[Senate Report 114-52]
[From the U.S. Government Publishing Office]
Calendar No. 94
114th Congress } { Report
SENATE
1st Session } { 114-52
_______________________________________________________________________
SURFACE TRANSPORTATION BOARD REAUTHORIZATION ACT OF 2015
__________
R E P O R T
of the
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 808
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
May 21, 2015.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
49-010 WASHINGTON : 2015
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fourteenth congress
first session
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR , Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas ED MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
David Schwietert, Staff Director
Nick Rossi, Deputy Staff Director
Rebecca Seidel, General Counsel
Kim Lipsky, Democratic Staff Director
Christopher Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel
Calendar No. 94
114th Congress } { Report
SENATE
1st Session } { 114-52
======================================================================
SURFACE TRANSPORTATION BOARD REAUTHORIZATION ACT OF 2015
_______
May 21, 2015.--Ordered to be printed
_______
Mr. Thune, from the Committee on Commerce, Science, and Transportation,
submitted the following
R E P O R T
[To accompany S. 808]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 808) to establish the Surface
Transportation Board as an independent establishment, and for
other purposes, having considered the same, reports favorably
thereon without amendment and recommends that the bill do pass.
Purpose of the Bill
The purpose of this legislation is to reauthorize the
Surface Transportation Board for fiscal years (FYs) 2016
through 2020, and for other purposes.
Background and Needs
The U.S. freight railroad industry has undergone a
remarkable transformation since the enactment of the Staggers
Rail Act of 1980.\1\ In the decades preceding the enactment of
the Staggers Act, railroads experienced traffic losses due in
part to regulatory policies and procedures that prevented
railroads from easily adjusting their rates to reflect changing
market or cost environments. These policies and procedures led
to financial strain in the industry, ultimately resulting in
the bankruptcy of many railroads by the 1970s.\2\ The Staggers
Act permitted railroads to have more freedom to set rates for
rail service. Specifically, it permitted the railroads to
charge lower rates to their customers who operate in a
competitive environment and higher rates to customers who are
``captive'' to one railroad carrier for transportation service
(i.e., demand-based differential pricing). The Staggers Act
also lowered many regulatory barriers to help the railroads
more easily rationalize their networks, such as easing the
requirements for railroads to abandon unprofitable lines.
Despite these extensive regulatory changes, the Staggers Act
still envisioned a role for the Federal Government to ensure
that captive shippers were not subject to unreasonable rates or
poor service and charged the Interstate Commerce Commission,
and later the Surface Transportation Board, with the authority
to oversee the railroad industry.\3\
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\1\P.L. 96-448
\2\Palley, Joel, ``Impact of the Staggers Act of 1980,'' Federal
Railroad Administration, March 8, 2011, at http://www.fra.dot.gov/eLib/
Details/L03012
\3\Ibid.
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Since the Staggers Act was enacted, the industry has
evolved and the railroads' financial viability has drastically
improved.\4\ There have been numerous acquisitions and
consolidations among the larger railroads and a proliferation
of short line railroads. There are currently seven Class I
railroads (BNSF Railway Company, Canadian National Railway
Company, Canadian Pacific Railway, CSX Transportation Inc.,
Kansas City Southern Railway Company, Norfolk Southern
Corporation, and Union Pacific Railroad). In 2014, Class I
railroads were categorized as those with operating annual
revenue of $467 million or more. As recently as 2013, the 7
Class I railroads reported approximately $71 billion in freight
revenues.\5\ Overall, Class I railroads account for 69 percent
of freight rail mileage, 90 percent of employees, and 94
percent of revenue.\6\ In addition to the Class I railroads,
there are more than 550 Class II and Class III railroads.
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\4\U.S. Congress, Senate Committee on Commerce, Science and
Transportation, Oversight and Investigations Majority Staff Report,
Update on the Financial State of the Class I Freight Rail Industry
(Washington, DC: 2013)
\5\Association of American Railroads, ``U.S. Freight Railroad
Statistics,'' July 15, 2014, at https://www.aar.org/Documents/Railroad-
Statistics.pdf
\6\Association of American Railroads, ``Overview of America's
Freight Railroads,'' April 2014, at https://www.aar.org/
BackgroundPapers/Overview of Americas Freight Railroads.pdf
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The U.S. freight rail industry continues to be integral to
the Nation's economy and global competitiveness. In 2014, the
Association of American Railroads (AAR) reported that rail
carload plus intermodal traffic volume was about 29 million
units, which represents a 4.5 percent increase over the same
period the prior year and the highest year-to-date total since
2007.\7\ According to the AAR, October 2014 was the best month
in history for U.S. rail intermodal traffic.\8\
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\7\Association of American Railroads, ``AAR Reports Increased
Freight Rail Traffic for 2014,'' January 8, 2015, at https://
www.aar.org/newsandevents/Press-Releases/Pages/2015-01-08-
railtraffic.aspx
\8\Association of American Railroads, ``AAR's Hamberger: America's
Rail Industry Taking on Changing Economy,'' November 20, 2014, at
https://www.aar.org/newsandevents/Press-Releases/Pages/AARs-Hamberger-
Americas-Rail-Industry-Taking-on-Changing-Economy.aspx
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Surface Transportation Board
The Federal agency charged with economic oversight of the
Nation's freight rail system is the Surface Transportation
Board (STB or Board). The three-member, bipartisan Board has
regulatory jurisdiction over railroad rate reasonableness,
mergers, line acquisitions, new rail-line construction,
abandonments of existing rail lines, and the conversion of rail
rights-of-way into hiking and biking trails.
The Board is decisionally independent, although it is
administratively housed within the Department of Transportation
(DOT). Since the economies of freight rail regulation are so
important to the national economy and involve a national
network, Congress gave the STB sole jurisdiction over rail
mergers and consolidations, regulating everything from Federal
antitrust laws to State and municipal laws. The STB also has
exclusive authority to determine whether railroad rates and
services are reasonable.\9\
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\9\Surface Transportation Board, ``Budget Request for FY 2016,''
February 2015, at http://www.dot.gov/sites/dot.gov/files/docs/FY2016-
BudgetEstimate-STB.pdf
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The STB's authorization expired in 1998, and it has
remained unauthorized since that time, each year submitting a
budget request directly to Congress for necessary
appropriations. It has 156 full-time equivalent employees and
receives an annual appropriation that is partially offset with
collections from filing fees.\10\ In the Consolidated and
Further Continuing Appropriations Act of 2015, the STB received
$31.375 million for its operations and staffing, partially
offset by $1.25 million in fees.\11\
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\10\Ibid.
\11\P.L. 113-235
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The STB's major responsibilities related to railroads
include: overseeing and monitoring railroad commercial
practices nationally; enforcing the railroads' common-carrier
obligation; ensuring that charged rates to captive shippers
(those with no other transportation options) are reasonable;
monitoring rail carriers to ensure they are able to earn
adequate returns necessary for the health of the rail system;
calculating the rail carriers' cost of capital; and approving
construction and abandonments of rail lines.
In addition to formal cases brought by shippers, the STB
has several other programs to help resolve shipper and carrier
disputes, including complaints lodged against railroads for
service inadequacies, rates, and car supply concerns. The STB's
Rail Consumer and Public Assistance (RCPA) program helps
address these concerns through a more informal process. The STB
sees this program as beneficial to both shippers and carriers,
because it places shipper concerns immediately before the
involved railroad, which can facilitate a prompt response and
is less burdensome for both parties than a formal proceeding.
With this program, the parties have an opportunity to resolve
their issues in an environment that can produce a timely and
cost-effective result.\12\
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\12\Surface Transportation Board, ``Budget Request for FY 2016,''
February 2015, at http://www.dot.gov/sites/dot.gov/files/docs/FY2016-
BudgetEstimate-STB.pdf
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Rail service issues
The United States Department of Agriculture (USDA) has
reported that in 2013 and 2014 a combined record harvest of
corn, soybeans, and wheat, and increased demand to ship
intermodal containers, energy products, and crushed stone,
challenged the capacity of the United States rail network.\13\
In addition, the harsh winter weather conditions often required
rail operators to cut train lengths by as much as 50 percent,
directly limiting the availability of rail services.\14\
Specifically, rail carriers noted that the weather conditions
exacerbated existing congestion in Chicago, a crucial network
hub.\15\ Broad increases in demand and service available issues
resulted in significant service problems in the industry.\16\
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\13\United States Department of Agriculture, ``Rail Service
Challenges in the Upper Midwest: Implications for Agricultural
Sectors,'' January 2015, at
\14\Ibid.
\15\Surface Transportation Board, ``United States Rail Service
Issues--Data Collection,'' Ex Parte 724, October 8, 2014, at http://
www.stb.dot.gov/decisions/readingroom.nsf/WebDecisionID/
43850?OpenDocument
\16\Ibid.
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Agricultural commodities- particularly in the Upper Midwest
States of Minnesota, Montana, North Dakota, and South Dakota -
were hit especially hard by rail service issues. Farmers in
that region have limited local markets for their products, less
access to barge or other transportation alternatives, and more
limited crop storage relative to the recent expansion of corn
production.\17\ The region experienced significant grain car
backlogs, storage issues, and rail car premiums increases. For
example, the USDA found capacity and service issues caused
shippers to pay record-high car premiums, 28 to 150 percent
above the average previous levels for roughly 65 consecutive
weeks.\18\ The extra costs of transportation and storage drove
down crop prices throughout the region.\19\
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\17\United States Department of Agriculture, ``Rail Service
Challenges in the Upper Midwest: Implications for Agricultural
Sectors,'' January 2015, at http://www.thune.senate.gov/public/
index.cfm/files/serve/?File_id=3777bd24-0350-4894-a654-48a800fcbcce
\18\Ibid.
