For House Rail Subcommittee, an Earful on Multiple Matters

Written by Marybeth Luczak, Executive Editor
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Among the topics addressed at the hearing: STB reauthorization, and the commuter railroads’ call for a new grant program and for parity among all publicly subsidized passenger rail operations, which includes conflict resolution through the STB. Pictured is Rep. Dan Lipinski (D-Ill.) outgoing House Transportation and Infrastructure, Subcommittee on Railroads, Pipelines, and Hazardous Materials chair. Photo: Roll Call

“Examining the Surface Transportation Board’s Role in Ensuring a Robust Passenger Rail System” was the topic of a virtual Nov. 18 hearing before the U.S. House of Representatives Committee on Transportation and Infrastructure, Subcommittee on Railroads, Pipelines, and Hazardous Materials.

The hearing took place the same day as the STB’s two remaining confirmations, Robert Primus and Michelle Schultz, were confirmed by the Senate. They now will be sworn in at any time, and the Board will have its full five-member complement.

In his opening remarks, U.S. Rep. Dan Lipinski (D-Ill.), outgoing Chair of the Subcommittee, explained that while Congress in recent years has expanded the STB’s jurisdiction on intercity passenger rail, more is needed.

“The STB has the responsibility of adjudicating any disputes when Amtrak or another railroad wants to initiate new rail service on an existing rail line,” he said. “In northern Illinois, there has been long-standing interest to start new rail service between Chicago and the Quad Cities. A significant amount of federal and state funds have been allocated to this project, but it has been caught in continuing delays due to a lack of cooperation. We should look more at what could be done in situations such as this.

“Beginning in 2008, STB was assigned the task of enforcing the Federal Railroad Administration’s on time intercity rail performance metrics. The recent publication of the on-time performance rule by the FRA makes the STB’s role in solving Amtrak/freight disputes even more critical.”

Lipinski also noted that “unlike Amtrak, Metra [Chicago’s commuter rail agency] and other commuter railroads do not have a statutory federal preference prioritizing commuter trains over freight trains. Additionally, commuter railroads generally do not have standing to bring cases before the STB. Therefore, commuter railroads have very limited leverage when it comes to trying to expand their service on freight rail lines or ensuring that freight railroads do not delay commuter trains.”

While this is not always a problem, conflicts sometimes arise, according to Lipinski. “For these occasions, I believe that Congress should establish a dispute resolution process between commuter railroads and freight railroads at the STB,” he said. “If this is not enough to help give commuters the type of service they deserve, perhaps Congress should take a balanced look at other options that can help improve service for commuters. With all of these challenges, there must be a better, yet still balanced, way that can achieve desirable outcomes for public and private stakeholders.”

Among those testifying at the hearing before U.S. Rep. Lipinski , Ranking Member Rick Crawford (R-Ark.) and U.S. Rep. Peter DeFazio (D-Ore.), Chair of the Committee on Transportation and Infrastructure: STB Chairman Ann D. Begeman and Vice Chairman Martin J. Oberman; Metra Board of Directors Chair Romayne C. Brown; Amtrak Senior Executive Vice President Stephen Gardner; Association of American Railroads (AAR) President and CEO Ian Jefferies; and American Public Transportation Association (APTA) President and CEO Paul Skoutelas.

Among the topics they addressed were STB reauthorization; the Federal Railroad Administration (FRA) final rule establishing metrics and minimum standards for measuring the performance and service quality of Amtrak’s intercity passenger trains; and the commuter railroads’ call for a new grant program and for parity among all publicly subsidized passenger rail operations, which includes dispute resolution through the STB.

Following are highlights from the presenters, with downloadable PDFs of their full written testimony.

Ann D. Begeman, Chairman, STB, and Martin J. Oberman, Vice Chairman, STB

Begeman, who spoke on behalf of the STB, told the Subcommittee that the STB’s jurisdiction over intercity passenger rail carriers is narrower than its jurisdiction over freight rail carriers. “The Board’s authority over rail transportation is derived from 49 U.S.C. § 10501, which gives the Board jurisdiction over transportation by rail carriers between a place in a state and a place in another state, and between a place in a state and another place in the same state, as long as that intrastate transportation is carried out ‘as part of the interstate rail network,’” she explained.

“In general, intercity passenger rail operations are subject to Board jurisdiction when they provide rail service between two states. An example is DesertXpress (also known as Brightline West), which has proposed building a high-speed rail line between Southern California and Las Vegas.

“There are also intercity passenger rail projects, such as California High Speed Rail, that operate within a single state but nevertheless fall within the Board’s jurisdiction because of their extensive links to the interstate rail network. Among other things, California High Speed’s through-ticketing arrangements and shared stations with Amtrak brought that project under the Board’s jurisdiction.”

“In contrast, an intercity passenger rail service that operates within a single state and does not connect with an interstate passenger rail carrier normally falls outside the Board’s jurisdiction,” Begeman pointed out. “For example, the Board found that the All Aboard Florida service—a 230-mile rail line between Miami and Orlando—was not within its jurisdiction due to its lack of connectivity to the national network. Other examples of such operations include tourist and excursion trains, which typically operate within a single state and do not interchange passengers with interstate carriers.”

