RAILROAD-SHIPPER TRANSPORTATION ADVISORY COUNCIL

Washington DC

> **MINUTES OF JULY 12, 2006 MEETING OF THE**

#  RAILROAD-SHIPPER TRANSPORTATION ADVISORY COUNCIL

The Railroad Shipper Transportation Advisory Council (the "Council"),
pursuant to notice, held a meeting on July 12, 2006, in the Hearing Room
of the Surface Transportation Board, 1925 K Street, NW, Washington DC.
The meeting was called to order at 8am.

The following members were present: Robert Pugh, Georgia Pacific; Connie
Thede, Muscatine Power & Water; James Brunkenhoefer, United
Transportation Union; Eric Butler, Union Pacific Railroad; Owen Zidar,
Kansas City Southern Railway; Bill Matheson, Schneider National; Reilly
McCarren, Arkansas and Missouri Railroad; Charles Marshall, Genesee and
Wyoming; D. J. Kratzberg, Exxon Mobil, Dean Piacente, CSX
Transportation, Larry Parsons, Wheeling and Lake Erie Railway; Rick
Webb, Watco Companies; Roger Fray, West Central Cooperative; Bruce
Ridley, Packaging Corporation of America; Terry Voss, Ag. Processing;
Francis P. Mulvey, Surface Transportation Board; Douglas Buttrey,
Surface Transportation Board; William Gelston, Federal Railroad
Administration.

I.  **Minutes of May 3^rd^ meeting were reviewed and approved**

II. **Financial Report was reviewed and approved**

III. **Council Business**

-   May 2006 meeting minutes were approved for placement on the STB
    website.

-   RSTAC Guidelines were reviewed.

-   Discussion was held regarding the role of large shippers and large
    railroads in the changing rail landscape of RSTAC. Members agreed
    RSTAC Guidelines would be clarified to say the issues affecting
    small shippers and small railroads are tied to all issues affecting
    the rail network, so care and consideration of that should be
    realized in any RSTAC positions.

-   Discussion continued to the topic of more formally defining what
    constitutes a small shipper vs. a large shipper. No formal action
    was taken.

-   Discussion continued to the topic of what types of issues RSTAC
    should discuss and take action on. For example---Railroad coal
    shipper hearings recently held by Federal Energy Regulatory
    Commission. Members discussed creating a fact-based process to
    identify key issues to address. Some members volunteered to define
    criteria and establish standards for product outcomes to send to
    STB, Congress and DOT.

**IV. General Discussion**

-   Investment Tax Credit Position was reviewed. Topics of discussion
    included:

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-   It's critical that the railroads invest in capacity improvements.
    The costs of the needed investments would be much greater the longer
    the investment is postponed.

-   The need to demonstrate that relative to demand, the railroads need
    assistance to invest additional capital.

-   The need for balance between all modes of transportation.

-   The need to produce a set of principles to support the position.

-   ITC must be stand-alone---there can be no handling of other issues
    such as rate or service guarantees to this legislation.

-   The need for a one page executive summary with details to support
    problem identification, other solutions and facts to support RSTAC's
    position.

    -   Principles to support position include:

        -   Business case to a position

        -   Earmarked for capacity enhancement

        -   Shippers can participate

        -   No bundling with other issues

        -   Private investment is the best way to expand rail
            network---not re-regulation---public investment for
            expansion only.

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-   The members approved establishing an issues process and identified
    the railroad ITC as the first issues to be considered.

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-   AAR Shippers Meeting details were discussed.

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-   Members agreed on sending a letter to customer organizations to urge
    them to solicit questions to the AAR in advance of AAR meeting.

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-   Rail Service discussion was held. The overall consensus was rail
    service is generally improving.

-   Other issues of discussion:

    -   Hurricane preparation update by Class I representatives was
        provided.

    -   Safe Food Shipment concerns were discussed. Members agreed that
        common standards are a necessity and suggested those concerns
        should be brought up to the AAR Standards Committee.

    -   Liability and Homeland Security concerns were discussed.

    -   Regulation of restrictive trackage rights and STB's review
        process

    -   Coal supply---utility concern discussion.

    -   Short Line Tax Credit discussion.

    -   S-919 review.

    -   Data Transparency follow-up. This issue appears to be improved
        with recent Railinc changes. No further activity will be worked
        on regarding this matter but we will monitor and do a follow up
        on the issue annually to make sure it stays on track.

**V: Next Meeting -- Will be held on November 7 & 8, 2006.**