[Congressional Record Volume 144, Number 75 (Thursday, June 11, 1998)]
[Senate]
[Pages S6186-S6198]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. HUTCHISON:
  S. 2164. A bill to amend title 49, United States Code, to promote 
rail competition, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.


                       the stb amendments of 1998

 Mrs. HUTCHISON. Mr. President, today I am introducing the 
Surface Transportation Board Amendments of 1998. This legislation 
proposes to expand the Surface Transportation Board's existing 
authority to address circumstances affecting rail service 
transportation in today's environment.
  First, I think most colleagues would agree that the STB has performed 
well since its inception in 1996. The industries it regulates have 
experienced a number of significant changes in the past few years. The 
STB has acted consistently with the authority Congress gave it, and 
clearly within the deregulatory intent with which it was created.
  This year's reauthorization gives us the first chance since we 
created the Board to review its practices and performance. My bill is 
based upon the principle that Congress sets government policy and the 
Executive Branch, through regulators such as the STB, executes that 
policy. During hearings in my Surface Transportation and Merchant 
Marine Subcommittee, I have consistently sought to identify the limits 
of STB authority to act in certain circumstances, and to identify those 
areas beyond which STB action would require a policy decision by 
Congress.
  It is very important that we pass a re-authorization bill this year. 
Doing that will require that we establish the middle ground between 
those who want to roll back the clock and begin to re-regulate the 
industry and those who think the board needs no additional authority to 
adequately address the many issues before it.
  I believe my bill does just that. However, I stand ready to work with 
my colleagues to further refine my proposals to move this bill through 
the legislative process. I welcome input from any interested members.
  My own personal view is that re-regulation is not called for. The 
Staggers Rail Act of 1980 has had very positive results for both 
industry and shippers. But we must ensure the board has sufficient 
tools to ensure that deregulation has its intended effect of greater 
competition and better value to the consumer. The experiences of the 
past few years, and this year in particular, give us much to consider.
  Mr. President, our country has endured a critical rail service crisis 
for many, many months. My home State of Texas has felt this crisis as 
much as any other State, and more than most. Texas has sustained 
billions of dollars of economic losses as the goods bound to and from 
the State's ports, factories and refineries sit gridlocked on the 
rails. These service problems primarily have occurred in the West, but 
there has been a ripple effect throughout the entire rail system. 
Service problems continue today, and I know the railroads have been 
working night and day to alleviate service troubles.

  Mr. President, I will explain my bill at greater length in a moment, 
but I want to stress that I have worked to craft a bill that maintains 
the basic de-regulatory rules that the rail industry and shippers have 
played by since the 1980s. However, it is the shippers today who face a 
most challenging rail shipping environment.
  Therefore, I am proposing we take action to ensure that the Board's 
procedures are more readily accessible to small shippers. I also am 
proposing to expand the Board's authority with regard to maintaining 
and promoting rail competition in appropriate circumstances. And, I 
believe strongly that we can do this without jeopardizing the integrity 
of deregulation.
  The Committee on Commerce, Science, and Transportation has been 
working for many months on issues surrounding the rail service 
transportation. In that effort, the reauthorization of the Surface 
Transportation Board is a priority of our Committee.
  To date we have held four rail service hearings during this 
Congress--three field hearings along with a Subcommittee hearing on the 
Board's reauthorization. In addition, at Senator McCain's and my 
request, the STB held 2 days of hearings in April to address rail 
access and competition issues at which more than 60 witnesses 
testified.
  In response to the information gathered during these many hearings 
both by our Committee and the Board, today I am proposing legislation 
to address a number of areas which I believe warrant serious attention 
and in some cases, reform. I expect some will have a strong reaction to 
my proposals, as some in the rail industry have tended to tar any 
legislative proposals affecting their industry as ``re-regulation.'' At 
the same time, I suspect some shipper groups will report that these 
proposals do not go nearly as far as they believe we should go. If so, 
that sounds like we're at least within striking distance of the middle 
ground.
  I want to briefly explain the major provisions of this legislation:
  First, the bill establishes that promoting competition within the 
rail industry is one of the criteria the STB should use in performing 
its responsibilities.
  Second, the bill would extend the time period covering the Board's 
emergency service orders. The current 270-day emergency order authority 
would be extended to cover a total period of 18 months. In the event an 
emergency remains in effect beyond this time frame, the Board would be 
permitted to request and receive two 6-month extensions of an emergency 
service order. The Congress could disapprove the Board's requests and 
also take affirmative action to grant any further extensions as may be 
necessary.

