Challenges with establishing new service, even with the IIJA

The two biggest challenges to starting a new intercity rail passenger service - especially a long-distance service - are:

*The PRIIA act of 2008, which limits long-distance services to existing routes, and

*The Restoration and Enhancement Grants Program of the IIJA which limits Operating Assistance to new routes to six years, with a diminishing amount of funding each year.

A synopsis of these challenges is offered here:

An observation from the Rail Passengers Association:

"There’s some confusion around the 750-mile threshold for some LDR (Long Distance Route) advocates. There are many difficulties to getting financing for an LDR restored, but no actual legal prohibitions.

I tried to gather the relevant bill and statute language below. Answer to who pays operating for a restored LDR has no clearly defined answer, and a lot of the underlying structures created by PRIIA seem to have built with the assumption that no one would ever seriously try to launch new/restored LDR service; it’s obviously very state-supported corridor-centric.

Given the 2008 caveat included in 49 U.S.C. §24102, it appears that 49 U.S.C. §24702 applies. That means new LDRs won’t be automatically included in Amtrak’s National Network grant.

But drafters of the IIJA understand that you can’t forge a working operating agreement across that many states. While I think the capital costs of restoring trains will likely require a local match, Congress envisioned operations being added to the National Network account via future law.

But that will, of course, require political support at the federal level. Some advocates seem to hope we can avoid that political fight by eliminating that 750-mile threshold—but in reality, that language would be MUCH harder to get passed."




(b) INCLUSIONS.—The study under subsection (a) shall—

(1) evaluate all options for restoring or enhancing to daily-basis intercity rail passenger service along each Amtrak route described in that subsection;

(2) select a preferred option for restoring or enhancing the service described in paragraph (1);

(3) develop a prioritized inventory of capital projects and other actions that are required to restore or enhance the service described in paragraph (1), including cost estimates for those projects and actions;

(4) develop recommendations for methods by which Amtrak could work with local communities and organizations to develop activities and programs to continuously improve public use of intercity passenger rail service along each route; and

(5) identify Federal and non-Federal funding sources required to restore or enhance the service described in paragraph (1), including—

(A) increased Federal funding for Amtrak based on applicable reductions or discontinuations in service; and

(B) options for entering into public-private partnerships to restore that service.

(e) REPORT.—Not later than 2 years after the date of enactment of this Act, the Secretary shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives a report that includes—

(1) the preferred options selected under subsection (b)(2), including the reasons for selecting each option;

(2) the information described in subsection (b)(3);

(3) the funding sources identified pursuant to subsection (b)(5);

(4) the estimated costs and public benefits of restoring or enhancing intercity rail passenger transportation in the region impacted for each relevant Amtrak route; and

(5) any other information the Secretary determines to be appropriate.

PRIIA (Note)


“(a)In General.— Within 2 years after the date of enactment of this Act [Oct. 16, 2008], the Amtrak Board of Directors, in consultation with the Secretary [of Transportation], the governors of each relevant State, and the Mayor of the District of Columbia, or entities representing those officials, shall develop and implement a single, nationwide standardized methodology for establishing and allocating the operating and capital costs among the States and Amtrak associated with trains operated on each of the routes described in section 24102(7)(B) and (D) [49 U.S.C. 24102(7)(B), (D)] and section 24702 [49 U.S.C. 24702] that—

“(1) ensures, within 5 years after the date of enactment of this Act, equal treatment in the provision of like services of all States and groups of States (including the District of Columbia); and

“(2) allocates to each route the costs incurred only for the benefit of that route and a proportionate share, based upon factors that reasonably reflect relative use, of costs incurred for the common benefit of more than 1 route.

