility, expected ridership, environmental impact, and other factors. 

State rail plans. S. 294 would establish a state rail planning process and require that new projects funded by the grant program be on the state’s rail plan. 

Rail cooperative research.PRIIA would require the Secretary of Transportation to conduct a rail cooperative research program to address: inter-city rail passenger and freight rail services; consider ways to expand the transportation of international trade traffic by rail: conduct research on the interconnectedness of commuter rail; and consider regional concerns regarding rail passenger and freight transportation.

 

Legislative History

On April 25, 2007, the Commerce, Science, and Transportation Committee favorably reported S. 294with amendments by voice vote. 

On May 22, 2007, S. 294was placed on the Senate Calendar. 

The 109^thCongress passed an almost identical version of S. 294 as an amendment to the Deficit Reduction Act of 2005 by a vote of 93 to 6 in 2005, but the measure was dropped in conference because the Republican majority in the House refused to include the measure.

 

Expected Amendments

Senators Lautenbergand Lott plan to offer a manager’s amendment to remove the rail security provisions incorporated into the Implementing Recommendations of the 9/11 Commission Act of 2007, which was enacted on August 3, 2007 (Pub. L. 110-53). 

Updated information about amendments will be sent via e-mail to the “DPC Transportation” e-mail list.

 

Administration Position

At press time, the Bush Administration had not yet issued a Statement of Administration Policy on S. 294.

DPC