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44–651 PDF 2008

H.R. 6707, THE ‘‘TAKING RESPONSIBLE 

ACTION FOR COMMUNITY SAFETY 

ACT’’ 

(110–164) 

HEARING 

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 9, 2008 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

ROBERT E. LATTA, Ohio 

(II) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... v 

H.R. 6707 ‘‘Taking Responsible Action for Community Safety Act,’’ as introduced in House ..................................................................................................... xiii 

TESTIMONY 

Baxandall, Ph.D., Dr. Phineas, Senior Analyst for Tax and Budget Policy, 

U.S. Public Interest Research Group, Federation of State Public Interest 

Research Groups .................................................................................................. 64 

Bean, Hon. Melissa, a Representative in Congress from the State of Illinois .... 9 

Biggert, Hon. Judy, a Representative in Congress from the State of Illinois .... 8 

Buttrey, Hon. W. Douglas, Board Member, Surface Transportation Board ....... 17 

Darch, Karen, President, Village of Barrington, Illinois ...................................... 35 

Foster, Hon. Bill, a Representative in Congress from the State of Illinois ........ 13 

Harrison, E. Hunter, President and Chief Executive Officer, Canadian National Railway ...................................................................................................... 35 

Manzullo, Hon. Donald, a Representative in Congress from the State of Illinois ........................................................................................................................ 6 

Mulvey, Hon. Francis P., Vice Chairman, Surface Transportation Board .......... 17 

Nekritz, Hon. Elaine, State of Illinois ................................................................... 35 

Nottingham, Hon. Charles D., Chairman, Surface Transportation Board ......... 17 

Roskam, Hon. Peter, a Representative in Congress from the State of Illinois ... 11 

Schwieterman, Ph.D., Dr. Joseph P., Director of the Chaddick Institute for 

Metropolitan Development, DePaul University ................................................. 64 

Silvestri, Peter, President, Village of Elmwood Park, Illinois ............................. 35 

Swanson, John, Executive Director, Northern Indiana Regional Planning 

Commission ........................................................................................................... 35 

Tolman, John, Vice President and National Legislative Representative, Brotherhood of Locomotive Engineers and Trainmen ................................................ 64 

Visclosky, Hon. Peter, a Representative in Congress from the State of Indiana ......................................................................................................................... 4 

Weisner, Hon. Tom, Mayor, City of Aurora, Illinois ............................................. 35 

Yagelski, Mark, Chairman of the Board of Trustees, Northern Indiana Commuter Transportation District and Member of the LaPorte County Council . 35 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Altmire, Hon. Jason, of Pennsylvania .................................................................... 71 

Bean, Hon. Melissa L., of Illinois ........................................................................... 72 

Biggert, Hon. Judy, of Illinois ................................................................................. 75 

Carnahan, Hon. Russ, of Missouri ......................................................................... 77 

Costello, Hon. Jerry F., of Illinois .......................................................................... 78 

Cummings, Hon. Elijah E., of Maryland ............................................................... 80 

Manzullo, Hon. Donald A., of Illinois ..................................................................... 86 

Mitchell, Hon. Harry E., of Arizona ....................................................................... 88 

Roskam, Hon. Peter J., of Illinois ........................................................................... 89 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Baxandall, Ph.D., Dr. Phineas ................................................................................ 92 

Buttrey, Hon. W. Douglas ....................................................................................... 94 

Darch, Karen ............................................................................................................ 95 

Harrison, E. Hunter ................................................................................................ 100 

Mulvey, Hon. Francis P. .......................................................................................... 118 

Nekritz, Hon. Elaine ................................................................................................ 123 

Nottingham, Hon. Charles D. ................................................................................. 127 

Schwieterman, Ph.D., Dr. Joseph P. ...................................................................... 133 

Silvestri, Peter ......................................................................................................... 137 

Page

IV 

Swanson, John ......................................................................................................... 140 

Tolman, John ........................................................................................................... 144 

Weisner, Hon. Tom .................................................................................................. 147 

Yagelski, Mark ......................................................................................................... 151 

SUBMISSIONS FOR THE RECORD 

Harrison, E. Hunter, President and Chief Executive Officer, Canadian National Railway, additional remarks .................................................................... 109 

ADDITIONS TO THE RECORD 

Berry, Christopher; Bueno de Mesquita, Ethan, Harris School of Public Policy 

Studies, the University of Chicago, ‘‘Stalemate over Rail Plan Reflects 

Failure of Political Leadership’’ .......................................................................... 155 

Cook County Board of Commissioners, Gregg Goslin, Commissioner, 14th 

District, written statement .................................................................................. 159 

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(1) 

HEARING ON H.R. 6707, THE TAKING RESPONSIBLE ACTION FOR COMMUNITY SAFETY 

ACT 

Tuesday, September 9, 2008, 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The Committee met, pursuant to call, at 11:00 a.m., in Room 

2167, Rayburn House Office Building, the Honorable James L. 

Oberstar [Chairman of the Committee] presiding. 

Mr. OBERSTAR. The Committee on Transportation and Infrastructure will come to order. 

The Chair would like to take this opportunity to welcome colleagues back to Washington, back to the Committee from our district work period, and I know for all of us it has been work. Conventions are work. The district period is a work time, and it is so 

refreshing, during August, not to be in Washington. You can 

breathe. 

And welcome all those Representatives of wide-ranging interests 

from across the Country back to Washington. It is good to have you 

all back with us. 

I know that my Committee colleagues on the Republican side had 

a very invigorating convention in Minneapolis-St. Paul and had an 

opportunity to see an element of transportation success with the reconstruction of the I-35W Bridge. 

This morning, we convene to review legislation to give the Transportation Board or to ensure the Transportation Board has the authority and the policy direction to deal with mergers that involve 

a Class I railroad and a Class II or III or other in which there may 

be safety, environmental or quality of life problems for the various 

communities. 

This is a rather complex subject of transportation, of rail transportation law, and I want to take just a few moments to elucidate 

the reasons for this legislation, for this hearing and for action. 

The Canadian National Railway filed a merger application that 

raises issues that have long simmered under the surface within the 

Surface Transportation Board and rail policy since enactment of 

the Staggers Act in 1980. 

The CN asks approval of the Board to acquire the Elgin, Joliet 

and Eastern Railway, EJ&E. In their application, CN says they 

will divert traffic on three of their lines going through Chicago onto 

the main line of EJ&E and that, thereby, they will reduce traffic 

2 

going through the City of Chicago, better service, better transit 

times, decreased rail traffic, lower cost to the railroad. 

Opponents, however—there are always two sides to these issues, 

especially in transportation—cite safety concerns and environmental consequences on the 50 communities lying along this 180- 

mile track. 

I took the opportunity to visit several of those communities at 

the request of Members who represent communities affected by the 

proposed merger. I met in situ. I walked the rail grade crossing 

areas, and I have listened to Ms. Biggert and Ms. Bean, Mr. Manzullo, Mr. Visclosky, Mr. Foster and Mr. Roskam who all voiced the 

concerns of the communities they represent, their constituents. 

Now, regardless of whether you support the CN acquisition or 

not, the transaction highlights a serious question: Does the STB 

under current law have authority to disapprove a merger or consolidation of a Class I railroad and a Class II or III on public interest grounds? That is an issue of law that has not been settled in 

court or any challenge or directly addressed by the Board. 

There are two differing standards in existing law. Depending on 

the class of railroad, STB must use one or another of these standards. The law gives the Board considerable discretion to disapprove 

a transaction involving at least two Class I railroads, much less 

discretion to disapprove transactions not involving two Class Is or 

two or more Class Is such as the case of the EJ&E acquisition by 

CN. 