“(b) Review.— If Amtrak and the States (including the District of Columbia) in which Amtrak operates such routes do not voluntarily adopt and implement the methodology developed under subsection (a) in allocating costs and determining compensation for the provision of service in accordance with the date established therein, the Surface Transportation Board shall determine the appropriate methodology required under subsection (a) for such services in accordance with the procedures and procedural schedule applicable to a proceeding under section 24904(c) [now 24903(c)] of title 49, United States Code, and require the full implementation of this methodology with regards to the provision of such service within 1 year after the Board’s determination of the appropriate methodology.

“(c) Use of Chapter 244 Funds.— Funds provided to a State under chapter 244 [now 229] of title 49, United States Code, may be used, as provided in that chapter, to pay capital costs determined in accordance with this section.”

§24102. Definitions

In this part—

(4) “intercity rail passenger transportation” means rail passenger transportation, except commuter rail passenger transportation.

(5) “national rail passenger transportation system” means—

(A) the segment of the continuous Northeast Corridor railroad line between Boston, Massachusetts, and Washington, District of Columbia;

(B) rail corridors that have been designated by the Secretary of Transportation as high-speed rail corridors (other than corridors described in subparagraph (A)), but only after regularly scheduled intercity service over a corridor has been established;

(C) long-distance routes of more than 750 miles between endpoints operated by Amtrak as of the date of enactment of the Passenger Rail Investment and Improvement Act of 2008; and

(D) short-distance corridors, or routes of not more than 750 miles between endpoints, operated by—

(i) Amtrak; or

(ii) another rail carrier that receives funds under chapter 244.

49 U.S. Code § 24702 - Transportation requested by States, authorities, and other persons

(a) Contracts for Transportation.— Amtrak may enter into a contract with a State, a regional or local authority, or another person for Amtrak to operate an intercity rail service or route not included in the national rail passenger transportation system upon such terms as the parties thereto may agree.

(b) Discontinuance.— Upon termination of a contract entered into under this section, or the cessation of financial support under such a contract by either party, Amtrak may discontinue such service or route, notwithstanding any other provision of law.

49 U.S. Code § 24712 - State-supported routes operated by Amtrak

(h) Definition of State.— In this section, the term “State” means any of the 50 States, including the District of Columbia, that sponsor the operation of trains by Amtrak on a State-supported route, or a public entity that sponsors such operation on such a route.

Restoration and Enhancements Grant Program Fact Sheet

Authorized Funding (*Fully Authorized Levels)

FY22-FY26 Funding: $100 Million/Year* ($50 Million from Amtrak National Network Account)

The Federal Railroad Administration supports the nation’s rail network through a variety of competitive and dedicated grant programs designed to develop safety improvements, and encourages the expansion and upgrade of passenger and freight rail infrastructure and services.

The information below highlights the changes to the Restoration & Enhancement grant program that are enacted in Section 22304 of the Bipartisan Infrastructure Law.

Restoration and Enhancements Grant Program

Purpose of Grant Program: To provide operating assistance to initiate, restore, or enhance intercity passenger service. (49 U.S.C 22908)

Eligible Applicants:

  • States, including the District of Columbia
  • An entity implementing an interstate compact.
  • A public agency/publicly chartered authority established by 1 or more States.
  • A political subdivision of a State.
  • Federally recognized Indian Tribe.
  • Amtrak & Other IPR Carriers.
  • Rail Carriers in partnership with at least 1 of the entities described above.

Eligible Projects:

  • Establishing new services.
  • Additional frequencies.
  • Service extensions.
  • Offering new on-board services.
  • Examples of eligible expenses; train engineer staffing, fuel, train dispatching, station management, and overhead.

Other Changes:

  • New priority to applications for routes selected under the Corridor Identification and Development Program and operated by Amtrak.
  • Grants may provide operating assistance for up to 6 years, and may not exceed:

*90% of the projected net operating costs for the first year of service.

*80% of the projected net operating costs for the second year of service.

*70% of the projected net operating costs for the third year of service.

*60% of the projected net operating costs for the fourth year of service.

*50% of the projected net operating costs for the fifth year of service.

*30% of the projected net operating costs for the sixth year of service.