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Congressional Testimony
December 6, 2000, Wednesday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 9707 words
COMMITTEE:
SENATE COMMERCE, SCIENCE AND TRANSPORTATION
HEADLINE: TESTIMONY RAIL PASSENGER SERVICE (F. H.)
TESTIMONY-BY: JOLENE M. MOLITORIS , ADMINISTRATOR
AFFILIATION: FEDERAL RAILROAD ADMINISTRATION
BODY:
STATEMENT OF JOLENE M. MOLITORIS,
ADMINISTRATOR FEDERAL RAILROAD ADMINISTRATION U.S. DEPARTMENT OF TRANSPORTATION
BEFORE THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION DECEMBER 6, 2000
Introduction Mr. Chairman and members of the Committee, I appreciate the
opportunity to be here today to testify about the potential of rail passenger
transportation in the Southeast, with particular attention to the State of
Georgia. I am particularly gratified and honored to appear before you in company
with Transportation Secretary Rodney Slater, who has done so much to advance the
cause of intermodal transportation, and Amtrak President George Warrington who
has overseen his company's transformation into the dynamic, expanding embodiment
of the intermodal ideal. Our joint appearance today symbolizes our long-term
partnership in progress. Role of FRA The Federal Railroad Administration, which
I head, plays a crucial role in rail transportation of all kinds, and fulfills
unique and longstanding functions in rail passenger transportation. Of course,
our first priority is safety for all railroad operations,
freight, intercity passenger, and commuter.
Consequently, most of our people are involved in safety assurance. Regarding the
freight railroads, we provide advice to the Secretary on regulatory issues and
other matters of national significance, conduct focused research and
development, and manage financial assistance programs. With respect to passenger
railroads, we initiated and worked closely with Amtrak to implement the
Northeast Corridor Improvement Project, making possible the Metroliners and the
Acela Express, and introducing true high-speed rail service to America. We also
represent the Secretary on Amtrak's board of directors and we provide financial
assistance to Amtrak. Today, the Federal Railroad Administration not only serves
as the Secretary's principal advisor on Amtrak matters, but also catalyzes
partnerships among the States, Amtrak, and the freight railroads for improved
passenger service. One of our many roles in this process is that of designating
corridors for high-speed rail development. Technically, these designations
merely make rail lines eligible for some very limited special funding for
highway-rail grade crossing elimination; but practically, the designation
process has energized the States and Amtrak to pursue far-reaching programs for
corridor upgrading. In support of such programs, we are also developing safe,
low-cost technologies (like non-electric locomotives and positive train control)
that will make high-speed rail investments more affordable and marketable than
ever. Recently, the designation of high-speed rail corridors has increased in
importance because of pending legislation which would make such corridors
eligible for up to $10 billion in bond funding for capital investments.
Importance of Rail Options for Large Metro Areas Passenger trains are essential
elements of intermodal transportation within and between our large metropolitan
areas. Let me give you just a few reasons for this: In the last two decades of
the 20th Century, the Nation's population grew by one-fifth, but intercity
travel more than doubled. Over that same period, lane miles increased by only
three percent. Capacity has not kept up with the growing demand. The result?
