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APPENDIX A The U.S. Railroad Industry Contents A.1 Introduction A-2 A.2 Summary of U.S. Railroad History A-2 A.3 Freight Railroads A-5 A.3.1 Introduction A-5 A.3.2 Class 1 Railroads A-6 A.3.3 Regional and Short-Line Railroads A-6 A.4 Passenger Railroads A-7 A.4.1 Amtrak A-7 A.4.2 Commuter Railroads A-9 A.5 Federal Agencies A-11 A.5.1 Federal Railroad Administration A-11 A.5.2 Federal Transit Administration A-12 A.5.3 Federal Highway Administration A-12 A.5.4 Surface Transportation Board A-13 A.5.5 National Transportation Safety Board A-13 A.6 Railroad and Related Industry Associations A-13 A.6.1 Association of American Railroads A-13 A.6.2 American Public Transportation Association A-14 A.6.3 American Association of State Highway and Transportation Officials A-15 A.6.4 States for Passenger Rail Coalition A-15 A.6.5 American Railway Engineering and Maintenance-of-Way Association A-15 A.6.6 Other Trade and Professional Associations A-15 A.7 The Railroad Supply Industry A-17 A-1

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A-2 Guidebook for Implementing Passenger Rail Service on Shared Passenger and Freight Corridors A.1 Introduction The U.S. railroad industry is complex, a somewhat isolated and specialized world that is largely unknown to the public at large. Regular users of rail passenger services may be familiar with Amtrak and their local commuter agency, but will lack familiarity with all that lies behind the provision of those services. As passenger rail services grow, many individuals concerned with implementing and managing those services and projects will encounter the industry for the first time. This appendix has been provided for those individuals as a guide to the industry and its key players. The specific areas covered in this appendix include: Recent U.S. railroad history, showing how the present industry structure has evolved in response to broader changes to transportation services and facilities The freight railroads The passenger railroads Federal agencies concerned with freight and/or passenger railroads Industry and professional associations concerned with the railroads The railroad supply industry A.2 Summary of U.S. Railroad History The present day structure of the U.S. passenger and freight railroad industry and accompany- ing legal and institutional arrangements are the end products of decades of change in the rail- roads themselves and in their competitors. Existing intercity and commuter rail services were established in their present form at different points over this period and reflect local and national circumstances in the railroad industry at those times. An understanding of this history and how it has led to the current situation will help passenger authorities develop realistic plans for new services and conduct effective track sharing negotiations with other railroad operators, whose actions and attitudes have been influenced by this history. For several decades at the end of the 19th and the early 20th centuries, railroads were the nation's largest industry and included some of the largest individual private business in the country. Railroads had a near monopoly of surface transportation over much of the United States, with competition only from navigable waterways and canals. This situation led to a range of industry- specific laws and regulations, as lawmakers attempted to balance the interests of railroads, ship- pers, railroad employees, and the general public. Government agencies were created to administer these laws, most notably the Interstate Commerce Commission (ICC) established in 1887 by the Interstate Commerce Act to oversee the fairness of railroad rates and the treatment of shippers. The ICC's powers were feeble at first, but by 1920 those powers had become very broad, con- trolling most aspects of railroad rates, mergers, and line purchases, sales, and abandonments. Industry associations came into being to represent the industry at these agencies and with the government generally. The engineering and administrative challenges of constructing and oper- ating the national railroad system and providing for movement of a carload of freight over mul- tiple rail systems led to the establishment of several professional and industry associations to improve technical knowledge and to set technical standards for track, cars and locomotives, sig- nals, and operating rules. Finally, the railroad workforce unionized, with relations between man- agement and labor being formalized in the Rail Labor Act of 1926. This complex and inflexible industry structure was completed just when highway trans- portation and commercial air service provided the beginnings of competition. The competition became much more severe after World War II, with construction of the interstate highways and turnpikes and the introduction of commercial jet airliners. In spite of the switch from steam to

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The U.S. Railroad Industry A-3 diesel traction and some regulation of the competition, railroads were unable to adapt to meet the competition, and the industry's financial condition deteriorated. Railroads operating in the northeast United States were especially vulnerable--freight hauls were shorter, they had more loss-making passenger services to support than elsewhere, and highway construction advanced more rapidly. Apart from a limited change in 1958, which eased the rules for discontinuing passenger services, there was no change in a railroad regulatory and institutional structure that prevented any effec- tive response to truck, automobile, and air competition. In a last-ditch effort to find a solution to their problems, the two dominant northeastern railroads (and historic rivals), the Pennsylvania and New York Central merged into the Penn-Central Railroad (Penn-Central) on February 1, 1968. The two partners hoped that the combined system could make cost savings that would enable the combined business to survive and prosper. The merger was a disaster. Penn-Central was unable to resolve post-merger operating prob- lems, and ICC regulation and generous labor contracts prevented any meaningful cost savings. As a result, Penn-Central's financial condition deteriorated rapidly, leading to bankruptcy in June 1970. Its dire financial condition was compounded by badly deteriorated physical condi- tions, chaotic operations, and questionable financial dealings as management had attempted to hide the true state of affairs. Passenger and freight service over a large area of the United States was in danger of collapse. All other significant northeastern railroads fell into bankruptcy at around the same time, compounding the regions transportation problems. Over the next decade, Congress responded with a series of major legislative actions and fund- ing initiatives designed to preserve passenger and freight rail service in the Northeast and pre- vent railroads in other regions from following the Northeast into chaos. Legislation was also designed to shift responsibility for passenger service, both intercity and commuter, to the pub- lic sector, including transfer of ownership of the principal commuter rail networks and the Northeast Corridor (NEC) to publicly funded entities. The purpose of separating passenger ser- vice from the freight carriers was twofold: 1) to take the financial burden of money-losing pas- senger carriage off the freight railroads, and 2) to preserve passenger service. Although the crisis originated in the Northeast, the resulting legislation changed the railroad industry nationwide: The Rail Passenger Service Act of 1970 created Amtrak to operate intercity passenger service with (supposedly temporary) federal assistance. In return for relief from the burden of passen- ger service, the participating railroads were required to transfer passenger locomotives and cars to Amtrak and give Amtrak rights of access to their networks. The railroads also agreed to an avoidable-cost formula for track-use charges. Amtrak started operations nationwide on May 1, 1971. Commuter railroads were considered a state and local responsibility and were not cov- ered by the Amtrak legislation. In any case, commuter rail operations were already receiving limited federal financial assistance through UMTA, which had been established in 1964. As Penn-Central struggled to operate in bankruptcy and other northeastern railroads went bankrupt it became clear that the whole northeastern network had to be restructured. The Regional Rail Reorganization Act (3-R Act) of 1973 created the United States Railway Asso- ciation (USRA) to plan and finance the restructuring of a new railroad company, to be called the Consolidated Railroad Corporation, or Conrail. The 3-R act also provided funding to keep northeastern railroads operating and established grant and loan programs to assist railroads in other regions. In 1976, the Railroad Revitalization and Regulatory Reform Act (the 4-R Act) implemented USRA's plan to create Conrail as a government-owned corporation. Conrail took over the assets and services of Penn-Central, and the other bankrupt northeastern freight carriers were given the option of joining Conrail. Except for the Boston and Maine Railroad, all the bankrupt railroads did join Conrail. Substantial funds were provided to Conrail to offset continued operating

