Rail Passengers' Analysis of BUILD America 250 Act (Part 1)

We look at the funding subtitle of the rail title in the House's BUILD America 250 Act.

by Sean Jeans-Gail, VP of Gov’t Affairs + Policy

[Updated May 20; 1:50PM Eastern]

The House Committee on Transportation & Infrastructure released a draft of its surface transportation reauthorization bill late Sunday, and Rail Passengers Association staff has been combing through the bill’s rail title to understand what the legislation is proposing for rail funding and policy.

There’s a lot in the Building Unrivaled Infrastructure and Long-term Development for America’s 250th (BUILD America 250) Act, and we’re still in the process of analyzing the language. Right now we can say the following: while there is a lot of good policy in this bill, if enacted, it is very unlikely it would meaningfully improve passenger rail in the U.S. over the five year life of the bill.

“We appreciate that the Committee included several Rail Passengers priorities, and we look forward to working with both parties to strengthen the bill,” said Rail Passengers‘ President & CEO Jim Mathews. “But as drafted, BUILD America 250 falls short of what passengers, states, workers, and communities need. Without reliable funding and a clear commitment to growth, this bill is not enough to earn our endorsement.”

We’ll be rolling out our detailed analysis of the bill over the next few days. In Part 1, we’ll focus on the funding subtitle for Amtrak and rail programs.

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Subtitle A – Authorization of Appropriations and Grant Reforms

Over the course of the bill’s five years, the BUILD America 250 authorizes $63.9 billion for rail programs, including:

• $10.4 billion for Amtrak’s Northeast Corridor;

• $20.7 billion for Amtrak’s National Network;

• $1.5 billion for the Federal Railroad Administration (FRA);

• $9.1 billion for the Consolidated Rail Infrastructure and Safety Improvements (CRISI) Program;

• $3.7 billion for the Railroad Crossing Safety Improvements and Elimination (RCE) Program; and

• $18.5 billion for National Intercity Passenger Railroad Partnership (NIPR) Program.

However, unlike the IIJA, none of the rail funds are guaranteed. Instead, they will be subject to annual appropriations.

Rail Passengers’ Analysis

The $64 billion for rail programs in the BUILD America 250 Act marks a 38% decrease from the IIJA. This is still a lot more money than rail was receiving pre-IIJA and—given unified GOP control of Congress, and some positive policy developments in other sections of the bill—this could have been an acceptable level of investment (and in fact, that narrative is already emerging in the media).

However, the BUILD America 250 Act provides not a single dollar of dedicated funding for rail. That means it expects the Appropriations Committees to use the annual budgeting process to find around $13 billion per year for rail programs when appropriators have consistently struggled to stay above the $3 billion mark. This doesn’t account for the other transportation programs BUILD is expecting appropriators to find additional money.

Using the past five years of annual appropriations as a guidepost, we can expect this bill to represent more than an 80% reduction in funding for rail programs.

This is especially galling when one compares it to the way BUILD 250 treats highways, where it shovels more money without even attempting to find the user-fees to pay for it. ENO Transportation estimates the extra above-baseline spending out of the Trust Fund in BUILD 250 would increase the Trust Fund revenue shortfall by around $38 billion over the next five years

In the leadup to this bill, Chairman Graves repeatedly made statements about getting “back to basics”, where he explicitly referenced highways and bridges. The repeated emphasis on non-Federal share for passenger rail is a strong indicator that this philosophy won out in this bipartisan process. The message of this bill is loud and clear: highways and roads are a core Federal priority and intercity rail is a State-level vanity project that Congress is willing to play along with—but only up to a point.

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Section 10104. Consolidated rail infrastructure and safety improvements.

• Expands eligible applicants, including lessees of federal hubs, more universities, and law enforcement;

• Broadens eligible projects to include “projects that facilitate intercity passenger rail ridership growth or improve the movement of freight by reducing rail traffic congestion on shared rail lines or at crossings and junctions”;

• Adds eligibility for “development, or testing that the Secretary considers necessary to advance any particular aspect of rail-related capital, operations, or safety improvements, including wayside defect detection technology, rail car and train movement monitoring technology, and advanced systems, that enhance the safety and efficiency of railroad operations and oversight”;

• Allows Secretary to waive cost‑benefit analysis for some freight safety projects;

• Allows some waivers of local funding match for freight and freight safety projects; and

• Requires USDOT to produce quarterly public grant reports.

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Section 10105. Railroad crossing safety improvements and elimination program.

