Passenger Rail Reauthorization: The Future of the Northeast Corridor

WRITTEN STATEMENT OF

SARAH FEINBERG,
ACTING ADMINISTRATOR,
FEDERAL RAILROAD ADMINISTRATION,
U.S. DEPARTMENT OF TRANSPORTATION

BEFORE THE

SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE INFRASTRUCTURE, SAFETY, AND SECURITY
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
U.S. SENATE

“PASSENGER RAIL REAUTHORIZATioN: THE FUTURE OF the NORTHEAST CORRIDOR”

May 4, 2015

Chairman Fischer, Ranking Member Booker, and Members of the Subcommittee, thank you for inviting me to New Jersey to discuss passenger rail, the Northeast Corridor (NEC), and the Administration’s surface transportation reauthorization proposal, GROW AMERICA. [1]  Like this Subcommittee, the Federal Railroad Administration (FRA) understands the value and importance of the NEC as a national asset.

More than six years ago, this Committee led the development of two pieces of legislation that have helped to redefine the role of intercity passenger rail in the United States and usher in a new era of critical safety reforms – the Passenger Rail Investment and Improvement Act of 2008 (PRIIA) and the Rail Safety Improvement Act of 2008 (RSIA).  Significant progress has been made since implementation of this legislation, and the rail industry has changed dramatically.  However, a significant amount of work remains to further improve the Nation’s rail network, and as the U.S. Department of Transportation’s recent Beyond Traffic report identified, there are numerous transportation challenges facing our Nation, including:

• Population Growth – America’s population will grow by 70 million by 2045.  The majority of this growth will be concentrated in roughly a dozen megaregions.  The national transportation system must prepare to meet this increased demand.  Increasingly, as evidenced by record ridership numbers, Americans are choosing to travel by passenger rail.  In addition to providing mobility and travel choices for this growing population, we must also identify solutions to accommodate resulting freight demand, which is anticipated to increase 45 percent during this timeframe.
   
• Infrastructure Deficit – As our population continues to grow, so too does the use of our transportation infrastructure.  The funding necessary to maintain and improve our transportation system has not kept pace with this usage and the burdens placed upon it, which has led to a widening infrastructure deficit as more and more transportation assets fall into a state of disrepair.  The World Economic Forum ranks the United States 16th in overall infrastructure, down from 7th in 1999 and below several western European, Asian, and Middle Eastern countries.
   
• Congestion and Mobility – Highway and aviation congestion continues to rise, with an estimated economic impact growing from $24 billion in 1982 to $121 billion in 2011 in lost time, productivity, and fuel.  In many places with the worst congestion, expanding airports and highways is difficult, as land is limited and environmental/community impacts are significant.  On average, Americans spend more than 40 hours stuck in traffic each year.
   
• Environmental Protection – Last month, the U.S. Environmental Protection Agency released its 20th Inventory of U.S. Greenhouse Gas Emissions and Sinks, which found that the U.S. emitted 5.9 percent more greenhouse gases in 2013 than it did in 1990, with emissions increasing 2 percent from 2012 to 2013.  In addition, 27 percent of all U.S. greenhouse gas emissions are now from the transportation sector.  Increased emissions will amplify the existing health threats the Nation faces, which can have substantial impacts on quality of life and the economy.
   
• Changing Demographics – As the U.S. population grows, it is also changing.  A large number of Americans are entering their retirement years and are choosing to drive less often, particularly over longer distances. Only 15 percent of Americans older than 65 drive regularly, and that rate declines to just 6 percent for those older than 75.  At the same time, younger generations of Americans are choosing to drive both less often and for fewer miles than previous generations, and are obtaining driver’s licenses at record low rates.  This cohort uses public transportation more frequently than older Americans and has different expectations for the composition of their transportation system.

GROW AMERICA

In order to help meet these challenges, Secretary of Transportation Anthony Foxx transmitted the GROW AMERICA Act to Congress on March 30, 2015.  GROW AMERICA is a six-year, $478 billion multi-modal reauthorization proposal intended to comprehensively address our surface transportation needs.  The proposal includes an integrated strategy to enhance rail safety, maintain current rail services and infrastructure, and expand and improve the rail network to accommodate growing passenger and freight demand.

