[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                   GETTING TO WORK: EXAMINING CHALLENGES 
                    AND SOLUTIONS IN THE COMMUTER RAIL 
                    INDUSTRY

=======================================================================

                                (118-53)

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON RAILROADS, PIPELINES,
                        AND HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 17, 2024

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure
             
[GRAPHIC NOT AVAILABLEL IN TIFF FORMAT]             


     Available online at: https://www.govinfo.gov/committee/house-
     transportation?path=/browsecommittee/chamber/house/committee/
                             transportation                             
                             
                                __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
57-118 PDF                  WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------                               
                   
                   COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                        Sam Graves, Missouri, Chairman
                      Rick Larsen, Washington, Ranking Member
                      
Eleanor Holmes Norton,               Eric A. ``Rick'' Crawford, 
  District of Columbia               Arkansas
Grace F. Napolitano, California      Daniel Webster, Florida
Steve Cohen, Tennessee               Thomas Massie, Kentucky
John Garamendi, California           Scott Perry, Pennsylvania
Henry C. ``Hank'' Johnson, Jr., Georgiaian Babin, Texas
Andre Carson, Indiana                Garret Graves, Louisiana
Dina Titus, Nevada                   David Rouzer, North Carolina
Jared Huffman, California            Mike Bost, Illinois
Julia Brownley, California           Doug LaMalfa, California
Frederica S. Wilson, Florida         Bruce Westerman, Arkansas
Donald M. Payne, Jr., New Jersey     Brian J. Mast, Florida
Mark DeSaulnier, California          Jenniffer Gonzalez-Colon,
Salud O. Carbajal, California          Puerto Rico
Greg Stanton, Arizona,               Pete Stauber, Minnesota
  Vice Ranking Member                Tim Burchett, Tennessee
Colin Z. Allred, Texas               Dusty Johnson, South Dakota
Sharice Davids, Kansas               Jefferson Van Drew, New Jersey,
Jesus G. ``Chuy'' Garcia, Illinois     Vice Chairman
Chris Pappas, New Hampshire          Troy E. Nehls, Texas
Seth Moulton, Massachusetts          Tracey Mann, Kansas
Jake Auchincloss, Massachusetts      Burgess Owens, Utah
Marilyn Strickland, Washington       Rudy Yakym III, Indiana
Troy A. Carter, Louisiana            Lori Chavez-DeRemer, Oregon
Patrick Ryan, New York               Thomas H. Kean, Jr., New Jersey
Mary Sattler Peltola, Alaska         Anthony D'Esposito, New York
Robert Menendez, New Jersey          Eric Burlison, Missouri
Val T. Hoyle, Oregon                 Derrick Van Orden, Wisconsin
Emilia Strong Sykes, Ohio            Brandon Williams, New York
Hillary J. Scholten, Michigan        Marcus J. Molinaro, New York
Valerie P. Foushee, North Carolina   Mike Collins, Georgia
                                     Mike Ezell, Mississippi
                                     John S. Duarte, California
                                     Aaron Bean, Florida
                                     Celeste Maloy, Utah
                                     Kevin Kiley, California
                                     Vacancy

     Subcommittee on Railroads, Pipelines, and Hazardous Materials

			  Troy E. Nehls, Texas, Chairman
			Donald M. Payne, Jr., New Jersey, 
				  Ranking Member
				  
Frederica S. Wilson, Florida         Brian Babin, Texas
Seth Moulton, Massachusetts          David Rouzer, North Carolina
Troy A. Carter, Louisiana            Mike Bost, Illinois
Andre Carson, Indiana                Doug LaMalfa, California
Mark DeSaulnier, California          Bruce Westerman, Arkansas
Marilyn Strickland, Washington       Pete Stauber, Minnesota
Valerie P. Foushee, North Carolina,  Tim Burchett, Tennessee
  Vice Ranking Member                Dusty Johnson, South Dakota
Grace F. Napolitano, California      Tracey Mann, Kansas
Steve Cohen, Tennessee               Rudy Yakym III, Indiana
Henry C. ``Hank'' Johnson, Jr., Georgiaomas H. Kean, Jr., New Jersey
Jared Huffman, California            Eric Burlison, Missouri
Jesus G. ``Chuy'' Garcia, Illinois   Brandon Williams, New York,
Robert Menendez, New Jersey            Vice Chairman
Rick Larsen, Washington (Ex Officio) Marcus J. Molinaro, New York
                                     John S. Duarte, California
                                     Vacancy
                                     Sam Graves, Missouri (Ex Officio)


                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................   vii

                 STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Troy E. Nehls, a Representative in Congress from the State 
  of Texas, and Chairman, Subcommittee on Railroads, Pipelines, 
  and Hazardous Materials, opening statement.....................     1
    Prepared statement...........................................     2
Hon. Valerie P. Foushee, a Representative in Congress from the 
  State of North Carolina, and Vice Ranking Member, Subcommittee 
  on Railroads, Pipelines, and Hazardous Materials, opening 
  statement......................................................     2
    Prepared statement...........................................     4
Hon. Rick Larsen, a Representative in Congress from the State of 
  Washington, and Ranking Member, Committee on Transportation and 
  Infrastructure, opening statement..............................    14
    Prepared statement...........................................    15

                               WITNESSES

Michael Noland, President, Northern Indiana Commuter 
  Transportation District, and Chairman, Commuter Rail Coalition, 
  oral statement.................................................    17
    Prepared statement...........................................    19
Debra A. Johnson, General Manager and Chief Executive Officer, 
  Regional Transportation District (RTD), Denver, Colorado, oral 
  statement......................................................    28
    Prepared statement...........................................    29
David W. Dech, Executive Director, South Florida Regional 
  Transportation Authority (Tri-Rail), oral statement............    33
    Prepared statement...........................................    34
Kevin S. Corbett, President and Chief Executive Officer, New 
  Jersey Transit, on behalf of the Northeast Corridor Commission, 
  oral statement.................................................    37
    Prepared statement...........................................    40
Darren M. Kettle, Chief Executive Officer, Southern California 
  Regional Rail Authority (Metrolink), oral statement............    42
    Prepared statement...........................................    44

                       SUBMISSIONS FOR THE RECORD

Submissions for the Record by Hon. Valerie P. Foushee:
    Letter to Mr. Ian N. Jefferies, President and Chief Executive 
      Officer, Association of American Railroads, from Hon. Pete 
      Buttigieg, Secretary of Transportation, U.S. Department of 
      Transportation.............................................     5
    Martin J. Oberman, Chairman, Surface Transportation Board, 
      Address at the Southeast Association of Rail Shippers 2024 
      Spring Meeting, February 29, 2024..........................     9
Submissions for the Record by Hon. Troy E. Nehls:
    Statement of Chuck Baker, President, American Short Line and 
      Regional Railroad Association..............................    48
    Statement of Fred Craig, Chair, Association for Innovative 
      Passenger Rail Operations..................................    75
Statement of Stephen Gardner, Chief Executive Officer, National 
  Railroad Passenger Corporation (Amtrak), Submitted for the 
  Record by Hon. Seth Moulton....................................    80

                                APPENDIX

Questions to Michael Noland, President, Northern Indiana Commuter 
  Transportation District, and Chairman, Commuter Rail Coalition, 
  from:
    Hon. Valerie P. Foushee......................................    87
    Hon. Seth Moulton............................................    88
Questions to Debra A. Johnson, General Manager and Chief 
  Executive Officer, Regional Transportation District (RTD), 
  Denver, Colorado, from:
    Hon. Valerie P. Foushee......................................    90
    Hon. Seth Moulton............................................    90
Questions to David W. Dech, Executive Director, South Florida 
  Regional Transportation Authority (Tri-Rail), from Hon. Seth 
  Moulton........................................................    91
Questions to Kevin S. Corbett, President and Chief Executive 
  Officer, New Jersey Transit, on behalf of the Northeast 
  Corridor Commission, from:
    Hon. Valerie P. Foushee......................................    91
    Hon. Seth Moulton............................................    92
Questions to Darren M. Kettle, Chief Executive Officer, Southern 
  California Regional Rail Authority (Metrolink), from:
    Hon. Valerie P. Foushee......................................    92
    Hon. Seth Moulton............................................    93

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                             April 12, 2024

    SUMMARY OF SUBJECT MATTER

    TO:      LMembers, Subcommittee on Railroads, Pipelines, 
and Hazardous Materials
    FROM:  LStaff, Subcommittee on Railroads, Pipelines, and 
Hazardous Materials
    RE:      LSubcommittee Hearing on ``Getting to Work: 
Examining Challenges and Solutions in the Commuter Rail 
Industry''
_______________________________________________________________________


                               I. PURPOSE

    The Subcommittee on Railroads, Pipelines, and Hazardous 
Materials of the Committee on Transportation and Infrastructure 
will meet on Wednesday, April 17, 2024, at 10:00 a.m. ET in 
2167 Rayburn House Office Building to receive testimony at a 
hearing entitled, ``Getting to Work: Examining Challenges and 
Solutions in the Commuter Rail Industry.'' The hearing will 
explore the state of the commuter railroad industry, challenges 
commuter rail providers face, and opportunities to address 
commuter issues. At the hearing Members will hear testimony 
from Mike Noland, President, Northern Indiana Commuter 
Transportation District; Debra Johnson, General Manager and 
Chief Executive Officer (CEO), Regional Transportation District 
(RTD)-Denver; David W. Dech, Executive Director, South Florida 
Regional Transportation Authority/Tri-Rail; Kevin Corbett, 
President and CEO, New Jersey Transit on behalf of the 
Northeast Corridor Commission; and Darren Kettle, CEO, 
Metrolink.

                             II. BACKGROUND

    Commuter rail means ``short-haul rail passenger 
transportation in metropolitan and suburban areas usually 
having reduced fare, multiple-ride, and commuter tickets and 
morning and evening peak period operations.'' \1\ It typically 
operates with higher-speed, higher-capacity trains with less-
frequent stops and traveling longer distances than transit 
rail, and can operate on shared right-of-way with freight 
rail.\2\ The average trip length on commuter rail measures 25.6 
miles.\3\ While the most heavily traveled commuter rail systems 
are in the Northeastern United States, 28 agencies operate 
commuter rail that service 25 states and Washington, D.C.\4\ In 
2021, commuter rail agencies employed approximately 33,000 
workers responsible for operations, maintenance, capital, and 
general administration.\5\
---------------------------------------------------------------------------
    \1\ 49 U.S.C. Sec.  24102 (3).
    \2\ American Public Transportation Association, 2023 Public 
Transportation Fact Book at 7, [hereinafter Fact Book] available at 
https://www.apta.com/wp-content/uploads/APTA-2023-Public-
Transportation-Fact-Book.pdf.
    \3\ Id. at 5.
    \4\ Id. at 39 (noting while APTA considers the Alaska Railroad to 
be a commuter railroad in this count, the Federal Railroad 
Administration generally does not consider the Alaska Railroad to be a 
commuter railroad).
    \5\ Id. at 20.
---------------------------------------------------------------------------
    Following the COVID-19 pandemic, in 2020, commuter rail 
ridership dropped to roughly 66 percent from the previous 
year's ridership as office commuters worked from home.\6\ While 
ridership has improved since the pandemic's end, the numbers 
remain below 2019 pre-pandemic figures. Specifically, commuter 
rail trips in 2019 totaled 510,443, while trips in 2023 totaled 
316,293, or 62 percent of pre-pandemic numbers.\7\
---------------------------------------------------------------------------
    \6\ American Public Transportation Association, Public 
Transportation Ridership Report Fourth Quarter 2020, (Mar. 4, 2021) at 
1, available at https://www.apta.com/wp-content/uploads/2020-Q4-
Ridership-APTA.pdf.
    \7\ See id. at 1; see also American Public Transportation 
Association, Public Transportation Ridership Report Fourth Quarter 
2023, (Mar. 4, 2024), at 1, available at https://www.apta.com/wp-
content/uploads/2023-Q4-Ridership-APTA.pdf.
---------------------------------------------------------------------------

               III. COMMUTER RAIL FUNDING AND OPERATIONS

OPERATING COMMUTER RAIL

    The way that commuter rail service is provided can vary. 
For instance, some commuter rail agencies operate their own 
service over track the agency owns, and others contract with 
freight railroads for access to their track and dispatching 
services.\8\ Several commuter agencies also partner with Amtrak 
for various services.\9\ Other agencies contract out their 
operations and/or other services to private sector 
providers.\10\ All shared use of rail corridors is based on 
voluntary agreements negotiated on a case-by-case basis to 
address corridor- and service-specific issues.\11\
---------------------------------------------------------------------------
    \8\ Association of American Railroads, Freight Rail & Amtrak, 
available at https://www.aar.org/issue/freight-railroads-amtrak.
    \9\ See e.g., Amtrak Awarded Five-Year Contract for MARC Penn Line, 
Mass Transit, (Feb. 28, 2018), available at https://
www.masstransitmag.com/technology/facilities/shelters-stations-
fixtures-parking-lighting/press-release/12400771/amtrak-amtrak-awarded-
five-year-contract-for-marc-penn-line.
    \10\ See e.g., HDR, Eagle Public-Private Partnership Commuter Rail 
Design Build, available at https://www.hdrinc.com/portfolio/eagle-
public-private-partnership-commuter-rail-design-build.
    \11\ Association of American Railroads, Freight Rail & Amtrak, 
available at https://www.aar.org/issue/freight-railroads-amtrak.
---------------------------------------------------------------------------
    Amtrak operates three commuter train services for state and 
regional authorities, the Maryland Area Regional Commuter 
(MARC) Penn Line; Southern California Regional Rail Authority 
(Metrolink); and Shore Line East (Connecticut).\12\ Amtrak also 
provides maintenance-of-equipment services for Central Florida 
Commuter Rail Commission (SunRail); CTrail in Connecticut; 
MARC; Shore Line East; and Sound Transit in Washington, as well 
as maintenance-of-way and dispatching services for 
Massachusetts Bay Transportation Authority (MBTA).\13\ Amtrak 
also provides access to its tracks (and in some cases, other 
services) for 10 agencies, including: CTrail; Long Island Rail 
Road; MARC Penn Line; NJ Transit; Southeastern Pennsylvania 
Transportation Authority (SEPTA); Delaware Department of 
Transportation; Rhode Island Department of Transportation; 
Shore Line East; Virginia Railway Express (VRE); and Metra in 
the Chicago area.\14\
---------------------------------------------------------------------------
    \12\ Fact Book, supra note 2, at 30.
    \13\ Amtrak, FY 2022 Company Profile, at 8-9, available at https://
www.amtrak.com/content/dam/projects/dotcom/english/public/documents/
corporate/nationalfactsheets/Amtrak-Company-Profile-FY2022-020823.pdf.
    \14\ Id.
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    Various private sector entities operate commuter rail 
services for state and regional authorities, including 
Peninsula Corridor Joint Powers Board (Caltrain); San Joaquin 
Regional Rail Commission (Altamont Corridor Express); South 
Florida Regional Transportation Authority (Tri-Rail); Trinity 
Railway Express (TRE); Trinity Metro (TEXRail); Denton County 
Transportation Authority (Texas); Rio Metro RTD (New Mexico 
Rail Runner Express); Massachusetts Bay Transportation 
Authority (MBTA); Virginia Railway Express (VRE); and 
Connecticut Department of Transportation (CTrail Hartford 
Line).\15\
---------------------------------------------------------------------------
    \15\ See Bayrail Alliance, Peninsula Corridor Joint Powers Board, 
available at https://www.bayrailalliance.org/pcjpb/; San Joaquin 
Regional Rail Commission, Altamont Corridor Vision, available at 
https://www.sjrrc.com/altamont-corridor-vision/; Tri-Rail, Overview of 
SFRTA, available at https://www.tri-rail.com/pages/view/overview; 
Trinity Metro, About Trinity Metro, available at https://
ridetrinitymetro.org/about/#::text=TEXRail%2C%20which
%20operates%20between%20Fort,and%20operated%20by%20Trinity%20Metro; 
Washington Metropolitan Area Transit Authority, Metrorail, available at 
https://www.wmata.com/service/rail/; Denton County Transportation 
Authority, Rail & Bus Services: A-Train, available at https://
www.dcta.net/getting-around/rail-bus-services/a-train; Rio Metro 
Regional Transit District, New Mexico Rail Runner Express, available at 
https://www.riometro.org/395/New-Mexico-Rail-Runner-Express; 
Massachusetts Bay Transportation Authority, Commuter Rail, available at 
https://www.mbta.com/schedules/commuter-rail; Virgnia Railway Express, 
available at https://www.vre.org/; Connecticut Department of 
Transportation, CTrail: Passenger Rail Service in Connecticut, 
available at https://portal.ct.gov/DOT/Publictrans/Bureau-of-Public-
Transportation/CTrail.
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SAFETY OVERSIGHT AND FUNDING

    The Federal Railroad Administration (FRA) is responsible 
for ensuring the safety of commuter rail through inspections, 
regulatory actions, and other operating practices.\16\ While 
FRA regulates safety, Federal funding for commuter rail is 
generally provided by the Federal Transit Administration (FTA). 
Commuter rail agencies are eligible to receive FTA formula 
funds, including funding under 49 U.S.C. Section 5307 
(Urbanized Area Formula Grants); 49 U.S.C. 5337 (State of Good 
Repair Grants); and 49 U.S.C. 5340 (High Density States Formula 
funds). These formula funds typically go to a regional 
transportation agency, the designated recipient, and are 
allocated by regional agreements to various transit agencies 
operating commuter rail, heavy and light rail, streetcars, 
ferries, and bus transit in the same urban area.\17\ The 
Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58) 
authorized approximately $33.5 billion for Urbanized Area 
Formula Grants; $23.1 billion for State of Good Repair Grants; 
and $1.8 billion for High Density State Formula Funds from 
fiscal year (FY) 2022 through FY 2026.\18\
---------------------------------------------------------------------------
    \16\ DOT, FRA, Railroad Safety, available at https://
railroads.dot.gov/railroad-safety.
    \17\ DOT, FTA, Urbanized Area Formula Grants--5307, available at 
https://www.transit.dot.gov/funding/grants/urbanized-area-formula-
grants-5307.
    \18\ See DOT, FTA, Fact Sheet: Urbanized Area Formula Grants 
Program, available at https://www.transit.dot.gov/funding/grants/fact-
sheet-urbanized-area-formula-grants-program; see also DOT, FTA, Fact 
Sheet: State of Good Repair and Rail Vehicle Replacement Program, 
available at https://www.transit.dot.gov/funding/grants/fact-sheet-
state-good-repair-and-rail-vehicle-replacement-program; see also DOT, 
FTA, Section 5340 Growing States/High Density States, available at 
https://www.transit.dot.gov/sites/fta.dot.gov/files/2024-02/Section-
5340-Growing-States-High-Density-States-Program-BIL.pdf.
---------------------------------------------------------------------------
    Additionally, commuter railroads may compete for 
discretionary grants under FTA's Capital Investment Grant (CIG) 
program, which funds capital investments in commuter rail as 
well as heavy and light rail, street cars, and bus rapid 
transit projects.\19\ IIJA authorized $23 billion for the CIG 
program over five years.\20\ Six commuter rail agencies are 
currently in the CIG pipeline seeking $12.2 billion.\21\ 
Commuter railroad authorities may also compete for 
discretionary grants under the Department of Transportation's 
Local and Regional Assistance (RAISE) and National 
Infrastructure Project Assistance (Mega) grant programs, 
although eligibility under Mega is limited to public 
transportation projects done in conjunction with another 
mode.\22\ IIJA advance appropriated $7.5 billion and authorized 
an additional $7.5 billion for the RAISE program and advance 
appropriated $5 billion and authorized an additional $10 
billion for the Mega program over five years.\23\
---------------------------------------------------------------------------
    \19\ DOT, FTA, Capital Investment Grants Program, available at 
https://www.transit.dot.gov/CIG.
    \20\ DOT, FTA, Fact Sheet: Capital Investment Grants Program, 
available at https://www.transit.dot.gov/funding/grants/fact-sheet-
capital-investment-grants-program.
    \21\ APTA, CIG Project Pipeline Dashboard, available at https://
www.apta.com/wp-content/uploads/APTA-CIG-Project-Pipeline-Dashboard-
03.11.2024.pdf.
    \22\ Infrastructure Investment and Jobs Act, Pub. L. No. 117-58, 
Sec. Sec.  21201 and 21202.
    \23\ Id.
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RAILROAD CROSSING ELIMINATION (RCE) PROGRAM

    IIJA authorized $600 million in annual advanced 
appropriations over five years, totaling $3 billion, to create 
the new RCE Program to address safety concerns at highway-rail 
or pathway-rail grade crossings Nationwide.\24\ The grant 
program is administered by FRA and is open to projects that 
would separate or close grade crossings; would relocate tracks, 
install or improve protective or preventive measures at 
crossings such as signs or signals; and funds planning and 
designs for eligible projects.\25\ Eligible recipients include 
states, political subdivisions of states, United States 
territories, Indian Tribes, local governments, port 
authorities, and metropolitan planning organizations.\26\ 
Commuter rail grade crossing projects qualify for this program, 
with the ability for FRA to transfer qualifying commuter rail 
projects to the FTA to administer.\27\
---------------------------------------------------------------------------
    \24\ Id. at Sec.  22305, 135 Stat. 695.
    \25\ DOT, FRA, Railroad Crossing Elimination Program, (last updated 
Oct. 2, 2023), available at https://railroads.dot.gov/grants-loans/
competitive-discretionary-grant-programs/railroad-crossing-elimination-
grant-program.
    \26\ Id.
    \27\ See Notice of Funding Opportunity for the Railroad Crossing 
Elimination Program, 87 Fed. Reg. 40335 (July 6, 2022) https://
www.federalregister.gov/documents/2022/07/06/2022-14344/notice-of-
funding-opportunity-for-the-railroad-crossing-elimination-program 
(noting grants under the RCE Program are not subject to the limitation 
in 49 U.S.C. 22905(f).
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RAILROAD REHABILITATION AND IMPROVEMENT FINANCING PROGRAM

    The Railroad Rehabilitation and Improvement Financing 
(RRIF) program was originally established by Congress in Title 
V of the Railroad Revitalization and Regulatory Reform Act of 
1976 and later amended in the Transportation Equity Act for the 
21st Century (TEA-21).\28\ RRIF offers long-term, low-interest 
loans for improving rail infrastructure, including for commuter 
rail.\29\ RRIF-eligible projects include: acquiring, improving, 
and rehabilitating track, bridges, rail yards, buildings, and 
shops; preconstruction activities; transit-oriented development 
projects; and new rail or intermodal activities.\30\ RRIF loans 
can cover up to 100 percent of a project's cost, with repayment 
periods of up to 35 years.\31\ Under this program the 
Department of Transportation (DOT) is authorized to provide 
direct loans and loan guarantees up to $35 billion to finance 
development of railroad infrastructure.\32\ To date, the RRIF 
program has provided $7.3 billion in financing.\33\
---------------------------------------------------------------------------
    \28\ See Pub. L. No. 94-240, 90 Stat. 257; Pub. L. No. 105-178, 112 
Stat. 107.
    \29\ Robert S. Kirk & William J. Mallet, Cong. Rsch. Serv., 
(R47573), Funding and Financing Highways and Public Transportation 
Under the Infrastructure Investment and Jobs Act (IIJA), (May 24, 
2023), available at https://crs.gov/Reports/R47573?source=search, 
[hereinafter, Funding and Financing].
    \30\ DOT, Build America Bureau, Railroad Rehabilitation & 
Improvement Financing (RRIF), available at https://
www.transportation.gov/buildamerica/financing/rrif [hereinafter RRIF].
    \31\ Id.
    \32\ Id.
    \33\ Funding and Financing, supra note 29.
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               IV. COMMUTER RAIL CHALLENGES AND CONCERNS

FUTURE FUNDING

    In May 2023, the American Public Transportation Association 
(APTA) surveyed its members on future potential operating 
budget shortfalls, also known as the ``Fiscal Cliff'' that many 
agencies are facing.\34\ Fifty-one percent of 122 responding 
agencies say they are facing a Fiscal Cliff in the next five 
years.\35\ Commuter rail authorities have expressed support for 
predictable Federal funding, to fully fund IIJA public transit 
and passenger rail investments in annual appropriations bills, 
including for CIG, RCE, and Federal-State Partnership for 
Intercity Passenger Rail grants.\36\ Additionally, commuter 
railroad agencies have requested funding for the operations and 
maintenance costs of positive train control, a safety 
communications system Congress mandated for passenger and 
freight lines carrying certain hazardous materials in 2008, and 
that safety requirements placed on freight railroads in 
additional rail safety legislation are not inadvertently borne 
by commuter rail agencies.\37\
---------------------------------------------------------------------------
    \34\ Policy Brief, APTA, Public Transit Agencies Face Severe Fiscal 
Cliff, (June 2023), available at https://www.apta.com/wp-content/
uploads/APTA-Survey-Brief-Fiscal-Cliff-June-2023.pdf.
    \35\ Id.
    \36\ Fact Sheet, APTA, Commuter Rail Legislative and Regulatory 
Priorities, (Jan. 1, 2024), available at https://www.apta.com/wp-
content/uploads/APTA-FACT-SHEET-Commuter-Rail-Priorities-
01.01.2024.pdf.
    \37\ Id.
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AMTRAK PREFERENCE AND ACCESS RIGHTS

    Certain commuter rail interests have questioned whether 
Amtrak has access rights to rail lines that were not in 
operation when Amtrak was created, and whether it has 
preference over commuter rail lines as it does over freight 
railroad-owned lines.\38\ The agencies assert commuter rail was 
never subject to the Rail Passenger Service Act of 1970 (RPSA) 
(P.L. 91-518) that granted Amtrak a right of track access or 
preference on track not owned by Amtrak.\39\ The Commuter Rail 
Coalition (CRC) argued that as ``non-RPSA'' railroads, commuter 
railroads were not relieved of their passenger common carrier 
obligations under the RPSA.\40\ Therefore, they harbor no 
obligation to give Amtrak preferential treatment on commuter 
railroad tracks and that doing so would burden publicly-funded 
commuter rail operations.\41\ The CRC stressed the need to 
``continue to realize the full, long-term value of the public 
investment'' \42\ in commuter lines and facilities ``to protect 
their valuable passenger service.'' \43\
---------------------------------------------------------------------------
    \38\ Letter from Chuck Baker, President, American Short Line and 
Regional Railroad Association and KellyAnne Gallagher, Chief Executive 
Officer, Commuter Rail Coalition to Martin J. Oberman, Chairman, 
Surface Transportation Board, (Dec. 11, 2023), available at https://
www.stb.gov/wp-content/uploads/ASLRRA-and-CRC-letters-to-STB-Regarding-
AMTRAK-Expansion-Plans-December-11-2023.pdf.
    \39\ Id.
    \40\ Id.
    \41\ Id.
    \42\ Id.
    \43\ Id.
---------------------------------------------------------------------------
    Amtrak stated that the access rights granted to Amtrak in 
RPSA do apply to commuter rail and that the Surface 
Transportation Board (STB) and its predecessor, the Interstate 
Commerce Commission have consistently held that the RPSA 
applies to both ``railroads'' and ``regional transportation 
authorities.'' \44\ Amtrak stated that it does not have 
statutory priority on commuter rail lines, as it does on 
freight railroad routes, though does claim it is generally an 
international best practice for transportation agencies to give 
some level of priority to intercity passenger rail trips over 
local trains when they run on the same tracks.\45\ Amtrak 
further asserted that commuter rail can benefit from Amtrak's 
presence on commuter tracks because Amtrak can access certain 
FRA grants for shared-use infrastructure that commuter 
railroad-only projects usually cannot, such as the Consolidated 
Rail Infrastructure and Safety Improvements (CRISI) and 
Federal-State Partnership for Intercity Passenger Rail (FSP) 
Grant Programs.\46\ Additionally, Amtrak claimed that a number 
of the commuter railroad-owned lines that carry Amtrak service 
were acquired after its creation with knowledge that Amtrak had 
statutory rights of access.\47\
---------------------------------------------------------------------------
    \44\ Letter from Stephen Gardner, Chief Executive Officer, Amtrak, 
to Martin J. Oberman, Chairman, Surface Transportation Board, (Feb. 7, 
2024) available at https://www.stb.gov/wp-content/uploads/Amtrak-
letter-to-Chairman-Oberman_2.7.24.pdf.
    \45\ Id.
    \46\ Id.
    \47\ Id.
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ACCIDENT LIABILITY INSURANCE

    Most commuter rail agencies self-insure against risks 
between $2 million and $7.5 million.\48\ In order to insure 
against larger losses, commuter rail agencies purchase policies 
from the private markets. Total annual price increases on 
premiums have ranged from 20 percent to 80 percent in the past 
five years.\49\
---------------------------------------------------------------------------
    \48\ APTA, Public Transportation Gets Us There: APTA Recommendation 
on Commuter Rail Liability Insurance, at 15 available at https://
www.apta.com/wp-content/uploads/APTA-Commuter-Rail-Liability-Insurance-
Final-Report-July-2021.pdf.
    \49\ Id. at 16.
---------------------------------------------------------------------------
    In 1997, Congress enacted the Amtrak Reform and 
Accountability Act, which limited overall damages from all 
passenger rail claims arising from a single accident to $200 
million, including punitive damages and required Amtrak to 
carry this level of accident liability insurance.\50\ Congress 
amended this provision in the Fixing America's Surface 
Transportation Act (FAST Act) by requiring the Secretary of 
Transportation to adjust the ceiling based on the change in 
Consumer Price Index, with revisions required every five 
years.\51\ The Secretary adjusted the rail passenger liability 
cap to approximately $295 million in February of 2016.\52\ On 
February 25, 2021, the Secretary updated the liability cap to 
the current amount of approximately $322.86 million.\53\ The 
next increase is expected in February 2026.
---------------------------------------------------------------------------
    \50\ Pub. L. No. 105-134, Sec.  28103.
    \51\ Pub. L. No. 114-97, Sec.  11415.
    \52\ See Adjustment to Rail Passenger Transportation Liability Cap, 
81 Fed. Reg. 1289, (Jan. 11, 2016), available at https://
thefederalregister.org/81-FR/1289/2016-00301.pdf.
    \53\ Adjustment to Rail Passenger Transportation Liability Cap, 86 
Fed. Reg. 11571, (Feb. 25, 2021), available at https://www.govinfo.gov/
content/pkg/FR-2021-02-25/pdf/2021-03886.pdf.
---------------------------------------------------------------------------
    While commuter rail agencies are not required by law to 
obtain an insurance policy that covers a loss up to that 
ceiling, they often are required by host railroads or Positive 
Train Control vendor contracts to maintain the statutory 
minimum level of liability insurance.\54\ Commuter rail 
agencies can experience difficulty with the 30-day window to 
acquire coverage following each liability cap increase every 
five years.\55\ Dozens of commuter railroads and Amtrak compete 
in a narrow market to acquire additional insurance.\56\ 
Accordingly, commuter rail agencies seek legislative solutions 
to make obtaining insurance easier and more affordable, such as 
extending the amount of time commuter authorities have to 
acquire additional insurance or to create a Federal liability 
insurance pool.
---------------------------------------------------------------------------
    \54\ American Public Transportation Association, APTA 
Recommendation on Commuter Rail Liability Insurance at 7, available at 
https://www.apta.com/wp-content/uploads/APTA-Commuter-Rail-Liability-
Insurance-Final-Report-July-2021.pdf.
    \55\ CRC: Liability Insurance Issues Remain Problematic, Railway 
Age, (Jan. 31, 2024), available at https://www.railwayage.com/news/crc-
liability-insurance-issues-remain-problematic.
    \56\ Id.
---------------------------------------------------------------------------

                              V. WITNESSES

     LMr. Michael Noland, President, Northern Indiana 
Commuter Transportation District
     LMs. Debra Johnson, General Manager and CEO, RTD-
Denver
     LMr. David W. Dech, Executive Director, South 
Florida Regional Transportation Authority/Tri-Rail
     LMr. Kevin S. Corbett, President and CEO, New 
Jersey Transit, on behalf of the Northeast Corridor Commission
     LMr. Darren Kettle, Chief Executive Officer, 
Metrolink

 
  GETTING TO WORK: EXAMINING CHALLENGES AND SOLUTIONS IN THE COMMUTER 
                             RAIL INDUSTRY

                              ----------                              


                       WEDNESDAY, APRIL 17, 2024

                  House of Representatives,
Subcommittee on Railroads, Pipelines, and Hazardous 
                                         Materials,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10 a.m. in room 
2167 Rayburn House Office Building, Hon. Troy E. Nehls 
(Chairman of the subcommittee) presiding.
    Mr. Nehls. The Subcommittee on Railroads, Pipelines, and 
Hazardous Materials will come to order.
    I ask unanimous consent that the chairman be authorized to 
declare a recess at any time during today's hearing.
    Without objection, so ordered.
    I also ask unanimous consent that Members not on the 
subcommittee be permitted to sit with the subcommittee at 
today's hearing and ask questions.
    Without objection, so ordered.
    And as a reminder, if Members wish to insert a document 
into the record, please also email it to 
DocumentsTI@mail.house.gov.
    I now recognize myself for the purposes of an opening 
statement for 5 minutes.

  OPENING STATEMENT OF HON. TROY E. NEHLS OF TEXAS, CHAIRMAN, 
 SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

    Mr. Nehls. At today's hearing, we will discuss the state of 
commuter passenger rail, with a focus on developing commuter 
rail to ensure it is safe, efficient, cost effective, and that 
it meets the demands of the public.
    Investments and innovation in our rail infrastructure are 
essential to building a robust and competitive American 
transportation system. We must ensure that Federal policies and 
spending are balanced with a realistic analysis of consumer 
demand for commuter rail and the best use of taxpayer dollars.
    Technology has now made it possible to work remotely. Many 
workers have responded by purchasing homes farther from the 
cities and forgoing their daily work commute. This naturally 
affects commuter rail ridership and demand.
    Commuter rail service is primarily designed to address a 
high volume of passengers traveling to and from cities, 
operating in metropolitan, suburban, and exurban areas. These 
systems can be a cost-effective transportation alternative for 
these longer commutes. Several local and regional agencies 
operate their own service, while others contract with Amtrak or 
private-sector companies. These private-sector providers help 
lower costs, improve services, and increase ridership.
    I look forward to hearing from today's witnesses about the 
challenges and opportunities for commuter rail services, as 
well as best practices to improve service, realize 
efficiencies, and increase fare revenues.
    [Mr. Nehls' prepared statement follows:]

                                 
Prepared Statement of Hon. Troy E. Nehls, a Representative in Congress 
   from the State of Texas, and Chairman, Subcommittee on Railroads, 
                   Pipelines, and Hazardous Materials
    Today's hearing will discuss the state of commuter passenger rail, 
with a focus on developing commuter rail to ensure it is safe, 
efficient, cost effective, and that it meets the demands of the public.
    Investments and innovation in our rail infrastructure are essential 
to building a robust and competitive American transportation system. We 
must ensure that Federal policies and spending are balanced with a 
realistic analysis of consumer demand for commuter rail and the best 
use of taxpayer dollars.
    Technology has now made it possible to work remotely. Many workers 
have responded by purchasing homes farther from cities and foregoing 
their daily work commute. This naturally effects commuter rail 
ridership and demand.
    Commuter rail service is primarily designed to address a high 
volume of passengers traveling to and from cities, operating in 
metropolitan, suburban, and exurban areas. These systems can be a cost-
effective transportation alternative for these longer commutes. Several 
local and regional agencies operate their own service, while others 
contract with Amtrak or private sector companies. These private sector 
providers help lower costs, improve services, and increase ridership.
    I look forward to hearing from today's witnesses about the 
challenges and opportunities for commuter rail services, as well as 
best practices to improve service, realize efficiencies, and increase 
fare revenues.

    Mr. Nehls. Before I recognize Mrs. Foushee, I would like to 
take a moment to say we wish Ranking Member Payne a quick 
recovery. I look forward to seeing him return to work with us 
here in the subcommittee soon.
    And with that, Representative Foushee, you are recognized 
for 5 minutes for an opening statement.

OPENING STATEMENT OF HON. VALERIE P. FOUSHEE OF NORTH CAROLINA, 
VICE RANKING MEMBER, SUBCOMMITTEE ON RAILROADS, PIPELINES, AND 
                      HAZARDOUS MATERIALS

    Mrs. Foushee. Thank you, Chair Nehls, for holding this 
hearing today.
    The Research Triangle expects to add more than 1 million 
people by 2050, and we need to provide good mobility options. I 
am hopeful that commuter rail can be a part of that solution.
    On the passenger rail front, I do have two State-supported 
Amtrak routes in my district, the Carolinian and the Piedmont, 
which carried more than 600,000 people last year. The Piedmont 
saw a 36-percent increase in ridership after North Carolina and 
Amtrak added a fourth daily round trip.
    In early December 2023, the U.S. Department of 
Transportation announced a $1 billion grant to develop a new 
intercity passenger rail route between Raleigh, North Carolina, 
and Richmond, Virginia, along the CSX S-Line that will connect 
North Carolina with Virginia, Washington, DC, and other 
destinations along the Northeast Corridor.
    I am proud to see this historic investment, which will 
bolster transportation options for North Carolina's residents. 
I championed this investment long before arriving to Congress 
and appreciate the work my predecessor, former Transportation 
Appropriations Subcommittee Chair David Price, did to develop 
this intercity passenger rail route.
    This generational investment, made possible by the 
Bipartisan Infrastructure Law, will make historic changes in my 
district. I look forward to working with you, Mr. Chair, and 
with our committee to ensure that this type of investment 
continues in the future.
    Let me now turn to rail safety. I am hopeful that this 
committee will focus on this important matter because we have 
not yet held a hearing on the Norfolk Southern derailment that 
happened in East Palestine, Ohio, or the 1,000 or so other 
derailments that occurred across the country last year.
    Last month, Secretary Buttigieg sent a letter to the Class 
I freight railroad association that expressed concern with the 
freight railroads' resistance to improving safety. He 
highlighted that the Federal Railroad Administration statistics 
do not show safety improving significantly over the past 
decade. He encouraged the railroads to join with Congress and 
regulators to improve safety, rather than continue to fight 
against proposed safety reforms.
    I ask consent to put Secretary Buttigieg's letter into the 
record.
    Mr. Nehls. Without objection.
    [This document appears after Representative Foushee's 
prepared statement.]
    Mrs. Foushee. There are several legislative proposals that 
have been introduced in the House that could serve as the basis 
for us to address rail safety.
    Furthermore, the National Transportation Safety Board, or 
NTSB, has 190 outstanding rail safety recommendations from 
prior accidents and incidents. The Chair told us this in 
January and reiterated it again last week during her 
renomination hearing. I hope when the NTSB's final East 
Palestine report comes out in June that we will be able to 
quickly turn to this issue.
    At the same time the safety regulator is expressing 
concern, the economic regulator is also raising red flags. 
Surface Transportation Board Chair Martin Oberman stated at a 
February conference for rail shippers that the freight rail 
workforce has declined dramatically over the past decade. While 
some railroads have refocused efforts on making capital 
investments and rehiring people to make improvements, others 
continue to cut workers and cut their capital expenditures.
    I ask consent to put STB Chair Oberman's speech into the 
record.
    Mr. Nehls. Without objection.
    [This document appears after Representative Foushee's 
prepared statement.]
    Mrs. Foushee. Freight rail is essential to our Nation's 
economy, but over the last 10 years, freight rail movements 
declined. If we want to see the environmental and safety 
benefits of moving freight by rail, it seems nearly impossible 
to do so if the railroads do not have enough people or are not 
making enough investments in their infrastructure.
    Turning back to commuter rail, we have been discussing in 
my district introducing commuter rail to Durham since the early 
1990s, but we don't yet have it.
    I look forward to learning more about commuter rail 
services around the country from our witnesses, and Mr. Chair, 
I yield back.
    [Mrs. Foushee's prepared statement follows:]

                                 
 Prepared Statement of Hon. Valerie P. Foushee of North Carolina, Vice 
  Ranking Member, Subcommittee on Railroads, Pipelines, and Hazardous 
                               Materials
    Thank you, Chair Nehls, for holding this hearing today.
    The Research Triangle expects to add more than a million people by 
2050--and we need to provide good mobility options. I am hopeful that 
commuter rail can be part of that solution.
    On the passenger rail front, I do have two state-supported Amtrak 
routes in my district--the Carolinian and the Piedmont, which carried 
more than 600,000 people last year. The Piedmont saw a 36-percent 
increase in ridership after North Carolina, and Amtrak added a fourth 
daily round trip.
    In early December 2023, the U.S. Department of Transportation 
announced a $1 billion grant to develop a new intercity passenger rail 
route between Raleigh, North Carolina, and Richmond, Virginia, along 
the CSX ``S-Line'' that will connect North Carolina with Virginia, 
Washington, DC, and other destinations along the Northeast Corridor.
    I am proud to see this historic investment, which will bolster 
transportation options for North Carolina's residents.
    I championed this investment long before arriving to Congress and 
appreciate the work my predecessor, former Transportation 
Appropriations Subcommittee Chair David Price, did to develop this 
intercity passenger rail route.
    This generational investment made possible by the Bipartisan 
Infrastructure Law will make historic changes in my district.
    I look forward to working with you, Mr. Chair, and with our 
Committee to ensure that this type of investment continues in the 
future.
    Let me now turn to rail safety. I am hopeful this Committee will 
focus on this important matter because we have not yet held a hearing 
on the Norfolk Southern derailment that happened in East Palestine, 
Ohio, or the one thousand or so other derailments that occurred across 
the country last year.
    Last month, Secretary Buttigieg sent a letter to the Class I 
freight railroad association that expressed concern with the freight 
railroads' resistance to improving safety. He highlighted that the 
Federal Railroad Administration's statistics do not show safety 
improving significantly over the past decade.
    He encouraged the railroads to join with Congress and regulators to 
improve safety--rather than continue to fight against proposed safety 
reforms.
    I ask consent to put Secretary Buttigieg's letter into the record.
    There are several legislative proposals that have been introduced 
in the House that could serve as the basis for us to address rail 
safety.
    Furthermore, the National Transportation Safety Board (NTSB) has 
190 outstanding rail safety recommendations from prior accidents and 
incidents. The chair told us this in January and reiterated it again 
last week during her renomination hearing.
    I hope when the NTSB's final East Palestine report comes out in 
June that we will be able to quickly turn to this issue.
    At the same time the safety regulator is expressing concern, the 
economic regulator is also raising red flags.
    Surface Transportation Board (STB) Chair Martin Oberman stated at a 
February conference for rail shippers that the freight rail workforce 
has declined dramatically over the past decade.
    While some railroads have refocused efforts on making capital 
investments and rehiring people to make improvements, others continue 
to cut workers and cut their capital expenditures.
    I ask consent to put STB Chair Oberman's speech into the record.
    Freight rail is essential to our nation's economy.
    But over the last 10 years, freight rail movements declined.
    If we want to see the environmental and safety benefits of moving 
freight by rail, it seems nearly impossible to do so if the railroads 
do not have enough people or are not making enough investments in their 
infrastructure.
    Turning back to commuter rail, we have been discussing in my 
district introducing commuter rail to Durham since the early 1990s. But 
we don't yet have it.
    I look forward to learning more about commuter rail services around 
the country from our witnesses.
    I yield back.

