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Content of Shared-Use Access and Operating Agreements 61 4.3.4 An Agreement between the Passenger Rail Agency and Amtrak With a few exceptions, a state or regional passenger rail agency funds capital and O&M costs of a passenger rail service on an intercity corridor. The exceptions are those services that were part of Amtrak's core network and historically have been fully funded by Amtrak. However, under Section 209 of PRIIA, state support will be required for all short-haul services including those historically funded by Amtrak, except for NEC services. In addition, the passenger rail agency often provides capital funds for track and signal upgrades to accommodate additional trips and shorter journey times and to improve service quality. The involvement of state or regional passenger rail agencies means that an agreement between the agency and Amtrak must be negotiated to set out the details of services to be provided by Amtrak, the compensation to be provided to Amtrak for these services, and commitments by the agency to take other actions (such as the provision of passenger station facilities and services and funding and contracting with the host railroad for track and signal upgrades) that will make the planned service feasible. The agreement between Amtrak and a state passenger rail agency for a state-supported service will typically include the subject areas described in the following three subsections. Definition of the Services to be Provided by Amtrak Term of the Agreement and Adjustment Period. The term of the agreement depends on both the long-term goals of the service and the characteristics of funding sources. Usually a long-term (20 years or more) framework agreement should be used, with provisions for reg- ular adjustments to funding formulas and the service specification. The rationale for a long- term agreement is to ensure that the agency can realize the benefit from long-life infrastructure investments, while the adjustment provisions allow for the agency and Amtrak to respond to traffic demand and the availability of funding for both planned infrastructure investments and for O&M expenses. A Mutually Agreed-upon Specification for the Service. The specification for the service includes frequency and schedules, fare levels, capacity (seats), planned journey time, etc. If the ser- vice will be implemented in stages as demand and funding permit, these stages and a prospective timetable will be included. Specific Services to be Provided by Amtrak. These services usually include access to the freight corridor; train crew; on-board services including food service; use of Amtrak's ticketing and reser- vation system; provision of station services (including staffing for ticketing and baggage service, if required) or provision of Amtrak's "QuickTrak" ticketing machines; and provision, maintenance, and servicing of equipment (passenger cars and locomotives). In some cases, the state agency may make independent arrangements or be involved in the selection of a food service provider, station services, and equipment acquisition in cooperation with Amtrak. State Financial Support to Amtrak for Operating and Maintenance Costs Amtrak states that, in the recent past, it has been reimbursed for approximately 70 percent of fully allocated O&M costs for a typical state-supported service. This reimbursement includes all direct costs and a contribution toward shared and overhead costs. Costs are estimated from an analysis of cost data from Amtrak's cost allocation system, less farebox revenue. Amtrak's posi- tion now is that state passenger rail agencies should bear the full direct cost of these services. However, state passenger rail agencies have often disputed Amtrak's cost allocation calculations and have asked for more transparency in Amtrak's accounting systems and cost allocation cal- culations. To address this issue, PRIIA (Section 209) includes a requirement that Amtrak develop new standardized methodology for cost allocation in cooperation with passenger rail agencies