As for Amtrak, she explained: “Although some private businesses provide regulated intercity passenger rail operations, most passenger rail service is provided by Amtrak, which is statutorily excluded from many of the Board’s regulatory requirements applicable to freight carriers. However, with the enactment of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA) and the Fixing America’s Surface Transportation Act of 2015 (FAST Act), the Board assumed additional Amtrak oversight responsibilities, including the authority to institute investigatory action under certain circumstances and, if appropriate, to award relief and identify reasonable measures to improve performance on passenger rail routes. Lengthy litigation over the constitutionality of the PRIIA provision directing the Federal Railroad Administration (FRA) and Amtrak to establish on-time performance metrics and standards has prevented the Board from fully utilizing this authority until now. After the constitutional issues were finally resolved last year, the FRA issued a notice of proposed rulemaking pertaining to its new on-time performance and service metrics and standards. Once the rule has been finalized, the Board should be able to exercise its investigative authority under PRIIA.”

Begeman also said that STB “does not have jurisdiction over public passenger transportation provided by local governments, which includes commuter rail passenger transportation and services, such as trolley, subway and light rail lines.”

She went on to say: “Under PRIIA, the Board is authorized to mediate disputes involving commuter rail providers seeking access to freight railroad tracks and services. The Board also has certain limited jurisdiction over matters involving commuter services, including establishing appropriate compensation paid by commuter rail providers to Amtrak for use of certain facilities if the parties cannot reach agreement among themselves.”

She noted that the STB is handling several pending matters involving passenger and commuter rail services: “One is a petition filed by Amtrak regarding the continued use by Metra of Chicago Union Station. In this case, the Board required Amtrak to continue to provide access to Metra on an interim basis while the parties participate in Board-sponsored mediation. Similarly, in a petition filed by the Southeastern Pennsylvania Transportation Authority (SEPTA) to determine compensation for the use of certain Amtrak passenger rail stations and parking facilities, the Board required Amtrak to continue to provide access to the stations and facilities on an interim basis while granting a joint motion to hold the proceeding in abeyance while the parties continue negotiations. In another matter, the Board issued interim findings and guidance to Amtrak and subsidiaries of the Canadian National Railway and initiated Board-sponsored mediation in an effort to establish reasonable terms and compensation for Amtrak’s use of the rail facilities and services. The Board is also considering a request by DesertXpress regarding the authorized construction of a high-speed rail line between Southern California and Las Vegas, Nevada. As these proceedings are pending matters, we cannot comment further.”

On the freight rail side, among other measures,“the Board is actively working to reduce the cost, complexity, and duration of rate reasonableness cases, particularly for smaller disputes,” Begeman said. “The Board has adopted a rule creating a streamlined process for pleading market dominance; held a two-day public hearing on revenue adequacy issues; amended its Waybill Sample data collection regulations to provide a more robust dataset for decision-making and analyses; and proposed a new procedure for challenging the reasonableness of railroad rates in smaller cases, called ‘Final Offer Rate Review’ (FORR). To allow for additional stakeholder input in the FORR rulemaking proceeding, in May 2020, the Board waived its general prohibition on ex parte communications to permit post-comment period discussions with outside parties, including railroad and shipper interests, about the FORR proposal and possible supplements or alternatives to it, including the potential use of voluntary arbitration to resolve smaller rate disputes. Summaries of these meetings are posted on the Board’s website. This rulemaking proceeding is ongoing and remains one of the Board’s top priorities.”

DOWNLOAD BEGEMAN AND OBERMAN’S FULL WRITTEN TESTIMONY:

Romayne C. Brown, Board of Directors Chair, Metra
(a Commuter Rail Coalition agency member)

“Clearly, our operating environment in Chicago—the most congested railroad region in the nation—provides us with unique insights into the importance of freight and passenger railroad relationships and the role of the Surface Transportation Board (STB) in overseeing passenger rail,” Brown told the Subcommittee.

She noted that with the pandemic, all transit agencies are facing a new operating reality. “We work daily to ensure our trains and crew facilities are stocked with sanitizer and PPE, we utilize additional maintenance vehicles and rolling stock to allow for social distancing for employees and riders, and we have expanded our human resource services to assist our employees impacted by the virus,” she explained. “While we are committed to safely serving the public and supporting our workforce during these unprecedented times, these are added costs that simply did not exist before the pandemic.

“If we continued to run service at normal levels, we would spend $2.65 billion over the 2021-23 period. However, our available operating funds over that same period in 2021-2023 (CARES, diminished fare revenues and diminished tax revenues) will only amount to $2.080 billion, a gap of $570 million. This $570 million shortfall is largely due to lower ridership and given the pain many Chicagoans are experiencing, fare increases are not practical at this time for our Board.

“Over the 2021-23 period, we are anticipating millions in additional costs for cleaning, PPE, cleaning materials, and adding extra vehicles for social distancing. Yet, we cannot spend more than we have available, unlike the federal government. Without additional financial assistance from Congress, we will face some extremely difficult decisions, including potential cuts in service, to overcome this $570 million shortfall.

“At our present ‘burn rate,’ we project that our CARES Act funding will run out sometime in the second half of 2021. While we will continue to step up to safely provide services to essential workers and those who lack access to a car, we are facing increases in costs to provide the same level of pre-pandemic service.”

Like many transit agencies have said in recent months, Brown requested the Subcommittee’s support in Congress for enacting at least another $32 billion in emergency transit relief.

Brown also addressed the implementation of Positive Train Control (PTC), which has further strained budgets.