  Third, the bill includes several features to simplify the regulatory 
process involving small rate cases. During every hearing before our 
Committee, shippers stressed their frustrations that for a small 
shipper, it is simply too time consuming and costly to ever bring a 
case to the Board. This bill seeks to acknowledge those concerns and 
proposes to foreclose discovery in small rate cases, absent a 
demonstration of compelling need. Further, it would direct the Board to 
establish an arbitration mechanism for small shipper cases. It would 
not require mandatory arbitration, but would allow for arbitration at 
one party's request.

[[Page S6197]]

  Fourth, my bill seeks to address concerns raised about the Board's 
market dominance standard. Some have advocated Congress statutorily 
eliminate product and geographic competition from the Board's market 
dominance analysis as it is a very time consuming process. Yet others 
contend these considerations remain necessary. My bill recognizes the 
Board's April 17th decision announcing it would initiate a proceeding 
to consider whether to maintain, change, or eliminate product and 
geographic competition from consideration in rate cases. I believe the 
Board's action is the proper route to follow.
  Fifth, my bill seeks to address another area of concern raised by 
shippers: revenue adequacy. At the Board's April hearings, rail and 
shipper representatives suggested referring this matter of considerable 
debate to one or more disinterested economists, which the Board 
initiated April 17th. My bill directs the Board to carry out its 
proposal in this area and direct rail and shipper representatives to 
select a panel of 3 disinterested economists to examine the Board's 
current standards for measuring revenue adequacy and to consider 
whether alternative measurements of a railroad's financial health are 
warranted.
  Sixth, my bill seeks to address the issue of bottleneck rates. There 
is considerable debate as to the correct approach in this area, with 
some strongly opposed to any change and others equally adamant about 
total reform. My proposal seeks to take a balanced approach, ensuring 
some needed boundaries remain. It would require a carrier to provide a 
shipper with a rate for a ``bottleneck'' line segment when requested to 
accommodate a transportation contract. The railroad would be required 
to provide the shipper with a rate over the ``bottleneck'' line segment 
as long as the interchange would be operationally feasible and the 
through route would not significantly impair the railroad's ability to 
serve its other shippers.
  Finally, my bill would remove the 3-year renewal requirement 
regarding antitrust immunity applicable to household goods carriers. 
While the continued propriety of collective actions by other types of 
motor carriers has been the subject of debate, no similar concerns have 
been voiced about the collective activities of household goods 
carriers. The repeal of the mandatory review requirement would relieve 
the carriers of an unnecessary regulatory burden, although it would 
have no effect on the STB's existing authority to modify or revoke 
collective actions when the STB determines such action is necessary to 
protect the public interest.
  Mr. President, I ask unanimous consent a copy of my bill be printed 
in the Record. I encourage my colleagues to look at this legislation 
and begin working with me now so that we may reauthorize the Surface 
Transportation Board this year and provide important policy guidance in 
regard to rail service matters.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2164

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Surface Transportation Board 
     Amendments of 1998''.

     SEC. 2. PROMOTION OF COMPETITION WITHIN THE RAIL INDUSTRY.

       Section 10101 of title 49, United States Code, is amended 
     by--
       (1) redesignating paragraphs (1) through (7) as paragraphs 
     (2) through (8);
       (2) inserting before paragraph (2), as redesignated, the 
     following:
       ``(1) to encourage and promote effective competition within 
     the rail industry;'';
       (3) redesignating paragraphs (9) through (16) as paragraphs 
     (10) through (17); and
       (4) inserting before paragraph (10), as redesignated, the 
     following:
       ``(9) to discourage artificial barriers to interchange and 
     car supply which can impede competition between shortline, 
     regional, and Class I carriers and block effective rail 
     service to shippers.

     SEC. 3. EXTENSION OF TIME LIMIT ON EMERGENCY SERVICE ORDERS.

       Section 11123 of title 49, United States Code, is amended 
     by--
       (1) striking ``30'' in subsection (a) and inserting ``60'';
       (2) striking ``30'' in subsection (c)(1) and inserting 
     ``60'';
       (3) striking the second sentence of subsection (c)(1) and 
     inserting the following: ``An action taken by the Board under 
     subsection (a) of this section may not remain in effect 
     longer than 18 months (including the initial 60-day period), 
     unless the Board requests an extension under paragraph 
     (4).''; and
       (4) adding at the end of subsection (c) the following:
       ``(4) The Board may request up to 2 extensions, of not more 
     than 6 months each, of the 18-month period under subsection 
     (a) by submitting to the Congress a request in writing for 
     such an extension, together with an explanation of the 
     reasons for the request. Such a requested extension goes into 
     effect unless disapproved by the Congress by concurrent 
     resolution. Any other extension requested by the Board will 
     not go into effect unless the Congress approve it under the 
     procedure established by section 4 of the Surface 
     Transportation Amendments of 1998.''.