\19\Ibid.
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The agricultural sector was not the only sector that
experienced rail service issues. Coal-fired utilities, ethanol
manufacturers, propane shippers, and others in the energy
industry voiced concerns throughout 2014 about unreliable
service and growing wait times for rail cars.\20\ The auto
industry has also alleged that rail service delays cost
manufacturers millions of dollars in storage fees, alternate
transport costs, and vehicle shortages at dealerships.\21\
While a particularly severe winter has been responsible for
some rail service delays, the auto industry contends that
additional factors exacerbated the service disruptions,
including a shortage of railcars and an inadequate response to
ameliorate this shortage, the annual month-over-month growth in
auto production and auto exports, and the boom in crude oil
shipped by rail.
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\20\Xcel Energy Comments, ``United States Rail Service Issues,'' Ex
Parte 724, July 31, 2014
\21\Alliance of Automobile Manufacturer Comments, ``United States
Rail Service Issues, Ex Parte 724, April 17, 2014
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Passenger rail operators have stated they have also faced
delay issues. For example, Amtrak has stated that the harsh
weather conditions and increased demand for freight services
has caused delays for its Empire Builder train service.\22\ In
addition, on August 29, 2014, Amtrak filed a complaint against
Canadian National Railway (CN) for causing unacceptable train
delays on the Illini/Saluki service that uses the CN line from
Chicago to Carbondale, Illinois.\23\
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\22\Franz, Justin. ``Amtrak's Empire Builder struggles in freight
boom,'' Washington Times, August 15, 2014, at http://
www.washingtontimes.com/news/2014/aug/15/amtraks-empire-builder-
struggles-in-freight-boom/?page=all.
\23\Amtrak, ``Amtrak Calls on Surface Transportation Board to
Investigate Canadian National Railway,'' press release, September 2,
2014, at http://www.amtrak.com/ccurl/306/662/Amtrak-STB-Investigation-
CN-ATK-14-078.pdf
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The service issues of 2013 and 2014 prompted increased
oversight from STB. In March of 2014, the STB's members wrote
to Canadian Pacific and BNSF Railway Company representatives to
express their concerns that poor rail service was negatively
affecting agricultural, coal, passenger, and other traffic.\24\
On April 10, 2014, in response to a significant decline in
reliable rail service for shippers over the preceding months,
the STB held a public hearing in Washington, D.C. to address
service problems affecting the U.S. freight rail network. Given
that service problems have been particularly acute on the
systems of Canadian Pacific and BNSF Railway Company,
representatives from those two companies testified at the
hearing.\25\ During the hearing, railroad representatives
described several factors that contributed to the deterioration
of rail service, including strained track capacity, unexpected
volume growth, crew shortages, lack of locomotives, severe
weather, and congestion in major corridors, particularly the
Chicago corridor.\26\
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\24\Letters from Daniel R. Elliott III, Chairman, and Ann D.
Begeman, Vice Chairman, STB, to Carl Ice, President and Chief Executive
Officer, BNSF Railway. Company, February 5, 2014 and E. Hunter
Harrison, Chief Executive Officer and Director Canadian Pacific Railway
Company, March 6, 2014
\25\Surface Transportation Board, ``Surface Transportation Board to
Hold Hearing on Rail Service Issues,'' press release, April 1, 2014, at
http://www.stb.dot.gov/__85256593004F576F.nsf/0/
B9B95D1200B9D81985257CAD006A133A?OpenDocument
\26\Surface Transportation Board, ``United States Rail Service
Issues--Grain,'' August 18, 2014, at http://www.stb.dot.gov/decisions/
readingroom.nsf/WebDecisionID/43956?OpenDocument
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At the hearing, farmers and agricultural producers also
expressed concern about delayed fertilizer deliveries,
backlogged grain car orders, and delayed shipments of loaded
grain cars. There were a number of impacts as a result,
including: little to no storage capacity at many grain
elevators; stored grain spoiling; lost sales; penalties
incurred by grain shippers for products not delivered on time;
and buyers shifting to foreign suppliers.\27\ Also at the
hearing, representatives from other industries, such as coal,
chemicals, feed, sugar, and paper expressed similar supply
chain disruptions.\28\
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\27\Ibid.
\28\Ibid.
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Subsequent to the hearing, on April 15, 2014, the STB
directed Canadian Pacific and BNSF Railway Company to provide
plans to ensure delivery of fertilizer shipments, as well as
provide status reports of the fertilizer shipments over a six-
week period.\29\ In response, BNSF Railway Company added rail
cars to the existing fertilizer service fleet and allowed
locomotives to remain with fertilizer cars during loading and
unloading in an effort to reduce potential delays and expedite
turn-around times.\30\
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\29\Surface Transportation Board, ``U.S. Rail Service Issues,'' Ex
Parte 724, April 15, 2014
\30\Ibid.
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Since the directive in April, the STB has closely monitored
Canadian Pacific's and BNSF Railway Company's progress in
moving the 2013/2014 crop. In May 2014, STB representatives
conducted meetings in Sioux Falls, SD, Malta, MT, Bloomington,
MN, and other cities in the region.\31\ On June 20, 2014, in
recognition of the limited amount of time until next harvest
and the large quantities of grain that still needed to be
moved, the Board again directed Canadian Pacific and BNSF
Railway Company to provide and/or update their plans to reduce
unfilled grain car orders, to resolve grain car delays, and to
provide weekly status reports on the movement of grain on their
networks.\32\
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\31\Doering, Christopher, ``Improved rail service is a start, S.D.
senators say,'' Argus Leader, May 14, 2014, at http://
www.argusleader.com/story/news/2014/05/14/thune-johnson-see-
improvement-freight-rail-service-urge-railroads/9098043/
\32\Surface Transportation Board, ``U.S. Rail Service Issues-
Grain,'' Ex Parte 724, June 20, 2014
---------------------------------------------------------------------------
On October 8, 2014, the Board expanded on the June 2014
action and required all Class I rail carriers and the Chicago
Transportation Coordination Office (CTCO), through its Class I
members, to submit weekly performance reports.\33\ In making
the decision, the Board noted that the United States rail
system is an interconnected network, and one carrier's service
issues can affect the performance of other carriers.\34\
Further, although severity differed, shippers reported problems
on multiple carriers. On December 30, 2014, the STB issued a
notice of proposed rulemaking soliciting comment on new
regulations requiring all Class I railroads and the CTCO,
through its Class I members, to report certain service
performance metrics on a weekly basis.\35\
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\33\Surface Transportation Board, ``U.S. Rail Service Issues-Data
Collection,'' Ex Parte 724, October 8, 2014, at http://www.stb.dot.gov/
decisions/readingroom.nsf/WebDecisionID/43850?OpenDocument
\34\Ibid.
\35\Surface Transportation Board, ``U.S. Rail Service Issues-
Performance Data Reporting,'' Ex Parte 724, December 30, 2014, at
http://www.stb.dot.gov/RailServiceIssues.nsf/
358097664f8d5cae85257e0500747798/dd91cdf262293ab985257dbf00680321/
$FILE/44168.pdf
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The Committee has conducted active oversight to better
understand and address current and emerging service issues. For
example, in July 2014 Senator Thune requested that the STB
collect additional performance measures on locomotive use and
grain car backlogs, and in August the STB required those
additional measures.\36\ The Committee also held oversight
hearings in September 2014 and January 2015, where grain,
chemical, automobile, and fertilizer company representatives
provided detailed testimony on rail service issues.\37\
Throughout 2014, Committee members also engaged with railroads,
shippers, and the STB to ensure service improvement.
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\36\Office of U.S. Senator John Thune, ``Following Request from
Thune, STB Issues Reporting Requirements to Improve Rail Service,''
press release, August 18, 2014, at http://www.thune.senate.gov/public/
index.cfm/2014/8/following-request-from-thune-stb-issues-reporting-
requirements-to-improve-rail-service
\37\U.S. Congress, Senate Committee on Commerce, Science, and
Transportation, Freight Rail Service: Improving the Performance of
America's Rail System, hearings, 113th Cong., 2nd sess., September 10,
2014 (Washington, DC: GPO, 2014). U.S. Congress, Senate Committee on
Commerce, Science, and Transportation, Freight Rail Transportation:
Enhancing Safety, Efficiency, and Commerce, hearings, 114h Cong., 1st
sess., January 28, 2015 (Washington, DC: GPO, 2015)
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Following the recent actions, outreach, and changing
conditions, rail carriers have made considerable progress
across a variety of service metrics, including dwell times and
turn times.\38\ For example, according to the STB, BNSF Railway
Company has reduced not only the number of backlogged orders
but also the average number of days late for these orders.\39\
In 2014, BNSF Railway Company invested about $5.5 billion in
its capacity, expanding its locomotive, railcar, workforce, and
double track miles.\40\ BNSF Railway Company decreased their
grain car orders past due from 6,166 as of October 18, 2014, to
550 cars as of April 11, 2015, though some of this decrease
occurred as a result of usual seasonal variability.\41\ Across
the industry, AAR estimated that in 2014 freight railroads
spent a total of $27 billion on infrastructure and equipment,
and it estimates investments in 2015 will exceed $29
billion.\42\
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\38\Surface Transportation Board, ``EP 724: Rail Service Issues,''
April 11, 2015, at http://www.stb.dot.gov/stb/
railserviceupdateslanding.html
\39\BNSF Status Report, Attachment C, ``U.S. Rail Service Issues-
Grain,'' Ex Parte 724, August 8, 2014
\40\BNSF Railway Company, ``Improving Our Network Performance: BNSF
Service Update,'' April 2015, at http://www.bnsf.com/customers/service-
page/pdf/bnsf-service-deck.pdf
\41\Surface Transportation Board, ``Rail Service Issues Reports,''
Ex Parte 724, BNSF reports posted on April 15, 2015 and October 22,
2014, at http://www.stb.dot.gov/stb/railserviceissues/
rail_service_reports.html#loaded
\42\Association of American Railroads, ``Freight Railroad Capacity
and Investment,'' January 2015, at https://www.aar.org/
BackgroundPapers/Freight Railroad Capacity and Investment.pdf
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While STB has worked diligently to address service issues,
and rail carriers have improved performance, the recent
challenges have highlighted inefficiencies at the agency.