“Throughout the United States, commuter rail systems receive a combination of funding from federal, state, and local government sources, though not all receive federal funds,” she pointed out. “Our industry has been working diligently to install and implement PTC) but the federal safety mandate has put great strain on our limited dollars for state-of-good repair and capital projects. I am pleased to report that Metra will meet its 2020 Alternative Schedule and be fully compliant with the PTC deadline for implementation on all 11 lines. Further, legacy commuter railroads, like Metra, face unique capital challenges as we work to maintain and upgrade aging track infrastructure and rolling stock.

“Since 1985, Metra has invested more than $6 billion to rebuild, maintain and expand Chicagoland’s passenger rail network. Operating funding is provided through system-generated revenues—primarily fares—and subsidized in large part through a regional sales tax. Capital funding is provided through a variety of federal programs, state and local funding sources, and a small amount of fare revenue.

“Capital funding to maintain and improve our aging system remains a constant challenge. Metra’s capital program is mostly funded through federal formula funds (Sec. 5307 and 5337) totaling $173.6 million for Fiscal Year (FY) 2019. However, our needs far exceed the level of funding available. In fact, the RTA, our region’s transit funding and oversight agency, estimates that Metra needs to invest $1.2 billion annually over the next decade to achieve and maintain a state of good repair.

“While we must reinvest in our network to continue to safely and efficiently move our customers, our complete PTC system is expected to cost Metra more than $400 million, equal to the amount of federal formula funding Metra receives every 2½ years. Further, based on our own estimates and discussions with our freight railroad partners, PTC operation and maintenance costs are expected to be between 5-10% of the total installation cost per year, or $15-$20 million per year.”

Brown also suggested a new source of funding for commuter railroads. Despite the “important progress” made in the INVEST Act, which was passed by the House as a part of the Moving Forward Act (H.R. 2), “we remain concerned about the state of federal commuter rail funding,” she said. “Creating a new grant program specifically for commuter railroads would provide much needed additional relief to public agencies, like ours, struggling to respond to the COVID-19 pandemic while ensuring our long-term capital projects are addressed.”

“The federal formula funding that Metra receives annually is the bedrock of our capital program,” she noted. “However, because our needs are great and state funding has been inconsistent, it has been nearly impossible to effectively budget and plan a capital renewal program. We believe Congress should also consider creating a dedicated formula funding stream for commuter railroads to ensure the numerous commuter rail systems across the country are no longer forced to rely on sporadic discretionary grants and can effectively plan for both safety and capital expenditures.”

Brown also noted that the STB excludes from its jurisdiction “public transportation provided by a local government authority,” with minor exceptions. Metra, unlike some of its commuter rail agency peers, maintains status as a rail carrier, which provides for greater standing at the STB.

“We believe that Congress should create parity amongst all publicly subsidized passenger rail operations, which includes standing at the STB,” Brown said. “Since Congress created Amtrak as the nation’s preeminent intercity and long-distance passenger rail carrier in 1970, the growth of commuter rail services has been stunning. At the time of Amtrak’s creation, there was one publicly owned commuter railroad. Today, there are now over 30 active commuter rail systems in the United States that deliver over 490 million passenger trips annually and provide the safest form of surface transportation for commuters. By comparison, in FY 2018, Amtrak served approximately 32 million passengers.

“This rapid growth has placed an incredible demand on our limited railroad infrastructure capacity. Commuter rail agencies must coordinate with both the freight railroads and Amtrak in order to operate, especially in Chicago where we must deal with more than 700 freight and Amtrak trains each weekday. While in general, we all work collaboratively in trying to solve issues and move goods and people in a capacity constrained system, like in all partnerships, there are sometimes challenges.”

She continued: “Under federal law certain preferences have been given to Amtrak, including greater standing at the Surface Transportation Board; however, those preferences have not been extended to publicly funded commuter railroads even though, in many cases, Amtrak, freight railroads and commuter railroads share the same tracks. As an example, Amtrak enjoys access to freight infrastructure at incremental costs, Amtrak charges commuter railroads a market rate to utilize their infrastructure, treating state and local taxpayer dollars differently than federally provided ones.

“Our current passenger rail system has not kept up with the pace of growth in commuter rail operations. Short-trip and commuter passenger services have increased dramatically yet lack parity with our intercity and long-distance passenger rail counterparts. We believe the Congress in its reauthorization of the STB should consider mechanisms that level the playing field between Amtrak and publicly-funded commuter rail agencies.”

She noted that, unlike Amtrak, “we lack the same ability to resolve disputes over right of way, on-time performance, and track access at the STB. Despite the tremendous growth of commuter rail services nationally, federal law still only provides preference to the federally subsidized passenger rail services while state and local taxpayer subsidized passenger operations are excluded from full standing at the STB.”

DOWNLOAD BROWN’S FULL WRITTEN TESTIMONY:

Stephen Gardner, Senior Executive Vice President, Amtrak

At the beginning of his testimony, Gardner pointed out the importance of the Rail Passenger Service Act (RPSA) of 1970’s access provisions, noting that 97% of Amtrak’s 22,300 route-mile network and more than 70% of its train-miles in 2019 were on rail lines owned by freight railroads and regional transportation authorities. “While the vast majority of the terms governing Amtrak’s operations over host railroads are negotiated without STB involvement, those negotiations take place against the backdrop of an STB that is empowered to resolve disputes and impose reasonable terms if the parties are unable to agree,” he said. “In every case in which Amtrak has sought access to a host railroad’s lines, facilities, or services under these provisions, the ICC/STB have found that the access Amtrak requested was necessary to carry out the RPSA. Were it not for these access provisions, the fulfillment of Amtrak’s statutory goals, the continued operation of nearly every Amtrak route, the expansion of Amtrak’s routes and services, and the compensation and terms applicable to Amtrak’s operations on host railroads would be subject to the whims of individual host railroads who could demand unreasonable compensation and other terms or simply refuse to accommodate Amtrak’s operations.”

