On Tuesday, May 6, the U.S. House Transportation & Infrastructure Subcommittee on Railroads, Pipelines, and Hazardous Materials convened a hearing entitled, “America Builds: Improving the Efficiency and Effectiveness of Federal Rail Assistance.” Members called on several witnesses from the rail sector to provide insights into the status and future of federal assistance in rail projects and programs.

Witness List

• Matthew Dietrich, Executive Director, Ohio Rail Development Commission
• Garrett Eucalitto, Commissioner, Connecticut Department of Transportation; on behalf of the American Association of State Highway and Transportation Officials
• Kevin Hicks, Senior Vice President, TransSystems; on behalf of the National Railroad Construction and Maintenance Association
• Kristin Bevil, General Counsel and Chief Legal Officer, Pinsly Railroad Company; on behalf of the American Short Line and Regional Railroad Association

Context

Congress uses surface transportation reauthorization to deliver funding for transportation infrastructure projects through multi-year funding packages, the most recent being the 2021 Infrastructure Investment and Jobs Act (IIJA). This funding allows states, localities, tribal governments, and other entities to plan for investments in new projects, maintenance, and improvements to transportation infrastructure.

While surface transportation reauthorization always has significant implications for all modes of transportation, the reauthorization of IIJA may be especially important for rail because of the implications for the future of rail funding. Dedicated funding exists for highways and transit through the multi-year contract authority provided through the Highway Trust Fund. Unlike highways and transit, rail has not historically enjoyed a dedicated multi-year source of funding and instead relies on annual appropriations of funding. The IIJA was not only the largest investment of federal dollars for rail projects to date, the $66 billion in rail funding was also provided as a five-year advance appropriation, which effectively created a source of dedicated long-term rail funding for the first time.

This amount of rail funding and the five-year certainty it provided was a significant boost for states and local governments to plan rail improvements, especially for passenger rail expansions and improvements. The funding from the IIJA also provided support for short line railroads, railroad safety programs, and improvements in rail infrastructure. But there is no guarantee that the next surface reauthorization in 2026 will include either the same level of funding for rail as in IIJA or the structure of advance appropriations of dedicated rail funds.

With so much more federal funding available under the IIJA, modal administrations under USDOT have the task of administering that funding. The Federal Railroad Administration administers its IIJA funding through various grant programs, such as discretionary grant programs, which award funding to eligible applicants. The process of applying for grants, submitting the necessary documentation, and obligating funds for projects adds up in time. The ability for projects to begin construction is tied to the process of receiving funds from the federal government for those projects. In the years since the passage of the IIJA, there have been persistent concerns over a lengthy process of signing grant agreements to get funds from discretionary grant programs to projects and completing environmental reviews.

Tuesday’s hearing included discussion on a variety of topics, but the discussion generally followed two themes. First, members and witnesses alike highlighted the importance of dedicated and reliable funding for rail and pressed for the upcoming reauthorization to include some amount of dedicated rail funding. Second, the process to get funds from origin to destination should be revised to be “streamlined” and reduce the time for selecting grants, obligating funds, and working through the environmental review process.

Reliability in Rail Funding

Members praised the rail funding made available in the IIJA throughout the hearing. Over the past four years, hundreds of projects across the country have been awarded billions of dollars from various programs. Responding to Rep. Valerie Foushee (D-NC), Eucalitto described the IIJA funding for rail as reliable and predictable. States like North Carolina, Nevada, Virginia, and Ohio took the opportunity of advanced appropriations and planned for significant passenger rail improvements. The S-Line in North Carolina, which will provide improved passenger rail service between Raleigh and Richmond, received a $1 billion award from the; the largest grant awarded in the state DOT’s history. Brightline West received a $3 billion grant from the federal government for its project connecting Las Vegas to southern California.

Some of the grant programs mentioned by name in the hearing were the Consolidated Rail Infrastructure and Safety Improvements (CRISI), Railroad Crossing Elimination (RCE), and Corridor ID (CID) programs. Whether it is funding new projects like the S-line, improving safety by removing grade crossings in rural Pennsylvania and Washington, or planning for bridge replacements along the Northeast Corridor, grant programs have been an important source of federal support for these projects. On top of that, state and local governments provided their own investment along with federal support. As Eucalitto put it, there is a multiplier effect: the federal funding may have the effect of expanding the availability of state funding to match it.