     SEC. 4. APPROVAL PROCEDURE.

       (a) In General.--Within 90 days (not counting any day on 
     which either House is not in session) after a request for a 
     third or subsequent extension is submitted to the House of 
     Representatives and the Senate by the Surface Transportation 
     Board under section 11123(c)(4) of title 49, United States 
     Code, an approval resolution shall be introduced in the House 
     by the Majority Leader of the House, for himself and the 
     Minority Leader of the House, or by Members of the House 
     designated by the Majority Leader and Minority Leader of the 
     House; and shall be introduced in the Senate by the Majority 
     Leader of the Senate, for himself and the Minority Leader of 
     the Senate, or by Members of the Senate designated by the 
     Majority Leader and Minority Leader of the Senate. The 
     approval resolution shall be held at the desk at the request 
     of the Presiding Officers of the respective Houses.
       (b) Consideration in the House of Representatives.--
       (1) Consideration of approval resolution.--After an 
     approval resolution is introduced, it is in order to move 
     that the House resolve into the Committee of the Whole House 
     on the State of the Union for consideration of the 
     resolution. All points of order against the resolution and 
     against consideration of the resolution are waived. The 
     motion is highly privileged. A motion to reconsider the vote 
     by which the motion is agreed to or disagreed to shall not be 
     in order. During consideration of the resolution in the 
     Committee of the Whole, the first reading of the resolution 
     shall be dispensed with. General debate shall proceed, shall 
     be confined to the resolution, and shall not exceed one hour 
     equally divided and controlled by a proponent and an opponent 
     of the resolution. The resolution shall be considered as read 
     for amendment under the five-minute rule. Only one motion to 
     rise shall be in order, except if offered by the manager. No 
     amendment to the resolution is in order. Consideration of the 
     resolution shall not exceed one hour excluding time for 
     recorded votes and quorum calls. At the conclusion of the 
     consideration of the resolution, the Committee shall rise and 
     report the resolution to the House. The previous question 
     shall be considered as ordered on the resolution to final 
     passage without intervening motion. A motion to reconsider 
     the vote on passage of the resolution shall not be in order.
       (2) Appeals of rulings.--Appeals from decision of the Chair 
     regarding application of the rules of the House of 
     Representatives to the procedure relating to an approval 
     resolution shall be decided without debate.
       (3) Consideration of more than one approval resolution.--It 
     shall not be in order to consider under this subsection more 
     than one approval resolution under this section, except for 
     consideration of a similar Senate resolution (unless the 
     House has already rejected an approval resolution) or more 
     than one motion to discharge described in paragraph (1) 
     with respect to an approval resolution.
       (c) Consideration in the Senate.--
       (1) Referral and reporting.--An approval resolution 
     introduced in the Senate shall be shall be placed directly 
     and immediately on the Calendar.
       (2) Implementing resolution from house.--When the Senate 
     receives from the House of Representatives an approval 
     resolution, the resolution shall not be referred to committee 
     and shall be placed on the Calendar.
       (3) Consideration of single approval resolution.--After the 
     Senate has proceeded to the consideration of an approval 
     resolution under this subsection, then no other approval 
     resolution originating in that same House shall be subject to 
     the procedures set forth in this subsection.
       (4) Motion nondebatable.--A motion to proceed to 
     consideration of an approval resolution under this subsection 
     shall not be debatable. It shall not be in order to move to 
     reconsider the vote by which the motion to proceed was 
     adopted or rejected, although subsequent motions to proceed 
     may be made under this paragraph.
       (5) Limit on consideration.--
       (A) After no more than 2 hours of consideration of an 
     approval resolution, the Senate shall proceed, without 
     intervening action or debate (except as permitted under 
     paragraph (9)), to vote on the final disposition thereof to 
     the exclusion of all motions, except a motion to reconsider 
     or table.
       (B) The time for debate on the approval resolution shall be 
     equally divided between the Majority Leader and the Minority 
     Leader or their designees.
       (6) No motion to recommit.--A motion to recommit an 
     approval resolution shall not be in order.