But that wasn’t always the case. Before the Staggers Act in 

1980—I remember this era quite well—the criteria for a merger or 

acquisition of two Class Is or a Class I, Class II or Class III were 

identical. The Commission was required to approve and authorize 

the transaction only when it found that the transaction was consistent with the public interest, not inconsistent, but consistent 

with the public interest. It is a different burden of proof. 

The Commission also was authorized to impose conditions governing the transaction, but Section 228 of the Staggers Act considerably altered the standards for consolidation applications after 

date of enactment. 

A new section was added governing this type of transaction that 

we are considering today, and that section provides that the Board 

shall approve such transactions of a Class I or a Class II or III unless the Board finds there is likely to be a lessening of competition, 

creation of a monopoly or restraint of trade or the anti-competitive 

effects outweigh the public interest in meeting transportation 

needs. 

On the face of it, this language does not seem to provide the 

Board with authority to disapprove a merger or consolidation even 

if the Board finds that the transaction should be disapproved on 

general public interest grounds such as safety or environment. 

In the testimony we will hear from Chairman Nottingham, he 

suggests that the Board assumed it still has the power to refuse 

to approve a merger of a Class I with a Class II or Class III railroad on environmental grounds, but he also concedes the Board has 

never tried to exercise this power and it has never been tested in 

court. 

3 

CN’s testimony also suggests that it believes the Board does not 

have this power. 

In this uncertain situation, it occurs to me in the context of this 

transaction, which reflects so much of what is happening in the rail 

sector today across the County, that we should have legislation to 

clarify the authority of the Board to deny a merger on environmental grounds or to modify the merger to comply with the concerns expressed justifiably by the affected communities. 

Transportation benefits are critical and important. Rails—we almost need not say it—they are so vital to movement of goods in 

America, but that significance and that role should not trump all 

other concerns regardless of how important those other concerns 

are. It should not be allowed to trump everything else. 

That is not good public policy, and I don’t think that is what the 

original drafters of the Staggers Act had in mind. There are not 

very many of them around anymore in the Congress or outside or 

in retirement. But in going through the debate and sitting on the 

House floor and rubbing my worry beads about what was the right 

vote, eventually, I cast my vote in favor of deregulation, never 

thinking it was going to have these kinds of consequences. 

So, with that, I overstayed my five minutes and framed the issue 

that we will consider this morning. 

I will recognize the gentleman from Florida, our distinguished 

Ranking Member, and then we will proceed to the witnesses. 

Mr. MICA. Well, thank you for convening this meeting. 

I also want to thank you for the hospitality extended to the Republican Members in Minneapolis-St. Paul at our convention last 

week. I said I hadn’t been in that area for 24 years. One of the 

things I think we get to see in our position is the majesty of this 

great Country and the beauty of some of our cities like Minneapolis 

and St. Paul. 

It was an incredible convention. There were a few people who 

made it unpleasant. 

Mr. OBERSTAR. Both conventions. 

Mr. MICA. At both conventions. I told the Chairman that people 

actually came up and apologized for some of the actions of some of 

the folks there but, again, I thank you. 

And, the I-35 Bridge visit we had—and I know you couldn’t be 

with us but sent words of greeting—Mn/DOT and other folks are 

to be commended for a remarkable project that will be completed 

in less than 437 days which I think should be a model for all of 

our replacement projects. 

I also appreciate your holding this hearing. I know it is important to Members. I haven’t really taken a position on this yet, and 

I want to hear some of the testimony and what you have to say. 

It does alter the review process, and it also can have a significant 

effect on some future rail mergers. As you know right now, STB 

participation is limited to the larger rail mergers, and this would 

change that. 

I do think that we have to look at public policy here, and in an 

era when we are trying to save energy and move goods and services 

and reduce congestions there are also benefits to the proposal to acquire the line and move some of the traffic in the perimeter area. 

4 

Now, I have exactly the same issue going on in Central Florida 

with a commuter rail line and moving freight to another line, and 

it does raise issues of the impact on various constituencies. So I am 

glad to see Members here who are doing their best to defend their 

interests and represent their communities on the adverse impacts 

and the positive effects that this plan will have. 

As we change, though, Federal policy relating to this, I don’t 

want it to have a chilling effect on some of the mergers that make 

sense or plans that may make sense in enhancing transportation 

alternatives that are good for the environment, good for energy and 

good for moving products around our metropolitan areas. 

So we will look at it, and I thank you again for allowing this 

forum, and I look forward to the presentation. 

I have dueling competition between guns and rail, and I will 

shuttle between here and my other Committee across the hall, and 

it will be in good hands with Mr. Shuster today. 

Mr. OBERSTAR. Defend the guns. 

Mr. MICA. I am for them, me and Sarah. Thank you. 

[Laughter.] 

Mr. OBERSTAR. I thank the gentleman for his kind remarks about 

the Twin Cities and on the bridge, and I think that bridge will 

stand as a very salient lesson for us as we shape the next transportation bill. 

Now we will begin with Mr. Visclosky and go through the list of 

Members present in descending order of seniority. 

TESTIMONY OF THE HONORABLE PETER VISCLOSKY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA 

Mr. VISCLOSKY. Or age perhaps, Mr. Chairman. 

Mr. OBERSTAR. Oh, no, no, no. You are younger than when you 

came here, first came to Congress. 

Mr. VISCLOSKY. Mr. Chairman, I want to thank you, and I want 

to thank Mr. Mica for holding this hearing today and especially for 

your leadership on addressing, in a bipartisan fashion, our Nation’s 

aging infrastructure. 

My remarks are going to be focused on the issue of safety but following up on the Ranking Member’s comments about the necessity, 

potentially, of some of these mergers taking place, I would make 

it clear for the record I am not opposed for businesses making 

money or gaining efficiencies. 

But in my congressional district, we also have a mass transportation system we want to expand. After six months of negotiation, 

the Canadian National didn’t even know which railroad had been 

trying to negotiate with them for six months. In the case of the 

Gary Airport, to the railroad to be bought, had been negotiating for 

six years to relocate one line. There are public interests. 

I would, at the beginning, also acknowledge the presence of two 

Indiana residents, Northwest Indiana Regional Planning Commission’s Executive Director, John Swanson, who will testify later and 

LaPorte County Councilman, Mark Yagelski, and Chairman of the 

Northwest Indiana Commuter Transportation District Board of 

Trustees. 

5 

I would also be remiss if I did not acknowledge the presence in 

the audience of my very good friend, Councilman Stan Dobosz of 

Griffith, Indiana. 

I come before you today as an original co-sponsor of H.R. 6707, 

the TRACS Act, and I am appreciative of the Chair’s sponsorship 

of this measure. 

I was born and raised in Lake County, Indiana, and I, like every 

resident of that county, am very experienced with freight rail traffic and the danger it poses to local residents. In 1977, my mother, 

Helen, was struck by a train and, thankfully, survived the experience. 

Waiting at crossing gates and finding alternative routes are a 

fact of life when you live in this heavily industrialized area that 

serves as the eastern gateway for freight into Chicago. Lately, 

though, it has become apparent to the residents of the region that 

the waits are becoming longer, that the detours are becoming more 

congested and that safety seems to be deteriorated. 

FRA statistics show three people died and four were injured via 

crossing collisions in Lake County, Indiana, alone from January to 

May of this year. 

On July 7th, three additional residents of my congressional district died at a CSX grade crossing. On July 25th at a CN crossing, 

three more were injured. 

In September, this month, September 3rd, a woman was killed 

at a CSX crossing. 

