ARTBA Government Affairs: ARTBA Policy Information: ARTBA Public Transportation and Railroad Policy

Background:
Public transportation capital investment is an effective means of adding capacity and mobility options to the overall surface transportation system, thereby reducing traffic congestion and improving the transport of interstate commerce, and overall regional quality of life and productivity. It also encourages mobility and freedom, and provides links to economic and social opportunities.

To achieve these objectives, public transportation systems should not be treated as independent entities serving the demand for travel. These systems should be conceived and coordinated as part of an integrated transportation network where each mode will perform the role that is most appropriate.

According to the American Public Transportation Association (APTA), 9.4 billion passengers took trips using some form of public transportation in 2003. APTA also estimates that over 14 million people ride on public transportation each weekday, and the U.S. Department of Transportation (U.S. DOT) estimates another 25 million use public transportation on a regular basis.

Investments in public transportation capital projects create job opportunities and stimulate private development. The public transportation industry provides direct employment to over 370,000 employees.

Public Transportation System:
The nation’s public transportation systems are owned and operated by state and local governments or governmental agencies, in partnership with the federal government. Currently, there are over 6,000 transit providers operating in the U.S.

The private sector also plays an important role in this system, designing and constructing capital facilities, furnishing rolling stock and equipment, as well as managing and operating services for governmental partners. This federal partnership with state and local governments, transit agencies and private firms is vital to the continued growth and improvement of the public transportation network.

The U.S. public transportation system consists of multiple-occupancy vehicle services operating on local and regional routes, including: private and public buses, fixed guideway systems, bus rapid transit systems, commuter rail operations, ferryboats, and para-transit, taxi or van pool services contracted by public transportation agencies with private transportation operators.

Public Transportation Financing:
Data in the U.S. Department of Transportation’s 2002 report to the Congress “Status of the Nation’s Highways, Bridges and Transit: Conditions & Performance” suggests a $57.7 billion federal investment in public transportation facilities is necessary over the five-year period FY 2005-09 just to maintain the overall system’s current operating performance and physical conditions. To provide maximum benefits to the overall surface transportation system, federal public transportation investments should be increased to meet the systems needs as quantified by the U.S. DOT.

ARTBA supports the utilization of a number of financing sources and mechanisms to generate the revenues necessary to achieve these needs based investment levels, including:

Support for Continuation of the Highway Trust Fund Mass Transit Account—ARTBA supports continuation of the Highway Trust Fund’s Mass Transit Account to help finance federal investments in public transportation. The association also believes that the current allocation of federal highway user fee revenues between the trust fund’s Highway and Mass Transit accounts sets a fair modal balance which should be maintained.

Appropriate Sources of Federal Investments in Public Transportation—Currently, federal funding for state and local public transportation program is provided through federal Highway Trust Fund Mass Transit Account (HTF-MA) revenues, federal General Fund revenues, and state transportation department “flexing” of their federal highway funding, which is supported by the federal Highway Trust Fund’s Highway Account.

Given the magnitude of unmet highway capital needs in every state, ARTBA believes federal investments in public transportation should only be derived from the HTF-MA and the General Fund. The association urges the Congress to increase the revenue stream from both of these sources to provide the level of investment necessary to meet the needs identified by the U.S. DOT.

Budgetary Treatment of Mass Transit Account Authorizations—ARTBA urges that the budgetary firewalls and funding guarantee mechanism contained in current law be retained and strengthened to ensure maximize federal investments in transit. These guarantees allow transit systems to leverage federal investments, lower project costs and develop public-private partnerships.

State and Local Support for Public Transportation Investments—Furthermore, ARTBA believes it is appropriate—and necessary—for state and local governments to increase public investments in transit service and programs. Such state and local investments could be derived from multiple funding state and local sources—including application of appropriate dedicated sales, income, payroll or property taxes; dedicated benefit district revenues; other general revenue; fare receipts; and local bond issuances.

Appropriate Use of Federal Investments in Public Transportation—ARTBA supports the use of federal revenues for long-term capital costs, including: right-of-way acquisition, design, construction, project management and oversight of state and local fixed guideway systems, bus facilities and other transit stations and facilities; rehabilitation and reconstruction of existing fixed guideway systems; purchase of rolling stock and major rehabilitation activities that significantly extend the operational life of rolling stock; and the National Transit Cooperative Research Program.