                                 
Letter to Mr. Ian N. Jefferies, President and Chief Executive Officer, 
Association of American Railroads, from Hon. Pete Buttigieg, Secretary 
of Transportation, U.S. Department of Transportation, Submitted for the 
                   Record by Hon. Valerie P. Foushee
                           The Secretary of Transportation,
                                              Washington, DC 20590.
Mr. Ian N. Jefferies,
President and CEO,
Association of American Railroads.

    Dear Mr. Jefferies:
    I received your recent letter on railroad safety, which begins with 
an observation I agree with: freight rail is an indispensable part of 
America's economy and way of life, essential for the delivery of 
virtually everything we count on every day. I also agree with your 
assertion that safety must be the top consideration whenever we are 
discussing railroad policies and practices.
    But in reading your letter, I was left with the impression that the 
Association of American Railroads (AAR) is satisfied with the current 
trajectory of railroad safety in America. I am not.
    Your letter correctly notes derailments are today less common than 
they were a quarter of a century ago. This is welcome, and it reflects 
the skill and effort of people in the railroad industry--as well as the 
impact of tougher safety regulations that responded to horrific 
disasters. Unfortunately, it is also clear that over the last decade, 
the safety performance of the Class I freight companies has stagnated--
and, by some measures, deteriorated. Like the American public, this 
Department considers that trend to be unacceptable.
    In the spirit of your stated aim of ``continually identifying and 
implementing safety advancements,'' I want to emphasize how your 
industry could do more to make sure that status quo improves. Let us 
begin with some basic data.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

 The above graph shows derailment rates for the last decade. Rates are 
 defined as number of derailments per million train miles (on mainline 
 track) or per million yard switching miles (for rail yards). Source: 
                    Federal Railroad Administration

    Again, in the last decade, derailment rates have not significantly 
improved, according to FRA data. In the case of yard derailments, data 
suggest the rate in 2023 was actually 49 percent higher compared to ten 
years ago. I recognize and agree with you that not all derailments are 
equal in seriousness, and certainly very few of them rise to the level 
of the East Palestine, Ohio, derailment in terms of impact and 
severity. Yes, mainline derailments differ from yard derailments. But I 
cannot accept your letter's generalization likening yard derailments to 
``fender benders,'' especially given that in 2023, two Class I freight 
employees on duty lost their lives in rail yard accidents while a 
separate incident resulting in an explosion at Bailey Yard in North 
Platte forced local residents to evacuate their homes.
    To be fair, the deterioration in derailment rates has not been 
uniform. We have been encouraged by recent data showing that Norfolk 
Southern has experienced a 34 percent reduction in the rate of mainline 
derailments in the last year. Less encouraging is the fact that data 
for 2023 suggest that Norfolk Southern is alone among the Class I 
railroads to achieve significant reductions in the rate of mainline 
derailments this past year. And more generally, the overall accident 
rate has not improved. The rate of accidents not at grade crossings has 
been rising slowly throughout the decade, peaking in 2022.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

   The above graph shows accident rate by year for the last decade. 
                Source: Federal Railroad Administration

    You are correct to note that freight rail is notably safer than 
highway freight transport. But this is less cause to be satisfied with 
the status quo in rail than to be disturbed by the status quo on our 
highways--something we are actively working to change through our 
policies and funding on roadway safety.
    A more appropriate benchmark might be passenger safety in 
commercial aviation. Consider that America's safest mode of 
transportation is one which involves using flammable liquids to propel 
passengers through the air at nearly the speed of sound. In a typical 
year, the number of U.S. commercial airline passenger enplanements is 
in the hundreds of millions--and the number of fatal crashes is 
typically zero. This is the result of extremely careful and prudent 
regulation and safety culture, as well as a determination to 
continuously improve. As shown by our response to the Boeing incident 
in January, even a close call can lead to extreme scrutiny, 
reassessment of practices, and proposals for regulatory reform.
    When it comes to railroads, the U.S. Department of Transportation 
(DOT) is acting to improve safety using every tool we currently have. 
We have used our authority to issue safety advisories, promulgate 
rules, and address rail safety concerns, sometimes over industry 
objections. We're making historic infrastructure investments to 
modernize and improve America's physical rail network--often in 
partnership with Class I railroads. That investment includes the 
Railroad Crossing Elimination grant program, which enjoys your support 
and which benefits your member railroads and American communities 
alike.
    In this safety journey, industry behavior is as important as 
government action. Your letter mentions measures that railroads have 
taken, without being required to do so, such as the use of wayside 
defect detectors. I agree that we are all better off because these are 
in use. Your members have taken many important actions that have 
improved safety. We welcome the agreements between your member 
corporations and their labor unions that have extended access to sick 
leave to more than 88 percent of Class I union freight railroad 
workers. I also recognize the work that you highlighted to increase 
access to hazardous material information via the AskRAIL app. This work 
is welcome, and you have my commitment that our Department will 
recognize any positive step for safety that your industry takes, alone 
or in partnership with DOT.
    But in too many other areas, we encounter major resistance from 
industry. And the truth is that we cannot do this work alone. We need 
to focus on results. And, to reiterate, the overall results of the last 
ten years in reducing accident rates on America's large freight 
railroads are unacceptable.
    I want to enlist you in the project of rejecting, not defending, 
today's status quo with its stagnant or worsening accident rates. The 
rate should be going down--and fast. We need AAR and Congress to join 
us in the mission of improving safety and to follow through on the 
safety commitments made in the wake of East Palestine. Americans expect 
those commitments to become actions, and Americans deserve a freight 
rail industry that does not oppose common-sense safety measures. I 
worry that this industry still does not grasp how profoundly it must 
change.
    Here are some particular areas of concern:
      The freight rail industry stands in opposition to 
important provisions in the bipartisan Railway Safety Act. AAR and the 
Class I freight railroads could and should break corporate America's 
pattern of professing public support for doing better and then lobbying 
against efforts to do so. It would be a welcome, watershed moment if 
AAR were to change course and support the passage of the bipartisan 
Railway Safety Act introduced by Senators Brown and Vance.

      In the wake of the East Palestine derailment, each Class 
I freight railroad committed to joining the Confidential Close Call 
Reporting System program (C3RS), yet one year later almost none of them 
have done so. So far Norfolk Southern is the only Class I freight 
railroad to join--and only at a select number of work sites with some 
of its workers. We again urge all Class I freight railroads to join 
C3RS.

      AAR continues to advocate for reducing human track 
inspections in favor of automated inspections. It is particularly 
exasperating to see AAR sometimes imply that DOT is standing in the way 
of newer inspection technologies like automated track inspections 
(ATI), when in fact railroads are already free to use these newer 
technologies as much as they like--complementing, not replacing, human 
inspections. If these technologies are as effective as promised, then 
by all means, railroads should deploy them widely, use them to 
dramatically reduce accident rates, and then we can discuss the future 
of track inspection requirements.

    The major freight railroads are widely and increasingly regarded as 
being obsessed with quarterly profits and short-term operating margins, 
to the exclusion of other vital priorities like safety, long-term 
network development, customer service, worker wellbeing, and community 
engagement. When your industry objects to safety provisions, this 
perception deepens.
    This reputation for being much too focused on short-term 
profitability is fueled by the fact that the industry is pushing for 
these workforce cuts and weaker regulations while it is already 
extremely--some would say ridiculously--profitable. Because Class I 
railroads tend to operate as regional duopolies or monopolies, they are 
not subject to the normal dynamics of supply, demand, and competition 
seen in most industries. Looking at your firms' profits, it shows. The 
Class I freight carriers recorded another wildly profitable year in 
2023, with preliminary figures from the six firms indicating a total of 
almost $25.2 billion in profits. Margins for these large players are 
often routinely above 20 percent.\1\ No one should begrudge a well-run 
business responsibly earning a good profit--but when such profitability 
is reported at the same time as the high level of customer, worker, and 
community complaints we field with regard to this industry, it is 
difficult to explain except through the lens of the industry's 
political and market power.
---------------------------------------------------------------------------
    \1\ From NYU Stern Margins by Sector (US) dataset: https://
pages.stern.nyu.edu/adamodar/New_Home_Page/datafile/margin.html
---------------------------------------------------------------------------
    Toward the end of your letter, you take exception to the fact that 
your industry is sometimes characterized as ``under-regulated.'' This 
comment has made me reflect: when an industry's customers are 
displeased, its communities frustrated, its workers upset, its 
regulators concerned, and its profits stupendous--what better word is 
there? If an industry can become spectacularly profitable while 
delivering poor service, stagnant safety outcomes, and a growing roster 
of communities that are frustrated because they can't get their calls 
returned, it is impossible to escape the sense that we are talking 
about a broken industry. And a broken industry almost always reflects a 
poor regulatory framework.
    I will close by taking AAR at its word that you are ``100% 
onboard'' a shared goal of enhancing safety. Your industry has an 
opportunity now to make good on this commitment. We will know it is 
working when accident rates plummet. Together, let's make that happen.
            Sincerely,
                                            Pete Buttigieg.

                                 
 Martin J. Oberman, Chairman, Surface Transportation Board, Address at 
    the Southeast Association of Rail Shippers 2024 Spring Meeting, 
 February 29, 2024, Submitted for the Record by Hon. Valerie P. Foushee
    Good afternoon. I'm delighted to be here and equally grateful for 
SEARS adding me to the agenda at a very late date.
    But because of disturbing current trends facing the management of 
the four US Class Is, I thought it my responsibility to address this 
important gathering of rail stakeholders--and the public--about 
existing and potential threats to the soundness of our all-important 
national freight rail network.
    As we all know, there's a proxy fight brewing for control of 
Norfolk Southern--and it does not bode well for the railroad industry, 
the U.S. economy, or the public. After weeks of news reports that 
Ancora Holdings, a Cleveland based hedge fund, was plotting to wrest 
control of Norfolk Southern's board, last week Ancora made their plans 
official and released a broadside attack on NS and its corporate 
philosophy of maintaining its workforce at resilient levels and 
investing for long term growth.
    Ancora wants to oust CEO Alan Shaw for the sole purpose of 
reversing that corporate strategy.
    This effort by a Wall Street firm--with short-term dollar signs in 
its eyes--to strip resources out of a railroad, of course, is not new.
    Just last year, another hedge fund, Soroban, launched a successful 
effort to depose Union Pacific's CEO--not because he was adding 
resources--but because he wasn't cutting fast and deep enough.
    Freight railroads are pillars of the nation's economy, moving 1.6 
billion tons of freight annually, representing 40% of all long-distance 
freight movement. And important to the fight against climate change, as 
all of you well know, rail offers a significantly more fuel-efficient 
and lower carbon-emitting alternative to trucking.
    In the past decade, activist investors--like Ancora and Soroban--
began gaining influence, if not outright control, of some railroads. 
They recognized that the seven--now six--Class Is dominating the U.S. 
and Canada--are natural monopolies and are the only transportation 
option for a high percentage of their customers--and therefore held 
great potential for profit seeking.
    Ignoring the essential role that railroads play in supporting the 
success of their customers, i.e., the manufacturers that drive our GDP, 
these investors succeeded in pressuring railroad management to exploit 
this monopoly power to achieve short-term profits. The strategy was, 
largely, to slash workforces, raise prices, and reduce output--i.e., 
service--which they did--thereby risking long-term viability in pursuit 
of massive stock buybacks and dividends.
    This strategy not only affects the economic output of US industries 
which cannot thrive without robust rail service. It also undermines 
safety because rail workers are essential to safe rail operations--for 
themselves and for the communities through which railroads must travel, 
often transporting hazardous materials. Cutting the workers who perform 
inspections, repairs and otherwise are responsible to ensure safety, 
increases threats to the public as well as the workers themselves. And 
unsafe rail operations, of course, undermine rail service.
    Because railroads are so essential to the public well-being; 
because they have benefited from massive governmental largess since 
their inception 200 years ago, and perhaps most importantly because 
they are monopolies--or at best, duopolies--for a major portion of 
their customers, the Congress long ago imbued railroads with a common 
carrier obligation.
    To best comprehend the unique import and mandate of the common 
carrier obligation, a pronouncement from the US Supreme Court more than 
125 years ago, bears repeating over and over again. Quote:

        `` . . . railways are public corporations organized for public 
        purposes, granted valuable franchises and privileges, . . . 
        many of them are the donees of large tracts of public lands, 
        and of gifts of money by municipal corporations . . .''

        And this is key: `` . . . they all primarily owe duties to the 
        public of a higher nature even than that of earning large 
        dividends for their shareholders. The business which the 
        railroads do is of a public nature, closely affecting almost 
        all classes in the community--the farmer, the artisan, the 
        manufacturer, and the trader.''

            [United States v. Trans-Missouri Freight Ass'n,
166 U.S. 290, 332-33, 17 S. Ct. 540, 555-56, 41 L. Ed. 1007 
                                                   (1897).]

    In all the time since, and even with the passage of the Staggers 
Act, this wise and powerful admonition from the Supreme Court has never 
been repealed or weakened.
    And I am going to repeat it over and over again until it seeps into 
the heads of every railroad shareholder--which includes Ancora and 
Soroban.
    Indeed, just last week, no less a capitalist than Warren Buffet 
reminded his shareholders in his annual letter that ``Rail is essential 
to America's economic future,'' and in his words, ``[t]he words `common 
carrier' define railroad responsibilities.''
    Unfortunately, ignoring their public duties, the largest railroads, 
beginning roughly around 2014 and persisting for years thereafter, 
lacerated their workforces by approximately 30%, or 45,000 persons. The 
euphemism they employed to label their actions was PSR.
    Thus, it was no surprise that by early 2022, months after the 
economy started to rebound from the pandemic, the railroads were in, 
what one Wall Street analyst had astutely called, a ``service crisis.'' 
After closely monitoring rail activity throughout 2021, and patiently 
listening to the Class Is worthless claims that they had the situation 
under control, the STB had little choice but to act.
    In April 2022, the Board intervened and instituted a two-day public 
hearing to address the causes of this crisis. At that hearing, the 
Board heard from numerous rail shippers who testified about missed 
shipments and delayed service that was costing them business. Several 
representatives of rail labor detailed the negative impact that the 
reduced workforce was having on rail operations and safety. We also 
commanded the appearance of senior executives from all the Class Is.
    Every stakeholder, including most importantly the rail executives 
themselves--told the Board that the cause of the service meltdown was 
the simple fact that the Class Is lacked sufficient workers to move the 
trains needed to service their customers. The problem was mostly a lack 
of engineers and conductors. But carmen, mechanics, and electricians--
the folks who keep the trains in shape to actually move freight and 
move it safely--had also been cut, slowing down rail operations. 
Shippers also reported difficulties at the white-collar level, with 
inabilities to reach salespeople and customer representatives.
    Of course, the rail executives were slow to acknowledge the 
obvious--that the shortages were the inexorable consequence of their 
own choices to eliminate tens of thousands of rail workers in recent 
years.
    Not ever having run a railroad--or having been a manager of any 
large business myself--I have thought long and hard about how the 
industry could ever have allowed itself to achieve such a dismal 
failure of its own business operations. No person who knows anything 
about running a railroad--and these executives do know how to run a 
railroad--could have failed to foresee that eventually the firing of 
45,000 workers would catch up to them.
    The explanation of course is that pressure from short term 
investors focused only on the operating ratio--or as my friend Tony 
Hatch likes to call it--the cult of the OR. Somehow, Wall Street has 
decided that the only important measure of success in the rail world is 
to have an OR at 60 or below. When the analysts can report progress 
towards that goal, rail stock prices have soared. These low ORs--which 
could only be achieved rapidly--as the activists demanded--by cutting 
payroll--have meant lots of free cash which the Class Is have not been 
shy about paying out in stock buybacks, dividends, and in BNSF's case, 
returns to its owner. The total in the last decade or so is over 
$250,000,000--money which was not invested in retaining workers or 
building new infrastructure to increase a railroad's reach and serve 
more customers.
    It is no mystery that this service crisis depressed the nation's 
industrial output. It also was a contributor to port congestion, 
causing shortages of consumer goods and increased prices.
    As a result of the eye-opening revelations at the hearing, the 
Board promptly ordered the four US Class Is--the railroads with the 
most significant service failures--to file with the Board service 
recovery plans with intermediate goals over the following six and 12 
months for their service improvements. The Board also mandated regular 
reporting of the railroads' efforts to rebuild their workforces to 
achieve those service goals. This included reports of hiring, training, 
washouts, and furloughs.
    After that April 2022 hearing, some progress has been made 
generally throughout the industry. Up until recently, hiring and 
training had been reinstituted at higher levels which resulted in a 
slow beginning of service improvement.
    But one standout failure of progress was at UP. During 2022, UP--
alone among the railroads--was subject to two emergency service 
orders--the first issued by the STB in over 10 years. UP also 
instituted a massive upsurge of 1,100 embargoes annually--labelling 
them congestion embargoes--a legal animal which in my opinion, does not 
exist, except possibly when the congestion is entirely the fault of the 
rail customer.
    In December 2022, the STB held an additional public hearing to 
investigate these embargoes. At the hearing, UP conceded that its 
colossal use of ``congestion embargoes'' was largely caused by crew 
shortages resulting from the fact that in previous years, UP had cut 
its overall work force by over 25%. At that hearing, when he was 
pressed on whether UP would commit itself to maintaining the resources 
to start providing adequate rail service, UP's Lance Fritz told the 
STB: ``We learned our lesson once; we don't have to learn it again.'' 
And shortly thereafter, he was shown the door--replaced by a management 
strategy which we now know has profoundly rejected and unlearned the 
lessons of too much cutting.
    By contrast, in recent years, other Class Is had appeared to learn 
the error of their ways and brought in new management committed to 
reversing these myopic and short-term strategies.
    Some say it has been the Board's actions which have had a positive 
effect. But whatever the reason, Boards of Directors in the past two 
years have supported CEOs at Canadian National, CSX, CPKC, and very 
importantly, Norfolk Southern, to make a new and different commitment. 
Recognizing their public obligations, they have instituted long-term 
strategies to reinvest capital and, most importantly through the ups 
and downs of economic cycles, to hire and retain workers to provide 
consistent and reliable service.
    This should be an important message to Wall Street investors 
because this strategy has every likelihood of producing more 
sustainable and long-term gains for shareholders as compared to the 
short-term thinking which dominated the advent of the PSR craze.
    The problem with activist investors bowing down to the cult of the 
OR is that they are impatient and want immediate returns. Their 
approach to lowering OR as fast as possible can only be accomplished by 
drastically cutting payroll and other resources in the short term.
    It does not take a degree in higher mathematics to understand that 
there is another way to lower the OR than by reducing the numerator, 
i.e., which includes the amount spent on payroll.
    The OR will also go down if you increase the denominator--that is 
by having enough resources to attract new business to the railroad, 
increase the volume--the number of loads--and thereby increase total 
revenue. That is the vision being employed up to now by this new group 
of CEOs--particularly those at CSX, CN and yes, Norfolk Southern.
    Thus far, those CEOs and their Boards have resisted pressure from 
activist investors to eviscerate workforces and cut spending on 
expansion capital. They understand that planning and spending for the 
long run--while taking time--will ultimately benefit shareholders more 
than short-term cost cutting, which is detrimental to the long-term 
vitality of the railroads and undermines efforts to improve safety. And 
of course, a long-term, future-focused strategy is essential if the 
railroads are to support the nation's economy and the public interest.
    Since the April 2022 hearing, the railroads have hired and trained 
approximately 9,000 workers. While that still leaves the railroads with 
14,000 fewer workers than pre-pandemic, even this limited increase has 
resulted in improved rail service. Moreover, the economy is expected to 
grow in the coming months and years. If the railroads are to meet their 
obligation to serve this expected growth, they must continue their 
expansion of both railroad workforces and infrastructure. Norfolk 
Southern has promised to do this and has already begun to deliver.
    Any campaign, proxy or otherwise, that threatens to undo recent 
efforts to rebuild the railroad resilience and move toward significant 
long-term growth would be a major setback. It would undercut safety and 
be the opposite of good business, the opposite of fulfilling the common 
carrier obligation, and the opposite of meeting the Congressional 
commandment to serve the public. Regardless of what happens with 
Norfolk Southern's governance, it is crucial that management take 
seriously their duties to customers and the public.
    To envision the consequences to NS if Ancora's efforts result in a 
course reversal, we need only look at what has happened at UP since 
just last August when its new CEO arrived with Soroban's short term, OR 
lowering mandate.
    In contrast to other Class Is, UP has embarked on a furlough 
odyssey. From the time Jim Vena arrived in August 2023, through January 
2024, as shown in UP's reports to the STB, UP has reduced its operating 
personnel by 771--this, after cutting 25% of its workforce in previous 
years. Every other US Class I has increased employment during the same 
period.
    At UP's 4th quarter earnings call, Mr. Vena promised growth, but at 
the same time promised to continue to reduce headcount throughout 2024 
as he has done continuously since he arrived. Indeed, just last week, 
UP announced additional furloughs. And the railroads' year end filings 
show that UP is the only Class I which ended 2023 with hundreds of 
fewer workers than it had a year earlier. All of the others, including 
Norfolk Southern, the only railroad which reported zero furloughs, 
ended the year with a larger workforce.
    Just today, the STB received a letter the FRA has sent to UP 
raising the specter of a threat to safety resulting from UP's 
eliminating hundreds of maintenance of equipment employees.
    Equally important, UP, unlike the others, is also cutting its 
capital spending, just when it's most needed for growth. UP's 2023 
financial statements show that at the end of last year when it 
furloughed hundreds of maintenance of way workers, it also cut $100 
million out of its 2023 capital budget.
    Thus, at the end of 2023, UP had $100 million in deferred capital 
maintenance, the effects of which may not be seen tomorrow, but which 
will eventually haunt the railroad, as we have seen in the past.
    UP also promises to continue on this path in 2024. Rather than make 
up for the $100 million cut in 2023, UP has actually reduced its 2024 
capital budget by $300 million, planning to spend only $3.4 billion as 
compared to its 2023 capital budget of $3.7 billion. By contrast, 
BNSF's capital budget for 2024 is $3.9 billion. And BNSF has already 
spent hundreds of millions more on projects like double tracking its 
Southern Transcon and building a massive new intermodal facility at 
Barstow.
    I must add, however, that BNSF only recently has decided to hop on 
the furlough bandwagon again--announcing hundreds of new furloughs just 
last week, with more to come. This is, indeed, unfortunate. How does 
BNSF's return to furloughing square with its exciting new partnership 
with J.B. Hunt to move millions of truckloads to rail by delivering 95% 
on time performance?
    And does UP really expect us to believe that it is committed to 
growth when it is cutting personnel and capital--the very resources 
which are essential to that growth.
    There's a saying of something about a turnip truck in here.
    While UP's course since the advent of the Soroban era is 
instructive about what happens to a railroad whose strategy is set by 
an activist investor rather than by a Board and CEO committed to the 
best interest of the railroad, we can get a further taste of what can 
be expected to happen at NS if Ancora takes over by looking at how NS 
has already responded to Ancora's planned proxy fight thus far. Under 
obvious pressure from Ancora's threats, NS recently announced buy outs 
for 7% of its management and staff--in direct contrast to its previous 
strategy of holding on to workers. And while management doesn't drive 
trains, it is essential to a well-functioning railroad that serves its 
present and potential customers.
    And in the all-important area of future growth for railroads by 
landing the burgeoning increase in intermodal traffic, one of Ancora's 
strongest criticisms is that NS has too much intermodal traffic 
compared to merchandise traffic. Ancora's complaint is that intermodal 
is not as profitable. Apparently, Ancora, inexperienced in railroading 
as it is, is unaware that roughly half of all rail traffic in the US is 
intermodal and that intermodal is where future volume growth is. Coal 
is not coming back.
    So what has happened at NS since those threats were levied? NS, 
which has been a standout in growing its intermodal base, has only 
recently announced that it is terminating some of its lower density 
intermodal lanes, regardless of whether there might be growth potential 
for the future.
    Several weeks ago, Ancora wrote me a letter. The essence of their 
message was that they had taken a $1 billion dollar stake in NS in 
order for it--quote--``to become a safer railroad.'' Really? What hedge 
fund raises $1 billion to promote safety anywhere? The measure of 
Ancora's disingenuous pitch to improve safety is that its slide deck 
completely omits reference to FRA data which shows that, in the last 
year, NS has been an industry leader in reducing mainline rail 
accidents and derailments. And NS is the only Class I railroad which 
has joined the Department of Transportation Confidential Close Call 
Reporting System, a major advance in instituting a safe culture in any 
workplace.
    Ancora has nothing to say about what it could do better.
    I think we can assume that if Ancora succeeds in its bid to control 
NS, its next move will be to put the Brooklyn Bridge on the market.
    Let's be real. Looking at Ancora's slide deck issued last week in 
which they're required to be a little more candid when soliciting other 
shareholders, Ancora principally and repeatedly focuses on a rapid 
lowering of the OR to drive cash payouts and raise its stock price, 
harshly criticizing present NS management for not making a lower OR the 
objective.
    We now know that this is wrong headed thinking. Making OR the 
corporate objective is what led to elimination of thousands of workers 
which caused the service crisis.
    Joe Hinrichs emphasized this morning that using OR as an operating 
objective by itself will ultimately lead to bad results. And another 
CEO has put it so well: ``the operating ratio has always been an 
outcome of running the railway the right way.'' You ``don't cut your 
way to success.'' That same CEO pointed out to his investors: ``I'm not 
enamored with having the lowest operating ratio. I'm enamored with 
earnings growth.'' In other words, managing a railroad for growth will 
achieve more sustainable profitability.
    In fact, the rapid reduction in OR championed by Ancora can only be 
accomplished by new major reductions in the workforce. Indeed, Ancora 
rejects NS' new long-term growth strategy and is particularly harsh on 
NS' focus on all important intermodal traffic. Clearly, their plan is 
to install a CEO ordered to reverse Norfolk Southern's recently 
instituted corporate strategy to maintain a resilient workforce and to 
invest more in infrastructure to grow the railroad's capacity long 
term.
    The implications of significant cost-cutting at one railroad are 
ominous for the US economy. The fall out could extend to the entire 
freight rail system. Railroads crisscross North America in an 
intertwined network; freight is often handed from one railroad to 
another before reaching its destination. When one railroad has a 
service meltdown, it has a ripple effect across all other railroads. 
Such a debacle occurred in 2017 when CSX went on a cost-cutting 
rampage--a shock to the system from which it took years to recover.
    Already, industrial customers of Norfolk Southern and shortline 
railroads that feed into Norfolk Southern have raised serious concerns 
that significant cost-cutting would undo the progress of the last two 
years.
    And of significance, two rail unions whose members' quality of life 
has improved under current NS management and whose personal safety is 
at stake have announced their strong opposition to Ancora's proposed 
management strategy which relies on the cult of the OR.
    Contrary to Ancora's sales pitch, a reversion to cutting workforces 
by major railroads would actually impede efforts to improve service and 
to improve safety standards to minimize the chances of another disaster 
like last year's East Palestine, Ohio derailment. These very concerns 
about what could happen to Norfolk Southern were raised recently by FRA 
administrator Amit Bose.
    Of equal if not greater concern to the health of the entire freight 
rail industry is that a successful takeover by any investors overly 
focused on cost cutting will have the other railroad CEOs looking over 
their shoulders, deterring them from pursuing long-term strategies, and 
harming the U.S. economy.
    At least for the last three years since I've been chairman, the STB 
has engaged in a long, continuous and continuing struggle to counteract 
the effects of this Wall Street pressure.
    It's a never-ending tension. Wall Street will always be there--
which is fine, it's part of our capitalist structure. But the activist 
investors, such as the ones that have surfaced now at Norfolk Southern, 
have a very short-term goal and it's not constructive.
    Indeed, if Ancora is successful, we will have a national rail 
network, in which half of it--UP and NS--will be run by CEOs answering 
to short term, cash maximizing, shareholders to the detriment of the 
long-term investors--and most dangerously to the detriment of rail 
customers and rail workers--and ultimately the US economy and every 
member of the public.
    Under those circumstances, I do not expect the STB will sit by and 
watch and wait while another service crisis unfolds as we confronted in 
2022.
    On the contrary, if service suffers, ultimately the STB would be 
called in--and may have little alternative but to institute more 
accountability hearings and more regulatory intervention to protect the 
public, an outcome which neither railroad investors nor the STB would 
relish.
    To be clear, the STB has tools available to incentivize better 
service. We are already considering a rule to make reciprocal switching 
a practical tool to provide relief to shippers experiencing subpar 
service. And the Board has also stated it is interested in considering 
additional ways to grant sole-served shippers competitive access to a 
second railroad. In my view, for example, it may well be time for the 
STB to re-examine the restrictions contained in the decades old 
bottleneck rule.
    To be clear: Railroads are a regulated monopoly. They have a common 
carrier obligation to the public interest and to the nation's economy. 
Unlike other businesses, railroad management and owners are not just 
free to manipulate the business by draining the company's resources for 
short-term gain.
    Those of us in the rail community--and every U.S. citizen--need to 
stay tuned. To be continued.
    Thank you.

    Mr. Nehls. The gentlelady yields. I now recognize the 
ranking member of the full committee, Mr. Larsen, for 5 minutes 
for an opening statement.

 OPENING STATEMENT OF HON. RICK LARSEN OF WASHINGTON, RANKING 
     MEMBER, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

    Mr. Larsen of Washington. Thank you, Chair, and thank you, 
Vice Ranking Member Foushee, for holding today's hearing on 
commuter rail.
    The BIL supercharged our Nation's investment in passenger 
rail, providing $102 billion in planned funding for intercity 
rail and $108 billion for transit agencies. A significant 
portion of this can be used for commuter rail.
    Now, the BIL guaranteed multiyear funding for the state-of-
good-repair investments and corridor development for intercity 
and commuter passenger rail. It made possible, for the first 
time ever, dedicated, reliable Federal funding disbursed over 5 
years to improve and expand intercity passenger rail.
    Now, transit agencies, Amtrak, the FRA, and the FTA are 
implementing long-term plans for passenger rail expansion and 
improvement, secure in the knowledge that the funding is there 
for the next 5 years. I look forward to hearing from our 
witnesses today about the difference this budget certainty has 
made for developing and sustaining infrastructure improvements 
and then, of course, what Congress can do to keep the momentum.
    Commuter rail systems have benefited from BIL funds, 
including the Capital Investment Grant, or CIG, funding, which 
supports transit expansion. In my district, Sound Transit runs 
Sounder trains with two round trips every weekday between 
Everett, Mukilteo, Edmonds, and Seattle. Further south, the 
Sounder serves commuters between Tacoma and Seattle. The trains 
run on freight tracks owned by BNSF, and BNSF operates the 
trains. Amtrak provides maintenance and Sound Transit owns the 
stations and provides security. This partnership is an example 
of the layers of support and coordination often necessary to 
provide commuter train service in the U.S.
    And even at the Federal level there are silos, though, with 
the Federal Railroad Administration providing most of the 
regulatory oversight of commuter rail and the Federal Transit 
Administration providing the bulk of the funding. So, I look 
forward to hearing recommendations from the witnesses for the 
next infrastructure bill to make passenger rail funding and 
service more effective.
    Now, BIL passenger rail funding is creating jobs, it is 
growing regional economies, it is reducing congestion and 
carbon emissions, it is building a cleaner, a greener, a safer, 
and more accessible transportation network. For example, the 
FTA announced over $631 million to replace 302 aging transit 
railcars, including over $100 million for Metra in Chicago. 
That is just the beginning. This transformational investment in 
the BIL is a great start. I am committed to ensuring reliable 
funding for long in the future.
    The BIL is also an investment in workers. Federal rail 
funding will develop a well-trained and diverse workforce to 
build, operate, and maintain intercity and commuter rail 
systems. So, while commuter rail agencies have access to 
dedicated funding through transit programs, there is no similar 
guaranteed source of funding for intercity passenger rail. And 
without the BIL's advance appropriations, intercity passenger 
rail is dependent on the annual appropriations process to fund 
its longer term major capital projects.
    Since commuter rail often shares tracks with freight or 
intercity passenger rail, investments in rail benefit those 
other partners. The FRA's Consolidated Rail Infrastructure and 
Safety Improvements grants, or CRISI, can be used to upgrade 
commuter rail property that is shared with Amtrak or freight 
rail, and the BIL guaranteed $5 billion in advance 
appropriations for CRISI. Providing steady funding for 
intercity passenger rail will allow States and communities the 
certainty they need to plan and deliver more and better 
passenger rail service.
    So, I thank the witnesses for being here today, for sharing 
your perspectives on these and other issues, and helping us 
hear about the opportunities and challenges facing you all in 
today's environment.
    With that, I yield back.
    [Mr. Larsen of Washington's prepared statement follows:]

                                 
 Prepared Statement of Hon. Rick Larsen, a Representative in Congress 
    from the State of Washington, and Ranking Member, Committee on 
                   Transportation and Infrastructure
    Thank you, Chairman Nehls and Vice Ranking Member Foushee, for 
holding today's hearing on commuter rail.
    The Bipartisan Infrastructure Law (BIL) supercharged our nation's 
investment in passenger rail, providing $102 billion in planned funding 
for intercity rail and $108 billion for transit agencies. A significant 
portion of this can be used for commuter rail.
    The BIL guaranteed multi-year funding for state of good repair 
investments and corridor development for intercity and commuter 
passenger rail.
    It made possible, for the first time ever, dedicated, reliable 
federal funding--disbursed over five years--to improve and expand 
intercity passenger rail.
    Transit agencies, Amtrak, the Federal Railroad Administration and 
the Federal Transit Administration are implementing long-term plans for 
passenger rail expansion and improvement, secure in the knowledge that 
funding is there for five years.
    I look forward to hearing from our witnesses today about the 
difference this budget certainty has made for developing and sustaining 
infrastructure improvements and what Congress can do to keep the 
momentum.
    Commuter rail systems have benefited from BIL funds, including 
Capital Investment Grant funding, which supports transit expansion in 
projects across the country.
    In my district, Sound Transit runs Sounder trains with two round 
trips every weekday between Everett, Mukilteo, Edmonds and Seattle. 
Further south, the Sounder serves commuters between Tacoma and Seattle.
    The trains run on freight tracks owned by the BNSF Railway Company, 
and BNSF operates the trains.
    Amtrak provides maintenance, and Sound Transit owns the stations 
and provides security. This partnership is an example of the layers of 
support and coordination often necessary to provide commuter train 
service in the U.S.
    Even at the federal level there are silos, with the Federal 
Railroad Administration providing most of the regulatory oversight of 
commuter rail and the Federal Transit Administration providing the bulk 
of the funding.
    I look forward to hearing recommendations from the witnesses for 
the next infrastructure bill, to make passenger rail funding and 
service more effective.
    BIL passenger rail funding is creating jobs, growing regional 
economies, reducing congestion and carbon emissions, and building a 
cleaner, greener, safer and more accessible transportation network.
    For example, the Federal Transit Administration announced over $631 
million to replace 302 aging transit rail cars, including over $100 
million for METRA in Chicago.
    That's just the beginning. This transformational investment in the 
BIL is a great start. I am committed to ensuring reliable funding for 
long in the future.
    The BIL is also an investment in workers. Federal rail funding will 
develop a well-trained, diverse workforce to build, operate, and 
maintain intercity and commuter rail systems.
    While commuter rail agencies have access to dedicated funding 
through transit programs, there is no similar guaranteed source of 
funding for intercity passenger rail.
    Without the BIL's advance appropriations, intercity passenger rail 
is dependent on the annual appropriations process to fund its long-term 
major capital projects.
    Since commuter rail often shares tracks with freight or intercity 
passenger rail, investments in commuter rail benefit these other 
partners.
    The FRA's Consolidated Rail Infrastructure and Safety Improvement 
grants, or CRISI, can be used to upgrade commuter rail property that is 
shared with Amtrak or freight rail. The BIL guaranteed $5 billion in 
advance appropriations for CRISI.
    Providing steady funding for intercity passenger rail will allow 
states and communities the certainty they need to plan and deliver more 
and better passenger rail service.
    I thank the witnesses for being here today and for sharing your 
perspectives on these and other issues, and help us hear about the 
opportunities and challenges facing you all in today's environment.

    Mr. Nehls. The ranking member of the full committee yields. 
I again thank you all for being here. I look forward to hearing 
from each and every one of you.
    I would like to take a moment to explain our lighting 
system for all of you. There are three lights in front of you. 
Green means go. Obviously, yellow, slow it down a little bit, 
you are running out of time, and then red means stop talking.
    I ask unanimous consent that the witnesses' full statements 
be included into the record.
    Without objection, so ordered.
    I also ask unanimous consent that the record of today's 
hearing remain open until such time as our witnesses have 
provided answers to any questions that may be submitted to them 
in writing.
    Without objection, so ordered.
    I also ask unanimous consent that the record remain open 
for 15 days for any additional comments and information 
submitted by Members or witnesses to be included in the record 
of today's hearing.
    Without objection, so ordered.
    As your written testimony has been made part of this 
record, the subcommittee asks that you limit your oral remarks 
to those 5 minutes.
    And now I would like to briefly recognize Mr. Yakym to 
introduce our first witness, Mr. Noland.
    Mr. Yakym.
    Mr. Yakym. Thank you, Mr. Chairman. It is my pleasure to 
introduce Mike Noland, the president of the Northern Indiana 
Commuter Transportation District which, back home in Indiana, 
we call the South Shore Line.
    The South Shore provides a vital connection between South 
Bend, Indiana--in my district--and Chicago, and many points in 
between, including the Indiana Dunes National Park. I and many 
other Hoosiers have fond memories of taking the South Shore to 
Chicago. I am sure many people from Chicago have fond memories 
of coming to South Bend to catch maybe a Notre Dame football 
game.
    Mike has over three decades in the rail industry, and he 
has presided over major capital projects for the South Shore 
Line. I especially want to highlight the almost complete $650 
million double track project, which will further cut down the 
time from South Bend to Chicago by making the full route 
double-tracked so that eastbound trains don't have to wait for 
westbound trains, and vice versa.
    Mike and I go way back, and I am thankful that you invited 
him today to lend his deep experience and expertise to our 
conversation. Thank you, Mr. Chairman, and I yield back.
    Mr. Nehls. With that wonderful introduction, I would like 
to now recognize you, Mr. Noland, for 5 minutes.