That is 1 death every 16 days in my congressional district at a 

rail crossing since July 7th. That is 1 accident at a rail crossing 

at my congressional district every 21 days. 

In 2007, Indiana was tied with the State of California—and 

think about the disparity in size and population—for the number 

of accidents at grade crossings, 161 in our States. 

To illustrate the need for the TRACS Act, I would like to highlight the situation created in northwest Indiana by the Canadian 

National proposed acquisition of the EJ&E railroad: 

In northwest Indiana, the CN/EJ&E transaction would result in 

a three-fold increase in rail traffic on the existing EJ&E line and 

cause the average train length to go from 2,590 feet to 6,321 feet. 

With as many as 34 trains per day running on the track, it 

would bisect communities, impede the flow of automobile traffic 

and create a considerable public safety concern. 

The proposed acquisition, as I have mentioned, also would create 

new barriers and fail to remove other obstacles to local economic 

development initiatives. 

Since this transaction was first proposed in the Fall of 2007, I 

would acknowledge that the STB has made some decisions in this 

transaction that would be considered favorable to the public’s interest, including their decision last evening to deny CN’s petition to 

shortcut the environmental review process. However, the recently 

released draft Environmental Impact Statement gives me a new 

appreciation for the term, getting railroaded. 

I would like to read just one passage from that statement from 

page 17 of the Mitigation section: Railroads, historically, have not 

paid more than a small share, 5 to 10 percent, of grade separations 

6 

because grade separations primarily benefit the community and not 

the railroads. 

Well, I would suggest to those families that lost four people in 

train accidents since July 7th, there is a greater public interest and 

would hope, as the Committee considers the testimony today and 

the TRACS legislation, that balance—and that is all I am looking 

for here—balance between public interest and private interest is 

struck. 

With that, Mr. Chairman, I thank you again for the opportunity 

to testify today. 

Mr. OBERSTAR. Thank you for that compelling statement. That is 

shocking news about the fatality incidents in your district. We have 

to address that. 

Mr. Manzullo. 

TESTIMONY OF THE HONORABLE DONALD MANZULLO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. MANZULLO. Thank you, Mr. Chairman, for the leadership 

that you have been providing to the people of this Country. 

The Chairman has stated the anomalies that are in the law. It 

simply means that the STB will not stop a transaction because of 

community concerns unrelated to antitrust issues, such as the safety of the people or environmental concerns. It may seem like semantics, but it is an important distinction that has long tipped the 

scale toward privately-owned rail carriers and away from communities who have to live with them. 

Let me state this. I have always encouraged rail for passengers 

and freight. In fact, I helped bring the Union Pacific intermodal 

hub to Rochelle, Illinois, which is in the rural area of my congressional district. 

However, in northern Illinois, in Ms. Bean’s district, the community of Barrington and surrounding areas are unalterably opposed 

to the proposed sale of the EJ&E line to Canadian National as evidence by the thousands of people who showed up at the STB 

scoping session last January and a formal hearing in August. 

This is not because of not in my back yard syndrome. Everybody 

understands the need to improve the national rail transportation 

network and would be willing to compromise, but having additional 

freight train traffic traverse on the aging EJ&E track would not 

just be a simple minor inconvenience. It will fundamentally alter 

the entire nature of the town and people who travel through the 

town such as the people that I represent in adjoining McHenry 

County. 

I am honored to serve the thousands of commuters who live in 

southern McHenry County and must travel through Barrington either by car or rail to get to work or perform daily errands. 

While I have been concerned about this deal since day one, the 

draft Environmental Impact Statement recently released by the 

STB confirmed many of our worst fears about increased accident 

risks, increased air pollution, increased exposure to hazard material and increased traffic, but at the same time said that CN would 

only have to pay 5 to 10 percent of the cost to mitigate these problems. 

7 

This will leave taxpayers paying the tab for a transaction that 

solely benefits a private company’s bottom line. I say it is not about 

what is tradition. It is about what is fair. 

The people from the 16th District of Illinois, which I represent, 

have had plenty of chances to talk over these issues in the past few 

weeks with me. I have heard from a lot of them. 

Your bill, Mr. Chairman, H.R. 6707, corrects an oversight made 

in 1995 and requires the STB to weight impacts on local communities more heavily when considering any railroad transaction. In 

fact, the STB would have to reject a proposed acquisition if it finds 

that transactions and impacts on the affected communities outweigh the transportation benefits. 

We have to learn from the experience of this particular transaction and make sure no community in the Nation will have to go 

through what Barrington is experiencing now. 

In this particular case, I understand that the transaction will 

have many macro benefits, but CN accomplishes that goal primarily by shifting the train congestion from downtown Chicago to 

outlying suburban areas such as Barrington. They don’t solve the 

problem. They shift the problem. 

Tens of thousands of motorists in northern Illinois, especially 

those in McHenry County, travel through Barrington on their way 

to work each day, crossing the EJ&E line at Route 14, 59 and Lake 

Cook Road. Approximately another 4,000 commuters from 

McHenry County ride metro rail to work in the Chicagoland area 

each day. 

When I talked to the CN authorities about trains that could be 

as long as 10,000 feet, blocking all three intersections at one time, 

their response was, well, we will make the trains go faster. 

I don’t think that is a responsible attitude, especially in light of 

the fact that we are very, very sensitive in northern Illinois when 

several years ago we lost seven children when a Metra train 

smashed into the school bus. 

Those problems are on top of all of this. They haunt us. There 

would be over 800 crossings of school buses each day just at the 

3 crossings in Barrington. So the people that we represent are very 

sensitive to balancing the issues of safety with the need for increased transportation enhancements. 

In closing, I would like to express my appreciation to you, Mr. 

Chairman, for introducing this piece of legislation, for working with 

me and others in the suburban Chicago delegation in a bipartisan 

manner and for calling this hearing on such a timely matter. 

We would urge our colleagues to support H.R. 6707. 

Mr. OBERSTAR. I thank the gentleman for those comments and 

for that. Again, did you say 800 school bus crossings? 

Mr. MANZULLO. Eight hundred and forty. 

Mr. OBERSTAR. Yes, thank you. 

Mr. MANZULLO. Mr. Chairman, there are about 130 grade crossings. Those 840 school bus crossings each day are just at 3 of those 

in Barrington. Ms. Bean has more information on that. 

Mr. OBERSTAR. Thank you for that clarification—Ms. Biggert— 

and thank you for your advocacy at this hearing and the resolution 

that we propose. 

8 

TESTIMONY OF THE HONORABLE JUDY BIGGERT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. BIGGERT. Thank you, Mr. Chairman and Members of the 

Committee and thank you, Mr. Chairman. I appreciate your giving 

us the opportunity today to speak on behalf of the TRACS Act, and 

I would like to express my gratitude for your willingness to work 

with my colleagues and me in such a bipartisan fashion on this important legislation. 

As you have heard from the previous speaker, the bill under consideration today is of vital interest to the people we represent in 

Illinois. 

In my district, there are over half a dozen cities and villages that 

would be devastated by the Canadian National’s proposal of the acquisition of the EJ&E. Their current plan is to increase freight 

traffic on the line through our communities by as much as 400 percent in some places. 

The result, according to the STB’s own findings, will be a disturbing increase in accidents, blocked crossings, pollution, noise, 

traffic and more. Home values will drop. At least 11 emergency response providers will be cut off from those who need their protection, and total automobile weight times would increase up to as 

much as 165 hours per day at a given crossing. 

Further complicating matters is the fact that the STB and the 

Canadian National expect local taxpayers to foot the bill for 90 to 

95 percent of grade separation construction costs. 