ARTBA also believes that the federal role in funding public transportation should be maintained as a “needs–based system,” providing investment in transit facilities, equipment and service where justified.

ARTBA opposes the use of federal funding to finance general operating costs of transit systems in urbanized areas over 200,000. These costs are best funded and administered at the state and local level, without federal subsidies.

Flexibility in the Use of Federal Highway Trust Fund Revenue—ARTBA urges the elimination of the current flexibility in use of federal funds between highway and mass transit programs. This practice limits the effectiveness of scarce federal capital resources.

Opposition to “Capitalization” of Maintenance Costs—ARTBA urges the elimination of the eligibility for transit agencies in areas with populations above 200,000 to treat maintenance costs as capital expenditures. This practice of “capitalizing” maintenance costs dilutes the financial resources available for capital improvements that add transit capacity or extend service coverage, and encourages deferral of system replacement and development activities.

Appropriate Use of Innovative Financing Mechanisms—ARTBA supports the continued use federal innovative financing programs—such as the Transportation Infrastructure Finance and Innovation Act (TIFIA) and State Infrastructure Banks (SIBS)—to provide financing and credit assistance that leverage additional private investment in public transportation investments.

Funding Security Improvements—ARTBA believes that any federal investments made to assure security on the nation’s public transportation systems should be financed exclusively through the General Fund of the U.S. Treasury. Investments in transportation security are critical to the functionality and performance of the nation’s public transportation infrastructure network, and are an important aspect of ensuring the safety and security of the American people—particularly in a time of crisis. Transportation agencies should be given a strong role in determining how best to improve the security of public transportation systems.

Public Transportation Programmatic Policy Recommendations:
Fixed Guideway Systems—Fixed guideway systems represent an effective component of urban transportation networks by serving major travel corridors in large metropolitan areas. They also serve as circulation/distribution systems in major activity centers such as central business districts. Fixed guideway systems can also be an effective component of a comprehensive strategy for urban revitalization.

ARTBA supports the development of these systems where projects can be economically justified by a comprehensive transportation, economic and social analysis.

To maintain a balanced regional transportation system and rational transportation planning and decision-making process, the current federal match share requirements of 80 percent federal and 20 percent state and local for fixed guideway capital investments should maintained.

Bus Rapid Transit—If communities choose to utilize Fixed Guideway Capital Investment funds for the development of Bus Rapid Transit (BRT) facilities, ARTBA urges that a majority of a BRT projects funds be allocated for the development of a separate right-of-way (ROW) for the exclusive use of public transportation vehicles. This ensures that public transportation capital investment funds are focused on capital intensive activities, and differentiates these facilities from traditional bus service.

A BRT facility will often operate in the same corridor as a roadway. ARTBA supports the standardization of procurement and contracting regulations throughout the entire transportation corridor to eliminate duplicative or inefficient requirements on project partners.

Small Starts—ARTBA supports creation of new “small starts program” for projects receiving less than $75 million in federal funding. Bus capital projects receiving assistance under this program should operate in a ROW corridor the majority of which is to be utilized for the exclusive use of public transportation vehicles.

Bus and Bus Related Facilities—ARTBA support the use of federal funds for bus and bus related facilities. The route flexibility inherent in bus transportation combined with the ability of the buses to share roadways with other highway motor vehicles provides significant potential benefits for investment in buses and bus facilities.

To fully realize the benefits of federal investments in bus and bus facilities, highway-related improvements such as preferential lanes, traffic signalization and bus turnoffs must be made. Many streets—particularly in residential areas—must be upgraded to accommodate the weight of buses. These highway-related improvements should be financed with Highway Trust Fund–Highway Account (HTF-HA) funds.

Research and Development—The National Transit Cooperative Research Program should be continued and expanded. Research should concentrate on improving the convenience, security, safety and comfort of public transportation, in addition to increasing the financial viability of public transportation services. Research efforts should also consider management and marketing techniques, innovative improvements to existing systems and methods of reducing operating costs. Continuation of the university transportation centers program is supported.

