July 13, 2017

Have you always wanted to run your own money-losing passenger rail route of at least 750 miles in length, but could never figure out who would give you operating subsidies to keep you afloat?

If so, the Federal Railroad Administration has a program for you. On July 7, FRA published a final rule in the Federal Register implementing section 11307 of the FAST Act of 2015. That section requires FRA to “implement a pilot program for competitive selection of eligible petitioners…in lieu of Amtrak to operate not more than 3 long- distance routs…operated by Amtrak”.

Once the rule becomes effective on September 5, petitioners will have 180 days to file papers with FRA requesting to participate in the program.

A winning bidder will be eligible to receive an operating subsidy for the first year at a level that does no exceed 90 percent of the level in effect for that specific route during the fiscal year preceding the fiscal year the petition was received, adjusted for inflation, and any subsequent years under the same calculation, adjusted for inflation.

The operating subsidy is based on Amtrak’s publically- reported fully-allocated operating costs of the route for the prior fiscal year, excluding costs related to Other Postretirement Employee Benefits (OPEB’s), Amtrak Performance Tracking System (APT) Asset Allocations, Project Related Costs, and Amtrak IG activities.