Like many communities in America, right now our towns and cities are facing tough economic times. Forcing them to come up with 

this 95 percent of the 40 to 60 million dollars necessary to build 

just one grade separation will literally break the bank. 

Coupled with the extra safety, noise and other infrastructure improvements necessary to accommodate the added traffic through 

over 112 crossings along the EJ&E, the burden on the Illinois taxpayer would be crippling, and this is all so some foreign company 

can add to its bottom line. 

Those defending this merger claim that it will reduce traffic elsewhere in the Chicago region, but mark my words, it won’t last. 

The demand for freight service in Chicago is expected to nearly 

double over the next 20 years. Even if some rail lines see a temporary decline in CN trains, they will be replaced in short order by 

trains from other shippers. 

And, many of those who currently support this acquisition 

haven’t yet realized that they too will be asked to pay for CN’s 

plans in the form of taxes and the disruption of commuter rail service. 

For rail companies, it is an easy and cheap way to increase traffic through the region without paying for the real infrastructure investments necessary to balance the needs of taxpayers, local communities and shippers. 

Mr. Chairman, during the time that this acquisition has been 

pending before the Surface Transportation Board, Members of our 

delegation have had to become quick experts of the laws governing 

the approval process for rail mergers. The STB is required to study 

how mergers would affect our communities, environment and even 

the social-economic impact. 

9 

It allows them to set certain and, in my opinion, right now inadequate conditions on the merger to partially mitigate the damage. 

But no matter how bad the impact is, no matter how contrary to 

the public interest, the STB approves or denies the merger based 

on whether or not it would create a rail monopoly. That is so unfair 

to be criminal or at least it should be, and that brings us to the 

subject of the hearing today and the TRACS Act. 

Mr. Chairman, I would like to again commend you for your work 

on this bill, and I am proud to be an original co-sponsor. 

It does exactly what a reasonable person would expect. It simply 

requires the STB to weigh the public costs a merger would have 

against the transportation benefits. If the transportation benefits of 

a proposed plan are completely outweighed by the damage to the 

public interest, then a merger could be denied or additional mitigation required. 

And, it spells out common-sense factors that the STB should consider when determining the public interest: things like public safety, emergency response time, noise and hazardous material safety. 

To Members of this Committee, I would ask that you strongly 

consider this bipartisan vital legislation and, when you do, keep in 

mind that your community could be next. The next time a massive 

rail company tries to unilaterally impose its will on small town or 

suburban America, we should have rules in place that provide some 

protection and basic fairness. The TRACS Act would do exactly 

that. 

Again, thank you for holding this hearing, and I yield back the 

balance of my time. 

Mr. OBERSTAR. Thank you very much for your comments and for 

your assessment of the common-sense factors. I think that may be 

a good new name for the bill, the Common-Sense Railroad Bill. 

Ms. Bean. 

TESTIMONY OF THE HONORABLE MELISSA BEAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. BEAN. Thank you, Chairman Oberstar, Ranking Member 

Mica and Members of the Committee here today for giving us the 

opportunity to testify in strong support of H.R. 6707, the Taking 

Responsible Action for Community Safety Act or TRACS Act. 

I want to commend Chairman Oberstar’s leadership on the bill 

and look forward to working with the Committee. 

Last month, during a field hearing that my colleagues and I held 

in Chicago, we heard testimony from the Illinois Department of 

Transportation and the Chicago Metropolitan Agency for Planning 

who expressed serious concerns about the STB review process. The 

process’ narrow focus on a given transaction in the private sector 

disregards existing transportation plans, investments and input 

from local and Federal officials. 

These hearings raised the following questions: 

How is it that a transaction initiated by and for the benefit of 

a foreign company and their shareholders would allow that shareholder upside to be paid for by American taxpayers? 

How is it that an Environmental Impact Statement can acknowledge an egregious burden on American communities but offer few 

or no solutions? 

10 

Why is it that a private company can preempt regional planning 

and transportation priorities that have been worked on by all levels 

of government and agreed to in a bipartisan fashion? 

We are here today and got involved in reviewing the STB’s mission and decision-making process because of the local deal that you 

have been hearing about that is impacting communities in all of 

our districts. But while we will share specific examples from CN’s 

proposal to acquire the EJ&E, it is important for you all to note 

that unless the mandate of the STB is clarified, communities in 

your districts can face the same sorts of challenges. 

The current process has historically put the interests of industry 

over those of American families and taxpayers. This doesn’t have 

to be the case. As noted by the Board’s most recent decision, the 

STB has the ability to deny an acquisition on environmental 

grounds. Toward that end, I hope that they use the CN/EJ&E case 

to set that precedent. 

However, the TRACS Act would clarify their obligation as a Federal Agency to protect the interests of the taxpayers who fund 

them. The impact on a local shipper, while important, shouldn’t 

outweigh the impact on communities and the citizens who live 

there. This bill will require that public impact concerns are given 

equal consideration to those of commerce, but that is not how it appears to be working currently. 

As I share details about this transaction with you, I am speaking 

not just on behalf of the 8th District constituents but as a mom 

who crosses those tracks to get to my daughter’s school, to the grocery store, the post office, almost anywhere in my community. 

But there are over 40 communities along the EJ&E in Illinois 

and northwest Indiana whose families will experience a 400 to 900 

percent increase in freight train traffic. That is why there is such 

strong bipartisan opposition to this deal. 

Last November, I requested an Environmental Impact Statement 

be prepared to give our local residents a forum to raise their concerns, and thousands of residents have shown unprecedented levels 

of involvement, culminating in over 5,000 residents attending a recent hearing held at a high school that Congressman Manzullo and 

I attended right in my district. 

The intent of an EIS should be to balance the priorities between 

issues of commerce and transportation with community concerns 

including safety, quality of life and economic impact. Regrettably, 

the draft EIS seemed to endorse allowing a private company to destroy local communities’ quality of life, safety and economies while 

expecting those communities to pick up the tab. 

It failed in scope and solutions, specifically placing an egregious 

tax burden on local communities by expecting them to fund the 

vast majority of mitigation costs for a project they don’t want and 

will not benefit from. 

CN has offered $40 million towards mitigation which is laughable considering costs are projected at well over a billion dollars, 

and that is just for grade separations. 

It fails to provide other options or review existing alternatives. 

We don’t have the time to get into those, but there are many options about how we build our transportation infrastructure for the 

11 

growth that Congresswoman Biggert just mentioned and to support 

that growth in the future. 

It identifies 11 communities who would be cut off from their police, fire and emergency providers. It disregards deadlocked traffic, 

emissions, noise levels, safety concerns, thousands of children 

standing in the cold winters of Chicago to get to school while 2-mile 

trains go by and the economic burdens as well. 

The reason we need this bill is that the STB acknowledged all 

these concerns, and we need this bill so that they can weigh those 

concerns when they make their final decisions and balance issues 

of commerce with issues that our taxpayers pay for. It is a common-sense solution, and it will create equity and serve the communities and the taxpayers who we all, as Federal officials or Federal 

workers, are entrusted to do. 

Thank you and I yield back. 

Ms. BROWN. [Presiding.] Next. 

TESTIMONY OF THE HONORABLE PETER ROSKAM, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. ROSKAM. Thank you. I want to thank Chairman Oberstar 

particularly for taking the time to come to our region and to visit 

and look and listen and spend the time on the ground, to come to 

the Chicagoland area and see firsthand. I know he has been there 

many times, but it was a great encouragement to me and my constituents to know that we have a Chairman who is willing to do 

that, rolling up his sleeves and taking the time, physically, to come 

in. 