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A-4 Guidebook for Implementing Passenger Rail Service on Shared Passenger and Freight Corridors losses and to overcome deferred maintenance. Physical condition and service improved, but financial losses continued because Conrail was unable to downsize the route network under prevailing ICC procedures or obtain relief from burdensome labor contracts. Conrail also continued to bear commuter rail expenses, not all of which were covered by financial support from state and local government agencies. The 4-R Act also transferred the NEC to Amtrak, except the sections that had previously been acquired by State agencies in New York, Connecticut, and Massachusetts. Congress provided funds for a NEC Improvement Plan, which included upgraded track and signal systems. Separately, Amtrak received funding for substantial numbers of new passenger cars and electric and diesel locomotives. The Staggers Rail Act of 1980 finally relieved freight carriers from most, though not all, fed- eral regulation of rail rates and services and simplified the regulatory process associated with railroad mergers, line sales, and abandonments. This legislation finally allowed Conrail and other freight carriers to rationalize their networks, services, and pricing so that they could sus- tain freight operations on a profitable basis. The Northeast Rail Service Act (NERSA) of 1981 was the final step to separate passenger and freight services in the northeast, ensuring that Conrail would not bear any burden from the cost of commuter operations. State and local agencies in the Northeast became fully responsible for commuter rail services, in most cases by establishing their own com- muter rail operations. These included the Massachusetts Bay Transportation Authority (MBTA) in Boston, Metro North Commuter Railroad in New York, New Jersey Transit (NJT) Rail Operations, and Southeastern Pennsylvania Transportation Authority (SEPTA) in Philadelphia, Pennsylvania. These measures were successful. After massive downsizing, Conrail prospered and was priva- tized in 1987 by a public offering of its stock, and the entire rail-freight industry entered a new era of sound financial performance. The commuter agencies also prospered, with new equip- ment, new routes and ridership growth. Further descriptions of the actions taken to establish these commuter operators can be found in Appendix D. Outside the Northeast, the only surviving commuter rail operations were in Chicago, Illinois and San Francisco, California. Over time, these were transferred in stages to regional public transportation agencies, which either set up their own operations or contracted for operations and maintenance (O&M) with Amtrak or the freight railroad that formerly operated the service. The passenger authority either assumed ownership of the infrastructure or continued to operate over freight-railroad tracks, depending on local circumstances. The commuter rail agreements were purely local in nature, and did not include any general rights of access to rail freight networks or generally applicable formulas for cost-sharing. The focus of the participants at the time was to preserve existing commuter services, not to lay the groundwork for future expansion. Therefore, unlike intercity rail services operated by Amtrak, there is no general right of access to the rail network or statutory formula for cost sharing for commuter services. After the Staggers Act, NERSA, and the privatization of Conrail, there was no major railroad industry legislation until late 2008. Now clearly separated into intercity, commuter, and freight railroads, each industry segment was able to focus on its own market: In the years following the Staggers Act, the freight railroads aggressively downsized, merged with each other, closed or sold underutilized lines, dramatically cut costs, and greatly improved their productivity and financial performance. From 1980 to the mid-1990s, there was some growth in rail traffic, mostly because of the growth of massive low-sulfur coal mines in the Powder River Basin in Wyoming. Otherwise, railroads focused on squeezing more profit from