Americans are driving more than ever, but bottlenecks in heavily trafficked
urban areas--where delays have increased by as much as 50 percent--often detract
from the travel experience. Air travel, too, has grown rapidly, at times posing
challenges to individual passengers. First, worsening highway congestion has
hampered airport access by motor vehicles. Second, since the 1980's, airlines
have raised the number of flights by one third and concentrated those flights in
the Nation's top airports. This dramatic leap forward in flight availability and
convenience has led to lengthier gate-to-gate travel times on most of the routes
serving America's busiest air hubs. Finally, as the deregulated airlines have
become more adept at setting fares and scheduling services, full flights have
become the rule rather than the exception. Consumer complaints about airlines
have increased in recent years--even as more consumers than ever before have
availed themselves of the world's finest air transport system. In brief, the
Nation's mobility challenge reflects the extraordinary success of its highways,
its airlines, and their supporting industries in bringing transportation options
to an ever-broader market. These mobility issues will directly affect the
Nation's future livability. President Clinton was correct when he recently said:
"To make our communities more livable ... This is a big issue. What does that
mean? You ask anybody that lives in an unlivable community, and they'll tell
you. They want their kids to grow up next to parks, not parking lots; the
parents don't have to spend all their time stalled in traffic when they could be
home with their children." To safeguard mobility and livability in the new
millennium, Americans need a lasting solution in the form of a balanced
transportation network. Offering an exciting, innovative transport option for
the future, rail passenger service brings to bear several inherent advantages as
part of such a seamless intermodal network. - Railroads are largely independent
of the traffic gridlock of highways and airports. Of all travel options, only
Amtrak's high-speed Northeast Corridor has unencumbered access to the heart of
Manhattan. Trains can whisk passengers into the hearts of other large cities,
like Los Angeles, Chicago, and of course Atlanta (once the intermodal terminal
is built), without succumbing to highway traffic jams or most types of bad
weather. In brief, passenger trains eliminate the traffic jams that are one of
the major sources of unreliability in the overall transportation system. - With
stations in downtown s, suburbs, and outlying population centers, rail has its
own pick-up and delivery system, giving passengers the freedom to choose where
to get on and off the train. Passenger convenience can further benefit from rail
stations at airports and transit stops. For example, in Boston, Amtrak stops at
Route 128, Back Bay, and South Station. At the last two stops, passengers have
direct access to three rapid transit lines, as well as to commuter rail routes
to Boston's southern and western suburbs. Such convenience could be replicated
in other regions of the country. - Railroad stations can anchor the
revitalization of city centers. Washington's Union Station redevelopment, for
instance, has turned a former white elephant into a vibrant, high-traffic
shopping and recreation center that is sparking the rebirth of Washington's
North Capitol Street corridor. - With rail, it's not just the speed that is
important; it is the total passenger experience. Passenger comfort on Amtrak is,
indeed, outstanding and constantly improving. With spacious, reclining seats,
plenty of room to walk around, snack bars and even dining cars on board, rail
travelers have mobility within their mobility. The public reacts well to this:
new train equipment in the Pacific Northwest with European-style d6cor and
taste-tempting local meals on the menu has sparked a 50 percent increase in
ridership since 1993. Amtrak's Acela Express on the Northeast Corridor which was
just inaugurated for revenue service to rave press reviews will offer
world-class comfort and amenities. - Improved rail passenger service operates so
cleanly that it actually reduces total transportation emissions as it attracts
riders from planes and cars. A recent Federal Railroad Administration study
estimated that the introduction of high- speed rail in seven corridors would
create pollutant emissions reductions valued at almost half a billion dollars,
just by diverting travelers from airlines and automobiles. Rail passenger
service is also compact and sparing in its use of resources, usually making use
of existing rail rights-of- way-in contrast with other modes, which often
require new highway lanes or runways. With inherent advantages like these,
passenger trains clearly deserve a prominent role in America's 21st Century
intermodal transportation system. Intercity and Commuter Rail-Integrated and
Intermodal Today, we speak of "intercity" and "commuter' 'rail as separate
modes. This is an artificial distinction, reflecting the funding mechanisms and
the institutions that have arisen since the mid- 20th Century. It is true that
the Federal Transit Administration (FTA) partially funds commuter rail projects,
using the transit share of Federal fuel taxes and that whatever Federal funds
are made available to intercity rail come from general funds through the Federal
Railroad Administration (FRA). It is also true that different entities, the
commuter agencies and Amtrak, are responsible for the two types of service. But
in reality, just as the FTA and the FRA are really part of One DOT, so are
commuter and intercity services two facets of a larger transportation offering.