Background:
Freight and intercity passenger rail systems are key components of the nation’s integrated transportation system. The 220,000–mile national rail network provides energy-efficient, cost-effective transportation, and is essential to the nation’s economy and national security. To ensure the full utilization of this network, a substantial amount of new public and private resources must be invested in freight and passenger rail infrastructure improvements.

Policy Position Regarding the Creation of a National Rail Policy:
To ensure maximum efficiency of the nation’s freight and intercity passenger rail networks, ARTBA calls for the creation of a national policy to focus and direct rail infrastructure investment.

The increased importance of freight movement requires that the development and expansion of the freight rail system be coordinated, and the condition, performance and investment needs of individual corridors be identified. Similarly, to fully realize the public benefits of intercity passenger rail, a comprehensive strategy must be in place to ensure necessary intercity service is provided, and funded commensurate with documented needs.

U.S. DOT should be required to provide regular assessments of the freight and intercity passenger rail infrastructure investment needs, and serve as the lead agency for all federal involvement in rail infrastructure development.

Protect and Acquire Rail Right–of–Way (ROW)—The abandonment of rail lines and the utilization of the unused ROW for non-rail purposes is an impediment to the development of the nation’s rail network. ARTBA encourages the adoption of policies to protect or recapture rail ROW. Such policies would ensure necessary rail lines and connections can be developed to improve the operations of the freight rail system, and provide ROW for the development of high speed rail corridors—as well as fixed guideway transit in metropolitan areas.

Provide Increased Funding for Security and National Defense Improvements—ARTBA believes that substantial increases in federal investments are required to assure the safety and security of the nation’s freight and intercity passenger rail networks. The rail system also plays a critical role in national defense, providing important links and logistical support for military facilities. A national rail policy must analyze the national defense and security investment needs of these systems and provide the resources to finance these enhancements.

Federal rail security investment should not dilute rail infrastructure funding, which also provides substantial security benefits. As such, the General Fund of the U.S. Treasury should be the source of freight and passenger rail security and/or national defense enhancements.

Role of Private Sector in Development of Freight and Passenger Rail Systems—When utilizing public funds and/or publicly leveraged funds to finance capital investments, private sector firms should be utilized to design, construct and reconstruct freight and intercity passenger rail infrastructure improvements.

Freight Railroads

Background:
ARTBA supports the development of a transportation system that allows more efficient handling of commercial, industrial, agricultural, energy and defense shipments. In the development of this system, ARTBA advocates a transportation policy that enables all modes to make the most of their inherent advantages and compete on equitable regulatory and promotional terms, sharing the transportation market on the basis of customer preference, service and relative economic costs. Freight railroads are a vital component of this system.

The U.S. DOT’s 2002 Commodity Flow Survey found that the nation’s freight rail system carries 16 percent of the nation’s freight by tonnage, and 40 percent of all freight ton-mileage. The U.S. DOT forecasts freight tonnage in the U.S. to increase 67 percent by 2020, and rail freight tonnage to increase 55 percent over this period.

Freight Rail System:
Class–I Railroads—The Surface Transportation Board defines Class–I railroads as having annual operating revenues over three consecutive years in excess of $250 million. There are currently seven share-holder owned Class–I railroads operating in the U.S. These railroads operate approximately 100,000-mile rail network and employ over 154,000 workers. Class–I railroads account for 84 percent of the nation’s rail traffic, and 92 percent of the total rail revenue.

Short-line and Regional Railroads—Regional (or Class II) railroads operate line-haul of at least 350 miles and/or have operating revenues between $20 million and $250 million. Short–line (or Class III) railroads are defined as having revenues below $20 million. All together, the over 500 short–line and 31 regional railroads operate and maintain 30,000 miles of track—approximately 29 percent of the nation’s rail route miles.

Class II and III railroads represent a growing segment of the industry, providing service to local jurisdictions and critical intermodal links to the freight transportation system. Sixteen percent of all rail traffic originates with short–line or regional rail systems. These carriers provide employment for approximately 23,000 workers. Approximately 95 percent of these railroads are privately owned.