National High-Performance Rail Network

GROW AMERICA proposes close to $29 billion over six years to invest in a National High-Performance Rail System, which allocates funds to two new programs aimed at promoting market-based investments to enhance and grow rail:

• Current Passenger Rail Service Program – Over six years, GROW AMERICA will provide $14.1 billion to maintain the current rail network in a state of good repair and continue existing services.  The proposed Current Passenger Rail Service Program fully funds the National Railroad Passenger Corporation (Amtrak) and for the first time organizes grants for passenger rail services by lines of business:  
   
  • $4.425 billion to bring Northeast Corridor infrastructure and equipment into a state of good repair, thus enabling future growth and service improvements;
  • $645 million to replace obsolete equipment on State-supported corridors and to facilitate efficient transition to financial control for these corridors to States, as required by Section 209 of PRIIA;
  • $4.5 billion to continue operations of the Nation’s important long-distance routes, which provide a vital transportation alternative to both urban and rural communities;
  • $2.43 billion to improve efficiency of the Nation’s “backbone” rail facilities, make payments on Amtrak’s legacy debt, and implement Positive Train Control (PTC) systems on Amtrak routes; and
  • $2.1 billion to bring stations into compliance with the Americans with Disabilities Act.
     
• Rail Service Improvement Program – GROW AMERICA also provides an additional $14.4 billion over six years to expand and improve America’s rail network to accommodate growing travel demand, which includes:
   
  • $9.45 billion to develop high-performance passenger rail networks through construction of new corridors, substantial improvements to existing corridors, and mitigation of passenger train congestion at critical chokepoints;
  • $3.05 billion to assist commuter rail lines in implementing PTC systems;
  • $1.5 billion to help mitigate the negative impacts of rail in local communities through rail line relocation, grade crossing enhancements, investments in short line railroad infrastructure, and training and technical assistance to help local governments better coordinate with railroads regarding operational and safety issues; and
  • $450 million to develop comprehensive plans that will guide future investments in the Nation’s rail system and to develop the workforce and technology necessary for advancing America’s rail industry.  

In addition to establishing these new grant programs, GROW AMERICA proposes a number of improvements to the Railroad Rehabilitation and Improvement Financing (RRIF) Program.  Specifically, GROW AMERICA proposes to allow FRA to subsidize RRIF loan costs in an effort to make the program more accessible, particularly to resource-constrained short line railroads.  With this change, the RRIF Program would be able to employ Federal subsidies like the Department’s Transportation Infrastructure Finance and Innovation Act Program, whereas now RRIF relies only on payments from borrowers.

Dedicated and Predictable Funding for Rail

Congress has for decades funded highway infrastructure and safety, transit, and airport programs through multi-year authorizations that provide dedicated funding.  Rail lacks a comparable stream of Federal revenue.  As a result, passenger rail capital investments have generally failed to keep up with the needs of existing equipment fleet and infrastructure, leading to a backlog of state of good repair and other basic infrastructure issues on our rail network across the country. 

For the first time, GROW AMERICA would establish a Rail Account within the Transportation Trust Fund to provide funding certainty for rail.  Predictable, dedicated funding will enable States, local governments, railroads, and other stakeholders to more effectively plan and make large-scale infrastructure investments.  A consistent Federal funding program, leveraged by State and local support, can also better attract private markets to invest in the transformative transportation projects needed to move America forward.  This approach has been affirmed internationally, where major rail systems have been planned and developed through a predictable multi-year funding program.

Freight Rail

America’s freight rail network plays a critical role in supporting the stability and growth of the U.S. economy.  Freight rail is a $70 billion industry that is relied upon by various sectors across the economy.  Outside of the NEC – where track and infrastructure is predominantly owned by Amtrak, the New York Metropolitan Transportation Authority, and the States of Connecticut and Massachusetts – most intercity passenger rail services operate over privately-owned freight railroads.  The GROW AMERICA proposal looks to advance investments and policies that create “win-wins” that benefit and strengthen both passenger and freight rail.  This includes authorizing a comprehensive evaluation of the operational, institutional, and legal structures that would best support high-performance passenger and freight rail services that operate over shared-use infrastructure.  Reassessing these parameters – many of which have been in place for decades – is needed to better accommodate growing demand and address the paradigm shift proposed in GROW AMERICA of providing predictable, dedicated funding for rail.      