I just want to point out to the Committee this is a bipartisan 

group here, three Republicans and three Democrats that have come 

together and are unanimous in this effort in joining with Chairman 

Oberstar. 

It is sort of an old playbook in Illinois to have city versus suburb 

tension, and those of you who represent metropolitan areas understand that natural tension. Those of here largely represent suburban areas. 

This is a case, with all due respect to the City of Chicago with 

whom we have good relationships, but the City of Chicago benefits 

from this. And, essentially, they are saying take the rail traffic that 

is coming our way and why don’t you just scoot it out and run it 

through the suburbs? 

As Ms. Biggert mentioned a couple of minutes ago, that may be 

a good deal for them in the short run, but ultimately in the long 

run I don’t think that is a very good deal. 

I think it bears out in even some of the observations that have 

made by the Surface Transportation Board. For example, they raise 

the point that there is going to be a 28 percent increase, likely, in 

the accidents that come out in the area that would be impacted as 

a result of this merger. 

With all due respect to CN and the offer that they have on the 

table, I don’t think it really passes the straight face test and, 

frankly, the law at this point doesn’t require them to do it. 

I think that this is an effort, and with the Chairman’s leadership 

we hope to change that dynamic so that they don’t simply have to 

12 

offer 5 percent of the infrastructure costs and get all of the benefits 

because think of the deal that they are offering. 

Essentially, they are coming in and they are saying: Look, we are 

going to string rail, and we are going to run it, and we are going 

to increase traffic that is going to blow right through your particular town. 

You, as the local community, as the local property taxpayer, are 

going to be asked to take on the infrastructure burden of rail traffic 

that is blowing through your town, coming from hundreds of miles 

away, going hundreds of miles away. 

And, it doesn’t create any great value to that particular community. 

I represent Bartlett, Illinois. Bartlett, Illinois is a town that is 

out west, in the northwest suburbs of Chicago. It had conflict after 

conflict in the past with CN over some of the rail line. 

They are currently putting in place a new fire station, but this 

new fire station is going to be cut off from some of the areas that 

they need to serve in the future. So, again, CN gets the benefit, but 

ultimately it is the local tax payers that pick up the burden, and 

that is just not a good deal. 

I think the wisdom of the Chairman’s approach is brilliant, and 

it is elegant in a way because all it does is says: Look, we are going 

to put this new and make this one of the considerations, safety and 

environmental effects on the proposed transaction including the effects on local communities such as public safety, grade crossing 

safety like Ms. Bean mentioned, hazardous materials, transportation safety, emergency response time, noise and other impacts. 

Also, we have not really touched on because we have been focusing primarily on the safety impact, but there is a commuter line 

that is in place to be used in this area. Our region has a real need 

for enhanced commuter rail up in sort of the north-south corridor, 

making an arc around the Chicago area, and it is called the STAR 

line. 

This is not a NIMBY issue because this is in our back yard. I 

mean we represent rail communities. We represent rail-oriented 

people. But what we have to do is use this, make sure that this 

is used wisely because these types of infrastructure decisions that 

are made are going to have an impact not only today but literally 

a ripple effect, I think, for a generation to come. 

So we are here as a bipartisan group that has joined together in, 

essentially, sending up the signal flare because we are not going 

to be alone in this. This is going to be an issue that is going to have 

an impact on other communities. 

Our hope is that we can invite you to come alongside us and to 

come alongside the Chairman to put these really common-sense 

things into place and ultimately come up with a system so that the 

right criterions are evaluated properly and that it is balanced. 

Mr. Chairman, thank you for the time and the opportunity to 

spend with you today. 

Mr. OBERSTAR. [Presiding.] Thank you, Mr. Roskam, for your 

very thoughtful comments, well expressed. The effect on the fire 

department that you described is evident all through communities, 

the 50 or so communities along this route. 

13 

And, your statement, goods come from hundreds of miles away 

and are destined for hundreds of miles further and little benefit to 

the local community, but that wasn’t always the case when the 

railroads had less than carload service and they would stop in 

small towns and pick up and drop off goods, pick up and drop off 

the mail and pick up and drop off passengers. That disappeared 

with the discontinuances in the 1960s and 1970s and with the 

Staggers Act. 

Mr. Foster. 

TESTIMONY OF THE HONORABLE BILL FOSTER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. FOSTER. I would like to thank Chairman Oberstar for this 

opportunity to testify today and also for his leadership on an issue 

of great importance to the people of Illinois and to our Country. 

I would also like to recognize the bipartisan efforts of my colleagues from Illinois—Representatives Biggert, Bean, Manzullo and 

Roskam—and whose work on behalf of their constituents these past 

several months has been exemplary. Finally, I would like to thank 

my friend and constituent, Mayor Tom Weisner of Aurora, for appearing today. He has stood up for his community, provided leadership to the nearby communities and brought the fight against this 

acquisition to Washington. 

For several months, families and businesses in my district have 

overwhelmingly declared their opposition to the potential acquisition of the EJ&E by Canadian National. I have heard from them 

in public forums, on the phone and in private meetings. They have 

held rallies and petitioned the Surface Transportation Board in 

writing. 

Meanwhile, both CN and the STB have ignored these voices. 

Last month, Canadian National skipped a public hearing on the 

purchase, refusing to participate in any panels not moderated by 

their de facto ally, the Surface Transportation Board. 

One hundred years ago, railroad barons struck deals in smokefilled rooms and made fortunes on the backs of ordinary Americans. It appears that not much has changed. 

Sadly, the public has been largely left out of the process even 

though they stand to lose the most in this transaction. There will 

be no improvement in the quality of life in the region and no economic upside. 

The recently released draft Environmental Impact Statement estimates the acquisition will lead to the loss of about 300 jobs in the 

region. It will also unreasonably saddle local taxpayers with the 

cost of mitigation for the project. 

The draft EIS provided, at best, a vague and incomplete study 

of the 133 grade crossings in the area and, from this, recommended 

that CN pay only 5 to 10 percent of mitigation costs. Grade separations cost about $50 million a piece, and the STB apparently expects local communities or the States or perhaps space alien to 

shoulder most of this burden. 

The deal also raises serious public safety concerns, many of 

which are simply glossed over in the draft EIS. Increased traffic on 

the EJ&E will raise the probability of train accidents in the area 

by 28 percent. 

14 

Furthermore, the ability of the local fire, police and EMS services 

to respond to emergencies in the affected communities will be hampered by blocked intersections. Once again, the CN is not directed 

to help fund projects that will mitigate this potentially life-threatening problem. 

Public transportation will also be adversely affected. Each year, 

millions of suburban commuters rely on Metra, but CN has not 

agreed to share the tracks along EJ&E. This threatens construction 

of Metra’s suburban STAR line and presents yet another financial 

burden to residents already dealing with high fuel prices. 

The STB must consider the impacts of transactions like this if 

they have unwelcome communities. That is why I support H.R. 

6707, the Taking Responsible Action for Community Safety, the 

TRACS Act. 

This legislation would require the STB to consider a transaction’s 

effect on public safety, grade crossing safety, hazardous materials 

transportation and emergency response time in its decision to approve or reject an acquisition proposal. Such a proposal would be 

approved when it is consistent with the public interest, rejected 

when it is not. 

To be clear, I do not mean to oppose all railway transactions. 

Railways are an extremely efficient means of transportation, and 

their use can and should increase in response to rising fuel prices. 

However, transactions such as the EJ&E expansion should only 

proceed when there is an overall commercial and economic benefit. 

That is not the case here. There is something seriously wrong with 

a process that leaves out the public interest and deflects the cost 

of these acquisitions and traffic increases onto local communities. 

H.R. 6707 will help change this. 

