[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


 OVERSIGHT OF THE SURFACE TRANSPORTATION BOARD REAUTHORIZATION ACT OF 
                                  2015

=======================================================================

                                (115-43)

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON RAILROADS, PIPELINES,
                        AND HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 17, 2018

                               __________

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             Committee on Transportation and Infrastructure
             
             
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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman

DON YOUNG, Alaska                    PETER A. DeFAZIO, Oregon
JOHN J. DUNCAN, Jr., Tennessee,      ELEANOR HOLMES NORTON, District of 
  Vice Chair                         Columbia
FRANK A. LoBIONDO, New Jersey        EDDIE BERNICE JOHNSON, Texas
SAM GRAVES, Missouri                 ELIJAH E. CUMMINGS, Maryland
DUNCAN HUNTER, California            RICK LARSEN, Washington
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL E. CAPUANO, Massachusetts
LOU BARLETTA, Pennsylvania           GRACE F. NAPOLITANO, California
BOB GIBBS, Ohio                      DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida              STEVE COHEN, Tennessee
JEFF DENHAM, California              ALBIO SIRES, New Jersey
THOMAS MASSIE, Kentucky              JOHN GARAMENDI, California
MARK MEADOWS, North Carolina         HENRY C. ``HANK'' JOHNSON, Jr., 
SCOTT PERRY, Pennsylvania            Georgia
RODNEY DAVIS, Illinois               ANDRE CARSON, Indiana
MARK SANFORD, South Carolina         RICHARD M. NOLAN, Minnesota
ROB WOODALL, Georgia                 DINA TITUS, Nevada
TODD ROKITA, Indiana                 SEAN PATRICK MALONEY, New York
JOHN KATKO, New York                 ELIZABETH H. ESTY, Connecticut, 
BRIAN BABIN, Texas                   Vice Ranking Member
GARRET GRAVES, Louisiana             LOIS FRANKEL, Florida
BARBARA COMSTOCK, Virginia           CHERI BUSTOS, Illinois
DAVID ROUZER, North Carolina         JARED HUFFMAN, California
MIKE BOST, Illinois                  JULIA BROWNLEY, California
RANDY K. WEBER, Sr., Texas           FREDERICA S. WILSON, Florida
DOUG LaMALFA, California             DONALD M. PAYNE, Jr., New Jersey
BRUCE WESTERMAN, Arkansas            ALAN S. LOWENTHAL, California
LLOYD SMUCKER, Pennsylvania          BRENDA L. LAWRENCE, Michigan
PAUL MITCHELL, Michigan              MARK DeSAULNIER, California
JOHN J. FASO, New York               STACEY E. PLASKETT, Virgin Islands
A. DREW FERGUSON IV, Georgia
BRIAN J. MAST, Florida
JASON LEWIS, Minnesota
VACANCY

                                  (ii)

  


     Subcommittee on Railroads, Pipelines, and Hazardous Materials

                   JEFF DENHAM, California, Chairman

JOHN J. DUNCAN, Jr., Tennessee       MICHAEL E. CAPUANO, Massachusetts
SAM GRAVES, Missouri                 DONALD M. PAYNE, Jr., New Jersey
LOU BARLETTA, Pennsylvania           ELIJAH E. CUMMINGS, Maryland
DANIEL WEBSTER, Florida              STEVE COHEN, Tennessee
MARK MEADOWS, North Carolina         ALBIO SIRES, New Jersey
SCOTT PERRY, Pennsylvania            JOHN GARAMENDI, California
MARK SANFORD, South Carolina         ANDRE CARSON, Indiana
TODD ROKITA, Indiana                 RICHARD M. NOLAN, Minnesota
JOHN KATKO, New York                 ELIZABETH H. ESTY, Connecticut
BRIAN BABIN, Texas                   CHERI BUSTOS, Illinois
RANDY K. WEBER, Sr., Texas           FREDERICA S. WILSON, Florida
BRUCE WESTERMAN, Arkansas            MARK DeSAULNIER, California
LLOYD SMUCKER, Pennsylvania          DANIEL LIPINSKI, Illinois
PAUL MITCHELL, Michigan              GRACE F. NAPOLITANO, California
JOHN J. FASO, New York, Vice Chair   PETER A. DeFAZIO, Oregon (Ex 
JASON LEWIS, Minnesota               Officio)
BILL SHUSTER, Pennsylvania (Ex 
Officio)
VACANCY

                                 (iii)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Hon. Ann Begeman, Chairman, Surface Transportation Board.........     3
Hon. Deb Miller, Vice Chairman, Surface Transportation Board.....     3

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Hon. Ann Begeman and Hon. Deb Miller, joint statement............    22

                       SUBMISSIONS FOR THE RECORD

Letter of April 17, 2018, from Chris Jahn, President, The 
  Fertilizer Institute, to Hon. Jeff Denham, Chairman, 
  Subcommittee on Railroads, Pipelines, and Hazardous Materials, 
  et al..........................................................    31

