Legislative Updates

• Senate Budget Committee Includes $1.78 Billion for Amtrak

• Amtrak Submits FY 2008 Budget to Congress

• Amtrak is Funded at $1.29 Billion in FY 2007 Continuing Resolution

• Amtrak Achieves Record Ridership in FY 2006

• Senators Lautenberg and Lott Introduce Amtrak Reauthorization Legislation

• Amtrak Appoints Alexander Kummant as New President and CEO

• Senate Appropriations Committee Approves $1.4 billion for Amtrak

• Two New Nominees to Amtrak Board are Confirmed by the Senate

• President's Budget Funds Amtrak at $900 Million

• Senate Approves S. 1516 in the Budget Reconciliation Act

• Senate Commerce Committee Approves Bipartisan Amtrak Reauthorization Bill

• House Members Announce Formation of a Bi-Partisan Passenger Rail Caucus

• Amtrak Grant Request and Strategic Reform Initiatives

• Administration Amtrak Bill Would Break Up the National Amtrak System, Shift Rail Operating Costs onto the States

• A Majority of Americans Support Strong Government Funding of Amtrak

Senate Budget Committee Includes $1.78 Billion for Amtrak

The Senate Budget Committee included $1.78 billion for Amtrak in its FY 2008 budget proposal which was made public on March 14. This is the funding level for Amtrak included in the Amtrak reauthorization bill (S. 294) introduced by Senators Lautenberg and Lott and cosponsors. This is more than double the funding for Amtrak included in President Bush’s FY 2008 budget ($800 million for Amtrak plus $100 million for federal-state rail partnerships). The Senate Budget Committee funding includes funding for a federal partnership with states for rail capital investments.

Amtrak Submits FY 2008 Budget to Congress

On February 15, 2007, Amtrak submitted its FY 2008 budget request to Congress. The budget requests $1.68 billion, of which $1.53 billion is for capital and operations and $150 million for strategic investments ($100 million for a partnership with states for investments on rail corridors and $50 million for Americans with Disabilities Act compliance). The budget request stated that Amtrak continues to make progress on reform efforts begun in 2005. Amtrak achieved $61.3 million in operating savings in FY 2006 and has budgeted an additional $61 million for FY 2007 for a total of $120 million to be achieved by the end of this fiscal year. Amtrak achieved a 40 percent reduction in its injury rate in the most recent quarter and has continued to reduce its long-term debt, from nearly $4 billion in FY 2002 to under $3.5 billion today.

Amtrak is Funded at $1.29 Billion in FY 2007 Continuing Resolution

When the 110th Congress convened in January 2007, most of the appropriation bills that fund federal agencies and programs, including transportation, had not been completed and were operating under a short-term Continuing Resolution (CR). In order to finalize FY 2007 funding and make way for the FY 2008 appropriations process, Congress enacted a long-term FY 2007 CR that funded federal agencies through the end of the fiscal year (Oct. 2007). Amtrak was funded at $1.29 billion which maintains Amtrak at the same funding level as the prior year, a level substantially higher than the $900 million recommended for Amtrak by the Administration.

Amtrak Achieves Record Ridership in FY 2006

Ridership in FY 2006 reached record levels for the fourth year in a row. Ridership nationwide was 24.3 million (if compared to prior years, this figure has been adjusted to reflect take-over of certain rail services in the Northeast by New Jersey Transit). Revenues in FY 2006 also reached record levels of $1.37 billion, up 11 percent over FY 2005. These trends continued in the first quarter of FY 2007 (Oct. 2006-Jan. 2007) with ridership up 4 percent over the same period in FY 2006 and ticket revenues up 10 percent.

Senators Lautenberg and Lott Introduce Amtrak Reauthorization Legislation

On January 16, 2007, Senators Frank Lautenberg and Trent Lott, Chairman and Ranking Member (respectively) of the Merchant Marine and Surface Transportation Subcommittee of the Commerce Committee, introduced the Passenger Rail Investment and Improvement Act of 2007 (S. 294), a bipartisan six-year Amtrak reauthorization bill. The bill closely resembles legislation introduced by Lautenberg and Lott in the 109th Congress (S. 1516), that passed the Senate by 93-6 but was not enacted into law.

Joining Senators Lautenberg and Lott as original cosponsors of the bill were Senators Robert Menendez (D-NJ), Tom Carper (D-DE), Barbara Boxer (D-CA), Arlen Specter (R-PA), Kay Bailey Hutchison (R-TX), Hillary Rodham Clinton (D-NY), Byron Dorgan (D-ND), Richard Durbin (D-IL), Joseph Biden (D-DE), Richard Burr (R-NC), Olympia Snowe (R-ME), Daniel Inouye (D-HI), Ted Stevens (R-AK), John Kerry (D-MA), Edward (Ted) Kennedy (D-MA), Charles Schumer (D-NY), Mark Pryor (D-AR) and Benjamin Cardin (D-MD).