Congressional oversight, including extensive communication with
STB leadership and the Committee hearings in September 2014 and
January 2015, has identified several areas for improvement.
Some inefficiencies result from insufficient authority. For
example, the STB currently does not have authority to
proactively investigate rail issues on its own initiative.
Other inefficiencies result from burdensome processes. For
example, though STB has taken action to improve simplified rate
review methodologies, it recently found the litigation costs
for the ``Simplified Stand-Alone Cost'' are about $4
million.\43\ The STB's previous authorization expired in 1998,
and S. 808 includes provisions to improve the efficiency of the
agency.
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\43\Surface Transportation Board, ``Rate Regulation Reforms,'' Ex
Parte 715, March 13, 2015, at http://www.stb.dot.gov/decisions/
readingroom.nsf/UNID/C945E11FDC839C5A85257E06006D3D45/$file/44230.pdf
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Summary of Provisions
S. 808, the Surface Transportation Board Reauthorization
Act of 2015, would establish the STB as an independent agency
outside of DOT. It would authorize the DOT Office of Inspector
General (OIG) to review financial management, property
management, and business operations of the STB. It also would
authorize the STB for fiscal year 2016 through fiscal year
2020.
To address inefficient quorum requirements, it would expand
membership of the STB from three members to five members, and
it would allow for limited instances in which a majority of
Board members can communicate without requiring a full public
meeting. It would set disclosure requirements for those
meetings.
To better allow for proactive engagement, S. 808 would
allow the STB to initiate certain investigations on its own
initiative and set restrictions on those investigations. It
also would set notification requirements, timelines, and other
due process requirements for parties under investigation.
To improve review processes, S. 808 would set rate review
timelines for full stand-alone cost rate challenges to ensure
the STB efficiently decides on petitioned relief. It also would
require the STB to maintain one or more streamlined processes
for rate cases in which the full stand-alone cost presentation
is too costly, given the value of the case.
To increase the efficiency of dispute resolution, S. 808
would expand existing work at the STB to encourage and provide
voluntary arbitration processes. S. 808 would maintain the
current practice in which arbitration process may be commenced
only when both relevant parties opt-in, and it would set the
issues, such as rates and practices, that are eligible for
arbitration. It also would set conditions for arbitration, such
as only if the rail carrier has market dominance. It would cap
relief from arbitration at $2 million for practice disputes and
$25 million for rate dispute damages. It would allow the STB to
review arbitration decisions based on specified factors.
To improve transparency and accountability, S. 808 would
include several reporting requirements. It would require
quarterly reports that describe the STB's progress toward
addressing the issues raised in unfinished regulatory
proceedings. It also would require quarterly reports of rail
rate review cases pending or completed by the STB during the
previous quarter. In addition, it would require the STB to post
on its public website quarterly reports formal and informal
service complaints received by the STB during the previous
quarter. Further, it would require the STB to submit an annual
report on its activities, including each instance where it
initiates an investigation on its own initiative.
S. 808 would require studies on important rail issues. It
would require the Government Accountability Office to commence
a study of rail transportation contract proposals containing
multiple origin-to-destinations movements. It also would
require the STB to complete a report that indicates whether
current large rate case methodologies are sufficient, not
unduly complex, and cost effective. The report must also
indicate whether alternative methodologies exist, or could be
developed, to streamline, expedite, or address the complexity
of large rate cases.
S. 808 would make other technical corrections, minor
changes, and clarifications. It would remove various obsolete
provisions. It also would allow for a rail carrier's agent to
be located outside of Washington, D.C. S. 808 also would
clarify that a carrier's capability to meets its current and
future service needs is relevant when considering revenue
adequacy.\44\
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\44\Interstate Commerce Commission, ``Coal Rate Guidelines
Nationwide,'' Ex Parte 347 (Sub-No. 1) (1985), 535-6 (acknowledging the
relevance of ``current and future service needs'' when determining the
financial soundness of carriers). Concerned Shipper Associations
Comments, ``Railroad Revenue Adequacy,'' Ex Parte 722, September 5,
2014
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Legislative History
S. 808 was introduced on March 19, 2015, and is sponsored
by Senators Thune and Nelson. On March 25, 2015, the Committee
met in Executive Session during which S. 808 was considered.
The bill was reported favorably by voice vote.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
S. 808--Surface Transportation Board Reauthorization Act of 2015
Summary: S. 808 would authorize appropriations for the
programs of the Surface Transportation Board (STB), establish
the STB as a government agency independent of the Department of
Transportation (DOT), and authorize other changes in the
agency's operations. Based on information from the STB, CBO
estimates that implementing the bill would cost $198 million
over the 2016-2020 period, assuming the appropriation of the
amounts authorized and estimated to be necessary.
Enacting S. 808 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
S. 808 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary effect of S. 808 is shown in the following table. The
costs of this legislation fall within budget function 400
(transportation).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------------
2016 2017 2018 2019 2020 2016-2020
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Operation of the Surface Transportation Board:
Authorization Level................................. 33 35 36 36 36 176
Estimated Outlays................................... 30 34 36 36 36 172
Additional Activities by the Surface Transportation
Board:
Estimated Authorization Level....................... 6 6 6 6 6 30
Estimated Outlays................................... 3 5 6 6 6 26
Total Changes:
Estimated Authorization Level................... 39 41 42 42 42 206
Estimated Outlays 33 39 42 42 42 198
----------------------------------------------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes the bill
will be enacted late in fiscal year 2015 and that the amounts
authorized and estimated to be necessary will be appropriated.
S. 808 would specifically authorize the appropriation of an
additional $176 million for the operation of the STB over the
2016-2020 period. The STB received an appropriation of $31
million in fiscal year 2015.
According to the STB, the requirements in the bill to
expand the number of board members and their associated staff,
to allow it to initiate proceedings against companies, and to
make it independent of DOT would impose additional costs on the
board. CBO estimates those additional responsibilities would
cost $6 million a year in addition to the amounts specifically
authorized in the bill. Those additional amounts would
primarily cover salaries and benefits for additional employees
needed over the 2016-2017 period and to modify information
technology systems. In total, CBO estimates that implementing
S. 808 would cost $198 million over the 2016-2020 period.
Pay-As-You-Go considerations: None.
Intergovernmental and private-sector impact: S. 808
contains no intergovernmental mandates or private-sector
mandates as defined in UMRA and would not affect the budgets of
state, local, or tribal governments.
Estimate prepared by: Federal costs: Sarah Puro; Impact on
state, local, and tribal governments: Melissa Merrell; Impact
on the private sector: Amy Petz.
Estimate approved by: Theresa Gullo, Assistant Director for
Budget Analysis.
Regulatory Impact
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
number of persons covered
S. 808 is intended to improve the efficiency of the STB by
making modifications to the STB's existing statutory authority.
The bill would codify actions already undertaken by the STB,
improve the processes for rate and practice cases, and expedite
review timelines, which would have no effect on the number of
individuals regulated. For railroads and shippers, the
efficiencies at the STB may reduce the cost of compliance. S.
808 also would give the STB the authority to initiate certain
investigations; however, the investigations would still need to
be within the scope of their existing authority, which would
not expand the persons or entities covered. S. 808 would expand
the number of Board members, which would not have any
foreseeable effect on the issues or entities regulated by the
STB. While S. 808 would require certain studies and reports on
rail issues, such as on multiple origin-to-destination pairs,
and on rate case procedures and methodologies these provisions
do not prescribe any particular finding or any action as a
result of those findings.
economic impact
S. 808 is expected to have a positive impact on the U.S.
economy. The bill would improve inefficiencies at the STB and
reduce delays in the case review process. The bill would allow
for the STB to better assist shippers and railroads, helping to
ensure rail service problems are addressed in a balanced and
timely manner. These improvements would have helpful economic
benefits, such as helping businesses to get goods to market
more efficiently.
privacy
The reported bill is not expected to have any impact on the
privacy rights of individuals.
paperwork
It is not anticipated that there would be a major increase
in paperwork burdens resulting from the enactment of S. 808.
Congressionally Directed Spending
In compliance with paragraph 4(b) of rule XLIV of the
Standing Rules of the Senate, the Committee provides that no
provisions contained in the bill, as reported, meet the
definition of congressionally directed spending items under the
rule.
Section-by-Section Analysis
Section 1. Short title; table of contents.
This section titles the bill, the ``Surface Transportation
Board Reauthorization Act of 2015.''
Section 2. References to title 49, United States Code.
The section would explain that changes made in this bill,
except where expressly provided otherwise, are made to title 49
of the United States Code.
Section 3. Establishment of Surface Transportation Board as an
independent establishment.
This section would amend administrative provisions to
clarify STB's role as an independent body and require that
submissions or transmissions of budgetary or legislative
matters be submitted concurrently to the President and the
Office of Management and Budget, the Committee on Commerce,
Science, and Transportation of the Senate, and the Committee on
Transportation and Infrastructure of the House of
Representatives. This section also would repeal a requirement
that the DOT provide administrative support to the STB. The
section would make other technical amendments re-organizing the
location of text in the United States Code.