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The U.S. Railroad Industry A-5 a roughly static volume of traffic. From the mid-1990s, freight railroads began seeing real traf- fic growth driven by additional increases in coal traffic from the Powder River Basin, rapid growth in intermodal traffic, especially international container traffic entering rail networks at West Coast ports, and a robust economy. The combination of a downsized network and traffic growth on the Class 1 railroads resulted in an increase in traffic density from 9.9 to 16.3 train-miles per route-mile per day (65 percent) over the 20 years from 1987 to 2006, after allowing for the sale of low-density branch lines. This sharp increase led to local congestion problems, aggravated by operating problems following major railroad mergers in the late 1990s. For the first time in decades, mainline rail capacity became scarce and, therefore, valuable. The per-mile net earnings from a freight train far exceeded track-use fees that a passenger operator would typically pay. This created the difficult negotiating environment for passenger rail inter- ests seeking access to the freight network. Commuter rail services also entered a period of expansion. The long-established systems expe- rienced traffic growth, and several cities and regions were able to implement entirely new com- muter services, aided by "New Starts" funding from the Federal Transit Administration (FTA). Most notably, the Southern California Regional Rail Authority (SCRRA) was established in the Los Angeles area. The SCRRA purchased 200 miles of underutilized rail right-of-way from freight railroads for its initial services. It now operates seven commuter rail routes on 388 route- miles, including its own tracks and by agreement with area freight railroads. New com- muter services were also introduced in the Virginia suburbs of Washington, D.C.; Miami/ Fort Lauderdale, Florida; Seattle, Washington; Albuquerque, New Mexico; San Diego and San Jose, California; Dallas, Texas; and Nashville, Tennessee. Several other services are in planning. Development of Amtrak intercity services between the early 1990s and 2008 was uneven. In the Northeast, a major project to extend electrification from New Haven, Connecticut to Boston, Massachusetts was completed in 1999, followed by the introduction of Acela high- speed train sets in 2000. California has made substantial investments in corridor services, which with the provision of operating support to Amtrak has resulted in large gains in rider- ship. Elsewhere, smaller scale investment in infrastructure improvements and provision of operating support for corridor services by state agencies in the Midwest, Pacific Northwest, Maine, and elsewhere have allowed additional trips and service improvements on routes in their areas. However, outside the State-supported corridors and the Northeast Corridor, the lack of funding has meant that there has been little service development. A.3 Freight Railroads A.3.1 Introduction Freight railroads own and operate about 97 percent of the railroad route miles in the United States, with the remainder, about 5,000 miles, owned by Amtrak and commuter rail agencies. Freight railroads also provide mostly local freight service over most routes owned by passenger agencies. Freight railroads are customarily divided by size into three categories: Class 1 railroads, designated by the Surface Transportation Board (STB) as those with freight revenues exceeding $319 million in 2005. The revenue threshold is adjusted annually using the Railroad Cost Adjustment Factor (RCAF). See the Section A.6.1 on the Association of American Railroads (AAR) for an explanation of RCAF. There are 7 Class 1 railroads operat- ing about 96,000 route miles in the United States, and they earn approximately 92 percent of all freight railroad revenue. The number of Class 1 railroads is unlikely to change unless two Class 1 railroads merge with each other, since no smaller railroad has revenues anywhere near the Class 1 threshold.

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A-6 Guidebook for Implementing Passenger Rail Service on Shared Passenger and Freight Corridors Regional railroads operate over 350 route miles or have revenue exceeding $40 million, as defined by the AAR. Regional railroads operate approximately 15,000 route miles and earn about 3.5 percent of all freight railroad revenue. Local railroads are too small to qualify as regional railroads. Local railroads operate approx- imately 26,000 route miles and earn about 4 percent of all freight railroad revenue. The following sections provide some details on these freight railroad groups. A.3.2 Class 1 Railroads The seven Class 1 railroads are listed in Table A-1 with some key data on their plant equip- ment and operations. The four leading railroads, BNSF and UP in the west, and CSX and NS in the east, dominate the railroad industry with more than 90 percent of total U.S. traffic and revenue. All are the prod- ucts of multiple mergers of predecessor railroads. Out of necessity, the majority of intercity and long-distance Amtrak services operate over track owned by these railroads, under operating agreements that Amtrak maintains with each of them. Each railroad continues to be active in line sales and acquisitions as they seek to build and maintain a network that best meets their busi- ness needs. Passenger service interests should be aware that (other than on obvious core routes) it is always a possibility that a freight route may be acquired or sold, and make sure that any pas- senger service obligations are transferable to a new owner. Because all four railroads host multi- ple passenger services, each has an official dedicated to coordinating Amtrak and commuter passenger services. Canadian National and Canadian Pacific data in the table only identify their U.S. operations. Both host a number of passenger services and, like the "big four," are familiar with the process involved in hosting passenger operations. The final Class 1, KCS, currently has minimal involve- ment with passenger service. Class 1 railroads are obliged to submit detailed reports on traffic, operations, revenue expenses, and capital expenditures to the STB. This information is in the public domain and is easily acces- sible from the STB or statistical reports compiled and published by AAR. A.3.3 Regional and Short-Line Railroads Regional railroads are intermediate sized systems as defined in Section A.3.1, usually com- prising one or two main lines and a number of yards and branches. There are about 30 regional railroads in the United States. Regional railroads can be long-standing independents that were Table A-1. Class 1 railroads operating in the United States (2005 data). U.S. Route Revenue Ton- Freight Revenue Locomotives in Railroad Miles Miles (billions) ($ millions) Service BNSF Railway 32,154 595 12,846 5,751 Canadian National Rail 6,736 54 1,422 716 Service (CN) Canadian Pacific Railway (CP) 3,511 24 687 372 CSX Corporation 21,357 247 7,689 3,601 Kansas City Southern Railway 3,197 25 800 565 Company (KCS) Norfolk Southern Corporation 21,184 203 8,526 3,655 (NS) Union Pacific Railway (UP) 32,426 549 13,545 8,119 Source: Railroad Facts, 2006 Edition