Strategic Rail Corridor Network (STRACNET)—Thirty-eight thousand miles of the U.S. rail network comprise the U.S. Department of Defense’s (DOD) STRACNET, handling movement of DOD shipments throughout the nation.

Capital Investment Needs of the Freight Rail System:
The railroad industry is extremely capital intensive. The Association of American Railroads estimates that Class-I railroads invest approximately 19 percent of their operating revenues in capital investments. This compares to an investment level of approximately four percent for the U.S. manufacturing sector.

The American Association of State Highway and Transportation Officials’ (AASHTO) 2003 “Freight Bottom Line Report” estimates that between $175 billion and $195 billion is needed between 2003 and 2023 just to maintain the nation’s current freight rail infrastructure and to maintain freight rail’s share of future freight capacity forecasts.

Increasing freight rail infrastructure investment to these needs-based levels is essential to U.S. economic health, national security, and quality of life.

Despite this substantial investment, many segments of the rail network are reaching maximum capacity, threatening the efficiency of rail operations. The anticipated increase in freight volumes make it imperative to generate additional revenue to provide the capital upgrades necessary to meet the future demands on the system.

ARTBA Supports Expansion of Tools to Generate Additional Private Financing, Such As:

Use of Targeted Federal Tax Incentives—ARTBA supports the enactment of targeted federal tax incentives to encourage and attract additional private investments in rail infrastructure improvements. The rehabilitation tax credit adopted by Congress in 2004 provides a tool to help non-Class-I railroads to improve their rail infrastructure. This program should be continued. ARTBA also supports the adoption of similar mechanisms to help Class-I railroads meet their capital needs.

Innovative Financing—ARTBA believes federal innovative financing and credit assistance programs––such as Transportation Infrastructure Finance and Innovation Act (TIFIA) and the Railroad Rehabilitation and Improvement Financing Program (RRIF)––should be continued and expanded. These programs are designed to attract substantial non-federal investments to improving the nation’s intermodal surface transportation system.

Public–Private Partnerships (PPPs)—ARTBA supports the creation of PPPs, and believes the resources each party contributes should be commensurate with the projected benefits each would derive from the project.

To facilitate and generate rail infrastructure improvements, the rail industry has begun to create a number of innovative PPPs. These agreements allow railroads to work with communities where rail traffic and capacity constraints have impacted the efficiency of the railroads and have negatively impacted communities.

ARTBA further believes that the U.S. DOT—working with state and local governments and the railroads—should identify regions and rail corridors in need of capital upgrades and improvements to address safety, capacity or system connectivity concerns. The USDOT should also play a leading role in the development of PPPs where it has identified necessary projects that provide public benefits and address public needs.

Policies Regarding Public Financing in Freight Rail Infrastructure:
ARTBA supports public resources being made available to rail infrastructure improvement projects providing public benefits in order to supplement private investments in rail capital improvements. These resources can be generated from a number of sources:

Dedicated Funding Mechanism—ARTBA supports the enactment of a dedicated funding mechanism—such as user-fees paid by railroads and shippers, tax-credit or tax-exempt bond financing–to ensure a necessary level of capital development of the freight rail system. Such a mechanism will also assist in leveraging additional private resources to meet the capacity and performance needs of the system.

Such a mechanism could utilize a number of funding sources:

Federal Tax-Exempt or Credit Bonds—ARTBA supports the creation of a federal program utilizing a tax-exempt or tax-credit bond mechanism to provide public sector contribution to freight infrastructure improvements projects.

Application of User Fee Collections—ARTBA believes it is appropriate—and necessary—for the federal, state and local governments to levy appropriate user fees on freight rail use to finance public investments in rail infrastructure.

Only Appropriate Use of Federal Highway Trust Fund Revenue—The appropriate use of federal highway user fee revenues is to improve the operation of the federal surface transportation program. These revenues should only be used for the highway/railway grade crossing program––including grade separation—and intermodal connectors to major freight rail facilities.

Freight Rail Policy Issues:
Development of Strategic Corridor Network—ARTBA urges the creation of a strategic rail corridor system. While ARTBA supports the concept of STRACNET; this system must be updated to address the growing defense and security challenges facing the freight rail network. Such a system must address not only national defense needs, but also the security threats to the network, particularly the shipment of hazardous material.