Section 4. Surface Transportation Board membership.
This section would expand membership of the STB from three
members to five in order to address inefficient quorum
requirements.
The nonpublic collaborative discussions provisions in
section 5 of this bill are intended to apply for any number of
STB board members, with or without the expansion to five
members.
Section 5. Nonpublic collaborative discussions.
This section would allow for limited instances in which a
majority of Board members can communicate without requiring a
full public meeting. During such communications, no vote may be
taken, the STB General Counsel must be present, and only Board
members or staff may attend. In addition, the STB would be
required to disclose meeting topics and participants within two
business days of the meeting, unless the discussion relates to
an ongoing proceeding, in which case the disclosure must be
made on the date of the final Board decision. This section
would also require the STB to provide a summary with as much
general information as possible on any sensitive matter
withheld from the public based on current law.
Section 6. Reports.
This section would require the STB to submit an annual
report on its activities, including each instance where it
initiates an investigation on its own initiative.
This section would also require the STB to post on its
public website quarterly reports of rail rate review cases
pending or completed by the STB during the previous quarter. To
help with compliance monitoring of the rate case procedures in
section 11 of this Act, such a report must include summary
information and key dates involved in the case.
This section would also require the STB to post on its
public website quarterly reports of formal and informal service
complaints received by the STB during the previous quarter. The
database must include the type, geographic origin, and
resolution of each complaint.
Section 7. Authorization of appropriations.
This section would authorize STB appropriations for fiscal
year 2016 through 2020 at $33 million, $35 million, $35.5
million, $35.5 million, and $36 million, respectively. Current
STB funding in fiscal year 2015 is $31.4 million.
Section 8. Agent in the District of Columbia.
This section would allow for a rail carrier's agent to be
located outside of Washington, D.C.
Section 9. Department of Transportation Inspector General authority.
This section would authorize the DOT OIG to review
financial management, property management, and business
operations of the STB. It would require the DOT OIG to keep the
appropriate congressional committees informed, issue findings
and recommendations, and report on STB progress in addressing
problems. It would allow the DOT OIG to use investigative
powers (e.g., subpoenas), authorize DOT to use necessary sums
for DOT OIG activities, and authorize reimbursable agreements.
All activities subject to this section are to be paid for
by DOT.
Section 10. Amendment to table of sections.
This section would make conforming technical amendments to
the table of sections.
Section 11. Procedures for rate cases.
This section would require the STB to maintain one or more
streamlined processes for rate cases in which the full stand-
alone cost presentation is too costly, given the value of the
case. This requirement would build on existing work at the STB,
and it would ensure the simplified reviews are accompanied by
expedited handling.
This section would also set rate review timelines for full
stand-alone cost rate challenges to ensure the STB efficiently
decides on relief. Timelines would apply to: discovery (150
days); development of evidentiary record (155 days); closing
brief (60 days); and final Board decision (180 days). The
section would provide an option for a Board-granted extension
upon request or in the interest of due process.
Finally, the section would require the STB to initiate a
proceeding to assess other procedures, including procedures
common in other litigation settings, to help expedite rate
cases.
Section 12. Investigative authority.
This section would allow the STB to initiate investigations
on its own initiative and set restrictions on those
investigations. Current law only allows investigations upon
complaint. For STB-initiated investigations, the STB would be
required to: provide 30-day notice to parties under
investigation; only investigate issues of national or regional
significance; permit parties under investigation to file a
written statement on the matter subject to investigation; make
available to parties under investigation and Board members any
recommendations and a summary of findings; dismiss any
investigation that is not concluded by the STB with
administrative finality within 1 year after the date on which
it was commenced; would require the STB to separate
investigating and decision-making functions of staff to the
maximum extent practicable; and, within 90 days of receiving
findings or recommendations, dismiss an investigation or
initiate a proceeding to determine whether a violation has
occurred.
The requirement to dismiss any investigation that is not
concluded by the Board with administrative finality within 1
year after the date on which it was commenced would only
include the time period needed to generate recommendations and
summary of findings. The time period needed to complete a
proceeding, after receipt of the recommendations and summary of
findings, would not be included in the 1 year time limitation
for investigations.
For STB-initiated investigations, if the Board determines a
violation has occurred, this section would allow for de novo
review of the Board's order and provide authority for the
United States court of appeals to affirm, modify, or set aside
all or part of the order or remand the proceeding. This section
also would limit any Board-ordered remedies to be prospective-
only.
Finally, this section would require, not later than 1 year
after the date of enactment of this act, the STB to issue rules
for the investigations that it initiates.
Section 13. Arbitration of certain rail rates, practices, and common
carrier service expectation disputes.
This section would expand existing work at the STB to
encourage and provide arbitration for dispute resolution. This
section would require, not later than 1 year after the
enactment of this Act, the STB to promulgate regulations
establishing a voluntary and binding arbitration process for
certain rate and practice disputes. Among other issues, this
arbitration process would apply to rates, accessorial charges,
and rules and practices as applied to particular rail
transportation, but it would not apply to labor protective
conditions, issues of industry-wide applicability, certain
license issues, and disputes solely between two or more
carriers.
This section would require arbitration process only to be
commenced when relevant parties opt-in. The process is
available only if the rail carrier has market dominance. This
section would set forth terms that require any arbitration
decision to: be consistent with sound principles of rail
regulation economics; be in writing; contain findings of fact
and conclusions; bind the parties; and not have any
precedential effect. It would limit the STB from separately
reviewing cases, and it requires that arbitrators give due
consideration to certain rail rate regulation issues.
This section would specifies timelines for the: arbitrator
selection (14 days after initiation); evidentiary process (90
days); and decision (30 days after evidentiary record closes).
It would allow certain discretionary extensions. The section
would also set a selection process for arbitrators and
establishes equal sharing for the cost of the arbitrators, but
not other associated arbitration costs.
This section would cap relief at $2 million for practice
disputes and $25 million for rate dispute damages. It would
limit rate prescription from arbitration to not longer than
five years from the date of the decision. The Board would only
be able to review an arbitration decision if there is a clear
abuse of arbitral authority or discretion, it does not comply
with statute, the relief award cap, or sound principles of rail
regulation economics.
Section 14. Effect of proposals for rates from multiple origins and
destinations.
This section would require, within 90 days of the date of
the enactment of this Act, the Government Accountability Office
to commence a study of rail transportation contract proposals
containing multiple origin-to-destinations movements and to
report results to the Committee on Commerce, Science, and
Transportation of the Senate and the Committee on
Transportation and Infrastructure of the House of
Representatives.
Section 15. Reports.
This section would require the STB to submit, within 1 year
of the enactment of this Act, a report to the Committee on
Commerce, Science, and Transportation of the Senate and the
Committee on Transportation and Infrastructure of the House of
Representatives that indicates whether current large rate case
methodologies are sufficient, not unduly complex, and cost
effective. The report would also be required to indicate
whether alternative methodologies exist, or could be developed,
to streamline, expedite, or address the complexity of large
rate cases. Any alternative methodologies must to be consistent
with sound economic principles.
This section would require the STB to provide, within 60
days of the date of enactment of this Act, quarterly reports to
the Committee on Commerce, Science, and Transportation of the
Senate and the Committee on Transportation and Infrastructure
of the House of Representatives that describe the STB's
progress toward addressing the issues raised in unfinished
regulatory proceedings.
Section 16. Criteria.
This section would clarify standards and procedures for
evaluating revenue adequacy and emphasizes the infrastructure
needed in order for rail carriers to be able to meet the
present and future demand for rail service. This section would
not require any change to how the STB determines railroad
revenue adequacy.
Section 17. Construction.
This section would clarify that nothing in the bill affects
any cases being considered by the STB at the time of enactment.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
material is printed in italic, existing law in which no change
is proposed is shown in roman):
TITLE 49. TRANSPORTATION
SUBTITLE I. DEPARTMENT OF TRANSPORTATION
[CHAPTER 7.] CHAPTER 13. SURFACE TRANSPORTATION BOARD
SUBCHAPTER I. ESTABLISHMENT
Sec. [701]1301. Establishment of Board
[(a) Establishment.--There is hereby established within the
Department of Transportation the Surface Transportation Board.]
(a) Establishment.--The Surface Transportation Board is an
independent establishment of the United States Government.
(b) Membership.--
(1) The Board shall consist of [3 members] 5 members,
to be appointed by the President, by and with the
advice and consent of the Senate. Not more than [2
members] 3 members may be appointed from the same
political party.
[(2) At any given time, at least 2 members of the
Board shall be individuals with professional standing
and demonstrated knowledge in the fields of
transportation or transportation regulation, and at
least one member shall be an individual with
professional or business experience (including
agriculture) in the private sector.]
(2) At all times--
(A) at least 3 members of the Board shall be
individuals with professional standing and
demonstrated knowledge in the fields of
transportation, transportation regulation, or
economic regulation; and
(B) at least 2 members shall be individuals
with professional or business experience
(including agriculture) in the private sector.
(3) The term of each member of the Board shall be 5
years and shall begin when the term of the predecessor
of that member ends. An individual appointed to fill a
vacancy occurring before the expiration of the term for
which the predecessor of that individual was appointed,
shall be appointed for the remainder of that term. When
the term of office of a member ends, the member may
continue to serve until a successor is appointed and
qualified, but for a period not to exceed one year. The
President may remove a member for inefficiency, neglect
of duty, or malfeasance in office.
[(4) On January 1, 1996, the members of the
Interstate Commerce Commission serving unexpired terms
on December 29, 1995, shall become members of the
Board, to serve for a period of time equal to the
remainder of the term for which they were originally
appointed to the Interstate Commerce Commission. Any
member of the Interstate Commerce Commission whose term
expires on December 31, 1995, shall become a member of
the Board, subject to paragraph (3).]