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

 
 OVERSIGHT OF THE SURFACE TRANSPORTATION BOARD REAUTHORIZATION ACT OF 
                                  2015

                              ----------                              


                        TUESDAY, APRIL 17, 2018

                  House of Representatives,
Subcommittee on Railroads, Pipelines, and Hazardous 
                                         Materials,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m., in 
room 2167, Rayburn House Office Building, Hon. Jeff Denham 
(Chairman of the subcommittee) presiding.
    Mr. Denham. The subcommittee will come to order.
    Without objection, the Chair is authorized to declare a 
recess at any time.
    Good morning. Today we meet to oversee the implementation 
of the Surface Transportation Board Reauthorization Act of 
2015. This is an important law that will reform the Surface 
Transportation Board to work more efficiently to better 
regulate the railroads.
    This year is the 38th anniversary of the passage of the 
Staggers Act, which saved the railroad industry from bankruptcy 
and played a major role in railroad deregulation. This 
deregulatory effort culminated in the creation of the STB 
[Surface Transportation Board] in the Interstate Commerce 
Commission Termination Act of 1995.
    The STB is a small but significant agency that conducts the 
economic regulation of our railroads, and its 2015 
reauthorization was the very first since its creation. The STB 
Reauthorization Act streamlined and simplified Government 
regulatory activities.
    While the STB has successfully overseen a stronger railroad 
industry, the act has helped the rail industry better serve its 
customers. It has streamlined dispute resolution procedures and 
set hard deadlines for completion of rate cases to reduce 
litigation costs.
    The act provided greater transparency into complaints 
received by the STB and required enhanced reporting by the 
agency. It rejected big Government reregulatory action that has 
been proposed in the past. The act made necessary reforms to 
the agency to improve its processes and procedures.
    Finally, the act had broad support from not only railroads 
and the STB, but also from shippers throughout the country, 
including the National Grain and Feed Association, the American 
Chemistry Council, The Fertilizer Institute, and the American 
Farm Bureau Federation.
    I am pleased at the content of the STB Reauthorization Act 
and the bipartisan nature in which it was enacted. Today we 
turn to the STB to evaluate their progress in enacting the STB 
Reauthorization Act.
    I look forward to hearing your testimony. I now recognize 
Mr. Capuano for any comments he may have.
    Mr. Capuano. I agree with everything the chairman just 
said. Thank you.
    Mr. Denham. I now recognize the full committee chairman, 
Mr. Shuster, for any comments he may have.
    Mr. Shuster. I thank the chairman. And, again, just to echo 
what Chairman Denham said, today we are exploring as to whether 
the reauthorization has been helpful, and being able to do the 
things like enhancing procedures in arbitration, timeline 
completion, rate cases, and reducing all of the burdens that 
the timing puts on the industry. So I will be happy to hear 
today what it looks like and if we need to address different 
issues as we move forward or if things are going in the right 
direction.
    So, again, thanks for being here today. We appreciate it. 
Thanks for holding the hearing, Mr. Chairman.
    Mr. Denham. I now recognize the ranking member of the full 
committee, Mr. DeFazio.
    Mr. DeFazio. Thanks, Mr. Chairman. Obviously, the rail 
network for freight and passenger is critical to this Nation, 
and that is why we gave STB enhanced authority in 2015, so that 
we could deal with service issues and efficiency issues on the 
network.
    I want to hear more about the letter that the Board wrote 
in March to all of the Class I railroads. And we all know that 
CSX, because of a radical management change, which hopefully--
well, which is now history, was degraded dramatically by a 
particular individual who took over before he died.
    So CSX has been a major focus, but I was surprised to see 
that you are finding basically nationwide a deterioration in 
service and would like to know what the STB believes is the 
root cause and what actions the STB would recommend or is going 
to recommend to deal with that.
    And then, secondly, we have the whole issue of Amtrak 
delays. We have seen--because Congress mandated that we have 
preference for Amtrak, yet the railroads went to court and got 
a rather confusing decision because of the way the statute was 
worded. You know, basically, the regulations were thrown out.
    And since that time, we have seen a huge deterioration in 
on-time performance for Amtrak, and that ultimately is going to 
impact the revenues, if it already hasn't, for Amtrak when you 
look at, you know, the Coast Starlight down to 57 percent on-
time. You know, that is just a huge deterioration; Empire 
Builder, from 90 to 59 percent.
    A lot of people are very much less likely to take rail if 
they are going to be infinitely delayed and they don't have any 
idea when they are going to get there. So I would like to hear 
recommendations from the Board. Seems to me the simplest thing 
we could do, although I don't know that this Congress can do 
anything, would be to rewrite that statute in a form that would 
withhold scrutiny from the courts.
    But absent that, we need to see some sort of effort by the 
railroads, the freight railroads, to better facilitate the 
movement of passenger rail.
    So I look forward to hearing about all those critical 
subjects today. Thanks for being here.
    Mr. Denham. Thank you, Mr. DeFazio.
    I now welcome our panel today, the Honorable Ann Begeman, 
Chair of the STB, and the Honorable Debra Miller, Vice Chair of 
the STB.
    I ask unanimous consent that our witnesses' full statements 
be included in the record. Without objection, so ordered.
    Since your written testimony has been made part of the 
record, the subcommittee requests that you limit your summary 
to 5 minutes. Welcome back to the Committee on Transportation 
and Infrastructure's Subcommittee on Railroads, Pipelines, and 
Hazardous Materials.
    Ms. Begeman?

TESTIMONY OF HON. ANN BEGEMAN, CHAIRMAN, SURFACE TRANSPORTATION 
      BOARD; AND HON. DEB MILLER, VICE CHAIRMAN, SURFACE 
                      TRANSPORTATION BOARD