Federal Capital Development for Shortline Railroads—ARTBA support the use of federal General Funds and/or bond financing for the infrastructure investments needs of shortline railroads. Many of these networks are not equipped to handle the 286-ton rail cars, which have become the industry standard. Failure to improve the infrastructure on these rail lines will undermine the operation and efficiency of the entire freight rail and intermodal transportation system.

Rail Relocation Program—ARTBA supports the creation of a new program funded from the federal General Fund to provide state and local governments with assistance for the relocation of freight rail lines. Such a program would facilitate safety, quality of life and economic development initiatives in communities with numerous railway/highway grade crossings.

Education and Research—ARTBA encourages and supports additional federal involvement and funding of education and research programs to improve railroad technology and safety, including enhancing public awareness and understanding of railroad operations and safety matters and continuation of National Operation Lifesaver Program.

Railway/Highway Grade Crossings—ARTBA believes the development and expansion of safe and efficient freight and passenger rail networks are dependant on improving highway-railway grade crossings. There are currently over 256,000 at-grade highway-railway grade crossings in the United States. Inefficiency at these crossings—particularly along high density freight rail corridors—has a severe impact on safety, traffic congestion, and the movement of goods.

Since the Railway/Highway Crossing Program was signed into law in 1973, Operation Lifesaver reports the number of train/motor vehicle crashes at public crossings has been reduced by 74 percent. Despite this improvement, the Federal Railroad Administration reports that the majority of railway safety incidents occur at grade crossings resulting in 300-400 deaths annually.

Rail/Highway Crossing Program—ARTBA supports the continuation and expansion of the Railway/Highway Crossing Program as a means to improve the overall safety and efficiency of the nation’s intermodal transportation system, and to improve the quality of life along rail corridors.

To ensure that funding provided under this program is directed to the highest priority crossings, ARTBA supports policies providing state highway agencies the authority to determine grade crossing priorities.

ARTBA also supports expanding eligibility under this program to include certain “private grade crossings” that are now fully accessible and used by the general public.

Appropriate Use of Federal Funds—Federal funds should be used for construction and/or reconstruction of grade separation, or the installation of warning devises and equipment. Funding made available under this program should not be used for the operation or maintenance of grade crossing safety equipment.

Type of Crossing Improvement—The location and type of crossing improvement should be determined by engineering studies that develop the most efficient and cost-effective improvements possible, considering warning signals and devices, gates or positive protections devices, road closures, grade separations, track consolidations and relocations, and a variety of other alternative improvements.

Use of Technology and Innovative Approaches at Crossings—ARTBA supports the development and utilization of new technology for highway-railway crossing warning systems, hazard elimination and construction techniques. Innovative methods to further improve safety at highway-railway grade crossings, such as cost-efficient active warning systems for lower volume grade crossings, positive protection devices, and photo enforcement at grade crossings should be explored.

Crossings on the National Highway System—There are over 4,500 at-grade crossings on the National Highway System (NHS). ARTBA recommends the establishment of a long-term priority for the Railway-Highway Crossing Program of improving safety at grade crossings on the NHS.

When a highway-railway grade crossing is present at the site of a capital improvement project on the NHS, the project should, if feasible, also eliminate the at-grade crossing.

Grade Crossings on High Speed Rail Corridors—In developing high-speed ground transportation systems, safety and security should continue to be a paramount consideration. Consequently, no high-speed system should operate over lines with highway-rail grade crossings.

Background:
Passenger rail plays a critical role in the nation’s multimodal transportation network, providing increased capacity and redundancy in transportation alternatives along congested intercity corridors, as well as providing an important intermodal transportation link in many communities across the country.

U.S. Passenger Rail System:
Conventional railroad passenger service (under 150 mph) in the U.S. is operated by government-sponsored and subsidized programs. The National Passenger Rail Corporation (Amtrak) provides the vast majority of this service as part of its national network of long–haul and high-density corridor trains. A number of states also contract with Amtrak to provide additional intercity service within their state.

The intercity passenger rail system consists of 23,000 miles of track—mainly owned by the freight railroads. This system serves 500 communities in 47 states, and approximately 23 million passengers annually. According to Amtrak, 81 percent of the intercity passenger trips are less than 500 miles.