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The U.S. Railroad Industry A-7 never part of a larger railroad system (e.g., the Florida East Coast Railroad), or formed when one of the major railroads "spun off" an unwanted segment of their network to form an independent system (e.g., the Portland and Western Railroad, formerly owned by BNSF, which now hosts a commuter service). Such spin-offs were common in the 1980s and 1990s as the Class 1 railroads downsized their networks to focus on a core system. Several of the regional railroads formed at that time have since been purchased back by Class 1 railroads as traffic grew and service patterns changed. As a group, regional railroads are the most likely to be purchased by a Class 1 in this way, and any passenger access agreement should ensure that passenger service obligations are transferred in case of a change in ownership. Short-line or local railroads are names given to railroads that are too small to qualify as regional railroads. There are approximately 500 short lines in the United States and may fall into different categories depending on the nature of the traffic, ownership, or geographical area served. These include: Switching and terminal railroads provide rail freight service in a compact geographical area, providing connections between the line-haul railroads serving the area as well as between line- haul railroads and shippers and receivers in the area. Switching and terminal railroads are often very busy, with numerous connections to classification yards and industries, a type of operation that is unlikely to mesh well with passenger service requirements. Examples are the Indiana Harbor Belt in the Chicago area and the New Orleans Public Belt Railroad. Single industry railroads are technically common carriers that can provide service to multiple customers, but are primarily devoted to serving the railroad owners industrial plant(s). Short-line and regional railroad holding companies own multiple railroads, combining the advantages of a larger firm, such as professional management, access to finance, and bulk pur- chasing with the flexibility of small local railroad operations. A substantial fraction of short lines and regional railroads belong to holding companies, examples of which are R. J. Corman and the Genesee and Wyoming groups. "Classic" short lines are independent small businesses often with fewer that 20 employees, operating a branch line. These short lines focus on providing individual service to customers on the route. To survive, they need a good relationship with the connecting line-haul railroad, which will often nurture short lines by providing access to information services for car track- ing and similar functions. Short lines are often good candidates for passenger service. Freight traffic is low, typically one or two round trips per day, and the owner will often be willing to sell the right-of-way to the pas- senger agency as long as it can retain access for freight service. The downside for passenger oper- ators is that substantial expenditure is usually needed to upgrade track and install a signal and train control system suitable for passenger service. A.4 Passenger Railroads A.4.1 Amtrak Section A.2 provides a brief explanation of the origins of Amtrak in 19701971 as a response to the Penn-Central bankruptcy and the losses incurred by freight railroads in operating passen- ger service. The following section expands on that account, particularly describing the subse- quent evolution of Amtrak services. Upon starting operations on May 1, 1971, Amtrak discontinued a significant portion of the non-commuter rail services that had been operated by the freight railroads, retaining only a DOT-designated route system determined to have the best chance of becoming profitable and which could be supported with the available funding. This became the core Amtrak network that

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A-8 Guidebook for Implementing Passenger Rail Service on Shared Passenger and Freight Corridors has evolved over the past 35 years in response to funding limits, business prospects, and direc- tion from Congress and the Administration of the day. Initially, Amtrak took ownership of pas- senger locomotives and equipment, but all O&M services were provided by the host freight railroads on a cost reimbursement basis. Since the early years, Amtrak gradually transferred these functions from freight to Amtrak employees, so that today only infrastructure maintenance and dispatching are provided by host railroads, with all other functions being provided by Amtrak employees. The services operated by Amtrak in recent years fall into three distinct groups, each with dif- ferent histories and characteristics. The Long-Distance and Intercity Network, Operated by Amtrak without State or Local Support This is the core Amtrak network that includes all long-distance multi-state routes and shorter corridors that lack state government support. Almost all these services operate over freight rail- roads under access agreements between Amtrak and the host railroads and most comprise only one or two trains in each direction per day. The services are well patronized, but vulnerable to quality issues stemming from host railroad operational issues, track quality problems and localized freight railroad congestion on certain routes. Amtrak's service quality incentives and penalties have lim- ited influence in many cases, as railroads choose to forego incentives rather than improve service. Amtrak has found that the most effective actions are to nurture a cooperative relationship with the host railroads to develop mutually beneficial plans to mitigate service problems. The Northeast Corridor between Boston, Massachusetts, and Washington, D.C. Prior to Amtrak, intercity services on the NEC were operated by the Pennsylvania, New Haven, and then Penn-Central railroads. There was limited government investment in improved equipment for the NEC under the High Speed Ground Transportation Act of 1965, in the form of Metroliner high-speed self-propelled multiple operated electric motor (MU) cars for the south end and tilting United Aircraft Turbo trains for the north end. These initiatives were not tech- nically successful, at least in part because there was no parallel effort to upgrade track. In the 1970s and early 1980s, the federal government and state agencies in New York, Massachusetts, and Connecticut purchased the Corridor in the wake of the Penn-Central and other railroad bankruptcies and invested over $2 billion in infrastructure improvements, concentrated on the southern New York to Washington, D.C. portion. A plan to electrify and upgrade the Northern portion from New Haven, Connecticut to Boston, Massachusetts was not completed at this time because of insufficient funding, but was revived in the 1990s and completed in 1999. Amtrak contributed to the NEC renaissance by purchasing the highly successful AEM7 electric locomo- tives (based on Swedish Railways RC4 design) and Amfleet cars in the late 1970s and putting the high-speed Acela train sets into service in 2000. Usage and management of this corridor is complex. Amtrak manages corridor operations over all segments except New Rochelle, New York to New Haven, Connecticut, which is owned by the New York and Connecticut Departments of Transportation (DOT) and operated by Metro North Commuter Railroad (MNCR - a unit of the New York Metropolitan Transportation Authority [MTA]). Commuter services share much of the NEC with Amtrak, as well as gener- ally limited freight service in most areas. Maryland DOT (MARC) and Connecticut DOT ser- vices east of New Haven (Shoreline East) commuter services on the NEC are operated by Amtrak, and the remainder by regional commuter rail agencies (SEPTA, NJT, Long Island Railroad (LIRR), MNCR, and MBTA). The agreements between the parties governing access to the NEC and payments for O&M expenses were worked out as required by federal legislation in the 1970s and early 1980s (the 3-R,