[[Page S6198]]

       (7) Disposition of senate resolution.--If the Senate has 
     read for the third time an approval resolution that 
     originated in the Senate, then it shall be in order at any 
     time thereafter to move to proceed to the consideration of an 
     approval resolution for the same special message received 
     from the House of Representatives and placed on the Calendar 
     pursuant to paragraph (2), strike all after the enacting 
     clause, substitute the text of the Senate approval 
     resolution, agree to the Senate amendment, and vote on final 
     disposition of the House approval resolution, all without any 
     intervening action or debate.
       (8) Consideration of house message.--Consideration in the 
     Senate of all motions, amendments, or appeals necessary to 
     dispose of a message from the House of Representatives on an 
     approval resolution shall be limited to not more than 1 hour. 
     Debate on each motion or amendment shall be limited to 30 
     minutes. Debate on any appeal or point of order that is 
     submitted in connection with the disposition of the House 
     message shall be limited to 15 minutes. Any time for debate 
     shall be equally divided and controlled by the proponent and 
     the majority manager, unless the majority manager is a 
     proponent of the motion, amendment, appeal, or point of 
     order, in which case the minority manager shall be in control 
     of the time in opposition.
       (d) Definitions.--For purposes of this section--
       (1) Approval resolution.--The term ``approval resolution'' 
     means only a concurrent resolution of either House of 
     Congress which is introduced as provided in subsection (a) 
     with respect to the approval of a request from the Surface 
     Transportation Board under section 11123(a)(4) of title 49, 
     United States Code.
       (e) Rules of House of Representatives and Senate.--This 
     section is enacted by the Congress--
       (1) as an exercise of the rulemaking power of the House of 
     Representatives and the Senate, respectively, and as such 
     they are deemed a part of the rules of each House, 
     respectively, but applicable only with respect to the 
     procedure to be followed in that House in the case of 
     approval resolutions described in subsection (c); and they 
     supersede other rules only to the extent that they are 
     inconsistent therewith; and
       (2) with full recognition of the constitutional right of 
     either House to change the rules (so far as relating to the 
     procedure of that House) at any time, in the same manner and 
     to the same extent as in the case of any other rule of that 
     House.

     SEC. 5. PROCEDURAL RELIEF FOR SMALL RATE CASES.

       (a) Discovery Limited.--Section 10701(d) of title 49, 
     United States Code, is amended by--
       (1) inserting ``(A)'' in paragraph (3) before ``The 
     Board''; and
       (2) adding at the end thereof the following:
       ``(B) Unless the Board finds that there is a compelling 
     need to permit discovery in a particular proceeding, 
     discovery shall not be permitted in a proceeding handled 
     under the guidelines established under subparagraph (A).''.
       (b) Administrative Relief.--Not later than 180 days after 
     the date of enactment of this Act, the Surface Transportation 
     Board shall--
       (1) review the rules and procedures applicable to rate 
     complaints and other complaints filed with the Board by small 
     shippers;
       (2) identify any such rules or procedures that are unduly 
     burdensome to small shippers; and
       (3) take such action, including rulemaking, as is 
     appropriate to reduce or eliminate the aspects of the rules 
     and procedures that the Board determines under paragraph (2) 
     to be unduly burdensome to small shippers.
       (c) Legislative Relief.--The Board shall notify the 
     Committee on Commerce, Science, and Transportation of the 
     Senate and the Committee on Transportation and Infrastructure 
     of the House of Representatives if the Board determines that 
     additional changes in the rules and procedures described in 
     subsection (b) are appropriate and require commensurate 
     changes in statutory law. In making that notification, the 
     Board shall make recommendations concerning those changes.

     SEC. 6. MARKET DOMINANCE STANDARD.

       The Surface Transportation Board shall complete a 
     rulemaking, as outlined in STB Ex Parte No. 575, to determine 
     whether and to what extent it should consider product and 
     geographic competition in making market dominance 
     determinations.

     SEC. 7. REVENUE ADEQUACY.

       The Surface Transportation Board shall reexamine, as 
     outlined in STB Ex Parte No. 575, its standards and 
     procedures for determining adequate railroad revenue levels 
     under section 10704(a)(2) of title 49, United States Code. In 
     carrying out it reexamination, the Board is directed to seek 
     recommendations of a panel of three disinterested economists 
     on the proper standards to apply. The panel shall submit its 
     report and recommendations simultaneously to the Surface 
     Transportation Board and to the Senate Committee on Commerce, 
     Science, and Transportation and the House Committee on 
     Transportation and Infrastructure.

     SEC. 8. BOTTLENECK RATES.