In addition to conventional rail service, 36 states are currently involved in efforts to develop high–speed regional service along high-density corridors. The federal government provides resources to assist planning activities in these corridors, as well as funding for efforts to develop next generation high–speed rail technology.

Capital Investment Needs of the Intercity Passenger Rail Network:
Insufficient capital investment in passenger rail infrastructure has resulted in increasing deferred maintenance costs across the system, and has contributed to the ongoing inefficiencies in the passenger rail network.

Amtrak has developed a 20-year capital plan calling for $50 billion in capital improvements to fully develop an efficient corridor system along its existing route network. Capital improvement requirements in the Northeast Corridor alone total $5.4 billion.

The American Association of State Highway and Transportation Officials’ (AASHTO) 2002 Intercity Passenger Rail Transportation report identifies $59.9 billion in capital investment that need to be made by 2022 to develop a national corridor system for the operation of high-speed intercity passenger rail.

These findings make clear that developing a cost-effective, fully functional intercity passenger rail network in the U.S. will require substantial rail infrastructure investments.

Intercity Passenger Rail Infrastructure Financing Policy Positions:
ARTBA supports the development and expansion of intercity passenger rail service where justified by marketing forecasts, economic feasibility or social requirements.

ARTBA believes that, where appropriate, the federal government should provide the funding necessary to meet the capital investment needs of the intercity passenger rail network. ARTBA also supports efforts by states to expand intercity service. To increase the efficiency and trip time competitiveness of the intercity passenger rail system, ARTBA supports the development of high speed rail corridors.

To generate the additional investments required to maintain, improve, and expand the intercity passenger rail network and to develop high speed rail corridors, ARTBA supports the utilization of a number of financing mechanisms, including:

Dedicated Funding Mechanism—ARTBA supports creation of a long-term, dedicated funding mechanism to finance capital investments in intercity passenger rail infrastructure. The revenue to finance these capital improvements should be generated by levying appropriate user fees and/or the creation of tax advantaged bonding mechanism.

Federal/State Matching Grant Fund Program—ARTBA supports the creation of a federal/state matching fund program to provide investments in intercity high speed rail corridor development.

Tax-based incentives—ARTBA supports the enactment of tax-based policies—such as tax credits—for owners of rail infrastructure who invests private resources in upgrading the rail network where passenger rail service utilizes privately-owned freight rail track.

Innovative Financing—ARTBA supports the continuation and expansion of federal innovative financing and credit assistance programs—such as Transportation Infrastructure Finance and Innovation Act (TIFIA) and the Railroad Rehabilitation and Improvement Financing Program (RRIF). Intercity passenger rail capital improvement projects are eligible for these programs, which are designed to attract substantial non-federal investments to improving the nation’s intermodal surface transportation system.

Appropriate Use of Federal Rail Funding—ARTBA supports the use of federal revenues for long-term capital costs, including: right-of-way acquisition, design, construction, project management and oversight of high speed or high-density rail corridors; and the purchase of rolling stock and major infrastructure rehabilitation activities.

ARTBA opposes the use of federal funds to finance general operating costs of high speed intercity passenger rail systems. These costs are best funded through operating revenues, without federal subsidies.

Appropriate Use of Federal Highway Trust Fund Revenue—Federal highway user fee revenues should not be utilized to provide investments under this program, except for the highway-railway crossing hazard elimination in high speed rail corridor program.

Funding High-Speed Rail Studies—ARTBA endorses the consideration, study and analysis by the federal government, individual states, a federation of states, or private organizations of the construction of high-speed passenger train systems. The Federal Railroad Administration should also be provided sufficient annual funding—from the federal General Fund—to assist states to conduct needed studies of the development of high-speed rail corridors and technology development.

Next Generation High Speed Rail Technology Research and Deployment—The federal government should continue to provide support for the development and testing of next generation high-speed rail technology for service in excess of 150 miles-per-hour, including magnetic levitation transportation technology. ARTBA urges the federal government to move toward implementing this technology in an effort to demonstrate its effectiveness as a key component of the transportation network.