[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2245 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2245

 To amend title 49, United States Code, to enhance competition between 
 and among rail carriers, to provide for expedited alternative dispute 
  resolution of disputes involving rail rates, rail service, or other 
matters of rail operations through arbitration, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 24, 2002

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

_______________________________________________________________________

                                 A BILL


 
 To amend title 49, United States Code, to enhance competition between 
 and among rail carriers, to provide for expedited alternative dispute 
  resolution of disputes involving rail rates, rail service, or other 
matters of rail operations through arbitration, and for other purposes.

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

SECTION 1. SHORT TITLE; AMENDMENT OF TITLE 49, UNITED STATES CODE.

    (a) Short Title.--This Act may be cited as the ``Railroad 
Competition, Arbitration, and Service Act of 2002''.
    (b) Amendment of Title 49, United States Code.--Except as otherwise 
expressly provided, whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or a repeal of, a section or 
other provision, the reference shall be considered to be made to a 
section or other provision of title 49, United States Code.

SEC. 2. PURPOSES.

    The purposes of this Act are as follows:
            (1) To eliminate unreasonable barriers to competition among 
        rail carriers.
            (2) To provide for use of expedited, private means for the 
        resolution of disputes between shippers and carriers.

SEC. 3. CLARIFICATION OF RAIL TRANSPORTATION POLICY.

    Section 10101 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 are as follows:
            ``(1) To ensure effective competition among rail carriers 
        at origins and destinations.
            ``(2) To maintain reasonable rates for rail transportation 
        where effective competition among rail carriers has not been 
        achieved.
            ``(3) To maintain consistent and efficient rail 
        transportation service for shippers.''.

SEC. 4. ARBITRATION OF CERTAIN RAIL RATE, SERVICE, AND OTHER DISPUTES.

