[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 621 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 621

  To enhance competition among and between rail carriers in order to 
ensure efficient rail service and reasonable rail rates in any case in 
          which there is an absence of effective competition.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 15, 1999

 Mr. Rockefeller (for himself, Mr. Dorgan, Mr. Burns, and Mr. Roberts 
and Mr. Conrad) introduced the following bill; which was read twice and 
   referred to the Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
  To enhance competition among and between rail carriers in order to 
ensure efficient rail service and reasonable rail rates in any case in 
          which there is an absence of effective competition.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Railroad Competition and Service 
Improvement Act of 1999''.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to clarify the rail transportation policy of the United 
        States by requiring the Surface Transportation Board to accord 
        greater weight to the need for increased competition between 
        and among rail carriers and consistent and efficient rail 
        service in its decision making;
            (2) to eliminate unreasonable barriers to competition among 
        rail carriers serving the same geographic areas and ensure that 
        smaller carload or intermodal shippers are not precluded from 
        accessing rail systems due to volume requirements;
            (3) to ensure reasonable rail rates for captive rail 
        shippers;
            (4) to provide relief for certain agricultural facilities 
        lacking effective competitive alternatives; and
            (5) to remove unnecessary regulatory burdens from the rate 
        reasonableness procedures of the Surface Transportation Board.

SEC. 3. FINDINGS.

    The Congress finds that:
            (1) Prior to 1976, the Interstate Commerce Commission 
        regulated most of the rates that railroads charged shippers. 
        The Railroad Revitalization and Regulatory Act (1976) and the 
        Staggers Rail Act (1980) limited the regulation of the rail 
        industry by allowing the Interstate Commerce Commission to 
        regulate rates only where railroads have no effective 
        competition and established the Interstate Commerce 
        Commission's process for resolving rate disputes.
            (2) In 1976, when the Congress began the process of 
        railroad deregulation, there were 63 class I railroads in the 
        United States. By 1997, through mergers and other factors, the 
        number of class I railroads shrunk to nine.
            (3) The nine class I carriers accounted for more than 90 
        percent of the industry's freight revenue and 71 percent of the 
        industry's mileage operated in 1997.
            (4) Rail industry consolidation has diminished competition, 
        creating an even greater dependence upon a rate relief process 
        through a regulatory body such as the Surface Transportation 
        Board.
            (5) Agricultural, chemical, and utility industries in 
        particular rely heavily upon rail transportation, and 
        unreasonable rail rates and inadequate service have a dramatic 
        impact on these important industries.
            (6) According to a report issued by the General Accounting 
        Office, `` . . . [t]he Surface Transportation Board's standard 
        procedures for obtaining rate relief are highly complex and 
        time-consuming'' and the General Accounting Office estimates 
        that over ``70 percent [of shippers] believe that the time, 
        complexity, and costs of filing complaints are barriers that 
        often preclude them from seeking relief.''
            (7) The General Accounting Office analyzed all 41 rate 
        complaints filed with the Interstate Commerce Commission and 
        its successor, the Surface Transportation Board, since 1990 and 
        found that each complaint cost shippers between $500,000 to $3 
        million apiece and took between a few months and 16 years to 
        resolve.
            (8) The General Accounting Office surveyed over 700 
        shippers and found that--
                    (A) 75 percent of the shippers believed that they 
                are overcharged with unreasonable rates and
                    (B) over 70 percent of the shippers believed that 
                the time, complexity, and costs of filing complaints 
                create unsurmountable barriers and therefore preclude 
                them from pursuing the rate relief they are entitled to 
                under the law.
            (9) The General Accounting Office survey of shippers 
        identified the following barriers to obtaining rate relief 
        under the current process:
                    (A) The costs associated with filing complaints 
                outweighs the benefits of winning relief.
                    (B) The rate complaint process is too complex and 
                too lengthy.
                    (C) Developing the stand-alone revenue-to-variable 
                cost model is too costly.
                    (D) Most shippers believe that the STB is most 
                likely to decide in favor of the railroad.
                    (E) The discovery process is too difficult because 
                the shipper is dependent upon the railroad for all the 
                necessary data.
                    (F) Responding to the railroads requests for 
                discovery is too difficult and time consuming.
                    (G) Shippers fear reprisal from the railroads.
                    (H) The Surface Transportation Board filing fee is 
                too high.
            (10) According to the General Accounting Office report, the 
        vast majority of shippers believe that the following changes in 
        the rate relief process are necessary to provide them with the 
        ability to seek the rate relief:
                    (A) The Surface Transportation Board's time limit 
                for deciding a rate relief case should be shortened.
                    (B) The complaint fee required upon filing should 
                be eliminated or reduced.
                    (C) The market dominance requirement should be 
                simplified.
                    (D) Mandatory binding arbitration should be used to 
                resolve rate disputes.
                    (E) The Surface Transportation Board's 
                jurisdictional threshold of 180% revenue-to-variable 
                cost should be lowered.
            (11) According to the General Accounting Office report, 
        shippers believe that increasing competition in the railroad 
        industry would lower rates and diminish the need for a rate 
        complaint process. Proposals to increase railroad competition 
        identified in the report include the following:
                    (A) Require the STB to grant trackage rights; 
                require reciprocal switching at the nearest junction or 
                interchange upon request of a shipper or competing 
                railroad; and increase rail access for shortline and 
                regional railroads.
                    (B) Overturn the STB's ``bottle neck'' decision by 
                requiring railroads to quote a rate for all route 
                segments.
            (12) Consolidation in the railroad industry has diminished 
        competition, thwarting the intended objectives of deregulation 
        to allow competition to lower rates and improve service.
            (13) The rate protection intended for shippers without 
        effective competition has been de-railed by a complex, costly, 
        and time-consuming maze of discovery, findings, and appeals 
        that take years and cost millions of dollars.
            (14) Because of diminished rail competition, a rate relief 
        process plagued with unsurmountable barriers and blanket 
        antitrust immunity unique to the railroad industry, captive 
        shippers have no effective recourse under the current system.