    Ms. Begeman. Good morning, Chairman Denham, Ranking Member 
Capuano, and members of the subcommittee. Thank you for holding 
today's oversight hearing on the Surface Transportation Board 
Reauthorization Act of 2015 and for inviting Vice Chairman 
Miller and me to provide an update on the Board's efforts to 
implement the act.
    I want to begin by first thanking Chairman Denham and 
Chairman Shuster for inviting Katherine Bourdon of our staff to 
serve as the detail to your subcommittee during the past few 
months. We know it has been a wonderful learning experience for 
her, and we hope that her service has been helpful to you as 
well.
    The STB Reauthorization Act was the Board's first 
reauthorization since it was created over two decades ago. It 
established the Board as a fully independent agency, enhanced 
our authority, and created new responsibilities. The Board 
members and staff have been fully committed to implementing the 
mandates of the act, and we have been accomplishing its 
directives.
    Today we will highlight the actions the Board has taken to 
implement the act and discuss some of the remaining challenges. 
Because of the STB Reauthorization Act, the Board has achieved 
greater efficiency, accountability, and transparency. For 
example, the Board prepares quarterly reports about its rate 
review cases, its formal and informal service complaints, and 
unfinished regulatory proceedings as directed by the act.
    We submit copies of these reports to our oversight 
committees, along with transmittal letters that track our 
implementation progress and also provide important Board 
updates. These reports and letters are also publicly available 
on the Board's website.
    Section 13 of the Reauthorization Act required the Board to 
revise its arbitration program. After notice and comment 
rulemaking, we issued rules in September of 2016 to conform to 
the new statutory requirements. Among other things, we expanded 
the program to encompass rate disputes and establish caps on 
damages as directed by the act. We also maintain a roster of 
arbitrators, which is updated annually.
    Although no parties have chosen to participate in the 
Board's program, we believe it would be a very viable 
alternative for resolving disputes. The Board also offers 
mediation services, which have been used successfully.
    Section 12 of the act gave the Board new authority to 
investigate issues of national or regional significance. After 
moving through notice and comment rulemaking, we issued rules 
in December of 2016. The rules contemplate a three-stage 
process, including preliminary fact-finding, Board-initiated 
investigation, and formal Board proceeding.
    In developing these rules, we wanted to ensure that 
appropriate protections for due process, separation of fact-
finding and decisionmaking, and timely resolution of 
investigations were incorporated. This new authority provides 
the Board an important additional tool to aid in carrying out 
its mission.
    Finally, with respect to the act's provisions regarding 
rail rate review procedures, Vice Chairman Miller and I have a 
shared interest in improving our current processes. Since 
coming to the Board, we have both expressed concerns about the 
costly, time-consuming, stand-alone cost methodology known as 
SAC, which is used in larger cases.
    The Reauthorization Act addresses some of these concerns. 
It shortened the timeline to process SAC cases. It directed us 
to initiate a proceeding to assess procedures used in court 
litigation that might be used to expedite our rate cases.
    It required the Board to maintain one or more streamlined 
processes for cases in which the SAC test is too costly, and it 
required us to submit a report on rate case methodologies. The 
Board has complied with these directives as detailed in our 
written testimony.
    Although the Board currently maintains a streamlined 
process for rate review for smaller cases, we believe 
additional work is needed to provide a more accessible and 
affordable rate review process.
    The Board issued an advance notice of proposed rulemaking 
to explore a new rate process for smaller shippers. Based on 
the comments we have received, more work is needed.
    To that end, the Board has recently established an internal 
Rate Reform Task Force, which is working to develop 
recommendations to streamline the Board's rate methodology for 
large cases and to improve rate options for smaller cases. The 
task force is comprised of eight Board staff, bringing together 
considerable economic and legal expertise and experience in 
this very difficult, challenging undertaking.
    The task force is going to be reaching out to stakeholders, 
including your offices, to obtain input and ideas on these 
issues. This is a very difficult assignment, but one that we 
simply must keep working on to address.
    I will now turn to my colleague, Vice Chairman Miller, to 
continue our testimony.
    Thank you.
    Mr. Denham. Vice Chairman Miller, you are recognized for 5 
minutes.
    Ms. Miller. Thank you, Chairman Denham and Ranking Member 
Capuano, members of the subcommittee. Chairman Begeman has 
clearly explained what steps the Board has taken to implement 
many of the Reauthorization Acts. I will pick up the narrative 
and address the two things the Board--the act has done to 
improve collaboration and to help us become an independent 
agency.
    So, first, on collaboration, which a very important and 
much-appreciated goal of the act was to allow for greater 
collaboration between the Board members. The first way that was 
done was through section 4 of the act, which increased the 
Board's membership from three to five.
    By having more than three members, the members will be able 
to talk with another member about pending proceedings in a 
nonpublic forum without running afoul of the Sunshine Act, 
which prohibits a majority of the Board from discussing pending 
matters in a closed setting. Because there are currently three 
vacancies on the Board, we have not yet been able to have any 
of these one-on-one conversations.
    However, the President has recently submitted two nominees 
to the Senate for consideration, and the Senate Committee on 
Commerce, Science, and Transportation held a hearing last week 
on their nominations, and one of the nominees is with us today, 
Patrick Fuchs.
    We look forward to the confirmation of the nominees and the 
chance to work more collaboratively with each of our member 
colleagues as envisioned under the Reauthorization Act.
    The Reauthorization Act also gave the Board another tool to 
allow for more collaborative discussions. Section 5 permits a 
majority of the Board members to hold nonpublic discussions 
regarding agency matters, which we refer to as section 5 
meetings.
    While the act still prohibits the Board members from 
agreeing on an outcome in these meetings, we are permitted to 
discuss ideas with one another. To ensure transparency, the 
Board's general counsel must be in attendance and is required 
to prepare a meeting summary of the matters discussed. The 
summary is then made public after the meeting.
    Since the act's passage, we have already had a number of 
section 5 meetings, and we would consider them very useful.
    The final significant change made by the Reauthorization 
Act was the conversion of the Board to a wholly independent 
Federal agency. Prior to the act, the Board was decisionally 
independent but administratively housed under the U.S. 
Department of Transportation, which meant that DOT performed a 
number of the Board's administrative and information technology 
functions.
    Since passage of the act, the Board has assumed these 
functions. This clearly has been the most challenging part of 
the act for us to implement. While we are pleased to report 
that we have made significant progress on adopting processes 
and systems necessary for the successful functioning of an 
independent Federal agency, there are clearly still areas where 
we have work to do, particularly in information security.
    In the Board's most recent Federal Information Security 
Management Act, or FISMA, audit, DOT's inspector general 
identified a number of areas where improvements need to be 
made.
    In addition, just last week, the full House passed H.R. 
4921, the STB Information Security Improvement Act, which was 
reported by your full committee and requires the Board to 
implement an improvement plan for its information security 
system.
    We appreciate your support of the Board's work to make 
needed improvements in this area. Improving our information 
security is a top priority of the Board. The Board has 
established a remediation plan in response to the IG's report, 
which we have shared with the IG's office. We have hired an 
information security system manager, who has already 
implemented corrective measures.
    In conclusion, I think it is fair to say that Chairman 
Begeman and I agree that the Board has successfully implemented 
the act's requirements and that has, in turn, led to 
improvements in the Board's operation, just as was envisioned 
by Congress.
    Before finishing my remarks, Chairman Begeman and I both 
felt that we should briefly address recent reports about 
service issues in the railroad industry. Several shipper 
organizations have indeed alerted us to concerns regarding 