   TESTIMONY OF MICHAEL NOLAND, PRESIDENT, NORTHERN INDIANA 
 COMMUTER TRANSPORTATION DISTRICT, AND CHAIRMAN, COMMUTER RAIL 
    COALITION; DEBRA A. JOHNSON, GENERAL MANAGER AND CHIEF 
  EXECUTIVE OFFICER, REGIONAL TRANSPORTATION DISTRICT (RTD), 
  DENVER, COLORADO; DAVID W. DECH, EXECUTIVE DIRECTOR, SOUTH 
FLORIDA REGIONAL TRANSPORTATION AUTHORITY (TRI-RAIL); KEVIN S. 
  CORBETT, PRESIDENT AND CHIEF EXECUTIVE OFFICER, NEW JERSEY 
 TRANSIT, ON BEHALF OF THE NORTHEAST CORRIDOR COMMISSION; AND 
DARREN M. KETTLE, CHIEF EXECUTIVE OFFICER, SOUTHERN CALIFORNIA 
              REGIONAL RAIL AUTHORITY (METROLINK)

   TESTIMONY OF MICHAEL NOLAND, PRESIDENT, NORTHERN INDIANA 
 COMMUTER TRANSPORTATION DISTRICT, AND CHAIRMAN, COMMUTER RAIL 
                           COALITION

    Mr. Noland. On behalf of the members of the Commuter Rail 
Coalition, thank you, Chairman Nehls, Ranking Member Larsen, 
and Congresswoman Foushee for inviting us here today to testify 
on some very unique issues, challenges, and opportunities 
facing commuter rail across the country.
    I would like to also thank Congressman Yakym for his 
vigorous support of the South Shore Line and, of course, our 
wonderful Governor, Eric Holcomb, who has been an incredible 
cheerleader and champion for commuter rail in the State of 
Indiana, investing hundreds and hundreds of millions of dollars 
into our rail system.
    As mentioned, my name is Mike Noland. Today, I am here as 
chairman of the Commuter Rail Coalition, an industry coalition 
representing the public agencies that provide 98 percent of all 
ridership in the country, plus over 30 private-sector 
consultants and suppliers that support our industry. I am also 
president of the Northern Indiana Commuter Transportation 
District that operates the South Shore Line. And as Congressman 
Yakym mentioned, we are a 90-mile system that runs from South 
Bend, Indiana, to Chicago, Illinois.
    I will focus my testimony today on two specific areas: 
first is the lack of capacity in the excess liability insurance 
market; and second is the Amtrak statutory authority over 
public-sector commuter rail operations.
    Commuter railroads purchase annually $323 million in excess 
liability insurance. That is the Federal cap. The cap will be 
adjusted in 2026, and it is based upon the Consumer Price 
Index. That is the sole determinant of the cap raise. We expect 
that the cap will go up from $323 million to over $400 million 
when the CPI is used.
    To be clear, commuter railroads are not required to 
purchase up to the cap. We do so because we have to comply with 
our third-party contracts. If a commuter railroad is unable to 
place that coverage, contractors, software providers, host 
railroads like Class I's can put us in breach of contract, and 
the likelihood is that some of us will have to suspend 
operations.
    The Commuter Rail Coalition is asking for Congress to give 
us a technical correction to the 30-day implementation rule 
that is currently in law when the cap is raised. We would like 
365 days of time to place the additional coverage. Why 365 
days? Well, if all of us, all 32 railroads in the country, at 
the same time approach the excess insurance markets, we think 
it is very unlikely that we will be successful. We have to go 
after these markets with a time when there is shrinking 
capacity in these markets. And if we are all there with 30 days 
to try to place that coverage, we don't think that is a recipe 
for success.
    We know that we must search for alternatives to our 
reliance on foreign insurance markets. We ask Congress to work 
with us to explore options and do studies.
    We also are looking for help from Congress perhaps to 
support some loans so that we could establish a national 
commuter rail industry liability pool. We are looking for ways 
to exercise self-help to resolve this issue.
    My final point has to do with Amtrak's relationship with 
commuter agencies, and the need for the Surface Transportation 
Board to serve as the arbiter of any disputes between commuter 
railroads and Amtrak. The Rail Passenger Service Act of 1970 
provided railroads the opportunity to be relieved of costly 
passenger operations, and Amtrak took those over. In return, 
the railroads granted priority access to Amtrak over their 
routes, and only charge Amtrak incremental costs. Importantly, 
public commuter rail agencies were not part of that grand 
bargain. However, Amtrak's statutory powers under the RPSA 
apply to our systems.
    Now, the CRC is a strong supporter of improved and expanded 
passenger rail networks in this country. We are not in any way 
anti-Amtrak. However, we believe that commuter railroads should 
not be subject to Amtrak's statutory powers under the RPSA of 
priority access on our lines or from only charging incremental 
costs if they are using our service. We would ask Congress to 
establish a well-defined process to issue resolution between 
commuter railroads and Amtrak. We believe the STB is the right 
body to adjudicate such disputes, and we hope that Congress in 
the reauthorization will provide the STB that power.
    Chairman Nehls, Ranking Member Larsen, Congresswoman 
Foushee, thank you on behalf of the Commuter Rail Coalition for 
having this hearing today. We appreciate the opportunity to 
realize the full potential commuter rail has to be stewards of 
the public interest.
    And since I have the opportunity, I invite any and all of 
you to come out on May 13 to our ribbon-cutting ceremony that 
will be held in Gary at our Miller Station. And if you can't 
make it for that, come out any time. We will give you a ride on 
the South Shore Line, which is the Nation's last remaining 
interurban passenger railroad.
    Thank you.
    [Mr. Noland's prepared statement follows:]

                                 
   Prepared Statement of Michael Noland, President, Northern Indiana 
Commuter Transportation District, and Chairman, Commuter Rail Coalition
                              Introduction
    On behalf of the members of the Commuter Rail Coalition, I want to 
thank you Chairman Nehls and Ranking Member Payne for the opportunity 
to testify on some very unique issues, challenges and opportunities 
facing the commuter rail agencies across the nation.
    I also wish to report that the very significant funding increase we 
have seen since the passage of the Bipartisan Infrastructure Law has 
provided necessary funds for critical investment and the predictability 
that allows us to move towards, or to maintain, a state of good repair.
    I am Mike Noland, Chairman of the Commuter Rail Coalition (CRC) and 
President of the Northern Indiana Commuter Transportation District, 
operator of the South Shore Line commuter rail system. Along with my 
colleagues Debra Johnson, CEO of Denver RTD, fellow Coalition board 
member David Dech, Executive Director of the South Florida Regional 
Transportation Authority, CRC board member Darren Kettle, CEO of LA 
Metrolink, and one of my CRC co-founders, New Jersey Transit's Kevin 
Corbett, we wish to review the state of commuter rail operations our 
industry faces today. From changing travel patterns and demographics 
altering how our customers use our service, and how we deliver that 
service, to changes taking place in the worldwide excess insurance 
industry that directly impacts our ability to deliver service, we are 
definitely in a state of change.
    As President of the South Shore Line I oversee a 90-mile commuter 
railroad serving Northern Indiana with service into downtown Chicago. 
Today, I am here as Chairman of the CRC, an industry coalition 
representing the public agencies that provide over 98 percent of all 
commuter rail ridership and over 30 private sector suppliers and 
consultants that support our industry.
    The Coalition just celebrated its five-year anniversary and we are 
very proud of our collective efforts to communicate with one voice to 
critical stakeholders such as the U.S. Congress and the Department of 
Transportation, about trends in service and the needs of our industry 
going forward. Since day one our mission has been to engage and educate 
stakeholders on the tremendous value commuter railroads bring to the 
communities we serve.
                   Safe, Efficient, Climate Friendly
    Commuter rail is not only safe, it is reliable, efficient, and 
climate friendly, proving to be an excellent return on the investment 
of public dollars. The 32 commuter rail agencies across the country 
pride themselves in providing 314 million (2022) riders with the safest 
mode of ground transportation.
    How safe? According to the National Safety Council, commuter rail 
is the safest mode of ground transportation in the U.S. And with 
innovations in technology such as Positive Train Control (PTC) and 
human factors analysis, commuter railroads are continuously improving 
their safety performance.
    The much-discussed PTC is just one of the many safety systems 
already in use by commuter railroads. My colleague Mr. Kettle just 
received a grant to introduce an intrusion detection system that will 
further enhance the capabilities of PTC in Southern California, and Mr. 
Corbett's New Jersey Transit will soon begin using AI to improve grade 
crossing safety on their light rail lines--a technology that will have 
application for commuter rail as well. The technology that railroads 
are installing today will be undergoing improvements and updates for 
decades to come.
    Commuter rail performs better than almost every other mode in 
operating expenses per passenger mile traveled. According to the 
National Transit Database, only subways provide better cost 
effectiveness.
    And of the top 20 US metro areas ranked by GDP, only three job 
centers are not served by commuter railroads. In the Chicago 
Metropolitan area alone, regional transit, of which commuter rail is an 
integral part, directly supports 126,000 jobs. Regional economic 
activity created by transit is approximately $5.6 billion per year 
while additional tax revenue created by transit is approximately $1 
billion per year. In the Chicago region, the economic benefit returned 
per $1.00 invested in transit is $3.86 \1\.
---------------------------------------------------------------------------
    \1\ ``Transit is the Answer'' (2023), Regional Transit Authority 
Strategic Plan.
---------------------------------------------------------------------------
    The transportation sector as a whole--including private cars, 
commercial trucks, commercial and private planes--is responsible for 
nine percent of all greenhouse gas (GHG) emissions--the largest of all 
US sectors. According to the Federal Railroad Administration, however, 
the rail sector--freight and passenger combined--emits only two percent 
of GHG, while also reducing dependence on private cars and commercial 
trucking.
    Rail's efficiency plays an important role in reducing the transport 
sector's emissions. Without transit, an additional 1.7 billion miles 
would be driven in the Chicago region, creating an additional 375,000 
tons of greenhouse gas emissions and 1,500 additional severe traffic 
accidents \2\.
---------------------------------------------------------------------------
    \2\ Id.
---------------------------------------------------------------------------
    As mentioned, I am the President of the South Shore Line commuter 
railroad, a 90-mile system serving Northwest Indiana, from South Bend 
International Airport to Millennium Station in Chicago. I have 
dedicated my career to providing safe and efficient rail service to 
millions of riders, and in Indiana we are thrilled that the South Shore 
service is being improved and expanded through a partnership with the 
Federal Transit Administration (FTA) with two Full Funding Grant 
Agreements as part of the Capital Investment Grant program. The 
combined impact of the new West Lake service, which will open in 2025, 
and the Double Track service, which will be open by this time next 
month, is nothing short of transformational for Northwest Indiana. The 
State of Indiana anticipates that these projects will generate in 
excess of $2.5 billion in private sector development over the next 20 
years, and a conservative return of $2 for every state dollar invested 
(with a more likely $4 in return) from these rail projects. In fact, we 
are already seeing over $500 million of committed private sector 
investment through transit development next to our stations, before 
opening service on either project.
    If the Chairman would indulge me for just a moment, I would like to 
thank Representative Yakym, a member of this subcommittee, for his 
support of this investment and for his keen interest in South Shore 
Line Service.
    ``Commuter rail'' is traditionally defined as a passenger rail 
service that primarily operates within a metropolitan area, connecting 
commuters to a central city from adjacent suburbs or towns. Commuter 
rail systems are ``heavy rail'' using electric or diesel trains, as 
opposed to traditional subways or elevated ``light rail'' trains.
    As my colleague Debra Johnson will address in greater detail, 
commuter rail as a mode has generated frequent jurisdictional questions 
within the federal government. Depending on the issue, we fall 
alternately under the jurisdiction of either the Federal Transit 
Administration or Federal Railroad Administration. We receive much of 
our federal assistance through formula funds, and we access to the 
Capital Investment Grant Program of the Federal Transit Administration 
for our large extension projects. The Federal Railroad Administration 
has safety oversight of all our operations and recently has also 
awarded some discretionary funding grants for commuter rail agencies.
    The service we provide, as well as the make-up of our agencies, 
reflects the diverse communities we serve.
    Ours is an industry with both a long history and significant recent 
growth: 12 new commuter rail services debuted in just the past 20 
years. The oldest in the nation, the Long Island Rail Road, is this 
year marking its 190th anniversary. The South Shore Line service began 
over a century ago, and the Denver RTD launched commuter rail service 
in 2016.
    Some of our agencies--like my own, Mr. Kettle's Metrolink, and Mr. 
Dech's Tri-Rail--are stand-alone commuter rail only service providers; 
others are part of multi-modal operations. Debra Johnson and Kevin 
Corbett both lead multi-modal agencies that provide a mix of rail and 
bus transit services.
    At the South Shore Line, we are the direct providers of the 
service. On the Metra system in Chicago, where I previously served as 
Chief Counsel for 16 years, the agency contracts with the Union Pacific 
and Burlington Northern Sante Fe to provide some of its service, and it 
directly operates five other service corridors in their system. In 
Florida, Dave Dech's system contracts out to provide service through 
Herzog, and in Los Angeles, Darren Kettle's Metrolink system is 
operated by Amtrak.
                   Issues Facing Commuter Rail Today
    My colleagues will delve into this more fully in their remarks, but 
myriad external factors illustrate that commuter rail has an 
opportunity to embrace an era of renaissance.
    There is no better time for the CRC to have brought these voices 
together in support of the agencies and, collectively, the mode in 
addressing the need to:
      Adapt to the post-pandemic ridership habits.
      Responding to freight operating practices and safety 
issues that impact communities through which we travel
      Balancing our needs with those of Amtrak's and other 
intercity passenger rail initiatives and ensuring that commuter 
railroads have equal footing in these discussions.

    With respect to our interactions with Amtrak, it would be very 
beneficial for the commuter rail industry to have one oversight agency 
or administrative body with jurisdiction over issues impacting our 
systems to evaluate the sometimes competing priorities and balance 
everyone's needs.
    Over the course of our long history, commuter railroads have met 
many challenges.
    I am happy to report that our industry succeeded with one of the 
biggest yet--the installation of PTC across all of our systems. The 
cost of implementation, with over 90 percent funded with precious local 
resources from our capital development budgets, came to roughly $4 
Billion for public agencies. And agencies are spending millions of 
dollars in ongoing, annual maintenance and upgrades to keep PTC in top 
form.
    The logistical challenges to implement PTC were equally harrowing. 
One of the main hurdles was ``interoperability'': The requirement that 
any train operating over another railroad's tracks must be able to 
communicate seamlessly with the ``back office'' of that railroad's PTC 
system, in addition to its own system. Nowhere was that more difficult 
than in Chicago, with its dense rail network that sees 1,300 to 1,400 
commuter and freight trains each day. Metra Chicago's PTC system must 
work seamlessly with the PTC systems of 12 other railroad companies 
including my South Shore Line--and on one of Metra's lines, the 
Southwest Service, it has to work with five.
               Challenge of Procuring Liability Insurance
    Currently we face a challenge to our ability to operate that is 
beyond our control, has nothing to do with our operations, and in our 
opinion, completely ignores the incredible safety record and commuter 
railroads' further safety enhancements, such as PTC. I am speaking 
about the challenge we face securing excess commercial liability 
insurance up to the federal liability cap. This problem threatens our 
ability to operate and will require close collaboration between the 
commuter rail industry and Congress. You are likely somewhat familiar 
with a similar scenario. The mainstream press has covered the fate of 
homeowners with no claims history losing their insurance as carriers 
exit various markets ``due to declining profitability.'' (Newsweek, 
March 4, 2024)
    In September 2023, the Senate Banking Committee held a hearing on 
Perspectives on Challenges in the Property Insurance Market and the 
Impact on Consumers. The climate the Senate Banking Committee examined 
for consumers is similar for commuter railroads. In a ``hardened'' 
insurance market, insurers are limiting their exposure by reducing 
coverage, or pulling out of markets entirely because they have made 
profitability calculations based on the range of payouts made to a 
broad range of insureds, such as following extreme weather events 
(hurricanes, tornados), wild-fires, coastal flooding, Texas grid 
failure, and mass-casualty events.
    The issues we face in worldwide excess insurance market are 
serious. Commuter railroads currently carry $323 million in excess 
liability coverage, the federal cap. Under law, the federal cap will be 
CPI-adjusted by notice in early 2026, at which time commuter railroads 
will have only 30 days to secure the additional coverage. If we are 
unable to place this additional coverage, contractors and host 
railroads can declare breach of contract, requiring a railroad to stop 
running service.
    Compounding this issue is the fact that we can only purchase small 
amounts of our excess insurance from US insurers; today the maximum we 
can purchase from domestic insurance carriers is only $32.5 million per 
railroad. Commuter railroads are forced to spend public dollars to 
purchase the balance, $300 million in additional coverage, in overseas 
insurance markets.
    The Coalition's immediate focus, though, involves the need for a 
technical correction to modify the 30-day timeframe mandated in law 
that provides for an adjustment to the federal cap on passenger and 
commuter rail liability. I fear that if this provision is not adjusted 
from 30 to 365 days before the next adjustment--currently scheduled for 
the first quarter of 2026--we may have to shut down and suspend some or 
all of our commuter rail systems.
    A bit of background: Limitations (or caps) on rail passenger 
liability first appeared in December 1997, as part of Title 49 U.S.C. 
Section 28103, when it was set at $200 million. Eight years later, in 
December 2015, the cap was incorporated into Section 11415 of the 
Fixing America's Surface Transportation (``FAST Act'') and was 
increased to $294 million. The FAST Act also indexed the cap to 
inflation, to be adjusted every five years.
    The largest commuter rail settlement to date occurred in 2010 as a 
result of the Chatsworth, California incident in which 25 people were 
killed and 135 injured. At that time the liability cap was $200M.
    Following that event, Congress mandated the implementation of 
positive train control and the improved crashworthiness of passenger 
rail vehicles and set the wheels in motion to periodically adjust the 
liability cap as indexed by the Consumer Prices Index. No commuter rail 
incident of the magnitude seen in Chatsworth has occurred since.
    The index methodology ensures that the aggregate allowable awards 
to all rail passengers, against all defendants, for all claims, 
including punitive damages, arising from a single accident or incident 
in the commuter rail or passenger rail industry is based on current 
dollars adjusted for inflation.
    The cap was last adjusted in February 2021, when the five-year look 
back added roughly $26 million to the new liability limits. The 
Department of Transportation triggered that increase by issuing a 
notice that the statutory adjustment to the rail passenger 
transportation liability cap under Section 11415 of the FAST Act would 
go into effect 30 days after the day the Secretary's notice was 
published in the Federal Register.
    The liability cap of $323 million became effective on March 27, 
2021. Every commuter railroad in the country raced to acquire the 
additional $26 million in coverage in the excess liability market. Many 
did not secure this additional coverage until nearly the end of this 
30-day timeframe.
    The cap is next scheduled to be adjusted in the first quarter of 
2026. With the Consumer Price Index as the sole determinant of the 
adjustment, the Commuter Rail Coalition anticipates a significant 
increase up to and likely in excess of an additional $70 million 
dollars.
    Due to the state of the domestic insurance market, all commuter 
rail agencies and Amtrak must procure a large proportion of their 
coverage from overseas insurers. U.S. insurers have, over time, exited 
the market for ``excess liability'' coverage, reasoning that they could 
deploy their capital in other areas and absorb less risk. The reasons 
domestic insurance companies exited the market are varied, but the fact 
remains that as public agencies we have no choice but to find this 
insurance coverage in foreign markets. Our need to purchase insurance 
outside the United States is certainly contrary to the Buy America 
initiatives so important to Congress.
    Further, no single insurance company is willing to fully insure an 
agency for a potentially catastrophic event. Consequently, multiple 
excess insurance carriers participate to provide converge up the 
federal cap, building layers of insurance from just above our self-
insured retention levels up the top layer of coverage. These layers are 
referred to as insurance ``towers'' and are built from the bottom 
(highest risk coupled with the highest premiums) to the top (lowest 
risk with the lowest premiums). Each insurance company has its own 
``appetite'' for varying degrees of risk. This, of course, allows 
insurance companies to limit the amount of insurance available and is 
how they manage their risk or exposure to any one insured. Some 
companies will insure only at the lowest levels of the tower (the so-
called ``working layers'') while others are interested only in the 
uppermost (and therefore ``safest'') levels of the tower.
    As coverage is built, the individual tower layers themselves are 
often further subdivided and can consist of numerous insurance 
companies each taking a share of the coverage in that layer. This 
framework further spreads the risk for insurers: it is not uncommon for 
ten or more insurance companies to participate in a particular layer 
with each company committing to provide a portion of the coverage 
(typically from $2.5M to $10M). Though increasingly rare, some 
companies, if the layer is small enough, will commit to covering the 
entire layer, usually in an amount not greater than $20M to $25M.
    If you were to examine each commuter railroad's insurance tower, 
you would find a distinct reliance on foreign markets, especially 
London, and in particular Lloyd's of London, the world's largest 
marketplace for excess casualty insurance. Bermuda is the second 
largest marketplace for excess casualty insurance, and other dominant 
carriers are located elsewhere in Europe.
    As mentioned, purchasing excess liability insurance in foreign 
markets is not by choice but by necessity. So, taking my experience for 
the South Shoreline in Indiana, you would find that I have 22 
participating insurers filling 35 slots on my insurance tower, a 
majority of the slots are covered by London insurers (many were from 
Lloyd's), seven were from Bermuda, and only one from the United States.
    In Metra's last renewal, 22 slots were filled by London carriers, 
six slots were filled by Bermuda carriers and one slot was filled by a 
European carrier. Two additional carriers from London and one from 
Bermuda filled slots covering punitive damages. No carriers from the 
United States participated in the Metra tower.
            Federal Law Does Not Mandate Insuring to the Cap
    To be clear, commuter railroads are required to carry coverage up 
to the federal cap only as a result of third-party contracts. Federal 
law does not mandate that commuter railroads insure up to the federal 
liability cap. Rather, third-party contracts--such as trackage rights, 
purchase of service and vendor contracts--require that commuter 
railroads insure and indemnify those third parties up to the liability 
cap.
    Many of these third-party agreements state that failure to maintain 
excess liability coverage up to the federal liability cap could lead to 
a commuter railroad being in breach of contract. As an example, a 
commuter railroad's inability to insure to the cap could result in 
vendors that supply software for PTC terminating a service that 
commuter railroads are federally required to have in place. Without PTC 
in place, the likely outcome is that commuter railroads would be forced 
to shut down service.
    A host railroad can also contractually forbid operation of the 
commuter railroad on its tracks without the full limits of excess 
liability insurance being in place. And other third-party service 
providers could refuse to allow its conductors and engineers to operate 
the railroad's rolling stock to transport passengers.
    So, while commuter railroads are not federally compelled to insure 
up to the liability cap, in all practical purposes, the cap serves as 
an existential requirement for our ability to operate service for the 
commuting public.
    Given the hardened insurance market, recent indications of market 
capacity, and inflation's impact on the CPI that will be used to 
calculate the next increase in 2026, commuter railroads have a very 
real concern that if we are unable to obtain the required insurance 
within the 30-day implementation window we could be forced to shut down 
our service, likely with little or no warning to our customers.
    Simply, if coverage is unattainable, we will be forced into 
shutting down until the coverage is obtained or some other type of 
financial guarantee is provided to the third-party.
                 Existing Threats to Securing Coverage
    ``Market Capacity in the Excess Insurance Industry'' is the 
headline you see when you consider the greatest threat to continued 
coverage for any one of the commuter rail agencies nationwide. The 
number of insurers in the market willing to offer coverage, and those 
still in the excess insurance market who have coverage to place has 
shrunk over the past ten years and particularly in the past five years, 
in terms of the number of participating insurers and the amounts they 
are willing to commit for coverage. In December 2023 we were advised 
that excess insurance capacity available to the commuter rail industry 
stood at just over $400 million.
    Why is capacity in the excess market being reduced? It is a complex 
set of market conditions that has absolutely nothing to do with 
commuter rail safety or commuter rail claims.
    The insurance industry is highly cyclical. A ``soft'' market cycle 
is defined by lower insurance premiums, a broader appetite to assume 
risks and coverages, increased capacity (the availability of high 
limits), and greater underwriting flexibility. A ``hard'' market is 
characterized by higher insurance premiums, diminished capacity, more 
conservative underwriting, and fewer carriers writing certain coverage 
lines or insuring certain specific industries.
    After 15+ years of a soft market, the insurance industry began 
experiencing a hardening of the market in 2018-2019. The effects of the 
current market are being seen across most lines of insurance and the 
majority of industries. Insurance experts we have consulted predict 
that the hard market will continue through this decade and likely 
beyond.
    This exponentially hardening market is primarily due to greater 
frequency of catastrophic weather events, economic and social inflation 
\3\, and litigation funding \4\. Coupled with a multitude of excess 
claims resulting in astronomically high settlements and verdicts, these 
conditions have created a vast imbalance in underwriting financials--a 
balance which the markets feel must be corrected for their own 
survival. Although these trends are not necessarily new, their impact 
is strengthening.
---------------------------------------------------------------------------
    \3\ Social inflation describes the phenomenon when insurance claims 
costs are increasing more quickly than the standard rate of inflation. 
Social inflation's impact on claim costs ultimately leads to higher 
insurance costs for all consumers. Recently, incurred claim losses have 
increased much more rapidly in recent years--much more rapidly than in 
preceding years and more rapidly than economic inflation would predict.
    \4\ Litigation funding is the practice where a third-party 
unrelated to the lawsuit provides capital to a plaintiff involved in 
litigation in return for a portion of any financial recovery from the 
lawsuit.
---------------------------------------------------------------------------
    These challenges really presented themselves in clear terms in 2020 
when the commuter rail industry, along with many others, saw 
significant rate increases--some as high as 75 percent from prior year 
premiums, predominantly at the high excess level. Excess insurers had 
suffered significant losses and decided to ``level their losses''.
    Again, it is important to note that these ``losses'' in the 
insurance market were not the result of losses incurred in the commuter 
rail industry. I must underscore here the fact that we have all 
implemented PTC, which would have prevented most of the high exposure 
accidents over the past 20 years. The losses cited by insurance 
providers are the result of hurricanes and wildfires and mass 
shootings, as well as trends in auto claims in both frequency and 
severity due to a decrease in oil prices (more driving), increased cell 
phone and marijuana (distracted and impaired driving), and an increase 
in overall technological distractions in vehicles.
    This came at a time when insurers had historical underpricing of 
premiums, an overall deterioration of reserves due to large payouts, 
and a lack of investment for new carriers.
    The losses were building at a rapid pace, impacting many markets 
where excess liability coverage is used. The following examples 
illustrate settlements or verdicts in excess of $500 million across 
several industries over the past several years \5\:
---------------------------------------------------------------------------
    \5\ Statistics culled from ``Liability Limit Benchmark & Large Loss 
Profile by Industry Sector 2023--Proper Protection in a Volatile 
World'' (Chubb)

Life Sciences...........................................................
1. Blood thinning drug causing stroke and death (2019).            $775M
2. 17 patients with defective hip replacements (various            $941M
 years)................................................
3. Opioid litigation (various years)...................            $48+B
4. Class action--coil birth control (2020).............            $1.6B
5. New York State opioid litigation (2021).............           $1.18B
 
Health Care.............................................................
1. Sexual abuse by university sports physician (2018)..            $500M
 
Consumer Products.......................................................
1. Talc Litigation (2018-2020).........................              $5B
2. Cable television provider held liable for murder by            $1.14B
 employee (2022).......................................
 
Real Estate and Hospitality.............................................
1. Hotel settlement for mass shooting resulting in 58              $800M
 deaths (2019).........................................
 
Transportation (Road)...................................................
1. Truck driver negligently causing death of college                 $1B
 student (2021)........................................
 
Manufacturing...........................................................
1. Engine defect litigation (2019).....................            $758M
2. Class action regarding improper emission controls               $700M
 (2020)................................................
3. Class action regarding engine fires (2021)..........      $889M-$1.3B
4. Faulty batteries for electric vehicles causing risk       Up to $1.9B
 of fire (2021)........................................
5. Death of two people due to truck's faulty roof                 $1.72B
 (2022)................................................
 
Oil and Gas.............................................................
1. Failure to investigate multiple leaks at gas storage            $1.1B
 facility (2021).......................................
 
Utilities...............................................................
1. Wildfires (2017/2018)...............................        $12B-$24B
2. Gas leak and explosion killing one, injuring 25                $790+M
 (2018)................................................
 
Chemical................................................................
1. Class action regarding chemical explosion (2017)....            $671M
2. Class action regarding agrichemicals (various years)          $11.22B
 

                         Transportation (Rail)
    These losses alone, all of which occurred in the United States, 
total over $105 billion. It is worth noting that some claims do not 
reveal themselves until many years later (i.e., product liability, 
sexual abuse, etc.), circumstances for which insurers must hold 
adequate reserves.
    It is worth noting that commuter rail does not appear on this list. 
Nevertheless, while commuter rail, as part of the excess liability 
insurance market, benefits from sharing risk with extensive coverage 
and low premiums in a soft market, it also suffers the shared 
consequences of shrinking coverage and very high premiums in a hard 
market fueled by social inflation and large losses.
    As noted above, the largest commuter rail settlement to date 
occurred in 2010 as a result of the Chatsworth, California incident in 
which 25 people were killed and 135 injured. Since then, the commuter 
railroads have invested billions in myriad new safety systems and 
protocols. No commuter rail incident of the magnitude seen in 
Chatsworth has occurred since.
                         Underwriting Capacity
    Even more problematic for commuter rail than exponentially rising 
premiums is the issue of ``capacity'' or, simply put, the availability 
of enough insurance to satisfy the requirements of all the insureds in 
a particular sector or market.
    From the perspective of the excess liability markets, underwriting 
capacity is the maximum amount of liability that an insurance company 
agrees to assume from its underwriting activities. It represents an 
insurer's ability to retain risk. It is important for an insurance 
company to calculate and maintain its underwriting capacity so it will 
be able to pay claims when needed.
    An insurance company's potential for profitability depends on its 
``appetite'' for risk. The more risk it assumes by underwriting certain 
types of insurance policies (or by increasing the number of policies it 
writes), the more premiums it can collect and invest. However, the more 
risk an insurer accepts through the issuance of a large number of 
policies or larger risks, the more the possibility exists that it may 
become unprofitable, or worse, insolvent.
    For an insurance company, striking the correct balance is essential 
to maintaining its financial health. An insurer's maximum amount of 
acceptable risk--or underwriting capacity--is a critical component of 
its operations.
    The goal of good underwriting is to generate premiums that exceed 
the insurer's losses and expenses. They do that by underwriting 
policies that cover less volatile risks (as commuter rail is perceived 
to be), increasing premiums, and decreasing capacity.
                       Capacity for Commuter Rail
    In general, capacity for lead excess insurers who underwrite 
commuter rail has greatly decreased over the past ten to twenty years. 
Non-lead excess insurers have decreased their capacity as well. The 
London and Bermuda excess insurance markets continuously monitor and 
adjust the amount of capacity they deploy. As a result of the current 
hard market, further capacity withdrawal is expected over the next few 
years.
    Capacity withdrawal in the insurance industry is especially 
problematic when the commuter rail industry is staring at a significant 
increase in the federal cap on liability in 2026. Given recent 
inflation, we are concerned that the cap could increase by $70 million 
or more.
    If one considers that 32 commuter railroads each will be competing 
for this additional coverage to meet the 2026 cap, it will be 
difficult--if not impossible--for all commuter railroads to obtain that 
coverage by the current 30-day deadline. Our best opportunity to obtain 
the new level of coverage is to have additional time to approach the 
excess insurance liability markets and not compete with each other in a 
30-day window. We need an immediate change to the 30-day implementation 
requirement to provide up to 365 days to place this additional 
coverage.
    With respect to cost, the upper layers of a tower (for example 
$28,000,000 in excess of $295,000,000, bringing coverage up to the 
current $323M liability cap) cost an average of $16,000 per million. We 
can expect the cost for one commuter railroad to acquire another $70 
million in coverage in 2026 would likely be an additional $1,120,000.
    In addition to seeking relief on the need to place this coverage 
within 30 days of the 5-year liability cap adjustment, we must also 
address to the overarching problem of a market with limited capacity 
and the need to find alternative arrangements. Needless to say, if the 
excess insurance market fails, Congress and the commuter railroads 
together will need more than 30 days to put alternatives in place so 
that vital transportation services around the country do not grind to a 
halt.
    What might those options include? One that we are considering is an 
industry pool formed by and funded through premiums paid by commuter 
railroads. Together, we are open to exploring all of our options, but 
are clear-eyed as to the hurdles of establishing such a pool.
                        Alternative Arrangements
    To assume that the current foreign excess liability market can 
continue to support the requirements leveled on commuter railroads has 
proven to be unreliable. We must search for stable alternatives and we 
look forward to working with this committee and the Congress to find 
workable solutions.
    We are clear-eyed as to the hurdles of establishing an industry 
insurance pool. A multi-state agreement to share liability is no small 
undertaking, especially when navigating varying state liability caps 
and tort immunity protections. We are actively discussing these options 
and ask Congress to assist us by supporting studies and, potentially, 
federally-supported loans needed for capitalizing a commuter rail 
industry liability pool.
    To assume that the current market can continue to support commuter 
rail's needs has proven to be unreliable. We must search for stable 
options that all willing commuter railroads can participate in, and we 
look forward to working with this committee and the Congress to find 
equitable solutions.
                     Amtrak and Commuter Railroads
    My final point has to do with Amtrak's relationship with commuter 
rail agencies and the need for the Surface Transportation Board to 
serve as the final arbiter for any disputes that arise between these 
two public assets over access rights to each other's property and the 
associated costs.
    Commuter railroads frequently interact with freight railroads and 
Amtrak but have extremely limited access to the dispute resolution 
mechanisms afforded by the Surface Transportation Board (STB) given the 
current STB authorization language. This lack of a forum puts public 
agencies--commuter railroads--at a significant disadvantage when it 
comes to issues involving the freight railroads, especially the Class 1 
railroads and Amtrak.
    As background, in 1970 the Rail Passenger Service Act (RPSA) 
provided freight railroads the opportunity to transfer their 
chronically unprofitable intercity passenger operations to Amtrak. In 
exchange, 22 freight railroads that were party to the agreement were 
required to: (1) allow Amtrak ``to operate wherever it wished'' over 
their lines; (2) ``grant Amtrak trains preference over their own 
freight trains;'' and (3) allow the ICC (now Surface Transportation 
Board) to determine compensation for Amtrak's operations if they could 
not reach agreement with Amtrak. Freight railroads were also required 
to pay some level of compensation to Amtrak.
    In short, the RPSA relieved 22 private railroads of their passenger 
common carrier obligations in exchange for Amtrak's right to priority 
access to tracks for incremental cost. The commuter agencies and 
handful of freight railroads were not part of this so-called ``grand 
bargain'': they did not transfer passenger operations to Amtrak and 
received no benefit from the Rail Passenger Service Act. Yet those who 
were not party to the RPSA are held to the quid pro quo that they did 
not make.
    It is inequitable to continue to subject commuter railroads to only 
the burden side of the grand bargain. Non-RPSA parties should not be at 
risk of being forced to provide access to Amtrak trains, absent a 
mutually acceptable agreement with Amtrak.
    In April 2021 Amtrak sent letters to commuter railroads across the 
country introducing their vision for Amtrak Connects US. ``We have 
developed a vision for the future that involves strategic expansion to 
increase train frequencies on some existing Amtrak corridor routes, and 
initiate new corridors to connect additional city-pairs, called Amtrak 
Connects US.'' The letter I personally received went on to state: 
``Some of these additional trains will (emphasis added) operate on 
NICTD rail lines.''
    Again, commuter agencies were not party to the grand bargain, we 
were not relieved of any financial burden assumed by Amtrak, and 
therefore, the CRC asserts that commuter railroads should not be 
subject to Amtrak's statutory ability to simply enforce it rights over 
commuter rail properties. The public assets that are commuter railroads 
must be on an equal footing to Amtrak and treated differently from the 
22 freight railroads that received the benefit of the RPSA.
    Further, commuter rail lines should not be seen as a preferred 
alternative from Amtrak's current routes. In the Indiana case, Amtrak 
desires to move their route from a freight line to the newly upgraded 
South Shore Line. The freight line where Amtrak currently operates in 
Indiana was just upgraded for their benefit; it received in excess of 
$65 million in state-funded enhancements to improve Amtrak service on 
the RPSA host railroad. Seemingly, Amtrak seeks to abandon the line 
that was improved by Indiana taxpayers for their benefit in order to 
avail themselves of the investments NICTD has secured to improve 
service for our own ridership.
    Should Amtrak exercise its statutory authority and begin operating 
over the South Shore Line, their presence will negatively impact the 
capacity and maintenance calculations made to support the federal 
investment in NICTD service.
    Further, under statute, Amtrak would only be required to pay the 
incremental costs of its use of the line. Host railroads have no 
leverage to negotiate or force Amtrak to pay anything approaching the 
actual cost of their presence on a rail line, meaning, in this case, 
that NICTD would be underwriting the cost of Amtrak service through 
Indiana.
    The equation creates a circumstance that requires commuter 
railroads to subsidize the operating costs of Amtrak without fair 
compensation.
    Conversely, when a commuter railroad operates over Amtrak-owned 
tracks, that access is billed at actual cost.
    Amtrak has stated that they desire to reach an acceptable agreement 
in Indiana, but they have also recently and vigorously defended their 
statutory authority over commuter railroads.
    Commuter authorities must be permitted to continue to realize the 
full, long-term value of the public investment that has been made in 
their lines and facilities and to protect the value of those 
investments for their own passengers. All railroads not party to the 
``grand bargain'' must be protected when Amtrak seeks to exercise its 
will. There must be a forum for negotiation between equal parties for 
access and compensation.
    The Commuter Rail Coalition believes the best approach to ensure a 
well-defined process for resolution is to adjust the statutory rights 
of Amtrak to require good faith negotiations between Amtrak and 
commuter rail systems when either party seeks trackage rights, and 
forum to adjudicate disputes. In our view, we believe the Surface 
Transportation Board is the right entity to deal with disputes between 
Amtrak and commuter railroads and we suggest that the STB be empowered 
with the authority to review and determine terms of any agreement 
between Amtrak and a commuter rail agency that remains in dispute.
                               Conclusion
    Chairman Nehls and Ranking Member Payne, I want to thank you again 
for the opportunity to explain some of the challenges we face in the 
commuter rail industry. If there is one message I wish to leave with 
you today, it is that commuter railroads face a changing landscape as 
our customers modify their travel patterns, and we embrace those 
opportunities that allow for us to offer safe reliable and affordable 
service. We look forward working cooperatively with you and the 
Congress to find the most expeditious, cost-effective solutions to the 
issues discussed here today. We all climbed a steep hill to meet the 
PTC mandate. The challenges we now face are equally as formidable but 
there are pathways to success. We look forward to working towards those 
solutions.

    Mr. Nehls. Thank you, Mr. Noland.
    Ms. Johnson, you are now recognized for 5 minutes.

