```

[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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \10\Ibid.
    \11\P.L. 113-235
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \27\Ibid.
    \28\Ibid.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \29\Surface Transportation Board, ``U.S. Rail Service Issues,'' Ex 
Parte 724, April 15, 2014
    \30\Ibid.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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)
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------
    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 $4 
million.\43\ The STB's previous authorization expired in 1998, 
and S. 808 includes provisions to improve the efficiency of the 
agency.
---------------------------------------------------------------------------
    \43\Surface Transportation Board, ``Rate Regulation Reforms,'' Ex 
Parte 715, March 13, 2015, at http://www.stb.dot.gov/decisions/
readingroom.nsf/UNID/C945E11FDC839C5A85257E06006D3D45/$file/44230.pdf
---------------------------------------------------------------------------

                         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\
---------------------------------------------------------------------------
    \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
---------------------------------------------------------------------------

                          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]
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