service on certain carriers, and there has been a noticeable 
drop in service metrics for some carriers.
    Last month we sent letters to all Class I railroads asking 
for their service outlook for the remainder of 2018. We have 
also asked certain railroads to participate in individual 
weekly calls with staff from our customer assistance office to 
help us monitor these carriers' service levels and progress.
    At the moment, these service issues do not appear to have 
as severe an impact as those that occurred in the winter of 
2013 and 2014, and the affected railroads generally appear to 
be taking aggressive measures to address their service and get 
it back to normal. But we will continue to monitor this 
situation very closely, and we will be happy to keep the full 
committee apprised of our actions, particularly if additional 
steps are needed.
    Again, I want to thank the subcommittee for holding today's 
hearing, and I look forward to answering your questions.
    Mr. Denham. Well, thank you, both. I know it is a difficult 
job with some of the controversies that you deal with on a 
regular basis. As a Member of Congress, normally shippers will 
contact us as a last resort when they are getting frustrated 
with any type of implementation.
    But I would also say that, you know, as we have talked to 
leaders from other countries about transportation and 
logistics, the number one thing that they point to is our 
freight network that we have for goods movement across the 
entire country.
    We have an amazing system with all of our freight rails, 
but that does also create a challenge with captive shippers. So 
when a lot of cars are being used for oil, sometimes you see 
shortages of cars being used for grain. That ends up with a 
call to a Member, and ultimately a call to the STB for you to 
work out some of these challenges as well. We deal with 
hazardous materials in this subcommittee, so a variety of 
different hazardous materials that must go by rail can be stuck 
captive as well.
    And one of the questions and concerns that has come up is 
currently you are the Board, with only two members. One of the 
big changes that we made was actually increasing the three 
members to five. I wonder if you both could give us your 
thoughts on whether that will create efficiencies and create 
greater opportunities to solve some of these challenges that we 
have with captive shippers across the country.
    Ms. Begeman?
    Ms. Begeman. Thank you for the question. I do think when we 
have additional members, more than three, that will really be a 
great help to us. Because of the Sunshine Act, we are not 
allowed to actually talk to each other one on one about issues, 
although as my colleague mentioned, because of the section 5 
meetings--we call them section 5 because that is the section 5 
of the Reauthorization Act that allows us to have meetings as 
long as the general counsel is in attendance, and that we have 
a summary that is posted on our website after a meeting. Or if 
it is about a particular decision we are working on, it is 
posted along with that decision.
    But it certainly would be--I think it will be a game 
changer for me to actually be able to walk into Deb's office 
and talk to her about a particular issue. I mean, imagine what 
your workload would be like if none of you could talk to each 
other. So I am really looking forward to it. I think it could 
only be a benefit.
    Mr. Capuano. It might be an improvement.
    [Laughter.]
    Ms. Begeman. I am looking forward to it.
    Mr. Denham. Thank you.
    Ms. Miller?
    Ms. Miller. I would echo what Ann said. I think of all of 
the changes in the Reauthorization Act, I think this is the 
most important one. I have been on the Board for about 4 years 
now, and I was really surprised when I got here by, I mean, 
honestly, how isolated I felt.
    For me, I have always felt that I learn a lot by working 
with colleagues, hearing their questions, having a better 
understanding about how they read a situation and how it might 
be different from the way I read it, or perhaps I just 
misunderstood something. And I have often felt that we could 
and would arrive at better decisions if we had more robust 
dialogue among the members of the Board.
    And, quite frankly, I think it would enhance the 
collegiality of the Board, which is certainly--I don't mean in 
any way to imply that there aren't, you know, good working 
relationships, but, you know, when you just aren't in contact 
with each other as frequently, I think it does have an impact.
    So, no, I am very enthusiastic about this change in the 
law. I think it will absolutely--I don't know that you could 
say it will lead to efficiency. I think with five members, you 
know, there might be some things that might feel a little less 
efficient, just the reality of that, but I think it will 
absolutely lead to better outcomes and that is what is 
important.
    Mr. Denham. Thank you. And how has designating the STB as 
an independent agency benefitted the STB?
    Ms. Begeman. Prior to the Reauthorization Act, while we 
have always been decisionally independent, we were 
administratively aligned with the DOT. I will say this has been 
our biggest challenge, such as establishing a number of our own 
processes with respect to IT and IT security.
    We need our own separate servers. We need our own lines 
that we use with our financial services. We have our own HR 
Department. But we are now more set up to be responsible for 
our own destiny, if you will.
    So it has been very challenging, although it has also been 
rewarding in its own way. As many of you know, we had a very 
difficult FISMA audit that we received last year from the DOT 
IG. They conducted the FISMA audit at our request. But that 
also has been an opportunity for us to improve problems that we 
didn't even necessarily know that we had.
    It is a long-term process. It is one that this committee 
has recognized as long term. You have passed legislation out of 
your committee. It passed the full House last week. And I can 
assure you that with or without legislation, we are fully 
committed to addressing our cybersecurity vulnerabilities, and 
we are making progress.
    So thank you for your interest in that area. But, again, I 
will say independence is a challenge.
    Mr. Denham. Thank you.
    Mr. Capuano.
    Mr. Capuano. Thanks, Mr. Chairman. And I thank the ladies 
for being here.
    I want to kind of get beyond some of the specifics. First 
of all, I am glad you like the changes because I agree with 
you. I am looking forward to it as well. I don't think the 
President will listen to me, though, when it comes to filling 
that fifth slot. Maybe I will give him a call, and maybe he 
will react, but I wouldn't hold my breath.
    For me, the biggest issue you deal with it, it all ties 
into it. As I see the freight rail industry, it is a de facto 
monopoly, which is in and of itself acceptable. It is a de 
facto monopoly. And like all monopolies, therefore, they are 
subject to certain regulations. That is the balance you have. 
When there is no competition, you get more regulation. It works 
well for the most part.
    What has changed in the last couple of years is that some 
of--and, again, not all people on Wall Street are bad people. 
Not all of--but some of the vultures of Wall Street have 
decided to come into the rail industry.
    And when they do, they start doing to the rail industry 
what they have done to other industries, which is to strip it 
down, you know, kind of ruin it for all the other people that 
try and do the right thing, and just make a quick buck without 
any consequences whatsoever, without any concern what happens 
to the people who have to rely on this monopoly, or, as far as 
I am concerned, for America as a whole.
    I think America absolutely needs a good, solid, 
functioning, and growing rail industry in freight. And when you 
get investors who only look at the immediate bottom line, it is 
a problem.
    Up until recently, in the return for regulation and a 
certain degree of monopoly, the rail industry has been pretty 
much guaranteed a reasonable rate of return and a reasonable 
profit to split amongst thoughtful investors and their 
employees and their leaders.
    When greed takes over, which it has done in other 
industries--it hasn't happened in the rail industry yet, but it 
has creeped into it starting just a few years ago with the 
attempt to get into Norfolk Southern. That was stopped, and 
then they--some of the things that CSX did, when you have a 
limited opportunity, and you intentionally reduce the number of 
locomotives, the number of rail, the number of employees, you 
intentionally stop making investments in your equipment and 
your people, in order to simply raise the price, therefore 
driving higher profits, if you have a pariah, eventually, if 
you let that system go, everybody else has to react to it.
    In my mind, that is kind of what has happened already, 
which is why--I am not even asking, but why you had to write a 
letter that says, ``Due to increased concerns over 
deteriorating service.'' The service isn't deteriorating on the 
good lines. It is deteriorating on the few lines that have 
seemed to have been taken over by Wall Street, why the National 
Grain and Feed Association, the Alliance of Automobile 
Manufacturers are concerned about it, and everybody else I hear 