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The U.S. Railroad Industry A-9 4-R and Northeast Rail Service Acts, as described in Section A.2). Full details governing cost of access to the NEC for commuter operators can be found in a decision of the ICC, Ex Parte No 417 of March 3, 1983. The fairness of these arrangements for the different users and the governance arrangements for the corridor continue to be a subject of debate among the users and State and federal agencies. In addition, the NEC has a growing backlog of investment needs to improve performance and add capacity. Sections 211 and 212 of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA) mandated a planning process to bring the NEC into a state of good repair, and established a Northeast Corridor Infrastructure and Operations Commission to plan for ongoing capital investments to improve the capacity and performance of the corri- dor and to establish new cost-sharing formulas. State-Supported Corridors Most of Amtrak's shorter distance and predominantly intrastate corridors receive support from state DOTs, varying from operating costs for additional trains to very substantial capital expenditures on infrastructure improvements and new passenger cars and locomotives. Many of these initiatives contain useful examples for methods of developing intercity passenger rail service and are described in Appendix D. Almost all new or expanded intercity passenger rail ser- vices developed using PRIIA and the American Recovery and Reinvestment Act of 2009 (ARRA) funding will fall into this category. Applicable methods and services are discussed at length in the body of this Guidebook. A.4.2 Commuter Railroads Commuter railroads typically provide passenger rail service in major metropolitan areas, usu- ally between a city center and outlying suburbs. The most extensive systems are in major U.S. cities, such as Boston, New York, Philadelphia, Washington, D.C., Chicago, and Los Angeles. There is no nationwide organization providing commuter rail services, established procedures for access to the railroad network, or cost sharing between multiple users of a commuter corridor, such as those that exist for Amtrak intercity services. Operating arrangements for each system and often for individual routes within a system have evolved in response to local circumstances. All commuter rail authorities are state or local agencies established under state law. All are eligi- ble to receive grants for capital expenses under various FTA public transportation grant programs. Grants are used to purchase or rebuild passenger cars and locomotives, for new and rebuilt sta- tions, to construct or upgrade the right-of-way, and related activities. However the FTA does not provide operating funds; all support for day-to-day operations must come from state and local sources. An exception is federal funding from the Congestion Mitigation and Air Quality (CMAQ) Improvement program funds administered by the FTA and Federal Highway Administration (FHWA), which may be available to agencies in air quality non-attainment regions. As of first quarter 2009, there were 21 commuter rail agencies in the United States, with several others under development. The agencies are listed in Table A-2 with the full title of the agency, the marketing name, and the service area. The table also gives annual passenger-miles (in mil- lions) to give an indication of the size of the operation. Size varies enormously--a range of 1000:1 between the largest agencies (e.g., LIRR or NJT) and the smallest (Music City Star in Nashville, Tennessee). Annual patronage data was not available on three recent startups, in Utah, Oregon, and New Mexico. The service provided varies too: the largest systems provide all-day service over an extensive network, while the smallest services are limited to weekday rush hour service. Note that the list does not include light rail transit services that are operated over shared track, with near-complete separation of freight and passenger services into exclusive time-of-day windows. Most commuter operations are over tracks owned by the commuter agency, most shared with limited freight services, and in some cases Amtrak service. The principal exceptions to this

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A-10 Guidebook for Implementing Passenger Rail Service on Shared Passenger and Freight Corridors Table A-2. Commuter rail agencies in the United States (in service 1st quarter 2009). Annual Marketing Passenger State/Parent Agency Title Name Service Area Miles (millions) Agency Central Puget Sound Regional Sounder EverettSeattle 53 Washington, Transit Authority Commuter Rail Tacoma, WA Sound Transit Connecticut DOT Shore Line East New HavenNew 9 Connecticut London, CT Maryland Transit Administration MARC Washington, D.C. to 228 Maryland Baltimore and western MD Massachusetts Bay MBTA or "The T" Greater Boston, MA 791 Massachusetts Transportation Authority (MBTA) MTA Long Island Railroad MTA Long Island Long Island, NY 2,258 New York Railroad Metropolitan MTA Metro-North Railroad MTA Metro- New York City, Hudson 2,127 Transportation North Railroad Valley, Westchester Authority County and New Haven, CT New Jersey Transit Corp, Rail NJ Transit All New Jersey 2,281 New Jersey DOT Operations New Mexico DOT Rail Runner BelenAlbuquerque NA New Mexico Express Santa Fe, NM North County Transit District Coaster San DiegoOceanside, 43 California (NCTD) CA Northern Indiana Commuter South Shore Chicago, ILSouth 119 Indiana and Transportation District (NICTD) Line Bend, IN Illinois Peninsular Corridor Joint Caltrain San FranciscoSan 280 California Powers Board JoseGilroy, CA Regional Transportation METRA Greater Chicago, IL 1,719 Illinois Authority (RTA) Regional Transportation RTA Music City Nashville to Lebanon, 2.4 Tennessee Authority (RTA) Star TN San Joaquin Regional Rail Altamont San JoseStockton, CA 34 California Commission Commuter Express (ACE) South Florida Regional Tri Rail MiamiFt. Lauderdale 108 Florida Transportation Authority West Palm Beach, FL (SFRTA) Southeastern Pennsylvania SEPTA Regional Greater Philadelphia, 479 Pennsylvania Transportation Authority Rail PA (SEPTA) Southern California Regional Metrolink Los Angeles Basin, CA 414 California Rail Authority (SCRRA) Tri-County Metropolitan Tri-Met WES WilsonBeaverton for NA Oregon Transportation District (Westside connection to Portland's Express Service) MAX light rail line, OR Trinity Railway Express (TRE) Trinity Railway Fort Worth and Dallas, 17 Texas, Dallas Express TX region and Ft. Worth transportation agencies. Utah Transit Authority (UTA) Front Runner Salt Lake City to NA Utah Ogden, UT Virginia Railway Express (VRE) Virginia Railway Virginia suburbs of 103 Virginia Express Washington, D.C.