GROW AMERICA will also support our freight rail network by providing dedicated capital funds for short line railroads through the new Local Rail Facilities and Safety Program under the Rail Service Improvement Program.  Short line railroads often provide the critical first- and last-mile connections between shippers and the national main line freight rail network.  However, many short line railroads lack the resources to adequately maintain and improve their infrastructure.  FRA believes Federal assistance is required to assist short line railroads and improve the fluidity of our freight rail network.

Continuous Safety Improvements

Through RSIA, Congress mandated that PTC be implemented on certain railroads and routes by December 31, 2015.  FRA believes the implementation of PTC is the single most important safety advancement being implemented by the rail industry today.  Although the railroads are working diligently towards implementation of PTC systems, FRA is concerned that the vast majority of railroads will not be able to meet the deadline. 

In recent months, both Members of Congress and industry representatives have expressed significant interest in an alternative path forward on PTC implementation in light of the fact that most railroads will not be able to comply with the statutory deadline.  In GROW AMERICA, FRA has proposed that it be given the authority to provide limited extensions to permit some latitude in those circumstances where unforeseen events delay a railroad’s ability to fully implement PTC.  FRA has also indicated its willingness to employ enforcement discretion in those situations where railroads have been consistently working towards PTC implementation but will not be able to comply with the current deadline. 

In addition to addressing PTC implementation, GROW AMERICA will improve the predictability of work schedules for railroad operating employees and prevent operator fatigue by granting FRA full rulemaking authority to replace outdated hours-of-service laws with scientifically-based regulations.  GROW AMERICA also promotes uniform operating rules for the industry by requiring harmonization of railroads’ operating rules in small geographic areas where two or more railroads host joint operations.  This provision could improve safety by assisting railroad employees to better understand and comply with another host railroad’s operating rules, as well as reduce railroads’ rule training and development cost.   

Transparency, Accountability, and Effective Planning

Achieving the priorities contained in GROW AMERICA can only occur if these programs and initiatives are effectively managed and deliver public benefits and service improvements through a process that is transparent to the American people.  The roles and responsibilities of the Federal government, States, Amtrak, freight railroads, and other stakeholders must be clear and based on sound public policy.  One of the principles of the grant programs contained in GROW AMERICA is to organize funding for current passenger rail services by business lines and invest Amtrak’s NEC operating surpluses back into the corridor to address NEC infrastructure needs.  This structure will improve transparency and accountability for taxpayer investments by aligning costs, revenues, and Federal grants to business lines to better ensure that our investments are advancing the Nation’s goals and objectives for rail services.

Similarly, infrastructure investments are most often delivered on time, within budget, and achieve their full intended scope when they are the result of a rigorous planning process.  GROW AMERICA will require Amtrak to engage in annual five-year operating and capital planning to focus on the long-term needs of its business lines.  Additional capital asset plans will describe investment priorities and implementation strategies and identify specific projects to address the backlog of state of good repair needs, recapitalization/ongoing maintenance needs, upgrades to support service enhancements, and business initiatives with a defined return on investment.  GROW AMERICA also emphasizes developing rail plans in the context of a broader regional framework that can help to better integrate rail projects with other transportation modes, promote greater involvement by stakeholders, identify priorities for limited Federal funding, and yield more cost-effective investments.  Establishing a framework for improved regional rail planning is a key component of the GROW AMERICA proposal.

The Northeast Corridor

There is no better place to emphasize the need for a multi-year reauthorization for rail and what the Administration is trying to accomplish with GROW AMERICA than right here in Newark.  The NEC is one of the most important transportation assets in the United States.  The lifeblood to the regional economy, the NEC carries more than 750,000 people each day on Amtrak and commuter services, with Amtrak setting a new NEC ridership record in fiscal year (FY) 2014 with 11.6 million passengers.  The residents and commuters that utilize the NEC to travel to and from work each day contribute more than $50 billion to the national economy each year.  The NEC is also one of the most complex transportation assets in the country, running through 8 States and Washington, D.C. and hosting more than 2,000 daily trains on 8 commuter railroads, 4 freight railroads, and Amtrak.