from.
    And it was good to me to see the rest of the freight 
industry stand up against the aggressive attempt to overtake 
Norfolk Southern. They saw it as a bad thing. I think they were 
right, and I was glad to stand with them. I am glad they stood 
with us.
    The question is: Does the STB have the tools to deal with 
these kinds of investors, to ensure that America has, and 
continues to have, a reasonably priced, effective freight rail 
system? And, again, I understand you can't have competition 
every rail.
    We are going to have--we have de facto monopolies. It is 
acceptable. But that makes regulation essential--essential to 
keep the system going. And I am just curious, Madam Chair, 
whether you think you have the tools to ensure that that 
continues.
    Ms. Begeman. Thank you very much. I certainly appreciate 
what you have stated. While the Board doesn't have jurisdiction 
per se over Wall Street, you know, we have limited 
jurisdiction, but part of our jurisdiction that Congress has 
given us is that rail carriers have a common carrier obligation 
to provide service.
    Mr. Capuano. Right.
    Ms. Begeman. So while--you know, let's take CSX as the 
example. During the past year, you know, we spent quite a bit 
of time shining a spotlight on their operations, having weekly 
phone calls with staff and senior executives. We required them 
to provide additional metrics on their service. We have been a 
real pain in the neck to them.
    Mr. Capuano. Madam Chair, my time is limited. I don't mean 
to jump in, but do you have the authority to deny them or to 
change their rates if they take bad actions? If there is no--if 
they can't increase their profits, they are not going to do 
these bad actions. Do you think you have the authority to take 
action on that one item?
    Because that is really--when everything is said and done, 
after all the good cajoling and discussions, if they can't make 
that extra profit, that that is what they are driven by, 
because you won't allow the rates to fluctuate that way, or you 
take action, that is your one cudgel. Is it effective enough? 
Is it strong enough for you to be able to react?
    Ms. Begeman. I believe the Board has really large 
untethered authority should it need to go that route. A carrier 
has a common carrier obligation to provide service on 
reasonable request.
    You can't get rid of all of your labor, all of your 
locomotives, all of your cars, just so you can show profits for 
a year. You have an obligation to serve your customers, and 
that is what we will make sure they do.
    Mr. Capuano. Thank you.
    Ms. Begeman. And if you don't, we will find another carrier 
who would be happy to do it.
    Mr. Capuano. That is what I wanted to hear. And, again, I 
want to be real clear. I think that all of the rail carriers 
want to do the right thing and have been doing the right thing 
for hundreds of years. I don't want it to change, and I don't 
want it to change because there is a couple of sharks coming in 
only looking at their own profit and without concern whatsoever 
to the American manufacturer.
    Thank you.
    Mr. Denham. Mr. Shuster.
    Mr. Shuster. Thank you.
    In your testimony, you talked about the various areas--
arbitration, investigative authority, and the rate cases, that 
you have increased the efficiency that you are able to--and the 
time--reduced the time, but you didn't quantify it.
    Either today, or at some point, can you give me an idea of 
how much have you reduced the time it takes to go through these 
different jurisdictions that you have? Because in Washington 
that is one of the biggest problems is it takes forever to go 
through these different processes. Can you quantify that?
    Ms. Begeman. Well, with respect to the stand-alone cost 
methodology, which is the process that is used for larger 
cases, you directed us to reduce our timeline by 5 months to 
complete those cases.
    Now, since the Reauthorization Act, we have not had a new 
case brought to us. I will tell you, the directive you have 
given us is nearly impossible for the Board to meet, and that 
is why we have this internal reform task force to try to find a 
better approach, whether it is to have an entirely different 
process or to even just streamline the process that we have, so 
there could be more standardized approaches, because we don't 
have a choice but to--you know, we need to meet what you told 
us to do. But I don't want you to think it is going to be easy.
    Mr. Shuster. Right.
    Ms. Begeman. We also established the changes to our 
arbitration program, as you directed. We have had an 
arbitration program on our books for over 20 years. It has 
never been used. Before the Reauthorization Act, about a few 
years before that, we actually tried to reform the program, so 
that people would use it. Unfortunately, it still isn't used. 
We do have success with our mediation program.
    Mr. Shuster. So the answer is you are working on it, but it 
is difficult. Will the five members, will that assist you in 
doing that, so you are able to have conversations sort of 
offline with other members to try to move things forward 
faster?
    Ms. Begeman. Yes.
    Mr. Shuster. And how does--the way you are set up there are 
three of you. If you have five, and even when you had three, 
does somebody sort of take a lead on an issue on a case, or how 
do you divvy up the work?
    Ms. Begeman. That is a great question. There has never been 
more than three members since I have been on the Board, and my 
colleague has been on the Board. We are now two. I hope that we 
don't get down to one, because that would just be me.
    But I am really--I can use all the help I can get. Being in 
charge after 6 years, it is a whole new experience. There is a 
lot of work to be done, and I am looking forward to having the 
help.
    One of the nice things about these section 5 meetings, for 
example, where we can get together with our general counsel and 
others--again, we do it in a transparent way--it is not just 
the Chairman deciding when to do such a meeting.
    But if my colleague thinks that she would benefit, or we 
would benefit, in addressing an issue by having a conversation, 
she will say, ``Let's have a section 5 meeting,'' and we will 
do it. Again, there are only two of us. Even when there are 
five of us, it is not like a committee your size. We should be 
able to do efficient and effective work.
    Mr. Shuster. But do you divvy up the work? You will take 
the lead on something versus--or is that not the way it works?
    Ms. Begeman. We haven't, but I am thinking that that would 
be an approach I would like to take, particularly on some of 
our pending regulatory proceedings. I am looking to sort of 
have some new brain power on that, and maybe we will see things 
in a new light.
    Mr. Shuster. Maybe 5 years ago, I heard a lot more about 
rate cases and captive shippers. I haven't heard too much of 
that going on out there. I mean, I am sure there is a couple--
--
    Ms. Begeman. Oh, it is still there.
    Mr. Shuster. It is still there? Because I--well, these 
captive shippers, I mean, some--you know, you can only grow 
wheat in some parts of the country, but I know over the years 
many of these folks that are captive shippers actually build a 
plant on a single line, and they create themselves to be 
captive shippers and then they complain about it.
    Again, we haven't heard a lot of people complaining to us. 
So, again, I just wondered, is it because you are doing a 
better job, the railroads are doing a better job, the captive 
shippers are happier?
    Ms. Begeman. I would like to say it is because we are doing 
a better job, but I do want to be completely candid with all of 
you. You know, captive shippers have struggles. As you 
mentioned, yes, there are times when people locate on a captive 
line, and they choose to do that. Perhaps that is where their 
best labor pool will come from.
    But I am a farmer's daughter. I grew up in South Dakota. I 
know what it is like to have captive service. I am not 
satisfied with the rate methods that the Board currently has, 
particularly for grain shippers, really smaller shippers. They 
can't afford multimillion-dollar cases and lawyers for 5 years 
to bring a case that they may or may not win.
    That is one of the reasons that we have put out an ANPRM 
[advance notice of proposed rulemaking] to try to establish a 
case for really small, small shippers. Unfortunately, our good 
intentions were not warmly received by either the industry or 
the shippers that we are trying to address, but we are not 
giving up.
    And, again, we have established a task force that is 
trying--going to really try to help us find a better solution.
    Mr. Shuster. All right. Thank you very much.
    I yield back.
    Mr. Denham. Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman.
    I was intrigued by something you said just previous to that 
in response to Mr. Capuano, which was that if someone were to 
shed themselves or strip the assets from a railroad, the power, 
the crews, and all that, and they weren't going to deliver 
adequate service, then you would find someone else who would.
    How would that work? I mean, at what point can you 
intervene when someone like, you know, we had essentially an 
attempt to destroy CSX by Mr. Harrison, and he was brought in 
