The exception that seems to prove the rule is the Northeast corridor, where the train offers comparatively high speed, low fares and where the major cities along the route have adequate public transportation minimizing the convenience value of the automobile. In 1977, Northeast corridor operations accounted for 57 percent of Amtrak's total ridership, 31 percent of Amtrak's revenues and only 24 percent of Amtrak's costs. Viewed solely in economic terms, Amtrak's rather bleak operating results would suggest little justification for continuing rail passenger service. The above are illustrative of the "Amtrak Problem" which the committee believes should be faced up to and every effort and sacrifice made by business, labor, Government and the passenger public to bring under control and reverse the escalation of these operating deficits. This escalation must be reversed and then the Nation's rail passenger system can be perfected on a sounder economic foundation. In the past few years several studies of Amtrak's operations have been conducted by the General Accounting Office, the conclusions and recommendations of which are summarized in this report to point out what needs to, and can hopefully, be done by Amtrak to move in this direction. ROUTE REEXAMINATION The legislation, as reported, provides for a reexamination of the Amtrak system by both the Secretary of Transportation, the Rail Service Planning Office, and the Congress. The Secretary will present to the Congress a preliminary recommendation on May 1, based, in part, upon the adequacy of alternative forms of transportation and the impact of frequency and fare structure alternatives. The rail service planning office will conduct public hearings, on the preliminary recommendation during the summer of 1978. The Secretary will submit a final recommendation by December 31, 1978, and the Congress will be given a 60-day period in which to adopt a resolution of disapproval. If neither the House nor Senate adopts such a resolution, the Secretary's recommendations will be deemed approved and take effect at the end of the 60-day period. In the event either House of Congress adopts a resolution of disapproval, the Secretary will submit a revised recommendation which will be subject to the same Congressional review process as the original recommendation. The route reexamination procedure, as outlines in the legislation closely parallels the procedures set forth in the Regional Rail Reorganization Act of 1973 for development and adoption of the final system plan. Under section 208 of the Regional Rail Reorganization Act of 1973, either House of Congress was given the authority to disapprove the plan submitted by the United States Railway Association. The Committee believes that the procedure worked well for the final system plan and has incorporated a similar procedure for the Amtrak route reexamination. During the lengthy process of public hearings, departmental recommendations, and congressional approval of the new route structure, provisions in present law relating to institution of new service are suspended. The reason is that the implementation process for the new route system is itself a procedure that becomes a substitute for sections 403 and 404 of the Rail Passenger Service Act. These are the two sections that relate to route and service criteria and procedures. However, the suspension is applicable only to the proposed new route structure, not the existing route structure. The committee intends that Amtrack immediately begin the process of utilizing its criteria and procedures for making route and service decisions. The authority to make these determinations was given to Amtrak's Board of Directors in the Amtrak Improvement Act of 1975. The route criteria process ranks all of Amtrak's routes, selects the lowest ranking ones for intesive analysis, and provides procedures for discontinuing or changing routes that fail to meet all standards, including the projected effects (versus costs) of possible improvements. Amtrak's criteria used to judge the performance of the routes are based on economic as well as social and environmental factors. While these two latter standards are sometimes unclear as a result of subjective interpretations. Amtrak itself, according to its testimony, considers the criteria to be sufficiently precise to perform their function of grading routes and providing guidance to the Amtrak Board in its decisions on whether or not to retain or change a route or services. If this process of intensive analysis is begun now, as the committee intends, the system can be significantly strenghtened by eliminating those trains that represent the worst financial drag; and, when the new fiscal year begins on October 1, 1978, the transition to a somewhat reduced but more efficient passenger train network will be well underway. NORTHEAST CORRIDOR PROJECT The legislation also amends section 703 of the Railroad Revitalization and Regulatory Reform Act dealing with the Northeast corridor project by directing the Secretary of Transportation to develop economical and reliable rolling stock that will be compatible with the upgraded right-of-way in the corridor. The committee believes that there is a high level of coordination required between the decision to purchase new rolling stock and the Department's ongoing track improvement project in order that the goals set forth in section 703 can be met. It is vital that equipment be designed and purchased to take advantage of the various markets for rail service in the corridor and that the equipment be specifically designed to be compatible with the track structure and operating requirements of the corridor. For this reason, the committee is granting to the Secretary an important role in responsibly developing compatible rolling stock and directs the Secretary to consult with Amtrak over such development. FACILITY AND SERVICE AGREEMENTS Under the original provisions of the Rail Passenger Service Act, Amtrak was to contract with railroads or regional transportation agencies for the use of tracks and other facilities and for the provision of services on such terms and conditions as the parties might agree. In the event that the parties could not agree, the Interstate Commerce Commission was to step in and order facility and service agreements for just and reasonable compensation. As a result of a Commission decision regarding compensation to be paid to the Penn Central Co. in 1973, the Congress amended the Rail Passenger Service Act to clarify that compensation should be paid to the railroads for incremental costs and not for those services that the railroad would have to provide for itself in the absence