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Rail News Home Federal Legislation & Regulation

February 2013

Rail News: Federal Legislation & Regulation

How the 2012 election results could shape rail industry issues

by Angela Cotey, Julie Sneider and Jeff Stagl of the Progressive Railroading Staff

President Barack Obama has been sworn in for a second term. The 113th Congress is in session. Republicans retained control of the House and Democrats, the Senate. The issues that created a bitter partisan divide the past two years remain. The new Congress will have to address automatic spending cuts that were delayed as part of the fiscal cliff deal. The debt ceiling once again must be raised. By March, Congress will need to pass a continuing resolution to keep government programs funded through FY2013.

The pressing fiscal issues won't leave the administration or new Congress with much time to debate new policies and programs in the near term. But does that mean another two years of political gridlock will ensue? Or that rail issues will continue to take a backseat to spending and revenue discussions? Not necessarily.

Last month, Progressive Railroading touched base with a variety of industry insiders to see how they're feeling about rail issues and how they rank on the congressional radar, post-election. We spoke with many of the same folks last fall, when we picked their brains to learn about their concerns heading into the election.

The issues haven't changed. Rail "re-regulation," positive train control (PTC) implementation, the next surface transportation bill, and truck size and weight still top the list. Industry followers also are anxious to see what Rep. Bill Shuster (R-Pa.) will bring to the table as chairman of the House Transportation and Infrastructure Committee, and plan to encourage members of Congress to reauthorize the Passenger Rail Investment and Improvement Act (PRIIA) and Rail Safety Enhancement Act, which expire in September.

The difference, post-election, is that progress might occur on some fronts. With Obama — who always has supported infrastructure investment — beginning his second term and the re-election pressure taken off members of Congress, there is a general consensus among those we spoke with that the next two years might be more productive than the past two. While members of Congress will continue to argue over spending cuts and revenue increases, legislators might be more willing to meet in the middle on certain topics.

And if that's the case, transportation issues could make the list.

"There's reason to hope that the election took away the political incentive for House Republicans to be reflexively opposed to anything the administration supports," says Chuck Baker, a partner with rail lobbying firm Chambers, Conlon & Hartwell L.L.C. "It's possible that post-election, there will be a more cooperative environment and perhaps infrastructure can get back to ... the bipartisan or even nonpartisan days where everyone agreed infrastructure investment was money well spent."

There's already been at least one promising sign that some House members are ready to tackle big-picture transportation issues: Shuster has come out of the gate talking about the need to develop new revenue sources for surface transportation funding.

"He has indicated he has a very open mind about the idea of increased infrastructure funding and he's immediately zeroed in on what, to me, is the key issue: How do we pay for it?" says Baker, who also serves as president of the National Railroad Construction and Maintenance Association. "He has said that nothing is off the table ... which is the most you can hope for from an incoming chairman."

Pay The Way

Shuster has said he'd like the T&I Committee to begin addressing surface transportation financing before it's time to begin discussing the next surface transportation authorization legislation. The current bill, MAP-21, didn't address long-term financing and maintained transportation infrastructure programs at the status quo. The next bill will need to do more, industry officials say.

"I think everyone's goal this time around is to have meaningful discussions on how to fund [transportation] over the long term," says Nicole Brewin, assistant vice president of government relations for the Railway Supply Institute (RSI). "And that's going to take a lot of discussion, working together, crossing the aisle and trying to find some compromise."

Robert Healy, American Public Transportation Association's (APTA) VP of government affairs, is optimistic the T&I Committee will be able to do just that under Shuster's direction. But APTA will be providing some direction of its own for the future surface transportation bill. The association recently created a task force that will develop recommendations for the next bill. By 2013's end, association officials hope to have a "clear vision" of what they would like to see included, Healy says.


But well before MAP-21 expires, many railroad and rail association officials will be focusing on the reauthorization of PRIIA and the Rail Safety Enhancement Act, which were enacted as one piece of legislation in 2008. The measures expire on Oct. 1, 2013.

The rail safety act includes a mandate that all Class Is, as well as some short lines, regionals and commuter railroads, implement PTC by 2015's end. Railroads and rail associations will be lobbying for an extension of that deadline, as well as funding to help cover the costly implementation.

"We will continue to stress to Congress that we are doing everything we can to live up to the mandate, but 2015 just isn't feasible," says Association of American Railroads (AAR) President and Chief Executive Officer Ed Hamberger. "It's important that we do it right and make sure it works as intended and is safe after installation."

A deadline extension isn't out of the question; in 2012, the T&I committee passed an amendment that would have extended the deadline five years to 2020, but the measure was defeated. The full Senate had included a three-year extension as part of MAP-21, but that proposal was later dropped from the bill.

With so many technological and operating questions still unanswered and given that, on the short-line end, "no one is near the testing stage," American Short Line and Regional Railroad Association (ASLRRA) President Richard Timmons hopes Congress will pass a longer-term deadline extension.

"I think a delay is likely, but the question is: Will it be a one- or two-year delay to the deadline? Three years?" he says. "Railroads wouldn't prefer a one-year delay or a series of one-year delays that has them rushing to finish something, only to find out they get another year."

APTA will join AAR and ASLRRA in their efforts to extend the deadline. Association officials also will ask Congress to address radio spectrum allocations for PTC, says Healy, adding that the frequency should be provided to transit agencies free of charge for public safety purposes.

