9 Ways the New FAST Act Affects Passenger Rail

9 Ways the New FAST Act Affects Passenger Rail

Surface transportation in America is set to improve over the next few years thanks to the recent signing into law of the FAST Act. The first long-term, comprehensive, fully funded transportation bill in a decade, the Fixing America’s Surface Transportation (FAST) Act authorizes roughly $305 billion in spending over the next five years for highways, transit, rail, and safety improvements. The main objectives of the bill, which garnered strong bipartisan support during its development, are to reform and strengthen transportation programs, refocus national priorities, allow states and local governments more flexibility and provide them with greater long-term certainty, streamline project approval processes, and maintain a strong commitment to safety.

While much of the Act focuses on highways and related matters, it also contains—for the first time ever in a comprehensive national transportation bill—provisions for passenger rail, including intercity passenger trains and public transit, as well as a number of measures dealing with freight and general railroad operations.

Rail and transit highlights of the FAST Act include the following:

1. Funding for Amtrak

The bill provides $1.45 billion in funding for Amtrak in 2016. This will rise to $1.8 billion by 2020.

2. Reform of Amtrak’s business operations

The FAST Act will provide separate funding authorizations for both the National Network and the Northeast Corridor. This will allow net operating revenues from the Northeast Corridor (NEC) to be reinvested in the significant capital needs of the NEC. In addition, the planning process for the NEC is strengthened in order to increase Amtrak’s accountability and to bring in the states involved as equal partners.

3. Non-federal participation

In certain areas of the Amtrak system, private-sector station development opportunities will be permitted. In addition, if they are able to achieve the same outcomes at less cost to the taxpayer, competitors may operate up to three long-distance Amtrak lines. Finally, the Act also explores the potential for right-of-way development to provide new revenue streams.

4. Two new grant programs

grand central station new yorkJust over $1.1 billion is earmarked for the Consolidated Rail Infrastructure and Safety Improvements grant program, which is intended to support a broad range of rail activities and projects. Examples of project types under this program include the deployment of safety technology, including positive train control systems; capital projects identified as being necessary to reduce congestion and allow for ridership growth along heavily traveled corridors; and projects considered necessary to improve multimodal connections or to facilitate service integration between rail and other transportation modes.

Another $997 million is provided for the Federal-State Partnership for State of Good Repair, a grant program that aims to improve those critical rail assets, such as NEC infrastructure, which are currently in a state of poor repair due to a backlog of deferred maintenance. Under this program, preference will be given to eligible projects where applications have been jointly submitted by multiple applicants, making the fund ideal for special Amtrak projects with strong state involvement, like the NEC Hudson River rail tunnels.

5. Expedited environmental review procedures

The new bill allows expedited environmental review procedures, which are already used for highways and transit, to be applied to rail projects. In addition, a pilot program has been authorized which will allow five states to use their own environmental regulations and laws in the environmental review process, provided that the state’s laws are as strong as or stronger than the National Environmental Policy Act, which is the current standard. Reforms have also been made to align environmental reviews for historic properties; existing requirements for historic stations and other historic sites have been preserved, while at the same time ensuring that the delivery of critical improvements to rail infrastructure can be expedited when needed.

6. Greater usage of the RRIF program

The FAST Act includes new provisions that aim to make Railroad Rehabilitation Improvement and Financing (RRIF) a more flexible lender, allow RRIF loans to be approved quicker and with enhanced transparency, and facilitate the development of partnerships that combine other types of financing, such as private financing, with RRIF loans. Under these new provisions, a borrower who that has repaid its RRIF loan is also required to have its credit risk premium paid back with interest.

7. Creation of a State-Supported Route Committee

This committee will allow states greater control over their routes and help increase transparency, foster multistate collaboration, and allow for the sharing of best practices in order to create a robust and efficient state-supported network. This is particularly important given that states have been responsible for funding all routes shorter than 750 miles since the last rail reauthorization bill in 2008.

8. Competitive grants and loans

Totaling roughly $200 million, this funding for commuter railroads will encourage the timely implementation of Positive Train Control technology.

9. Creation of a Gulf Coast Working Group

This organization will evaluate all options for the restoration of intercity passenger rail service in the Gulf Coast region, select a preferred restoration option, and develop a prioritized inventory of the capital projects and other efforts needed for the restoration.

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