Issue Brief

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DOT 62-05
Contact: Robyn Boerstling, Tel.: (202) 366-9789
Thursday, April 14, 2005

The Bush Administration Introduces the Passenger Rail Investment Reform Act in Congress, Transportation Secretary Mineta Invites Serious Dialogue on Amtrak Reform

Legislation that breathes new life into the nation’s inter-city passenger rail service and improves Amtrak’s operations nation-wide was transmitted to Congress the Bush Administration announced today. Delivering the Passenger Rail Investment Reform Act to Congress sets the stage for a serious debate about the future of passenger rail and needed reforms to save the system from failing.

“This legislation is a lifeline to a dying railroad company. Congress has postponed saving Amtrak long enough. It’s time to act,” Secretary Mineta said.

The Passenger Rail Investment Reform Act makes key reforms to transition Amtrak into a purely operating company, create a federal-state partnership to support passenger rail, introduce market-based competition to the system and set up an inter-state compact to maintain the heavily used Northeast Corridor service.

Under the legislation, Amtrak will no longer carry the burden of maintaining tracks, stations and other infrastructure. Amtrak will have the ability to be an operating company, focused solely on running trains safely and on time. Regional, state or local authorities will be empowered to make decisions about service, planning where it is and what best meets local transportation needs; as well as ensure rail operators are providing a reliable, efficient and cost effective service.

The reform proposal includes a new federal-state partnership to fund capital improvements, much like the successful programs relied on in other modes of transportation, such as mass transit. The federal government will offer 50-50 matching grants to states for development of infrastructure projects that improve passenger rail service. The matching grants will provide an incentive for states to make capital investments that support high quality, integrated regional rail services. The grant funding will come from the General Fund through an application process.

The legislation makes the cost of ‘first dollar’ liability insurance eligible for capital investment grants, meaning the federal government will continue indirect support for this coverage. The states will also have the option to shift liability insurance costs to their chosen carriers, should this arrangement work better for their needs.

As well, the reform introduces true competition for inter-city passenger rail service provided by rail operators. States will be able to select from Amtrak or a private or public rail operator. This allows rail service to respond to competitive demand and results in better service at a reasonable price, while also allowing states to decide what is best for their region. No matter which carrier a state chooses, the legislation guarantees that the winning passenger rail operator will have access to the train tracks in their region owned by freight or any other railroad entity.

To ensure the stability of service in the Northeast Corridor (NEC), which accounts for nearly half of all passenger rail ridership, the legislation authorizes targeted capital funding for the backlog of projects needed to bring the NEC back to a state of good repair. This funding will be used to restore rail facilities and equipment, completing the necessary improvements that Amtrak has been unable to fund.

“This legislation carries forward our vision where a vibrant and viable passenger rail network continues to connect our nation. We can achieve this vision by dramatically increasing Amtrak’s accountability while allowing the proven principles of competition and local control to improve the operation of the system,” Secretary Mineta said.

Passenger Rail Investment Reform Act of 2005

Passenger Rail Reform FAQs

Intercity Passenger Rail news conferences by the USDOT Secretary Norman Mineta