of Amtrak. Unfortunately, the amended language specified only "services" as being subject to incremental costs and did not mention the use of tracks and facilities. The Commission recently ruled in the Texas and Pacific case that "while an express guideline is drawn for our determination of just and reasonable compensation for the provision of services, no such express guideline governs the Commission's fixing of just and reasonable compensation for the use by Amtrak of the railroad's tracks and facilities." In other words, in fixing compensation, quality of service is a consideration only with regard to the provision of services. It is the intent of the committee, in the reported bill, to clarify that both track and service shall be covered by an "avoidable cost" concept. In the case of trackage, the Commission shall limit compensation to those costs that the railroad would not incur if the facility was not used for Amtrak's operations. Similarly, with respect to the provision of services, compensation in excess of avoidable costs will only be ordered in proportion to increases in the quality of service and only where the railroad provides ontime performance in excess of 80 percent of the time. The committee wants to emphasize that railroads will be compensated for those costs that it can show it incurred (that it would not incur if it did not contract with Amtrak) in providing both track usage and services. Another issue that is of concern to the committee is the transportation of pet animals on Amtrak passenger trains and baggage cars. Because of the high cost of converting its baggage cars and renovating its station facilities to comply with the regulations promulgated by the Department of Agriculture pursuant to the Animal Welfare Act of 1976, Amtrak has had to alter its pet policy and in fact, eliminate the carriage of pets in baggage cars. The committee feels that Amtrak has an obligation to determine the demand for transporting pet animals and establish a fare structure that will reflect any additional costs incurred by Amtrak in providing pet services. It is not the committee's intention to endanger the safety and well being of pet animals in transit nor to erode the authority of the Secretary of Agriculture in carrying out the provisions of the Animal Welfare Act. The committee has been informed by Amtrak that it will conduct a marketing study of both on board passengers and potentia! passengers to determine the demand for pet services and an appropriate fare structure to provide those services. In any event, the committee believes that Amtrak should permit carriage of pets in accommodations such as sleeping cars where passengers agree to pay whatever additional cost are imposed by such a policy. ESTIMATED COSTS The Congressional Budget Office has submitted to the committee its estimate on this bill pursuant to section 403 of the Congressional Budget and Impoundment Control Act of 1974. The CBO submission of March 31, 1978, follows: CONGRESSIONAL BUDGET OFFICE, Hon. HOWARD W. CANNON, U.S. CONGRESS, Washington, D.C., April 17, 1978. Chairman, Committee on Commerce, Science, and Transportation, U.S. Senate, Washington, D.C. DEAR MR. CHAIRMAN: Pursuant to section 403 of the Congressional Budget Act of 1974, the Congressional Budget Office has prepared the attached cost estimate for S. 2478, the National Rail Passenger Corporation Authorization Act of 1978. Should the Committee so desire, we would be pleased to provide further details on the attached cost estimate. Sincerely, ALICE M. RIVLIN, Director. CONGRESSIONAL BUDGET OFFICE-COST ESTIMATE 1. Bill number: S. 2478. April 17, 1978. 2. Bill title: National Rail Passenger Corporation Authorization Act of 1978. 3. Bill status: As ordered reported by the Senate Committee on Commerce, Science, and Transportation, April 11, 1978. 4. Bill purpose: This bill authorizes appropriations of $655 million for fiscal year 1979 for the National Rail Passenger Corporation, Amtrak. In addition, it provides for public consideration and implementation of a rail passenger service study, mandates compatability of rail rolling stock, delineates Interstate Commerce Commission responsibilities regarding facility and service agreements, allows Amtrak transportation of certain animals, directs the Postal Service to use rail services to the extent feasible, and exempts the National Rail Passenger Corporation from certain state and local laws. 5. Cost estimate: Fiscal year 1979: Authorization level.. Estimated costs.... Fiscal year 1980: Authorization level. Estimated costs. Fiscal year 1981: Authorization level. Estimated costs.. Fiscal year 1982: Authorization level.. Estimated costs... Fiscal year 1983: Authorization level.. Estimated costs.. The costs of this bill fall within budget subfunction 401. Millions 655 655 6. Basis of estimate: The total authorization level in the bill is $655 million, including $510 million for operating grants, $120 million for capital grants, and $25 million for debt retirement. All funds authorized are assumed to be appropriated. Estimated costs are based on the historical spendout rate for this account of 100 percent the first year. The route reexamination mandated in section 3 of the bill is presently being conducted. The effect of this section is to establish specific reporting dates and delineate the responsibilities of the affected agencies. There is no additional cost to the Federal Government due to this section. It was further estimated that the other sections of the bill relating to the Northeast corridor, facility and service agreements, transportation of certain animals, transportation of mail and policy statements would result in no Federal budgetary impact. 7. Estimate comparison: None. 8. Previous CBO estimate: None. 9. Estimate prepared by: Patrick J. McCann. 10. Estimate approved by: JAMES L. BLUM, Assistant Director for Budget Analysis. REGULATORY IMPACT STATEMENT In compliance with paragraph 5, rule XXIX of the Standing Rules of the Senate, it is the judgment of the committee that implementation of the bill, as reported, will not result in any increased Federal regulation. In point of fact the legislation calls for a temporary reduction in federal regulation by suspending the adequacy of service provisions of the Rail Passenger Service Act with respect to the development or implementation of the new basic route system during the period from the date of enactment until 12 months after the effective date of the new basic system. Section 1. Short title SECTION-BY-SECTION ANALYSIS This section states that the title of this Act shall be the "National Railroad Passenger Corporation Authorization Act of 1978." |