Now, a final observation I would like to make is that this problem, the problem here, is not limited to STB approval of mergers 

and acquisitions. A fundamental problem is that there is no mechanism in Federal law to ensure that the public costs are balanced 

against private profit. 

As railway traffic increases in the coming decades, if companies 

such as CN continue to conduct themselves in ways that are indifferent or antagonistic to the public interest, they can fully expect 

Congress’ attention to turn to explicit mechanisms to ensure environmental and economic remediation for their actions. 

Once again, I thank Chairman Oberstar for the opportunity to 

testify and thank the Committee for its consideration. 

Mr. OBERSTAR. I thank the gentleman for his statement. I think 

he summed it up very well. The public has been left out of the process, and the purpose of our legislation is to reinsert the public interest into the process. 

I would simply observe that in a previous hearing on rail issues, 

I pointed out that in the period 1820 to 1871 the Federal Government gave to the railroads 173 million acres of public land, nearly 

9 percent of the land surface of the United States for the public 

use, convenience and necessity to develop a rail system across the 

land. 

There is a public responsibility on the part of the railroads, to 

be responsive to the public. 

Do Members have any questions? Mr. Shuster? 

15 

Mr. SHUSTER. No, sir. I have no questions, just to express that 

I certainly am sympathetic to the needs of the communities that 

all of you represent and that are affected by this deal and also to 

point out, at this point, I am in no position to judge whether this 

should move forward and that in this Committee, I believe, our role 

is to make sure that the STB has the tools in place to make good, 

wise decisions on whether mergers and acquisitions like this should 

proceed. 

My concern is that this particular legislation might have much 

broader and longer lasting implications and effects on the rail industry and the transactions that may occur in the future. 

But again, I appreciate all of your being here, and all of you obviously know your subject matter and put forth a very compelling 

case. So I want to thank you for taking the time to do that. Thank 

you. 

Mr. OBERSTAR. I thank the gentleman. 

Are there other Members who wish to make a comment or question our colleagues? Mr. McNerney? 

Mr. MCNERNEY. Thank you, Mr. Chairman. 

I just want to say the testimony was very compelling. Everyone 

on the panel said something that was very memorable. 

In my own community, we have a similar problem. We have a 

town that is bisected by rail. It has cut off the emergency services 

from the people that need it, school buses, crossings. And another 

town, Tracy, is considering expanding rail service. So these are 

very relevant questions and issues. 

I want to thank you for your testimony, and I want to thank the 

Chairman for bringing this issue in front of the Committee. 

Mr. OBERSTAR. I thank the gentleman. 

Are there any others who wish to make comments? Mr. Brown? 

Mr. BROWN. Thank you, Mr. Chairman. I, too, appreciate the bipartisan support that this hearing has conducted. 

My question would be if we did not pass this bill and the merger 

did not go through, would it mean that those railroads could not 

be used or could they use them without the merger? 

Mr. OBERSTAR. I think the answer to your question is yes. The 

EJ&E, if the STB disapproved the merger, EJ&E would remain in 

the hands of U.S. Steel Corporation. The CN would continue operating as it does. They would just operate on different levels of service. 

Ms. BEAN. I think if there is also a question, could the CN add 

traffic on the EJ&E? 

They could work out a lease arrangement. However, the length 

of these new trains that they are proposing to put on there could 

not be supported by the existing track. So I think it is less likely 

that it would proceed, but that would be between what their arrangement to do something like that. 

Mr. BROWN. And my question would be then would this bill have 

any influence on extending those tracks under some kind of new 

management? 

Ms. BEAN. No. This bill really doesn’t affect this transaction. It 

is just affecting the considerations and clarifying the considerations 

that we would expect the Federal Agency to consider and that they 

already can consider. 

16 

But because there is a lack of clarity in balancing the community 

considerations with issues of commerce, it will require them to do 

that more clearly. 

Mr. BROWN. Okay. I was just concerned about the discouraging 

more train usage because I know the efficiency we are all dealing 

with now with the energy crisis and with the shortage of and dealing with foreign energy. I just felt like since the rail is more efficient at moving freight, that we certainly should try to consider all 

alternatives whether it be above-grade crossings or some other 

ways to mitigate the transaction. 

I know I am not from Chicago. I am from Charleston, South 

Carolina, but we all have transportation needs and problems related to that. 

Mr. FOSTER. If I could make, no. Go ahead. 

Ms. BIGGERT. I think that we all really appreciate the railroads 

and how they affect our economy and how important they are and 

don’t want to cause any loss of that, and I think this type of bill 

is important particularly. 

What is unusual about this merger and most of the mergers are 

not concerned with the density in population that this proposed 

merger and where the track is would cause such angst to the communities because of the disruptions and because of the numbers of 

grade crossings that you don’t really find in train traffic. 

There have been some proposals that will move this out to an 

area that is not densely populated. So there is other consideration 

and other options that they would have. 

So we are not trying to say we don’t want commerce, we don’t 

want trains, but really look very carefully at what the public interest is, and that is what this bill would allow the Surface Transportation Board to do. 

Mr. FOSTER. I would just like to explain my comment at the end 

in my testimony. The merger and acquisitions are only part of the 

problem. As was mentioned by Representative Bean, you could 

have a leasing arrangement that would accomplish pretty much the 

same thing in terms of transferring the traffic load. 

So the problem is bigger than just acquisitions, and I urge the 

Committee to think through a set of solutions that would cause the 

public interest to be considered everywhere as train traffic evolves. 

Ms. BEAN. Can I add one final comment to just draw attention 

to what Congressman Manzullo had said? 

There is a sincere interest by all of the Members here today in 

wanting to solve the issues of congestion and expand rail traffic 

and efficiencies in the area, but moving the problem from one congested, densely populated area to another densely populated area 

is just moving a problem. It is not solving anything. 

Mr. MANZULLO. Chairman, as the Chairman knows, whenever a 

railroad wants to extend a passenger service, there has to be an 

alternative study to see if it is the best way to do it, et cetera. 

But here, it is very strange because we are moving the problem 

from urban Chicago to suburban Chicago, and the only consideration by the Surface Transportation Board has to do with an antimonopoly issue. The law simply does not make sense. 

Mr. OBERSTAR. With those remarks, I think the gentleman from 

Illinois summed it up quite well, we want to establish a balance. 

17 

The purpose of the legislation is to establish a balance between 

consideration of mergers between two Class I or more railroads and 

those between a Class I and a Class II or III and to have equitable 

treatment and consideration of the public interest. 

I thank the panel, each and separately, for their advocacy on behalf of their communities in bringing this issue to the attention of 

the Chair and to our Committee. Thank you very much for being 

with us. 

We will now proceed to our next panel which consists of Mr. Nottingham, Mr. Mulvey, Mr. Buttrey, the Board Members of the Surface Transportation Board. 

And, in case you haven’t done so before, you have just heard 

from the voice of the people, the Members of Congress who represent the citizens of the communities along the route that will be 

affected by the proposed merger. Having thus been informed, we 

welcome you to the Committee hearing and look forward to your 

testimony. 

We will begin with you, Chairman Nottingham. 

TESTIMONY OF THE HONORABLE CHARLES D. NOTTINGHAM, 

CHAIRMAN, SURFACE TRANSPORTATION BOARD; THE HONORABLE FRANCIS P. MULVEY, VICE CHAIRMAN, SURFACE 

TRANSPORTATION BOARD; AND THE HONORABLE W. DOUGLAS BUTTREY, BOARD MEMBER, SURFACE TRANSPORTATION BOARD 

Mr. NOTTINGHAM. Good morning, Chairman Oberstar, Ranking 

Member Mica, distinguished Members of the Committee. I appreciate the opportunity to appear before the Committee today to discuss H.R. 6707. 