       (a) Through Routes.--Section 10703 of title 49, United 
     States Code, is amended--
       (1) inserting ``(a) In General.--'' before ``Rail 
     carriers''; and
       (2) adding at the end thereof the following:
       ``(b) Connecting Carriers.--When a shipper and rail carrier 
     enter into a contract under section 10709 for transportation 
     that would require a through route with a connecting carrier 
     and there is no reasonable alternative route that could be 
     constructed without participation of that connecting carrier, 
     the connecting carrier shall, upon request, establish a 
     through route and a rate that can be used in conjunction with 
     transportation provided pursuant to the contract, unless the 
     connecting carrier shows that--
       ``(1) the interchange requested is not operationally 
     feasible; or
       ``(2) the through route would significantly impair the 
     connecting carrier's ability to serve its other traffic.
     The connecting carrier shall establish a rate and through 
     route within 21 days unless the Board has made a 
     determination that the connecting carrier is likely to 
     prevail in its claim under paragraph (1) or (2).''.
       (b) Board's Authority to Prescribe Division of Joint 
     Rates.--Section 10705(b) of title 49, United States Code, is 
     amended by striking ``The Board shall'' and inserting 
     ``Except as provided in section 10703(b), the Board shall''.
       (c) Complaints.--Section 11701 of title 49, United States 
     Code, is amended--
       (1) by redesignating subsection (c) as subsection (d); and
       (2) by inserting after subsection (b) the following:
       ``(c) Where transportation over a portion of a through 
     route is governed by a contract under section 10709, a rate 
     complaint must be limited to the rates that apply to the 
     portion of the through route not governed by such a 
     contract.''.

     SEC. 9. SIMPLIFIED DISPUTE RESOLUTION.

       Within 180 days after the date of enactment of this Act, 
     the Surface Transportation Board shall promulgate regulations 
     adopting a simplified dispute resolution mechanism with the 
     following features:
       (1) In general.--The simplified dispute resolution 
     mechanism will utilize expedited arbitration with a minimum 
     of discovery and may be used to decide disputes between 
     parties involving any matter subject to the jurisdiction of 
     the Board, other than rate reasonableness cases that would be 
     decided under constrained market pricing principles.
       (2) Applicable standards.--Arbitrators will apply existing 
     legal standards.
       (3) Mandatory if requested.--Use of the simplified dispute 
     resolution mechanism is required whenever at least one party 
     to the dispute requests.
       (4) 90-day turnaround.--Arbitrators will issue their 
     decisions within 90 days after being appointed.
       (5) Payment of costs.--Each party will pay its own costs, 
     and the costs of the arbitrator and other administrative 
     costs of arbitration will be shared equally between and among 
     the parties.
       (6) Decisions private; not precedential.--Except as 
     otherwise provided by the Board, decisions will remain 
     private and will not constitute binding precedent.
       (7) Decisions binding and enforceable.--Except as otherwise 
     provided in paragraph (8), decisions will be binding and 
     enforceable by the Board.
       (8) Right to appeal.--Any party will have an unqualified 
     right to appeal any decision to the Board, in which case the 
     Board will decide the matter de nova. In making its decision, 
     the Board may consider the decision of the arbitrator and any 
     evidence and other material developed during the arbitration.
       (9) Mutual modification.--Any procedure or regulation 
     adopted by the Board with respect to the simplified dispute 
     resolution may be modified or eliminated by mutual agreement 
     of all parties to the dispute.

     SEC. 10. PROMOTION OF COMPETITIVE RAIL SERVICE OPTIONS.

       Section 11324 of title 49, United States Code, is amended--
       (1) by striking ``and'' in paragraph (4) of subsection (b);
       (2) by striking ``system.'' in paragraph (5) of subsection 
     (b) and inserting ``system; and'';
       (3) by adding at the end of subsection (b) the following:
       ``(6) means and methods to encourage and expand competition 
     between and among rail carriers in the affected region or the 
     national rail system.''; and
       (4) by inserting after the second sentence in subsection 
     (c) the following: ``The Board may impose conditions to 
     encourage and expand competition between and among rail 
     carriers in the affected region or the national rail system, 
     provided that such conditions do not cause substantial harm 
     to the benefits of the transaction to the affected carriers 
     or the public.''.

     SEC. 11. HOUSEHOLD GOODS COLLECTIVE ACTIVITIES.

       Section 13703(d) of title 49, United States Code, is 
     amended by inserting ``(other than an agreement affecting 
     only the transportation of household goods, as defined on 
     December 31, 1995)'' after ``agreement'' in the first 
     sentence.
                                 ______