SEC. 4. CLARIFICATION OF RAIL TRANSPORTATION POLICY.

    Section 10101 of title 49, United States Code, is amended--
            (1) by inserting ``(a) In General.--'' before ``In 
        regulating''; and
            (2) by adding at the end the following:
    ``(b) Primary Objectives.--The primary objectives of the rail 
transportation policy of the United States shall be--
            ``(1) to ensure effective competition among rail carriers 
        at origin and destination;
            ``(2) to maintain reasonable rates in the absence of 
        effective competition; and
            ``(3) to maintain consistent and efficient rail 
        transportation service to shippers, including the timely 
        provision of railcars requested by shippers; and
            ``(4) to ensure that smaller carload and intermodal 
        shippers are not precluded from accessing rail systems due to 
        volume requirements.''.

SEC. 5. FOSTERING RAIL TO RAIL COMPETITION.

    (a) Establishment of Rate.--Section 11101(a) of title 49, United 
States Code, is amended by inserting after the first sentence the 
following: ``Upon the request of a shipper, a rail carrier shall 
establish a rate for transportation and provide service requested by 
the shipper between any two points on the system of that carrier where 
traffic originates, terminates, or may reasonably be interchanged. A 
carrier shall establish a rate and provide service upon such request 
without regard to--
            ``(1) whether the rate established is for only part of a 
        movement between an origin and a destination;
            ``(2) whether the shipper has made arrangements for 
        transportation for any other part of that movement; or
            ``(3) whether the shipper currently has a contract with any 
        rail carrier for part or all of its transportation needs over 
        the route of movement.
``If such a contract exists, the rate established by the carrier shall 
not apply to transportation covered by the contract.''.
    (b) Review of Reasonableness of Rates.--Section 10701(d) of title 
49, United States Code, is amended--
            (1) by redesignating paragraph (3) as paragraph (4); and
            (2) by inserting after paragraph (2) the following:
            ``(3) A shipper may challenge the reasonableness of any 
        rate established by a rail carrier in accordance with sections 
        11101(a) and 10701(c) of this title. The Board shall determine 
        the reasonableness of the rate so challenged without regard 
        to--
                    ``(A) whether the rate established is for only part 
                of a movement between an origin and a destination;
                    ``(B) whether the shipper has made arrangements for 
                transportation for any other part of that movement; or
                    ``(C) whether the shipper currently has a contract 
                with a rail carrier for any part of the rail traffic at 
                issue, provided that the rate prescribed by the Board 
                shall not apply to transportation covered by such a 
                contract.''.