[(5)](4) No individual may serve as a member of the
Board for more than 2 terms. In the case of an
individual [who becomes a member of the Board pursuant
to paragraph (4), or an individual] appointed to fill a
vacancy occurring before the expiration of the term for
which the predecessor of that individual was appointed,
such individual may not be appointed for more than one
additional term.
[(6)](5) A member of the Board may not have a
pecuniary interest in, hold an official relation to, or
own stock in or bonds of, a carrier providing
transportation by any mode and may not engage in
another business, vocation, or employment.
[(7)](6) A vacancy in the membership of the Board
does not impair the right of the remaining members to
exercise all of the powers of the Board. The Board may
designate a member to act as Chairman during any period
in which there is no Chairman designated by the
President.
(c) Chairman.--
(1) There shall be at the head of the Board a
Chairman, who shall be designated by the President from
among the members of the Board. The Chairman shall
receive compensation at the rate prescribed for level
III of the Executive Schedule under section 5314 of
title 5.
(2) Subject to the general policies, decisions,
findings, and determinations of the Board, the Chairman
shall be responsible for administering the Board. The
Chairman may delegate the powers granted under this
paragraph to an officer, employee, or office of the
Board. The Chairman shall--
(A) appoint and supervise, other than regular
and full-time employees in the immediate
offices of another member, the officers and
employees of the Board, including attorneys to
provide legal aid and service to the Board and
its members, and to represent the Board in any
case in court;
(B) appoint the heads of offices with the
approval of the Board;
(C) distribute Board business among officers
and employees and offices of the Board;
(D) prepare requests for appropriations for
the Board and submit those requests to the
President and Congress with the prior approval
of the Board; and
(E) supervise the expenditure of funds
allocated by the Board for major programs and
purposes.
Sec. [702]1302. Functions
Except as otherwise provided in the ICC Termination Act of
1995, or the amendments made thereby, the Board shall perform
all functions that, immediately before January 1, 1996, were
functions of the Interstate Commerce Commission or were
performed by any officer or employee of the Interstate Commerce
Commission in the capacity as such officer or employee.
Sec. [703]1303. Administrative provisions
[(a) Executive Reorganization.--Chapter 9 of title 5, United
States Code, shall apply to the Board in the same manner as it
does to an independent regulatory agency, and the Board shall
be an establishment of the United States Government.
[[(b)](a) Open Meetings.--For purposes of section 552b of
title 5, United States Code, the Board shall be deemed to be an
agency.]
(a) Open Meetings.--
(1) In general.--The Board shall be deemed to be an
agency for purposes of section 552b of title 5.
(2) Nonpublic collaborative discussions.--
(A) In general.--Notwithstanding section 552b
of title 5, a majority of the members may hold
a meeting that is not open to public
observation to discuss official agency business
if--
(i) no formal or informal vote or
other official agency action is taken
at the meeting;
(ii) each individual present at the
meeting is a member or an employee of
the Board; and
(iii) the General Counsel of the
Board is present at the meeting.
(B) Disclosure of nonpublic collaborative
discussions.--Except as provided under
subparagraph (C), not later than 2 business
days after the conclusion of a meeting under
subparagraph (A), the Board shall make
available to the public, in a place easily
accessible to the public--
(i) a list of the individuals present
at the meeting; and
(ii) a summary of the matters
discussed at the meeting, except for
any matters the Board properly
determines may be withheld from the
public under section 552b(c) of title
5.
(C) Summary.--If the Board properly
determines matters may be withheld from the
public under section 555b(c) of title 5, the
Board shall provide a summary with as much
general information as possible on those
matters withheld from the public.
(D) Ongoing proceedings.--If a discussion
under subparagraph (A) directly relates to an
ongoing proceeding before the Board, the Board
shall make the disclosure under subparagraph
(B) on the date of the final Board decision.
(E) Preservation of open meetings
requirements for agency action.--Nothing in
this paragraph may be construed to limit the
applicability of section 552b of title 5 with
respect to a meeting of the members other than
that described in this paragraph.
(F) Statutory construction.--Nothing in this
paragraph may be construed--
(i) to limit the applicability of
section 552b of title 5 with respect to
any information which is proposed to be
withheld from the public under
subparagraph (B)(ii); or
(ii) to authorize the Board to
withhold from any individual any record
that is accessible to that individual
under section 552a of title 5, United
States Code.
[(c) Independence.--In the performance of their functions,
the members, employees, and other personnel of the Board shall
not be responsible to or subject to the supervision or
direction of any officer, employee, or agent of any other part
of the Department of Transportation.]
[(d)](b) Representation by Attorneys.--Attorneys designated
by the Chairman of the Board may appear for, and represent the
Board in, any civil action brought in connection with any
function carried out by the Board pursuant to this chapter or
subtitle IV or as otherwise authorized by law.
[(e)](c) Admission to Practice.--Subject to section 500 of
title 5, the Board may regulate the admission of individuals to
practice before it and may impose a reasonable admission fee.
[(f) Budget Requests.--In each annual request for
appropriations by the President, the Secretary of
Transportation shall identify the portion thereof intended for
the support of the Board and include a statement by the Board--
[(1) showing the amount requested by the Board in its
budgetary presentation to the Secretary and the Office
of Management and Budget; and
[(2) an assessment of the budgetary needs of the
Board.
[(g) Direct Transmittal to Congress.--The Board shall
transmit to Congress copies of budget estimates, requests, and
information (including personnel needs), legislative
recommendations, prepared testimony for congressional hearings,
and comments on legislation at the same time they are sent to
the Secretary of Transportation. An officer of an agency may
not impose conditions on or impair communications by the Board
with Congress, or a committee or Member of Congress, about the
information.]
(d) Submission of Certain Documents to Congress.--
(1) In general.--If the Board submits any budget
estimate, budget request, supplemental budget estimate,
or other budget information, legislative
recommendation, prepared testimony for a congressional
hearing, or comment on legislation to the President or
to the Office of Management and Budget, the Board shall
concurrently submit a copy of such document to--
(A) the Committee on Commerce, Science, and
Transportation of the Senate; and
(B) the Committee on Transportation and
Infrastructure of the House of Representatives.
(2) No approval required.--No officer or agency of
the United States has any authority to require the
Board to submit budget estimates or requests,
legislative recommendations, prepared testimony for
congressional hearings, or comments on legislation to
any officer or agency of the United States for
approval, comments, or review before submitting such
recommendations, testimony, or comments to Congress.
Sec. [704]1304. [Annual report] Reports
(a) Annual Report.--The Board shall annually transmit to the
Congress a report [on its activities.] on its activities,
including each instance in which the Board has initiated an
investigation on its own initiative under this chapter or
subtitle IV.
(b) Rate Case Review Metrics.--
(1) Quarterly reports.--The Board shall post a
quarterly report of rail rate review cases pending or
completed by the Board during the previous quarter that
includes--
(A) summary information of the case,
including the docket number, case name,
commodity or commodities involved, and rate
review guideline or guidelines used;
(B) the date on which the rate review
proceeding began;
(C) the date for the completion of discovery;
(D) the date for the completion of the
evidentiary record;
(E) the date for the submission of closing
briefs;
(F) the date on which the Board issued the
final decision; and
(G) a brief summary of the final decision;
(2) Website posting.--Each quarterly report shall be
posted on the Board's public website.
(c) Complaints.--
(1) In general.--The Board shall establish and
maintain a database of complaints received by the
Board.
(2) Quarterly reports.--The Board shall post a
quarterly report of formal and informal service
complaints received by the Board during the previous
quarter that includes--
(A) the date on which the complaint was
received by the Board;
(B) a list of the type of each complaint;
(C) the geographic region of each complaint;
and
(D) the resolution of each complaint, if
appropriate.
(3) Written consent.--The quarterly report may
identify a complainant that submitted an informal
complaint only upon the written consent of the
complainant.
(4) Website posting.--Each quarterly report shall be
posted on the Board's public website.
Sec. [705]1305. Authorization of appropriations
There are authorized to be appropriated for the activities of
the Board--
[(1) $8,421,000 for fiscal year 1996;
[(2) $12,000,000 for fiscal year 1997; and
[(3) $12,000,000 for fiscal year 1998.]
(1) $33,000,000 for fiscal year 2016;
(2) $35,000,000 for fiscal year 2017;
(3) $35,500,000 for fiscal year 2018;
(4) $35,500,000 for fiscal year 2019; and
(5) $36,000,000 for fiscal year 2020.
Sec. [706]1306. Reporting official action
(a) Reports on Proceedings.--The Board shall make a written
report of each proceeding conducted on complaint or on its own
initiative and furnish a copy to each party to that proceeding.
The report shall include the findings, conclusions, and the
order of the Board and, if damages are awarded, the findings of
fact supporting the award. The Board may have its reports
published for public use. A published report of the Board is
competent evidence of its contents.
(b) Special Rules for Matters Related to Rail Carriers.--
(1) When action of the Board in a matter related to a
rail carrier is taken by the Board, an individual
member of the Board, or another individual or group of
individuals designated to take official action for the
Board, the written statement of that action (including
a report, order, decision and order, vote, notice,
letter, policy statement, or regulation) shall
indicate--
(A) the official designation of the
individual or group taking the action;
(B) the name of each individual taking, or
participating in taking, the action; and
(C) the vote or position of each
participating individual.
(2) If an individual member of a group taking an
official action referred to in paragraph (1) does not
participate in it, the written statement of the action
shall indicate that the member did not participate. An
individual participating in taking an official action
is entitled to express the views of that individual as
part of the written statement of the action. In
addition to any publication of the written statement,
it shall be made available to the public under section
552(a) of title 5.