He pointed out to the Subcommittee that STB also has authority to:

“Require continuation of, and determine compensation for, certain commuter and freight rail operations on the portions of the Boston-to-Washington Northeast Corridor and other rail lines that Amtrak acquired pursuant to the Railroad Revitalization and Regulatory Reform Act of 1976.

“Resolve, or assist in resolution of, disputes regarding the implementation of or compliance with the Northeast Corridor (NEC) Cost Allocation Policy developed pursuant to Section 212 of PRIIA to allocate NEC costs among Amtrak and commuter railroads.

“Resolve, or assist in resolving, certain types of disputes arising under the Cost Methodology Policy for State Supported Services operated by Amtrak in partnership with states that was developed pursuant to Section 209 of PRIIA.

“Require, if certain conditions are met, that Amtrak provide facilities, equipment or services to a state that has selected an entity other than Amtrak to provide services for the operation of a state-supported route.”

Gardner focused his testimony on three of the issues regarding Amtrak and its host railroads over which the STB has jurisdiction: Amtrak’s preference rights; the schedules of Amtrak trains; and resolution of disputes regarding the operation of additional Amtrak trains.

 “Amtrak’s right to preference over freight transportation under the law is clear but often ignored, most likely because of a lack of enforcement,” he said. “The largest cause of delay to our customers is ‘freight train interference,’ typically caused by a freight railroad requiring an Amtrak passenger train to wait so that its freight trains can operate on the tracks ahead.”

He went on to say: “When freight railroads ignore the law, our customers and your constituents suffer. Amtrak rigorously tracks all delays on every train to the minute and categorizes them according to the cause of delay. Freight train interference delays amounted to one million minutes in FY 2019—equivalent to nearly two years of passengers waiting for freight trains to operate first. As a result of these delays, the on time performance of nearly all long-distance services, and many state-supported trains, is unacceptably low. In FY 2019, only 42% of long-distance customers and 75% of state-supported customers arrived at their destination on time.”

He continued: “Moreover, while the law allows the STB to grant relief to a freight railroad from the obligation to provide preference in the event that doing so would materially lessen the quality of freight transportation provided to shippers, no railroad has ever sought such relief. Why? We believe this is because the presence of a few daily passenger trains on freight railroad main lines is no threat to the quality and growth of freight transportation. For comparison, Amtrak’s mostly two-track Northeast Corridor main line between Newark and New York Penn Station hosts up to 48 trains an hour. On most host railroad mileage, Amtrak operates two trains a day.”

Gardner pointed to VIA Rail Canada, Canada’s intercity passenger rail operator, as an example of “the dire consequences when there is not even the pretense of the right to preference over freight transportation.”  

He told the Subcommittee: “As noted in a 2016 Special Examination Report of VIA Rail by Canada’s auditor general, ‘In Canada, passenger trains do not have the right of way. Therefore, VIA’s trains are frequently required to yield to freight traffic, which sometimes results in significant delays.’ These delays due to lack of preference have decimated the performance of VIA’s principal long-distance train, the Toronto-Vancouver Canadian. In 2009, VIA added an extra night to the Canadian’s schedule with the expectation that this would improve its poor on time performance. Instead, on time performance plummeted to just 8% in 2018 and some trains operated as much as 43 hours late. In that year, VIA added an additional 12 hours to the Canadian’s schedule, but on time performance continued to deteriorate. VIA’s recently released five-year plan states that operation of the Canadian ‘is not sustainable’ due to a ‘combination of poor OTP’ and ‘significant increases to the schedule.’”

Gardner continued: “One of the reasons why freight railroads can delay our passengers while facing essentially no consequences is because Amtrak’s ability to enforce our right to preference is limited. Only the U.S. Attorney General is presently allowed to bring a case to enforce provisions of the RPSA.”

He then said: “That is why Amtrak is particularly appreciative of the work of this Committee to include a provision in the Moving Forward Act that would allow Amtrak itself to seek enforcement of its right to preference, a vital step toward improving Amtrak on time performance. Simply put—if this provision is enacted, we believe host railroads will stop ignoring the law and your constituents will receive the service that they deserve.”

Gardner then addressed the passage of two provisions in the PRIIA, of which he was a principal architect prior to joining Amtrak: Section 207, which directed Amtrak and the FRA to develop metrics and minimum standards for measuring the performance and service quality of intercity passenger train operations, and Section 213, which set forth a new process for the STB to investigate the causes of substandard on time performance. Section 213, he explained, “provides that the STB may initiate an investigation, or ‘Amtrak, an intercity passenger rail operator, a host freight railroad over which Amtrak operates, or an entity for which Amtrak operates intercity passenger rail service’ may require the STB to initiate an investigation, when ‘the on time performance of any intercity passenger train averages less than 80% for any 2 consecutive calendar quarters, or the service quality of intercity passenger train operations for which minimum standards are established under section 207 of the PRIIA fails to meet those standards for 2 consecutive calendar quarters…’ The STB would then determine whether the failure to achieve the minimum standards ‘are attributable to a rail carrier’s failure to provide preference to Amtrak over freight transportation’ and potentially award damages or prescribe other relief to Amtrak.”