SEC. 6. SIMPLIFIED RELIEF PROCESS FOR CERTAIN AGRICULTURAL SHIPPERS.

    (a) Limitation on Fees.--Notwithstanding any other provision of 
law, the Surface Transportation Board shall not impose fees in excess 
of $1,000 for services collected from an eligible facility in 
connection with rail maximum rate complaints under part 1002 of title 
49, Code of Federal Regulations.
    (b) Simplified Rate and Service Relief.--Section 10701 of title 49, 
United States Code, is amended by adding at the end thereof the 
following:
    ``(e) Simplified Rates and Services.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, a rail carrier may not charge a rate for shipments from or 
        to an eligible facility which results in a revenue-to-variable 
        cost percentage, using system average costs, for the 
        transportation service to which the rate applies that is 
        greater than 180 percent.
            ``(2) Acceptance of requests.--Notwithstanding any other 
        provision of law, a rail carrier shall accept all requests, for 
        grain service from an eligible facility up to a maximum of 110 
        percent of the grain carloads shipped from or to the facility 
        in the immediately preceding calendar year. If, in a majority 
        of instances, a rail carrier does not in any 45-day period, 
        supply the number of grain cars so ordered by an eligible 
        facility or does not initiate service within 30 days of the 
        reasonably specified loading date, the eligible facility may 
        request that an alternative rail carrier provide the service 
        using the tracks of the original carrier. If the alternative 
        rail carrier agrees to provide such service, and such service 
        can be provided without substantially impairing the ability of 
        the carrier whose tracks reach the facility to use such tracks 
        to handle its own business, the Board shall order the 
        alternative carrier to commence service and to compensate the 
        other carrier for the use of its tracks. The alternative 
        carrier shall provide reasonable compensation to the original 
        carrier for the use of the original carrier's tracks.
            ``(3) Cancellation penalties.--A carrier may accept car 
        orders under paragraph (2) subject to reasonable penalties for 
        service requests that are canceled by the requester. If the 
        carrier fills such orders more than 15 days after the 
        reasonably specified loading date, the carrier may not assess a 
        penalty for canceled car orders.
            ``(4) Damages.--A rail carrier that fails to provide 
        service under the requirements of paragraph (2) is liable for 
        damages to an eligible facility that does not have access to an 
        alternative carrier, including lost profits, attorney's fees, 
        and any other consequences attributable to the carrier's 
        failure to provide the ordered service. A claim for such damage 
        may be brought in an appropriate United States District Court 
        or before the Board.
            ``(5) Timetable for board proceeding.--The Board shall 
        conclude any proceeding brought under this subsection no later 
        than 180 days from the date a complaint is filed.
            ``(6) Definitions.--In this subsection:
                    ``(A) Eligible facility.--The term `eligible 
                facility' means a shipper facility that--
                            ``(i) is the origin or destination for not 
                        more than 4,000 carloads annually of grain as 
                        defined in section 3(g) of the United States 
                        Grain Standards Act (7 U.S.C. 75(g));
                            ``(ii) is served by a single rail carrier 
                        at its origin;
                            ``(iii) has more than 60 percent of the 
                        facility's inbound or outbound grain and grain 
                        product shipments (excluding the delivery of 
                        grain to the facility by producers), measured 
                        by weight or bushels moved via a rail carrier 
                        in the immediately preceding calendar year; and
                            ``(iv) the rate charged by the rail carrier 
                        for the majority of shipments of grain and 
                        grain products from or to the facility, 
                        excluding premium for special service programs, 
                        results in a revenue-to-variable cost 
                        percentage, using system average costs, for the 
                        transportation to which the rate applies that 
                        is equal to or greater than 180 percent.
                    ``(B) Reasonable compensation.--The term 
                `reasonable compensation' shall mean an amount no 
                greater than the total shared costs of the original 
                carrier and the alternative carrier incurred, on a 
                usage basis, for the provision of service to an 
                eligible facility. If the carriers are unable to agree 
                on compensation terms within 15 days after the facility 
                requests service from the alternative carrier, the 
                alternative carrier or the eligible facility may 
                request the Board to establish the compensation and the 
                Board shall establish the compensation within 45 days 
                after such request is made.
                    ``(C) Original carrier.--The term `original 
                carrier' means a rail carrier which provides the only 
                rail service to an eligible facility using its own 
                tracks or provides such service over an exclusive lease 
                of the tracks serving the eligible facility.
                    ``(D) Alternative carrier.--The term `alternative 
                carrier' means a rail carrier that is not an original 
                carrier to an eligible facility.''.