Sec. [721]1321. Powers
(a) In General.--The Board shall carry out this chapter and
subtitle IV. Enumeration of a power of the Board in this
chapter or subtitle IV does not exclude another power the Board
may have in carrying out this chapter or subtitle IV. The Board
may prescribe regulations in carrying out this chapter and
subtitle IV.
(b) Inquiries, Reports, and Orders.--The Board may--
(1) inquire into and report on the management of the
business of carriers providing transportation and
services subject to subtitle IV;
(2) inquire into and report on the management of the
business of a person controlling, controlled by, or
under common control with those carriers to the extent
that the business of that person is related to the
management of the business of that carrier;
(3) obtain from those carriers and persons
information the Board decides is necessary to carry out
subtitle IV; and
(4) when necessary to prevent irreparable harm, issue
an appropriate order without regard to subchapter II of
chapter 5 of title 5.
(c) Subpoena Witnesses.--
(1) The Board may subpoena witnesses and records
related to a proceeding of the Board from any place in
the United States, to the designated place of the
proceeding. If a witness disobeys a subpoena, the
Board, or a party to a proceeding before the Board, may
petition a court of the United States to enforce that
subpoena.
(2) The district courts of the United States have
jurisdiction to enforce a subpoena issued under this
section. Trial is in the district in which the
proceeding is conducted. The court may punish a refusal
to obey a subpoena as a contempt of court.
(d) Depositions.--
(1) In a proceeding, the Board may take the testimony
of a witness by deposition and may order the witness to
produce records. A party to a proceeding pending before
the Board may take the testimony of a witness by
deposition and may require the witness to produce
records at any time after a proceeding is at issue on
petition and answer.
(2) If a witness fails to be deposed or to produce
records under paragraph (1), the Board may subpoena the
witness to take a deposition, produce the records, or
both.
(3) A deposition may be taken before a judge of a
court of the United States, a United States magistrate
judge, a clerk of a district court, or a chancellor,
justice, or judge of a supreme or superior court, mayor
or chief magistrate of a city, judge of a county court,
or court of common pleas of any State, or a notary
public who is not counsel or attorney of a party or
interested in the proceeding.
(4) Before taking a deposition, reasonable notice
must be given in writing by the party or the attorney
of that party proposing to take a deposition to the
opposing party or the attorney of record of that party,
whoever is nearest. The notice shall state the name of
the witness and the time and place of taking the
deposition.
(5) The testimony of a person deposed under this
subsection shall be taken under oath. The person taking
the deposition shall prepare, or cause to be prepared,
a transcript of the testimony taken. The transcript
shall be subscribed by the deponent.
(6) The testimony of a witness who is in a foreign
country may be taken by deposition before an officer or
person designated by the Board or agreed on by the
parties by written stipulation filed with the Board. A
deposition shall be filed with the Board promptly.
(e) Witness Fees.--Each witness summoned before the Board or
whose deposition is taken under this section and the individual
taking the deposition are entitled to the same fees and mileage
paid for those services in the courts of the United States.
Sec. [722]1322. Board action
(a) Effective Date of Actions.--Unless otherwise provided in
subtitle IV, the Board may determine, within a reasonable time,
when its actions, other than an action ordering the payment of
money, take effect.
(b) Terminating and Changing Actions.--An action of the Board
remains in effect under its own terms or until superseded. The
Board may change, suspend, or set aside any such action on
notice. Notice may be given in a manner determined by the
Board. A court of competent jurisdiction may suspend or set
aside any such action.
(c) Reconsidering Actions.--The Board may, at any time on its
own initiative because of material error, new evidence, or
substantially changed circumstances--
(1) reopen a proceeding;
(2) grant rehearing, reargument, or reconsideration
of an action of the Board; or
(3) change an action of the Board.
(1) An interested party may petition to reopen and
reconsider an action of the Board under this subsection
under regulations of the Board.
(d) Finality of Actions.--Notwithstanding subtitle IV [49
USCS Sec. Sec. 10101 et seq.], an action of the Board under
this section is final on the date on which it is served, and a
civil action to enforce, enjoin, suspend, or set aside the
action may be filed after that date.
Sec. [723]1323. Service of notice in Board proceedings
(a) Designation of Agent.--A carrier providing transportation
subject to the jurisdiction of the Board under subtitle IV
shall designate an agent [in the District of Columbia,] on whom
service of notices in a proceeding before, and of actions of,
the Board may be made.
(b) Filing and Changing Designations.--A designation under
subsection (a) shall be in writing and filed with the Board.
The designation may be changed at any time in the same manner
as originally made.
(c) Service of Notice.--Except as otherwise provided, notices
of the Board shall be served on its designated agent at the
office or usual place of residence [in the District of
Columbia] of that agent. A notice of action of the Board shall
be served immediately on the agent or in another manner
provided by law. If that carrier does not have a designated
agent, service may be made by posting the notice in the office
of the Board.
(d) Special Rule for Rail Carriers.--In a proceeding
involving the lawfulness of classifications, rates, or
practices of a rail carrier that has not designated an agent
under this section, service of notice of the Board on an
attorney in fact for the carrier constitutes service of notice
on the carrier.
Sec. [724]1324. Service of process in court proceedings
(a) Designation of Agent.--A carrier providing transportation
subject to the jurisdiction of the Board under subtitle IV
shall designate an agent [in the District of Columbia] on whom
service of process in an action before a district court may be
made. Except as otherwise provided, process in an action before
a district court shall be served on the designated agent of
that carrier at the office or usual place of residence [in the
District of Columbia] of that agent. If the carrier does not
have a designated agent, service may be made by posting the
notice in the office of the Board.
(b) Changing Designation.--A designation under this section
may be changed at any time in the same manner as originally
made.
[Sec. 725. Administrative support
[The Secretary of Transportation shall provide administrative
support for the Board.]
Sec. [726]1325. Railroad-Shipper Transportation Advisory Council
(a) Establishment; Membership.--There is established the
Railroad-Shipper Transportation Advisory Council (in this
section referred to as the ``Council'') to be composed of 19
members, of which 15 members shall be appointed by the Chairman
of the Board, after recommendation from rail carriers and
shippers, within 60 days after December 29, 1995. The members
of the Council shall be appointed as follows:
(1) The members of the Council shall be appointed
from among citizens of the United States who are not
regular full-time employees of the United States and
shall be selected for appointment so as to provide as
nearly as practicable a broad representation of the
various segments of the railroad and rail shipper
industries.
(2) Nine of the members shall be appointed from
senior executive officers of organizations engaged in
the railroad and rail shipping industries, which 9
members shall be the voting members of the Council.
Council action and Council positions shall be
determined by a majority vote of the members present. A
majority of such voting members shall constitute a
quorum. Of such 9 voting members--
(A) at least 4 shall be representative of
small shippers (as determined by the Chairman);
and
(B) at least 4 shall be representative of
Class II or III railroads.
(3) The remaining 6 members of the Council shall
serve in a nonvoting advisory capacity only, but shall
be entitled to participate in Council deliberations. Of
the remaining members--
(A) 3 shall be representative of Class I
railroads; and
(B) 3 shall be representative of large
shipper organizations (as determined by the
Chairman).
(4) The Secretary of Transportation and the members
of the Board shall serve as ex officio, nonvoting
members of the Council. The Council shall not be
subject to the Federal Advisory Committee Act. A list
of the members appointed to the Council shall be
forwarded to the Chairmen and ranking members of the
Committee on Commerce, Science, and Transportation of
the Senate and the Committee on Transportation and
Infrastructure of the House of Representatives.
(5) Each ex officio member of the Council may
designate an alternate, who shall serve as a member of
the Council whenever the ex officio member is unable to
attend a meeting of the Council. Any such designated
alternate shall be selected from individuals who
exercise significant decision-making authority in the
Federal agency involved.
(b) Term of Office.--The members of the Council shall be
appointed for a term of office of 3 years, except that of the
members first appointed--
(1) 5 members shall be appointed for terms of 1 year;
and
(2) 5 members shall be appointed for terms of 2
years,
(1) as designated by the Chairman at the time of
appointment. Any member appointed to fill a vacancy
occurring before the expiration of the term for which
the member's predecessor was appointed shall be
appointed only for the remainder of such term. A member
may serve after the expiration of his term until his
successor has taken office. Vacancies on the Council
shall be filled in the same manner in which the
original appointments were made. No member of the
Council shall be eligible to serve in excess of two
consecutive terms.
(c) Election and Duties of Officers.--The Council Chairman
and Vice Chairman and other appropriate officers of the Council
shall be elected by and from the voting members of the Council.
The Council Chairman shall serve as the Council's executive
officer and shall direct the administration of the Council,
assign officer and committee duties, and shall be responsible
for issuing and communicating the reports, policy positions and
statements of the Council. In the event that the Council
Chairman is unable to serve, the Vice Chairman shall act as
Council Chairman.
(d) Expenses.--
(1) The members of the Council shall receive no
compensation for their services as such, but upon
request by the Council Chairman, based on a showing of
significant economic burden, the Secretary of
Transportation or the Chairman of the Board, to the
extent provided in advance in appropriation Acts, may
provide reasonable and necessary travel expenses for
such individual Council members from Department or
Board funding sources in order to foster balanced
representation on the Council.
(2) Upon request by the Council Chairman, the
Secretary or Chairman of the Board, to the extent
provided in advance in appropriations Acts, may pay the
reasonable and necessary expenses incurred by the
Council in connection with the coordination of Council
activities, announcement and reporting of meetings, and
preparation of such Council documents as are required
or permitted by this section.