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The U.S. Railroad Industry A-11 arrangement are lines that carry significant freight traffic or where the freight carrier was not pre- pared to sell to the commuter agency: Several METRA (Chicago area) services are operated on freight railroad tracks owned by UP, BNSF, and CP, with the host railroad operating the trains. Sounder Services in Washington State on BNSF-owned corridors. A few route segments used by the major East Coast commuter rail agencies, such as NJT, MNCR, and MBTA, and by Metrolink in the Los Angeles, California area. The majority of commuter rail systems engage contractors to operate and maintain the ser- vice. The principal exceptions are the major systems around New York City (LIRR, MNCR, and NJT), SEPTA in Philadelphia, and the Chicago area lines that were inherited from bankrupt freight railroads or railroads that did not want to continue as a contract operator. These excep- tions are usually full operating railroad subsidiaries of the parent agency, with their own opera- tions and maintenance facilities and personnel. The remaining commuter rail systems contract for O&M with a freight railroad, Amtrak, or an independent firm, depending on local circum- stances. In some cases the principal functions (train operations, car and locomotive mainte- nance, and infrastructure maintenance) are split between two or three contractors. A.5 Federal Agencies A.5.1 Federal Railroad Administration The Federal Railroad Administration (FRA) is the principal modal agency within U.S.DOT concerned with railroads. Compared with the other modal agencies within U.S.DOT it is a small agency and, until recently, received modest funding for its activities. There are three principal offices within the FRA, excluding legal and internal administration activities such as personnel. These are as listed below, with a brief description of their activities. Office of Policy and Communications This is a small office that performs in-house analyses and research concerning the railroad industry as requested by the Administrator and other FRA and U.S.DOT officials. It does not make grants and only occasionally awards contracts to analyze issues of interest. Office of Railroad Development This office is one of the two major offices in the FRA with a variety of responsibilities, recently much expanded by PRIIA and ARRA. Before this legislation, the office had the following responsibilities: Act as the conduit for Amtrak's annual appropriations and oversee Amtrak's activities as directed by Congress and applicable legislation. Much of the actual work in this area concerned working with Amtrak on major NEC capital projects, and working with the administration of the day and Congress on Amtrak-related initiatives and legislation. Manage pre-PRIIA and ARRA grant and loan programs, such as Railroad Rehabilitation and Investment Financing (RRIF) and the Rail Line Relocation grant program (aimed at removing busy rail lines from city centers). Manage the FRA's responsibilities relating to National Environmental Policy Act (NEPA) compliance in railroad construction projects. Manage the FRA's research and development programs, the bulk of which are concerned with safety research to support the FRA Office of Safety activities. The Office of Railroad Development now has the added and very large responsibility of admin- istering the funds and grant programs established by PRIIA and ARRA. Tight timeframes have

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A-12 Guidebook for Implementing Passenger Rail Service on Shared Passenger and Freight Corridors been established for each stage in implementing these programs, including a policy and vision for intercity passenger rail, grant application procedures and requirements, and award criteria. Office of Railroad Safety The Office of Railroad Safety is responsible for developing and enforcing railroad safety statutes, regulations, and standards, maintaining comprehensive railroad accident reporting sys- tems and databases, and conducting safety-related analyses and investigations. The safety regu- lations and related FRA procedures, such as for obtaining a waiver to specific regulations, are discussed in detail in Appendix C. A.5.2 Federal Transit Administration The FTA is responsible for managing the federal government's funds, policies, and programs for urban and rural local mass transportation. Currently, the FTA's responsibilities are defined in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) of 2005. The FTA manages a broad range of programs covering all modes of local and regional surface public transportation. The scope of its activities is summarized in the following list: Modes of transportation covered include local and regional bus services, light and heavy rail mass transit, commuter rail, commuter ferries, and para-transit systems. The FTA is not con- cerned with intercity rail transportation, although some shorter-distance Amtrak routes qual- ified for FTA funding, such as the Boston, Massachusetts to Portland, Maine Downeaster service, the Capitol Corridor in California, and the Philadelphia to Harrisburg service in Pennsylvania. The FTA administers a variety of grant programs for planning and capital projects and to pur- chase or rebuild transit vehicles of all types. However, the FTA does not provide operating support to public transportation agencies. One of these programs, the New Starts grant pro- gram, is commonly used to fund part of the cost of building a new commuter rail route or extending an existing route. The FTA provides many types of technical assistance to local, regional, and state public trans- portation agencies, such as for planning, implementing new technologies (such as fare collec- tion systems, customer information systems, implementing intelligent transportation systems), improving safety and security, and others. The FTA supports a transit research and demonstration program to encourage the develop- ment and application of new technology. Developing alternative-fuel propulsion systems and improving energy efficiency are major elements in the research and demonstration program. A.5.3 Federal Highway Administration FHWA involvement with railroad concerns highway traffic safety at rail-highway grade cross- ings. FHWA provides safety standards for the design of the highway at grade crossings and for crossing warning systems. Specifications for types and placement of crossing warning devices such as gates, lights, and bells are given in the Manual of Uniform Traffic Control Devices (MUTCD). The FRA is responsible for the systems that activate crossing warning devices when a train approaches, and the railroad is responsible for the inspection, monitoring, and maintenance of crossing systems. FHWA also manages a federal grant program for grade crossing improvements using funds authorized by SAFETEA-LU. Most practitioners know this program as "Section 130 funding," although strictly this title refers to a section in a former surface transportation act, not SAFETEA- LU. Approximately $150200 million is disbursed to states each year to add or upgrade crossing