He went on to say that after the metrics and minimum standards rule was issued in 2010, “the AAR filed suit, spending nearly a decade and millions of dollars fighting to prevent the implementation of the minimum standards. When the litigation finally concluded in 2019, Amtrak and FRA once again developed metrics and minimum standards, publishing a proposed rule in March of this year.

“Just this week, the final metrics and standards were issued once again. This landmark rule fulfills the intent of Congress to create a framework to help ensure that your constituents traveling on Amtrak arrive at their destination on time, and if they do not, the responsible parties are held accountable. The establishment of an 80% customer on time performance standard grounds the regulatory framework in the experience of our passengers. That is, for a given train, a minimum of 80% of our customers must arrive at their destination within 15 minutes of the scheduled time for two consecutive quarters. If the standard is not met, the STB can investigate in accordance with the terms of Section 213. We appreciate the hard work and leadership of Administrator Batory and the FRA to progress the rule and reach this critical milestone in the pursuit of a reliable intercity passenger rail network.

“While the final rule has been issued, Amtrak remains concerned that the AAR will pursue additional legal challenges to prevent the rule’s implementation.”

Gardner also addressed schedules: “The train schedule is one of the fundamental attributes of Amtrak travel that determines whether a trip is attractive to customers and provides a valuable transportation option for communities. The AAR and some freight host railroads claim that schedules are outdated and never change. This is incorrect. It is important to note that all schedules in operation have been agreed on with every host railroad and state partner associated with each train. Amtrak and host railroads discuss schedules frequently – every week, in the case of some host railroads – and schedule accuracy is also regularly tested using statistical analysis and ride study programs.”

He noted that: “The proposed rulemaking for Metrics and Minimum Standards for Intercity Passenger Rail Service that the FRA published in March of this year included guidance on schedules, stating that the recovery time should be redistributed within each schedule – with no time added – to align the schedule with the proposed customer OTP metric and improve the likelihood that a customer will arrive on time by putting the pad in the ‘right’ place. Amtrak and host railroads have redoubled our efforts to assess schedules and determine whether any changes are necessary in light of the proposed metric. Customer OTP has been Amtrak’s internal measure of reliability for several years, so many schedules have already been designed or modified to align with the customer OTP metric, such as the San Joaquin service in California and Northeast Regional trains that operate in Virginia. For other routes, we are nearing agreement on potential modifications.”

He also noted that: “While some host railroads assert there is a trade-off between longer schedules and on time performance, that is a false choice. Current schedules already include plenty of time to absorb delays and lengthening schedules provides more opportunity to delay passengers. Further, what some host railroads deem to be a ‘modest’ schedule change has historically included the addition of as many as several hours to the schedule – drastic and unnecessary schedule changes when OTP could be improved by simply reducing delays and enforcing Amtrak’s right to preference. Lengthening the schedule allows for additional time to delay the train and inconveniences our passengers who would otherwise be able to arrive at their destination sooner. Additionally, lengthening the schedule costs Amtrak and any state that funds the service.”

He also discussed Amtrak’s right, administered by the STB, to add more trains and routes on any rail line.

“The problem of host railroad intransigence the Additional Trains Provision [of the Rail Passenger Service Act (RPSA)] was intended to address remains today,” he said. “Rail freight traffic has been declining – down 10% from 2006 to 2019 – and railroads that have embraced Precision Schedule Railroading claim that it has produced excess rail line capacity. Nevertheless when Amtrak seeks to add additional trains – often at the request of state agencies who will be funding the additional service – many host railroads continue to demand exorbitant capital investments that clearly are not necessary to accommodate limited new operations or modest increases in service on existing routes. Some host railroads have refused to engage in joint planning using objective, agreed-upon, criteria to determine whether, and if so what, capital investments are required. Instead, they insist that Amtrak or its state partners fund capacity modeling studies performed by the railroad or consultants it controls, using assumptions and criteria unilaterally chosen by the railroad and data not shared with Amtrak.

“Host railroad demands have delayed, and in some cases thwarted entirely, efforts by Amtrak and its state partners to add additional trains and routes to serve growing regions and corridors that are underserved or not served at all by Amtrak’s existing network.”

To address this, he said, “the Additional Trains Provision needs to be updated and clarified to provide a fair, well-defined, and expeditious process for resolving disputes over adding Amtrak services.”

He added: “Amtrak is gratified that the Moving Forward Act that originated in this Committee and the House adopted includes, in Section 9205, amendments to the Additional Trains Provision that address these issues.”

Regarding the STB, he said: “There are a number of practical measures Congress can take that will help to maximize the effectiveness of the STB in ensuring a thriving passenger rail system that meets the needs of the American public. The STB requested a total of $37.5 million for FY 2021 in furtherance of its statutory responsibilities and in support of its efforts to continue investing in personnel and modernizing workflow processes and data capabilities. Amtrak supports this request and urges Congress to make every effort to meet the Board’s desired funding level, and in fact, Amtrak supports additional resources for the STB to allow it to acquire staff with specific expertise in passenger rail issues in recognition of the central role the Board plays in various matters involving passenger railroads, despite the Board’s more common focus on freight rail issues.”