S.294 authorizes $19.2 billion in federal finds ($3.2 billion per year) for Amtrak over the six-year period. Of the $3.2 billion per year, $1.9 billion is in annual appropriations and $1.3 billion is in bonding authority. The funding will be used to revitalize and reform Amtrak, enhance security and provide Amtrak with a predictable and stable source of capital investment. It will create the first-ever federal-state partnership for investment in rail corridors; an average of $300 million annually will be capital grants to states. As part of the reforms, Amtrak is expected to reduce its operating expenses by 40% over the life of the bill. The bill restructures Amtrak’s Board of Directors and makes other reforms. APRC strongly supported S. 1516 and will work for enactment of S.294 this year.

Amtrak Appoints Alexander Kummant as New President and CEO

On August 29, the Amtrak Board of Directors appointed Mr. Alexander Kummant as the railroad’s new President and CEO. He will begin his position on September 12. Mr. Kummant brings many years of experience in the railroad industry and private sector. Mr. Kommant comes to Amtrak from Komatsu America Corporation, the second largest supplier of construction equipment in North America, where he served as Executive Vice President and Chief Marketing Officer. Mr. Kummant previously worked at Union Pacific Railroad where he held positions as Regional Vice President, overseeing 6,000 employees and as Vice President and General Manager of Industrial Products, a $2 billion division. Mr. Kummant fills a position that has been held for the past nine months by Acting President David Hughes.

Senate Appropriations Committee Approves $1.4 billion for Amtrak

On July 18, the Senate Transportation, Treasury, HUD, Judiciary Appropriations Subcommittee approved $1.4 billion for Amtrak in FY 2007. An amendment by Subcommittee Chairman Chris Bond to condition Amtrak’s funding on language that required unions to reach new agreements with Amtrak was not added to the bill. At full Committee mark-up on July 20, an amendment by Senators Robert Byrd and Patty Murray to prohibit outsourcing of Amtrak jobs was accepted. A House-Senate conference to work out differences on the two bills is not expected until the fall.

Two New Nominees to Amtrak Board are Confirmed by the Senate

On May 17, President Bush sent the names of two new nominees to the Amtrak Reform Board (the Amtrak Board of Directors). The nominees, who would have to be confirmed by the Senate, are: Mr. Hunter Biden and Mrs. Donna McLean. Mr. Biden is a founding partner of the Washington D.C. law firm Oldaker, Biden & BelAir. He previously worked at the U.S. Department of Commerce. Mrs. McLean is a founding partner of McLean Associates. She previously served as Chief Financial Officer at the U.S. Department of Transportation and also worked in the Federal Aviation Administration. Upon being nominated, Mr. Biden, a son of U.S. Senator Joseph BIden, stated, “I see this as a great opportunity to turn around what can and must be a key component of our transportation system. Amtrak should be one of our success stories; right now it’s one of our biggest challenges.” On June 8, the Senate Commerce Committee held a confirmation hearing on the nominees. Their names will be sent to the full Senate for confirmation. On July 26, the Senate confirmed both nominees to the Amtrak Board.

President's Budget Funds Amtrak at $900 Million

On February 6, the Administration released its FY 2007 budget which includes $65.6 billion for transportation programs. Amtrak is funded at $900 million, an improvement over last year’s zero funding, but not sufficient to address Amtrak’s capital and operating needs. Of the $900 million, $500 million is for capital, leaving only $400 million in “Efficiency Incentive Grants” to pay for national operations, debt relief and other costs. Amtrak’s current appropriation is $1.3 billion, of which about $770 million is for capital and debt relief, $490 million for operations and $31 million in “efficiency incentive grants.”

In presenting the budget, DOT Secretary Norman Mineta stated, “In last year’s budget we demanded reform…And, over the past year, both Amtrak and the Congress have responded…In recognition of this progress—and with the expectation that we will see much more by the end of FY 2006—the President requests funds to help Amtrak make the transition....” Secretary Mineta stated that the $400 million in efficiency incentive grants “are directly tied to continued momentum in turning the troubled railroad around.”

Responding to the Administration’s budget proposal, Amtrak Acting President David Hughes stated, “The Administration’s proposal serves in part as recognition of the strategic reforms currently underway at Amtrak to reduce costs and make us more efficient. It is imperative that we continue to pursue these measures with urgency and energy…This is the first step in a nine-month process...”

For other modes of transportation, the President’s budget includes: $8.85 billion for transit; $13.7 billion for aviation and $39.8 billion for highway programs.