Despite the important role that the NEC plays in the lives of millions of Americans and our economy, many segments of the corridor operate at or near capacity and are in need of major repairs.  The NEC requires nearly $1.5 billion per year over 15 years just to bring the corridor into a state of good repair and maintain it in that condition.  The average age of the NEC’s major bridges and tunnels is approximately 110 years old.  These assets have remained in service well beyond their expected useful life and today require extensive maintenance and are major sources of corridor delays.

NEC Commission

Congress recognized the opportunities, constraints and challenges facing the NEC in the passage of PRIIA by establishing the Northeast Corridor Infrastructure and Operations Advisory Commission (NEC Commission).  Composed of members from each of the NEC States, Amtrak, and the U.S. DOT – as well as other non-voting stakeholders – the NEC Commission was charged by Congress with developing a cost allocation formula for determining and allocating costs, revenues, and compensation for users of the NEC.

The NEC Commission has been successful in promoting mutual cooperation among a myriad of stakeholders and public officials with differing political persuasions, each having to balance parochial interests with the greater good of the corridor.  In December 2014, the NEC Commission members voted to approve a cost allocation policy.  Set to take effect in FY 2016, the policy establishes the methodology for allocating the approximately $500 million in operating costs and $425 million in capital costs that are shared among NEC commuter rail operators and Amtrak.  The capital contributions represent the annual funding needed to maintain assets in a state of good repair, if not for the backlog of deferred investment needs.  The policy also provides recommendations for addressing the backlog of state of good repair needs and improving collaboration and project delivery along the corridor.

Building on the cost allocation policy, in April 2015 the NEC Commission released the first joint five-year capital plan for investing in the corridor.  The plan integrates the priorities of the four infrastructure owners, nine operators, and government agencies along the corridor; identifying both funded and unfunded components (should additional capital dollars be made available).  The plan proposes that the Federal government assume the responsibility for funding the elimination of the state of good repair backlog on the NEC, which is consistent with the Administration’s Current Passenger Rail Services Program under GROW AMERICA.     

NEC FUTURE and Capital Investments

In addition to establishing the NEC Commission, PRIIA created new discretionary grant programs for rail development and subsequently appropriated more than $10 billion for the High-Speed Intercity Passenger Rail (HSIPR) Program.  FRA utilized a portion of these funds to initiate the NEC FUTURE program, a comprehensive planning effort to define, evaluate, and prioritize future passenger rail investments along the NEC.  This FRA-led study will produce the necessary environmental and service planning documents for establishing the corridor’s future vision and enabling further public investment.  NEC FUTURE is expected to be completed in 2016 and will have a lasting legacy in guiding the corridor’s development.

Through the HSIPR Program, FRA has invested nearly $1 billion in additional capital and planning funds on the NEC mainline between Washington, D.C. – New York City – Boston, including:

• Amtrak – $450 million:  to increase capacity, reliability, and speed along one of the NEC’s most heavily used segments (New Brunswick to Trenton, NJ).
   
• New York – $295 million:  to reduce congestion and improve on-time performance by allowing Amtrak trains to bypass Harold Interlocking in Queens, NY.
   
• Maryland – $60 million:  to complete preliminary engineering and environmental work to replace the nearly 150-year-old Baltimore and Potomac tunnel.
   
• New Jersey – $38.5 million:  to complete final design to replace the 100-year-old Portal Bridge over the Hackensack River.
   
• New York – $30 million:  to complete the first phase of construction for the new Moynihan Station, which will increase capacity and relieve congestion at Penn Station.
   
• Maryland – $22 million:  to complete preliminary engineering and environmental work to replace the century-old Susquehanna River Bridge, a source of frequent delays caused by emergency maintenance requirements.

With the HSIPR Program funding authorized and appropriated by Congress, FRA has also funded nearly $450 million in projects located on the branch lines that provide critical connections between the NEC and the national rail network, including:

• Philadelphia to Harrisburg – $66 million:  to eliminate grade crossings and upgrade signaling systems to improve safety and service reliability.
   