DOWNLOAD GARDNER’S FULL WRITTEN TESTIMONY:

Ian Jefferies, President and CEO, AAR

“Freight railroads want passenger railroads to succeed,” Jefferies told the Subcommittee. “This is more likely to happen if four overarching principles are followed.

“First and foremost, safety is always most important. Railroads are an extremely safe way to move people and freight, and we must keep it that way.

“Second, passenger rail use of freight rail corridors must be balanced with freight railroads’ need to provide safe, reliable service to present and future customers. Current as well as future capacity needs of freight railroads must be protected.

“Third, policymakers should provide passenger railroads with the dedicated funding they need to operate safely and effectively, and to pay for expanded capacity when required. Freight railroads should not be expected to subsidize passenger operations.

“Fourth, preference for Amtrak’s trains does not mean there will never be delays to Amtrak trains. We all know that when we set out driving somewhere or book an airline flight, delays might happen because of congestion, weather, accidents, or other reasons. It’s no different for passenger trains on freight rail tracks. Transparency and good data shared by Amtrak with the host freight railroad can help identify causation and potentially assist in avoiding a similar situation in the future.”

Jefferies addressed the FRA’s final rule establishing metrics and minimum standards for measuring the performance and service quality of Amtrak’s intercity passenger trains:

“Keeping both Amtrak and freight trains running on time is a tremendously complex issue, but bringing finality to the statutory mandate with an appropriate metric measured against accurate and attainable schedules will create certainty for Amtrak, the host railroads, and, most importantly, the traveling public,” he said. “The AAR, on behalf of its freight railroad members, has been participating in the FRA rulemaking process since its inception to help ensure this desirable outcome is achieved.

“While the proposed rule uses published schedules to measure the customer on-time performance of an Amtrak train, unless the schedules are updated to reflect current conditions and the new metric proposed by FRA, they will give rise to misleading OTP measurements, create unrealistic expectations, and lead to unnecessary litigation at the STB — something the STB expressed concern about in its comments on the proposed rule. More broadly, none of the Amtrak schedules in use today were designed around FRA’s proposed metric, something FRA acknowledged in its proposed rule. If underperforming trains (from an on-time point of view) are to be identified based on an OTP metric, their schedules — against which the metric is measured — must be revised and updated as necessary to ensure the metric is reasonably achievable. This may require a modest lengthening of total Amtrak schedules, but that would result in greater certainty for the traveling public and improved OTP for Amtrak. Several passenger rail advocates, including the Southern Rail Commission and Transportation for America, have noted that ‘many riders would accept slight schedule adjustments if it meant their train could run on time more often.’ We hope Amtrak will work with our host freight railroad members to do so where needed.

“The proposed rule also fails to adequately assess the performance of each individual host railroad on a route with multiple hosts. Therefore, if one host continually delivers a train late to another host, the OTP metric would not be satisfied, and the receiving host could be subject to an STB investigation. Indeed, the FRA acknowledges in the rule that any individual Amtrak customer may travel over the lines of multiple individual host railroads, and that ‘the customer OTP metric does not easily distinguish performance on individual host railroads.’ Although the proposed rule includes other metrics that more directly focus on host-specific performance, such as measuring minutes of delay, it is the OTP standard that determines when hosts may be subjected to an STB investigation. Other factors come into play too in evaluating proposed OTP metrics. For example, when track conditions require it, freight railroads temporarily reduce allowable operating speeds for safety reasons. These ‘slow orders’ can delay trains of all types, but safety must take precedence over everything else. Similarly, railroads must devote sufficient time to track and signal maintenance. This often produces unavoidable delays in the short term for freight and passenger trains, but enhances safety and improves reliability in the long term.

“Freight railroads should not be penalized for making sure their tracks are safe. Put another way, delays caused by what in one way or another are safety enhancements should not count against host freight railroads under an OTP metric. In addition, Amtrak delays are often caused by factors completely outside freight railroad control, including delays caused by Amtrak’s own actions. Freight railroads should not be penalized for delays they did not cause and cannot alleviate.

“Finally, for host railroads to monitor their performance against an OTP metric, identify improvement opportunities, and take corresponding corrective action, they need a close-to-real-time electronic feed of recent, current, and forecasted station-specific ridership data, as well as historical data for analyzing schedules.

“Freight railroads will continue to work cooperatively with the FRA, Amtrak, and others in the rulemaking process to ensure that the new metrics and standards are appropriate, realistic, and fair to all parties.”

Jefferies pointed out to the Subcommittee: “When Amtrak and a host freight railroad are unable to agree on terms for a new operating agreement, either railroad can ask the STB to resolve the matter. Furthermore, if there are disagreements about the operation of additional trains by Amtrak over the hosts’ rail line, the statute provides that the STB may resolve that dispute.”

He added: “Once an operating agreement between a host railroad and Amtrak is in place, disagreements over the interpretation and application of those terms are resolved through binding arbitration before a standing panel of qualified arbitrators.”

Jefferies went on to say: “Congress has granted Amtrak additional enforcement rights related specifically to OTP. As noted, if OTP falls below a certain statutory threshold, Amtrak has the right to file a complaint at the STB against the host railroad and to seek relief. Moreover, if the STB determines that poor OTP was due to the freight railroad’s failure to give Amtrak trains preference, damages can be awarded to Amtrak.”

Amtrak, like other government entities, can also bring complaints to the Department of Justice (DOJ), he said.

Jefferies also said that “Amtrak believes it should have a third means of redress beyond the STB and DOJ: a private right of action — that is, filing suit against a host freight railroad in a court of law.