(3) The Council may solicit and use private funding
for its activities, subject to this subsection.
(4) Prior to making any Federal funding requests, the
Council Chairman shall undertake best efforts to fund
such activities privately unless the Council Chairman
determines that such private funding would create a
conflict of interest, or the appearance thereof, or is
otherwise impractical. The Council Chairman shall not
request funding from any Federal agency without
providing written justification as to why private
funding would create any such conflict or appearance,
or is otherwise impractical.
(5) To enable the Council to carry out its
functions--
(A) the Council Chairman may request directly
from any Federal agency such personnel,
information, services, or facilities, on a
compensated or uncompensated basis, as the
Council Chairman determines necessary to carry
out the functions of the Council;
(B) each Federal agency may, in its
discretion, furnish the Council with such
information, services, and facilities as the
Council Chairman may request to the extent
permitted by law and within the limits of
available funds; and
(C) each Federal agency may, in its
discretion, detail to temporary duty with the
Council, such personnel as the Council Chairman
may request for carrying out the functions of
the Council, each such detail to be without
loss of seniority, pay, or other employee
status.
(e) Meetings.--The Council shall meet at least semi-annually
and shall hold other meetings at the call of the Council
Chairman. Appropriate Federal facilities, where available, may
be used for such meetings. Whenever the Council, or a committee
of the Council, considers matters that affect the
jurisdictional interests of Federal agencies that are not
represented on the Council, the Council Chairman may invite the
heads of such agencies, or their designees, to participate in
the deliberations of the Council.
(f) Functions and Duties; Annual Report.--
(1) The Council shall advise the Secretary, the
Chairman, the Committee on Commerce, Science, and
Transportation of the Senate, and the Committee on
Transportation and Infrastructure of the House of
Representatives with respect to rail transportation
policy issues it considers significant, with particular
attention to issues of importance to small shippers and
small railroads, including car supply, rates,
competition, and effective procedures for addressing
legitimate shipper and other claims.
(2) To the extent the Council addresses specific
grain car issues, it shall coordinate such activities
with the National Grain Car Council. The Secretary and
Chairman shall cooperate with the Council to provide
research, technical and other reasonable support in
developing any reports and policy statements required
or authorized by this subsection.
(3) The Council shall endeavor to develop within the
private sector mechanisms to prevent, or identify and
effectively address, obstacles to the most effective
and efficient transportation system practicable.
(4) The Council shall prepare an annual report
concerning its activities and the results of Council
efforts to resolve industry issues, and propose
whatever regulatory or legislative relief it considers
appropriate. The Council shall include in the annual
report such recommendations as it considers appropriate
with respect to the performance of the Secretary and
Chairman under this chapter, and with respect to the
operation and effectiveness of meetings and industry
developments relating to the Council's efforts, and
such other information as it considers appropriate.
Such annual reports shall be reviewed by the Secretary
and Chairman, and shall include the Secretary's and
Chairman's views or comments relating to--
(A) the accuracy of information therein;
(B) Council efforts and reasonableness of
Council positions and actions; and
(C) any other aspects of the Council's work
as they may consider appropriate.
The Council may prepare other reports or develop
policy statements as the Council considers appropriate.
An annual report shall be submitted for each fiscal
year and shall be submitted to the Secretary and
Chairman within 90 days after the end of the fiscal
year. Other such reports and statements may be
submitted as the Council considers appropriate.
[Sec. 727. Definitions
[All terms used in this chapter that are defined in subtitle
IV shall have the meaning given those terms in that subtitle.]
Sec. 1326. Authority of the Inspector General
(a) In General.--The Inspector General of the Department of
Transportation, in accordance with the mission of the Inspector
General to prevent and detect fraud and abuse, shall have
authority to review only the financial management, property
management, and business operations of the Surface
Transportation Board, including internal accounting and
administrative control systems, to determine the Board's
compliance with applicable Federal laws, rules, and
regulations.
(b) Duties.--In carrying out this section, the Inspector
General shall--
(1) keep the Chairman of the Board, the Committee on
Commerce, Science, and Transportation of the Senate,
and the Committee on Transportation and Infrastructure
of the House of Representatives fully and currently
informed about problems relating to administration of
the internal accounting and administrative control
systems of the Board;
(2) issue findings and recommendations for actions to
address the problems referred to in paragraph (1); and
(3) submit periodic reports to the Committee on
Commerce, Science, and Transportation of the Senate,
and the Committee on Transportation and Infrastructure
of the House of Representatives that describe any
progress made in implementing actions to address the
problems referred to in paragraph (1).
(c) Access to Information.--In carrying out this section, the
Inspector General may exercise authorities granted to the
Inspector General under subsections (a) and (b) of section 6 of
the Inspector General Act of 1978 (5 U.S.C. App.).
(d) Authorization of Appropriations.--
(1) Funding.--There are authorized to be appropriated
to the Secretary of Transportation for use by the
Inspector General of the Department of Transportation
such sums as may be necessary to cover expenses
associated with activities pursuant to the authority
exercised under this section.
(2) Reimbursable agreement.--In the absence of an
appropriation under this subsection for an expense
referred to in paragraph (1), the Inspector General and
the Board shall have a reimbursement agreement to cover
such expense.
SUBTITLE IV. INTERSTATE TRANSPORTATION
PART A. RAIL
CHAPTER 107. RATES
SUBCHAPTER I. GENERAL AUTHORITY
Sec. 10701. Standards for rates, classifications, through routes,
rules, and practices
* * * * * * *
(d)(1) If the Board determines, under section 10707 of this
title, that a rail carrier has market dominance over the
transportation to which a particular rate applies, the rate
established by such carrier for such transportation must be
reasonable.
(2) In determining whether a rate established by a
rail carrier is reasonable for purposes of this
section, the Board shall give due consideration to--
(A) the amount of traffic which is
transported at revenues which do not contribute
to going concern value and the efforts made to
minimize such traffic;
(B) the amount of traffic which contributes
only marginally to fixed costs and the extent
to which, if any, rates on such traffic can be
changed to maximize the revenues from such
traffic; and
(C) the carrier's mix of rail traffic to
determine whether one commodity is paying an
unreasonable share of the carrier's overall
revenues, recognizing the policy of this part
that rail carriers shall earn adequate
revenues, as established by the Board under
section 10704(a)(2) of this title.
[(3) The Board shall, within one year after January
1, 1996, complete the pending Interstate Commerce
Commission non-coal rate guidelines proceeding to
establish a simplified and expedited method for
determining the reasonableness of challenged rail rates
in those cases in which a full stand-alone cost
presentation is too costly, given the value of the
case.]
(3) The Board shall maintain 1 or more simplified and
expedited methods for determining the reasonableness of
challenged rates in those cases in which a full stand-alone
cost presentation is too costly, given the value of the case.
Sec. 10704. Authority and criteria: rates, classifications, rules, and
practices prescribed by Board
(a)(1) When the Board, after a full hearing, decides that a
rate charged or collected by a rail carrier for transportation
subject to the jurisdiction of the Board under this part, or
that a classification, rule, or practice of that carrier, does
or will violate this part, the Board may prescribe the maximum
rate, classification, rule, or practice to be followed. The
Board may order the carrier to stop the violation. When a rate,
classification, rule, or practice is prescribed under this
subsection, the affected carrier may not publish, charge, or
collect a different rate and shall adopt the classification and
observe the rule or practice prescribed by the Board.
(2) The Board shall maintain and revise as necessary
standards and procedures for establishing revenue
levels for rail carriers providing transportation
subject to its jurisdiction under this part that are
adequate, under honest, economical, and efficient
management, for the infrastructure and investment
needed to meet the present and future demand for rail
services and to cover total operating expenses,
including depreciation and obsolescence, plus a
reasonable and economic profit or return (or both) on
capital employed in the business. The Board shall make
an adequate and continuing effort to assist those
carriers in attaining revenue levels prescribed under
this paragraph. Revenue levels established under this
paragraph should--
(A) provide a flow of net income plus
depreciation adequate to support prudent
capital outlays, assure the repayment of a
reasonable level of debt, permit the raising of
needed equity capital, and cover the effects of
inflation; and
(B) attract and retain capital in amounts
adequate to provide a sound transportation
system in the United States.
(3) On the basis of the standards and procedures
described in paragraph (2), the Board shall annually
determine which rail carriers are earning adequate
revenues.
* * * * * * *
[(d) Within 9 months after January 1, 1996, the Board shall
establish procedures to ensure expeditious handling of
challenges to the reasonableness of railroad rates.] (d)(1) The
Board shall maintain procedures to ensure the expeditious
handling of challenges to the reasonableness of railroad rates.
The procedures shall include appropriate measures for avoiding
delay in the discovery and evidentiary phases of such
proceedings and exemption or revocation proceedings, including
appropriate sanctions for such delay, and for ensuring prompt
disposition of motions and interlocutory administrative
appeals.
(2)(A) Except as provided under subparagraph (B), in a stand-
alone cost rate challenge, the Board shall comply with the
following timeline:
(i) Discovery shall be completed not later than 150
days after the date on which the challenge is
initiated.
(ii) The development of the evidentiary record shall
be completed not later than 155 days after the date on
which discovery is completed under clause (i).
(iii) The closing brief shall be submitted not later
than 60 days after the date on which the development of
the evidentiary record is completed under clause (ii).
(iv) A final Board decision shall be issued not later
than 180 days after the date on which the evidentiary
record is completed under clause (ii).
(B) The Board may extend a timeline under subparagraph (A)
after a request from any party or in the interest of due
process.