   TESTIMONY OF DEBRA A. JOHNSON, GENERAL MANAGER AND CHIEF 
  EXECUTIVE OFFICER, REGIONAL TRANSPORTATION DISTRICT (RTD), 
                        DENVER, COLORADO

    Ms. Johnson. Good morning, Chairman Nehls, Ranking Member 
Larsen, Congresswoman Foushee, and members of the subcommittee. 
I am pleased to join my industry colleagues to discuss 
opportunities and challenges facing commuter rail operators 
nationwide.
    The face of commuter rail is evolving. This vital public 
service is now experiencing a renaissance. Agencies across the 
country are delivering service that match needs of a hybrid 
workforce, as well as to provide more attractive mobility 
options to discretionary customers. To advance these 
enhancements, investments are a must.
    On March 29, the Federal Railroad Administration released 
the Notices of Funding Opportunity for fiscal years 2023 and 
2024: $2.4 billion for rail safety and infrastructure 
improvements. Amtrak and short line railroads are eligible to 
apply, but not commuter rail agencies.
    The CRISI program, administered by FRA, funds projects that 
improve the safety, efficiency, and reliability of intercity 
passenger and freight rail, yet commuter rail priorities are 
not eligible for direct funding under the CRISI program. Since 
CRISI was first initiated, Amtrak has seen its access to direct 
funding grow exponentially while commuter railroads must 
compete with all other surface modes for discretionary funding. 
There is no existing specific U.S. DOT program that is focused 
on commuter rail infrastructure and rolling stock. Commuter 
rail agencies seeking Federal assistance to maintain a safe, 
efficient, and reliable network have been shortchanged.
    Speaking to rail safety, most commuter rail capital needs 
are related to safety investments that ensure commuter rail 
remains one of the safest mobility options. When agencies 
invested over $4 billion to implement Positive Train Control 
systems nationwide, this investment came at the expense of 
locally prioritized improvements and/or service. Capital 
reinvestment projects were postponed or delayed indefinitely, 
while operational safety was maintained at a significant but 
necessary cost.
    As the subcommittee considers future rail safety 
legislation, the commuter rail industry welcomes the policies 
and practices that may emerge in that legislation. That said, 
reliable Federal funding for continued commuter rail safety 
investments is paramount for long-term sustainability. 
Hazardous materials are frequently transported by freight 
railroads across alignments shared by commuter rail. The cost 
associated with these inherent risks must be borne by the 
freight railroads as a cost of doing business, thus they must 
be held accountable for their safety practices.
    The Commuter Rail Coalition supports the concepts advanced 
in the Senate's proposed Railway Safety Act, legislation 
introduced by Senators Brown and Vance last year. That said, 
the coalition's primary concern with the legislation is the 
significant cost that commuter rail agencies are being asked to 
absorb for the benefit of private entities, specifically with 
the wayside technology requirements such as hot boxes.
    It cannot be overstated that such requirements are for the 
freight railroad's sole benefit. Considering that commuter 
railroads operate under a much stricter safety regime than 
freight railroads, commuter rail operators foresee little, if 
any, benefit from the hot box detector introduction on our 
rights-of-way. While the Senate bill proposes the installation 
cost to commuter railroads be partially offset by a new 
reimbursable Federal funding program, coalition members have 
significant concerns with this requirement.
    First, taxpayers should not shoulder private entity costs 
of safely moving freight.
    Second, the reimbursement program envisioned in the Senate 
bill would neither fully cover the hot box detector 
installation costs nor the required ongoing maintenance.
    And third, many commuter railroads currently have unfunded 
capital projects that are a matter of public necessity. 
Diverting public funds for private-sector purpose is not good 
Government.
    Congress has an opportunity to address these concerns and 
several others in any final legislation.
    On behalf of the Commuter Rail Coalition, we look forward 
to further collaboration.
    Mr. Chairman, Congresswoman Foushee, and Ranking Member 
Larsen, it has been a pleasure to appear before the 
subcommittee today to share concerns as an industry and, most 
importantly, to express our support for achieving even greater 
safety levels in the commuter rail industry. Once again, I 
offer our collective expertise and assistance as you move 
forward on safety legislation and, ultimately, the 
reauthorization of the surface transportation bill. Thank you.
    [Ms. Johnson's prepared statement follows:]

                                 
   Prepared Statement of Debra A. Johnson, General Manager and Chief 
  Executive Officer, Regional Transportation District (RTD), Denver, 
                                Colorado
                          RTD Rail Operations
    RTD operates light rail and commuter rail lines within its 2,342 
square-mile service area. The Denver metro region has long championed 
rail transit as a necessary transportation mode. The agency's first 
light rail line commenced revenue service nearly 30 years ago. 
FasTracks, the agency's transit expansion program, at the time of 
approval by voters in 2004, was the largest such program in the nation. 
Together with a concessionaire partner, Denver Transit Partners/Denver 
Transit Operators, RTD's Commuter Rail operations consist of four 
commuter rail lines, one of which is directly operated by RTD. Commuter 
rail service spans from Denver International Airport in the east to 
adjoining suburbs in the north and west of the metro region. According 
to the 2023 Public Transportation Fact Book published by the American 
Public Transportation Association, RTD experienced the highest 
ridership per mile of track of any commuter railroad in the country.
 Commuter Rail Eligibility under the Consolidated Rail Infrastructure 
                and Safety Improvements (CRISI) Program
    The face of commuter rail is evolving. This vital public service, 
first established to move a workforce from the more affordable suburbs 
into the city center during morning and evening rush hours, is 
experiencing a renaissance. More and more, agencies across the country 
are introducing service that mirrors a regional rail approach--that is: 
bi-directional all-day service to serve the post-pandemic travel 
patterns of a hybrid workforce and to provide additional or more 
attractive travel options to discretionary customers.
    To advance these adaptations, investments must continue to be made 
into the essential public assets that are commuter railroads. Prior to 
the pandemic, commuter railroads across the US moved approximately half 
a billion people annually (as compared to Amtrak's 33 million).
    As a transit mode, commuter railroads are accountable to two 
different agencies within the Department of Transportation. In certain 
congressional circles, there is some debate as to whether commuter rail 
should be considered rail transportation or transit with respect to 
committee jurisdictional responsibility. Media outlets regularly 
conflate ``passenger rail'' as including commuter rail operations when, 
typically, this is simply shorthand for ``Amtrak.'' And, remarkably, 
the Surface Transportation Board has no authority to intervene when 
commuter railroads are party to a dispute with Amtrak.
    It is unfortunate, then, that Consolidated Rail Infrastructure and 
Safety Improvement (CRISI) Act funds the privately held short-line 
railroads' projects along with Amtrak's, while explicitly excluding a 
transit mode that moves vastly more people every year in comparison. 
The Coalition has a vested interest in working with Congress to correct 
this critical oversight.
    Earlier this month, the Federal Railroad Administration released 
the notice of funding opportunity for the FY23 and FY24 funding: $2.4 
billion for rail safety and infrastructure improvements--but none for 
commuter rail.
    The CRISI program is administered by the Federal Railroad 
Administration and funds projects that improve the safety, efficiency, 
and reliability of intercity passenger and freight rail, yet commuter 
rail priorities are not eligible for funding under the CRISI program. 
Authorized by Congress in the Fixing America's Surface Transportation 
(FAST) Act, funding under this program has grown significantly since 
its inception--from $200 million initially to $1.5 billion in FY2023 
and $1.1 billion in the recently enacted FY2024 appropriations bill.
    Currently, the CRISI program limits eligibility only to projects 
directed by freight rail and intercity passenger rail, specifically 
Amtrak in this instance. If a commuter railroad benefits from the 
program, it is only as an ancillary partner to another entity's 
project, as commuter rail operators are not eligible direct recipients 
for CRISI funds.
    Since CRISI was first initiated, Amtrak has seen its access to 
direct funding grow exponentially, while commuter railroads must 
compete with all other surface modes for discretionary funding.
    There is no specific program in existence at USDOT, either within 
the Federal Railroad Administration or the Federal Transit 
Administration, that is focused on commuter rail projects.
    Commuter rail agencies must compete for funding in large 
discretionary programs at the USDOT that attract competition from all 
other surface modes and a wide array of projects. This includes, for 
example, pedestrian walkways and bicycle paths, and thus commuter 
railroads are at a disadvantage from a significant amount of 
competition.
    RTD's commuter rail service is relatively new, and the agency does 
not currently face the pressure of trying to absorb significant 
``lumpy'' investments in the manner that similarly situated agencies 
do. However, it will not be very long before RTD, too, must endeavor to 
make infrastructure improvements and replacements as well as to begin 
rebuilding and replacing rolling stock. These investments often come 
along every 10 to 20 years; venturing to find ways for commuter rail 
agencies to absorb costs within the confines of the formula funds 
transit agencies receive is extremely challenging. What often happens 
is that agencies make investments to forestall major makeovers with the 
hope that resources will become available at a later date; they may 
have no viable options absent other sources of available funding.
    Commuter rail agencies could plan much more effectively and would 
likely be able to make better economic decisions if they were able to 
tap into CRISI funds or a similar capital investment funding source. 
Program managers at the USDOT, the Federal Railroad Administration, and 
Federal Transit Administration would be able to look at the commuter 
rail industry as a whole and better plan for each agency's upcoming 
vital capital replacement needs.
    There may be disagreement from some, including short-line 
railroads, that commuter rail projects should gain eligibility under 
the CRISI program; these entities have expressed trepidation regarding 
potential competition from commuter rail for funds they would otherwise 
benefit from. It must be stated, however, that commuter rail agencies 
are publicly funded organizations that rely heavily on state and local 
funding for capital needs in order to provide a public benefit, with no 
federal program dedicated for offsetting infrastructure and rolling 
stock costs. Whether these needs compete with or supersede those of 
privately-owned entities who also struggle with capital replacement 
demands, it is, of course, Congress' prerogative to decide that 
question. The fact remains that commuter rail operators' needs are 
great, and allowing them to go unaddressed, while at the same time 
funding in large amounts those of private entities, will mean that 
commuter rail assets will be allowed to degrade. Agencies and their 
customers seeking safe, efficient, reliable transportation solutions 
have been short-changed with respect to access to federal funding.
Rail Safety
    Most commuter rail capital needs are related to safety investments, 
which ensure that commuter rail remains one of the safest 
transportation modes available. When agencies invested over $4 billion 
to deploy Positive Train Control (PTC) systems nationwide, it came at 
the expense of locally prioritized improvements and upgrades. Capital 
reinvestment projects were pushed back or delayed indefinitely, while 
operational safety was maintained at a significant, but necessary, 
cost. Moving forward, as the subcommittee considers future rail safety 
legislation, the commuter rail industry stands ready to embrace the 
policies and practices that may emerge in that legislation. That said, 
reliable federal funding for continued commuter rail safety investments 
is needed to ensure long-term sustainability nationwide.
    The Commuter Rail Coalition supports the concepts advanced in the 
Senate's proposed Railway Safety Act legislation introduced by Senators 
Brown and Vance last year. Because some commuter rail agencies host 
freight operations carrying hazardous material, the Coalition also 
recognizes the important role it must play in the eventual solution. 
Commuter rail's safety record speaks for itself, and the industry 
stands ready to work with Congress to identify solutions that ensure 
the safety of commercial freight movements over shared tracks, while 
not placing the safety burden--or risk--on the taxpayer or public 
agencies. Safety is of utmost importance to every commuter rail 
provider.
    The Coalition's primary concern is related to costs. In this case--
as the Senate language is currently drafted--commuter rail agencies are 
concerned with being asked to absorb significant costs for the benefit 
of private entities only. This is, of course, in reference to mandates 
requiring wayside technology, such as hotboxes, and the resulting 
responsibility for the high cost for installing and maintaining these 
devices. It cannot be overstated that such requirements are for the 
freight railroads' sole benefit. Considering that commuter railroads 
operate under a much stricter safety regime than freight railroads, 
commuter rail operators foresee little if any benefit from the 
introduction of hotbox detectors on our right-of-way.
    To reiterate, commuter rail operators are held to, and operate at, 
a much higher standard in the interest of customer safety. Passenger 
railroads are required to inspect rail vehicles at least daily, under 
FRA's Part 238 requirements; given the nature of commuter rail 
operations, on-board personnel have eyes on equipment each time they 
step off the train at station stops.
    In contrast, freight railroads do not operate in the same manner, 
and are not held to the same inspection standards. For this reason, 
freight railroads have in some locations relied on wayside detectors to 
be alerted to degraded equipment. Class 1 rail consists can move 1,500 
miles or more between visual equipment inspections, whereas commuter 
rail operators have much shorter intervals between examination by 
maintenance personnel--in most cases fewer than 100 miles.
    Hazardous materials are frequently moved by freight railroads 
across commuter rail properties. The risks and the cost of keeping 
surrounding communities safe must be borne by the freight railroads as 
their cost of doing business. And they must be held to account for 
their safety practices.
    While the Senate bill proposes the costs to commuter railroads of 
installing new required technology be partially offset by a new 
reimbursable federal funding program, the members of the Coalition take 
issue with this requirement on several points. First, taxpayers should 
not shoulder the cost of private entities safely moving freight. The 
associated cost could be absorbed by freight railroads, who can easily 
pass the costs onto their customers. Second, the reimbursement program 
envisioned in the Senate bill would neither fully cover the cost of 
installation of the required hotbox detectors nor the required ongoing 
maintenance. Third, many commuter railroads currently have a myriad 
unfunded capital projects that are a matter of public necessity; 
diverting public funds for a private sector purpose is anathema to 
serving the public good.
    Congress has an opportunity to address these concerns and a number 
of others in any final legislation.
Excess Liability Coverage
    Federal statute directs the Secretary of Transportation to adjust 
the cap for excess liability coverage of commuter railroads every five 
years by applying the consumer price index.
    Commuter railroads have existing liability limits under the law in 
each state in which they operate. Rather than being required by federal 
law to carry excess liability coverage, however, it is commuter 
railroads' contractual obligations to host railroads, PTC system 
contractors and suppliers, and other similar entities that require 
indemnification and coverage up to the federal limit.
    In RTD's case, due to incremental increases in the federal 
liability limit, which currently sits at $323 million, the cost of 
excess liability coverage has grown tremendously over time and 
currently exceeds $1 million annually. Once notice of the increased 
limit is publicly posted by USDOT, railroads currently have no more 
than 30 days to acquire the necessary additional coverage. Compounding 
this challenge is the fact that ever fewer insurers, whether domestic 
or international, are willing to take on this level of insurance risk. 
This means that, following posting of each new liability cap, commuter 
railroad representatives must quickly travel overseas to seek coverage 
from the dwindling handful of insurers globally, primarily in markets 
in London and Bermuda, that are willing to extend coverage to meet the 
federal cap.
    If the federal liability limit were to be raised to the level 
beyond which these few insurers are willing to offer coverage, commuter 
railroads would simply not be able to obtain insurance and would 
therefore be forced to suspend operations.
    To address this possible market failure, Congress must extend the 
window, from the posting date to the effective date of any new federal 
liability limit, to a full 365 days. Doing so would allow railroads 
sufficient time to seek excess liability coverage and, barring 
availability of this coverage in the insurance market, would allow 
Congress time to act to intervene while commuter railroads continue to 
operate.
Notification to Commuter Rail Agencies for Trains Carrying Hazardous 
        Materials
    Should the House consider a similar hazardous materials 
notification requirement such as that contemplated in the Senate 
Railway Safety Act, the Commuter Rail Coalition encourages the 
inclusion of commuter rail agencies on the list of entities receiving 
advance notification of the movement of such materials across their 
property. Currently, commuter rail agencies receive no notification of 
hazardous materials being transported on their property or their 
service territory. Having advance notification would allow commuter 
rail agencies to prepare appropriate responses to any occurrence that 
may impact customers or employees.
Requirements for Equipment Intended to Prevent Wheel Bearing Failures
    The Senate bill as currently structured would require trains 
carrying hazardous materials to be scanned by hotbox detectors at a 
minimum of every 10 miles to prevent wheel bearing failures and 
possible derailments. The Commuter Rail Coalition questions the value 
of the outdated technology of wayside detectors, and, if such mandates 
are required on property owned by commuter rail agencies, the cost of 
installation and ongoing maintenance for any such wayside monitoring 
devices should be borne by freight carriers as a cost of their 
business, not by the public in the interest of their own safety.
Research through Centers of Excellence for Freight and Passenger 
        Services
    The Commuter Rail Coalition sincerely applauds congressional 
efforts to conduct critical research by creating Centers of Excellence 
to study not only improvements in operating practices, but also new 
emerging technologies that could help address the challenge of trying 
to ensure against disasters such as that which took place in Ohio. The 
Coalition strongly supports all research efforts that can help improve 
vehicle safety, to also include passenger rail vehicles. And while the 
legislation will undoubtedly be focused mainly on the transport of 
goods, especially hazardous materials, a similar focus should be 
applied to research for on-board sensors that alert train crews to 
developing mechanical failures; such advancements will benefit both 
freight and passenger railroads.
    The Commuter Rail Coalition further applauds any additional 
research on passenger car designs that can help achieve lighter weight 
vehicles with improved safety. Current passenger rail car design 
standards are outdated and need to be reviewed and updated, 
particularly in light of the positive train control technology required 
to be in place across all commuter railroads.

    Mr. Nehls. Thank you, Ms. Johnson.
    Mr. Dech, you are now recognized for 5 minutes.
    Turn on your little button.
    Well, pull the mic closer. It should turn on red. Do you 
see a little red?
    Maintenance, maintenance. Get on it.
    [Laughter.]
    [Pause.]
    Mr. Dech. Let me try this again. OK, thank you very much.
    Mr. Nehls. My apologies.
    Mr. Dech. No, no.
    Mr. Nehls. All right.
    Mr. Dech. I am sure it was my fault.

 TESTIMONY OF DAVID W. DECH, EXECUTIVE DIRECTOR, SOUTH FLORIDA 
          REGIONAL TRANSPORTATION AUTHORITY (TRI-RAIL)

    Mr. Dech. Thank you, Chairman Nehls and Congresswoman 
Foushee, for the opportunity to testify today before this 
subcommittee. My name is David Dech, and I am the executive 
director of the South Florida Regional Transportation 
Authority, and we provide commuter rail service on behalf of 
the Florida Department of Transportation, known as Tri-Rail.
    I am here today to talk about two main topics: the benefits 
that the commuter rail industry has derived from utilizing 
outside private contracted services, and some additional views 
on overall rail safety.
    But first I would like to add that the additional funding 
that we have received through the Federal formula funds and the 
new railcar replacement program, both a result of the 
Bipartisan Infrastructure Law, have provided critical 
assistance that will allow us to address important capital 
replacement needs.
    Also, we all recognize that COVID-19 has fundamentally 
changed the way we live and work, including altering commuting 
patterns. I am very pleased to report that Tri-Rail ridership 
has steadily grown over the last few years, and as of the last 
couple of weeks, we are exceeding prepandemic ridership 
numbers.
    Regarding contracted services, the South Florida 
Transportation Authority, as well as my previous employer, 
Capital Metro in Austin, Texas, rely heavily on private outside 
contractors to provide our services. I have worked with both 
bundled and unbundled or bifurcated contracts, wherein you 
contract with either a single contractor for all of your needs, 
or you split those contracts up among different companies. 
Either of these strategies can be beneficial, depending on the 
needs of the commuter rail agency.
    SFRTA has relied on outside contracting since its inception 
in 1989. These contracts are competitively procured. Outside 
contracting is particularly advantageous when standing up a 
relatively new railroad, allowing the agency to leverage the 
expertise of the private sector to roll out the service and 
maintain it while it matures. While most of the focus is on 
large operating and maintenance contracts, there are other 
opportunities for specialized competition, as well. Examples 
would be PTC maintenance, security fare collection, all the way 
to leasing of rolling stock.
    We believe that we benefit from competition. There are 
seven private contractors who offer a full range of services: 
Herzog Transit Services, Keolis, Alternate Concepts 
Incorporated, Amtrak, Bombardier/Alstom, RATPDev, and Transdev.
    This subcommittee in the near future may consider 
legislation to further improve rail safety. As a railroad 
operations executive who has served in both the freight and 
passenger worlds, I would like to offer a few observations.
    But first let me emphasize that the Commuter Rail Coalition 
supports the concepts advanced in the Senate's proposed Railway 
Safety Act legislation. Where we differ is who should bear the 
costs, and whether there are other technologies that may be 
useful. Commuter railroads are taxpayer and farebox funded, and 
we believe that the installation and operating expenses for 
wayside defect detectors or other equivalent technologies 
should be borne by the entities benefiting from such 
technology, and in this case, that would be the freight 
carriers.
    Mr. Chairman, please allow me to be clear on this point. 
The commuter rail industry fully supports the introduction of 
any technology or change in practice that will lead to improved 
rail safety. We need to ensure that these changes do not 
degrade the quality of our service, and we do have concerns of 
the potential impact of an increased number of hot box 
detectors on our service levels.
    We also fully embrace the funding of the research and 
development of new technologies that may meet or exceed the 
abilities of existing wayside defect detectors.
    Chairman Nehls and Congresswoman Foushee, I again want to 
express my thanks for the honor and the opportunity to be part 
of this process and share my experience with contract services 
and the commuter rail safety act, and I will be here to answer 
any questions that you may have. Thank you.
    [Mr. Dech's prepared statement follows:]

                                 
Prepared Statement of David W. Dech, Executive Director, South Florida 
              Regional Transportation Authority (Tri-Rail)
                              Introduction
    Thank you Chairman Nehls and Ranking Member Payne for the 
opportunity to testify today before the subcommittee. My name is Dave 
Dech and I am the Executive Director for the South Florida Regional 
Transportation Authority--the provider of commuter rail services known 
as ``Tri-Rail'' in South Florida, serving three counties--West Palm 
Beach, Broward and Miami-Dade. You have heard from my esteemed 
colleagues today on the very unique issues and challenges facing the 
commuter rail agencies across the nation. Today I wish to focus my 
remarks on two important issues: first, the benefits the commuter rail 
industry has derived from its extensive use of contracted services with 
private contract service providers, and; two, some additional views as 
an industry on strategies to improve overall rail safety, especially in 
the aftermath of the tragic derailment and fires that occurred in East 
Palestine, Ohio earlier last year.
    In addition, let me also add that the federal funding we have 
received from increased formula funds and the new rail car replacement 
program that were both the result of the Bipartisan Infrastructure Law, 
have provided critical assistance that has allowed us to address 
capital replacement challenges that have been a difficult problem for 
several years. We look forward to working with the committee to address 
a more predictable and reliable funding sources for capital replacement 
needs that the commuter rail industry desperately needs.
    During my career leading two commuter rail agencies that utilize 
private contract operators, I have gained a unique perspective on the 
benefits of contracted services. My current system, Tri-Rail, has 
contracted for all services--Train Operations, Maintenance of 
Infrastructure and Maintenance of Equipment since its inception in 
1989. My prior employer, the Capital Metropolitan Transportation 
Authority in Austin, Texas (``Capital Metro'') operates a commuter rail 
system throughout the Austin urbanized area also utilizing contracted 
services for all functions.
    At Tri-Rail, all our services have been competitively procured and 
we have contracted with several different contractors over the life of 
the agency. We have used what is commonly referred to as ``bundled'' 
and ``unbundled'' contracts, which is a format whereby agencies decide 
if they wish to have one contractor handling all aspects of service--
train operations, maintenance of rolling stock and maintenance of the 
right-of-way and facilities and other infrastructure--such as stations. 
And while most attention is focused on these larger contracts, we also 
contract for many other critical services, such as: train dispatching 
services, signals and communication, positive train control 
maintenance, station operations and maintenance, security services, to 
name a few.
    When you look across the entire commuter rail industry, you will 
find many agencies contract for direct provision of train services much 
in the way Tri-Rail does, as well as many other services. And in some 
cases, commuter rail agencies provide a mix of contracted train 
operations and maintenance as well as services that are provided 
directly by agency employees. An example of this approach is seen in 
the commuter system in Chicago, where Metra, since a 1983 
reorganization, has continued to utilize purchase-of-service agreements 
with freight rail companies--the Union Pacific and the BNSF railroad--
to provide service on three lines; the remainder of their service on 
six other lines is provided directly by Metra employees. Metra owns all 
the rolling stock and is responsible for all stations along with the 
respective municipalities.
Why Contracted Services
    The commuter rail industry has a unique history that has offered 
ample opportunity to use contracted services wherever possible. When 
Tri-Rail commenced service in 1989, thus becoming one of the first new 
start commuter rail services in the US in many years, the federal 
government strongly encouraged consideration of competitive contracting 
wherever possible in the provision of public transportation services. 
Tri-Rail saw that by contracting with a service provider, they could 
stand up a commuter rail operation in a short period of time by 
bringing in the expertise that a contractor could offer. Hiring and 
training railroad employees is a skill and process that requires unique 
expertise and acquiring that expertise through contracted services 
makes economic sense in many cases.
    And 35 years later Tri-Rail has found that through this 
relationship they can save money and benefit from the innovative 
approaches offered by a contract operator. This has allowed Tri-Rail to 
be responsive to changing demographics and ridership patterns in South 
Florida and I would say has had a hand in allowing us to continue to 
respond to growing demand in ridership, even beyond pre-pandemic 
levels.
    An examination of the commuter rail industry shows contracted 
services in more than 14 of the 32 commuter rail operations nationwide, 
including: Los Angeles (MetroLink); Virginia Railway Express; MARC; and 
many others that utilize various forms of contracted services.
    There are approximately seven private contractors offering a full 
range of contracted services, including: Herzog Transit Services, 
Keolis, Alternate Concepts, Inc., Amtrak, Bombardier/Alstom, RATPDev 
and Transdev. There have been other players offering contracted 
services to commuter rail agencies in the recent past and vehicle 
manufacturers such as Bombardier/Alstom who also offer maintenance of 
equipment services.
    The question of whether to bundle or unbundle services is one that 
each agency makes individually. Some agencies may have the in-house 
ability to perform certain functions, such as facility maintenance, 
which may provide a more economic solution than contracted services. 
Also, agencies have found that it may be of benefit to contract with 
individual contractors who offer a certain level of expertise and 
qualification in particular areas. As with all things, this unbundling 
of contracted services can require additional resources for oversight 
and coordination. Again, these are the conditions that each agency 
weighs in making this decision.
    I can say that during my experience at Tri-Rail and before in 
Austin, I have found that contracted services have provided a level of 
transparency and accountability that is key to smooth operations and 
cost controls. At Tri-Rail we believe that contracted services provide 
a level of expertise and stability with economic value that we would 
have difficulty maintaining if we provided the service directly with 
our own employees. This of course is not to say that directly-operated 
services do not have an important place in the commuter rail industry.
    Directly operated service provides direct accountability and 
greater cost transparency. Plus, there is no profit factored into the 
cost of operations and maintenance. Additionally, because contracts are 
competitively procured, there can be challenges when a new contract 
operator assumes control under a new agreement. Tri-Rail has had 
experience in the past with transitions from one contractor to another, 
and while I was not in my current position when those transitions 
occurred, what I understand is that the transitions were managed very 
effectively, mainly because Tri-Rail employees committed the required 
time and effort to assure a smooth transition.
    The bottom line is that the commuter rail industry has made 
extensive use of contracted services and has found great value in the 
expertise of contractors. We continue to explore various options and 
experiment with differing arrangements and fortunately there has been 
strong interest from long time contractors such as Herzog and Transdev, 
as well as growing interest from newer players in the market. Our 
challenge from an industry standpoint is to work with our federal, 
state and local partners to ensure that our contracting process is 
streamlined, concise and not exclusionary or overly complex so as to 
make potential contractors question the level of effort required to 
respond to our solicitations. Most contractors will tell you they often 
invest in excess of $100,000 to research, prepare and submit a proposal 
for contracted services.
    Mr. Chairman, we in the commuter rail industry believe that the 
federal government should continue to embrace contracted services 
wherever grantees believe it makes sense. Going forward we see new 
emerging opportunities to contract with entities who provide rolling 
stock and locomotives under lease arrangements and the use of federal 
grant monies for this purpose should continue to be allowed and 
encouraged. One of the greatest challenges we face is transitioning to 
cleaner and more robust equipment and in today's world where procuring 
new equipment requires long lead times, leasing with options for 
maintenance through a private contractor often makes strong economic 
sense.
Rail Safety
    This subcommittee in the near term may consider legislation to 
improve rail safety. As my colleague Debra Johnson outlined, the 
Commuter Rail Coalition supports the concepts advanced in the proposed 
Senate's Railway Safety Act legislation introduced by Senators Brown 
and Vance, and believes changes to the freight railroad's inspection 
practices are necessary to ensure the safety of the communities through 
which they travel.
    Commuter Railroads, as public entities funded by public tax 
dollars, are concerned that the costs associated with any new 
requirements for the movement of private commerce on privately-owned 
railroads should be borne by those private entities. I am of course 
addressing the mandate requiring new infrastructure or wayside 
technology, such as hotboxes and where the responsibility for the high 
cost for installing and maintaining these devices will fall. It cannot 
be overlooked that such requirements are for the freight railroads' 
sole benefit and while they often transport hazardous materials over 
trackage owned by commuter rail agencies, unfortunately commuter rail 
agencies do not derive similar benefits from these wayside detectors.
    Mr. Chairman, let me be very clear on this point. The Commuter Rail 
industry fully supports the introduction of any technology or changes 
in practices that will in any way help to improve rail safety--even in 
areas of freight movement where we have no direct input. We just want 
to assure that any solutions proposed do not in any way degrade our 
quality of service, and we do have significant concerns about the 
operating implications for the use of hot box detectors on our rail 
territory.
    As a current CEO having overseen operations at two commuter rail 
agencies and previously as an operating executive for a Class I 
railroad, I can tell you that the use of wayside detectors where there 
is passenger operations can be quite disruptive due to false positive 
readings. I have witnessed numerous occasions where a detector notifies 
a train crew of an elevated temperature reading for a particular 
journal bearing, only for it to turn out to be an inaccurate reading. 
The result is a stopped train on the right-of-way with resulting delays 
for all other trains behind it, in particular passenger trains on a 
timetable.
    The standard operating practice for all railroads that receive an 
elevated temperature reading from a wayside detector is to stop the 
train and have the on-board crew conduct a visual inspection. And if 
the specified area of the reading does not yield the discovery of a 
problem, crews are instructed to inspect the 4-5 cars before and after 
the identified car. This is a time-consuming process that can cause a 
lot of disruption for commuter operations as well as other freight and 
intercity movements.
    This is the reason for our concern over investing in a technology 
that may not have the same reliability as other new emerging sensor 
technologies. In comparison to the mandate to adopt PTC, the industry 
had many years of research completed and while the technology was being 
finalized, its performance and reliability proved to be quite strong. 
In the case of wayside detectors, the technology is known to be very 
limited, less reliable and quite expensive to install and maintain, 
especially in northern climates. Pushing forward to bring new sensor 
technologies to the market seems to be an approach that will yield 
better results from a safety standpoint, as well as less disruptive to 
operations on the corridor.
    In addition to concerns about the performance of hotbox detectors, 
we are also very concerned that if mandated in any subsequent 
legislation, the cost for acquisition will rise exponentially. Supply 
capacity for the devices is already limited due to minimal historical 
demand. The combination of significant new demand and limited supply 
will surely result in cost increases of a large magnitude. And of 
course, we are also concerned about the resulting need for additional 
maintenance and testing required by commuter agency personnel to assure 
these detectors are working properly.
    We have raised these concerns during consideration of the Senate 
bill and we are very appreciative of inclusion in their bill of a 
provision to allay some of the costs for installation. We hope to be 
able to continue the discussion as legislation moves forward that will 
yield the best results at an affordable cost.
Conclusion
    Chairman Nehls and Ranking Member Payne, I want to thank you again 
for the opportunity to discuss the experience with contracted services 
in the commuter rail industry. I also appreciate the opportunity to add 
a bit more detail to earlier testimony on rail safety.
    As my colleagues have pointed out in their testimony, commuter 
railroads face a changing landscape as our customers modify their 
travel patterns. The commuter rail industry believes contracted 
services allow us to better respond to these changing dynamics while 
controlling costs. And Congress should emphasize the importance of 
allowing commuter rail agencies to use all forms of federal assistance 
for contracted services and leasing of rolling stock.
    We really look forward to working cooperatively with you and the 
Congress to find permanent solutions to the issues discussed here 
today.

    Mr. Nehls. Thank you. I want to get it right. It's Dech, 
correct?
    Mr. Dech. I have been called much worse. Yes, Dech is 
correct.
    Mr. Nehls. All right. Thank you, Mr. Dech. I now recognize 
Mr. Corbett for 5 minutes, sir.

 TESTIMONY OF KEVIN S. CORBETT, PRESIDENT AND CHIEF EXECUTIVE 
    OFFICER, NEW JERSEY TRANSIT, ON BEHALF OF THE NORTHEAST 
                      CORRIDOR COMMISSION

    Mr. Corbett. Yes. Good morning, Chair Nehls, Ranking Member 
Larsen, and Congresswoman Foushee. Thank you for inviting me 
here to discuss the BIL and its impact not only on the 
Northeast Corridor, which serves up to 800,000 rail passengers 
every day, but on commuter railroads across the Nation.
    I'm speaking today both as cochair of the Northeast 
Corridor Commission, which I serve alongside my fellow cochair, 
FRA Administrator Amit Bose, in addition to my role as 
president and CEO of NJ Transit, the largest statewide transit 
system in the country and the third largest overall. I am also 
cofounder of the Commuter Rail Coalition, an association of 25 
commuter rail agencies acting together to engage and educate 
stakeholders on the value commuter railroads bring to the 
communities they serve.
    As some of you may remember, I testified before this 
committee in both 2021 and 2020, where I largely covered NJ 
Transit's experience implementing Positive Train Control. We at 
NJ Transit remain extremely proud of the herculean effort to 
successfully achieve PTC certification by the December 2020 
deadline, although, to be clear, significant challenges with 
PTC still persist.
    For example, there are currently more than five variations 
of PTC systems nationwide, which can create significant 
interoperability challenges. And of course, there are 
significant and ongoing costs associated with upgrades and 
maintenance of PTC going forward. NJ Transit alone has spent 
more than half a billion dollars on this unfunded mandate, and 
this figure will only continue to grow. We continue to advocate 
for creation of a more cost-effective, unified, standardized 
national system across railroads throughout the country: Call 
it PTC 2.0.
    While the implementation of PTC represents a significant 
step forward in our commitment to safety and operational 
efficiency, it also highlights the broader context of the 
challenges we face in rail transportation, stemming from 
historical underinvestment and the inherent complexities of 
balancing the needs of commuter and intercity rail service.
    For decades prior to the public takeover of rail transit, 
our country disinvested in railroad infrastructure, which left 
Amtrak and the commuter railroads with a huge hill to climb, a 
burden we still carry on today.
    Further exacerbating capital funding challenges, many 
agencies continue to face operating budget challenges, as well. 
When there is a hole in the operating budget, many transit 
agencies are forced to use capital budget dollars to fill the 
gap, an insidious practice that ultimately undermines long-term 
infrastructure resilience and growth.
    Whether our railroad network is in the hands of private- or 
public-sector operators, there is no magic wand. We cannot 
improve efficiency, reliability, and safety for our customers 
without adequate funding for both operating and capital. As 
such, I am a strong advocate for commuter rail systems to have 
access to the Consolidated Rail Infrastructure and Safety 
Improvements, CRISI, program, just as intercity rail does now, 
or a similar source of such funding.
    While the markets we serve may be different, both intercity 
and commuter rail systems have significant operating and 
capital needs. To be certain, NJ Transit supports Amtrak, and 
we have a good working relationship with them, although there 
is always a natural conflict, a tension that exists between 
intercity and commuter rail, which should not be an 
insurmountable barrier, but rather a challenge to be managed 
with strategic collaboration and open dialogue.
    Speaking more broadly about funding, BIL has been 
transformational for both commuters and intercity rail. Thanks 
to the work of Congress and the Biden administration on the 
BIL, the NEC has its first-ever source of dedicated, multiyear 
funding, providing predictability needed to more efficiently 
deliver a major capital program. This historic investment weans 
us off what I call the ``Transit Hunger Games,'' where agencies 
routinely compete against each other for constrained funding 
that is never enough to maintain even a state-of-good-repair, 
much less the ability to modernize or expand.
    In addition to the increase in formula funding for commuter 
railroads through the BIL, the FRA and FTA are awarding 
billions of additional dollars through various discretionary 
competitive grants. These grants are vitally important as we 
and other transit agencies pursue sweeping projects that are 
beyond the scope of our traditional capital budgets.
    Projects such as AI-powered safety systems with light rail 
vehicles that are currently being funded by the FTA, for 
example, where we are being able to invest in safe 
modernization and state-of-good-repair to ensure that our 
constituents get safety and service improves out of every 
dollar that we spend.
    A perfect example of what transit agencies can do when 
given necessary Federal resources is New Jersey Transit's $2 
billion Portal Bridge replacement project, which is on time, on 
budget, and 50 percent complete in just 2 years, with the first 
track scheduled to open in 2026. Portal North Bridge, as many 
of you know, is a critical single point of failure on the 
Northeast Corridor between New Jersey and New York, which is 
also a critical link between DC and Boston.
    Switching hats for a moment to my role as cochair of the 
NECC, it is important to note that the BIL provides a 
significant downpayment on Connect NEC 2037, or C37, a 15-year 
plan covering 300 projects, along with a comprehensive renewal 
program for state-of-good-repair work, including track, signal, 
and power systems. With the substantial funding from BIL, we 
now have an opportunity to utilize the FRA's Northeast Corridor 
Project Inventory effectively. This inventory is crucial, as it 
allows us to strategically prioritize projects along the NEC, 
ensuring that the investments are made where they are needed 
most to enhance safety, efficiency, and reliability along the 
whole corridor.
    As we approach reauthorization, it is vital to recognize 
that NJ Transit, like commuter rail agencies nationwide, 
continues to operate with substantial unfunded capital needs. 
For example, while we are incredibly grateful for the passage 
of BIL, this funding will not be sufficient to bridge the 
nearly $5 billion gap between funded and unfunded projects in 
our unconstrained $17 billion capital plan.
    Reauthorization presents a critical opportunity to secure 
the necessary funding to bridge this gap. For this funding to 
be effective, it must be guaranteed like the funding provided 
in BIL. The guaranteed advance appropriation that BIL provided 
was a game-changer for the Northeast Corridor and allowed 
agencies to more effectively plan their hiring, purchase 
equipment, and sign contracts.
    It is also essential to streamline funding mechanisms to 
reduce the complexity and increase the efficiency of how 
Federal funds are allocated. This also boosts confidence among 
manufacturers and contractors and other stakeholders crucial to 
our projects.
    Infrastructure has historically been a bipartisan issue in 
this country, and I am hopeful that this spirit of cooperation 
will continue through the reauthorization process, enabling us 
to tackle our significant capital needs head-on.
    [Mr. Corbett's prepared statement follows:]

                                 
 Prepared Statement of Kevin S. Corbett, President and Chief Executive 
   Officer, New Jersey Transit, on behalf of the Northeast Corridor 
                               Commission
    Good morning, Chair Nehls, Ranking Member Payne, Vice Ranking 
Member Foushee, and members of the Committee.
    Thank you for inviting me to discuss the Infrastructure Investment 
and Jobs Act, or IIJA, and its impact not only on the Northeast 
Corridor--which serves more than 800,000 rail passengers every day--but 
on commuter railroads across the nation.
    I'll be speaking today both as co-chair of the Northeast Corridor 
Commission, where I serve alongside my fellow co-chair, FRA 
Administrator Amit Bose, in addition to my role as President & CEO of 
NJ TRANSIT--the largest statewide transit system in the country, and 
the third largest overall.
    I am also a co-founder of the Commuter Rail Coalition--an 
association of 25 commuter rail agencies acting together to engage and 
educate stakeholders on the value commuter railroads bring to the 
communities they serve.
                                  PTC
    As some of you may remember, I testified before this Committee in 
both 2021 and 2020, where I largely covered NJ TRANSIT's experience 
implementing Positive Train Control.
    We at NJ TRANSIT remain extremely proud of our herculean effort to 
successfully achieve PTC certification before the December 2020 
deadline, although to be clear, significant challenges with PTC still 
persist.
    For example, there are currently more than five variations of PTC 
systems nationwide, which can create significant interoperability 
challenges.
    And, of course, there are significant and ongoing costs for the 
continuing maintenance and upgrades associated with PTC--NJ TRANSIT 
alone has spent more than half a billion dollars on this unfunded 
mandate, and this figure continues to grow.
    We continue to advocate for the creation of a more cost-effective, 
unified, standardized national system across railroads throughout the 
country--call it PTC 2.0.
                      History/``Natural Conflict''
    While the implementation of PTC represents a significant step 
forward in our commitment to safety and operational efficiency, it also 
highlights the broader context of the challenges we face in rail 
transportation, stemming from historical underinvestment and the 
inherent complexities of balancing the needs of commuter and inter-city 
rail services.
    For decades prior to the public takeover of rail transit, our 
country disinvested in railroad infrastructure, which left Amtrak and 
commuter railroads with a huge hill to climb--a burden we still bear 
today.
    Further exacerbating capital funding challenges, many agencies 
continue to face operating budget challenges, as well.
    When there's a hole in the operating budget, many transit agencies 
are forced to use capital budget dollars to fill the gap--a practice 
that ultimately undermines long-term infrastructure resilience and 
growth.
    Whether our railroad network is in the hands of the private or 
public sector, there is no magic wand--we cannot improve efficiency, 
reliability, and safety for our customers without adequate funding for 
both operating and capital.
    As such, I am a strong advocate for commuter rail systems to have 
access to the Consolidated Rail Infrastructure and Safety Improvements 
(CRISI) Program, just as inter-city rail does now--or a similar source 
of funding.
    While the markets we serve may be different, both inter-city and 
commuter rail systems have significant operating and capital needs.
    To be certain, NJ TRANSIT supports Amtrak, and we have a good 
working relationship with them--although there is always a natural 
conflict that exists, which should not be seen as an insurmountable 
barrier, but rather a challenge to be managed with strategic 
collaboration and open dialogue.
                                  IIJA
    Speaking more broadly about funding, the IIJA has been 
transformational for both commuter and inter-city rail.
    Thanks to the work of Congress and the Biden Administration on the 
IIJA, the NEC has its first-ever source of dedicated, multi-year 
funding, providing the predictability needed to efficiently deliver a 
major capital program.
    This historic investment weans us off what I call the ``Transit 
Hunger Games''--where agencies routinely compete against each other for 
constrained funding that's never enough to maintain even a state-of-
good-repair--much less the ability for modernization or expansion.
    In addition to an increase in formula funding for commuter 
railroads through the IIJA, the FRA and FTA are awarding billions of 
additional dollars through various discretionary competitive grants.
    These grants are vitally important as we, and other transit 
agencies, pursue sweeping projects that are beyond the scope of 
traditional capital budgets.
    Projects such as AI-powered safety systems on light rail vehicles 
at grade crossings to significantly enhance safety, while reducing 
accidents at light rail grade crossings and on rights-of-way and other 
new investments in safety, modernization, and state-of-good-repair--to 
ensure your constituents get safety and service improvements out of 
every dollar they spend.
    A perfect example of what transit agencies can do when given the 
necessary federal resources is NJ TRANSIT's $2 billion-dollar Portal 
Bridge Replacement Project, which is on time, on budget, and 
50%complete, with the first track scheduled to open in 2026.
    Portal North Bridge, as many of you know, is a critical single 
point of failure on the Northeast Corridor between New Jersey and New 
York, which is also a critical link between D.C. and Boston.
                          Amtrak's Impact/C37
    Switching hats for a moment to my role as co-chair of the NECC, 
it's important to note that the IIJA provides a significant down 
payment on Connect NEC 2037, or C37--a 15-year plan covering 300 
projects, along with a comprehensive renewal program for state of good 
repair work, including track, signal, and power systems.
    With the substantial funding from the IIJA, we now have the 
opportunity to utilize the FRA's Northeast Corridor Project Inventory 
effectively.
    This inventory is crucial as it allows us to strategically 
prioritize projects across the NEC, ensuring that investments are made 
where they are most needed to enhance safety, efficiency, and 
reliability along the corridor.
                            Reauthorization
    As we approach reauthorization, it's vital to recognize that NJ 
TRANSIT--like commuter rail agencies nationwide--continues to operate 
with substantial unfunded capital needs.
    For example, while we are incredibly grateful for the passage of 
the IIJA, this funding will not be sufficient to bridge the nearly $5 
billion dollar gap between funded and unfunded projects in our 
unconstrained $17 billion dollar capital plan.
    Reauthorization presents a critical opportunity to secure the 
necessary funding to bridge this gap.
    For this funding to be effective, it must be guaranteed like the 
funding provided in IIJA.
    The guaranteed advance appropriations that IIJA provided was a 
game-changer for the Northeast Corridor and allowed agencies to more 
effectively plan their hiring, purchase equipment, and sign contracts.
    It's also essential to streamline funding mechanisms to reduce the 
complexity and increase the efficiency of how federal funds are 
allocated.
    This would boost confidence among manufacturers and other 
stakeholders crucial to our projects.
    Infrastructure has historically been a bipartisan issue in this 
country, and I am hopeful that this spirit of cooperation will continue 
through the reauthorization process, enabling us to tackle our 
significant capital needs head-on.
                               Conclusion
    In the interests of time, I'll close with this: Multi-year, 
predictable funding beyond FY26 is essential to address not just the 
Northeast Corridor's state-of-good repair and improvement needs, but 
the needs of commuter railroads across the nation--this includes 
significant investments in fleet vehicles as well as facilities and 
infrastructure.
    Let me once again thank you, Chair Nehls, Ranking Member Payne, 
Vice Ranking Member Foushee, and all the committee members for giving 
me the opportunity to testify before you today.
    I invite members of the committee to visit New Jersey to see 
firsthand federal dollars at work on our Portal North Bridge project.
    Now, I'd be happy to answer any questions you may have.