“Freight railroads strongly oppose granting Amtrak a private right of action, for several reasons. First, as discussed above, Amtrak already has other options to enforce its rights. Second, it would be premature, given that the metrics and standards rulemaking has not yet been completed by the FRA and ample time has not been provided to allow for implantation and operation of the new standard. Third, it would give Amtrak the freedom to ignore the terms of its negotiated contracts and evade the expert eye of the STB.

“Fourth, granting Amtrak a private right of action would open the door to wildly inconsistent decisions by district courts (which, unlike the STB, are not experts on rail transportation policy), as each court would apply its own assessment of how freight and passenger interests should be balanced.”

Jefferies also addressed the STB and its recent actions: “Looking ahead, our nation’s recovery from the pandemic in the short term and our economic prosperity in the long term will depend on the viability and effectiveness of our freight railroads.

“That’s why freight railroads are troubled by several proceedings under way at the STB that could derail many of the tremendous gains that have accrued to railroads, rail customers, and the broader economy since Staggers was passed.

“First, decades ago, as part of a Staggers-inspired effort to reinvigorate railroads, rail regulators exempted certain rail commodities from rate regulation on the grounds that, because these commodities could easily move by truck or barges, railroads would always face pervasive competition for their movement.

“Unfortunately, the STB is considering revoking existing exemptions for some of these products. The STB instituted this proceeding on its own — not because Congress asked it to, but because firms producing or using these commodities asked the STB for it, despite the fact that there’s no evidence that railroads even possess meaningful market power, much less have abused such power, in their transportation of these commodities. Revoking the exemptions would conflict with the clear directive from Congress that rail regulators should regulate railroad rates and service only when market forces are not up to the task.

“Another second proceeding before the STB involves what the STB calls ‘final offer rate review’ (FORR). It’s complicated, but in a nutshell, the STB is proposing a new rate-resolution process for small cases in which both a railroad and a low-volume rail customer would submit a rail rate — a ‘final offer’ — to the STB, which would then choose one of the two offers. Railroads are sensitive to the desire to make the STB more accessible to rail customers, but FORR is not an appropriate way to accomplish that goal. To our knowledge, no other regulatory agency uses an arbitration process similar to what the STB proposes, and FORR conflicts in numerous serious ways with statutes that govern the STB. The AAR has offered the STB ideas regarding ways to ensure small shippers have access to the existing rate reasonableness processes in ways that are practical and consistent with existing law.

“A third STB proceeding currently under way involves railroad revenue adequacy. A railroad is deemed ‘revenue adequate’ by the STB when the railroad’s rate of return on net investment (ROI) equals or exceeds the rail industry’s cost of capital (COC). The concept of revenue adequacy is consistent with the unassailable point that, in our economy, firms and industries must produce sufficient earnings over the long term or capital will not flow to them. The subject of the STB proceeding is what, if anything, revenue adequacy means in terms of rail rates.”

Jefferies went on to say: “Finally, a fourth proceeding under way at the STB involves ‘mandated switching.’ Mandated switching is when a railroad that can carry freight all the way from origin to destination by itself is ordered to switch, or interchange, traffic with another railroad that has replaced the incumbent for part of the move. Under established law and regulatory policy, the STB must first find that a railroad engaged in anti-competitive conduct before the STB can order the railroad to switch traffic to another railroad. However, the proposal being considered by the STB would allow it to order mandated switching without showing that the incumbent railroad did anything anti-competitive at all.”

Jefferies also addressed the Moving Forward Act: “Back on July 1 of this year, the U.S. House of Representatives passed H.R. 2, the ‘Moving Forward Act.’ The railroad industry wants to help find solutions to genuine problems that are out there. Regrettably, H.R. 2 includes many provisions that would undermine freight railroads’ ability to offer the safe, reliable, and environmentally-friendly service that their tens of thousands of customers require – and in so doing would also negatively affect passenger rail service. For example, the bill mandates two-person railroad crews in most rail operations.”

He continued: “Another provision of H.R. 2 that freight railroads oppose would mandate STB mediation when a commuter railroad wants access to a freight railroad’s right of way and the two parties cannot come to terms on that access.

“Many existing and proposed commuter railroads in the United States operate (or hope to operate) at least partially on tracks or corridors owned by freight railroads. Before it can operate on freight-owned property though, a commuter railroad must first reach voluntary agreement with the freight railroad on various issues, such as hours of passenger operations, the number of commuter trains, access fees, liability protections, track modifications, and more. These issues can often be resolved, as the significant growth in commuter rail over the years shows. Sometimes, though, an agreement is not reached.

“Mandated STB mediation in these cases creates the misperception that there is mandated commuter rail access to freight rail facilities. Absent voluntary agreement, private freight railroads should not be forced to allow commuter trains to use freight rail assets any more than any other private business should be forced to grant another company use of its assets without its consent and without just compensation. That said, freight railroads will continue to engage in good faith with commuter railroads whenever there is a credible proposal that involves commuter rail access to freight facilities.

“The recently-passed one-year extension of the FAST Act provides Congress with time to forge a longer-term reauthorization addressing critical transportation issues. With total freight traffic expected to grow by close to 40 percent by 2045, the challenges of operating a rail system capable of meeting future needs is daunting and will require the benefit of effective public policy. We believe it’s possible to craft a bill that meets Congress’s objective without compromising the safe and reliable freight railroad network our nation depends on.”