SEC. 7. COMPETITIVE RAIL SERVICE IN TERMINAL AREAS.

    (a) Trackage Rights.--Section 11102(a) of title 49, United States 
Code, is amended--
            (1) by striking ``may'' in the first sentence and inserting 
        ``shall'';
            (2) by inserting [as a new second sentence] after 
        ``business.'' the following: ``In making this determination, 
        the Board shall not require evidence of anticompetitive conduct 
        by the rail carrier from which access is sought.''; and
            (3) by striking ``may establish'' in the next-to-last 
        sentence and inserting ``shall.''
    (b) Reciprocal Switching.--Section 11102(c)(1) of title 49, United 
States Code, is amended--
            (1) by striking ``may'' in the first sentence and inserting 
        ``shall'';
            (2) by inserting after ``service.'' the following: ``In 
        making this determination, the Board shall not require evidence 
        of anticompetitive conduct by the rail carrier from which 
        access is sought.''; and
            (3) by striking ``may establish'' in the last sentence and 
        inserting ``shall''.

SEC. 8. SIMPLIFIED STANDARDS FOR MARKET DOMINANCE.

    Section 10707(d)(1)(A) of title 49, United States Code, is amended 
by adding at the end thereof the following: ``The Board shall not 
consider evidence of product or geographic competition in making a 
market dominance determination under this section.''.

SEC. 9. REVENUE ADEQUACY DETERMINATIONS.

    (a) Rail Transportation Policy.--Section 10101(3) of title 49, 
United States Code, is amended by striking ``revenues, as determined by 
the Board;'' and inserting ``revenues;''.
    (b) Standards for Rates.--Section 10701(d)(2) is amended by 
striking ``revenues, as established by the Board under section 
10704(a)(2) of this title'' and inserting ``revenues.''.
    (c) Revenue Adequacy Determinations.--Section 10704(a) of title 49, 
United States Code, is amended--
            (1) by striking ``(a)(1)'' and inserting ``(a)''; and
            (2) by striking paragraphs (2) and (3).

SEC. 10. RAIL CARRIER SERVICE QUALITY PERFORMANCE REPORTS.

    (a) In General.--Chapter 5 of subtitle I of title 49, United States 
Code, is amended by adding at the end thereof the following:

                 ``subchapter iii. performance reports

``Sec.  541. Rail carrier service quality performance reports
    ``(a) In General.--The Secretary of Transportation shall require, 
by regulation, each rail carrier to submit a monthly report to the 
Secretary, in such uniform format as the Secretary may by regulation 
prescribe, containing information about--
            ``(1) its on-time performance;
            ``(2) its car availability deadline performance;
            ``(3) its average train speed;
            ``(4) its average terminal dwell time;
            ``(5) the number of its cars loaded (by major commodity 
        group); and
            ``(6) such other aspects of its performance as a rail 
        carrier as the Secretary may require.
    ``(b) Information Furnished to STB; the Public.--The Secretary 
shall furnish a copy of each report required under subsection (a) to 
the Surface Transportation Board no later than the next business day 
following its receipt by the Secretary, and shall make each such report 
available to the public.
    ``(c) Annual Report to the Congress.--The Secretary shall transmit 
to the Congress an annual report based upon information received by the 
Secretary under this section.
    ``(d) Definitions.--In this section, the definitions in section 
10102 apply.''.
    (b) Conforming Amendment.--The chapter analysis for chapter 5 of 
subtitle I of title 49, United States Code, is amended by adding at the 
end thereof the following:

                  ``SUBCHAPTER III. PERFORMANCE REPORTS


``541. Rail carrier service quality performance reports''.
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