Senate Approves S. 1516 in the Budget Reconciliation Act

The Senate approved the six-year Amtrak reauthorization bill, S. 1516, by a vote of 93:6 as an amendment by Senator Trent Lott, to the Budget Reconciliation bill. The bill provides $11.4 billion over six years, including $1.4 billion in federal capital grants for the federal government to partner with states on rail corridor investments. The House of Representatives approved its Budget Reconciliation bill before Congress adjourned for the Thanksgiving holiday. Thus, it appears that S. 1516 will be a subject of the conference when House and Senate conferees meet to work out differences in their bills in December.

Senate Commerce Committee Approves Bipartisan Amtrak Reauthorization Bill

The Senate Commerce Committee approved by a vote of 18-4, a bipartisan comprehensive Amtrak reauthorization bill, the Passenger Rail Investment and Improvement Act of 2005 (S. 1516) that would authorize intercity passenger rail operations and capital investments from FY 2006-2011. Commerce Committee Chairman Ted Stevens called the bill, "the most comprehensive bill on Amtrak we've ever had." Cosponsors of S. 1516 include Surface Transportation and Merchant Marine Subcommittee Chairman Trent Lott and Ranking Member Daniel Inouye and Senators Frank Lautenberg, Kay Bailey Hutchison and John D. Rockefeller. The bill addresses the need to bring the Northeast Corridor into a state of good repair, creates a new federal-state partnership for capital investments in rail corridors and establishes a rail cooperative research program. The bill authorizes the following funding for Amtrak capital and operations and funds to be set aside for capital investments in state rail corridors.

House Members Announce Formation of a Bi-Partisan Passenger Rail Caucus

On May 6, 2005, a bi-partisan group of Members of the House of Representatives formed for the first time, a Passenger Rail Caucus. Led by Representatives Michael Fitzpatrick (R-PA), Earl Blumenauer (D-OR), Michael Castle (R-DE) and Robert Andrews (D-NJ), the new caucus is an exciting development that represents strong bipartisan interest by Members of Congress to assure a bright future and adequate funding for Amtrak. The mission of the caucus is to “create a coalition among Members of Congress who will ensure the long-term sustainability of America’s passenger rail system” and serve as a forum for ideas to improve passenger rail. The caucus will host a series of briefings and events in the months ahead.

“The importance of Amtrak’s rail service to the economy of the Northeast Corridor cannot be overstated,” Representative Fitzpatrick stated. “Thousands of people use Amtrak’s rail lines to travel to work everyday. Amtrak serves as a bridge that connects the economies of Boston, New York, Philadelphia, Baltimore and Washington D.C.”

“Today, the case for an efficient national passenger rail system has never been stronger,” stated Representative Blumenauer. “Since the 1990’s, Amtrak has seen a significant increase in ridership…Yet, the anti-Amtrak forces are ready to pull the plug entirely…This is simply unacceptable and that’s why we need this caucus, to protect the rail service that we have and to build a strong rail service in the future.”

“We need to seriously talk about a comprehensive strategy for improving passenger rail, including more clearly defined goals and a thorough understanding of the consequences. Traveling by rail is environmentally friendly and it plays an important role in alleviating congestion on the rest of our transportation system. I look forward to working with Amtrak, the Department and Members of Congress to sustain an effective passenger rail system and improve its service to our constituents,” stated Representative Castle.

Amtrak Grant Request and Strategic Reform Initiatives

Amtrak submitted an FY 2006 grant request for $1.82 billion to Congress on April 21, 2005. The grant request accompanied a “Strategic Reforms Initiatives” plan developed by the Amtrak Board of Directors and submitted to Congress for consideration. The grant request makes clear that regardless of actions that Congress may decide to take about reform, Amtrak needs $1.8 billion to continue operations and make strategic capital investments in the year ahead: $787 million for capital investments, $560 million for operations and the remainder for debt service, working capital and other needs. The Strategic Reform Initiatives consists of three elements: Structural Initiatives; Operating Initiatives and Legislative Initiatives.

1) STRUCTURAL INITIATIVES:

• Organize planning and reporting by rail business line, estimating profit or loss and capital needs of each rail line. This will be used to develop a Strategic Plan, involving rail stakeholders in the planning process.
• Outsource additional services where greater efficiency can be obtained
• Begin to facilitate competition for routes and individual services (needs legislation)

2) OPERATING INITIATIVES:

• Continue to bring infrastructure into a state of good repair.
• Begin selective outsourcing of work and require all NEC users to pay “full proportionate share” of operating and capital costs by FY 2011.
• Create an NEC Advisory Board, consisting of operators, states and FRA.
• NEC Corridor Operations: Make a variety of changes to NEC, including reserved service on all trains; improved on-time performance; expanded automated reservations; work rule changes to improve efficiency.
• State Corridor Operations: Establish an Equipment Clearinghouse to help states procure, standardize and manage fleet; use new activity-based costing approach; require states to cover “fully allocated operating losses” on all corridor trains by FY 2011, premised on enactment of a federal-match staring in FY 2008.
• Long-Distance Operations: Establish performance metrics and minimum thresholds; rank routes and publish annual route termination projections in the absence of performance improvement; provide network restructuring plan to ensure routes meet targets (FY 2007).