    Mr. Nehls. Thank you. Thank you, Mr. Corbett.
    Mr. Corbett. In the interest of time, I will close.
    Mr. Nehls. Thank you, you were great, and we will have time 
to ask questions, but thank you so very much for your 
attention.
    I would like to briefly recognize Mrs. Napolitano, who will 
introduce our final witness, Mr. Kettle.
    Mrs. Napolitano. Thank you, Mr. Chairman. I am proud to 
welcome Mr. Darren Kettle, CEO of Metrolink, to our committee.
    Good to see you again, sir.
    Metrolink is a major transportation provider for the 
residents and businesses in my district throughout southern 
California.
    He was appointed in 2021 as Metrolink's CEO. He has more 
than 30 years of experience in effective transportation 
leadership in southern California, having worked for three of 
the five Metrolink member agencies, including my neighboring 
San Bernardino County Transportation Authority, Riverside 
County Transportation Commission, and most recently, he was 
executive director of the Ventura County Transportation 
Commission. He has overseen implementation of Positive Train 
Control and gone beyond to ensure safety in the next generation 
of locomotives.
    Mr. Kettle, thank you for being here, and thank you to all 
the witnesses for attending, and we look very much forward to 
your testimonies.
    Thank you, Mr. Chair.
    Mr. Nehls. Mr. Kettle, you are now recognized for 5 
minutes.

    TESTIMONY OF DARREN M. KETTLE, CHIEF EXECUTIVE OFFICER, 
    SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY (METROLINK)

    Mr. Kettle. Good morning, Mr. Chair. Thank you for having 
me here.
    Good morning, Ranking Member Foushee. Again, my name is 
Darren Kettle. I am the chief executive officer of Metrolink, 
southern California's six-county commuter rail system.
    As was mentioned during my introduction, I was previously 
in Ventura County. I still live in Ventura County, 60 miles 
from where my office is in downtown Los Angeles. I am not only 
the CEO of Metrolink, I am also a customer of Metrolink. I 
regularly take the train.
    Metrolink was formed three decades ago by southern 
California's transportation agencies, and operates on a 
dedicated right-of-way, as well as with active freight lines. 
Today, Metrolink has about 20,000 weekday boardings on 142 
daily trains, operating on a network of 545 route-miles.
    Before the COVID-19 pandemic, three-quarters of our riders 
held monthly passes. With today's remote and hybrid work 
schedules, commuters ride less frequently, and so, commuter 
railroads must change our business model to attract new riders. 
Two Metrolink initiatives have proven quite successful in 
boosting ridership.
    The first initiative involved increasing off-peak, evening, 
and weekend service frequencies. We call it Metrolink 
Reimagined. It has been introduced on one of our lines that 
serves Los Angeles County from Los Angeles to the Antelope 
Valley, or the high desert of Los Angeles County.
    The second initiative offers free fares to every student in 
southern California with a .edu web address. College students 
and high school students are able to take our trains for free. 
Now, nothing is free. It is State grant-funded, so, we are able 
to take care of our program and keep our farebox.
    These two initiatives boosted our overall ridership by 27 
percent on that one Metrolink line in just 4 months. And due to 
this success, we are looking forward to implementing this new 
schedule throughout our system.
    Two historic developments hold promise to permanently 
transform rail passenger service in southern California.
    First, the Olympic and Paralympic Games, which will be 
hosted by Los Angeles in 2028. Expected to attract 3 million 
spectators, the games are designated as car-free, meaning that 
parking will not be available at the venues for those sporting 
events. Southern California's transit system must be prepared 
for the unprecedented demand, and Metrolink will provide the 
regional backbone transit service to those games from the five 
urban counties of southern California.
    We have shared with the administration our multiyear 
funding needs, which include the operational surge in 2028 and 
rolling stock, maintenance facilities, and rail improvements 
throughout our system. While the Federal Government provided 
crucial transportation funding for prior U.S. games, a 
significant funding need still exists for the L.A. games, and 
the window of opportunity to complete rail projects and 
procurements is rapidly closing. We need congressional and 
administrative support to realize the promise of this 
transformative moment for public transit in southern California 
and our Nation.
    The second development is high-speed rail between Las Vegas 
and southern California. The first 200-mile-per-hour train in 
this country, it is Brightline West. Brightline West is 
planning a groundbreaking ceremony next week to start 
construction on that high-speed rail line. Metrolink presently 
operates a station on the exact same footprint of where the 
Brightline's last station stop will be in Rancho Cucamonga in 
San Bernardino County. We have coordinated with Brightline West 
to ensure that our schedules match up with theirs to ensure a 
seamless connection for travelers on both systems.
    By attracting those currently traveling by air or by 
highway, high-speed rail can significantly boost passenger rail 
use throughout southern California. My colleague, Dave Dech of 
Tri-Rail, addressed the importance of private-sector partners 
in efficiently delivering commuter rail service. Metrolink also 
operates on a contracting business model, enabling us to 
efficiently ramp up our future operations and maintenance 
temporarily for L.A. 2028 and those Olympic Games, but also the 
longer term connections for high-speed rail.
    Finally, I would also like to echo the testimony of Debra 
Johnson of the Denver Regional Transportation District, urging 
that commuter rail be granted full eligibility for the CRISI 
grant program currently restricted to projects that benefit 
intercity and freight rail. Distinctions in Federal statute 
between intercity and commuter rail appear increasingly 
outmoded, and we join the Commuter Rail Coalition in urging 
reform to the CRISI program.
    Chairman Nehls, Ranking Member Foushee, and subcommittee 
members, thank you for the opportunity to testify today. I look 
forward to working with you and your staff in delivering the 
vision of transforming passenger rail service in southern 
California. Thank you, Mr. Chair.
    [Mr. Kettle's prepared statement follows:]

                                 
   Prepared Statement of Darren M. Kettle, Chief Executive Officer, 
        Southern California Regional Rail Authority (Metrolink)
    Thank you, Chairman Nehls, Ranking Member Payne, and members of the 
subcommittee, for the invitation to testify today on the many 
opportunities and challenges facing our nation's commuter railroads. My 
name is Darren Kettle, Chief Executive Officer of Metrolink in Southern 
California. I appreciate the opportunity to provide Metrolink's 
perspective as operator of the third-largest commuter rail system in 
the country and the largest in California.
    Metrolink began service in October 1992 and was established to 
provide Southern California with safe, efficient, dependable rail 
transportation service while offering an outstanding customer 
experience, reducing emissions and fostering economic vitality by 
connecting jobs and housing in a traditionally car-centric region. 
Today, Metrolink is constituted as a joint powers authority under 
California law and governed by an 11-member Board of Directors 
representing the county transportation agencies in Los Angeles, Orange, 
Riverside, San Bernardino and Ventura counties. Metrolink's 545 route 
mile system also extends into the northern portion of San Diego County.
    As you know, Southern California is a region with some of the most 
congested highways in the nation. The population of the six Southern 
California counties served by Metrolink is now 21.5 million people, 
more than half of California's total population. For those commuting to 
work, Metrolink provides the freedom to live in almost any portion of 
the region with the option to hop on one of our trains to get to work 
or school and to travel to the region's rich entertainment and cultural 
destinations. We connect multiple commercial markets, along with urban 
and rural areas, to major job centers all over Southern California--the 
largest of which is downtown Los Angeles where most of our lines 
converge at historic Los Angeles Union Station.
                       Opportunities & Challenges
Transition to Regional Rail
    The COVID-19 pandemic fundamentally altered the commute patterns of 
many of America's workers. While this has impacted all modes of transit 
across the country, none more so than commuter rail. Before the 
pandemic, roughly three-fourths of Metrolink's riders held 22-day 
monthly passes. The size of this market has plummeted significantly. 
Full-time or hybrid remote workers have forced commuter railroads to 
evolve to attract new riders.
    For the last 30 years, Metrolink has operated service focused on 
these commuters, offering peak service in the morning to primary job 
centers such as downtown Los Angeles and Orange County and then 
returning in the evening, centered around traditional white-collar 
office schedules. Today, remote work and hybrid work schedules remain 
common, and the white-collar commuter customer group--Metrolink's 
historic core market--may never fully ride in the same patterns or 
frequencies as they did before the pandemic.
    In early 2022, Metrolink began to work on the development of a new 
optimized service plan to increase off-peak service levels and support 
our transformation from a commuter rail model to a regional rail model. 
We started on the path of determining how to serve a broader set of 
markets such as leisure travelers and non-office commuters, while 
operating more cost-effective service by optimizing crews and equipment 
and operating more train miles with fewer train sets.
    We have had time to observe changed travel patterns and welcome 
some riders back to our system. While peak commuter period ridership 
remains below pre-pandemic ridership levels, off-peak ridership has 
returned more strongly. We see this on our weekend ridership and off-
peak trains; there is an unmet demand for midday service and desire for 
travel across multiple lines. Presently, Metrolink operates a total of 
142 trains across all our line segments that are primarily focused on 
peak periods. The recommended schedule to transform our system to a 
regional rail model would increase service by 36 trains, with 178 total 
trains operating in the system, and would spread service across the day 
and into the evening. The schedule would promote transfer opportunities 
through ``pulse'' scheduling across lines, providing a more competitive 
travel time when compared to driving.
    We have started to implement this first phase of systemwide service 
optimization starting with our Antelope Valley Line, which provides 
service from northern Los Angeles County, through the San Fernando 
Valley and downtown Los Angeles. In October 2023, we implemented a 58% 
increase in revenue train-miles with most of the new service added 
during non-commuter hours and doubling weekend service. During this 
time, we also launched a pilot student pass program using funds 
provided from a State of California grant program that allows all 
students to ride at no cost.
    For the four months following the expansion of service on the 
Antelope Valley Line, total ridership increased by 27% compared to the 
same period of the prior year, with students accounting for half of the 
new ridership. We expect to see further increases long-term, but the 
short-term results are promising. We believe that a full roll out of 
optimized service with pulse scheduling and distribution of trains to 
cover non-peak times will be a successful model and transform the 
transportation landscape for Southern California.
    In addition to the promising ridership returns of this expanded 
model, we recognize there are two opportunities in the coming years 
that hold the potential to provide permanent, transformative impacts to 
passenger rail transportation in Southern California for the 21st 
century. These are the 2028 Olympic and Paralympic Games, which will be 
held in multiple venues throughout the Southern California region, and 
the introduction of high-speed rail passenger service--the nation's 
first, true high-speed service--connecting Las Vegas to Southern 
California, also scheduled to commence in 2028. I would like to briefly 
explain Metrolink's critical role in the success of each.
Olympics
    The 2028 Olympic Games are a once in a generation opportunity to 
welcome the world to the United States to celebrate our shared humanity 
through sports competition. Los Angeles has hosted two successful 
Olympic Games in the past, but this will be the first ``car-free'' 
Olympics to be held in the United States, where spectators and 
participants will not be provided parking at sports venues. With an 
estimated 3 million people from around the country and the world 
expected to attend and support these Games, the public transit system 
of the region must be improved and prepared to accommodate that 
expected demand. Metrolink's service will provide the regional backbone 
of public transit service, connecting people across five counties to 
first and last mile connections to reach venues across Southern 
California.
    Building off the foundation of an optimized schedule and in 
anticipation for hosting the world as part of the Olympics in 2028, 
Metrolink is also preparing its entire Southern California rail network 
to operate more frequent service in all directions. This effort to 
improve service through capital investment is part of a more than $10 
billion Metrolink capital improvement initiative called the Southern 
California Optimized Rail Expansion (SCORE) program. Metrolink has 
secured more than $2.5 billion in state, local and some federal funds 
to improve capacity by adding new track sidings, grade crossing 
improvements, station upgrades, and by revitalizing our fleet. The goal 
is to improve our railroad system to accommodate two trains per hour in 
both directions of travel on core lines and one train per hour on all 
other lines. Such improvements are necessary to accommodate a sizable 
portion of regional travel during the Games period in 2028 and to 
provide a legacy for the growth of Southern California passenger rail 
capacity beyond the Games. Metrolink is on track to complete a first 
tier of service improvements before the Games but requires additional 
funding for several key projects to round out the program of 
investments. Particularly, there is a need to complete the 
rehabilitation or replacement of the oldest and most polluting models 
in our 55-locomotive fleet. Funds are needed to replace Tier 2 
locomotives with the cleanest burning and more reliable EPA-certified 
Tier 4 locomotives, which offer significant reductions in smog-
producing emissions and diesel particulates, a key public health goal 
in Southern California which far too often ranks as the most polluted 
air basin in the nation. We also need federal funds to enhance the 
capacities of our facilities to maintain those locomotives as well as 
our coach and cab car fleet. Furthermore, Metrolink seeks to secure 
agreements with Class I railroads to operate passenger service more 
frequently during the Games periods and explore ways to leverage that 
experience to support more long-term growth.
    We have identified, and shared with the Biden Administration, 
Metrolink's specific multi-year funding needs for rolling stock, 
maintenance and capital projects, and operational surge. These needs 
include additional leased or rehabbed trainsets consisting of up to 13 
locomotives and 78 railcars; expansion of our shop/yard maintenance 
facilities; relocated station platforms along a key capacity chokepoint 
located between Los Angeles and Anaheim, and an operational surge 
supplement to ramp up for the Games. In total these costs are estimated 
at $651.9 million over three fiscal years leading to the 2028 Games.
    In prior U.S. Olympics, including most recently in Atlanta and Salt 
Lake City, the federal government provided significant transportation 
infrastructure funding to supplement local investment in providing 
transportation for the Games. To date, no such investment has been made 
for the 2028 Games which will be ``car-free''. The window of 
opportunity to complete rail infrastructure projects and rolling stock 
procurements is rapidly closing and attention to the transit needs of 
the Games is needed from Congress and the Administration. While the 
Games are hosted by cities worldwide, it is the national government 
which typically takes the lead in providing robust transportation 
funding and security coordination for the Olympic Games. It is 
important that the U.S. government step up to provide this assistance 
to ensure that America again provides an Olympic Games experience that 
the rest of the world can aspire to, with legacy benefits to residents 
and visitors for decades to come.
    The benefits of investing in passenger rail are well-documented, 
saving time and expense and improving safety for travelers, enhancing 
economic activity while also alleviating the need for investments in 
highway systems. Investment also reduces greenhouse gas emissions and 
increases independence from imported fuels. According to the American 
Public Transportation Association, investment in transit can yield 
49,700 jobs per $1 billion invested and offers a 5 to 1 economic 
return.
Brightline West
    The other truly transformational passenger rail transportation 
opportunity on the near-term horizon in Southern California is high 
speed rail service between our region and Las Vegas. In December 2023, 
the U.S. Department of Transportation awarded $3 billion in grant funds 
to Brightline West to construct a privately owned and operated 
electrified high-speed passenger railroad between Southern California 
and Las Vegas. The fully grade-separated line will operate primarily 
within the right of way along Interstate 15 between Las Vegas and 
Rancho Cucamonga--where Metrolink currently operates a station. Design 
coordination at the Rancho Cucamonga Station is ongoing between 
Brightline West and Metrolink staff and is intended to facilitate 
passenger transfers between high-speed rail and our commuter railroad 
for a seamless passenger connection. We have also agreed that the 
service schedule for Brightline West trains and Metrolink's San 
Bernardino Line trains will be on an hourly, pulsed schedule, providing 
a customer-friendly schedule that is intuitive and reliable.
    I am pleased to report that our partnership with Brightline West 
has been outstanding and, going forward, we believe that we will 
connect our services efficiently with sufficient capacity to provide an 
attractive, viable alternative to the millions of people who annually 
travel between Las Vegas and Southern California by car and airplane. 
The advent of this service holds the promise to truly transform 
passenger rail in the region.
    It also underscores another topic I would like to touch on that my 
colleague, Dave Dech of Tri-Rail in Florida, addressed in his 
testimony, and that is our work in partnership with the private sector. 
Metrolink, like Tri-Rail, operates on a contracting business model 
where most of the maintenance and operations of the railroad are 
contracted with private sector partners in the rail industry. We 
utilize the services of many, if not most, of the same rail industry 
partners that Dave mentions in his testimony. Metrolink has operated on 
this model since the beginning, and we have found that it is flexible, 
efficient, and responsive to the needs of our railroad in a rapidly 
evolving economy and passenger service market. A contracting model of 
operations and maintenance will help us ramp up our service temporarily 
in preparation for the Olympics and permanently with the advent of 
high-speed rail service. We value our partnership with our private 
sector partners, whether it is to help operate the railroad or 
transform connectivity from our region to Las Vegas.
Retirement of Polluting Fleet
    As I previously mentioned, Metrolink has made a concerted effort to 
replace older, more polluting locomotives with the cleanest operating 
models certified as Tier 4 by the U.S. Environmental Protection Agency. 
Metrolink's acquisition of 40 Tier 4 locomotives, among the largest 
fleet of Tier 4s in the nation, allowed Metrolink to decommission all 
its remaining Tier 0 locomotives in March 2020. This decommissioning 
was required as a condition of state grant funds provided to purchase 
the new Tier 4 locomotives. Older locomotives that are replaced are 
required to have their engines destroyed or rendered unusable to 
improve regional air quality and reduce localized impacts to 
communities near maintenance facilities. However, Metrolink's 
retirement of two locomotives occurred after about 18 years of service, 
before the end of their useful life expectation of 25 years under 
Federal Transit Administration regulation. Due to this early 
retirement, Metrolink has been required to repay to the FTA the 
remaining federal interest in the equipment, for a total repayment 
amount of nearly $1.3 million. If the remaining Tier 2 locomotives we 
are seeking funds to replace are retired, we estimate that Metrolink 
will be required to repay another $3 million to $3.5 million. This FTA 
repayment requirement unfairly penalizes agencies like Metrolink 
seeking to replace polluting locomotives in an air basin as polluted as 
Southern California's, a laudable public policy goal. We urge Congress 
to require the repayment be waived when locomotives are retired earlier 
than allowed by FTA regulation in a federally recognized pollutant non-
attainment air basin.
Funding--Full Eligibility for CRISI
    Finally, I would like to reiterate and amplify the testimony of 
Debra Johnson of the Denver Regional Transportation District regarding 
full eligibility of commuter rail for the Consolidated Rail 
Infrastructure and Safety Improvements (CRISI) grant program. CRISI was 
first authorized in the Fixing America's Surface Transportation (FAST) 
Act of 2015. The program consolidated five existing FRA funding 
programs into one safety and infrastructure funding source. Despite 
being administered by the FRA, project eligibility is limited to 
intercity and freight rail corridors, and commuter rail-specific 
corridors are not eligible. Due to this limitation, much of the 
Metrolink railroad network does not qualify to receive program funding.
    To ensure the safety and resilience of rail corridors for regional 
passenger rail service, we urge Congress to consider including full 
eligibility for commuter and regional rail corridors, rolling stock 
procurements, and rehabilitation to be eligible for CRISI program 
funding.
Conclusion
    In my role as Chief Executive Officer, I am committed to ensuring 
Metrolink delivers the safest and most convenient passenger rail 
service possible. With improved customer service, increased frequency 
and reliability, and a paramount commitment to passenger safety, 
commuter rail will become an even more compelling alternative to our 
nation's most congested roadways. I invite members of this Committee to 
visit us in Southern California to see Metrolink's commitment in 
action.
    The future for our industry depends on an integrated transportation 
system that connects all modes with one another in a system that offers 
a seamless experience to passengers. In our region and across the 
country in metropolitan areas, this begins with commuter rail. We are 
modernizing our business practices and delivering services for future 
generations. To achieve these goals, we need robust federal support.
    Chairman Nehls, Ranking Member Payne and Subcommittee Members, 
thank you for the opportunity to testify before you today. I look 
forward to working with you as we deliver on the vision of 
transformative commuter rail service across the nation.

    Mr. Nehls. Thank you, Mr. Kettle.
    I ask unanimous consent to enter into the record a letter 
from the American Short Line and Regional Railroad Association 
dated April 17, 2024.
    Without objection, so ordered.
    [The information follows:]

                                 
 Statement of Chuck Baker, President, American Short Line and Regional 
  Railroad Association, Submitted for the Record by Hon. Troy E. Nehls
                              Introduction
    As president of the American Short Line and Regional Railroad 
Association (ASLRRA), the trade association that represents the more 
than 600 Class II and III freight railroads (commonly known as short 
line railroads or short lines) and hundreds of suppliers that support 
the country's short line freight rail economy, I appreciate the 
opportunity to provide a statement for the record for this hearing.
    The short line industry is a great American success story, and 
short lines are tremendously proud of their vital role in the country's 
economy and their work creating jobs in each of your states.
    The topic of this hearing is the commuter rail industry, and we 
recognize the important role held by our friends in the commuter rail 
space. Our worlds overlap to some extent; we share some of the same 
track and technology, especially in densely-populated regions where 
commuter rail plays an important role in getting people to and from 
work, home, school and other critical destinations--sometimes alongside 
short line trains hauling important goods and freight to and from 
market.
    We recognize that the commuter rail industry faces numerous 
economic challenges, especially after the Covid pandemic disrupted and 
re-arranged once-certain commuting patterns for tens of millions of 
Americans. Due to the upheaval and continuing uncertainty facing 
commuter rail farebox revenue and overall financing, we understand many 
commuter rail agencies are now seeking new economic lifelines. We stand 
ready to work with Congress and all stakeholders in the rail space to 
ensure the health of our commuter rail partners. Short line railroads, 
however, also face economic headwinds due to years of deferred 
maintenance that come with inheriting worn-out track and aging 
structures. With surface transportation reauthorization on the horizon, 
it is imperative that Congress recognize that any solution to help 
commuter railroads not come at the expense of the short line freight 
rail network. Congress should support the programs, policies and 
resources that allow small railroads to upgrade their infrastructure to 
modern standards and good condition and to serve thousands of customers 
and communities in a safe, reliable, economically efficient, and 
environmentally friendly manner.
                  The Short Line Freight Rail Industry
    Short line freight railroads are a vital part of the country's rail 
economy. Our members are critical links in the nation's freight supply 
chain, and all are vital engines of economic activity. Together, our 
members are tied to 478,000 jobs nationwide, $26.1 billion in labor 
income and $56.2 billion in economic value-add--providing a service 
that more than 10,000 businesses nationwide rely upon to get goods and 
products to market.\1\ Short line railroads are particularly essential 
to the provision of first- and last-mile service to shippers, typically 
serving as the first and final link between suppliers and customers. 
Our members provide this connection in many key industries critical to 
our country's economic health, including the manufacturing, 
agricultural, mining, energy and chemical sectors. For large areas of 
rural and small-town America, short lines are the only connection to 
the national rail network.
---------------------------------------------------------------------------
    \1\ The Section 45G Tax Credit and the Economic Contribution of the 
Short Line Railroad Industry, prepared by PWC for ASLRRA (2018).
---------------------------------------------------------------------------
    Short lines are an environmental success story. Just as commuter 
railroads can take cars off the road, reducing greenhouse gas 
emissions, short line railroads are environmental stewards. They 
provide a sustainable, low-carbon freight logistics option that is more 
environmentally friendly than competing forms of surface 
transportation. Short line service keeps 31.8 million heavy trucks off 
highways and public roads--preventing costly wear and tear on pavement, 
relieving traffic congestion, cutting the emissions of harmful criteria 
pollutants and reducing deadly crashes.
    Short line railroads face economic challenges from inheriting old, 
outdated track. As this panel knows well, the short line industry was 
spurred to new life in the early 1980s when smart deregulatory action 
by Congress allowed larger, Class I railroads to spin off moribund 
track. Short line railroads acquired and revived these marginal lines, 
turning them over time into thriving enterprises while preserving 
freight rail service for thousands of customers and employees. But even 
after decades of investment by short line railroads in upgrading track 
and structures--often a third to 40 percent of annual revenue--the 
backlog of repairs still looms large. Our industry estimates more than 
$12 billion is still needed to allow short line railroads to fully 
modernize and meet the country's freight needs.\2\ This number is 
likely higher still, considering the hard-hitting impact of inflation 
on construction costs in recent years and emergent needs for investment 
by short lines in their locomotive fleets.
---------------------------------------------------------------------------
    \2\ PWC report.
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    Competitive federal grants are critical for strengthening the short 
line rail network. In 2015, Congress recognized the significant 
rebuilding needs of the rail industry and acted, creating the 
Consolidated Rail Infrastructure and Safety Improvements (CRISI) 
program. Congress was aware at the time of challenges that even then 
faced the commuter rail industry but nonetheless explicitly chose to 
exclude them from eligibility for this program. Lawmakers limited CRISI 
funding eligibility to projects on intercity passenger rail lines, such 
as those operated by Amtrak, and to freight rail projects and 
specifically to projects on Class II and Class III short line 
railroads. The effects of this wise policy choice can be seen at short 
line railroads and customers nationwide and in the short line freight 
rail network. Since the first CRISI grants were awarded in 2017, short 
lines have used CRISI resources to replace track and crossties, add and 
extend sidings, rehabilitate bridges, improve drainage and roadbeds, 
and upgrade lines to handle industry-standard 286,000-pound railcars, 
ensuring national network interoperability. CRISI has allowed short 
lines to provide more service, eliminate bottlenecks, and reduce 
congestion--and most importantly, improve safety, as upgrading track 
helps prevent the top causes of derailments on short lines: old, worn-
out rail, poor crosstie condition, and deficiencies in roadbed and 
drainage. Because of the conditions faced by short lines, and the 
nature of their service areas, a small CRISI investment can be 
transformational to a railroad's operations and the safety and quality 
of service to shippers.
    Rural and urban economies have thrived because of CRISI. Fiscal 
Year 2022's appropriations law brought the first full year of IIJA's 
implementation and, with it, new and significant investments in short 
line freight rail projects. The Federal Railroad Administration (FRA) 
selected 47 projects that were advanced by short line railroads or 
short line partners. These projects are found in 36 states. All have 
helped improve safety, strengthen network efficiency for shippers, 
further minimize short line rail's environmental footprint, and create 
new jobs. The next round of IIJA-spurred funding (covering Fiscal Years 
2023 and 2024) is now available for competition. Short lines are 
inspired and confident in their ongoing ability to put forward smart, 
resourceful and competitive grant applications that will bolster the 
country's freight rail backbone.
             Ill-Conceived Efforts To Alter and Upend CRISI
    CRISI's demonstrated ability to bolster the freight rail network 
should be protected. Altogether, 48 states have received CRISI awards 
since the program's inception. With challenges facing the commuter rail 
industry--as evidenced by testimony presented for this hearing--some 
are proposing a dramatic undoing of the successful path forged by 
CRISI. Some have suggested expanding eligibility within CRISI to allow 
funding for commuter rail projects. Any such effort to loosen or expand 
CRISI to include a whole other sector of rail would be a dire and 
drastic mistake. CRISI is the only competitive grant program for which 
short line railroads are directly eligible. Despite the continued 
strength and quality of short line projects, adding another mouth--or 
dozens of them--at the table could swallow the entire program. This 
would snuff out small railroad projects, despite the continued strength 
and quality of short line projects. Throwing out the current structure 
in favor of commuter rail would counter well-thought, deliberative 
Congressional intent reflected in two successive surface transportation 
reauthorization bills (both the FAST Act and IIJA) to use CRISI to help 
rebuild our freight rail network instead of focusing on regional 
commuter rail programs. This uncertainty and upheaval could be 
calamitous to the short line freight rail ecosystem.
    Vast resources are already available to commuter railroads. 
Congress has already wisely provided for commuter rail in substantial, 
well-established, and dedicated funding programs. Commuter railroads 
can avail themselves of many large-scale competitive grant programs 
provided with massive funds by IIJA. For instance, commuter entities 
are eligible for department-wide competitive grant programs, like Mega 
and RAISE, and programs through the Federal Transit Administration 
(FTA) like the Capital Investment Grants (CIG) program. Commuter 
railroads are recipients of funding from major pots of formula funds, 
like the impressively funded Urbanized Area Formula Grants program. 
Commuter railroads that share lines with intercity passenger rail--
especially those along the Northeast Corridor (NEC)--can and have 
benefited in recent years from the enormously funded new programs in 
IIJA to expand passenger rail service. Commuter railroads can also 
avail themselves of Congressionally directed spending unavailable to 
most short lines. Commuter properties are eligible for major federal 
loan programs like TIFIA and RRIF and have state, local and farebox 
revenue, too. Lastly, those seeking to throw out CRISI in favor of a 
new, untested framework are doing so on the heels of massive infusion 
of resources in several Covid relief packages in 2020 and 2021.
    Congress should consider the creation of new resources and 
programs, not raiding existing ones. If current resources are 
insufficient and Congress wants to explore new pathways for investing 
in commuter rail, we will not stand in the way of such a worthwhile 
discussion. Many commuter rail operating models are facing new economic 
pressures and significant reductions and changes in demand for their 
services. This is not a challenge to be addressed by attempting to 
temporarily paper over the situation with CRISI funds. In practice, 
this funding is not necessarily being sought for capital purposes, but 
rather to provide financial flexibility to try to fill in unexpected 
operating deficits. Lawmakers should carefully evaluate how to use or 
bolster the existing tools they have in the established transit funding 
toolkit. Congress needs to determine, with a long-term view, the 
federal objectives that are realistic and appropriate to be attained 
with federal resources in the commuter rail space given changed 
circumstances in recent years.
    Short line railroads do not seek to deplete commuter rail 
resources. We in the short line rail community are currently urging 
Congress to consider authorizing new resources for small railroads 
impacted by an increasingly devastating number of natural disasters. We 
appreciate the robust bipartisanship evidenced by the members of this 
panel who have endorsed important legislation proposed by Rep. Byron 
Donalds (R-FL), the Short Line Railroad Relief Act (H.R. 3782), now 
before the committee. An authorization for commuter and transit 
entities to receive emergency funds already exists and has been used to 
provide tens of millions of dollars for commuter rail agencies, which 
we do not question nor want to change. We encourage our friends in the 
commuter space, rather, to consider modeling their effort on ours--
seeking new authorization and appropriations as necessary instead of 
upending current successful and time-tested USDOT endeavors.
    Finally, more resources will be needed by short lines to face new 
challenges since CRISI's creation. Earlier this year, a new rule went 
on the books in California that threatens to impose drastic new 
financial obligations on short line railroads. The agency implementing 
the rule, the California Air Resources Board (CARB), even admits some 
short lines ``would be eliminated'' due to ``the costs of the Proposed 
Regulation'' (emphasis added).\3\ Should this rule stand (and even 
worse proliferate nationwide) and California be granted the 
inappropriate authorization that it has requested from the EPA, short 
lines would require ever more resources to ensure they can make 
unexpected, massive investments in locomotives, while simply trying to 
keep their business afloat. We calculate that this rule could force 
California short lines to try to make nearly half a billion dollars in 
motive power fleet investments over only a few years. That would be a 
step change by multiple orders of magnitude above historical short line 
locomotive capital investment levels. We expect the next round of the 
CRISI program will see several applications for funding for locomotive 
projects from California short lines as they attempt to respond to this 
huge and problematic unfunded mandate. Having more entities eligible to 
receive CRISI moneys, such as commuter rail, could push already 
endangered short lines in California--and those states that could mimic 
California's emissions rule--ever close to the brink of bankruptcy.
---------------------------------------------------------------------------
    \3\ State of California Air Resources Board. Proposed In-Use 
Locomotive Regulation Standardized Regulatory Impact Assessment. Page 
143. May 26, 2022.
---------------------------------------------------------------------------
                               Conclusion
    ASLRRA appreciates the committee's close attention to the items we 
have noted in our statement, and we welcome future opportunities to 
work together on these matters.