The purpose of the bill is to direct how the Board should take 

certain environmental and safety considerations into account into 

its decision-making in merger and acquisition proposals involving 

only one large railroad. My testimony will be fairly general because 

an issue addressed by the bill is raised in a pending Board proceeding. 

Railroads may not merge with or acquire another railroad without prior Board approval. 

In 1980, Congress changed the standards and procedures for considering railroad mergers and acquisitions that do not involve more 

than one large railroad. Congress found that over-regulation had 

contributed to the railroad industry’s financial woes, and so Congress sought ‘‘to provide, through freedom from unnecessary regulation, for improved physical facilities financial stability of the national rail system.’’ 

Essentially, Congress changed the statute to require the Agency 

to rule on smaller transactions, those that do not involve two large 

carriers, more quickly and it ‘‘reduced the number of factors the 

Agency must consider’’ in those cases. 

Under the current standard, the Agency examines whether there 

would be a substantial lessening of competition or restraint of 

trade if the transaction were approved 

The Board must also comply with the broad Federal statute governing Agency decision-making regarding environmental impacts. 

Proper deference to and compliance with the National EnvironVerDate Aug 31 2005 15:15 Apr 23, 2009 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 P:\DOCS\44651.TXT JASON
18 

mental Protection Act, or ‘‘NEPA’’ is a matter of great importance 

and has been of interest to me personally since law school where 

it was a focus of my studies. 

I first began working on the front lines of NEPA implementation 

and interpretation 20 years ago at the U.S. Department of Justice’s 

Environment and Natural Resources Division, the litigating division that advises and defends most Federal Agencies in NEPA 

cases. 

As any student of NEPA knows, there is a rich history connecting transportation infrastructure projects with the development 

and enactment of NEPA. Much of the justifying rationale for the 

enactment of NEPA in 1970 grew out of concerns that highway 

planners in particular were selecting construction corridors with 

little or no regard to environmental and community impacts. 

As a former State DOT Chief Executive Officer and former senior 

official in the Federal Highway Administration, I gained extensive 

firsthand experience in NEPA interpretation and compliance related to projects such as the Woodrow Wilson Bridge Corridor replacement in Virginia and Maryland, the Stillwater Bridge replacement project in Minnesota and Wisconsin, the I-80 widening project 

in Nebraska and the Intercounty Connector project in Maryland— 

important projects that raised extensive NEPA concerns. 

In my more recent work at the STB, I have gained additional experience working on NEPA issues related to a variety of proposed 

rail line construction projects, abandonments—including those that 

may lead to Rail-to-Trails projects—and proposed mergers. I am 

pleased to report that the STB has an excellent record in the areas 

of NEPA compliance and environmental stewardship. 

NEPA requires Federal Agencies to consider ‘‘to the fullest extent 

possible’’ the potential environmental consequences in every major 

Federal action that could significantly affect the quality of the 

human environment. 

This means that when considering an action that has the potential for significant environmental impacts, the Federal Agency 

must examine potential impacts, inform the public of those impacts 

and generally take those impacts into account in its decision-making. 

In doing so, NEPA’s implementing regulations direct Federal 

Agencies to consider a range of alternative courses of action, including the ‘‘no action’’ alternative, also known as denial. The consideration of alternatives is intended to prevent decision-makers 

from preselecting a preferred course of action and then ignoring information about alternatives to that action. 

The nature and extent of the Board’s environmental review in 

railroad merger and acquisition cases varies, depending upon the 

extent to which operational changes and traffic increases are projected as a result of the proposed merger or acquisition. 

However, the environmental review that the Board has conducted under NEPA in various types of Board cases routinely includes consideration of the safety and community impacts described in H.R. 6707, and the Board has imposed mitigating conditions addressed to those sorts of impacts in various cases in the 

past. 

19 

H.R. 6707 would place transactions involving only one large railroad together with one or more smaller Class II or III railroads 

under the standard now applicable only to the merger of two or 

more large railroads. The bill also would amend the standards that 

specifically enumerate certain safety and community impacts along 

with effects on passenger transportation as mandatory criteria that 

must always be considered in the analysis. 

H.R. 6707 was introduced ‘‘in response to an application filed last 

year by the Canadian National Railway, seeking the STB’s approval to acquire control of the 198-mile Elgin, Joliet and Eastern 

rail line encircling Chicago.’’ 

It is inappropriate for me to discuss any aspect of this proposed 

acquisition while it is currently pending at the Board. When it is 

reviewing a proposed merger or acquisition application, the Board 

is operating in a quasi-judicial role similar to an administrative 

court. As such, Board Members must exercise extreme caution in 

commenting on any aspect of a pending proceeding in a manner 

that might give the impression that the Board has reached certain 

conclusions about a case before the record is complete and a decision is rendered. 

The Board is currently receiving public comments on the proposed CN/EJ&E transaction. The comment period ends September 

30th, 2008. 

I understand that the Committee may wish to discuss the legal 

question of whether the Board believes that it always had the authority under the current statute to deny on environmental 

grounds a transaction that does not involve two or more large railroads. However, that issue recently has been raised in the CN/ 

EJ&E case. 

It is a legal issue of first impression, as the Chairman mentioned, that has not been addressed by the Board or any court. Accordingly, it would not be appropriate for me to discuss that issue 

at this time. 

I should note, however, that the introduction of the bill, purportedly to provide clarity, has to date served primarily to create confusion. Until this bill’s introduction, it had been assumed that the 

Agency had the authority to deny a transaction on environmental 

grounds. The Board’s environmental staff along with the parties 

have put forth extensive efforts in studying the environmental 

issues in the CN/EJ&E case. 

Unfortunately, the overarching premise of this bill—that the 

Board currently lacks authority to protect the public interest, public safety and the environment—could now be referenced in litigation by parties seeking to pressure the Board to either approve or 

deny a pending merger application. 

This Board takes its merger review and environmental review responsibilities seriously, and we have always been able to take appropriate action to address the environmental concerns that have 

been brought before us. If we determine that existing law does not 

allow us to protect the public interest and the environment, we will 

not hesitate to seek legislative reform. 

I would be happy to respond to any questions so long as they are 

not focused on a pending proceeding. Thank you for providing me 

this opportunity. 

20 

Mr. OBERSTAR. Thank you very much, Chairman Nottingham. 

I didn’t realize you spent such a chunk of your career on the 

NEPA law or that you had been involved in the Wilson Bridge Corridor or the Stillwater Bridge. You know that issue has finally 

reached a decision, and there is now an agreement to go ahead. 

The problem is after 20, almost 25 years, the cost went from $15 

million to $330 million, and I don’t know when that bridge is ever 

going to be built. 

Mr. Mulvey, welcome back to the Committee. 

Mr. MULVEY. Thank you very much and good morning, Mr. 

Chairman, Mr. Shuster sitting in for Mr. Mica, Ms. Brown. Always 

nice to see you again Mr. Lipinski and other Members of the Committee. 

I would like to thank you all for giving me this opportunity to 

testify today on H.R. 6707, the Taking Responsible Action for Community Safety Act or TRACS. 

At the outset, I would like to make clear that my testimony 

today pertains only to the TRACS Act, and it should not be interpreted as signaling my views on any cases currently pending before 

the Board including three control transaction cases: those between 

the Canadian Pacific and the Dakota, Minnesota and Eastern; the 

oft referenced here Canadian National and the Elgin, Joliet and 

Eastern; and the most recent Norfolk Southern proposal to merge 

with the Pan American Railways. 