• Adds rail-safety nonprofits as eligible;

• Encourages use of advanced tech/data;

• Reduces mandatory fund transfers; and

• Updates urban-area terminology.

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Section 10106. National intercity passenger railroad partnership program.

This newly created program would consolidate three existing rail programs--the Federal-State Partnership for Passenger Rail, Restoration & Enhancement, and Interstate Passenger Rail Compacts--into a single program;

• Eligible to fund operating costs for new/restored/enhanced intercity service, with a declining federal share over 5 years and 5‑year limit;

• Allows non‑Amtrak passenger rail operators and lessees of federally owned hubs to receive funding;

• Makes rolling stock procurement/leasing via interstate equipment pools eligible;

• Requires more non‑federal funding commitment, detailed business plans (ridership, revenue), and evaluation of financing credibility;

• Prioritizes projects ready to implement and those selected through the Corridor Identification Program; and

• Allows the Secretary to require Amtrak to provide access to the Amtrak-owned reservation system, stations, and facilities in exchange for financial compensation.

Rail Passengers’ Analysis

There’s nothing inherently wrong with consolidating FSP and R&E into one program, if there’s enough funding to carry out the goals of the two disparate programs. Given an annual appropriations process that is more likely to generate an extended government shutdown than pass a bill on time, we can say with a high degree of confidence: there won’t be enough funding.

In the absence of dedicated funding, we shouldn’t get distracted by shiny new policies—such as the inclusion of eligibility for equipment pools run by interstate compacts, a version of a policy that Rail Passengers has been advocating for in our reauthorization blueprint.

An improved policy framework with insufficient funding is like getting a fancy new car and popping the hood to find an “IOU” note where the engine should be.

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Section 10107. Corridor identification and development program.

• Adds a process for preparing Service Development Plans wherein eligible entities may “concurrently undertake project development work, including preliminary engineering and environmental activities, if the Secretary determines such eligible entity has the capability, authority, and experience… and has secured the required non-Federal funding to undertake such work.”

• Amends requirements for Service Development Plans, which must now include:

  • Projected operating revenue, including ticket prices;

  • Maintenance costs included in cost projection;

  • Replace “benefits” with “impacts”;

  • Add detailed methodologies for all projections;

  • Financial contingency plan;

  • Description of other proposed modal alternatives to the proposed corridor, including a no-build alternative;

  • Freight rail impact assessment; and

  • Analysis of non-Federal financial support for operations and maintenance.

• Prohibits inclusion of new corridor selections after Oct. 1, 2031.

• Corridors without non-Federal match commitments must update plans to include new requirements.

• Adds two required reports from the FRA:

• Project Pipeline Report (annual):

  • Describe non-Federal financial commitment;

  • Evaluate credibility of cost/utilization forecasts;

• Project Progress Report (quarterly):

  • Funds obligated;

  • Service development plan status;

  • Corridor timelines; and

  • Other issues affecting corridor development.

Rail Passengers’ Analysis

One reading of this language is that someone in Congress looked at the CID Program and thought “this thing is moving too dang fast… we better pump the brakes to make sure Uncle Sam’s money is invested wisely.” If that’s the case, we wish that person a speedy recovery from the massive brain trauma they’ve recently suffered.

No one has ever accused the CID Program of moving fast and breaking things. Rather, the complaints from applicants trying to move through the process has been that it is a highly convoluted system of gates and checkpoints that seems more focused on process than outcomes.

BUILD 250’s response to this state of affairs is to create a more rigorous analysis of a future corridor’s ridership and balance sheets, emphasizes that projects must seek more non-Federal funding, focuses on “impacts” over “benefits” of launching a new service, and directs applicants to look at other modes or a “no-build” option (“if applicable”). It even permanently closes CID to all new applicants after 2031.

(It almost goes without saying: none of this analysis is required for new highway corridors, and State DOTs would be up in arms if the Feds ever tried.)

A more cynical interpretation is that some people saw the list of the 69 corridors selected by CID and thought “these local governments have their head in the clouds, we better throw some cold water on this before it gets too far down the track”. This revision would drive many of the current applicants out of the program by creating additional layers of bureaucratic red tape to navigate—which may well be the point, since there probably won’t be enough money in the discretionary rail grant programs to advance major work on a single corridor.

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Section 10108. Emergency relief.

• Creates grant program for rail infrastructure/operations after disasters;

• Defines eligible entities/costs;

• Allows up to 80% Federal share, and outlines scenarios in which the Scenario can waive the local match requirement; and

• Sets insurance, duplication‑of‑benefits, and oversight rules.