3) FEDERAL LEGISLATIVE INITIATIVES:

• Create an intercity passenger rail corridor Capital Matching Program comparable to other modes (80:20 match);
• Provide funding to bring NEC into a state of good repair;
• Support national long-distance trains that meet performance thresholds;
• Provide transition funding for state operating needs;
• States will develop detailed rail corridor plans and negotiate with host railroads on infrastructure improvements; by FY 2011, states will fund fully-allocated operating losses with a selected operator and provide 20% match for federal capital funding.

Administration Amtrak Bill Would Break Up the National Amtrak System, Shift Rail Operating Costs onto the States

On July 28, 2003, the Bush Administration unveiled its six-year Amtrak restructuring bill, the Passenger Rail Investment Reform Act of 2003. The bill would replace the current system of capital and operating payments to Amtrak with a federal matching grant program paid directly to states or compacts of states for rail capital investments. The grant program is modeled on the federal transit program. Federal capital investments would require at least a 50% match by states. States or groups of states would submit proposals for capital investments to the U.S. Dept. of Transportation. By the end of the six-year period, states would be able to contract with private entities or a public transit agency to operate passenger rail service. The bill does not specify the amount of federal capital funding authorized annually, noting only “such sums as may be necessary.” States would bear the entire burden for intercity passenger rail operating costs, which would likely result in the end of most if not all long-distance train service.

Amtrak’s current structure would be broken up into three entities:

1. A Private Passenger Rail Company to operate trains under contract to states or multi-state compacts;
2. A Private Rail Infrastructure Company to operate and maintain the Northeast Corridor infrastructure under contract to a Northeast Corridor Compact, consisting of 8 states along the corridor and the District of Columbia. The federal government would hold title to Amtrak’s tracks, stations and other infrastructure on the corridor and lease them to the Northeast Corridor Compact.
3. A National Passenger Rail Corporation which would continue as a government corporation that retains Amtrak’s corporate name and right to use the tracks of the freight railroads.

Northeast Corridor infrastructure would be transferred from Amtrak to the federal government. The federal government would fund the backlog of capital projects on the corridor over several years—estimated in excess of $12 billion—and lease the corridor to the newly created Northeast Corridor Compact. During a transition of several years, the passenger rail service provider company would take over train operations on the corridor from Amtrak. The rail infrastructure company would hold the contract for corridor maintenance and upgrades, signaling and switching during the transition period. At the end of the transition, the Northeast Corridor Compact would take bids from private companies and public sector agencies for both contracts and bring competition to the Northeast Corridor.

Responding to introduction of the Administration bill, Amtrak President David Gunn stated: “Amtrak wasn’t asked to work on developing the plan and hasn’t been briefed on it. Consequently, we’ll withhold commenting until such time as we are briefed. That said, we expect the Administration to continue a responsible course to supporting Amtrak’s present operations, capital projects and improved efficiency of service. At the same time, Amtrak will continue its critical mission and responsibility to serve our passengers and run the railroad.”
Senator Kay Bailey Hutchison (R-TX), Chairwoman of the Surface Transportation Subcommittee of the Commerce Committee with jurisdiction over Amtrak, stated, “If you turn Amtrak over to the states, it’s gone. Train tracks, just like our highways and airways, don’t stop at the state line.” Senator Ernest Hollings, ranking member of the Commerce Committee stated, “They’re trying to shut it down.”

A Majority of Americans Support Strong Government Funding of Amtrak

Several recent public opinion polls have all found strong public support for federal government funding of the national Amtrak system.

• 71% of Americans surveyed July 26-30, 2002 by the Washington Post support government investments in Amtrak at current or higher levels of funding;
    
• 70% of Americans surveyed in a CNN/USA Today/Gallup Poll conducted June 21-23, 2002 support continued government funding for the national Amtrak system.
    
• 77% of citizens questioned in a poll in 2002 by Chamberlain Research Consultants of Madison, Wisconsin, support a nationwide passenger rail system with increased routes, frequencies and reduced travel times. They strongly support the Midwest Regional Rail Initiative that will improve passenger rail service throughout the Midwest region.