    (a) In General.--
            (1) Authority.--Chapter 117 of title 49 is amended by 
        adding the following section after section 11707:
``Sec. 11708. Arbitration of certain rail rate, service, and other 
              disputes
    ``(a) Election of Arbitration.--A dispute described in subsection 
(b) shall be submitted for resolution by arbitration upon the election 
of any party to the dispute that is not a rail carrier.
    ``(b) Covered Disputes.--(1) Except as provided in paragraph (2), 
subsection (a) applies to any dispute between a party described in 
subsection (a) and a rail carrier that--
            ``(A) arises under section 10701(c), 10701(d), 10702, 
        10704(a)(1), 10707, 10741, 10745, 10746, 11101(a), 11102, 
        11121, 11122, or 11706 of this title; and
            ``(B) involves--
                    ``(i) the payment of money;
                    ``(ii) a rate charged by the rail carrier; or
                    ``(iii) transportation by the rail carrier.
    ``(2) Subsection (a) does not apply to a dispute if the resolution 
of the dispute would necessarily involve the promulgation of 
regulations generally applicable to all rail carriers.
    ``(c) Arbitration Procedures.--The Secretary of Transportation 
shall prescribe in regulations the procedures for the resolution of 
disputes submitted for arbitration under subsection (a). The 
regulations shall include the following:
            ``(1) Procedures, including time limits, for the selection 
        of an arbitrator or panel of arbitrators for a dispute from 
        among arbitrators listed on the roster of arbitrators 
        established and maintained by the Secretary under subsection 
        (d)(1).
            ``(2) Policies, requirements, and procedures for the 
        compensation of each arbitrator for a dispute to be paid by the 
        parties to the dispute.
            ``(3) Procedures for expedited arbitration of a dispute, 
        including procedures for discovery authorized in the exercise 
        of discretion by the arbitrator or panel of arbitrators.
    ``(d) Selection of Arbitrators.--(1) The Secretary of 
Transportation shall establish, maintain, and revise as necessary a 
roster of arbitrators who--
            ``(A) are experienced in transportation or economic issues 
        within the jurisdiction of the Board or issues similar to those 
        issues;
            ``(B) satisfy requirements for neutrality and other 
        qualification requirements prescribed by the Secretary;
            ``(C) consent to serve as arbitrators under this section; 
        and
            ``(D) are not officers or employees of the United States.
    (2) For a dispute involving an amount not in excess of $1,000,000, 
the regulations under subsection (c) shall provide for arbitration by a 
single arbitrator selected by--
            ``(A) the parties to the dispute; or
            ``(B) if the parties cannot agree, the Secretary of 
        Transportation, from the roster of arbitrators prescribed under 
        paragraph (1).
    ``(3)(A) For a dispute involving an amount in excess of $1,000,000, 
the regulations under subsection (c) shall provide for arbitration by a 
panel of three arbitrators selected as follows:
            ``(i) One arbitrator selected by the party electing the 
        arbitration.
            ``(ii) One arbitrator selected by the rail carrier or all 
        of the rail carriers who are parties to the dispute, as the 
        case may be.
            ``(iii) One arbitrator selected by the two arbitrators 
        selected under clauses (i) and (ii).
    ``(B) If a selection of an arbitrator is not made under clause (ii) 
or (iii) of subparagraph (A) within the time limits prescribed in the 
regulations, then the Secretary shall select the arbitrator from the 
roster of arbitrators prescribed under paragraph (1).
    ``(e) Disputes on Rates or Charges.--(1) The requirements of this 
subsection apply to a dispute submitted under this section for 
resolution of an issue of the reasonableness of a rate or charge 
imposed by a rail carrier.
    ``(2)(A) Subject to subparagraph (B), the decision of an arbitrator 
or panel of arbitrators in a dispute on an issue described in paragraph 
(1) shall be one of the final offers of the parties to the dispute.
    ``(B) A decision under subparagraph (A) may not provide for a rate 
for transportation by a rail carrier that would result in a revenue-
variable cost percentage for such transportation that is less than 180 
percent, as determined under standards applied in the administration of 
section 10707(d) of this title.
    ``(3) If the party electing arbitration of a dispute described in 
paragraph (1) seeks compensation for damages incurred by the party as a 
result of a specific rate or charge imposed by a rail carrier for the 
transportation of items for the party and the party alleges an amount 
of damages that does not exceed $500,000 for any year as a result of 
the imposition of the specific rate or charge, the arbitrator, in 
making a decision on the dispute, shall consider the rates or charges, 
respectively, that are imposed by rail carriers for the transportation 
of similar items under similar circumstances in rail transportation 
markets where there is effective competition, as determined under 
standards applied by the Board in the administration of section 
10707(a) of this title.
    ``(f) Time for Issuance of Arbitration Decision.--Notwithstanding 
any other provision of this subtitle limiting the time for the taking 
of an action under this subtitle, the arbitrator or panel of 
arbitrators for a dispute submitted for resolution under this section 
shall issue a final decision on the dispute within the maximum period 
after the date on which the arbitrator or panel is selected to resolve 
the dispute under this section, as follows:
            ``(1) In the case of a dispute involving $1,000,000 or 
        less, 120 days.
            ``(2) In the case of a dispute involving more than 
        $1,000,000, 180 days.
    ``(g) Authorized Relief.--A decision of an arbitrator or panel of 
arbitrators under this section may grant relief in either or both of 
the following forms:
            ``(1) Monetary damages, to the extent authorized to be 
        provided by the Board in such a dispute under this subtitle.
            ``(2) An order that requires specific performance of any 
        obligation under a statute determined to be applicable, 
        including any limitation of rates to reasonable rates, for any 
        period not in excess of two years beginning on the date of the 
        decision.
    ``(h) Judicial Confirmation and Review.--The following provisions 
of title 9 shall apply to an arbitration decision issued in a dispute 
under this section:
            ``(1) Section 9 (relating to confirmation of an award in an 
        arbitration decision), which shall be applied as if the parties 
        had entered into an agreement under title 9 to submit the 
        dispute to the arbitration and had provided in that agreement 
        for a judgment of an unspecified court to be entered on the 
        award made pursuant to the arbitration.
            ``(2) Section 10 (relating to judicial vacation of an award 
        in an arbitration decision).''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of such chapter is amended by inserting after the 
        item relating to section 11707 the following:

``11708. Arbitration of certain rail rate, service, and other 
                            disputes.''.
    (b) Time for Implementing Certain Requirements.--Not later than 180 
days after the date of the enactment of this Act, the Secretary of 
Transportation shall promulgate regulations, prescribe a roster of 
arbitrators, and complete any other action that is necessary for the 
implementation of section 11708 of title 49, United States Code (as 
added by subsection (a)).