by some Wall Street investor. We had a previous attempt by the 
Children's Fund to take over and destroy CSX, a benignly named 
hedge fund out of Europe who was also a master at stripping 
assets and extracting value, they call it, as they destroy the 
capability of the railroad.
    So what did you mean when you said that? How could you say 
you are going to find someone else who will? I mean, you don't 
have that authority.
    Ms. Begeman. Well, we do have emergency service authority, 
which has rarely been used. It really hasn't been used since 
the UP-SP merger back in the 1990s, the ``mess in the West'' 
after that particular merger.
    Mr. DeFazio. Yes, I lived through that.
    Ms. Begeman. Yes. Me, too. And I would like to never live 
through another mess.
    And so we do have authorities that we could direct another 
carrier to operate and provide service over another line. You 
know, I don't look forward to using that authority, but we do 
have it if we need to use it.
    Mr. DeFazio. That would be fairly----
    Ms. Begeman. I will also say that we certainly recognize 
that our regulations may need to be altered. When there is a 
degradation of service, a carrier and a shipper can come in and 
petition the Board to provide service over another line. That 
regulation has not been used, and so we have started some 
informal discussions with stakeholders and the Board staff to 
try to determine whether there are some changes that we could 
make to these regulations to make them more usable. We want to 
try to explore whether or not there is something we could do to 
improve the regulations, so that they could be used, if they 
needed to be.
    Mr. DeFazio. But at this point, since you lack a quorum, 
you couldn't take any definitive action.
    Ms. Begeman. We don't have quorum requirements.
    Mr. DeFazio. Oh, you don't.
    Ms. Begeman. However, you know, we also have not been 
challenged in court, whether or not there are two of us doing 
our work, whether that is an issue. There was a time when there 
was only one member for about a year, about 10 years ago. So we 
are--you know, we would like to not have to determine that 
answer.
    But, again, we are not not doing our jobs because there are 
only two of us. We are trying to do as much as we possibly can.
    Mr. DeFazio. OK. Yes. I mean, I wonder, and I am not 
exactly sure how I would approach it, but, you know, we finally 
did get rid of Frank Lorenzo. You know, Congress had standards, 
fitness standards, for operating airlines, and maybe we need 
something similar for railroads to try and keep out those 
people who would just come in and strip the assets and don't 
care about the vital service that is being provided after and 
disappear after they profit. So it is something to think about.
    Thank you, Mr. Chairman. I appreciate it.
    Mr. Denham. Thank you, Mr. DeFazio.
    Mr. Westerman, you are recognized for 5 minutes.
    Mr. Westerman. Thank you, Mr. Chairman.
    I have a large number of fertilizer and chemical 
manufacturers located throughout my district, and the majority 
of the fertilizer shipments moved by rail due to rail's ability 
to move it securely and safely and economically.
    These shippers are vastly affected by the current rate 
review standards. These rate and service cases can take up to 3 
years and the costs can run in the millions, hurting these 
companies' bottom lines, which trickle down and hurt workers 
and constituents in my district.
    So I greatly appreciate the work that has been done since 
the implementation of the reauthorization of 2015 and working 
to expedite many of these cases. Could you give examples of 
improvements you have seen, as well as positive feedback you 
may have received in the first month of 2018, since the rule 
has been implemented? And that is for both of you.
    Ms. Begeman. I am sorry. You are asking what the positive 
impacts of the act have been? Is that what you are asking?
    Mr. Westerman. Yes. And maybe feedback you are getting from 
folks that have been affected by the rule.
    Ms. Begeman. Well, as I had mentioned in my testimony, we 
provide quarterly reports to Congress that we also post on our 
website that address our rate cases. They give an overview of 
our quarterly pending proceedings, regulatory proceedings, and 
they also provide information on our formal and informal 
service complaints during that time.
    I think it has been really helpful for not just the Board 
but also for interested stakeholders to know what kinds of 
calls we are receiving, because, again, informal means there 
hasn't been a written filing. It is more like what our Rail 
Customer and Public Assistance office--what kind of phone calls 
they have been getting.
    One of the things that my colleague and I have done as a 
result of the directive on the regulatory proceedings is we 
have been working to establish an internal process to set 
deadlines for our other cases, not just regulatory cases but 
actually our day-to-day caseload. We have been doing this for 
the past year.
    One of the benefits I have found, because I have not always 
been the Chairman or Acting Chairman, is it lets all of us 
know, and the staff know, what our priorities are for the next 
3 months, what cases we plan to get done once the record is 
closed, and how to kind of prioritize our workload, and so that 
all of the different burdens we put on staff, they can help to 
better juggle.
    So we are really trying to, you know, just be as productive 
and efficient as possible for the stakeholders.
    Mr. Westerman. Would you like to add to that?
    Ms. Miller. Yes. Thank you very much, Mr. Westerman. Well, 
first, I would say, since you brought up the fertilizer 
industry, they have, since I have been on the Board, gotten 
much more proactive. And I have found them to be very helpful 
partners to work with.
    They visit us fairly regularly and provide very good and 
helpful information, and I think just their proactive approach 
has been I think good for their industry. It has certainly been 
good for me as a member of the Board to have a better 
understanding of the challenges they face and how we might 
impact them.
    In terms of positive improvements, I think that the issue 
of transparency is extremely important and have in my 
Government service always championed it. I think that, one, we 
are doing the work of the public, so the public has a right to 
know what we are doing and when we are doing it. And, secondly, 
I think for those who are impacted by the decisions we make, 
the more information they have about what we are doing, when we 
are doing it, how we are doing it, helps them both understand 
and, you know, quite frankly, then interact with us in a way 
that is useful.
    So I think one of the most beneficial consequences of the 
Reauthorization Act has been the collaboration, the 
transparency requirements. When it comes to transparency, one 
can always do more, and I do think there are other things the 
Board could do to continue to refine its processes that would 
be helpful.
    But I think the fact that there is more information 
available to those stakeholders who engage with us has made a 
difference, and I think in the service challenges that is one 
of the places we can be helpful. The metrics that we require 
railroads to submit, the information we then provide to 
stakeholders, helps them to adjust their activity.
    Mr. Westerman. OK. And I have got more questions, but I 
will submit them for answers, unless we get another round.
    I yield back, Mr. Chairman.
    Mr. Denham. Thank you, Mr. Westerman.
    Mr. Carson? Mr. Carson, you are recognized for 5 minutes.
    Mr. Carson. Thank you, Chairman.
    I am very concerned about the growing problems of freight 
trains blocking grade crossings in urban and suburban 
communities across our country, particularly Indianapolis. The 
trains have gotten longer, especially downtown, and I think it 
is important that this subcommittee, and our regulatory 
partners quite frankly, take steps to better understand what is 
happening and how the problem can be essentially fixed.
    Are investigations being conducted as we speak, and what 
have you learned so far, and beyond what you can tell me today, 
we would appreciate more information and detail in writing. I 
know we have limited time, and a separate briefing would be 
very helpful.
    Ms. Begeman. Well, one thing I would like to ask of you or 
your staff, if you would follow up with us after this. We have 
a Rail Customer and Public Assistance office. You know, there 
are times when blocked crossings are occurring and the carrier 
needs a phone call and a nudge, like, ``what can you do to try 
to address this''--ASAP kind of a matter. So please don't 
hesitate.
    I will leave the phone number for our office, so that we 
can try to be as responsive and timely--occasionally, that 
could be almost an emergency situation. You know, hospitals 
can't be blocked. Please, you know, we want to be helpful to 
you.
    With respect to our new investigative powers, we did 
implement regulations to establish regulations on our 
investigations. We have not currently--we have not conducted a 
formal investigation at this point. That is not to say that it 
is not a very helpful tool.
    It is actually a very big stick of authority that you have 
given us. What our first preference is is to exhaust our 