    Mr. Nehls. Thank you all for being here and your testimony. 
We will now turn to questions from the panel, and I will 
recognize myself for 5 minutes.
    First question, Mr. Noland, Amtrak asserts that it has a 
right of track preference over the commuter lines. How does 
Amtrak's use of commuter lines impact commuter rail services?
    Mr. Noland. Well, if we have built, which we just did, a 
$650 million project to really build up our own commuter 
system, we have got schedules that are based upon the 
infrastructure we have built, we also have a freight partner 
that uses that line. If Amtrak shifts their current service 
onto our line, that will use up capacity.
    And so, we need to have the ability to have a fair arm's-
length negotiation if Amtrak is going to come to our line and 
not simply--and they have not said this, but they have the 
power to say, ``Thank you for negotiating, but we have the 
right to enter your line. And if we do come on your line, all 
we have to pay you is the incremental cost to be there.'' For 
us, that seems to be an inequitable circumstance, and we would 
suggest that that needs to be balanced with fair and reasonable 
adjudication if we can't reach an agreement.
    Mr. Nehls. Sure. Mr. Corbett, do you have any thoughts?
    Mr. Corbett. Yes. I think, for us, we have a good 
relationship with Amtrak, but that Amtrak preference does 
have--if there is a train coming hours late on Amtrak, for us, 
we are operating 20-plus trains on the Northeast Corridor, 
particularly at rush hour, so, we have to wait until that train 
comes through. That can hold up 1,000 people on each one of our 
trains.
    I think the key for us is to be part of the dispatching. We 
can live with Amtrak preference if we are part of the 
dispatching, which currently we are not.
    Mr. Nehls. Sure. And Mr. Noland, at a recent subcommittee 
hearing, NTSB Chair Jennifer Homendy expressed the need to 
eliminate the redtape and better communicate with communities 
to improve grade crossing safety. How might FRA improve 
communication and streamline the application process and grant 
distribution with regards to the Rail Crossing Elimination 
program?
    Mr. Noland. Well, I think everybody on this panel would 
agree that wherever we can eliminate a grade crossing, that is 
a good result.
    We talked about Positive Train Control. It is a great 
system. We invested $4 billion-plus into it. It saves lives, it 
makes a safer system. But if we collectively look at the 
injuries and deaths at grade crossings across the country, it 
pales in comparison to what PTC is doing for us. So, we are big 
advocates, and anything that we can do to make access to those 
funds simpler and easier, we support that.
    Mr. Nehls. I agree with that, and that is where the lives 
are lost, the injuries are taking place. I think there is about 
$500 million, if I am correct, in that program. I believe that 
there should be more robust funding into that area, without 
question.
    Ms. Johnson, RTD-Denver has applied for Federal loans and 
grants for rail improvement projects in the past. What has been 
RTD-Denver's experience in these application processes?
    Ms. Johnson. Thank you, Mr. Chairman. Our experience has 
been one that has been slightly cumbersome in the sense of 
trying to understand fully the rules of engagement. We have 
leveraged opportunities by partnering with other jurisdictions 
when we have taken advantage of the opportunities to 
rehabilitate our Denver Union Station nearly 12 years ago.
    And so, as we go forward, basically understanding more in a 
straightforward manner would be advantageous for us to take 
advantage of programs more holistically.
    Mr. Nehls. Yes. This one here, I guess, again for Mr. 
Noland, but anybody can.
    You touch upon it in your opening statement. We talked 
about the issues commuter rail faces with regard to the excess 
liability insurance and the 30-day window to obtain the 
insurance. You are asking for that 1 year, that 365. Do you 
want to just add a little bit more, and then maybe we have a 
second or two for some of the others?
    So, if you want to, Mr. Noland, if you want to touch upon 
it one more time, or----
    Mr. Noland [interrupting]. Sure. The excess liability 
insurance market is all foreign. So, we are not buying here in 
the United States. This is not Buy America. We are going to 
London, and we are going to Bermuda.
    The prices have skyrocketed, and the market capacity is 
shrinking. And I think anybody who has followed the news has 
seen that in homeowners or car situations, the insurance is 
getting more costly and less available. And we are seeing that 
in the excess insurance market. There is approximately $400 
million of rail excess market available worldwide. And when the 
act is adjusted, when the amount in the cap goes up, we are 
going to have difficulty placing that coverage.
    Mr. Nehls. Mr. Kettle, do you have any comments on that, or 
any point?
    Mr. Kettle. I would just echo what Mr. Noland said. When 
the increase occurs in 2026, that is when we get real anxious. 
For now we are stable; 2026 is an entirely different question.
    Mr. Nehls. Yes, it has my attention. And hopefully the 
members of this subcommittee, we are going to continue to look 
into that, because you should be able to buy that insurance 
here someplace in the United States.
    All right, I will now recognize Mrs. Foushee for 5 minutes.
    Mrs. Foushee. Thank you, Mr. Chairman. And thank you again 
to the witnesses for your testimonies today. This question is 
for any or all of you: Do your contract partners work with rail 
unions?
    Mr. Dech. So, I can address that. Yes, our outside 
contractor in south Florida, we do deal with the--we are 
organized labor both on the transportation dispatching and on 
the maintenance of equipment side, as well as maintenance of 
way. So, yes, ma'am.
    Ms. Johnson. Mrs. Foushee, Debra Johnson, once again. We 
are part of a concessionaire agreement. And in reference to the 
employees that they have, their signalmen are unionized, but 
the conductors and engineers are not.
    Mr. Noland. On the South Shore Line, we directly provide 
service. We have 300-plus employees who are with five different 
national rail unions. We are right now in negotiations, so, we 
are no different, really, than a Class I or other commuter 
properties that directly provide service. So, yes, we have 
union employees.
    Mrs. Foushee. Thank you. The next question is for Mr. 
Corbett.
    Mr. Corbett. For us we have 12,000 employees, 10,000 which 
are unionized overall. Our rail is fully unionized directly for 
us. Our light rail is contracted out, but they are also fully 
unionized.
    Mr. Kettle. And just lastly--again, Darren Kettle, CEO of 
Metrolink--our engineers and conductors are Amtrak contractors. 
And in that fashion, they are represented.
    Mrs. Foushee. Thank you. The next question is for Mr. 
Corbett.
    Should other regions of the country have similar regional 
commissions to the Northeast Corridor Commission?
    And if so, what would be the benefits of that?
    Mr. Corbett. Thank you. I think we have seen it be very 
beneficial. It has been a growth curve, a learning curve since 
the commission was created, but we really see that now, 
particularly with the funding, we are able to prioritize and 
cooperate and work collaboratively with Amtrak.
    Sometimes there is a tension. When it was all the 
Pennsylvania Railroad, intercity and commuter rail even within 
one company, that is a natural tension. But we worked that out. 
And I think the success and the progress we have made at the 
Northeast Corridor Commission would be a good role model for 
some other regions, as well, yes.
    Mrs. Foushee. Mr. Dech, do you think the flexibility in the 
Senate version of the Railway Safety Act that allows railroads 
to submit a plan to the Federal Railroad Administration for 
alternate technology options for hot box detectors gets to your 
concern on what alternative technologies there might be to hot 
box detectors?
    Mr. Dech. I think that is a good start. There are 
technologies out that are available that, like, I personally--
our agency isn't big enough to kind of leverage those--put that 
R&D in. But I know some of the Class I's have been dabbling for 
quite some time. And I know there is some grant money out there 
for research and development because there are ways that we can 
leverage different technology, even existing technologies such 
as using fiber optic lines that are along the railroads.
    With advances in machine learning, you have the possibility 
to map the acoustic footprint of what is a healthy bearing. So, 
over time, with enough research, you should be able to map that 
out and then be able to pick out an overheating or 
malfunctioning bearing, which would be far more effective than 
waiting every 10, 15, 20 miles.
    Mrs. Foushee. In a March 2023 press release, the 
Association of American Railroads stated that they would 
immediately install 1,000 additional hot box detectors every 15 
miles. What are your thoughts on why they would say that if the 
technology is obsolete?
    Mr. Dech. The technology is there. It is a sure-fire way to 
add a layer of protection. I think that it is a small market.
    I am a supporter of the wayside defect detectors. I 
installed them in Austin when we didn't have any. We have 
upgraded our defect detectors here. I worry about the supply 
chain and being able to fulfill those orders, which I think 
will affect the cost for all of us, which is, I think, why we 
need to look at some alternatives.
    Mrs. Foushee. Thank you, Mr. Chairman, I yield back.
    Mr. Nehls. The gentlelady yields. I now recognize Mr. Kean 
for 5 minutes.
    Mr. Kean of New Jersey. Thank you, Mr. Chairman, and I want 
to thank our witnesses for being here today. I would especially 
like to thank Mr. Kevin Corbett, president and CEO of New 
Jersey Transit, for traveling south to inform us of the 
challenges faced by New Jersey Transit, and also the critical 
work they do for the great State of New Jersey.
    Mr. Chairman, thank you for holding this hearing, as it is 
critical for my constituents in the Seventh Congressional 
District of New Jersey, which relies heavily on commuter rail 
on a daily basis. May that be for commuting eastward into New 
York City in the morning, or commuting westward in the 
afternoon, or reverse on those routes in the morning and the 
evening; the ability to catch a children's sporting event or 
other activities; or to access dinner with their families and 
on a timely basis, having an efficient rail system is vital for 
that to happen. It needs to be predictable commutes, and it 
needs to be as easy as humanly possible.
    New Jersey Transit is operating efficiently, is vital for 
all New Jerseyans. As Mr. Corbett knows, my constituents are 
enthusiastic about the Hunter Flyover. It basically constructs 
a flyover south of Newark Penn Station to eliminate at-grade 
crossings and to reduce conflict between trains, and increases 
capacity for New Jersey Transit and for Amtrak alike, enabling 
New Jersey Transit to improve Raritan Valley Line service. That 
is why I introduced, and this committee and the whole House has 
passed, the One Seat Ride Act, which directs the Secretary of 
Transportation to conduct a cost-benefit analysis of a one-seat 
ride trip versus a transfer trip option during peak hours on 
New Jersey Transit's Raritan Valley Line.
    This committee and this House should recognize the immense 
benefits commuter rail has for the State of New Jersey and the 
Northeast Corridor, but also the future benefits to the entire 
Nation.
    Mr. Corbett, as I know, you are extensively familiar with 
the Gateway Project and its benefits not only to New Jersey, 
but to the entire region and to the country. Additionally, I 
know we have spoken many times regarding the need for a one-
seat ride option on the Raritan Valley Line before the 
completion of the overall Gateway Project. As you know, I 
worked with one of your predecessors over a decade ago to 
secure the first-ever off-peak option for Raritan Valley Line 
commuters.
    A key part of having a full-time redundant system 
throughout New Jersey and throughout the region is making the 
Hunter Flyover as a reality. In September of last year, it was 
announced that FHWA awarded an additional $425 million in 
Federal transportation dollars to NJDOT as part of the Federal 
August redistribution process. I know that funding is key for 
completion of the Hunter Flyover. Is New Jersey DOT allocating 
any of these funds for this project?
    And what is currently the status of the Hunter Flyover 
completion?
    Mr. Corbett. Thank you, Congressman, and thank you for all 
your efforts on behalf of New Jersey Transit and for our 
regional and national economy in that context.
    Hunter Flyover, as you know, a one-seat ride and a smooth 
transition, the flex funds that we get from FHWA do not have 
that flexibility to cover a Hunter Flyover, because that is 
just a pure rail bridge. We did put in for a RAISE grant for 
it, a competitive RAISE grant, but that did not make the cut 
for a RAISE, and I think that is one of the reasons we are 
looking at CRISI, because this would be a kind of bridge that 
would be perfect for CRISI. It will improve both Amtrak--
instead of going for a ladder cutting across the Northeast 
Corridor, it will bring the Raritan Valley Line over and tie in 
right into the corridor smoothly, not disrupting Amtrak or our 
Northeast Corridor trains, but be able to tie right in. So, it 
is a critical piece of infrastructure.
    But that is the challenge. We are in the preliminary design 
work for that. But to get the funding to really go to full 
design and contracting, we need to--we do not have that 
funding. So, that is a critical issue, and that is one of the 
things we would like to see--
    Mr. Kean of New Jersey. And the--as you know, the one-seat 
ride on the Raritan Valley Line can be completed long before 
the Gateway Project is completed.
    Mr. Corbett. Yes.
    Mr. Kean of New Jersey. It is vital to my constituents and 
needs to be prioritized.
    As you mentioned in your testimony, there is always a 
natural conflict that exists between New Jersey Transit and 
Amtrak. But what are these conflicts? You said they were 
managed with strategic collaboration. Specifically, what are 
the most common areas of conflict between New Jersey Transit 
and Amtrak operations, and how are they usually resolved?
    Mr. Corbett. Well, I think, for the purpose of--regarding 
the BIL, I think the money that we spend on projects, things 
like Elizabeth Station, if they are projects that are 
beneficial to us but not necessarily a priority for Amtrak, the 
workforce availability has been the biggest cause of delays and 
cost overruns when they are not able to provide protection.
    And I think one of the things we have done for the 
Northeast Corridor as this money is coming in to allow these 
projects to move ahead quicker is, for projects where Amtrak 
cannot supply their workforce in a timely manner, is for us--we 
are doing a pilot program right now for County Yard/Delco Lead 
project, where we will do the flagging because it is for our 
benefit. Our flaggers we properly trained so that we can do 
that, which will free up Amtrak's labor force to be able to 
work where they do have their limited resources as they ramp 
up. They are adding a lot, but right now they struggle to 
provide adequate flagging up and down the corridor.
    Mr. Kean of New Jersey. Perfect. Thank you.
    I yield back.
    Mr. Nehls. The gentleman yields. I now recognize a very 
valued member of this subcommittee, Mr. Moulton, for 5 minutes.
    Mr. Moulton. Mr. Chairman, thank you very much. It is an 
honor to be here with all of you.
    Mr. Chairman, you talked about how more people are working 
remotely. We heard that from a number of our witnesses. My 
estimation is that this will delay some of the ridership goals 
that were laid out before the pandemic, but not ultimately 
reduce them. And I was going to brag about how, as of February, 
Boston commuter rail ridership had reached 96 percent of 
prepandemic levels, but Mr. Dech has already surpassed 
prepandemic ridership.
    So, congratulations, and I won't pat ourselves on the back 
for that.
    But the bottom line is that commuter rail systems need to 
modernize. In Massachusetts, we are talking about converting 
from a commuter rail system to simply taking people in and out 
of the city to a regional rail system that will fundamentally 
get people around the Commonwealth faster. That's when they are 
valuable, if they can get you around faster.
    Now, when we have highway hearings, we often talk about EVs 
and self-driving vehicles, but most of the clips from this 
hearing could be from 1949, because we are fundamentally 
talking about technology that is 75 years out of date. Ranking 
Member Larsen talked about the contributions of the Bipartisan 
Infrastructure Law to intercity rail services like Sound 
Transit, which, like my MBTA Commuter Rail in Boston, operate 
with essentially 1950s technology at 1900s speeds.
    By the way, not 1920 speeds, because by 1920, most speeds 
were faster. And if you compare commuter rail timetables from 
1920 to today, they are mostly faster in 1920. That's pathetic.
    Vice Ranking Member Foushee talked about intercity 
passenger rail in North Carolina, a great investment. But the 
reality is that ridership estimates for this new system are 
very low compared to highway or air traffic numbers for one 
clear reason: they are too slow.
    I am grateful for Mr. Yakym, actually, because he was, I 
think, the only Member to discuss actually increasing speeds, 
which Mr. Noland is accomplishing on his system.
    And, Mr. Kettle, thank you very much for talking about the 
importance of high-speed rail, even though there was no 
dedicated high-speed rail funding in the Bipartisan 
Infrastructure Law.
    So, one question I have for all of you is, what are you 
doing to actually increase speeds to attract riders, because 
you can get people faster where they need to go?
    There is a 1947 rule that limits speeds to 79 miles per 
hour without automatic train stop, based on a crash in 1946. 
Where are we with PTC? We have PTC. How many of you are 
petitioning to increase speeds on your lines, now that you have 
adopted PTC?
    I am going to take that for the record, because we have 
limited time, but I would very much appreciate your responses.
    We also talked a bit about the Senate bill for more hot box 
detectors. Hot box detectors are 1960s technology. And sure, we 
can put more of them--we could put one every 5 feet, and it 
would reduce but never eliminate crashes. Whereas, if you had 
onboard technology to actually measure the bearing temperatures 
in real time, just like we have onboard technology that we 
wear, wearable technology all around, you could actually 
eliminate accidents. That should be the focus of our committee: 
modernizing.
    And so, the big question is, OK, so, why are we so behind? 
Why is this? Well, there are a number of reasons, but there is 
none bigger than funding. And Mr. Corbett, you talked about 
historical underinvestment, decades of subsidizing highways and 
driving and airports and airlines. But while we celebrate $100 
million for Metra commuter cars in Chicago, you couldn't build 
a single highway interchange for that kind of money. We are 
talking about PTC here at the same time as we are talking about 
next-generation air traffic control. There is one big 
difference. Congress pays for it, for the air system, but it is 
forcing private railways to pay for the rail system.
    Now, we also talk here about increasing fare revenues, but 
we never talk about doing that with driving, to actually make 
people who drive pay the cost. So, I asked for a study in 
Massachusetts to examine the cost of driving. Conclusion: $64 
billion annually to the Commonwealth, just in the small State 
of Massachusetts. That is $14,000 per person that they are 
paying with their tax dollars to subsidize people who drive. 
Even if you don't own a car, even if you don't own a car, that 
is what we are paying to subsidize driving.
    And instead, the MBTA system in Massachusetts is estimated 
to save about $15 billion a year because of increased--I'm 
sorry, that is just in terms of the highway that we don't have 
to build, and the 3,000 acres of parking spaces we don't 
require. It also has $11.4 billion in annual economic benefit.
    If you look at Massachusetts in terms of airports, it is 
the same thing. Terminal E just got a $700 million expansion. 
If you look at the number of passengers it will serve, that is 
about $130 per passenger investment at the same time we are 
repairing the Orange Line with an investment of $3.13 per 
passenger.
    So, the bottom line is that I am a big fan of America, but 
I am not a big fan of our commuter rail systems. We need to 
modernize. We need to catch up with the rest of the world. And 
what this committee should be doing is pushing commuter rail 
systems to move forward. I hope we can accomplish that with 
you.
    And Mr. Chairman, I yield back.
    Mr. Nehls. Mr. Moulton, I appreciate your insight. I now 
recognize Mr. Yakym for 5 minutes.
    Mr. Yakym. Thank you, Mr. Chairman.
    Mr. Noland, we have talked both about the transformational 
impact that the $650 million double track project will have on 
the South Shore in our local economy. From an initial concept 
to next month's groundbreaking, how long has it taken for the 
double track project to come to fruition from concept all the 
way through to completion?
    Mr. Noland. Well, Samuel Insull thought about it 100 years 
ago, but 10 years ago, our board passed a strategic plan. We 
started the engineering in 2016. So, from the time we went out 
with preliminary engineering and environmental to finishing up 
the punch list, which we are doing today, is 8 years.
    Mr. Yakym. And there has been a lot of work over the course 
of the last 8 years. Is that fair to say?
    Mr. Noland. That is fair to say.
    Mr. Yakym. Can you briefly walk through how the financing 
of this project came together?
    Mr. Noland. Well, we have financing from a lot of different 
sources: four counties that we operate in each contributed 
$18.25 million towards the funding. In two of the counties, it 
was split between the county government and the city of South 
Bend and St. Joe County, as you know, and $12 million from 
Michigan City and the other $6 million from LaPorte County.
    We also received funding from the State of Indiana, 
tremendous funding from the State. I mentioned Governor Holcomb 
is our major champion there. We appreciate that.
    And then we went out and received funding from the Capital 
Investment Grant process. We have a full funding grant 
agreement with the FTA for the balance of our funding.
    Mr. Yakym. So, many sources of funding over the course of 
the last 8 years to come up with the $650 million.
    Mr. Noland. Correct.
    Mr. Yakym. So, you and the South Shore Line put in a lot of 
blood, sweat, and tears over the last, call it now 10 years 
almost, to put together the funding, the contractors, and 
everything else to make this double track a reality, which we 
are going to open next month. Yet, as I understand it, Amtrak, 
which doesn't currently operate on South Shore's track, is 
considering essentially inviting itself onto the double track. 
Is that correct?
    Mr. Noland. Amtrak currently runs parallel to us on the 
Norfolk Southern. They have historically indicated they have 
issues with their on-time performance and capacity, and I think 
they see the opportunity to use the significantly improved 
right-of-way. And so, we have had conversations with them, and 
they have indicated they would like to strongly consider moving 
their operations over to our line.
    Mr. Yakym. And if they do that, you would have very little 
bargaining power over Amtrak's compensation to you, and it 
would be essentially Amtrak that tells you what it believes is 
going to be a fair rate for them to come onto your tracks. Is 
that correct under current Federal law?
    Mr. Noland. Absent an across-the-table negotiation at arm's 
length, Amtrak does have the statutory power to come on our 
service and only pay incremental cost.
    Mr. Yakym. Did Amtrak contribute any money or other 
nonmonetary support for the double track project?
    Mr. Noland. No, sir.
    Mr. Yakym. Mr. Chairman, I hope that we can watch this 
space very, very closely. And I will say I have had a very good 
dialogue with the CEO of Amtrak, Stephen Gardner in this 
hearing room, but also in private in my office. And I want to 
make sure that, if Amtrak does go this route, it does so only 
after it follows through on its promise and commitment of close 
consultation and adequate compensation for the South Shore Line 
and the double track project.
    Thank you, Mr. Chairman, again, for holding this hearing 
today, and I yield back.
    Mr. Nehls. The gentleman yields. I now recognize Mrs. 
Napolitano for 5 minutes.
    Mrs. Napolitano. Thank you, Mr. Chairman. A question for 
Mr. Kettle.
    With 500-plus route-miles serving more than 20 million 
people, how does Metrolink prioritize investments in 
infrastructure or programs that increase access to its service 
for underserved communities?
    Mr. Kettle. Thank you, Congresswoman. So, as you said, we 
service a large market, southern California, 20 million people. 
Many of the lines that we operate on originally were freight 
railroad lines, and they go through a number of disadvantaged 
communities throughout southern California, including your 
district, but all over southern California, where we have 
residents of lower incomes.
    We have established a couple of different programs. One 
that we are quite proud of is a program that allows for any 
individual with a EBT card to get 50 percent discounts on the 
ability to ride our trains, regardless of age. We also have 
programs for active military and seniors. And of course, I 
mentioned during my opening remarks our ``students ride free'' 
program that has been tremendously successful across the 
region.
    As I have said, I ride the train, I see the students, I see 
what it is doing to change their lives, and it is growing our 
ridership. So, it is a win-win.
    Mrs. Napolitano. Thank you. You mentioned a concerted 
effort to replace older, more polluting locomotives with a 
cleaner model. Why does Metrolink need to add cleaner burning 
diesel locomotives to its fleet?
    How many do you have now?
    What impact will these newer locomotives have on southern 
California?
    How many is the agency seeking to purchase?
    Mr. Kettle. Our current fleet is a fleet of 55 locomotives; 
40 of those are virtually brandnew, Tier 4 locomotives, the 
cleanest burning diesel locomotives in the country.
    I don't think anybody will question that southern 
California has historically had a real challenge when it comes 
to air quality. So, it would be irresponsible for us if we 
didn't make best efforts to make sure that entire fleet of 55 
is the cleanest burning diesel engines you can find. Our goal 
is to get to 53 of our 55 to be Tier 4 locomotives. Again, the 
oldest ones we have were only introduced into our fleet in 
2017, so, they are brandnew.
    And then we are going to be testing the market of zero-
emission push-pull locomotives. We received a regional grant 
most recently in the amount of $60 million for us to start 
looking at exploring zero-emission push-pull locomotives. It 
would be the first demonstration of that type of technology in 
the country.
    And I should mention real quickly we will also be launching 
our hydrogen fuel cell multiple unit in the region where we 
have some of the dirtiest air in San Bernardino County, between 
San Bernardino and Redlands. It will be the first zero-
emission, multiple unit, hydrogen fueled in revenue service in 
the United States.
    Mrs. Napolitano. Thank you. California, as in other States, 
has a severe housing shortage. How does Metrolink service help 
connect people living in more affordable areas of the region 
get to their employment centers?
    Mr. Kettle. Again, we live in a vast region. Some of our 
trips are 70 or 80 miles because that is where the affordable 
housing is, whether you work in Orange County or Los Angeles 
County, and our trains get there.
    We have started working with homebuilders to provide 
incentive programs. As new homeowners are purchasing homes in 
outlying areas that are more affordable, we are working with 
homebuilders to develop programs that get people onto our 
trains so they know that the commuter rail system in southern 
California can be an option for them besides driving a car.
    Mrs. Napolitano. Great. Would you explain a little bit of 
what you have done with the Positive Train Control to better 
the service?
    Mr. Kettle. Positive Train Control, along with all of my 
colleagues, it has been something that we have pursued. We were 
the first to actually have it in the country in southern 
California.
    What we have learned with PTC, though, is that it is all 
about safety, but we are finding value added in PTC. Most 
recently, we have been able to connect Positive Train Control 
to ShakeAlert. Everybody knows southern California has an 
occasional earthquake. So, now we are set up to the point where 
ShakeAlert, through PTC, alerts our engineers. Depending on the 
severity of the earthquake, it may entirely shut down that 
train if it is within a certain radius of where the earthquake 
occurs, or it may simply tell an engineer that an earthquake 
has occurred, you need to slow your train or stop it.
    So, we are taking the opportunity of this safety 
technology, and taking it to a whole other level.
    Mrs. Napolitano. Thank you very much.
    Mr. Chairman, I yield back.
    Mr. Nehls. The gentlelady yields. I now recognize Mr. 
Stauber for 5 minutes.
    Mr. Stauber. Thank you, Mr. Chair. I know we are discussing 
commuter rail today. However, I want to discuss crime.
    And crime is happening on all modes of public 
transportation: buses, transit rail, commuter rail, you name 
it. It wasn't always this way, but Minnesota has changed with 
our current Governor at the helm. It is now known for leniency 
for criminal behavior. There is no better proof than the Metro 
Transit in Minneapolis.
    Let's start with the ``party car.'' On the three-car light 
rail, operators never enter the middle car when the light rail 
switches directions. This was quickly noticed by a certain 
crowd. The middle car now attracts riders who are more likely 
to smoke or break rules, so much that it is conversationally 
known as the ``party car,'' that middle car.
    So, instead of cracking down on the bad behavior, however, 
the Democrats in Minnesota, they took a different approach. 
Fare violations are now a petty misdemeanor, a $35 ticket 
instead of a $180 misdemeanor charge, and they have replaced 
police officers with Transit Rider Investment Program, TRIP, 
agents: nonpolice agents who are to ``remind'' criminals of 
their behavior. Now it has become so bad that they are 
considering reducing the size of the trains, rolling out a two-
car train instead. Instead of punishing the criminals, our 
State would rather punish our good citizens who are just trying 
to get to or from work.
    To our witnesses, I know Minneapolis is not alone in the 
fight against crime, but it is clear our State leaders are lost 
on this issue. What have your commuter transportation systems 
done to ensure the safety of your passengers?
    Mr. Kettle.
    Mr. Kettle. Thank you, Congressman. As I mentioned in my 
earlier remarks, I am a user of our system. I ride the train, I 
am a customer. I see what our customers see on a daily basis.
    What we have addressed on our system--and generally 
speaking, across the country, commuter rails are considered 
relatively safe in the transit sector. But that is not enough. 
We have Los Angeles County sheriff deputies that ride our 
trains regularly. My chief of safety, security, and compliance 
ensures that we have strong metrics that then--yes, sir.
    Mr. Stauber. So, Mr. Kettle, I appreciate that. 
Specifically, if I am on one of your trains, something happens 
to me, will there be a sheriff's deputy there?
    Mr. Kettle. We do not have sheriff deputies on every train, 
no. We target----
    Mr. Stauber [interrupting]. OK. So, in that case, Mr. 
Kettle, somebody assaults me or one of my children. What do I 
do?
    Mr. Kettle. On our trains, we make sure there--first of 
all, we have conductors on all of our trains that have 
immediate access to our security operations center. If 
something occurs, our conductors immediately call that into 
security.
    Mr. Stauber. What is the timeframe?
    Mr. Kettle. Well, in a 545-mile system, and sheriff 
deputies spread throughout, it can take a couple of train 
stations before our sheriff is able to be on our trains.
    Mr. Stauber. OK. Mr. Corbett, how about you?
    Mr. Corbett. Yes----
    Mr. Stauber [interrupting]. If somebody is being assaulted, 
tell me the pace at which they could get immediate help.
    Mr. Corbett. Congressman, also, we have our own police 
force, an extremely proud police force. We do deal with 
counterterrorism with the New York-Philadelphia market, so, we 
have a lot of experience.
    Mr. Stauber. Yes.
    Mr. Corbett. We also deal with--you see more drug-related 
crimes----
    Mr. Stauber [interrupting]. Do you have law enforcement on 
every train, in case----
    Mr. Corbett [interrupting]. We don't put them on every 
train, similar--but what we do have is the next station--we 
tell our crews generally not to get involved with the assault, 
but we put through legislation we just got passed in New Jersey 
2 years ago that allows us to--if you are in assault, we 
protect certainly our train crews so that it--we don't have 
to--through the court system, that it is--raised it as a 
felony. So, it is a serious felony, so, we do that. And then we 
are able to ban them from riding the system.
    Mr. Stauber. Thank you, Mr. Corbett, thank you.
    Mr. Noland, how about you?
    Mr. Noland. We have our own police force, but it is not a 
large police force, and we are over 90 miles. Our conductors 
are trained that if there is an incident on a train, to 
immediately get a hold of dispatch, who will get a hold of our 
police department. And if they can't be there in a timely 
fashion, we work with our local municipalities very 
cooperatively so that at the next available train stop we can 
handle that situation.
    Mr. Stauber. In any of your equations, are you expecting 
other commuters to jump in and help?
    Voice. No, we are not.
    Mr. Stauber. OK.
    Ms. Johnson, how about you?
    Ms. Johnson. We have a sworn police department. Our second 
crewmember actually is contracted out on our concessionaire 
agreement platform, and they are armed. And we also have a 
transit ride app. If somebody were to see something, they can 
say something, and then we will deploy additional support.
    Mr. Stauber. Is there law enforcement on every train?
    Ms. Johnson. Not sworn, certified police officers, but 
armed security.
    Mr. Stauber. OK. With no arrest powers, or----
    Ms. Johnson [interrupting]. No arrest powers.
    Mr. Stauber. Got it. Mr. Dech, you are the last one. I've 
got 10 seconds left.
    Mr. Dech. We have armed security on our trains, as well as 
at our stations. We do randomize those processes. We have 
conductors on every train that have access to our PSCC, and we 
work very closely with our counties and municipalities for 
police to have arrest powers.
    Mr. Stauber. Yes, I just--real briefly, Mr. Chair, if you 
would indulge me for a minute. The reason I am asking this is, 
you talk about safety as your priority. If I am on your 90-mile 
train, 45 miles into it, and I get assaulted, or my children or 
my wife, the expectation is there will be help as soon as 
practical. You are talking 25 or 30 minutes. The assault is 
over, the damage is done.
    And so, as a former police officer, I know getting there 
quicker--and I think you all would agree with this. I 
understand the practicality of it. But you know what? I think 
that more people would feel comfortable and probably more 
ridership if that were to happen, if they saw law enforcement 
there with arrest powers. That is a deterrent.
    I thank you very much for indulging me, Mr. Chair. Thank 
you.
    Mr. Nehls. The gentleman yields. I now recognize Mr. Garcia 
for 5 minutes.
    Mr. Garcia of Illinois. Thank you, Mr. Chairman and Ranking 
Member, and to all of our witnesses.
    As you have heard, a commuter rail is a lifeline for many 
people who rely on it for affordable, convenient ways to get to 
work, school, and anywhere else they want to go.
    With the upcoming surface transportation reauthorization 
bill, there are ample opportunities to address some of the 
challenges for commuter rail. One such challenge is the 
challenge in ridership levels and patterns that has shifted 
since the COVID pandemic.
    Mr. Noland, I understand that NICTD is building a second 
set of tracks between Michigan City and Gary, Indiana, which is 
expected to bring more ridership to Chicago, as well. I welcome 
that. Amidst a new ridership landscape, what factors went into 
deciding to build additional tracks on this route?
    And how is NICTD evaluating what projects to fund, based on 
the change in ridership?
    Mr. Noland. Thank you, Mr. Congressman. The section is a 
26-mile section that was largely single track. And Congressman 
Moulton mentioned that we are an older technology, and we need 
to look at ways to improve our service.
    So, one of the things that we have looked at was areas 
where we have congestion. We had congestion in that area. By 
adding a second track with high-speed crossovers, we are able 
to add more express service, reduce our time to and from 
Chicago, and that drives ridership. Better performance is an 
opportunity to drive ridership.
    We are also going to add trains to the off-peak evening and 
weekend services so that we are not just that rush hour--that 
traditional rush hour--that 8 a.m. to 5 p.m. worker is not 
there anymore. We need to service the midday folks, as well.
    So, those two things, reducing the time to Chicago and back 
and offering the services off peak are huge for us.
    Mr. Garcia of Illinois. Great, thank you.
    Another pressing issue for commuter rail and the rail 
industry writ large is the lack of regulation around locomotive 
emission standards. As of 2016, nearly 50 percent of existing 
locomotive emissions were uncontrolled, with no standards for 
any pollutants. Mr. Kettle, why has the rail industry, in your 
opinion, been so slow to cut emissions, despite the fact that 
cleaner engines exist?
    Mr. Kettle. Congressman, I think, again, in our system, we 
have gone all-in as it relates to finding the cleanest burning 
technology utilizing diesel locomotives. Again, we use 
renewable fuel. We do not use petroleum diesel.
    I think it is a combination of factors I think you are 
seeing throughout the country. Commuter railroads are shifting 
to cleaner burning, Tier 4 locomotives. We certainly are 
committed to that, with a long-term future of getting to zero 
emission.
    And I think it is a byproduct of just the nature of the 
cost of equipment. When you buy a locomotive, you are going to 
have that locomotive for 30 years, and I think it takes time 
for that public investment to be fully absorbed, at which point 
I think other agencies across the country will look towards 
cleaner burning equipment.
    Mr. Garcia of Illinois. Well, thank you for that answer. 
And just following up on it, the people most harmed by 
pollution from these emissions are rail workers and communities 
around those railroads, communities like my district, which has 
some of the worst air quality in the country. What can we do at 
a Federal level to speed up the transition to Tier 4 or zero-
emissions engines?
    Mr. Kettle. It really does boil down, Congressman, to 
funding. And you have heard my colleagues talk about the CRISI 
grant program and our eligibility or lack thereof. I think it 
is a question that, as you look towards reauthorization, making 
sure that there are opportunities for agencies like ours to 
pursue funding for those cleanest burning technologies.
    Mr. Garcia of Illinois. Very well, thank you so much.
    Mr. Chairman, I yield back.
    Mr. Nehls. The gentleman yields. I now recognize Mr. 
Burchett for 5 minutes.
    Mr. Burchett. Thank you, Mr. Chairman.
    Mr. Kettle, Metrolink is taking some steps, I believe, to 
reform its commuter rail business model. What would ticket 
prices be for you to break even?
    Mr. Kettle. It is going to take some time for us to play 
this all out, Congressman. It is a great question. I think what 
we are going to look towards is, by growing the number of 
riders, we are hoping to keep our fares exactly where they are 
today as we grow our service. It is just going to take time to 
see if that generates the ridership that we hope it does, 
because we can't keep doing the business the way we have been 
doing it.
    Mr. Burchett. What is your current deficit?
    Mr. Kettle. Well, I think that any commuter railroad in the 
country is going to say we are a public transit agency----
    Mr. Burchett [interrupting]. That is just----
    Mr. Kettle [continuing]. Right now our current----
    Mr. Burchett [interrupting]. That is just a simple 
question.
    Mr. Kettle. All right. Our farebox recovery right now is 13 
percent. So, public sources besides our farebox come to that 
number of 87 percent that requires additional public support.
    Mr. Burchett. So, you don't have an exact number of your 
deficit.
    Mr. Kettle. I do not. I can provide that to you, sir.
    Mr. Burchett. I would like that. You serve a region in 
southern California from San Diego to Los Angeles Counties. It 
seems to me like it is the State's and counties' responsibility 
to subsidize your services, not the Federal Government.
    Your request that the Federal Transit Administration would 
waive interest on two locomotives because California passed 
some very costly and very, very burdensome rail regulations, to 
me, is out of touch. Our Nation is already $35 trillion in 
debt, and billions in Federal handouts are already available to 
rail. California's excessive regulation is a problem, and it's 
folks like you that don't--if you all don't speak up at the 
State level, it's only going to get worse for everyone else's 
sake. The rest of the country shouldn't have to pay for 
California's mistakes.
    I yield the remainder of my time, Mr. Chairman.
    Mr. Nehls. The gentleman yields. I now recognize Mr. 
Johnson for 5 minutes.
    Mr. Johnson of Georgia. Thank you, Mr. Chairman. Today, the 
demand to increase accessibility, opportunity, and equity 
through infrastructure improvements is more attainable than 
ever before because of the Infrastructure Investment and Jobs 
Act passed by Democrats, along with a few Republicans, Joe 
Biden's legislation, which provides $1.1 trillion--I think 
probably $200 billion of that going to rail--the largest 
investment in the Nation's rail system, probably. Well, I don't 
know how long it has been, but it has been a long time, and it 
was long overdue. We did it, but we need to do more.
    And when finding solutions to the challenges confronting 
commuter rail systems, we cannot overlook the critical 
necessity of adequate funding for capital projects, service 
expansion, and enhancing transit ease of access, particularly 
for underserved communities.
    Mr. Kettle, you have caught a lot of flak for being from 
California today. That is unfortunate. Not that you are from 
California, but you are catching flak for being from 
California. In your testimony, you discuss Metrolink's 
commitment to delivering safe and convenient passenger rail 
service, while emphasizing the importance of Federal support 
for the commuter rail industry's modernization efforts. How 
does Metrolink ensure its service expansions and improvements 
benefit all community members, including those living in areas 
with little to no transportation access?
    Mr. Kettle. Thank you, Congressman Johnson. The Metrolink 
system is an expansive system, 545 miles. We go through a lot 
of communities, many communities where freight railroads have 
long traveled.
    As we look to transform ourselves away from just being 
about the commuter, but about the user of our system for so 
many other purposes--a discretionary trip throughout the 
midday, the peak, the evening--that, I think, is something you 
are seeing throughout the industry, that we have to change our 
business model. That is what is going to ensure equity in 
transportation.
    If we are built only around the commuter, generally 
speaking, we are building for some essential service workers, 
but primarily for white collar workers. That is not what we can 
be for the long term. And by instituting and implementing more 
midday service, evening service, and weekend service, that is 
providing equity and mobility that our region has never seen in 
a region as large as southern California. So, that is where we 
are going full steam ahead to try to make that happen. We see 
that as our real opportunity for our future.
    Mr. Johnson of Georgia. Well, it definitely seems like a 
viable alternative, particularly as commuter rail passengers' 
ridership has declined since the pandemic and the advent of 
work from home.
    What programs and initiatives can the Federal and local 
government implement to mitigate barriers in service for 
marginalized groups such as language, mobility, and awareness?
    Mr. Kettle. Well, the Metrolink system--the nature of 
access to our system, I think it comes back to frequency and 
reliability of service for those that use our system.
    Access, we can always improve our access at our facilities, 
at our stations, on our equipment that is, in some cases, out 
of date. So, I think those are areas, as we overhaul equipment, 
those are our opportunities.
    But I do think, Congressman, the biggest opportunity for us 
to make sure that we are providing access is making sure we are 
providing frequency and reliability of our trains throughout 
our system so that people can count on us when they need us.
    Mr. Johnson of Georgia. Thank you. Have you seen 
collaboration between Federal, State, and local governments in 
advocating for support and funding for transit projects or 
programs?
    And where do you see the need for improvement?
    Mr. Kettle. The very nature of our system--we operate a 
five-county system. I work for five counties that make up the 
Southern California Regional Rail Authority. We are all about 
collaboration. We all come together to fund our system. Our 
local--those counties are funding a big part of what we are 
doing, it is not all on the Federal Government. But we do come 
to the Federal Government and State government to help support 
the needs of the region.
    So, we are very, very strong in our collaboration at all 
levels, including Sacramento, as well, the State capital.
    Mr. Johnson of Georgia. Thank you, and that concludes my 
time.
    And I yield back.
    Mr. Nehls. The gentleman yields. I now recognize Mr. 
Menendez for 5 minutes.
    Mr. Menendez. Thank you, Chairman. First, I just want to 
let our ranking member, Congressman Payne, know that we are 
thinking about him, wishing him a speedy recovery.
    I also want to welcome Mr. Corbett, who serves as the 
president and CEO of NJ Transit. NJ Transit operates bus, light 
rail, and commuter rail throughout New Jersey, carrying 
thousands of people every day to work and helping our 
constituents move through the region.
    NJ Transit provides an essential service to the State and 
to our district. Last fall, they sprang into action to take on 
additional bus routes after private companies operating in 
Jersey City announced the closure of several essential routes. 
I applaud NJ Transit for ensuring that our constituents remain 
connected to essential resources and preventing gaps in 
service.
    Mr. Corbett, as your testimony highlights, the 
Infrastructure Investment and Jobs Act has been a critical 
investment for infrastructure across the country. Our district 
has received almost $11 billion in grants from the IIJA, 
including $6.9 billion for the Gateway Project alone. The 
importance of these funds for our district cannot be 
overstated. Just yesterday, NJ Transit and Amtrak service was 
disrupted along the Northeast Corridor for hours due to 
overhead wire problems, disrupting the evening commute for 
thousands of people.
    Mr. Corbett, what happens when there are issues with 
infrastructure on even a small section of the Northeast 
Corridor?
    Mr. Corbett. Thank you, Congressman, great to see you.
    Mr. Menendez. Yes, sir.
    Mr. Corbett. We are the most densely populated State in the 
Union, as you well know, and we are back--COVID, the days of 
COVID--we are packed, our trains, rush hour, you see standing 
room only. So, if we have 1,000 people on a train and we have 
20-plus trains an hour going into New York, if they are delayed 
even 10 minutes, that backs up trains all the way down to 
Philadelphia. So, that means thousands, tens of thousands of 
commuters are stranded.
    Our number-one cause of delays for New Jersey Transit is on 
the Northeast Corridor, for our whole statewide system. And 
that ties into the catenary and infrastructure. And Amtrak is--
that is what they inherited from the Pennsylvania Railroad. A 
lot of that catenary goes back to the 1930s. The signal system, 
these are almost 100-year-old systems, as Congressman Moulton 
touched on. So, if that is not repaired and brought up to 
standard, for us it is important to prioritize that. To upgrade 
the catenary and the signal system would be huge.
    The other big bottleneck, as you know, is Portal North 
Bridge. And certainly, the chairman--we would love to have 
anyone from the committee come up. That is a huge bottleneck 
that within 2 years will be eliminated. And that is what this 
kind of funding provides us and Amtrak to do.
    Mr. Menendez. I appreciate you highlighting those points. 
It is why it is so critically important that we continue to 
provide robust funding for our State and regional partners as 
we continue to invest in rail.
    I want to just switch quickly to commuter trends. Over the 
past couple of years, transit agencies across the country have 
been struggling with budget deficits. At the same time, we have 
also seen a large shift in commuter trends. And we know that 
more people are working from home, which means less folks 
commuting into work, which means less fares for public transit 
agencies.
    Mr. Corbett, about how much of New Jersey Transit's budget 
relies on fare?
    Mr. Corbett. We rely on, for the operating budget, about 20 
percent from Federal money. Our capital plan is over 40 
percent.
    So, again, our system, we don't--as you saw with Midtown 
Direct Service, and as Congressman Kean talked about, having 
our service--direct ride, one-seat ride into New York, when you 
do that, property values soar in the surrounding communities. 
We are a big boom of transit-oriented development. That 
generates tremendous wealth, but we don't capture that 
ourselves. So, even if we are running at a deficit, we are 
generating wealth for the whole economy. So----
    Mr. Menendez [interrupting]. But fares go into a large part 
of what your operating budget is. And so, if you have less 
fares, your operating budget is constrained because less people 
are using your services.
    Mr. Corbett. That is right, but we do see--on buses, we are 
back to pre-COVID levels. On rail we are about 80 percent. I 
think in the New York market particularly, people are not 
working Fridays. They say they are working from home. The jury 
is out on that. So, we do see that pulling down our average 
ridership. But weekend ridership, people are using a lot of 
weekends. So, the trend is ripe.
    But, it was--you couldn't raise the fares during the 
pandemic, and now we are having--we are raising our fares, as 
you know. But we still need that Federal component to cover--
help us----
    Mr. Menendez [interrupting]. Yes, I understand it is a 
challenging dynamic. I think that is what we all appreciate 
here, and we have talked about it with Secretary Buttigieg. As 
you see these new trends, it creates difficulty for planning 
purposes, operating purposes for public transit agencies, like 
all of yours. And Congress wants to be here to be helpful, 
especially this committee. And if you have ways that we can 
partner together to make sure that we create that funding on a 
go-forward basis so you have dedicated funding to make those 
capital improvements, to ensure that we have a quality of 
product that is a customer-forward product or commuter-forward 
product, that is what we want to do.
    Just quickly, Mr. Noland, my in-laws live in northern 
Indiana, in Plymouth. So--and my sister-in-law lives in 
Chicago. So, I appreciate your work, as well as what all of you 
do, but New Jersey and Indiana is special for me. All right, 
thank you all so much.
    I yield back.
    Mr. Nehls. The gentleman yields. I now recognize Mr. Ryan 
for 5 minutes.
    Mr. Ryan. Thank you, Mr. Chair, and I appreciate the 
opportunity to waive in here on an important topic to my 
district. Thank you to everybody here. I represent the Hudson 
Valley north of New York City, so, sort of on the other side 
of--but have many of the same challenges as you do, Mr. 
Corbett, in New Jersey, being part of the Greater New York City 
metro area.
    So, as you might imagine, the congestion pricing 
conversation is very much on the minds of my constituents who, 
along with me, are, frankly, very upset--I would say furious--
over this plan. As I am sure you know, the MTA is rolling out 
what I think is an unfair, uninformed, and unacceptable 
congestion pricing plan which would charge, in my district, 
families up to $15 a day, up to $5,000 more a year, to commute 
to Manhattan.
    The problem there is that this comes with no commitments to 
actually improve service in our system. So, you are asking my 
constituents to pay a lot more with no guarantees, nothing in 
the plan to upgrade service.
    I know you all are sort of tangential to the MTA, but I 
wanted to sort of get your take on that. And really, as I 
understand your system, there are a lot more ride options, a 
lot more frequency. So, if you could give any advice to the 
MTA, and in my area in particular, and just talk about how you 
see that playing out.
    Mr. Corbett. Sure. Actually, your colleague, a friend of 
mine, Mike Lawler, his district, we actually provide service. 
We operate, I would say----
    Mr. Ryan [interposing]. In Orange County, yes.
    Mr. Corbett. Yes. MTA----
    Mr. Ryan [interrupting]. We appreciate that.
    Mr. Corbett [continuing]. Their best performance, the MTA 
is actually the service we operate for them west of Hudson. So, 
it is relevant.
    Certainly, there are places in the world where congestion 
pricing has worked: Singapore, Oslo, London, whatever. But in 
this case, it really is just shifting the problem out without--
and MTA is taking that money, but it is not going to benefit, 
for example, our west-of-Hudson MTA service, even. So, we need 
to share in that money if it comes, so that we can provide that 
service. And we need the capital investments to be able to get 
a one-seat ride from Orange and Rockland County through into 
Penn Station, New York. And right now, we are getting zero, and 
it is just pushing the pollution.
    So, we were very disappointed, and Governor Murphy 
certainly is fighting, and I know Congressman Lawler is working 
with Congressman Gottheimer, for example, to really make sure 
that there is an equitable sharing of that funding, if indeed 
it does go through.
    Mr. Ryan. And I appreciate you being direct, and actually 
letting the facts and the reality guide us, rather than some 
delusional plan, particularly in the outer boroughs.
    And I do want to thank you. Orange County is about half of 
my district, so, you all operate that system. And most people 
don't realize that west of the Hudson River in New York State, 
there is no way to get to New York City without going through 
New Jersey, which, no offense to New Jersey, but just doesn't 
make a lot of sense. And the fact that zero dollars from this 
huge, multibillion-dollar plan are going to go to improve 
service to my constituents is incredibly frustrating, and, I 
think, a significant public policy failure.
    So, I appreciate your continued partnership on this, and I 
look forward to working with you and others that, if we are 
going to force this through, which it sounds like they are 
going to try to do, I would like and will continue to push for 
investments in single-seat ride for west of the Hudson for my 
constituents and all the residents of the Hudson Valley.
    So, that is the main topic that I wanted to bring up, and I 
appreciate everybody here and your commitment to all of our 
communities.
    And I yield back, Mr. Chair.
    Mr. Nehls. The gentleman yields. I now recognize Mr. 
LaMalfa for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman, I appreciate it. 
Thank you, panelists.
    Let me launch right in here. As a Californian here, we have 
been observing the debacle that the high-speed rail project has 
been for many years. It took several times on the ballot for 
voters to even have a crack at whether they wanted to decide to 
be bonded by $9.9 billion for the project that was told to be a 
$33 billion project. Now the real numbers are out, and it is 
well over $120 billion. The project needs at least $100 billion 
from some other source that is unknown. Private investment is 
not happening. They are not coming in unless you can guarantee 
your return, which is prohibited by the initiative that put it 
in place. So, you can't guarantee or underwrite high-speed rail 
systems.
    So, Mr. Dech, I wanted to run this by you here. For what we 
could be doing instead of high-speed rail--I call it high-cost 
rail--in California, is local rail, commuter rail, using 
regular trains that would run a commute distance and adding to 
them--there has been a Sacramento to the bay area one--wouldn't 
we--for a lot more bang for the buck when we are talking--we 
are still short $100 billion--to invest that in private 
companies or other, more local possibilities, or enhancing 
local possibilities that we would have?
    Mr. Dech. I think there is benefit to both. We are in a 
unique spot in south Florida, where we are witnessing both of 
those. So, we have our railroad, which is public 
transportation, commuter rail, and we run just a couple of 
miles away from Brightline. And you can see the advantages and 
disadvantages to both.
    So, I have seen that where the private contractors and 
private entities can get things done very quickly, they don't 
have some of the restraints that we have when we are spending 
public money. So, I do think that there is room in the pool for 
both of us, so we are both very successful in south Florida----
    Mr. LaMalfa [interrupting]. Are you talking high-speed 
rail, or public----
    Mr. Dech [interrupting]. Both. I think there is room for 
both. We see Brightline in Florida, they run not quite 200 
miles an hour, but they are 125 miles an hour between Cocoa 
Beach and----
    Mr. LaMalfa [interrupting]. Now, is that on conventional 
tracks?
    Mr. Dech. Those are on conventional tracks, yes, sir.
    Mr. LaMalfa. All right, because it is horrifically more 
expensive to do the high-speed-rail-type tracks that are 
capable of 220, the long, elliptical turns, and you have to 
just cut through communities and everything else on that basis. 
So, it is a lot.
    Now, if you are talking something that is a lot more 
affordable like that, I would like to see more work--and that 
is kind of what I am talking about--more work done on up to 
125-mile-an-hour rail on using conventional track and more 
conventional trains. That would be a fraction of the cost that 
we are talking about.
    So, I've got to move quickly here. So, Mr. Kettle and Ms. 
Johnson, we are seeing more and more mandates in California on 
locomotives done by our--it is known as CARB, the air resources 
board. They are constantly ratcheting down numbers of what the 
emissions are allowed on locomotives. I see a bit, actually, on 
social media about Arizona is opposing it being forced on them, 
and even a national mandate emulating California.
    I mean, I always tell people, don't do what California 
does, it will just cost you.
    So, are you--Mr. Kettle, Ms. Johnson, are you aware of the 
rule being put in place by California on locomotive standards 
being continually ratcheted down and trying to implement new 
technology ? It might even end up being complete electric.
    Mr. Kettle. Congressman, this is Darren Kettle with 
Metrolink in southern California.
    I will take this, Ms. Johnson, given that we are dealing 
with it real time.
    Yes, Congressman. So, when CARB originally came out with 
their initial rule, we opposed it because we had concerns about 
technology being available for us to be able to run zero-
emission locomotives. Over the course of the rule development, 
we negotiated a position to give us time to fully complete our 
fleet at Tier 4 locomotives, the cleanest burning diesel.
    Mr. LaMalfa. Tier 4?
    Mr. Kettle. Tier 4.
    Mr. LaMalfa. So, you get to keep diesel, you don't have to 
go to electric. Is that----
    Mr. Kettle [interrupting]. Correct. We will not have to go 
to zero emission for 25 years. It gives us the time, it gives 
the industry time to actually develop the technology to get to 
zero emission for push-pull locomotives.
    Mr. LaMalfa. What do you expect that new technology is 
going to look like, batteries that last longer or----
    Mr. Kettle [interrupting]. Batteries or hydrogen, sir.
    Mr. LaMalfa. Hydrogen?
    Mr. Kettle. Hydrogen or batteries. Those are the two zero-
emission fueling sources that are out there.
    Mr. LaMalfa. And let's say 20 years from now, when you 
start running up against that deadline and you are not anywhere 
close, kind of like CARB did in 1990, as I recall, what do you 
do then?
    Mr. Kettle. We are hopeful that when CARB sees that--if the 
technology does not exist at that point, they do have within 
their rule an analysis of the technology. So, at that time we 
will know more. But again, 25 years buys us some time.
    Mr. LaMalfa. OK, thank you.
    Sorry that didn't work out, Ms. Johnson. The 5 minutes 
flies by. Maybe someone else will open it up for you. But thank 
you.
    Thank you all, panelists.
    Mr. Nehls. The gentleman yields. I now recognize 5 minutes 
to another valuable member of this subcommittee, Mr. 
DeSaulnier.
    Mr. DeSaulnier. Thank you, Mr. Chairman.
    And Mr. LaMalfa, this reminds me of our long debates on 
this issue 20 years ago, when we debated in the legislature 
about extension cords for battery-electric cars. I think you 
lost that debate.
    But anyway, and as a former member of----
    Mr. LaMalfa [interrupting]. The cord wasn't long enough, is 
what turned out----
    Mr. DeSaulnier [interrupting]. Right, right. Anyway, I made 
a comment about I would be supportive of that for your district 
if the district had electricity, I think, which was unfair, but 
it got a good laugh.
    Anyway, as a former member of the California Air Resources 
Board, I appreciate the--appointed by two Republicans and one 
Democrat, and the public health standards were held to under 
the Clean Air Act signed by Richard Nixon and the California 
Clean Air Act signed by Governor Ronald Reagan. So, more 
comment on how the Republican Party has changed vis-a-vis 
public health.
    Mr. Kettle, I have a district in the San Francisco Bay area 
not dissimilar. I am very familiar with your challenges in the 
South Coast. Long commutes, I think, between L.A. and the bay 
area. We have over half of the mega-commutes in the country, 2 
hours or more as people go further away.
    So, in that context, in many years of trying to figure out 
how our investments in California--very car culture--in 
transit, in commuter, intercity and intracity rail, and high-
speed rail, and the challenges of peak trips--so, when I was on 
the MTC we had an agreement in one of our RTPs that we would 
reach 10 percent of our peak trips. I think we got as high as 6 
percent, as opposed to London, 90 percent. New York, I think, 
is 20 percent, which is the best of the United States.
    So, when all of us deal with these issues about land use 
and transportation--and the 405 in West L.A., and induced 
demand, and how those HOV lanes were filled up like this, we 
know we have to invest in this. And I very much appreciate the 
comments in this hearing, because we know that, exurban, 
suburban, urban.
    But what has changed in the last few years is what has 
happened to the economy. Certainly in the bay area, where we 
are going through layoffs in Silicon Valley and San Francisco, 
we probably have close to 40 percent vacancy in downtown San 
Francisco. For my commuters 25 miles east of that, they--
particularly people who are in the tech industry and can do 
it--remote work. So, we have a great opportunity.
    And of course, not to bore the rest of you with Prop 13 and 
initiatives and municipal revenue and transportation revenue in 
California, but how do you see your challenges, just when we 
were starting to attract more people into traditional peak 
commutes that would make that farebox recovery and make more 
discretionary opportunities for your governing board?
    This is a wonderful opportunity, but it is fraught with 
risks and challenges. So, how do we take advantage of this, not 
punish people to make them start to go back into work and the 
employer doesn't pay for that commute time?
    In California, we rely predominantly on sales tax, which is 
regressive. So, this is the wonderful opportunity in areas like 
yours and mine, but it is fraught with challenges.
    Mr. Kettle. Thank you, Congressman DeSaulnier. Good to see 
you again, sir.
    Yes, so, in southern California right now, the peak has 
changed. Four years ago, the world changed. In Los Angeles, our 
major urban center where jobs had been plentiful and vacancy 
rates were low, we are at about the same as the San Francisco 
Bay area and the San Jose area, where, again, two markets that 
had large peak commute periods.
    The other thing that has really changed is that the peak 
has changed. What used to be this 9 o'clock in the morning or 8 
o'clock in the morning to 5 o'clock in the afternoon is 
fundamentally different. So, we are looking at how do we 
reimagine who we are to provide train service at different 
times of the day into the evenings and on weekends, because it 
can't just be about that commute. And so, that's our push.
    It is not for the faint of heart to look at some new 
concepts about how we are going to change how we do our 
business, but I think it is critical. It is going to be the 
only way that we are going to stay sustainable, because we know 
continuing business practices the way they are today, just 
looking at the standard peak, that's not sustainable long term.
    Mr. DeSaulnier. Just briefly, we know that density is very 
important in modeling around the world. So, getting those peak 
trips and reverse peak trips and getting higher density around 
your hubs and transit-oriented development, could you respond 
to that?
    Mr. Kettle. I completely agree the density is important. 
But again, in southern California, where affordable housing is 
in the outlying areas, and we still have essential workers that 
need to get to urban areas, we have got to make sure we are 
getting to some of those less dense areas, as well.
    Mr. DeSaulnier. Thank you very much.
    Mr. Kettle. Thank you.
    Mr. DeSaulnier. I yield back.
    Mr. Nehls. The gentleman yields. We are going to go to a 
second round. Mr. LaMalfa has other questions for you, so, we 
are going to do that.
    So, Mr. LaMalfa, a second round. Go ahead, sir.
    Mr. LaMalfa. Thank you. I just have a retort, too, for my 
great colleague from the bay area there. The Republicans didn't 
leave those pieces of legislation that Reagan and others have 
signed. They left us, OK? They have been weaponized for 50 
years and turned against us in court decision on court 
decision. We are still all-in for those positive things. But at 
this point, you can't even hardly make a move to do simple 
things.
    And as far as the electricity going all the way up to my 
area, it is getting harder when the enviros tear out my 
hydroelectric dams up on the Klamath and don't replace the 
electricity. So, yes, we do look like we are less electrified.
    So, anyway, but he is my good pal. I am not--this is fun 
banter here. Anyway----
    Mr. DeSaulnier. We have a comedy routine. Bear with us.
    I respect your reference to Senator Jeffords.
    [Laughter.]
    Mr. LaMalfa. OK. Thank you, panelists.
    And Ms. Johnson, I am going to throw that question back to 
you I had a little bit earlier on the CARB and the technology 
and the locomotives, et cetera, that we were talking about.
    Ms. Johnson. Yes. Thank you very much, Congressman. I would 
like to state for the record I was previously in California, 
recognizing I am in Denver, Colorado.
    And so, to Mr. Kettle's point that was raised relative to 
having more or less a 25-year exemption, recognizing that CARB 
had originally put forward the Innovative Clean Transit 
regulation for 2040, I don't feel as I could opine, recognizing 
that I run the agency in Denver, Colorado, as it relates to 
where we are currently.
    Mr. LaMalfa. OK, OK. Thank you. Back to Mr. Dech.
    When we were talking about local lines, commuter rail, and 
such, I have been interested a long time, especially as we 
suffered with the super high costs and massive delays on 
California's high-speed rail. And I guess if there is good luck 
in Florida and they are paying for it themselves, great. I 
don't begrudge anybody doing that and having it economically 
working out.
    But how much more can we benefit from 125-mile-an-hour 
trains on regular tracks, and what would it take to raise our 
infrastructure, our, you know, rail, the track condition to be 
suitable? How much potential is there for a lot more 125-mile-
an-hour tracks in any given area around the whole country, or 
regionally, what have you?
    Mr. Dech. So----
    Mr. LaMalfa [interrupting]. And is that a good way to be 
able to achieve higher speed without having the hyper-expensive 
high-speed rail?
    Mr. Dech. So, I will preface this by saying I am by no 
means an expert on high-speed rail, but I do know that once you 
start getting to those speeds, you really have to worry about 
your grade crossings. So, the biggest concern for me is going 
at any higher speeds than that is grade separating and making 
sure that you don't have the road crossings. When you have a 
train going 125 or 200 miles an hour, those grade crossings 
become critically important. And that is where you really get 
that cost factor that goes in with raising those, is that you 
are separating from your conventional road crossings.
    Mr. LaMalfa. And if you are talking rural areas, can you 
possibly build enough split-level crossings through fields and 
farmland and all that stuff?
    Mr. Dech. With enough money, anything is possible.
    Mr. LaMalfa. Well----
    Mr. Dech [interrupting]. That is the answer to that. It's 
an investment.
    Mr. LaMalfa. Well, every crossing, I hear, is about $40 
million. In California it's probably double that at $80 
million. And I don't know if you can do that on every little 
small bird like I have in my district. And we certainly can't 
be taking away all these crossings because they are critical to 
small towns and ag areas.
    But overall, do you see much potential for--instead of 
being hell bent on 220-mile-an-hour, hyper-expensive, is there 
a lot of potential for 125-mile-an-hour conventional tracks to 
be able to kind of fit that need for higher speed that people 
seem to be looking for?
    Mr. Dech. I think it depends on the area and the service 
and what you want. If you are looking at--like, in particular, 
the Brightline West that is going to go from Los Angeles to Las 
Vegas, the business model is to get you there faster than a car 
in a high-speed train. So, that is a private entity making that 
investment that they can do that. So, I do believe that it is a 
matter----
    Mr. LaMalfa [interrupting]. Yes, unfortunately----
    Mr. Dech [continuing]. Of what the customer----
    Mr. LaMalfa [continuing]. It started out as a private 
concern, and then recently, I think, $3 billion of Federal 
money got dumped in on that. I was very disappointed in that 
because it was touted as being private the whole time.
    Does anybody else on the panel want to touch on that 125-
mile-an-hour rail topic?
    Sir.
    Mr. Corbett. The only thing I would say, in New Jersey, 
with the dense population we are running with Amtrak, one of 
the things is not just hitting a certain X number of miles per 
hour, it is the whole trip. So, if you are doing 160 miles an 
hour, but then you have got to slow speed because you have 
ancient infrastructure that you have a temporary speed 
restriction doing 60 or 35 miles, it sort of obviates it. So, 
it is the whole system from A to B to make sure that you can 
keep a steady higher speed than necessarily be the top, the 
Shinkansen or whatever kind of speeds.
    Mr. LaMalfa. Yes. I mean, I focus on 125 because that seems 
to be where it becomes a quantum jump into rail technology that 
has to be hyper more expensive.
    So, Mr. Chairman, I appreciate your extra time. I yield 
back.
    Mr. Nehls. The gentleman yields. Are there any further 
questions from any members of the committee?
    There being none, this concludes our hearing for today. I 
would like to thank each and every one of you. The first 
hearing, I guess, we have had in this subcommittee for commuter 
rail in 20 years. So, job well done. Great dialogue today.
    The committee stands adjourned.
    [Whereupon, at 11:54 a.m., the subcommittee was adjourned.]