SEC. 5. ELIMINATION OF BARRIERS TO COMPETITION BETWEEN CLASS I CARRIERS 
              AND CLASS II AND CLASS III CARRIERS.

    (a) Restriction on Approval or Exemption of Carriers' Activities by 
Surface Transportation Board.--Section 10901 is amended by adding at 
the end the following new subsection:
    ``(e)(1) The Board may not issue under this section a certificate 
authorizing an activity described in subsection (a), or exempt from the 
applicability of this section under section 10502 of this title such an 
activity that involves a transfer of interest in a line of railroad, by 
a Class I rail carrier to a Class II or III rail carrier if the 
activity directly or indirectly would result in--
            ``(A) a restriction of the ability of the Class II or Class 
        III rail carrier to interchange traffic with other carriers; or
            ``(B) a restriction of competition between or among rail 
        carriers in the region affected by the activity in a manner or 
        to an extent that would violate antitrust laws of the United 
        States (notwithstanding any exemption from the applicability of 
        antitrust laws that is provided under section 10706 of this 
        title or any other provision of law).
    ``(2) Any party to an activity referred to in paragraph (1) that 
has been carried out, or any rail shipper affected by such an activity, 
may request the Board to review the activity to determine whether the 
activity has resulted in a restriction described in that paragraph. If, 
upon review of the activity, the Board determines that the activity 
resulted in such a restriction and the restriction has been in effect 
for at least 10 years, the Board shall declare the restriction to be 
unlawful and terminate the restriction unless the Board finds that the 
termination of the restriction would materially impair the ability of 
an affected rail carrier to provide service to the public or would 
otherwise be inconsistent with the public interest.
    ``(3) In this subsection:
            ``(A) The term `antitrust laws' has the meaning given that 
        term in subsection (a) of the first section of the Clayton Act 
        (15 U.S.C. 12(a)), except that such term also means section 5 
        of the Federal Trade Commission Act (15 U.S.C. 45) to the 
        extent that such section 5 applies to unfair methods of 
        competition.
            ``(B) The terms `class I rail carrier', `class II rail 
        carrier', and `class III rail carrier' mean, respectively, a 
        rail carrier classified under regulations of the Board as a 
        Class I rail carrier, Class II rail carrier, and Class III rail 
        carrier.''.
    (b) Applicability to Previously Approved or Exempted Activities.--
Paragraph (2) of section 10901(e) of title 49, United States Code (as 
added by subsection (a)), shall apply with respect to any activity 
referred to in that paragraph for which the Surface Transportation 
Board issued a certificate authorizing the activity under section 10901 
of such title, or exempted the activity from the necessity for such a 
certificate under section 10502 of such title, before, on, or after the 
date of the enactment of this Act.

SEC. 6. SYSTEM WIDE COMPETITION.