informal approaches. You know, we want the railroads to work 
with us and with their shippers and other carriers--in an 
appropriate way--to try to address issues. And a formal 
investigation, as you can imagine, will have a bit of a 
chilling effect on the person or the entity perhaps being 
investigated.
    So I am not saying that, you know, we--there may be the 
right time and place for that, but to the extent we can exhaust 
our work in an informal way, that is the way we would like to 
do it, particularly because it also is a transparent process. 
It is not done confidentially.
    Mr. Carson. You know, we are seeing delays up to 3 hours 
now, which has become extremely problematic, especially for 
folks trying to get to work and emergency vehicles. So if we 
could have a separate briefing, that would be tremendously 
helpful.
    Ms. Begeman. Absolutely.
    Mr. Carson. Thank you. Secondly, your written testimony 
mentions some adjustments from your previous affiliation with 
the DOT and now your status as an independent agency. Can you 
describe some of the outstanding cybersecurity and information 
technology challenges that should be addressed? And what are 
your top priorities in this area?
    Ms. Begeman. When we became independent, we actually 
suddenly became responsible for everything we do, and that 
included all of our IT network, our financial network, et 
cetera. Some of the answers I would like to give to you in 
private.
    Mr. Carson. Sure.
    Ms. Begeman. If you don't--and I am sure you can appreciate 
why. But I will say that it is a top priority of my colleague 
and me, and the Board staff frankly. They are working very hard 
to address some of our vulnerabilities. I will also say that 
much of it is about paperwork.
    Mr. Carson. All right. Thank you.
    I yield back, Mr. Chairman.
    Mr. Denham. Thank you, Mr. Carson.
    Mr. Katko, you are recognized for 5 minutes.
    Mr. Katko. Thank you, Mr. Chairman, and thank you, both, 
for testifying today. We appreciate you being here.
    A quick question to start off with. The Rate Reform Task 
Force, where are we with that process? And at what point can we 
expect it to reach some conclusions as to that task force?
    Ms. Begeman. It is a new undertaking. It was established in 
January. It is comprised of eight members of our staff that are 
attorneys or economists. They all have, you know, personal 
experience processing rate cases. All except one I think has 
finally come to the conclusion that the SAC process is just 
more than we can really bear, and we need a new way.
    What they have been doing is they have been doing a lot of 
different research. They have been exploring various ideas that 
they have had, you know, over the past several years. Shortly, 
they plan to be going out to various stakeholder communities. 
Again, as I said, we would be happy to meet with any of you or 
your staff.
    But also, they are going to different association meetings. 
The National Grain and Feed Association is having a meeting in 
a few months. And so they are going to travel around a bit and 
to try to really get a best sort of--just the best ideas that 
they can put forward.
    I am not interested in the rail industry telling us that 
the status quo is perfect or that we should be content with it, 
because we are not going to be content with it. We need to 
change.
    Mr. Katko. That I understand. Is there some sort of a 
timeframe you have put on this endeavor, or is this going to be 
kind of an open-ended thing?
    Ms. Begeman. You know, saying it is open-ended probably is 
not the approach I want you to think that we are taking. But it 
is a long, difficult process, and I----
    Mr. Katko. Everything is in the rail industry.
    Ms. Begeman. Everything is, and I don't want to say I want 
it next month.
    Mr. Katko. Yes.
    Ms. Begeman. But we want to see it brought to a conclusion 
as quickly as it can be.
    Mr. Katko. OK. And I take it stakeholders have the 
opportunity to provide input, even----
    Ms. Begeman. They will. Yes, they will be.
    Mr. Katko. OK. All right. Wonderful. I want to switch gears 
a bit. I am also on the Committee on Homeland Security, and I 
just don't know if I understand the breadth of your 
jurisdiction.
    One of the things I am very concerned about is the shipment 
of volatile crude on the trains through urban areas. In 
Syracuse, New York, my jurisdiction, for example, we have 
multiple shipments sometimes a day of 100-car trains of 
volatile crude going through urban areas. And they are subject, 
really, to a lot of concern that, you know, a disaster in an 
urban area with volatile crude train shipments is a very 
serious thing.
    And I just wonder, are you involved at all in the safety 
aspects of the shipment of that crude, or is that outside your 
jurisdiction?
    Ms. Begeman. That is primarily FRA.
    Mr. Katko. Pardon me?
    Ms. Begeman. It is primarily the Federal Railroad 
Administration.
    Mr. Katko. OK. All right. Under section 6, the Board has 
established and maintained a database of complaints. Could you 
tell me, are you gathering complaints?
    Ms. Begeman. Yes.
    Mr. Katko. OK. And how many formal complaints have been 
filed with the STB since the Reauthorization Act?
    Ms. Begeman. Formal, I think there were approximately 20. 
There are currently five pending.
    Mr. Katko. OK. And how do you deal with those when you get 
those formal complaints? And we will talk about informal in a 
minute.
    Ms. Begeman. Sure. Well, formal complaints, you know, are 
in writing. It is basically--it is a case. A party will make 
their formal filing. The entity that they are filing against 
will then reply to that. Depending on what the situation is, 
they may get to a point where they want to have discovery, 
which can be a long process in its own way. But ultimately, you 
know, the record will be closed, and then we will work to issue 
a final decision as quickly as possible.
    Mr. Katko. OK. Great. And now let's talk about the informal 
complaints. I take it there is probably more of those than----
    Ms. Begeman. There are, yes.
    Mr. Katko. OK. And how is that process different than the 
formal complaint process?
    Ms. Begeman. For the informal complaint process, our Rail 
Customer and Public Assistance office fields phone calls from 
shippers, sometimes from other railroads, sometimes from short 
line railroads.
    And it is a small group, but it is comprised of some 
attorneys, some former shippers, some former railroad folks, 
and they will then, assuming that the--sometimes the shipper 
does not want to be outed. You know, they just maybe want to 
have an ear and try to get some informal recommendations as to 
sort of what--you know, is there anything that the Board could 
do or what--you know, what is the law. So sometimes they just 
want to get information.
    But there are times when a shipper will say, ``I need you 
to help me, please. Yes, let the railroad know that if they 
don't provide service to me, you know, if I can't get a 
shipment by midnight tomorrow, I am shutting down.'' And our 
staff will then get on the phone and they have been extremely 
successful. I am so proud of them. I mean, they are probably 
the--they can get things done.
    Mr. Katko. Well, that is exactly what we want to hear, and 
I appreciate that very much.
    With that, Mr. Chairman, I see I am out of time, so I will 
yield back. Thank you.
    Mr. Denham. Thank you, Mr. Katko.
    Mrs. Napolitano.
    Mrs. Napolitano. Thank you very much, and good morning, 
ladies. I am just wondering, who is your new Board member? 
Would you have him stand up?
    Ms. Begeman. Well, he is not currently a Board member, but 
he is our nominee.
    Mrs. Napolitano. Nominee?
    Ms. Begeman. Patrick Fuchs is our nominee.
    Mrs. Napolitano. Very good. And do you expect a fourth one?
    Ms. Begeman. We also have a fourth nominee, who is not here 
today, but they had their confirmation hearing last week. And 
then we are waiting for one more to be nominated.
    Mrs. Napolitano. Good. Well, it is about time.
    Ms. Begeman. Yes.
    Mrs. Napolitano. I am sorry. But there are several 
questions I have in regard to the status of the law passed in 
2015 by the Federal courts giving Amtrak preference on-time 
service over freight railroads. How does STB see this issue 
moving forward?
    Ms. Begeman. As you know, the reauthorization--I am sorry--
PRIIA [Passenger Rail Investment and Improvement Act of 2008] 
directed FRA and Amtrak to establish metrics. Those metrics 
would then be used by the Board in order to process on-time 
performance complaints.
    Mrs. Napolitano. OK. That was 3 years ago.
    Ms. Begeman. Yes.
    Mrs. Napolitano. How is it moving?
    Ms. Begeman. It is still in court. In the meantime, the 
Board tried to step in and establish our own standards. The 
U.S. Court of Appeals for the Eighth Circuit vacated our 
attempt last year. So at this point, we have authority but we 
don't actually have standards. So, again, it is back in court, 
and until the court rules there is----
    Mrs. Napolitano. Back in court as in appeal?
    Ms. Begeman. Yes, it is being--DOT--they are back trying to 
say that the FRA metrics and Amtrak metrics, that they should 
not be invalid.
    Mrs. Napolitano. OK. That same act provided STB with 
authority to investigate nationally or regionally significant 