                      Submissions for the Record

                              ----------                              


 Statement of Fred Craig, Chair, Association for Innovative Passenger 
    Rail Operations, Submitted for the Record by Hon. Troy E. Nehls
    I am Fred Craig, Chair of the Association for Innovative Passenger 
Rail Operations or AIPRO. (See Addendum #1--About AIPRO) I also serve 
as Chief Operating Officer of Transdev Rail in North America. On behalf 
of AIPRO we appreciate this opportunity to present testimony to this 
Subcommittee on the potential future of passenger rail in the United 
States.
 The Case for the Competition Model on Commuter and Intercity Corridors
    The prior witnesses at this hearing have made a compelling case 
that competitive selection of operators and service providers is a 
valuable option when selecting partners for their services. These 
commuter agencies are the primary customers for our AIPRO operating 
members, which are Herzog, Keolis, Transdev and RATPDev. It should also 
be noted that two Rail Labor Organizations the Brotherhood of Railway 
Signalman and the Brotherhood of Maintenance of Way Employees are 
active AIPRO members.\1\ Developing strong partnerships between these 
agencies and our service providers and rail labor has been the key to 
efficient and successful operations.
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    \1\ In addition to AIPRO passenger rail contract operators, the 
Railroad Cooperation and Education Trust (RAILCET), representing 
unionized rail construction contractors, is also a proponent of the 
competition model for expanding commuter and intercity passenger rail 
service. RAILCET is comprised of two building trade unions, LIUNA and 
IUOE and thirty rail contract companies with whom they have a national 
agreement.
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    While this hearing is not focused on the intercity corridors, the 
witnesses from SFRTA and RTD presented a compelling case that having 
qualified firms bid for their services is the model that works best. In 
this written testimony, we argue that the ways commuter agencies select 
operators though through competitive processes provide excellent models 
for expanding the current and future intercity rail market. The 
substantial number of FRA Corridor Identification and Development (CID) 
projects now in process make the competitive model completely feasible.
    Our primary AIPRO objective is to maintain the forward progress on 
competition in the commuter arena while at the same time building a 
similar framework for implementation of FRA CID intercity corridors 
across America. Today, states/authorities sponsoring intercity projects 
have two clear options. One--they may select from the Competitive 
Models currently used by commuter agencies which have been so well 
articulated in this hearing. Two--they may stay within the Traditional 
Amtrak Model which has been the dominant method of contract partnering 
between the states and operators for the last half century. We 
encourage the Competitive Model to be applied to both the commuter 
market and state supported intercity CID corridors where appropriate. 
In fact, there is minor difference in the basics of commuter rail 
operations, under FTA authority for financial support, and state 
supported intercity operations, largely under the authority of FRA. 
Both rail services are regulated for safety under the FRA regime. As 
Chairman Nehls said, at the opening of this hearing, ``private sector 
providers help lower costs, improved services, and increased 
ridership.'' In this regard the extensive expertise of the established 
commuter agencies and their private sector partners could be of immense 
value in the emerging world expanding intercity rail corridors. The 
question is how to make it all work together?
    The issue of creating a better future for passenger rail falls 
squarely within the jurisdiction of this Subcommittee. Since the 2008 
PRIIA Act, Congress has laid the foundation for a competition model on 
intercity corridors. (See Addendum #2--Congress Encourages the 
Competitive Model on Intercity Corridors.) With the opportunity created 
by the Bipartisan Infrastructure Law it is time to accelerate this pro-
competition trend.
    As re-authorization time approaches, we propose your committee 
pursue a targeted re-arrangement of railroad passenger law to more 
effectively build a robust and cost-effective rail passenger network 
that better maximizes the benefits of commuter operations and the 
expanding CID intercity corridors. The legislation should encourage 
competition for operations and services in both arenas. In this 
testimony we will identify specific issues we believe should be 
addressed.
        The Competitive Direct Access Model for FRA CID Projects
    Compared to many regions around the world, America's intercity 
passenger network is lacking in many ways. While our country has 
neglected its national rail passenger system, the developed world has 
created an amazing web of high speed and high-performance rail 
passenger service. Now, we are at an inflection point in America. The 
Bipartisan Infrastructure Law or BIL has appropriated significant 
funding and created a process that gives us new hope. Can we bring home 
the dream in the next round?
    We suggest BIL's FRA Corridor Identification and Development 
Program (CID) is the pathway to constructing a high-performance 
intercity passenger network. While advancing high speed rail and long-
distance corridors are important, we suggest a primary early objective 
should be a massive commitment to city-pair corridors under 750 miles. 
A strong framework is already in place. States and localities must 
commit to managing the projects and subsidize the operations. For the 
first time states have significant federal-state partnership grants 
available for capital related projects. As the CID pipeline progresses, 
FRA can become an integral partner and guide implementation of the 
national program. Currently there are thirty state supported routes 
with sixty-nine new projects being studied through FRA funding. This 
model is roughly akin to the Federal Highway Program with federal 
oversight and significant funding. This is appropriate.
    The Competitive Direct Access Model. Federal law clearly permits 
alternative passenger operators and service providers to become 
partners with states/authorities in developing intercity corridors 
under 750 miles. However, since Amtrak has been the only game in town 
for a half century, it takes a new platform to introduce the 
competitive model. AIPRO is collaborating hard with stakeholders and is 
developing a model based on commercial principles and permitting 
competitive options for selecting passenger rail operators and service 
providers. We call this the Competitive Direct Access Model. This 
provides the states with both the Traditional Amtrak Model and the 
alternative Competitive Direct Access Model for expanding and managing 
their intercity corridors under FRA guidance.
    Our Direct Access Model eliminates statutory operator preferences 
over track owners. Access, metrics, and standards, including on time 
performance, are negotiated legal contracts. The Model will encourage 
competition for services and require early expressions of interest from 
potential operators and service providers on any given project. It will 
also incorporate fair labor practices designed to produce good jobs. 
The goal is a streamlined process.
    We do not underestimate the difficulty of the task ahead. The 
Traditional Amtrak Model has pretty much been the sole method for 
contracts between the states and an operator on an intercity corridor. 
It excludes the competitive option. The Competitive Direct Access Model 
opens the market to alternative operators and service providers. For 
the last year, AIPRO and its allies have been developing a pragmatic 
template for this innovative approach. It is based largely on previous 
work by a Class 1 railroad and has been used effectively in the 
commuter arena. It has been adopted by the Chippewa Rail Commission 
which proposes a new Corridor ID service.
      The Competitive Direct Access Model is designed under 
current law and needs no statutory change (See Addendum #3--Moving to 
the Competition Model)
      +  On-Time-Performance Metrics and Standards. It positions 
projects through commercially negotiated access as well as metrics and 
standards including on-time performance.
      +  Competition Test. States/authorities will be encouraged to 
adopt a formal two-step procedure to evaluate the market for a 
competitive option. The Step 1 planning stage will include a simple 
solicitation of expressions of interest to determine the viability of a 
competition. Assuming there is interest, Step 2 in the project 
development stage will include more formal Expressions of Interest and 
then later in the process Requests for Proposal. The entire Direct 
Access Model needs to be streamlined to assure the delivery of 
equipment at the appropriate time in the implementation cycle.
      Fair Labor Practices. Achievement of fair labor practices 
that will produce good paying jobs while creating flexibility to 
achieve success in new vulnerable corridor operations.
      Streamlining. This process will be designed to not add 
any additional time to make a project operational. The competitive 
option will run concurrently with other project activities such as 
construction and equipment delivery.

    Again--we are advancing the Direct Access Model framework under 
current law.
      Looking Toward a new Authorization--What Should Congress Do?
    With a new BIL authorization on the horizon, we suggest a 
restructuring of the passenger rail law is in order. Here are a few 
areas that we believe would create a good result.
      Promotion of a pro-competitive policy--Legislative 
provisions should proactively promote passenger rail innovation and 
competition.
      +  The statute should require a competitive method for selecting 
rail service operators as a condition of grants where practicable.
        +  Specific rail programs should require competitive criteria 
for applicant states and local agencies.
        +  The process should include a requirement for simple 
Expressions of Interest in the planning stage to evaluate the 
competition option.
      +  PRIIA Section 301 grant competitive requirement should be 
referenced in the criteria. States can select Amtrak or an Operator 
without a competitive process if they meet the following PRIIA 301 
test--If the State/Authority does not select the operator competitively 
it must ``provide written justification to the secretary showing why 
the proposed operator is best, taking into account price and other 
factors and that the proposed operator will not unnecessarily increase 
the cost of the project.''

      Infrastructure and Equipment Funding. There should be a 
sustainable funding source available to major providers of rail service 
on a fair basis including commuter agencies and states/authorities 
sponsoring passenger rail.
      +  Commuter agencies should have access to the CRISI.
      +  Federal grants should have set-asides to build state capacity 
to manage state supported routes.
      +  The federal-state partnership program should be available 
exclusively to the states and authorities sponsoring corridor 
development.
        +  Grants available to states/authorities should not be 
available directly to competing operators including Amtrak or Private 
Operators such as Brightline, Herzog, TransDev, RATPdev or other 
operators or service providers.
      +  Equipment and Liability--The legislation should address the 
insurance shortfall and create an adequate equipment pool available 
directly to states and commuter authorities.

      Amtrak Reforms--The political reality is such, it will 
undoubtedly be necessary to maintain Amtrak's statutory privileges 
including access and metrics and standards. These should increasingly 
become a fallback last resort. Wherever possible the tilt should be to 
the competitive model.
      +  Amtrak should not have statutory privileges that increase 
their power over commuters or other publicly funded agencies. They 
should deal on a commercial basis as equals. STB should be given clear 
authority to mediate and resolve disputes between Amtrak and commuter 
agencies.\2\
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    \2\ Indeed, the new STB Passenger Rail Advisory Committee (PRAC) 
may prove instrumental in making recommendations to the Board and 
Congress on how best to use the STB capacity and experience in 
developing a pragmatic competition platform for expansion of intercity 
corridors.
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      +  Amtrak Operations should be separated from other functions and 
made an independent entity with transparent accounting and 
accountability. The planning functions should be separated as an 
independent office or transferred to FRA. A level playing field should 
be created between Amtrak operations and alternative operators and 
service providers with whom Amtrak will compete.

      Insurance and Liability--There should be a complete 
review on liability and options for coverage of both commuter and state 
supported rail operations. (See Addendum 4--Insurance and Liability)
      +  The Commuter Rail Coalition proposal for an additional year to 
secure insurance when the federal cap is increased should be adopted.
      +  Options for reform including pooling arrangements should be 
pursued.

      Equipment--How can the many needs of the emerging state 
supported corridors be met? Amtrak cannot efficiently meet the growing 
requirements of the states and/authorities for the 69 CID corridor 
projects. Assorted options, including an FRA equipment pool available 
to states/authorities should be reviewed in the coming months.

    Finally, AIPRO would ask this Subcommittee to consider a future 
hearing on the legislative ideas we have put forward as well as those 
from other stakeholders. Our immediate goal is a package of reforms 
that will streamline relations between the FTA oriented commuter world 
and FRA CID intercity corridors to produce the most cost-effective 
alternative to produce a high-performance rail passenger network across 
America.
    Thank you!
                   ADDENDUM #1--AIPRO and Its Mission
    About AIPRO. We are an alliance of independent operators, labor 
organizations and associates dedicated to advancing innovative 
passenger rail operations in the United States. The organization is 
made up of passenger rail professionals including operators, labor, 
rail construction contractors, consultants, and other stakeholders. We 
share the goal of a transparent and competitive marketplace. The Board 
is composed of Transdev; Keolis; Herzog; RATPDev; BRS-BMWE (rail labor) 
and McGrath Rail (rail construction). Our Associates include Direx 
Consulting and Safe Track. For more than a decade AIPRO has pressed its 
goals in a low-key fashion. We believe we are now poised to make a 
significant contribution to the creation of an American high 
performance passenger rail network.
    Today the AIPRO companies play a significant role in the American 
passenger rail space. In 2019 Amtrak carried about thirty million 
passengers while the AIPRO companies carried eighty million passengers. 
Certainly, all passenger rail took a terrible hit in the pandemic. In 
2020 Amtrak carried 16.8 million passengers, a 47.4% decrease and the 
commuter world saw a similar decline. However, ridership is coming 
back. In 2023 Amtrak carried twenty-eight million passengers. Commuter 
operations are seeing a similar rebound. In 2023 AIPRO companies 
carried about 65.5 million passengers by rail in the US (Transdev 2.1 
million; Herzog 17 million; Keolis 30 million; RATPDev 15.4 million).
    Globally and in America our members compete fiercely against each 
other. They run everything on the rails from streetcars to high-speed 
trains. Internationally my company Transdev carries over 608 million 
passengers a year. Keolis carries about 470 million passengers. RATPDev 
passenger count totals a whopping 1.5 billion annually. Together our 
members transport about 2.6 billion passengers by rail each year. This 
is the equivalent of carrying every American citizen 7.8 times a year.
    AIPRO members have incredible experience and a great deal to offer. 
We are anxious to contribute to the creation of an American high 
performance passenger rail network in the coming decade.
  ADDENDUM #2--Congress Encourages the Competitive Model on Intercity 
                               Corridors
    In the late 1950s and 1960's passenger service operated by freight 
railroads collapsed. Amtrak was organized in 1971 as a federally 
controlled entity that would be managed as a ``for profit'' corporation 
that would receive taxpayer subsidies. It was given a monopoly over 
intercity passenger train operations as well as special privileges 
including forced access to freight rights of way at incremental cost 
and a metrics and standards priority to be enforced at the Surface 
Transportation Board. At that time no viable passenger operators were 
on the horizon.
    Over the last half century times have changed. There is now a 
robust group of independent passenger rail operators that run tens of 
thousands of trains in the United States and carry 2.6 billion rail 
passengers internationally. How did this happen? Toward the end of the 
20th century new commuter agencies moved to the model of competition 
for operations and the current AIPRO members became principal players.
    By the end of the last century, Congress began to nudge intercity 
passenger rail in the direction of a competitive model. It began to 
recognize the growing diverse marketplace for expanding passenger rail 
operations and services. By 1997, Amtrak had received more than $20 
billion in federal funding and there was no end in sight. Recognizing 
the growing number of passenger rail operators in the commuter field, 
Congress repealed the prohibition against alternative passenger service 
providers operating over intercity corridors without Amtrak's consent.
    In the PRIIA Act of 2008, Congress strengthened the role of the 
states to manage all intercity corridors under 750 miles. PRIIA, 
Section 301 added a new requirement that compelled state grant 
applicants to use a competitive process in the selection of an 
operating partner. Further a predecessor Coalition to AIPRO (Herzog-
Transdev-NRC) negotiated a provision, also included in PRIIA Section 
301, to protect rail labor rights on these intercity corridors in the 
event there was an operator change from Amtrak to an independent 
operator. Thus, the rail unions became agnostic as to the operator, and 
in some cases, are now in active support of the Competition Model being 
developed by AIPRO.
    PRIIA 2008 encourages intercity passenger service.
      Section 209--States, not Amtrak, were made fully 
responsible for operating losses on the state supported routes under 
750 miles.
      Section 301--Established a grant program for the states. 
Unfortunately, for assorted reasons, the 301 grants were smothered in 
the bureaucracy cradle.\3\ However, these grants available to states 
were revived in a big way in the Bipartisan Infrastructure Law (BIL) 
and other FRA grant programs.
---------------------------------------------------------------------------
    \3\ The Obama High Speed Rail appropriation pumped nearly $11 
billion into rail projects outside the PRIIA 301 framework. The PRIIA 
grants then died for lack of an appropriation.
---------------------------------------------------------------------------
      Section 301--Requires that as a condition of grants, 
states are to select operators competitively. If a state does not, ``it 
shall provide written justification to the secretary showing why the 
proposed operator is best, taking into account price and other factors 
and that the proposed operator will not unnecessarily increase the cost 
of the project.'' AIPRO believes this to be a critical provision that 
should be strengthened in the next authorization and fully applied by 
FRA.
      Section 217--Provides that states selecting alternative 
operators shall have access to Amtrak facilities, equipment & services 
with STB binding arbitration. This provision has never been assessed 
but could become important.\4\
---------------------------------------------------------------------------
    \4\ Again, this should be an appropriate issue to be reviewed by 
the STB's new Passenger Rail Advisory Committee.
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      Section 305--Provides states with responsibility for and 
access to Next Generation passenger cars.
      Section 205--Created an Alternative Passenger Rail 
Service Pilot Program. Again, this program failed in the implementation 
and should be revisited.

    The FAST Act of 2015 strengthened the PRIIA provisions promoting 
competition and enhancing the role of states. Then came the Bipartisan 
Infrastructure Law (BIL) signed into law in November 2021. In total it 
appropriates about $1.2 trillion over 5 years for transportation and 
other infrastructure. It appropriated about $39 billion to improve 
transit and $66 billion primarily for intercity passenger rail. Much of 
this intercity funding is available through the Federal State 
Partnership for Intercity Passenger Rail Program. Here both the states 
and Amtrak are eligible for these grants. This includes $36 billion in 
advance appropriations. Throughout the BIL the option to pick 
alternative operators for intercity corridors is fully protected.
                ADDENDUM #3--Moving to Competition Model
    Progress to Date. In the pre-pandemic world Amtrak pressed for a 
$75 billion trust fund giving Amtrak all the money and the authority to 
manage all intercity passenger rail development. This would have 
provided complete control over intercity passenger operations. The 
infrastructure law, drafted by a bipartisan group in the Senate, 
rejected that approach. It placed FRA in charge of design and funding 
of the intercity passenger rail network outside the Northeast Corridor. 
It provided states with substantial funding for the first time ever, 
primarily through the Federal-State Partnership Program. It is 
specifically agnostic on the choice by sponsoring states/authorities of 
contract operators and service providers. Thus, either Amtrak, an 
alternative service operator or a combination can become the contract 
partners who operate the passenger service in the intercity corridors.
    Specifically, the BIL:
    a.  Puts the Federal Railroad Administration in complete charge of 
developing the intercity passenger network outside the NEC through the 
new Corridor Identification and Development program (CID). This creates 
a system of partnering between states, contract operators and service 
providers (which may or may not include Amtrak), and FRA. These 
operating partnerships then enter the CID funding pipeline. AIPRO is 
convinced that vigorous competition for the partnering role will bring 
a high-performance rail network to America.

    b.  Provides significant grant funding to the states for the first 
time. Through the Federal-State partnership and other grant programs 
states now have access to more than $66 billion over the next five 
years. The USDOT Build America Bureau (BAB) currently has about $110 
billion in soft money to lend.

    c.  Provides two clear options for the state/authority CID grant 
applicants to choose operators and service providers in these emerging 
corridors. First, of course, states can deploy the Traditional Amtrak 
Model and keep Amtrak as the exclusive partner. Or states have the 
alternative option to choose partnering corridor service providers 
competitively. In many cases, given the long history, Amtrak will be 
the logical partner. They clearly have an essential role in the future 
of intercity passenger development. But--there will be circumstances, 
particularly on new routes identified under the CID program where the 
competitive model will make the most sense. That will be the sweet spot 
for AIPRO. We are working to refine that competitive mechanism which we 
are calling the Competitive Direct Access Model.
                  ADDENDUM #4--Insurance and Liability
    This is a complicated and critical arena. An insurance solution 
must be built into the Direct Access Model so that the cost of claims 
does not sink the benefits of competition. AIPRO is looking at a range 
of options for the emerging intercity corridors. This includes 
everything from property-by-property insurance coverage on the Commuter 
model to pooling arrangements, likely through the USDOT, and ``nuclear 
type'' coverage. We believe the liability issue needs to be addressed 
legislatively in reauthorization.
    The liability regime in 49 U.S.C. Sec.  28103, with the ever-
increasing federal cap, makes it extremely difficult for commuter 
authorities or states to obtain adequate coverage. The per incident 
liability cap is expected to reach $397 million in 2026. Increased 
exposure and a shrinking rail insurance market threatens the future of 
passenger rail.
    Amtrak has tools to address these liability concerns across 
intercity passenger routes. Given its direct federal subsidy and 
special statutory protections for self-insurance, Amtrak gets a ``head 
start'' on the cost of claims. Some states/authorities with their 
private operators in the commuter arena have found ways to ``skin the 
cat'' on liability--but none are as simple or cost-effective as 
Amtrak's federal support and captive off-shore insurer. On intercity 
operations, this has already been accomplished on the Hartford Line as 
well as the Brightline operation in Florida. We believe similar 
arrangements can be crafted on the FRA Corridor ID expansions. We are 
optimistic that liability coverage can be arranged for the emerging 
intercity corridors as it was on the Hartford Line and Brightline.
    To that end, Congress should work to re-level the field. Here are 
some options:
    (1)  Requiring Amtrak to offer coverage to any intercity operator 
or state sponsor through its Passenger Rail Insurance Plan with fair 
and reasonable terms and conditions. Disputes could be resolved by the 
Federal Railroad Administration or the Surface Transportation Board.

    (2)  Enacting a statute that would permit states to extend their 
sovereign immunity to intercity passenger rail operators by contract.

    (3)  A USDOT solution. The Build America Bureau programs (RRIF) 
could be used as a backstop. In another alternative, FRA could provide 
a federal ``match'' (akin to the federal appropriation to Amtrak) to a 
risk liability pool for intercity commuter rail operators or state 
participants that would also contribute and obtain coverage through 
that pool; or

    (4)  Eliminating Amtrak's ``head start'' by requiring Amtrak to 
obtain a bona fide third-party policy--without ``self-insurance'' and 
Passenger Rail Insurance Ltd.

                                 
    Statement of Stephen Gardner, Chief Executive Officer, National 
 Railroad Passenger Corporation (Amtrak), Submitted for the Record by 
                           Hon. Seth Moulton
                              Introduction
    As Amtrak's Chief Executive Officer, I am pleased to submit this 
statement for the record following the House Railroads Subcommittee's 
April 17 hearing entitled ``Getting to Work: Examining Challenges and 
Solutions in the Commuter Rail Industry.'' I thank you for giving me 
this opportunity to share Amtrak's views on the important issues 
discussed at the hearing that affect Amtrak.
                     Amtrak and Commuter Railroads
    As the testimony at the hearing indicated, until the COVID-19 
pandemic, commuter rail service was experiencing a renaissance, with 
many new services added and significant expansion of existing services. 
Amtrak, working in conjunction with our commuter and state partners, 
has played a major role in that renaissance.
    Amtrak is the largest host railroad for commuter rail service in 
the United States. Since we acquired most of the then decrepit Boston-
to-Washington Northeast Corridor (NEC) from its bankrupt private 
railroad owner in 1976, investments to increase NEC capacity and 
upgrade infrastructure have allowed the number of commuter trains 
operating over the NEC to more than double. In addition to increasing 
trains on existing commuter rail services, Amtrak has accommodated many 
new and extended commuter rail services on the NEC, the busiest 
railroad in the United States; Amtrak's Hartford Line between New 
Haven, Connecticut and Springfield, Massachusetts; Amtrak's Keystone 
Corridor between Philadelphia and Harrisburg, Pennsylvania; and at 
Amtrak's Chicago Union Station, where the number of commuter trains has 
also increased enormously since Amtrak acquired control. Each weekday, 
approximately 2,000 commuter trains of 10 commuter authorities and 
state departments of transportation operate over the Amtrak-owned and 
operated portions of the Northeast Corridor and on Amtrak-owned 
trackage in Chicago.
    We are far from finished with adding commuter rail service on 
Amtrak-owned lines. Construction to accommodate new Metro-North 
Railroad service between New Rochelle and New York Penn Station on 
Amtrak's Hell Gate Line, one of the few segments of the NEC without 
commuter rail service, is currently underway. The Hudson Tunnel, on 
which we expect construction to begin next year, and other 
transformative infrastructure investments that are part of the Gateway 
Program that will double capacity between Newark, New Jersey, and New 
York City, will allow passengers on NJ Transit's Raritan Valley Line 
and other NJ Transit lines who must currently change trains to reach 
New York City to enjoy a one-seat ride directly into New York Penn 
Station.
    In addition to infrastructure access, Amtrak also provides railroad 
operations services to commuter railroads around the country. As noted 
at the hearing, Amtrak is one of the seven full-service operators of 
contract commuter rail services in the United States. Unlike most of 
the other operators, we are a U.S.-based company and all of our non-
management employees who provide commuter rail services are members of 
one of our 15 labor unions and councils. We operate the Maryland Area 
Regional Commuter (MARC) Penn Line service between Washington, D.C., 
and Baltimore and Perryville, Maryland; the Metrolink service provided 
by the Southern California Regional Rail Authority (SCRRA) in the Los 
Angeles area; and the Connecticut Department of Transportation (CTDOT) 
Shore Line East service between New Haven and New London, Connecticut.
    All of these commuter rail services have experienced tremendous 
growth since Amtrak began operating them. For example, the number of 
weekday MARC Penn Line trains has increased from six when Amtrak became 
the operator in 1983 to 57 today. We also provide equipment maintenance 
services for MARC, CTDOT, Sound Transit's Sounder commuter rail service 
in the Seattle area, and the Central Florida Commuter Rail Commission 
for the SunRail commuter rail service in the Orlando area, as well as 
some services for the Virginia Railway Express service in Washington, 
D.C. and NJ Transit.
                    Amtrak's Statutory Access Rights
    Amtrak strongly favors collaboration rather than an adversarial 
approach in all of our dealings with stakeholders. We were therefore 
disappointed that we did not learn of the proposals of the Commuter 
Rail Coalition (CRC) to diminish Amtrak's statutory access rights for 
operation of our trains over commuter railroad-owned lines from CRC 
itself. Instead, we found out about CRC's proposals when the Surface 
Transportation Board (STB) posted on its website an ex-parte letter CRC 
sent to STB members last December.
    CRC's letter urged that commuter railroads, and other railroads not 
relieved of obligations to provide intercity passenger rail service by 
the Rail Passenger Service Act of 1970 (RPSA) that created Amtrak, ``be 
treated differently'' by the STB should Amtrak seek access to their 
lines. The letter ignored the fact that the pertinent statutory 
language, codified at 49 U.S.C. 24308, applies equally to all railroads 
and commuter rail authorities, as the STB and its predecessor, the 
Interstate Commerce Commission (ICC), have repeatedly recognized. At 
the Subcommittee's recent hearing, one of the witnesses representing 
CRC urged that commuter railroads be given a complete veto power over 
the operation of Amtrak trains on their tracks, stating that commuter 
railroads ``should not be . . . forced to provide access to Amtrak 
trains, absent a mutually acceptable agreement.''
    The testimony at the hearing by witnesses representing CRC made it 
clear that CRC has a fundamental misunderstanding of Amtrak's statutory 
access rights.
    First, Amtrak trains do not have statutory preference or priority 
over commuter trains. Section 24308(c) of title 49 gives Amtrak trains 
only ``preference over freight transportation'' (emphasis added).
    Second, the statutory provisions that govern Amtrak's access to 
freight and commuter railroads already require what CRC's witnesses 
claim it is seeking: ``good faith negotiations'' before a dispute can 
be brought before the STB and ``protect[ions] when Amtrak seeks to 
exercise its [rights].'' The STB and ICC have always interpreted 49 USC 
24308(a), which gives the STB jurisdiction if Amtrak and a host 
railroad ``cannot agree,'' as requiring good faith negotiations before 
a dispute can be brought before them. The parallel statutory provision 
that governs STB resolution of disputes regarding commuter railroad 
operations over Amtrak-owned rail lines, 49 U.S.C. 24903(c)(2), 
contains a virtually identical requirement that the parties must ``not 
agree'' before the STB's jurisdiction can be invoked.
    Section 24308 already provides numerous protections for all host 
railroads when Amtrak seeks an STB order allowing it to initiate or 
continue operations over their lines. For example:
      Section 24308(a)(2)(A) empowers the STB to issue orders 
granting Amtrak access only if the STB finds that is ``necessary to 
carry out'' the purposes of Amtrak's governing statutes.