    (a) Trackage Rights.--Chapter 111 is amended by inserting after 
section 11102 the following new section:
``Sec. 11102a. Trackage rights
    ``(a) Alternative Rail Carrier Service.--(1) A person who uses or 
seeks to use rail service for major train load shipments to or from a 
facility (whether located in a terminal area or served by terminal 
facilities) that has physical access solely to one rail carrier may 
request, as provided in this subsection, that rail service for such 
shipments be provided to or from that facility by--
            ``(A) an existing Class I rail carrier; or
            ``(B) an existing Class II rail carrier, existing Class III 
        rail carrier, or new rail service provider that, as determined 
        by the Federal Railroad Administration before the person makes 
        the request--
                    ``(i) is or is likely to be capable of transporting 
                the major train load shipments over the facilities of 
                the one rail carrier to or from the facility with the 
                physical access solely to that rail carrier;
                    ``(ii) is or is likely to be capable of doing so in 
                compliance with applicable Federal Railroad 
                Administration regulations and with the operating and 
                safety rules of the rail carrier responsible for 
                dispatching for the use of the facilities; and
                    ``(iii) has or is likely to have the financial 
                ability (or insurance coverage with limits customary in 
                the railroad industry) to satisfy liability claims 
                arising from its operations.
    ``(2) For the purposes of this section a major train load shipment 
is any train load shipment that consists of 50 or more rail cars and is 
tendered all at one time on a single bill of lading.
    ``(b) Procedure for Requesting Service.--(1) A person seeking under 
subsection (a) to obtain from an alternative rail service provider 
transportation for major train load shipments to or from a facility 
described in paragraph (1) of that subsection shall file with the Board 
a notice of intent to request that service. The notice shall include 
the following:
            ``(A) A description of the facilities to be used by the 
        alternative service provider.
            ``(B) A statement that the person has attempted without 
        success, through negotiations with the rail carrier that has 
        been providing the person with rail service to or from the 
        facility, to obtain the proposed service from that rail carrier 
        on terms similar to those available from the alternative rail 
        service provider.
            ``(C) Any other details of the proposed service.
            ``(D) If the alternative rail service provider is a 
        provider described in subparagraph (B) of subsection (a)(1), a 
        certification by the Federal Railroad Administration of the 
        determinations required for eligibility under that 
        subparagraph.
    ``(2)(A) Subject to subparagraph (D), rail service described in a 
notice filed with the Board under paragraph (1) may be provided by the 
alternative rail service provider referred to in the notice beginning 
60 days after the notice is so filed unless, before the expiration of 
that 60-day period, the Board determines that the alternative rail 
service provider's use of the facilities involved--
            ``(i) will be unsafe;
            ``(ii) is not operationally feasible; or
            ``(iii) will substantially impair the ability of the other 
        rail carrier or rail carriers using the facilities to provide 
        transportation over those facilities in accordance with the 
        reasonable requirements of the customers served by the other 
        carrier or carriers as of the date of the Board's 
        determination.
    ``(B) The rail carrier or carriers that own or provide 
transportation over the facilities to be used by an alternative rail 
service provider in rail service covered by a notice filed with the 
Board under paragraph (1) shall have the burden of proving the matters 
described in clauses (i), (ii), and (iii) of subparagraph (A).
    ``(C) The Board shall consult with the Federal Railroad 
Administration in determining the facts regarding any allegation by a 
rail carrier or rail carriers that an alternative rail service 
provider's use of facilities would be unsafe.
    ``(D) An alternative rail service provider may not begin to provide 
any rail service under subparagraph (A) before the provider's train 
crews are qualified to operate over the facilities to be used to 
provide the service, as determined under rules applicable to such 
operations.
    ``(c) Dispatching and Other Responsibilities.--(1) The rail carrier 
responsible for controlling rail operations on, or for dispatching for 
the use of, facilities used by any alternative rail service provider 
pursuant to a notice filed with the Board under subsection (b) shall--
            ``(A) continue to perform those functions for all rail 
        carriers using the facilities, including the alternative rail 
        service provider; and
            ``(B) dispatch trains for the alternative rail service 
        provider, without discrimination, on the same basis that the 
        rail carrier would apply if it were providing the 
        transportation for the traffic transported by the alternative 
        rail service provider.
    ``(2) The Board shall have jurisdiction over, and shall promptly 
resolve, any disputes arising under paragraph (1)(B).
    ``(d) Compensation for Use of Facilities.--(1) An alternative rail 
service provider that, pursuant to a notice filed with the Board under 
subsection (b), is providing transportation over facilities owned by 
another rail carrier shall compensate the owner of the facilities on 
such terms as the alternative rail service provider and the owner may 
agree. The terms of compensation shall be adjusted annually, as the 
parties may agree, effective as of the anniversary of the date on which 
the alternative rail service provider began to use the facilities.
    ``(2)(A) The terms of compensation for an owner of facilities for 
the use of facilities by an alternative rail service provider shall be 