• New York to Albany – $68 million:  to double track the route, improve grade crossings, and complete engineering and environmental analysis to reduce congestion and improve safety.
   
• New Haven to Springfield – $191 million:  to upgrade track and install signaling systems in Connecticut to increase speeds and reduce trip times.
   
• D.C. to Richmond – $122 million:  to complete track construction and planning and environmental studies to upgrade passenger rail service that connects the Northeast Corridor to Southeast High-Speed Rail to Charlotte, NC.

Having made these initial investments with HSIPR funding appropriated by the American Recovery and Reinvestment Act of 2009 and the FY 2010 Consolidated Appropriations Act, the GROW AMERICA Act is ready to move forward with additional critical NEC projects as soon as Congress approves new funding.

Hurricane Sandy

In October 2012, Hurricane Sandy caused extensive damage along the entire eastern seaboard.  Amtrak suffered damage to much of its NEC transportation infrastructure, particularly the infrastructure in and around New York City and northern New Jersey.  Specifically, Hurricane Sandy caused significant flooding in and associated damage to Amtrak’s existing Hudson River tunnels, resulting in the cessation of all Amtrak NEC intercity passenger rail and New Jersey Transit service into New York City for approximately five days, affecting nearly 600,000 daily riders and causing substantial economic harm.

Hurricane Sandy served as a stark reminder of the importance of the NEC to the region and the need for resiliency for our vital transportation assets.  The NEC Commission estimates that the loss of the NEC for a single day costs the U.S. $100 million in travel delays and lost productivity.

In the wake of Hurricane Sandy, Congress enacted the FY 2013 Disaster Assistance Supplemental Appropriations Bill (P.L. 113-2), which provided a wide range of assistance for those affected by the storm and flooding.  Amtrak received approximately $30 million for repairs and $235 million to fund the first two phases of the Hudson Yards Encasement Project, the first step in creating new Trans-Hudson River rail tunnels to increase capacity and provide redundancy into the New York Penn Station/Moynihan complex.  Once the new tunnels are constructed, the existing century-old tunnels could be closed off in order to retrofit them with flood prevention measures and to perform other necessary upgrades and repairs, while still maintaining direct access to Penn Station.

Conclusion

Thank you again for inviting me to testify on this very important topic.  FRA is proud of its accomplishments in implementing PRIIA and RSIA, particularly in light of the laws’ sweeping provisions and the FRA’s concurrent need to implement and administer the more than $10 billion in HSIPR Program funding appropriated by Congress in the American Recovery and Reinvestment Act of 2009 and the FY 2010 Consolidated Appropriations Act.  The Administration is encouraged and expresses its gratitude that this committee is once again stepping to the forefront to develop a new rail reauthorization proposal that will help improve and grow our rail network to meet the 21st century transportation challenges facing the United States.

American passengers and shippers are continuing to choose rail more than ever before.  Over the last decade, Amtrak ridership increased 29 percent, from 24 million passengers in FY 2005 to 30.9 million passengers in FY 2014.  On the freight rail side, U.S. rail intermodal freight volumes set a new record in 2014 with nearly 13.5 million containers and trailers, up 5.2 percent over the previous record achieved in 2013.  Rail safety – FRA’s top priority – has also improved dramatically in the last decade, as evidenced by total train accidents declining by 46 percent, total derailments declining by 47 percent, and total highway-rail grade crossing accidents declining by 24 percent.

FRA, States, Amtrak, commuter railroads, other industry stakeholders, and the American people are ready to take the next step.  Many of the nearly 150 projects initiated under the HSIPR Program are complete or nearing completion.  The HSIPR Program and independent State and regional efforts have created a strong pipeline of planning, environmental, and engineering projects that are now ready for construction.  This includes the critical Portal Bridge project just a few miles from where we are meeting today.  Failure to act on these shovel-ready projects in a timely manner often results in increased costs as environmental analyses and engineering designs have to be reevaluated after periods of dormancy.

FRA strongly supports the proposals contained in GROW AMERICA, and I look forward to continuing to work with Congress to enact a comprehensive surface transportation bill that provides robust and dedicated funding to strengthen rail transportation.