Commuter and intercity trains use the same tracks, the same signals, and the
same stations. Improvements that benefit intercity trains usually benefit
commuters, and vice versa. The potential for interconnections between the two
services, and with transit, are legion. Anyone who has ever left an Amtrak train
at Newark, crossed the platform, and taken the PATH train direct to the World
Trade Center; or ever changed at Penn Station, New York to the Long Island Rail
Road for direct service to the east would know what I mean. It is no accident
that all the services I have just mentioned were owned and operated for many
years by a single company, the Pennsylvania Railroad. With engineering foresight
and a dedication to public service, that company built integrated facilities and
coordinated its train schedules, providing interconnections both in space and
time for maximum passenger convenience. The days when commuter and intercity
trains were operated as one service by large private firms like the Pennsylvania
Railroad have gone. Today, the participants in rail transport are as numerous
and varied as the sources and uses of the funds that support them. Yet, the
actual physical interdependence, and the potential for connectivity, of these
two types of services remain strong. That more agencies are involved simply
means we have to work harder to fulfill the growing potential of rail passenger
transportation. For example, the FRA recently prepared a study of the
Washington- Richmond corridor. We worked with the freight
railroads, the commuter agencies, and Amtrak, as well as State
and local governments. What resulted was a plan that would improve all services
by addressing their common needs and intelligently allocating improvements to
their common facilities. We have a similar study underway in the
Philadelphia-Harrisburg corridor, and--closer to Atlanta-on the
Richmond-Charlotte route. The principle is always the same---careful attention
to the needs of all users-and the outcome is not surprising: where there's a
will, there's a way to design cost-effective improvements that will result in
better-integrated transportation. All rail services form part of an even larger
transportation network. I have already mentioned examples where commuter and
intercity trams intersect with local transit services. Although intermodal
terminals are scattered throughout the country, the most prominent examples of
seamless passenger service remain in the Northeast, the Great Lakes region, and
California. Georgia generally, and the Atlanta region in particular, is a prime
location given its status as the hub of transportation in the South, for this
kind of intermodalism. Indeed, I salute Georgia for its efforts to join other
prominent metropolitan areas in moving to a higher plateau of passenger
transport. Role of Amtrak I am particularly excited to have Mr. Warrington on
this panel because Amtrak fulfills multiple roles in today's world of intermodal
passenger transportation. Increasingly, the States and Amtrak are creating
successful partnerships to make the service and facility improvements that move
the Nation toward high-speed rail. This has already taken place in the Pacific
Northwest, in California, in the Chicago hub region, in New York State, in
Pennsylvania, and in Virginia. Further service expansions are occurring
elsewhere under Amtrak's Network Growth Strategy, which moves our national rail
passenger system out of the "retreat and retrench" mode into the realm of
dynamic growth. Amtrak's experience in intermodal transport goes far beyond the
State high- speed rail partnerships and includes Amtrak's ownership and
operation of the Northeast Corridor, which is host to thousands of daily
commuter trains operated by local agencies. Moreover, nothing speaks to the
synergies of commuter and intercity services better than Amtrak's success in
directly operating both intercity trains on its own account and commuter
services under contract to many local agencies. So, Amtrak is both a "landlord"
and a "tenant ; both a commuter operator and a facility provider for other
agencies. In addition, Amtrak has been a key player in the development of
mixed-use intermodal terminals, for example in Washington, D.C. and in
Philadelphia. For all these reasons, the sponsors of commuter and high-speed
rail are increasingly Amtrak's partners and customers. High-Speed Corridor
Designations One of FRA's principal roles in nail passenger service is in the
designation of routes for development as high-speed rail corridors. Our current
map of designated corridors positions Atlanta as a possible hub for the
high-speed corridors in the South. The map shows lines radiating from Atlanta to
Charlotte and Richmond, to Macon, Savannah, and Jacksonville, and to Birmingham,
Meridian, and New Orleans. While it may be some years before "high-speed"
service can be implemented, there is no reason why "high-quality" and
"higher-frequency" service could not be quickly realized on some or all of these
routes. Uncertainties remain regarding the precise long-term route between
Atlanta and Birmingham and congestion on the Norfolk Southern route may make
restoration of the old Seaboard Air Line (SAL) route, if available, more
economic. A similar situation may exist on the Savannah-Jacksonville run, where