established on a basis that provides for the alternative rail service 
provider to compensate the owner at a level that--
            ``(i) defrays the relevant costs incurred by the owner for 
        transportation over those facilities to the extent of a share 
        that is proportionate to the use of those facilities by the 
        alternative rail service provider in relation to the use of 
those facilities by all users of the facilities; and
            ``(ii) provides the owner with a reasonable return on and 
        of the owner's net book investment in road property for the 
        facilities (exclusive of write-ups or write-downs resulting 
        from mergers and consolidations of any of the facilities that 
        were acquired from another rail carrier on or after July 1, 
        1995).
    ``(B) For the purposes of subparagraph (A), an alternative rail 
service provider's proportionate share of the total relevant costs 
incurred by the owner of facilities for the use of facilities during 
the first 12 months of the provider's use of the facilities pursuant to 
a notice filed with the Board under subsection (b) shall be the ratio 
of--
            ``(i) the extent to which the alternative rail service 
        provider is reasonably expected to use the facilities during 
        that 12-month period, measured in gross ton-miles, to
            ``(ii) the total volume of the use of the facilities by all 
        users of the facilities during the 12 calendar months preceding 
        the month in which the notice was filed with the Board, 
        measured in gross ton-miles.
    ``(C) For the purpose of calculating an annual adjustment of the 
terms of compensation for an owner of facilities for the use of those 
facilities for rail service by an alternative rail service provider, 
the ratio applied under subparagraph (A) for determining the 
alternative rail service provider's proportionate share of the total 
relevant costs incurred by the owner of facilities for the use of 
facilities shall be the ratio of--
            ``(i) the total volume of the use of the facilities by the 
        alternative rail service provider during the 12 calendar months 
        preceding the month in which the adjustment takes effect, 
        measured in gross ton-miles, to
            ``(ii) the total volume of the use of the facilities by all 
        users of the facilities during those 12 months, measured in 
        gross ton-miles.
    ``(D) For the purposes of subparagraph (A), the total relevant 
costs for use of facilities shall include the following:
            ``(i) Roadway maintenance expenses.
            ``(ii) Costs reasonably related to the dispatching or 
        control of the operation of users' trains.
            ``(iii) Any ad valorem taxes.
    ``(3)(A) If the owner of facilities to be used by an alternative 
rail service provider pursuant to a notice filed with the Board under 
subsection (b) and the alternative rail service provider do not agree 
on the terms of compensation for the initial use of the facilities 
before the expiration of the 60-day period applicable to the notice 
under paragraph (2) of that subsection (b), either party (or the person 
requesting the rail service from the alternative rail service provider) 
may request the Board to establish the terms of compensation. The Board 
shall establish those terms of compensation, in accordance with the 
standards applicable under this subsection, within 60 days after 
receiving such a request. The terms so established shall be effective 
retroactively as of the date on which the 60-day period applicable 
under subsection (b)(2) expires.
    ``(B) If the owner of facilities and an alternative rail service 
provider do not agree on an annual adjustment to terms of compensation 
under paragraph (1) before the anniversary of the date on which the 
alternative rail service provider began to use the facilities, either 
party may submit the dispute to the Board. The Board shall resolve the 
dispute within 60 days after the dispute is submitted. Any adjustment 
pursuant to a resolution of the dispute shall take effect retroactively 
as of that anniversary date.
    ``(e) New and Enhanced Facilities.--(1) If it is necessary for an 
owner of facilities to construct a new connecting track or interlocker 
or any other new facility or to improve a connecting track, 
interlocker, or other facility of that owner solely to accommodate the 
commencement of rail service by an alternative rail service provider 
under this section, the person requesting the rail service by the 
alternative rail service provider over those facilities shall pay the 
entire reasonable cost of the construction or improvement. The owner 
constructing the new facility or facilities shall own the newly 
constructed or improved facility or facilities, as the case may be.
    ``(2) If, at any time during the period of use of facilities by one 
or more alternative rail service providers pursuant to this section, it 
is necessary to construct or improve facilities to ensure the safe or 
efficient operation of rail service by the alternative rail service 
providers and all other rail carriers using the facilities to provide 
rail service, the reasonable cost of the construction or improvement 
shall be shared by the owner and each of the users of the facilities on 
such terms as those parties may agree. Any dispute concerning such 
terms shall be promptly resolved by the Board upon the request of any 
such user.
    ``(f) Relationship to Other Authorities.--This section may not be 
construed to provide an exclusive remedy, nor to limit the availability 
of any other remedy under this part, to users of rail transportation 
for the enhancement of intramodal rail competition.''.
    (b) Clerical Amendment.--The table of contents at the beginning of 
such chapter is amended by inserting after section 11102 the following 
new item:

``11102a. Trackage rights.''.

SEC. 7. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsection (b), this Act and 
the amendments made by this Act shall take effect on October 1, 2002.
    (b) Exceptions.--Section 6 and the amendment made by that section 
shall take effect on the date of enactment of this Act.
                                 <all>