[Congressional Record Volume 147, Number 33 (Tuesday, March 13, 2001)]
[Senate]
[Page S2228]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DORGAN (for himself and Mr. Rockefeller):
  S. 526. A bill to amend title 49, United States Code, to provide that 
rail agreements and transactions subject to approval by the Surface 
Transportation Board are no longer exempt from the application of the 
antitrust laws, and for other purposes; to the Committee on Commerce, 
Science, and Transportation.
  Mr. DORGAN. Mr. President, I would like to raise an issue that is of 
great concern to many of my constituents and to me. That is the issue 
of unchecked monopoly power of the nation's freight railroad industry.
  Since the supposed deregulation of the rail industry in 1980, the 
number of major Class I railroads has declined from approximately 42 to 
only four major U.S. railroads today. Rather than achieving the 
competitive framework intended by deregulation, today's freight 
railroad industry can be best described as a handful of regional 
monopolies that rely on bottlenecks to exert maximum market power. Four 
mega-railroads overwhelmingly dominate railroad traffic, generating 95 
percent of the gross ton-miles and 94 percent of the revenues, 
controlling 90 percent of all U.S. coal movement; 70 percent of all 
grain movement and 88 percent of all originated chemical movement.
  This drastic level of consolidation has left rail customers with only 
two major carriers operating in the East and two in the West, and has 
far exceeded the industry's need to minimize unit operating costs. But 
consolidation alone has not produced these regional monopolies. Over 
the years, regulators have systematically adopted policies that so 
narrowly interpret the procompetitive provisions of the 1980 statute 
that railroads are essentially protected from ever having to compete 
with each other.
  In my state, it costs $2,300 to move one rail car of wheat from North 
Dakota to Minneapolis, approx. 400 miles. Yet for a similar 400 mile 
move, between Minneapolis and Chicago, it costs only $238 to deliver 
that car. Move that same car another 600 miles to St. Louis, Missouri 
and it costs only $356 per car.
  Since the deregulation of the railroad industry, the Interstate 
Commerce Commission, now the Surface Transportation Board, has been 
charged with the responsibility to make sure that the pro-competitive 
intent of that law was being carried out, so that those rail users 
without access to true market based competition would be protected by 
``regulated competition.''
  That clearly hasn't happened. Competition among rail carriers is 
virtually nonexistent in part because the ICC and the STB have 
consistently chosen to protect railroads from such competition, and 
have done little to protect rail customers that have no alternatives.
  It is time for Congress to make it very clear that true market 
competition among railroads is what we originally intended then and 
what we require now. This is the same approach we have taken with 
telecommunications and natural gas pipelines, and it is the center of 
our deliberations regarding the future of the airline industry. 
Competition among railroads is critical for large sectors of our 
national economy.

  That is why today, along with Senator Jay Rockefeller, I am 
introducing the Rail Competition Enforcement Act to reinstate the 
Justice Department's review of proposed railroad mergers under 
antitrust laws. The bill would require both the Surface Transportation 
Board and the Justice Department to approve new mergers.
  I look forward to working with my colleagues on this most important 
matter. I ask unanimous consent that the text of the bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 526

       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 ``Rail Competition Enforcement 
     Act of 2001''.

     SEC. 2. TERMINATION OF EXEMPTION.

       (a) In General.--Section 10706 of title 49, United States 
     Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (2)(A), by striking ``, and the Sherman 
     Act (15 U.S.C. 1, et seq.),'' and all that follows through 
     ``or carrying out the agreement'' in the third sentence;
       (B) in paragraph (4)--
       (i) by striking the second sentence; and
       (ii) by striking ``However, the'' in the third sentence and 
     inserting ``The''; and
       (C) in paragraph (5)(A), by striking ``, and the antitrust 
     laws set forth in paragraph (2) of this subsection do not 
     apply to parties and other persons with respect to making or 
     carrying out the agreement''; and
       (2) by striking subsection (e) and inserting the following:
       ``(e) Application of Antitrust Laws.--
       ``(1) In general.--Nothing in this section exempts a 
     proposed agreement described in subsection (a) from the 
     application of the Sherman Act (15 U.S.C. 1 et seq.), the 
     Clayton Act (15 U.S.C. 12, 14 et seq.), the Federal Trade 
     Commission Act (15 U.S.C. 41 et seq.), section 73 or 74 of 
     the Wilson Tariff Act (15 U.S.C. 8 and 9), or the Act of June 
     19, 1936 (15 U.S.C. 13, 13a, 13b, 21a).
       ``(2) Antitrust analysis to consider impact.--In reviewing 
     any such proposed agreement for the purpose of any provision 
     of law described in paragraph (1), the Board and any other 
     reviewing agency shall take into account, among any other 
     considerations, the impact of the proposed agreement on 
     shippers and on affected communities.''.
       (b) Combinations.--Section 11321 of title 49, United States 
     Code, is amended--
       (1) in subsection (a)--
       (A) by striking ``The authority'' in the first sentence and 
     inserting ``Except as provided in section 11 of the Clayton 
     Act (15 U.S.C. 21(a)), the authority''; and
       (B) by striking ``is exempt from the antitrust laws and 
     from all other law,'' in the third sentence and inserting 
     ``is exempt from all other law (except the antitrust laws 
     referred to in subsection (c)),''; and
       (2) by adding at the end the following:
       ``(c) Application of Antitrust Laws.--
       ``(1) In general.--Nothing in this section exempts a 
     transaction described in subsection (a) from the application 
     of the Sherman Act (15 U.S.C. 1 et seq.), the Clayton Act (15 
     U.S.C. 12, 14 et seq.), the Federal Trade Commission Act (15 
     U.S.C. 41 et seq.), section 73 or 74 of the Wilson Tariff Act 
     (15 U.S.C. 8 and 9), or the Act of June 19, 1936 (15 U.S.C. 
     13, 13a, 13b, 21a).
       ``(2) Antitrust analysis to consider impact.--In reviewing 
     any such transaction for the purpose of any provision of law 
     described in paragraph (1), the Board and any other reviewing 
     agency shall take into account, among any other 
     considerations, the impact of the transaction on shippers and 
     on affected communities.''.
       (c) Clayton Act.--
       (1) Application of act.--Section 7 of the Clayton Act (15 
     U.S.C. 18) is amended by striking ``Surface Transportation 
     Board,'' in the last paragraph of that section.
       (2) FTC enforcement.--Section 11(a) of the Clayton Act (15 
     U.S.C. 21(a)) is amended by striking ``subject to 
     jurisdiction'' and all that follows through the first 
     semicolon and inserting ``subject to jurisdiction under 
     subtitle IV of title 49, United States Code (except for 
     agreements described in section 10706 of that title and 
     transactions described in section 11321 of that title);''.
       (d) Conforming Amendments.--
       (1) The heading for section 10706 of title 49, United 
     States Code, is amended to read as follows:

     ``Sec. 10706. Rate agreements''.

       (2) The item relating to such section in the chapter 
     analysis at the beginning of chapter 107 of such title is 
     amended to read as follows:

``10706. Rate agreements.''.

     SEC. 3. EFFECTIVE DATE.

       The amendments made by section 2 shall apply to any 
     agreement or transaction referred to in section 10706 or 
     11321, respectively, of title 49, United States Code, that is 
     submitted to the Surface Transportation Board after December 
     31, 2001.
                                 ______