the former SAL line may provide a realistic option. These alternatives would
affect the routes from Atlanta/Macon to Savannah and Jacksonville. Also of
interest are the potential impacts of these designations, and their future
options and service patterns, on the design of Atlanta's proposed intermodal
terminal. Beyond the current map, many possibilities are in play: direct service
between Atlanta, Birmingham, Meridian, Shreveport, and Dallas/Fort Worth, in
keeping with Amtrak's Network Growth Strategy and connecting the existing Gulf
Coast and South Central Corridors; and service between Atlanta and Chattanooga,
or between Atlanta and Birmingham, then north to Nashville, Louisville, and the
Midwestern states, possibly as part of a restored connection between the Midwest
and Florida. The possibilities are endless, all would redound to the ultimate
benefit of Georgia and the Atlanta region, and all would exhibit synergy with
plans for commuter rail service, in keeping with the essential unity of the two
types of passenger trains. Rail Success Stories All these prospects or rail
service are realistic if there is a consensus among all the agencies and
entities involved in rail passenger service in Georgia and the Southeast, and if
an effective partnership is forged with Amtrak and the freight railroads that
own the tracks. FRA's experience with similar projects in other parts of the
country underlines the realism of these possibilities. The shared theme of all
these success stories is local involvement. Northeast Corridor Alone among the
high-speed rail projects in the Nation, the Northeast Corridor (NEC) was
primarily a Federal project from its modest origins in the 1960s until its
substantial completion this past year. Still, there was substantial State and
local involvement: in securing the original Federal funding in the mid 1970s; in
providing matching funds and local planning participation for the station
program, which transformed the passenger experience at every important station
on the entire 456- mile corridor; and in progressing the electrification of the
last non-electrified segment from New Haven to Boston. At every step of the way,
in the planning, the environ-mental process, the construction, and now the
operation, States and localities partnered with the FRA and Amtrak. All these
efforts have paid off as the NEC hosts continually improving commuter and
intercity services, ranging from new, direct service from northern New Jersey to
Manhattan, to an intercity passenger service so good that it now carries as many
passengers as the airlines do between New York and Washington. Over the long
term, from Amtrak's first full year of operations in 1972 through 1999,
intercity passenger traffic on the NEC more than doubled-the surest indicator of
the program's success. The partnership continues as Amtrak, the States, the
metropolitan planning organizations, FRA, and the commuter authorities continue
to plan additional improvements to fulfill expanding demand for passenger
service in the new century. Projects in other parts of the country will require
even more intensive State and local involvement. California Of all the States,
California has invested most heavily in intercity rail passenger services-over a
billion dollars in direct State funding of capital improvements alone, for
track, signals, equipment, and support facilities. The localities, Amtrak, and
the freight railroads have contributed another $600 million in a remarkable
partnership. As a result, California has an outstanding frequency and quality of
intercity rail service in many of its corridors, although much remains to be
done in that vast and topographically difficult State. The result is obvious:
passenger-miles more than tripled on Amtrak's main line in California's Central
Valley, and have scored impressive gains elsewhere, since the early 1980s.
Pacific Northwest The States of Washington and Oregon have conclusively
demonstrated that new equipment, higher frequencies, and a winning attitude can
score impressive gains for rail passenger service even in the absence of heavy
fixed plant investments. The new Cascades services, making use of modern Talgo
equipment, have created traffic volumes almost ten times those of the early
1980s. These phenomenal gains have occurred with State and local contributions
totaling $130 million, which leveraged additional funds from Amtrak and the
freight railroads. The success of the Cascades services testifies both to the
value of partnerships and to the public's hunger for attractive rail passenger
services- even if major speed increases are slow in coming. Midwest (Chicago
Hub) In the Midwest, nine States have joined together to develop a comprehensive
plan for service centered on the Chicago hub. They call it the "Midwest Regional
Rail Initiative." Although major service improvements have yet to be realized,
progress is underway in a number of partnerships: positive train control
demonstrations in Michigan and Illinois; creative grade crossing barrier systems
in Illinois, where some track reconfigurations and reroutings are in process;
and most recently, a joint equipment request for proposals by Amtrak, and the
States of Illinois, Michigan, and Wisconsin. This request involves 13 trainsets