APTA is advocating for the rail safety act's companion bill, too. PRIIA authorized Amtrak for five years, called for improvements and upgrades to the country's national intercity passenger-rail system, created the framework for a new capital assistance program and authorized the U.S. Department of Transportation to establish a high-speed rail corridor development program.

"We have been advocating for greater high-speed rail and intercity passenger-rail investment, and we will continue to do so in the context of the debate to reauthorize PRIIA," says Healy.

Amtrak President and Chief Executive Officer Joseph Boardman won't turn down additional funds. But to him, the real debate needs to center around what Congress wants from the railroad.

In 2012, Amtrak registered an operating loss of $361 million — a steep decline from the $560 million loss the railroad registered four years ago, Boardman said during a Jan. 10 teleconference to discuss Amtrak's 2013 projects and goals.

"We think the numbers are right, and now is the time to talk about the policies that are needed for rail transportation across this country," he said.

Joshua Schank, president and CEO of the Eno Center for Transportation, agrees, but he's not sure it will happen in this session of Congress.

"[Amtrak is] a poster boy for government waste and a punching bag for Republicans. The Democrats block any changes and we always wind up in the same place," he says. "That's why we don't have any kind of impressive [intercity] passenger-rail system in this country. There's no certainty, no plan, nothing, and I don't see any evidence that that's going to change."

Higher Hopes For Higher Speed

Even if passenger-rail policy doesn't dramatically shift, projects — including those of the higher-speed variety — might receive more attention, Baker believes. At the state level, some Republican governors continue to push for intercity passenger-rail improvements. That nonpartisan approach to transportation needs to be more prevalent at the federal level, too, Baker says.

"We're making great progress on projects in Michigan and Virginia, for instance, both of which have high-profile Republican governors," he says.

When it comes to making a case for rail — be it Amtrak, transit or freight — industry stakeholders need to make sure they adequately communicate their message about the role rail plays in the surface transportation picture. In particular, they'll have to educate new members of Congress, which includes about 80 freshman senators and representatives. About a third of the T&I Committee members are newcomers. Railroaders, rail industry suppliers and contractors will have a chance next month when they travel to Washington, D.C., for the annual Railroad Day on Capitol Hill.

Sizing Things Up

One of the hot topics they'll surely raise? Truck size and weight.

In December, the U.S. Department of Transportation issued a request for proposals soliciting a firm to conduct a study on the impact larger and heavier trucks would have on highways and bridges. In the meantime, the battle for congressional support to raise the weight limits already has begun.

"We know the trucking industry is already out there talking to members about how to increase truck size and weight and length," says RSI's Brewin.

The rail industry will do the same in communicating its side of the issue to Congress. RSI is working with the Coalition Against Bigger Trucks to highlight the safety and infrastructure impacts bigger trucks could have on the highway system. AAR and ASLRRA, too, will continue to preach the benefits of rail transportation versus truck.

"The question is, will truck size and weight be part of the reauthorization of MAP-21 in 2014, or part of a longer-term measure?" asks Hamberger.

Another question weighing on rail industry proponents' minds is when talk of "re-regulation" or "balanced competition" might resurface in Congress.

"We know there will be some pressure in the Senate, and we know there will be some proposals out there to increase regulation, as there are in almost every Congress," says Baker.

If the issue does come up, Baker is confident Congress will continue to recognize the need for balanced regulation.

"Neither the administration nor the House have shown any inclination to re-regulate the railroads," says Baker. "I think they understand that the system is working really well and railroads are a huge success story right now."

The AAR, however, is more worried about the Surface Transportation Board (STB) than the administration when it comes to regulation.

The STB is developing a rulemaking based on a National Industrial Transportation League proposal that the board eliminate competitive access rules and precedents as they apply to reciprocal switching. Some filings are due in March, and the AAR plans to "hit harder on the impact reciprocal switching would have on operations," says Hamberger.

"We will still make the argument about how railroads need to get ample returns on their investments, but we can focus on the regulation's effects on fluidity of the network, planning how traffic flows, and where crew change points and back-up power points would be," he says. "What now is about six discrete moves for a shipment could become 16 to 24 discrete moves with a reciprocal switch, adding time and cost. The railroads could assess access charges, but it doesn't all add up from an operational standpoint."

On the short-line front, ASLRRA will continue its push for a longer short-line tax credit extension. The tax credit was extended through 2013 as part of the fiscal cliff deal. A longer-term extension would provide some certainty to short lines planning future projects, Timmons says.

For all railroads, a little certainty would go a long way in helping them chart a future course.

"We need to stabilize things. Let's make a decision rather than governing by default, waiting until the last minute and figuring something out so we don't collapse," says Eno's Schank.

Stability could come in the form of a long-term tax credit extension, Amtrak reauthorization, PTC funding and a review of deadlines for same, or a longer-term surface transportation bill that finally includes some new revenue sources. Will that happen? It all depends on how willing and able the 113th Congress will be to have serious and meaningful discussions about surface transportation and rail's role in it.

"I don't know that we'll see a huge, dramatic change, but there might be some emphasis on producing more than what was produced with the last Congress," says Schank. "It's hard to conceive of a Congress that could do less than the one we just had. And if that's the case, then there is nowhere to go but up."


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