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The U.S. Railroad Industry A-13 warning systems and other crossing safety measures, up to and including crossing closure, con- solidation, and grade separation. The FRA, together with other surface transportation modal agencies, has developed crossing risk assessment methods to guide the selection of crossings for safety improvements. A.5.4 Surface Transportation Board The STB was founded in 1995 by the ICC Termination Act, which eliminated the ICC and transferred some of its powers and duties to the STB. The bulk of the STB's responsibilities relate to freight railroads and interstate trucking, but it also inherited ICC responsibilities concerning Amtrak's relationship with host railroads, including resolving disputes between Amtrak and a freight carrier over access rights and payments. More generally, the STB is a federal regulatory agency with general jurisdiction over rail carrier transportation, including construction, acqui- sition, operation, or abandonment. This jurisdiction is exclusive and preempts that of state and local authorities, even when the service or facility is located entirely within one state. More detail is provided in Section B.2.8 of Appendix B, including the new STB responsibilities defined by PRIIA to conduct non-binding arbitration in disputes between commuter agencies and freight railroads, and to monitor and enforce Amtrak on-time performance standards. A.5.5 National Transportation Safety Board The primary function of the National Transportation Safety Board (NTSB) is to investigate serious individual transportation accidents in any mode, including railroad accidents. NTSB is independent of DOT modal agencies and has the authority to investigate serious accidents, deter- mine the probable cause, and make recommendations to prevent similar accidents in the future. To carry out its investigations, NTSB has the authority to access accident sites, to inspect and test all equipment and systems that may have a bearing on the investigation, to obtain relevant records from the railroad operator, and to compel testimony under oath from witnesses. NTSB investi- gates almost all passenger train accidents that result in a loss of life, as well as other serious pas- senger and freight train accidents. It also will conduct special studies of a class of accidents where it identifies a systemic safety problem that the industry and responsible government agencies should be aware of and address. The end result of each investigation is a comprehensive report detailing the investigation, the probable cause of the accidents, and recommendations to the train operators and responsible government agencies that would prevent similar accidents in the future. NTSB has no safety reg- ulatory powers, and it is the responsibility of the railroads and government regulators to imple- ment the recommendations. A.6 Railroad and Related Industry Associations A.6.1 Association of American Railroads The AAR is the industry association for the Class 1 railroads. It performs all the customary industry association functions and provides a number of services essential to the smooth run- ning of an interconnected network industry. These are: Representing the interests of the industry in public forums of all kinds, including Congressional hearings, hearings by other government agencies (DOT, STB, etc.), and through public outreach. Maintaining and publishing industry statistics, mainly derived from mandatory reports on railroad finances and operations to the STB, and performing economic and statistical analyses

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A-14 Guidebook for Implementing Passenger Rail Service on Shared Passenger and Freight Corridors on behalf of the industry. AAR publications are the most convenient and accessible sources of railroad financial and operations data. Determining industry policies and practices on matters of common interest, especially on technical issues of interoperability between railroads, such as for data communications, train control communications, freight car and equipment condition, and operating rules. AAR has established a subsidiary, Railinc Corporation, to provide data services to the freight railroads, including a national register of freight equipment, nationwide freight car location information, an official register of freight car rental rates, and inter-railroad billing and pay- ment systems. The payment systems are used for sharing freight revenue in compliance with agreed contracts, making car hire and demurrage payments applicable when a freight car is not on the owning railroad's property, making freight car repair payments, and similar functions. AAR has established the Transportation Technology Center Inc. (TTCI) to provide a wide range of technology services to railroads worldwide, including: Managing the FRA-owned Transportation Test Center (TTC) in Pueblo, Colorado. Carrying out railroad research and testing for AAR itself (under an industry-financed strategic research program), for various FRA research programs, for individual railroads and railroad suppliers, and contract research and analysis for overseas clients. This includes passenger car analysis and testing, such as tests on prototype cars and locomotives, accep- tance tests for car purchasers, and crashworthiness tests for the FRA and the Volpe Center. Maintaining and publishing a comprehensive Manual of Recommended Standards and Practices for freight cars and locomotives. Although mostly devoted to freight equipment, a number of standards are widely used in passenger car specifications, such as for wheels, axles, bearings, and couplers. Maintaining and publishing the railroad industries Interchange Rules, which contain the technical standards that must be met for a rail car to be acceptable for nationwide operation. Providing a quality assurance service to manufacturers of safety-critical freight car compo- nents, such as wheels axles, bearings, truck frames, and brakes. As a freight railroad association, AAR does not formally represent or provide services to pas- senger railroads, which, except for Amtrak, are not members. However, AAR activities do affect passenger railroads that operate services hosted by freight railroads, in part by setting the tone of the freight railroads' relationships with passenger operators through its policy positions, and in part through the various technical and interoperability standards that govern both passenger and freight operations. A.6.2 American Public Transportation Association The American Public Transportation Association (APTA) is the industry association for all modes of local and regional public transportation, including commuter rail. APTA's trade asso- ciation activities are similar to those performed by AAR on behalf of Class 1 freight railroads-- maintaining relationships with Congress and relevant DOT agencies, speaking out on issues of interest to its members, and participating in the formulation of public transportation policy. APTA also organizes regular conferences, publishes industry statistics (derived from transit agency reports to the FTA) and develops and maintains selected industry standards. The stan- dards of most relevance to commuter and intercity passenger rail agencies are the Passenger Rail Equipment Safety Standards (PRESS). These standards, which have been developed over the last several years, add considerable detail to the underlying FRA passenger equipment safety stan- dards and are commonly referenced in passenger car specifications and maintenance manuals. The purpose of the standards is not only to enhance safety but also to introduce a measure of standardization among passenger car designs and details, to simplify the car purchasing process, to reduce capital costs, and to improve the reliability and efficiency of passenger rail operations.

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The U.S. Railroad Industry A-15 A.6.3 American Association of State Highway and Transportation Officials The American Association of State Highway and Transportation Officials (AASHTO) supports and represents U.S. state transportation agencies with a very wide range of services and other activ- ities. These activities include both representing state transportation concerns and issues to federal agencies and Congress, advocating for transportation policies and funding responsive to state's concerns, and maintaining a wide range of industry standards for transportation facil- ities, especially for highways. One of AASHTO's committees, the Standing Committee on Rail Transportation (SCORT) undertakes these activities with regard to rail freight and passenger trans- portation. SCORT has been growing in prominence in AASHTO with recognition of rail trans- portation as an important contributor to freight and passenger mobility. An example of recent SCORT activity is to facilitate and provide inputs to the National Rail plan and support the devel- opment of state rail plans. A.6.4 States for Passenger Rail Coalition States for Passenger Rail Coalition (SPRC) is an organization of state passenger rail officials with a specific interest in implementing and expanding intercity passenger rail services in their states. SPRC's functions are to keep its members fully informed of developments in Congress and Federal agencies that affect intercity passenger rail interests and to advocate for policies and funding supportive of passenger rail developments. A.6.5 American Railway Engineering and Maintenance-of-Way Association The American Railway Engineering and Maintenance-of-Way Association (AREMA) is a pro- fessional association for individuals interested in all aspects of railroad infrastructure engineer- ing, including railroad track, structures, and signal and train control systems. Membership is drawn from professionals working with railroads, rail transit systems, research and academic institutions, consultants, suppliers, and others. AREMA is the primary developer of industry standards in its areas of interest and publishes two key industry manuals of standards and rec- ommended practices: Manual for Railway Engineering Communications and Signaling Manual The manuals are updated annually through the work of about 30 specialist committees and are widely used and referenced in North America and throughout the world for application on freight and passenger railroads and rail transit systems. The Communications and Signals Manual was formerly maintained and published by AAR, but was transferred to AREMA when AAR narrowed its focus to the interests of the Class 1 freight railroads several years ago. AREMA also holds an annual conference and expo and numerous training seminars, courses, and workshops throughout the year. A.6.6 Other Trade and Professional Associations There are a number of trade and professional organizations active in the railroad industry other than those mentioned above. Most are unlikely to be of more than passing interest to offi- cials concerned with planning, implementing, and operating passenger rail services, but it can be useful to know of their existence and the nature of their railroad activities. In most cases,