issues on its own initiative rather than on complaint. Do you 
believe you have staff capacity to initiate such 
investigations? How do you determine when it is time to launch 
an investigation?
    Ms. Begeman. I do believe we have staff capacity. Of 
course, we would always benefit from having more employees than 
we have. I think we are a very fortunate agency in that the 
Congress and also the administration have provided us a bit of 
an increase in our funding since the previous years. Hiring 
people is a lengthy process in the Federal Government. It is 
surprising how frustrating of a lengthy process it can be.
    But again, I mean, we--whatever we need to do, we will do, 
but we are trying to hire up. So if you know of any good 
people, please send them our way.
    Mrs. Napolitano. Well, we need to know that because we are 
facing an issue where a lot of our agencies are experiencing 
diminishing capacity to hire people, qualified people.
    Other questions are the--you talked about--Mr. Carson 
indicated that grade crossings sometimes is a public problem, 
and you directed him to the Rail Customer and Public Assistance 
office. But I also want to know, to what extent are you 
involved with the length of the trains and the Positive Train 
Control?
    Ms. Begeman. I am----
    Ms. Miller. Positive Train Control, length.
    Mrs. Napolitano. And the length of trains, because 
sometimes the crossings are held up with trains moving back and 
forth in half an hour, and you have traffic, you have rage, and 
you have problems because there are not quad gates or the like. 
I am a new member on this subcommittee, so I am digging.
    Ms. Begeman. When we had our listening session with CSX 
last October, one of the witnesses who appeared did indicate--
told us about his concerns--it was actually a representative of 
rail labor--about the length of trains and how much they are--
how they sort of are growing quite a bit, not just with CSX but 
other carriers as well.
    You know, there is a tradeoff with the length. You know, 
longer trains means fewer trains. But as you mentioned, one of 
the results also could be impacting a crossing that wouldn't 
have been otherwise.
    Mrs. Napolitano. And also, they don't--the receiving end is 
not capable of receiving that length of a train either.
    Ms. Begeman. And that is really more of an FRA issue than 
it is an STB issue. But, yes, certainly, you know, this--we 
want a fluid network. But we also don't want--you know, it is 
not just about rail service impact. We don't want them to 
impact, you know, drivers sitting at crossings. I certainly 
have----
    Mrs. Napolitano. And Positive Train Control?
    Ms. Begeman. You know, Positive Train Control is not our 
jurisdiction. It is the Federal Railroad's jurisdiction.
    Mrs. Napolitano. Are you involved in it in any way?
    Ms. Begeman. Absolutely. Because ultimately it is about 
service.
    Mrs. Napolitano. Thank you very much, Ms. Begeman.
    Mr. Denham. Mr. DeSaulnier, you are recognized for 5 
minutes.
    Mr. DeSaulnier. Thank you, Mr. Chairman. I am sorry I was 
distracted. I am still looking up the--I am trying to figure 
out what a shock is, but I will leave that to the ranking 
member to translate it for me. Shock.
    I wanted to ask you--and I appreciate the comments by the 
ranking member and Mr. DeFazio in terms of a changing private 
environment where you have investors who expect really 
sometimes an unfair rate of return. So I appreciate your 
historic responsibilities in protecting this valuable national 
capital infrastructure.
    But I want to question a little bit--and it goes to some of 
the other comments about changing environments and anticipating 
that and working jurisdictionally, cross-jurisdictionally, with 
FRA and with State agencies.
    I used to be on the California Air Resources Board. The 
rail companies would complain about our idling rules and some 
of our issues getting into the Port of Long Beach and L.A. and 
the Port of Oakland.
    So just maybe in terms of reauthorization, how you feel you 
could better work with your sister agencies, both at the 
Federal and State level, so that you can keep rates as low as 
possible and still consistently meet your mandate about 
efficiency in regard to public health and other issues, and the 
FRA issues with hazardous materials going through urban areas.
    So this goes to a little bit about the other comments, 
understanding the jurisdictional constraints, but the 
communication with sister agencies in this regard, anticipating 
your mandate, effects on your mandate.
    Ms. Begeman. That is a very good question. Thank you so 
much. One of the things that the Board has been doing over the 
past several years is Board staff meets with staff of the FRA 
on a routine basis. Now that the FRA Administrator is 
confirmed, I have been a bit negligent in reaching out and 
trying to set up a dialogue with him, although I will be doing 
that.
    I think it would actually be helpful for all of the members 
to--so that we know each other and we know their staff, so that 
we have a good understanding, because what we do is all 
interrelated. It is not to say we have jurisdiction over--you 
know, we don't share jurisdiction, but it certainly is 
interrelated.
    We have a Rail Shipper Transportation Advisory Council that 
meets four times a year, and they are going to meet in early 
May, and we have invited FRA staff to come and give us an 
update on PTC [Positive Train Control] implementation. So that 
way we will, you know, have a new update relative to shippers 
that are affected by PTC, and there are carriers that also are 
on that council, and so we will also get a sense of the 
progress at that point.
    Mr. DeSaulnier. And on another external pressure on your 
mandate, west coast we are concerned about trade wars and the 
impact on our economy, and certainly in northern California the 
ability to transport agricultural goods, as the Chairman is 
aware of, in and out of the Port of Oakland.
    Do you look at those things to try to anticipate, again, 
that what the effect on those kind of external things, trade 
implications of a trade war, in this case in the Pacific Rim, 
which is certainly the focus of the administration right now, 
how that might affect your mandate in terms of rates and 
efficiency of the system?
    Ms. Begeman. Well, certainly, if products become less 
desirable from other countries, there probably will be less 
movement to those ports.
    Mr. DeSaulnier. Understood. But do you do any kind of 
analysis in anticipation of that? Or is it just sort of----
    Ms. Begeman. No.
    Mr. DeSaulnier [continuing]. We wait and react--we are 
somewhat reactive, and then the shippers will come to you and 
say, ``We need a rate reduction,'' or ``We are moving some of 
our assets because of this.''
    Ms. Begeman. Well, rate--our rate reform, our rate review I 
should say, is--it is on complaint. So we don't just 
proactively or go out on our own and say your rates are too 
high; you can't do X. So that is not the approach that we take. 
It is actually a shipper needs to come to the Board to 
establish that----
    Mr. DeSaulnier. But that is my point. If you anticipate, 
certainly, intellectually on your own, you might anticipate 
when you read news articles that one of your shippers may come 
to you and say, ``Our model has changed dramatically. Do we 
do''--and this is hopefully part of our review in Congress is 
letting you--being mindful.
    We don't want mission creep, and we want to keep the 
jurisdictions focused, but still anticipating these changes, 
you know, in a world that changes quite dramatically quickly. 
You don't have a vehicle to do that is what I am getting from 
your response.
    Ms. Begeman. I think that is right. And also, the majority 
of movements are--I shouldn't say a majority, but many are 
under contract.
    Mr. DeSaulnier. Right.
    Ms. Begeman. So that is individually dealt with between the 
shipper and the carrier.
    Mr. DeSaulnier. Would it be helpful to have more assets or 
jurisdictional responsibility to anticipate those changes, or, 
no, you--it is fairly predictive, the contracts are constrained 
and your jurisdiction is----
    Ms. Begeman. You know, I think that the more we know, the 
more helpful it is for--not just for the Board to be effective 
and efficient, but so that--and, again, we try to be very 
transparent. So the more that we can share with interested 
stakeholders, we certainly want to do.
    Mr. DeSaulnier. OK. Thank you.
    I yield back, Mr. Chairman.
    Mr. Denham. Thank you, Mr. DeSaulnier.
    Ms. Begeman, Ms. Miller, thank you very much for joining us 
on this hearing about STB. We are looking forward to the full 
implementation as well.
    I ask unanimous consent that the record of today's hearing 
remain open until such time as our witnesses have provided 
answers to any questions that may be submitted to them in 
writing, and unanimous consent that the record remain open for 
15 days for additional comments and information submitted by 
Members or witnesses to be included in the record of today's 
hearing.
    Without objection, so ordered.
    If no more Members have any other questions, this 
subcommittee stands adjourned.
    [Whereupon, at 11:08 a.m., the subcommittee was adjourned.]
    
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