that will provide upgraded service over the Chicago Hub network. Lessons Learned
What do these success stories teach us that we can apply to a potential Atlanta
hub system for intercity and commuter rail service? Let me sum up the basic
principles. - Local commitment. Where there is intense State and local
commitment, there will be progress in rail passenger service. We see this most
clearly in California, which has made the heaviest investment, but even in
States that have committed more modest resources a strong dedication and focused
attention to specific, perceptible service improvements can overcome a lack of
funds. - Partnership. Time and again we see that it is possible to bring Amtrak
and the freight railroads into mutually beneficial agreements. Our
state-by-state estimates show that Amtrak and the freight railroads pumped
almost a billion dollars into intercity passenger improvements in the 1990s,
with the freight carriers contributing almost 40 percent of that amount. While
no one can foresee the future ability of either Amtrak or its freight colleagues
to replicate that investment in the coming decade, the precedent exists; and we
have ongoing programs in Pennsylvania, New York, Virginia, and elsewhere to back
up our hopes. - Incremental progress. We would all like to see high-speed rail
right away, in its full glory. The fact is, it takes time; the Northeast
Corridor, well-funded though it has been, has taken over 35 years from concept
to realization. Part of that delay reflects the complexity of the Northeastern
rail operations, with their thousands of commuter and hundreds of intercity
trains each day, as well as the sheer number of different State and local
governments involved. Simpler corridors, with more straightforward operations
and fewer actors, can take much less time. The phenomenal success of the Pacific
Northwest corridor, still at top speeds of 79 mph, further confirms the lesson
that modest improvements can produce major increases in service quality and
ridership. - Equipment pays. Often, it is easier to finance and acquire
attractive equipment than to make the fixed plant improvements for high-speed
service. Equipment can often be privately financed; it is not a sunk cost, but
rather has a market value that can be used to secure a loan. It can also be used
at a variety of speeds--conventional speeds where necessary, higher speeds when
investments and safety considerations permit. Just as Amtrak and the Midwest
states are proceeding with equipment in advance of major fixed facility
investments, so can other states do so. As long as the equipment meets FRA
safety standards, provides the marketability that rail passenger service needs,
and (in the case of the Southeast Corridor) is well-suited for through operation
over the Northeast Corridor and its high-level platforms, it can be used to good
effect. Detailed planning; freight and commuter needs. Our
enthusiasm must always be tempered with the realities of rail transportation
today. Specifically, just because the tracks are there, and even empty, does not
necessarily make them suitable for passenger service. The proper connections
must be in place at the right places; the needs of freight service-so vital to
the Nation's economy-must always be protected; and future commuter services must
be allowed for. Even our remaining, disused passenger stations are of no benefit
if the tracks that lead to them are gone, or if huge skyscrapers are blocking
their former approaches. The bottom line is: detailed engineering investigations
must be the prerequisite to significant rail passenger investment. I know that
you have done, and are doing this in Georgia, but there is always the danger
that enthusiasm can outpace realism. So, I advise all advocates of rail
passenger improvements, wherever they may be, to get the facts before leaping
into visionary projects. This does not mean that we cannot make big plans-just
that the big plans must take into account the engineering realities. Sources of
Funds Time and again, this testimony has emphasized state, local, Amtrak, and
freight railroad funds. This emphasis reflects the limited availability of
direct Federal funding for intercity rail passenger improvements. Some limited
programs are available. The FY 2001 Transportation appropriation includes
$200,000 for planning, earmarked for the Charlotte-to-Macon segment of the
Southeast Corridor. In recent years such planning funds have been scarce, and
only available for ear-marked routes. We also have a total of $5.25 million in
grade crossing improvement funds, also for high-speed lines, and also completely
earmarked. For larger Federal investments, the most promising options right now
are the Railroad Rehabilitation and Improvement Financing Program (RRIF),
managed by the FRA, and the Transportation Infrastructure Finance and Innovation
Act (TIFIA), which is a DOT-wide program. Let me summarize for you these two
creative financing approaches, both of which originated in the Transportation
Equity Act for the 21st Century, or TEA-21. In addition, there are some other
opportunities for intercity rail funding under TEA-21, as well as a pending
proposal in Congress that should be of considerable interest. RRIF The RRIF
program provides for direct loans and loan guarantees for terms up to 25 years.