Sec. 10709. Authority and criteria: rates, classifications, rules, and
practices prescribed by Board
* * * * * * *
[(h)(1) Any rail carrier may, in accordance with the terms of
this section, enter into contracts for the transportation of
agricultural commodities (including forest products, but not
including wood pulp, wood chips, pulpwood or paper) involving
the utilization of carrier owned or leased equipment not in
excess of 40 percent of the capacity of such carrier's owned or
leased equipment by major car type (plain boxcars, covered
hopper cars, gondolas and open top hoppers, coal cars, bulkhead
flatcars, pulpwood rackcars, and flatbed equipment, including
TOFC/COFC).
[(2) The Board may, on request of a rail carrier or
other party or on its own initiative, grant such relief
from the limitations of paragraph (1) of this
subsection as the Board considers appropriate, if it
appears that additional equipment may be made available
without impairing the rail carrier's ability to meet
its common carrier obligations under section 11101 of
this title.
[(3)(A) This subsection shall cease to be effective
after September 30, 1998.
[(B) Before October 1, 1997, the National
Grain Car Council and the Railroad-Shipper
Transportation Advisory Council shall make
recommendations to Congress on whether to
extend the effectiveness of or otherwise modify
this subsection.]
SUBTITLE IV. INTERSTATE TRANSPORTATION
PART A. RAIL
CHAPTER 117. ENFORCEMENT: INVESTIGATIONS, RIGHTS, AND REMEDIES
Sec. 11701. General authority
(a) Except as otherwise provided in this part, the Board may
begin an investigation under this part [only on complaint] on
the Board's own initiative or upon receiving a complaint
pursuant to subsection (b). If the Board finds that a rail
carrier is violating this part, the Board shall take
appropriate action to compel compliance with this part. If the
Board finds a violation of this part in a proceeding brought on
its own initiative, any remedy from such proceeding may only be
applied prospectively.
(b) A person, including a governmental authority, may file
with the Board a complaint about a violation of this part by a
rail carrier providing transportation or service subject to the
jurisdiction of the Board under this part. The complaint must
state the facts that are the subject of the violation. The
Board may dismiss a complaint it determines does not state
reasonable grounds for investigation and action. However, the
Board may not dismiss a complaint made against a rail carrier
providing transportation subject to the jurisdiction of the
Board under this part because of the absence of direct damage
to the complainant.
(c) A formal investigative proceeding begun by the Board
under subsection (a) of this section is dismissed automatically
unless it is concluded by the Board with administrative
finality by the end of the third year after the date on which
it was begun.
(d) In any investigation commenced on the Board's own
initiative, the Board shall--
(1) not later than 30 days after initiating the
investigation, provide written notice to the parties
under investigation, which shall state the basis for
such investigation;
(2) only investigate issues that are of national or
regional significance;
(3) permit the parties under investigation to file a
written statement describing any or all facts and
circumstances concerning a matter which may be the
subject of such investigation;
(4) make available to the parties under investigation
and Board members--
(A) any recommendations made as a result of
the investigation; and
(B) a summary of the findings that support
such recommendations;
(5) to the extent practicable, separate the
investigative and decisionmaking functions of staff;
(6) dismiss any investigation that is not concluded
by the Board with administrative finality within 1 year
after the date on which it was commenced; and
(7) not later than 90 days after receiving the
recommendations and summary of findings under paragraph
(4)--
(A) dismiss the investigation if no further
action is warranted; or
(B) initiate a proceeding to determine if a
provision under this part has been violated.
(e)(1) Any parties to an investigation against whom a
violation is found as a result of an investigation begun on the
Board's own initiative may, not later than 60 days after the
date of the order of the Board finding such a violation,
institute an action in the United States court of appeals for
the appropriate judicial circuit for de novo review of such
order in accordance with chapter 7 of title 5.
(2) The court--
(A) shall have jurisdiction to enter a judgment
affirming, modifying, or setting aside, in whole or in
part, the order of the Board; and
(B) may remand the proceeding to the Board for such
further action as the court may direct.
Sec. 11708. Voluntary arbitration of certain rail rates and practices
disputes
(a) In General.--Not later than 1 year after the date of the
enactment of the Surface Transportation Board Reauthorization
Act of 2015, the Board shall promulgate regulations to
establish a voluntary and binding arbitration process to
resolve rail rate and practice complaints subject to the
jurisdiction of the Board.
(b) Covered Disputes.--The voluntary and binding arbitration
process established pursuant to subsection (a)--
(1) shall apply to disputes involving--
(A) rates, demurrage, accessorial charges,
misrouting, or mishandling of rail cars; or
(B) a carrier's published rules and practices
as applied to particular rail transportation;
(2) shall not apply to disputes--
(A) to obtain the grant, denial, stay, or
revocation of any license, authorization, or
exemption;
(B) to prescribe for the future any conduct,
rules, or results of general, industry-wide
applicability;
(C) to enforce a labor protective condition;
or
(D) that are solely between 2 or more rail
carriers; and
(3) shall not prevent parties from independently
seeking or utilizing private arbitration services to
resolve any disputes the parties may have.
(c) Arbitration Procedures.--
(1) In general.--The Board--
(A) may make the voluntary and binding
arbitration process established pursuant to
subsection (a) available only to the relevant
parties;
(B) may make the voluntary and binding
arbitration process available only--
(i) after receiving the written
consent to arbitrate from all relevant
parties; and
(ii)(I) after the filing of a written
complaint; or
(II) through other procedures adopted
by the Board in a rulemaking
proceeding;
(C) with respect to rate disputes, may make
the voluntary and binding arbitration process
available only to the relevant parties if the
rail carrier has market dominance (as
determined under section 10707); and
(D) may initiate the voluntary and binding
arbitration process not later than 40 days
after the date on which a written complaint is
filed or through other procedures adopted by
the Board in a rulemaking proceeding.
(2) Limitation.--Initiation of the voluntary and
binding arbitration process shall preclude the Board
from separately reviewing a complaint or dispute
related to the same rail rate or practice in a covered
dispute involving the same parties.
(3) Rates.--In resolving a covered dispute involving
the reasonableness of a rail carrier's rates, the
arbitrator or panel of arbitrators, as applicable,
shall consider the Board's methodologies for setting
maximum lawful rates, giving due consideration to the
need for differential pricing to permit a rail carrier
to collect adequate revenues (as determined under
section 10704(a)(2)).
(d) Arbitration Decisions.--Any decision reached in an
arbitration process under this section--
(1) shall be consistent with sound principles of rail
regulation economics;
(2) shall be in writing;
(3) shall contain findings of fact and conclusions;
(4) shall be binding upon the parties; and
(5) shall not have any precedential effect in any
other or subsequent arbitration dispute.
(e) Timelines.--
(1) Selection.--An arbitrator or panel of arbitrators
shall be selected not later than 14 days after the date
of the Board's decision to initiate arbitration.
(2) Evidentiary process.--The evidentiary process of
the voluntary and binding arbitration process shall be
completed not later than 90 days after the date on
which the arbitration process is initiated unless--
(A) a party requests an extension; and
(B) the arbitrator or panel of arbitrators,
as applicable, grants such extension request.
(3) Decision.--The arbitrator or panel of
arbitrators, as applicable, shall issue a decision not
later than 30 days after the date on which the
evidentiary record is closed.
(4) Extensions.--The Board may extend any of the
timelines under this subsection upon the agreement of
all parties in the dispute.
(f) Arbitrators.--
(1) In general.--Unless otherwise agreed by all of
the parties, an arbitration under this section shall be
conducted by an arbitrator or panel of arbitrators,
which shall be selected from a roster, maintained by
the Board, of persons with rail transportation,
economic regulation, professional or business
experience, including agriculture, in the private
sector.
(2) Independence.--In an arbitration under this
section, the arbitrators shall perform their duties
with diligence, good faith, and in a manner consistent
with the requirements of impartiality and independence.
(3) Selection.--
(A) In general.--If the parties cannot
mutually agree on an arbitrator, or the lead
arbitrator of a panel of arbitrators, the
parties shall select the or lead arbitrator
from the roster by alternately striking names
from the roster until only 1 name remains
meeting the criteria set forth in paragraph
(1).
``(B) Panel of arbitrators.--If the parties
agree to select a panel of arbitrators, instead
of a single arbitrator, the panel shall be
selected under this subsection as follows:
(i) The parties to a dispute may
mutually select 1 arbitrator from the
roster to serve as the lead arbitrator
of the panel of arbitrators.
(ii) If the parties cannot mutually
agree on a lead arbitrator, the parties
shall select a lead arbitrator using
the process described in subparagraph
(A).
(iii) In addition to the lead
arbitrator selected under this
subparagraph, each party to a dispute
shall select 1 additional arbitrator
from the roster, regardless of whether
the other party struck out the
arbitrator's name under subparagraph
(A).
(4) Cost.--The parties shall share the costs incurred
by the Board and arbitrators equally, with each party
responsible for paying its own legal and other
associated arbitration costs.
(g) Relief.--
(1) In general.--Subject to the limitations set forth
in paragraphs (2) and (3), an arbitral decision under
this section may award the payment of damages or rate
prescriptive relief.
(2) Practice disputes.--The damage award for practice
disputes may not exceed $2,000,000.
(3) Rate disputes.--
(A) Monetary limit.--The damage award for
rate disputes, including any rate prescription,
may not exceed $25,000,000.
(B) Time limit.--Any rate prescription shall
be limited to not longer than 5 years from the
date of the arbitral decision.
(h) Board Review.--If a party appeals a decision under this
section to the Board, the Board may review the decision under
this section to determine if--
(1) the decision is consistent with sound principles
of rail regulation economics;
(2) a clear abuse of arbitral authority or discretion
occurred;
(3) the decision directly contravenes statutory
authority; or
(4) the award limitation under subsection (g) was
violated.
[all]