      Section 24308(a)(2)(A)(ii) requires the STB to 
``prescribe reasonable terms and compensation.'' The STB has held that 
Amtrak's payments must compensate the host railroad for all incremental 
costs attributable to Amtrak's operations, and that Amtrak (or its 
state partners) may be required to provide funding for capital 
investments to increase rail line capacity, or to upgrade tracks and 
other infrastructure, to accommodate new or additional Amtrak trains if 
the Board deems this necessary.

      Section 24308(a)(2)(B) authorizes the STB to award 
compensation in excess of incremental costs that is based upon quality 
of service, as the ICC and STB have consistently done.

    Given these safeguards, there is no basis for any of the major 
changes in and exceptions to Amtrak's longstanding statutory access 
provisions that CRC is seeking. Nor is there any factual support for 
CRC's purported concerns that Amtrak will run roughshod over commuter 
railroads to force its way onto their lines. As the testimony at the 
hearing indicated, Amtrak has made no attempt to do that. Moreover, 
under the Infrastructure Investment and Jobs Act (IIJA), the United 
States Department of Transportation, acting through the Federal 
Railroad Administration (FRA), is tasked with leading efforts to expand 
and increase intercity passenger rail service. The FRA-led Corridor 
Identification and Development (Corridor ID) Program the IIJA 
established will determine what corridors will be prioritized and 
awarded FRA grants for infrastructure and other capital investments 
required to accommodate new or increased service. The addition of new 
short-distance (under 750 miles) routes and trains will also continue 
to be dependent upon state funding support. What this means is that FRA 
and states, rather than Amtrak, will play the lead role in determining 
where expansion of intercity passenger rail service will occur.
    In the 53 years since enactment of the RPSA, Amtrak has brought 
only seven cases before the ICC or STB seeking access to a railroad's 
lines for new or rerouted services. None involved a commuter railroad. 
The only case under what is now Section 24308 in which a commuter 
railroad was a party pertained to compensation for the operation of 
existing Amtrak services.
    While Amtrak has reached negotiated agreements with host railroads 
in the vast majority of cases in which it has added new routes or 
trains, Amtrak's statutory access rights are absolutely essential. If 
they no longer applied to all freight and commuter-railroad owned 
lines, a single railroad that owned just a couple of miles of track on 
a route could arbitrarily preclude Amtrak from initiating a new 
service, or force Amtrak to discontinue service on an existing route 
when the contract governing Amtrak's operations expired. Twelve of 
Amtrak's 15 long distance routes, and many of its state-supported 
supported routes, operate in part over commuter railroads or on 
railroad lines that in 1971 were owned by railroads not relieved of 
their intercity passenger rail service obligations.
    Finally, there is no basis for special treatment for commuter 
railroads when it comes to compensation for Amtrak's operations over 
their lines. All of the commuter railroad-owned lines that Amtrak 
operates over were acquired by their present owners after Amtrak was 
created in 1970, with full knowledge of Amtrak's statutory rights. It 
also bears noting that, outside of the NEC, state-supported trains 
primarily funded by Amtrak's state partners account for nearly 85% of 
Amtrak train miles on commuter railroads. This means that states would 
have to provide funding for the vast majority of the additional 
compensation that CRC seeks for its members. We see no reason why 
Amtrak and our state partners should be obligated to pay more merely 
because of changes in the ownership of rail lines over which our trains 
operate, most of which occurred many decades ago.
    Commuter Rail and Amtrak Eligibility for Federal Grant Programs
    As indicated by the testimony at the hearing, capital projects that 
solely benefit commuter rail service are not eligible for Consolidated 
Rail Infrastructure and Safety Investment (CRISI) grants awarded by the 
Federal Railroad Administration (FRA). There is a good reason why 
projects that only benefit commuter rail service are not eligible for 
the FRA-administered federal grant programs for ``rail'' projects: 
commuter railroads are considered ``transit'' services, which makes 
them eligible for the federal grant programs administered by the 
Federal Transit Administration, primarily funded through the Highway 
Trust Fund, for which Amtrak is ineligible. While CRISI received $5 
billion in advance appropriations in the IIJA and an additional $1.4 
billion in annual appropriations since its enactment, the federal 
transit programs for which commuter railroads are eligible received 
$107 billion in guaranteed funding in the IIJA.
    While the vast majority of CRISI grants are awarded to short line 
and regional freight railroads, CRISI is an important source of funding 
to Amtrak for safety, job training and other projects that in many 
cases are not eligible for other competitive grant programs. Although 
projects that solely benefit commuter rail service are ineligible for 
CRISI grants, states and regional transportation authorities can 
receive CRISI grants for projects, such as the proposed Hunter Flyover 
on the NEC mentioned at the hearing, that benefit intercity as well as 
commuter rail service. (Amtrak supported NJ Transit's 2022 application 
for a CRISI grant for the Hunter Flyover.) Many CRISI grants have been 
awarded for projects that benefit both commuter and Amtrak service. For 
example, SCRRA received a CRISI grant for a project to make track, 
signal and safety improvements on one of its lines in Burbank, 
California that was eligible for CRISI funding because Amtrak also 
operates over the line.
    Needless to say, making projects that solely benefit commuter rail 
service eligible for CRISI grants would reduce the relatively small 
amount of federal funding that Amtrak and short line and regional 
railroads receive through federal ``rail'' grant programs, and 
exacerbate the longstanding disparity between federal funding for 
Amtrak and the funding provided for transit and highways. Were Congress 
to make commuter rail-only projects eligible for CRISI grants, it 
should also repeal the statutory provision, codified at 49 U.S. 
5302(15)(B)(1), that prohibits federal transit funds from being used 
for intercity passenger rail service provided by Amtrak.
   Effective Date of Increase in Statutory Cap on Passenger Liability
    Amtrak supports the recommendation of the witnesses at the hearing 
that the effective date of the adjustment for inflation in the 
statutory cap on passenger rail liability that occurs every five years 
be extended from 30 to 365 days after USDOT announces the new cap. As 
those witnesses testified, the availability of passenger liability 
insurance for rail has significantly decreased since the statutory 
provision requiring the inflation adjustment was enacted in 2015. Some 
insurance carriers have left the rail insurance market, while others 
are reducing the lines of coverage they provide or increasing premium 
costs. Needless to say, the suspension of Amtrak service if a commuter 
railroad over which Amtrak operates is unable to increase its insurance 
coverage to the level of the adjusted cap by the current, relatively 
short, statutory deadline would have a major adverse effect on Amtrak 
and its passengers.
    Additionally, many would be surprised to learn that commuter 
railroads--unlike Amtrak and virtually every other form of passenger 
transportation--are not required by federal law to maintain any 
liability insurance. Many commuter railroads also have sovereign 
immunity under state law that significantly limits their liability for 
personal injury claims in the event of an accident, and their ability 
to honor contractual indemnification obligations. If Congress extends 
the effective date for increases in the statutory cap on liability for 
rail passenger claims, it should also amend 49 U.S.C. 28103, which 
requires Amtrak to maintain a minimum level of liability insurance, to 
make that requirement applicable to commuter railroads as well. Since 
the testimony at the hearing indicated that all U.S. commuter railroads 
are contractually obligated to maintain liability insurance with 
coverage limits in excess of the level specified in Section 28103, 
making this a statutory requirement should not adversely impact any 
commuter railroad. However, creating consistency in the application of 
the law will ensure the many agencies around the United States 
considering new commuter rail operations understand from the outset 
what is necessary regarding liability insurance, which could help 
minimize negotiations over this topic with railroads over which they 
seek to operate.
    Amtrak and Commuter Railroads: The Opportunity for Collaboration
    As discussed at the hearing, the work of the NEC Commission 
established by the Passenger Rail Investment and Improvement Act of 
2008 demonstrates what can be accomplished when Amtrak and commuter 
railroads work together to plan, secure funding for and carry out 
infrastructure investments. The comprehensive, 15-year, CONNECT NEC 
2037 capital investment plan the NEC Commission has developed will 
maximize the benefits of the IIJA funding made available for the NEC by 
prioritizing the projects for which there is the greatest need and that 
will provide the largest benefits to NEC commuter, Amtrak and freight 
operations. Another outstanding example of Amtrak, commuter rail, state 
and freight railroad collaboration is the Transforming Rail in Virginia 
program, which is advancing unprecedented investments that will improve 
and increase capacity for commuter, Amtrak and freight rail service 
throughout Virginia.
    We strongly believe that Amtrak and commuter railroads should work 
together to improve their service and infrastructure and serve more 
passengers to help make the case for the increased, sustained federal 
funding that both need. We view commuter railroads as collaborators 
rather than as competitors for existing track capacity and the small 
portion of federal transportation spending that currently goes to 
passenger rail.
    Amtrak has recovered nearly all of the ridership we lost as a 
result of the COVID-19 pandemic. Our Fiscal Year 2024 ridership through 
February was only 2% below our ridership during the same pre-COVID 
period in Fiscal Year 2020, and we are projecting that we will end this 
Fiscal Year ahead of our pre-pandemic ridership and revenue levels. As 
indicated by the testimony at the hearing, commuter railroads have not 
been as fortunate, as most are still carrying significantly fewer 
passengers than they did before the pandemic due to increases in hybrid 
and remote work. To respond, many commuter railroads are looking to 
grow ridership by attracting more passengers who are traveling off-peak 
and for purposes other than work commutes.
    One way that can be accomplished is through greater collaboration 
and improved, more seamless, connectivity between their services. Last 
year, 24.5 million Amtrak passengers began or ended their trips at just 
six Amtrak stations--in Boston, Chicago, Los Angeles, New York City, 
Philadelphia and Washington--that are also hubs of those cities' 
commuter rail systems. Millions more Amtrak passengers boarded or 
deboarded at the many other stations throughout our network where 
Amtrak trains connect with commuter trains. Collaborative efforts by 
Amtrak and commuter railroads, facilitated by advancements in 
technology and investments in infrastructure, can help break down the 
barriers, such as uncoordinated schedules and separate ticketing 
systems, that discourage passengers from connecting between Amtrak and 
commuter trains today. That would enable both Amtrak and commuter 
railroads services to attract much needed new passengers and help the 
public gain more utility out of these respective systems funded by 
their tax dollars.
             Needed in Reauthorization: Multi-Year Funding
    The significant multi-year funding the IIJA has provided through 
advanced appropriations has been, as one hearing witness stated, a 
``game-changer for the Northeast Corridor.'' That funding is allowing 
Amtrak and its commuter rail partners to at last commence construction 
of vital NEC infrastructure projects, including the Hudson Tunnel, the 
Frederick Douglass Tunnel in Baltimore and the Susquehanna River 
Bridge. Completion of these projects will ensure continuity of NEC 
operations, enhance reliability and performance, and provide much 
needed capacity for expansion of high-speed, intercity and commuter 
rail services along our nation's most important transportation artery. 
IIJA funding is allowing Amtrak and its commuter, state and local 
partners to advance much needed infrastructure investments on our 
National Network, such as the Chicago Hub Improvement Program that aims 
to transform Amtrak and commuter rail service at Chicago Union Station 
and enhance rail infrastructure used by Amtrak trains throughout the 
Chicago area.
    Of all of the issues discussed at the hearing, the most important 
is ensuring that substantial, assured, multi-year funding like that the 
IIJA provides through advance appropriations continues when a new 
surface transportation bill is enacted. Without that, the enormous 
progress that Amtrak and commuter railroads have made in advancing 
joint benefit infrastructure projects on the NEC, in Chicago and 
elsewhere on our National Network will not continue.
                               Conclusion
    Amtrak looks forward to continuing to work with our commuter 
railroad partners to ensure that Amtrak and commuter rail service 
realize their full potential. Expansion of both commuter rail and 
Amtrak service should be encouraged rather than impeded. We see many 
untapped opportunities for improving collaboration on infrastructure 
projects and enhancing connectivity between Amtrak and commuter rail 
services, and for joining together to make the case for increased 
funding for all passenger rail services.


                               Appendix

                              ----------                              


   Questions to Michael Noland, President, Northern Indiana Commuter 
 Transportation District, and Chairman, Commuter Rail Coalition, from 
                        Hon. Valerie P. Foushee

    Question 1. Your statements at the hearing seemed to indicate that 
you believe Amtrak has a statutory right to priority scheduling on 
commuter railroad-owned tracks. Amtrak has shared with the Committee 
that it does not believe it has this right of preference on commuter 
railroad-owned track, but does have a statutory right of access.
    Could you please clarify what you meant by this/these statement(s)?
    Answer. 49 U.S.C. Sec.  24308(c) gives Amtrak statutory preference 
to operate its service over that of freight transportation. Amtrak has 
interpreted the statute to include preference for Amtrak trains over 
freight trains operating on lines owned by commuter railroads. For 
example, in response to questions by the late \\ Donald M. 
Payne, Jr. in 2021, Amtrak's Chief Executive Officer, Stephen Gardner, 
replied as follows:
---------------------------------------------------------------------------
    \\ Editor's note: Representative Payne died on April 24, 
2024.

        ``Question 12. Does Amtrak believe it has superior statutory 
        rights over commuter railroads as it does over the lines of 
        freight railroads? If yes, explain the grounds for this claim. 
        ANSWER to 12 & a. Amtrak's statutory right to preference over 
        freight transportation (49 U.S.C. 24308(c)) does not give 
        Amtrak trains preference over commuter trains. It does give 
        Amtrak trains operating over commuter-railroad owned lines 
        preference over freight trains operating over those lines.'' 
        (Emphasis added.) \1\
---------------------------------------------------------------------------
    \1\ Plans for Expanding Intercity Passenger Rail, Remote Hearing 
before the Subcommittee on Railroads, Pipelines, and Hazardous 
Materials of the Committee on Transportation and Infrastructure, House 
of Representatives, 117 Cong. 37 [https://www.govinfo.gov/content/pkg/
CHRG-117hhrg47413/pdf/CHRG-117hhrg47413.pdf] (Dec. 9, 2021), Appendix 
(Questions from Hon. Donald M. Payne, Jr. on behalf of Hon. Eddie 
Bernice Johnson to Stephen Gardner, President, National Railroad 
Passenger Corporation).

    However, because neither 49 U.S.C. Sec.  24308(c) nor any other 
statutory provision also gives commuter railroads similar rights over 
freight transportation, commuter railroads are often at a disadvantage. 
Because they have no statutory right of preference, both Amtrak and 
freight railroads that dispatch commuter operations often place 
commuter operations in a position where they effectively yield their 
operations to both Amtrak and freight trains, even if a delayed Amtrak 
or freight train could disrupt the on-time service of the commuter 
operations. The resulting reality leaves commuter railroads at a 
distinct disadvantage and compromises the reliability of their service. 
Moreover, as owner of certain corridors and facilities used by commuter 
railroads, Amtrak's control over dispatching in an environment where 
the commuter carriers have no statutory protection of either first or 
equal priority, gives Amtrak the ability to give its trains priority 
over commuters even where its trains are delayed and will cause 
disruption to commuter operations.
    Of note, in contract negotiations with commuter railroads, Amtrak 
repeatedly requires commuter operators to provide Amtrak with 
dispatching priority over that of commuter railroads, often citing its 
statutory rights of access \2\ as leverage over the commuter railroads 
in its negotiations. This statutory right of access, a right that can 
be enforced by the Surface Transportation Board, and the terms of which 
can be set by the Board if the parties cannot agree on a governing 
contract, places Amtrak in a distinctly advantageous position.
---------------------------------------------------------------------------
    \2\ 49 U.S.C. Sec.  24308(a).

    Question 2. Have you ever been unable to come to a contractual 
agreement with Amtrak? Are you currently in active negotiations with 
Amtrak regarding new or expanded intercity passenger rail service on 
Northern Indiana Commuter Transportation District-owned lines?
    Answer. Given Amtrak's statutory access rights under 49 U.S.C. 
Sec.  24308(a), Amtrak has a disproportionate advantage in contract 
negotiations over commuter railroads. The agency uses this authority to 
secure the right to operate on tracks owned, controlled, operated or 
managed by commuter railroads, enjoying the public capital investments 
made by state governments without providing sufficient value to 
compensate for its access. When possible, for example, Amtrak chooses 
to operate over commuter-owned railroads over freight lines because the 
commuter lines are already improved to benefit passenger operations and 
will not require the same level of investment by Amtrak to make them 
suitable for Amtrak's use.
    In Northern Indiana, for example, the State of Indiana has invested 
hundreds of millions of dollars into the Northern Indiana Commuter 
Transportation District (``NICTD'') to improve its lines by double 
tracking and adding other capacity enhancements designed to increase 
and both frequency and reliability of sits service offerings into 
Chicago. Amtrak already has a route into Chicago on the lines of 
Norfolk Southern, but despite the investments the federal government 
has made to improve service on the NS corridor, Amtrak has expressed 
interest in moving its service onto NICTD. While they have advised that 
they would only do so if they could negotiate an agreement for use of 
the NICTD corridor, because of Amtrak's statutory right, NICTD cannot 
refuse to negotiate. In addition, Amtrak has the statutory right to 
access and is only obligated to pay the incremental costs of its 
service on NICTD's line. These rights put NICTD, or any other publicly 
funded commuter line at significant disadvantage in the negotiating 
process, and are subject to Amtrak's unilateral decision whether or not 
to enforce its rights. In short, Amtrak's statutory rights put the 
commuter industry at risk of losing the benefit of the service 
enhancements made possible by its substantial investment in its system 
if it is required to allow Amtrak to take up capacity for commuter 
service, and receive minimal, inadequate, and as a result unfair 
compensation for providing Amtrak access.

   Questions to Michael Noland, President, Northern Indiana Commuter 
 Transportation District, and Chairman, Commuter Rail Coalition, from 
                           Hon. Seth Moulton

    Question 1. Is increasing speed a goal on your commuter rail 
system? How does the implementation of Positive Train Control 
contribute to efforts to increase network speeds?
    Question 2. Has your system created initiatives to attract more 
riders? If so, have you seen the results of these initiatives?
    Answer. Thank you for providing the opportunity to expand on my 
April 17 testimony in front of the Committee on Transportation and 
Infrastructure's Railroads, Pipelines, and Hazardous Materials 
subcommittee. Indeed, the industry's thoughts on improving commuter and 
passenger rail operations in the United States exceed what could be 
covered in a single hearing.
    Commuter and regional passenger rail is one of the safest and most 
efficient modes of public travel and plays an important role in the US 
transportation network. Passenger rail provides direct and indirect 
economic value to a region, promotes economic investment in communities 
along its corridors, and provides an unparalleled capacity to move 
people and reduce greenhouse gas emissions.
    As an industry, we pride ourselves on our safety initiatives, 
always looking to augment our safety-first culture. Positive Train 
Control (PTC) has further enhanced already safe commuter and passenger 
rail operations and provides a platform for the industry to further 
improve. This multi-billion dollar initial capital investment, and the 
on-going annual operating and capital funds needed to maintain the 
system--almost entirely resourced with local funding--are now part of 
our everyday operating environment.
    The deployment of PTC was complicated, and the federally mandated 
timeframe required the industry to focus its efforts on standing up the 
system as efficiently as possible to meet the required deadlines. We 
have since discovered PTC's shortcomings: decreased operational 
performance, caused by both system reliability issues and lower overall 
train speeds. These operating performance impacts are a byproduct of 
both the maturity and limitations of the technology, and the 
conservative nature in which it had to be developed and deployed to 
meet the implementation deadline. Similar to the investments into Next 
Generation (NextGen) Air Traffic Control systems, continued investment 
in PTC and related technologies will provide railroads an opportunity 
to not only address these impacts, but also improve operational 
performance and efficiencies by extracting value out of system and the 
initial investment the industry has made.
    PTC's impact on train handling and resulting operational 
performance come in various forms, but the most prevalent are related 
to technology reliability, PTC technology performance trade-offs 
associated with implementation timelines, and how operating crews 
interact with the technology. The first two are byproducts of the 
nature in which PTC was implemented, where certain limitations in 
capability and performance were accepted as a necessary trade-off in 
order to implement the systems in the timeframe required. Limitations 
to Global Positioning System (GPS) accuracy and reliability, as well as 
the use of conservative enforcement algorithms that approximate 
performance of several vehicle types are examples of known limitations 
that have an impact on operational performance \1\. While the industry 
is working with its PTC suppliers to improve these elements, this 
requires continued research well as continuous investment to update 
both the hardware and software deployed across the system.
---------------------------------------------------------------------------
    \1\ Additionally, certain PTC technologies that utilize traditional 
cab-signal track circuit codes to enforce speeds are limited by the 
number of electrical signals that can be sent through the rail without 
interference. In practice, if the safe design speed of a curve is 55 
mph, but the PTC system only has speed codes for 30 and 60 mph, the 
operating speed for the entire track circuit that includes that curve 
is limited to 30 mph (a 25 mph difference).
---------------------------------------------------------------------------
    As noted above, the implementation of PTC has also changed how 
train engineers operate their trains, including impacts on train 
handling. Our train crews, seasoned conductors and engineers, have 
provided great insight into the daily performance restrictions that 
have resulted under this new safety overlay system. As an example, when 
an engineer is operating a train and their speed is approaching the 
track speed limit, warning alarms sound in the operating cab of the 
train to alert the engineer that a braking enforcement is imminent. To 
avoid risking a PTC braking enforcement (a computer-enforced train 
stop), engineers keep their trains well below authorized track speeds, 
and likewise, begin braking far in advance of what is actually 
necessary to safely operate the train.
    To be clear, we are not advocating that engineers operate their 
trains in excess of authorized track speeds but have observed that PTC 
often indirectly compounds the safety margins that were already present 
in railroad operating rules and regulations. If a train is authorized 
to travel over a segment of track at 50 mph, the engineer will often 
operate their train at 2-3 mph below the authorized track speed to 
avoid the potential of PTC enforcement by the nature in which PTC was 
implemented. Reduction in available track speed can result in a loss of 
3%-4% of safe and approved operating speeds. This loss of operational 
performance translates directly in to longer travel times for our 
riders, reduced efficiency and increased energy consumption, and 
reduced capacity on the overall rail network. By extension, this loss 
also is a diminution of the capital investment our industry has made in 
the rail system's infrastructure.
    To define this issue and identify opportunities to safely improve 
operating performance, we suggest that the Railroads, Pipelines and 
Hazardous Materials Subcommittee consider instructing the Department of 
Transportation to undertake a detailed study of the impact of PTC on 
railroad operating performance. As part of this study, it would be 
helpful to understand the level of investment required to continue to 
make the technological improvements required, and if there are any 
regulatory modifications that could be made to improve passenger 
railroad operations with PTC. This will help the industry further 
maximize the investment made in the technology and support the 
passenger rail industry in delivering the competitive transportation 
solution that rail provides.
    An example of what could be considered is the speed limits set for 
classification of track \2\. Under FRA rules, track speeds are set to 
ensure safe operating performance with associated levels of maintenance 
and grade crossing warning protection. These standards have been in 
place for many decades and have not been examined in relation to how 
railroads operate today, with technologies such as PTC and current 
railroad operating practices. Class IV track, for example, has a 
maximum authorized speed of 80 miles per hour (mph). We know our 
equipment, maintenance and inspections practices have greatly improved 
since this standard was put in place. Can FRA Class IV track speeds be 
adjusted from 80 mph to 85 mph safely? By holistically examining the 
safety margins in place, and the flow-down effect of how different 
regulatory requirements translate to operating a modern passenger 
railroad today, the industry would be better positioned to mitigate the 
unintended operational restrictions imposed by compounding 
requirements, such as PTC.
---------------------------------------------------------------------------
    \2\ Maximum authorized operating speeds are governed by track 
safety standards contained in 49 CFR Part 213.
---------------------------------------------------------------------------
    We know from studies, surveys and rider feedback that our customers 
demand greater schedule frequency--especially outside of the 
traditional morning and evening peak periods--reduced time to and from 
their destinations, more reliable service, and amenities such as wi-fi 
on-board our trains. The challenge is how we meet these customer 
expectations, maintain stable operating budgets, and provide the 
necessary investments to deliver the service that our customers demand. 
We believe that the opportunity to study the impact of PTC (and 
associated operating regulations) on railroad operations has the 
ability to deliver improved performance without compromising any aspect 
of safety, and at little or no additional cost. When aligned with long 
term and continued investments in infrastructure and improved PTC 
capability and functionality, Congress can help ensure that commuter 
railroads can reach they full potential as an essential transportation 
mode, just as it has with highway and air travel (e.g., dedicated long-
term funding programs).

   Question to Debra A. Johnson, General Manager and Chief Executive 
Officer, Regional Transportation District (RTD), Denver, Colorado, from 
                        Hon. Valerie P. Foushee

    Question 1. Why is it important for passenger rail agencies to know 
when hazmat is being transported on their property?
    Answer. RTD does not share trackage with freight operations but 
does operate parallel to freight. Emergency response is best served 
with increased time to prepare and respond. Early notification of 
potential hazards allows crews to be on alert. This is similar to 
having personnel on high alert, for example, when a credible threat is 
made against an organization.

  Questions to Debra A. Johnson, General Manager and Chief Executive 
Officer, Regional Transportation District (RTD), Denver, Colorado, from 
                           Hon. Seth Moulton

    Question 1. Is increasing speed a goal on your commuter rail 
system? How does the implementation of Positive Train Control 
contribute to efforts to increase network speeds?
    Answer. Increasing the speed of commuter rail system is not 
currently an RTD goal. Several factors contribute to this assessment:
      RTD's rail network has a significant amount of single-
track sections. Increasing speeds only to reach a control point or 
interlocking and having to stop to wait for an opposing train operating 
in the opposite direction diminishes the return on any time gained 
through faster speeds.
      To effectuate increased speeds, RTD would need to 
reconfigure its existing Positive Train Control system, including the 
highly complex wireless grade crossing technology currently in place. 
Implementation of the existing system was an extensive and complicated 
effort that is still being perfected. Reconfiguring the system to 
accommodate increased speeds and maintaining this new system would be a 
costly and time-intensive endeavor.
      The proximity and number of stations reduces the 
effectiveness for potential high speeds, as trains need appropriate 
distance to attain that speed and then appropriate distance to slow 
down and stop at the next station.

    Question 2. Has your system created initiatives to attract more 
riders? If so, have you seen the results of these initiatives?
    Answer. RTD has implemented several initiatives aimed at 
incentivizing transit use, including but not limited to the following:
      In August 2022 and July and August 2023, RTD offered zero 
fares across its entire system as part of the Zero Fare for Better Air 
initiative. The collaborative, statewide initiative was made possible 
by a grant program administered by the state. The grant program was 
designed to reduce ground-level ozone by increasing the use of public 
transit. The zero-fare periods aligned with Colorado's highest ozone 
months. While ridership increased significantly during these periods, 
staff has not determined whether the program influenced commuting 
behaviors in the long-term.
      In September 2023, RTD launched Zero-Fare for Youth, a 
one-year pilot program that aims to enhance the lives of RTD customers 
and communities by reducing transportation costs for families. By 
inviting individuals 19 years of age and under to use the system at no 
cost, the agency removed barriers to education and employment, while 
creating access to destinations across the metro Denver region. While 
the overall success of the program will be evaluated closer to the 
conclusion of the pilot period, reports from local school districts, 
most notably Denver Public Schools, indicate that the program has had a 
considerable positive impact on truancy rates. The agency will continue 
offering zero-fare youth transit in future years through state funding.
      Following an industry peer review of RTD's transit 
policing model conducted in 2021, RTD shifted its transit network 
security operations toward a community policing model, bolstered by 
sworn police officers, with a corresponding reduction in the agency's 
reliance on contracted security personnel. Responses to customer and 
agency employee surveys indicate that respondents now have a higher 
perception of personal security both utilizing transit and waiting at 
stops and stations. Staff believes this enhanced perception of security 
will yield a sustained increase in ridership.

Questions to David W. Dech, Executive Director, South Florida Regional 
      Transportation Authority (Tri-Rail), from Hon. Seth Moulton

    Question 1. Is increasing speed a goal on your commuter rail 
system? How does the implementation of Positive Train Control 
contribute to efforts to increase network speeds?
    Answer. We do not currently have any projects planned to increase 
the maximum authorized speed of our railroad, We have a MAS of 79 mph. 
We have 19 stations and rarely would have an opportunity to run over 79 
mph given the spacing between our stations.
    If we were to plan on increasing the speed, PTC upgrades would be a 
significant factor in evaluating the cost vs. benefit as this would 
necessitate almost a complete overhaul of the software and braking 
algorithms.

    Question 2. Has your system created initiatives to attract more 
riders? If so, have you seen the results of these initiatives?
    Answer. We have added our first ever set of express trains as part 
of a pilot program to increase ridership. These trains only have 5 
stops instead of 19. We are still evaluating but the program has had 
moderate success with ridership around 400 passengers per day on the 
set and growing.
    We have added two additional trains in the late evening hours in an 
effort to capture increased ridership from our airports. We met with 
airport leadership, airport unions, and surveyed employees to find the 
times that best fit. The results thus far have been mixed. We have 
ramped up our marketing and outreach.
    We have increased the trains that we will run for special events, 
Taylor Swift, Ultra Music Festival, etc., in an effort to expose our 
system to new riders. These trains have been very successful.
    We sent teams to Miami to court local businesses as well as low-
income area to advertise our discount programs.

 Question to Kevin S. Corbett, President and Chief Executive Officer, 
  New Jersey Transit, on behalf of the Northeast Corridor Commission, 
                      from Hon. Valerie P. Foushee

    Question 1. What does the development of the Northeast Corridor 
Inventory, as required in the Bipartisan Infrastructure Law, mean for 
the projects on the Northeast Corridor, many of which are 100+ years 
old?
    Answer. The creation of the Northeast Corridor (NEC) Inventory is 
providing greater certainty for the advancement of NEC projects. The 
NEC Inventory includes a list of projects that have been consistently 
documented and tracked in the NEC Commission's multiple planning 
publications. This vetting and documentation, which is being done as 
part of the NEC Commission's routine annual processes, now allows the 
Federal Railroad Administration (FRA) to have a convenient, valid, and 
predictable menu of options to choose from for its grant programs that 
have been funded by the Bipartisan Infrastructure Law.
    The NEC Inventory and NEC Commission processes are a ``win-win'' 
for all parties, as the FRA now has a stronger knowledge base and 
greater familiarity with details for all of the projects, resulting in 
a faster and more efficient review of grant applications, while NEC 
rail operators have more confidence regarding whether and when their 
projects will move forward. Such progress is critical to replace and 
improve and upgrade the NEC 's aging infrastructure that, as noted, has 
been in place for more than a century.

 Questions to Kevin S. Corbett, President and Chief Executive Officer, 
  New Jersey Transit, on behalf of the Northeast Corridor Commission, 
                         from Hon. Seth Moulton

    Question 1. Is increasing speed a goal on your commuter rail 
system? How does the implementation of Positive Train Control 
contribute to efforts to increase network speeds?
    Answer. Yes, increasing speed if safely feasible is a goal. 
However, it must be noted that implementation of Positive Train Control 
(PTC) has arguably made the actual work to increase speeds more 
complicated as the onboard and wayside equipment configurations have to 
be modified in order to make changes to speed limits. If the speed 
change is equipment specific, such as with particular types of 
locomotives, all of those locomotives need to be boarded and have the 
speed change done manually by the appropriate personnel from NJ TRANSIT 
or the vendor of the PTC system. For changes to track speeds the 
transponders on the rights-of-way need to be reprogrammed with new 
speeds, and adjustments must be made to the overall design of the 
transponder sequence as braking distances increase if speeds are 
increased. This would involve design work by a vendor and then the 
changeout of the transponders located between the rails in the affected 
area by NJ TRANSIT personnel--all of which carry significant costs.

    Question 2. Has your system created initiatives to attract more 
riders? If so, have you seen the results of these initiatives?
    Answer. There are a number of initiatives NJ TRANSIT has undertaken 
to attract more riders, all of which collectively have had positive 
impacts as evidenced by our rail ridership coming back at a strong and 
steady pace. These initiatives include:
      FLEXPASS--This was a creative pandemic-era ticket pilot 
program that was extremely popular and attracted riders, both current 
and new, who traveled several days a week, and so did not need a 
monthly pass.
      Four seasonal marketing campaigns targeting first-time 
riders, as well as those who haven't ridden for six or more months.
      Effective communication campaigns to reinforce the 
customer experience improvements, safety and the reliability of our 
system, including ``While You've Been Away,'' ``Ride Kind,'' and 
``Daily Dose of Progress,'' among others.
      Mobile App Enhancements to improve customers' travel 
experience, including Station Arrival Alerts, How Full is My Train/Bus, 
and more--4.8 stars with 217,000+ reviews in the Apple App Store.
      Special Promotions to attract riders during events, 
including discounts and special offers for Valentine's Day, Earth Day, 
Fleet Week, Take Your Children to Work Day, the North 2 Shore Festival, 
and more.
      Marketing Activations at high visibility events, 
including the Atlantic City Airshow, events at major colleges & 
universities, and at the busy Secaucus Junction Rail Station during 
concerts & sporting events at MetLife Stadium, among others.

    Question to Darren M. Kettle, Chief Executive Officer, Southern 
 California Regional Rail Authority (Metrolink), from Hon. Valerie P. 
                                Foushee

    Question 1. You shared that Metrolink service linking with 
Brightline West, once constructed and operating, is scheduled to run 
hourly, independent of the regular commuter schedule.
    How will this impact other Metrolink operations?
    Answer:
Added Maintenance Capacity
    Because Brightline West intends to connect its Las Vegas service 
with Los Angeles via the Metrolink Rancho Cucamonga station, its 
opening is forecasted to significantly increase the number of Metrolink 
customers. As such, Metrolink is increasing maintenance capacity 
overall within its system and growing its vehicle fleet to accommodate 
future service growth. Specifically, the agency intends to build a new 
maintenance facility in Orange County that includes additional service 
and inspection tracks, a locomotive and passenger railcar heavy 
maintenance shop, and a permanent materials storage building.
Pulse Scheduling
    Metrolink will also ``pulse'' its schedule to provide customers 
with seamless connections to the high-speed rail service. An intuitive, 
reliable, hourly service between Rancho Cucamonga and Los Angeles Union 
Station will sync with the private operator's schedule, thereby 
ensuring little down time for customers looking to get to and from Las 
Vegas.

   Questions to Darren M. Kettle, Chief Executive Officer, Southern 
 California Regional Rail Authority (Metrolink), from Hon. Seth Moulton

    Question 1. Is increasing speed a goal on your commuter rail 
system? How does the implementation of Positive Train Control 
contribute to efforts to increase network speeds?
    Answer. Increasing system speed and travel time competitiveness is 
dependent on several factors, including track design, signal spacing, 
track infrastructure, and signal and crossing design and 
infrastructure. Increasing speeds is a goal but one that requires 
addressing one or more of these factors.
    Positive Train Control (PTC) is a safety overlay system which is 
intended to enforce the existing and underlying speed limits, whether 
track, signal, or authority based. Some speed limitations are dependent 
on track and signal geometry, design, infrastructure, or operating 
rules and PTC can't be used to increase these speeds.
    However, there are some instances where PTC can be used to increase 
the capacity of the system. Industry efforts are underway to leverage 
PTC to accomplish Quasi-Moving Block (QMB) and Fully-Moving Block (FMB) 
methods of train control, which would allow higher throughput of 
trains. Metrolink will be initiating a feasibility study and possible 
implementation plan for Higher Reliability/Capacity Train Control 
(HRCTC). HRCTC is the next generation of train control that leverages 
PTC to deliver options like QMB technology.

    Question 2. Has your system created initiatives to attract more 
riders? If so, have you seen the results of these initiatives?
    Answer. Metrolink has several initiatives underway to earn back 
pre-pandemic riders and attract new customers.
Student Adventure Pass
    Metrolink launched its Student Adventure Pass, a state grant-funded 
pilot program that enables K-12, college, and trade school students 
throughout Southern California to take the train at no cost. Between 
October 2023 and April 2024, more than 209,000 riders took advantage of 
the program. The share of Metrolink's total riders that are students 
grew from 17% to 25%. Today, 34% of these students are new riders, an 
indication Metrolink is successfully integrating our service into the 
lifestyles of the next generation of riders.
Partnerships for Special Events
    For the past two years, Metrolink and Insomniac Events have teamed 
up to offer late-night trains for music festival goers, particularly 
for events at the NOS Events Center in San Bernardino. These special 
trains provide safe and convenient transportation for attendees, mainly 
in the 18-35 age range, to get home without needing to drive. This 
partnership aims to enhance the festival experience, reduce traffic and 
parking problems, and provide increased revenue to Metrolink.
    Metrolink is also offering special round-trip service to select Los 
Angeles Angels home games during the 2024 baseball season. Adult 
roundtrip tickets are $10 per person, and up to three kids ages 17 and 
under can ride free with each paying adult, making the Angels Express 
an affordable option for families. Metrolink's Anaheim stop at the 
Anaheim Regional Transportation Intermodal Center (ARTIC) is adjacent 
to Angel Stadium, allowing for a short walk to the ballpark.
    Additionally, in partnership with the X Games, Metrolink has 
extended service on the Ventura County Line to provide X Games Ventura 
attendees an affordable and convenient transportation alternative to 
driving. Special service to the event-adjacent Ventura-Downtown/Beach 
Station, which is normally only serviced through Amtrak, reduces car 
reliance while helping to familiarize infrequent or new riders with 
public transit. Metrolink offered this enhanced service in 2023 and 
will again be providing extended service in 2024.
Mobility-4-All
    Mobility-4-All provides a 50% discount on any Metrolink ticket for 
those who qualify via their California Electronic Benefit (EBT) card. 
Since launch of this program in September 2022, monthly ridership by 
low-income riders has grown by more than 30% year-over-year. More than 
1,000 new low-income riders take advantage of the program each month 
and low-income fares account for nearly one in ten Ticket Vending 
Machine transactions.
$15 Summer Day Pass
    On weekdays between the Memorial Day and Labor Day, Metrolink 
offers a $15 Summer Day Pass. The seasonal promotional fare is designed 
to attract infrequent or first-time riders and out-of-town visitors by 
offering unlimited rides at a fixed price. In 2022, the first year the 
pass was offered, nearly half of all passes (48%) were purchased by new 
customers.
Free Fare Days
    Metrolink's free fare days (Transit Equity Day, California Clean 
Air Day and Earth Day) regularly result in record ridership levels by 
encouraging those who do not normally take the train to try the 
service. The highest ridership days this fiscal year were:

------------------------------------------------------------------------
                                    Date                 Ridership
------------------------------------------------------------------------
Clean Air Day............  10/4/2023               26,077
Earth Day................  4/22/2024               25,906
------------------------------------------------------------------------

More off-peak trains
    For the last 30 years, Metrolink service has catered to 9 to 5 
commuters, offering peak service in the morning to primary job centers 
such as downtown Los Angeles and Orange County and then returning in 
the evening. Today, as remote work and hybrid work schedules remain 
common, travel patterns have changed. To respond, Metrolink has 
announced it intends to transform its operations to meet weekend and 
off-peak demand, which has returned more strongly than peak ridership. 
The recommended schedule to transform our system to a regional rail 
model would increase service by 36 trains per day, with 178 total 
trains operating in the system, and would spread service across the day 
and into the evening. The schedule would promote transfer opportunities 
through ``pulse'' scheduling across lines, providing a more competitive 
travel time when compared to driving.
    The initial implementation of regional rail service occurred on the 
northern Los Angeles County Antelope Valley Line in October 2023 with a 
58% increase in revenue train-miles and demonstrated exciting results. 
Most of the new service was added during non-commuter hours. For the 
four months following the expansion of service on the Antelope Valley 
Line (accompanied by systemwide roll out of free student fares in the 
same month), total ridership increased by 27% compared to the same 
period of the prior year. We expect to see further increases in the 
long-term, but the short-term results are promising. We believe that a 
full roll out of optimized service with pulse scheduling and 
distribution of trains to cover non-peak times will be a successful 
model and transform the transportation landscape for Southern 
California.
                              [all]