There is a statutory maximum amount of outstanding principal of $3.5 billion. Of
this, $1 billion is reserved for projects primarily benefitting short line and
regional railroads. Statutory priority projects are those that: - Enhance
safety; - Enhance the environment; - Promote economic development; - Are
included in State transportation plans; - Promote U.S. competitiveness; and -
Preserve and enhance rail or inter-modal service to small communities and rural
areas. Eligible applicants for RRIF funding include State and local governments,
government- sponsored authorities and corporations, railroads, and joint
ventures that include at least one railroad. Financing can be used- - To
acquire, improve, or rehabilitate intermodal or rail equipment or facilities,
including track, track components, bridges, yards, buildings, and shops; - To
refinance existing debt incurred for the previous purposes; and - To develop and
establish new intermodal or railroad facilities. RRIF funding is not restricted
to freight and could be applied to passenger railroads. The unique feature of
the RRIF Program is the payment of a Credit Risk Premium in lieu of an
appropriation of funds. The Credit Risk Premium is a cash payment provided by a
non-Federal entity. The Credit Risk Premium must cover the estimated long-term
cost to the Federal Government of a loan or loan guarantee. The amount of Credit
Risk Premium required is determined by the specifics of the transaction. It is
based on an applicant's creditworthiness as well as the, impact of the project
on an applicant's financial strength. The pledging of collateral will reduce the
amount of the Credit Risk Premium since the greater the value of the collateral,
the higher the recovery in the event of default. The credit risk premium must be
paid to the FRA before funds are disbursed. FRA issued final procedures for
applying for RRIF financing (49 C.F.R. Part 260) this past summer. TILFIA The
Transportation Infrastructure Finance and Innovation Act (TIFIA) is a new
program created in Section 1501 of TEA-21 that provides Federal assistance in
the form of credit (e.g., direct loans, loan guarantees, and standby lines of
credit) to help find major transportation investments of critical national
importance. The TIFIA credit program is designed to fill market gaps and to
leverage substantial private co-investment by providing supplemental and
subordinate capital. The TIFIA credit program consists of three different types
of financial assistance designed to address projects' varying requirements
throughout their life cycles: - Secured loans are direct Federal loans to
project sponsors. These loans provide combined construction and permanent
financing of capital costs. The interest rate is "not less than" the yield on
marketable Treasury securities of similar maturity on the date of execution of
the loan agreement. - Loan guarantees ensure a Federal government
full-faith-and- credit guarantee to institutional investors making a loan to a
project. - Standby lines of credit represent secondary sources of funding in the
form of contingent Federal loans that may be drawn upon to supplement project
resources if needed during the first ten years of project operations. Funds to
implement the project may be provided by a corporation, a joint venture, a
partnership, or a governmental entity. The amount of Federal credit assistance
may not exceed 33% of total project costs. Projects eligible for Federal
financial assistance through regular surface transportation programs (Title 23
or chapter 53 of Title 49) are eligible for the TIFIA program. In addition,
regionally or nationally significant projects such as intercity passenger rail
facilities and vehicles (including Amtrak and magnetic levitation systems),
publicly owned intermodal freight facilities on the National Highway System,
border crossing infrastructure, and other large infrastructure projects such as
the Penn Station Redevelopment project in New York are examples which could fit
under the TIFIA umbrella. To qualify, projects must cost at least $100 million
or at least 50% of a State's annual apportionment of Federal-aid funds,
whichever is less. Also, the project must be supported in whole or in part from
user fees or other non-Federal dedicated funding sources (e.g., tolls) and must
be included in the State's transportation plan. For Intelligent Transportation
System projects, the minimum cost must be $30 million; these might include a
regional train control project or a significant advanced train propulsion
control system covering a major metropolitan area. Qualified projects meeting
the above threshold eligibility would then be evaluated by the Secretary based
on the extent to which they generate economic benefits, leverage private
capital, and promote innovative technologies. The senior debt for each project
must possess an investment grade rating (BBB minus or higher) in order to
receive Federal credit assistance under TIFIA. Under TEA-21, a total of $530
million of contract authority was provided to pay the subsidy cost of supporting
Federal credit under TIFIA (to cover anticipated losses). The maximum amount of
credit that may be provided is capped at $10.6 billion over the 6- year