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A-16 Guidebook for Implementing Passenger Rail Service on Shared Passenger and Freight Corridors abundant information about the organizations and activities is available on-line and is easily accessed. Professional Engineering Associations Professional engineering associations that hold technical and scientific conferences publish both general interest professional journals and refereed technical papers and hold regular con- ferences. The associations may also develop and maintain engineering standards and recom- mended practices relevant to railroad plant and equipment. The principal associations with rail interests include: American Society of Civil Engineers American Society of Mechanical Engineers Institute of Electrical and Electronic Engineers Railroad Supply Industry Associations There are four associations that often work closely with each other and which provide typical industry association services for their members. These are: National Railroad Construction and Maintenance Association (NRC) for railroad contractors. Railway Engineering-Maintenance Supplier Association (REMSA) for suppliers of track main- tenance equipment, materials, and services. Railway Supply Institute (RSI) for rail rolling stock manufacturers, repair and maintenance contractors, and lessors of rolling stock. Railway Systems Suppliers Inc. for suppliers of signal, train control, and communications equipment. International and Overseas Organizations The world divides into two camps regarding railroad technical and interoperability standards. North American practice is applied in its home region (United States, Canada, and Mexico) and elsewhere in the world to mainly heavy-haul freight operations. European practice, as originally developed by the International Union of Railways (UIC), is generally used on passenger-oriented systems, especially high-speed routes and commuter rail systems. UIC used to manage the equiv- alent of AAR's interchange rules, obligatory standards to be met by passenger and freight rail vehi- cles used in international service over multiple national rail systems. UIC also published numerous recommended practices for rail vehicles, track, and signal systems. In addition, each country and national rail system developed its own technical standards and safety oversight procedures. In recent years, many of these functions have transferred to European Commission (EC) insti- tutions, as the EC sought to ensure interoperability of rail systems throughout Europe and har- monize national standards into Europe-wide standards. These standards (Euro Norms [EN] documents) cover such issues as rail vehicle crashworthiness and typically cover requirements for light and heavy rail mass transit as well as for main line railways. From a North American point of view, European standards and practices of most interest are those concerned with the strength and crashworthiness of passenger rail cars. Car buff (end load) strength specified in European standards is approximately half that required in equivalent FRA and APTA PRESS standards, and unmodified European cars would not be permitted to operate in the United States without a waiver. However, the European market for rail passenger cars is far larger that the equivalent North American market, and a number of car and train designs devel- oped by the supply industry for European customers are attractive to U.S. passenger rail author- ities. There could be substantial cost, delivery time, and reliability advantages in acquiring proven European designs, but the feasibility of using such vehicles on the U.S. rail system is unproven.

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The U.S. Railroad Industry A-17 A.7 The Railroad Supply Industry The U.S. freight and passenger railroad industries are supported by a broad supply industry that can provide everything from complete high-speed rail system to inspection services. For the most part, working with the supply industry to obtain materials and services for a passenger rail project is the responsibility of the professional engineers, contractors, and consultants working on the project details, following customary industry standards and practices. However there are two or three areas where the structure of the industry and the products offered can have higher- level influence on the implementation of new passenger rail services. Some points to bear in mind are: There has been a worldwide consolidation of the manufacturers of the most complex railroad products, so that few leading firms dominate. Examples are Bombardier (Canada), Alstom (France), Siemens (Germany), and Kawasaki (Japan) for electric locomotives and self-powered train sets of all types, U.S. firms EMD and General Electric for high-power diesel-electric freight locomotives; and Alstom, Ansaldo STS, and Siemens for signal and train control systems. All these firms have operations worldwide, including in the United States, and offer a full range of products. It would be difficult for serious competitors to emerge, given the technological edge and experience accumulated by these firms. There are opportunities for smaller or more specialized firms in slightly less complex or special- ized products, such as unpowered passenger cars. Examples include the Talgo tilting trains, and the South Korean firm Rotem that is supplying passenger cars with Crash Energy Management structures to Metrolink and other commuter rail authorities. The U.S. market for passenger rail vehicles is relatively small--typically a few hundred vehicles a year--and is dominated by demand from east coast subway and commuter rail systems, especially around New York. The additional demand for new intercity passenger service equipment plus an aggressive program to replace life-expired Amtrak cars might add 200 to 300 cars per year or about 40 percent to the existing market. Some of this expansion can be accommodated within existing facilities and would perhaps require one or two new assembly shops. The Railroad Safety Improvement Act of 2008 mandate for the widespread installation of pos- itive train control (PTC) presents a serious challenge for signal and control system suppliers. Existing products have relatively little service history and will likely need further development to meet performance requirements specified by the FRA and the railroads. In addition, some of these requirements are still being worked out by the FRA. Some of the open questions regarding PTC are listed in Section C.7 of Appendix C. Once all requirements are developed, then the suppliers have to produce and install the systems in quantity. Passenger rail interests need to follow these developments and be on the lookout for events that could affect both existing and emerging passenger rail corridors.