Bevil added to the value of grant programs from the perspective of short line railroads. According to Bevil, many short line railroads came into being by purchasing old and unprofitable branch lines of larger railroads. A short line would come and scoop up an old branch line and inherit the old track infrastructure. The increase in funding from the CRISI program provides short line railroads with the support to replace old railroad ties, replace old tracks with welded rail, or update signaling on previously unsignaled trackage. Short line railroads are only eligible for CRISI funding. Bevil noted several times that dedicated funding for rail is especially crucial for short lines, as they are limited in which grant programs from which they can receive funding.

Revising the Funding Process

Throughout the hearing, members and witnesses expressed dissatisfaction with the process of getting money from discretionary grant programs to projects and begin physical construction. Discretionary grant programs provide funding to eligible applicants based on merit, rather than through a predetermined formula. Responding to Rep. Eric Burlison (R-MO), Dietrich provided a perspective on the nature of discretionary grants. According to Dietrich, it would be beneficial to have funds obligated for the entire life cycle of a project, rather than having to wait for funding for each project step. In this case, the applicant knows that that they have funding for the entire project, rather than parts of it.

Another element Dietrich pointed out was how the process of administering federal funds differs by agency and program type. Dietrich and Hicks suggested a solution is to standardize the process of administering federal funds in grant programs, with Hicks noting in his opening remarks that for example, there could be a template-based system for certain documentation. This solution targets the differing processes by program and agency and pushes uniformity to relieve any potential administrative burden from state and local DOTs.

A proposed revision to the funding process was to consolidate grant programs into one. In that scheme for example, the CRISI, RCE, and CID programs would be combined into one large railroad grant program. Dietrich cautioned against the idea with a focus on the RCE program. The program targets a specific issue and bundling it together with all other rail funding may take away from funding for rail-crossing in favor of a different project. A consolidated grant program would rank rail-crossing projects against corridor expansion projects or investments in new equipment. Having the railroad crossing program separate creates a playing field where only railroad crossing projects are ranked against each other.

There was an inquiry from Rep. Dave Taylor (R-OH)  on the ability of rural communities to access federal funds, with concern expressed that rural and small communities may not have the resources to apply for federal grant funding. For example, a small-town government may not have a grant writer, and there may only be one person who handles a host of responsibilities including applying for grant funding but does not have the expertise or time to do so. The analysis of benefit relative to cost is also typically smaller in a location with fewer people, and rural communities are unable to access the large federal support for things like removing a grade crossing through downtown or replacing an aging railroad bridge. One recommendation from the witnesses was to provide training to rural communities on accessing and administering federal funds. The Federal Highway Administration (FHWA) provides online resources and training programs for Local Public Agencies (LPA, which refers to a part of a local government that manages state or federal funds for projects). In Ohio, the state government applies for grant funding on behalf of local communities, thereby transferring the responsibility of applying from a local government to the state government, which may have more resources to do so.

Pauses in Federal Funding

Members of the Subcommittee including full Committee Ranking Member Rick Larsen (D-WA) and Rep. Jerry Nadler (D-NY)  expressed concern over recent pauses in federal funding. The freeze of federal funding in early 2025 and the ongoing reduction in the federal workforce were issues of note, and there was discussion about the impact reduced federal funding would have on rail projects. Throughout the hearing, witnesses highlighted the profound benefit of increased federal funding for rail projects. State and local governments can invest in much needed rail improvements, with certainty that federal funding exists to support or match their individual state or local investments. Pauses in federal funding may cause project delays. A state government may have planned for a passenger rail extension, but a freeze on a grant program creates uncertainty for the state because they may no longer have access to the funding originally planned for the project. While witnesses and members discussed challenges with the grant funding process, the recommendations were geared towards reforming the process and not eliminating federal assistance. Consistent, reliable, and predictable rail funding is top of mind for people in the rail industry, rail associations, and governments. The upcoming surface reauthorization is an opportunity to decide what consistent, reliable, and predictable means for rail funding.