authorization period. Other TEA-21 Sources Although TEA-21 did not provide the
expanded flexibility for States to apply highway trust fund moneys to intercity
rail passenger investments that the Clinton/Gore Administration sought, there
are some limited opportunities for States to do so. For example, feasibility
studies of a broad range of alternative transportation investments (including
rail investments) in a corridor might be included in FHWA-funded planning
activities. Also, the FHWA's grade crossing safety funds may be applied to
high-speed rail corridors as long as FHWA mandates are followed. Similarly, the
Congestion Mitigation and Air Quality (CMAQ ) Improvement Program can be (and
has been) used for rail passenger and freight purposes in nonattainment and
maintenance areas under TEA-2 1. All these applications of funds to rail
passenger purposes of course require the concurrence of the FHWA division
offices. Finally, as Secretary Slater has discussed in his testimony, federal
funding is available from the Federal Transit Administration for commuter rail
improvements. Improvements benefitting commuter rail also frequently provide a
benefit for intercity rail passenger services operating over the same rail
lines. Pending Proposal in Congress Congress is currently considering
legislation, the "High-Speed Rail Investment Act," that would finance
Amtrak/State partnerships to build high-speed rail systems. This legislation has
the endorsement of the Clinton/Gore Administration. The proposal's basics,
furnished by the bill's sponsors, are as follows (note that the legislation is
changing as Congress continues to refine it). - Amtrak is authorized to sell $1
0 billion in high-speed rail bonds between FY 2001 and FY 2010. - This money may
be invested in designated high-speed rail corridors to upgrade existing routes
to high-speed rail, construct new dedicated high-speed rail tracks, and to
purchase high-speed rail equipment. - No more than $3 billion of the bonds will
support any one corridor. - Up to ten percent of the funds would be available to
improve non-high-speed rail service nationwide. - States are required to match
at least 20 percent of Amtrak's share. These funds would be managed by an
independent trustee and used to redeem the bonds. The repayment of bond
principal by the trust would be assured by a separate non-Federal guaranteed
investment contract. - State funds contributed in excess of the 20 percent
minimum may go directly towards funding projects. The state matching requirement
ensures that Amtrak will work in partnership with the states and invest these
funds in only the most economically viable projects. - A preference will be
given to projects with a State share greater than 20 percent. - Provisions are
included which would prevent the use of both bond money and Highway Trust Funds.
- Bondholders receive tax credits in lieu of interest payments, which decreases
federal revenues by $762 million over five years and $3.3 billion over ten
years. The states have already spent a significant amount to get started-about
$1.5 billion in the last decade-mostly on incremental improvements, and they
plan to spend another $1.3 billion in the next 5 years, even without recognizing
the full effects of the proposed High-Speed Rail Investment Act. Thus, improved
intercity rail passenger service will expand somewhat in any case, but the High
Speed Rail Investment Act would make a dramatic difference. Future Vision
Incremental high-speed rail systems are likely to emerge in a number of
corridors in this decade. Construction will probably begin on a new high-speed
rail or maglev system between major cities somewhere in this country, probably
on the West or East Coast. All these systems will demonstrate growing synergy
with commuter rail, transit and motor vehicle transportation, thus fulfilling
Secretary Slater's vision of a seamless transportation network. Beyond that, I
envision a constant improvement in the quality and consistency of Amtrak's
service on all its routes, as well as an expansion of intercity rail passenger
service to new markets (like Atlanta-Birmingham:-Dallas/Fort Worth). To achieve
these improvements, we need to apply the lessons learned from our recent work on
developing improved passenger rail service. We need to combine a local
commitment in partnership with cooperation from freight railroads and federal
support. We need to take advantage of opportunities to improve track and
equipment gradually, as our resources permit, so that improved service and
ridership generates support for further improvements in the future. And we need
to make sure that our enhancements improve service quality for all rail
users-intercity passenger, commuter and freight. The
demographics of the United States are changing with unprecedented growth
occurring in regions like Atlanta and the State of Georgia. The rail system of
the future needs to reflect the residential, commercial, and travel patterns of
the future, not those of the past. That's why I expect great things to happen in
Georgia and the Southeast as population increases, congestion poses challenges,
and opportunities for improved rail service converge to make this region a
world-class hub for intermodal transportation. Thank you.
LOAD-DATE: December 13, 2000, Wednesday