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Paul P. Skoutelas, President and CEO, APTA

“Commuter railroads’ success in advancing their reach is dependent, in part, on the Surface Transportation Board (STB) ensuring a robust passenger rail system,” Skoutelas told the Subcommittee. “While the majority of the agency’s jurisdiction revolves around freight rail, the STB is charged with adjudicating service disputes that may arise between commuter rail, freight railroads, and Amtrak.”

“Currently, Amtrak has the statutory right to access the rail lines or facilities of a rail carrier or regional transportation authority and has preferential use rights over freight railroads when conducting intercity or commuter rail passenger transportation,” he noted. “However, other passenger rail services (including commuter rail and high-speed rail) do not have the same right of access or preference. As the Committee considers the surface transportation authorization bill in the 117th Congress, APTA would like to work with you and our rail partners, including Amtrak and the freight railroads, to explore the best opportunities to ensure equitable access for all passenger rail on freight rail lines. A robust passenger rail system is critical to ensure our post-pandemic economic recovery.

“APTA is grateful for the Committee’s recognition that commuter rail authorities need to have an equitable and fair process for negotiating passenger rail operational access on freight railroad trackage and rights-of-way. H.R. 2, the INVEST in America Act, included two provisions to enhance the STB’s role in mediating disputes. Sections 9401 and 9402 of H.R. 2 address the STB’s authority to mediate disputes involving commuter rail track usage and service requests as well as rights-of-way usage requests for the construction and operation of a segregated fixed-guideway facility. Importantly, both provisions in H.R. 2 require a rail carrier to provide good faith consideration to reasonable access and usage requests. If an agreement cannot be reached between the public transportation authority and the rail carrier, either party can apply to the STB for nonbinding mediation. If this language is passed into law, APTA encourages the STB to ensure that rail carriers provide full and fair consideration to commuter rail requests for track and right-of-way access and usage.”

Skoutelas addressed capacity, as well: “The STB could also be instrumental in ensuring that any unused capacity on freight rail lines is defined and the railroad owner is fairly compensated for available capacity and, where there is insufficient capacity, a fair and equitable process is created to enhance capacity. We strongly encourage the STB to conduct a summit on capacity to discuss the appropriate parameters to allow for the efficient allocation and use of capacity on freight rail lines for passenger rail operations. One outcome of the summit could be an agreed-upon tool to define capacity. APTA notes that after positive train control is fully implemented, additional capacity may become available and provide opportunities for passenger rail service expansion.

Regarding the FRA’s rulemaking on metrics and minimum standards for intercity passenger rail service, Skoutelas said: “The STB will play a very important role in investigating and resolving any disputes that arise after the standards are finalized. It is critically important that any implementation of the final rule take into account the individual performance of rail carriers, including commuter railroads, on multi-carrier routes so as not to unduly subject such carriers to the costs and burdens of associated investigations that are unrelated to their service delivery.”

He also addressed insurance coverage for commuter railroads: “In advance of the next surface transportation authorization bill, APTA is undertaking research to illustrate how liability costs have increased for the commuter rail industry and identify the reasons for the increases. There are a number of instances where federal law provides a backstop to cover losses above liability limits or allows for federal intervention where the insurance marketplace has become noncompetitive and premiums unaffordable. APTA is developing a proposed legislative framework to reduce liability insurance premium costs for commuter railroads for the Committee to consider in the next Congress.”

Skoutelas also addressed the pandemic and continued recovery funding for public transportation: “According to the Federal Transit Administration (FTA), as of Nov. 11, 2020, public transit agencies have obligated 94% of CARES Act transit funds through 760 grants totaling nearly $23.4 billion of the $25 billion appropriated; more than one-half (57%) of these funds have been fully expended. Moreover, FTA is currently processing an additional 92 grants, totaling $265 million, of CARES Act funds.

“Over the past several months, in many states, things have taken a turn for the worse—coronavirus cases are spiking, governors and mayors are renewing stay-at-home orders, and businesses are shutting down. Our railroads have faced ridership declines of close to 90 percent with a corresponding loss in farebox revenues. In addition, agencies across the country are gaining a clearer understanding of the impact that the pandemic is having on sales taxes, gas taxes, and other state and local revenue streams linked to the economy.

“APTA estimates that the shortfall of additional transit COVID-19 costs and revenue losses is now at least $32 billion. Without additional emergency funding, many transit agencies, including commuter rail agencies, will need to consider cutting transit services and routes and furloughing transit workers. Transit systems, both large and small, are also predicting significant budget shortfalls due to declining revenues heading into fiscal year 2021 without additional federal support.

“As our nation’s commuter rail agencies work to maintain and restore essential services, federal support is critical to ensure that they can reposition themselves to survive and help our communities and nation recover from the economic fallout of the pandemic. Time is of the essence in securing this additional emergency funding.

“APTA strongly supports H.R. 925, ‘The Heroes Act,’ which provides $32 billion of emergency transit funding. In addition, APTA supports Amtrak’s request for $4.9 billion in COVID emergency relief. We stand ready to work with this Committee and Congress to ensure that additional COVID-19 emergency funding for public transportation and Amtrak is passed before the end of the year.”

Skoutelas also said: “APTA strongly supports the funding levels in the INVEST Act and encourages the Committee to continue this robust funding for public transportation and passenger rail in the surface transportation authorization bill in the 117th Congress.”

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