Whether or not the Board can deny approval of a merger that it 

has categorized as a minor transaction on grounds other than potential anti-competitive impacts is a question that is under review 

at present. To date, however, the Board has never rejected any 

merger on such grounds. 

Our statute with respect to minor transactions specifies that we 

focus on anti-competitive impacts. On the other hand, the National 

Environmental Policy Act or NEPA directs that agencies take a socalled hard look at potential environmental impacts in carrying out 

their mandates. 

‘‘The Congress authorizes and directs that, to the fullest extent 

possible, one, the policies, regulations and public laws of the United 

States shall be interpreted and administered in accordance with 

the policies set forth in this chapter’’ of NEPA and, secondly, that 

‘‘all agencies of the Federal Government shall’’ give appropriate 

consideration to environmental concerns in their decision-making 

along with considering economic and technical aspects. 

They should also explain the environmental impacts of the proposed action, identify any unavoidable adverse impacts and any alternatives to the proposed action including the no action alternative. 

There seems to be a conflict here, and as a result the question 

of the scope of the Board’s authority is very likely to wind up in 

the courts in the very near future. 

A related concern of mine is the way in which the Agency has 

categorized mergers in the past. That is we have three categories 

of mergers: major, significant and minor. 

I have long thought that the Agency’s categorization was problematic in practice because the significant category is almost a null 

21 

set. The Agency has only categorized one transaction as significant 

since 1993. 

Now when I was on this Committee staff, I was very critical of 

the Board’s categorizations. Several proposals came before us, 

which I believed should have been categorized as significant because of their far-reaching impacts, which the Board classified as 

minor. In fact, virtually all non-major transactions were determined to be minor even where there were important regional impacts, at least in my opinion. 

I believe that mergers, other than those involving two Class I 

railroads, that have regional or national transportation significance 

should be classified as significant in accordance with our existing 

statute. 

Over the past year, I have made clear my views regarding the 

Board’s categorization of particular transactions, in several cases 

dissenting when they were classified as minor. 

I believe it is important that we continue to differentiate 

amongst transactions although what is considered significant needs 

to be recalibrated because of changes in the railroad industry since 

the Staggers Act of 1980. 

I also believe the Board should accord the fullest due process permissible under our existing statute to all transactions before it, including adequate opportunities for stakeholder participation in developing the evidentiary record and in undertaking the environmental review process. 

Now I am not opposed to the TRACS Act. I believe the Board 

should consider the public interest, including environmental issues, 

in some manner in deciding whether or not to approve control 

transactions. 

If the Board already has a direct authority to do so, then the 

TRACS Act is not needed. If it does not have that authority, then 

I would welcome the additional authority to do so. 

So while I have already stated I don’t oppose the TRACS Act, I 

do want to comment on a practical problem that I do see with it. 

Section 2 of the TRACS Act requires that the Board hold public 

meetings ‘‘in the affected communities unless the Board determines 

that public hearings are not necessary in the public interest.’’ 

It appears that this language provides a suitable amount of discretion for the Board to determine whether or not and where to 

hold hearings and how many hearings to hold and how to conduct 

such hearings. However, I do want to emphasize that as a small 

agency, we currently dedicate a considerable portion of our resources to holding hearings, and I urge the Committee to be mindful of this in light of the size and scope of potential future transactions. 

As you know, Class I railroads operate networks in the tens of 

thousands of miles running through literally hundreds of communities. It would be impractical and impossible for us to hold hearings in every community that might affected by a major merger. 

That concludes my statement, and thank you for the opportunity 

to testify today, and I look forward to answering any questions the 

Committee might have. 

Mr. OBERSTAR. Thank you very much for, as usual, your thoughtful comments on pending legislation—as you, Mr. Chairman. 

22 

Now, Mr. Buttrey. 

Mr. BUTTREY. Good morning, Mr. Chairman and other Members 

of the Committee. 

What I would like to do, if I could with your permission, is to 

associate myself with the remarks of the Chairman. If I had said 

what my views were, they would be exactly in line with what the 

Chairman said. 

So I am not going to submit separate testimony in the interest 

of time. I would be happy to answer any questions you might have. 

Mr. OBERSTAR. Well, thank you very much. You are of one accord. 

Chairman Nottingham, you say it has been assumed that the 

Agency has the authority to deny a transaction on environmental 

grounds. Then you go on to say it is a legal issue of first impression 

that has not been addressed by the Board or any court. 

So how can you come to the assumption or conclusion that the 

Board has authority when it hasn’t been tested and when the 

precedent is with the Interstate Commerce Commission that the 

Board does not have that authority and a Federal Court affirmed 

the ICC position? 

Mr. NOTTINGHAM. Thank you for the question, Mr. Chairman. 

The case you reference, I believe, is the Seventh Circuit case. It 

did not relate to NEPA whatsoever. As you point out, the ICC was 

affirmed. 

It related to a labor issue. The petitioner sought to require the 

Board to consider a labor question. So there weren’t two competing 

statutes at play there. There was an argument that the Board 

should consider labor impacts. 

In this situation, I have to be careful wading very deeply into it 

at all because, as you did point out, we have been served legal paperwork by the CN indicating very clearly we may well be in court 

with them very soon, where they seem to assert that we don’t have 

certain authority. 

But it is important to recognize we do have two statutes here. 

In the first panel, you heard a lot about the first statute which is 

the one that says we should consider, and look at impacts, economic impacts and what not. 

You didn’t hear much about the National Environmental Policy 

Act which is a very broad and sweeping statute. We have always 

assumed that it applies to everything we do, every Federal action, 

just as it does to reach every other agency in the Federal Government. 

We often and very regularly interpret statutes before they are 

ever litigated in court. Usually, it is not too difficult to read a law 

and make sense of it, and that has always been the understanding 

with the Agency. 

Mr. OBERSTAR. Well, this is a very important issue to address 

and goes to the heart of the concerns of the previous panel of Members and those witnesses who represent the communities from 

whom we will hear shortly. 

I go back to the origins of the dissolution of the ICC and the 

Staggers Act, and subsequently Reese Taylor, who was Chairman 

of the ICC, said in a hearing in the Senate that in those cases, the 

cases not involving two Class I railroads, the Commission is diVerDate Aug 31 2005 15:15 Apr 23, 2009 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 P:\DOCS\44651.TXT JASON
23 

rected to approve the application unless it finds there is likely to 

be a substantial lessening of competition and the anti-competitive 

effects outweigh the public interest. 

Then Reese Taylor goes on to say that, I think, this is an area 

of the law that should be addressed by the Congress. The Senate 

didn’t address it, unfortunately, and left it lying there on the table 

for all this time. 

But the direction that the application shall be approved unless 

the Board finds serious anti-competitive effects that outweigh the 

public interest, the burden of proof really shifts doesn’t it? 

Mr. NOTTINGHAM. I don’t know former Commissioner Taylor. 

That was, I think, in the early eighties when apparently he testified. 

Mr. OBERSTAR. It was. It was 1981. 

Mr. NOTTINGHAM. I don’t know the full context even of the hearing. I expect, though, that it was not focused on NEPA whatsoever. 

Very often, we get into dialogues about our statutes, and if we take 

statements in a certain context and try to apply them to another 

context they are not really good fits. 

But, in any event, if the Committee is inclined to address the 

issue of what authority the Board may or may not have, I would 

propose that there are very short and more surgical ways to do 

that, just something as simple as nothing should be interpreted to 

imply that the STB isn’t governed by the full parameters of NEPA. 

I am sure counsel could draft it even more capably than that. 

We have no problem being governed by NEPA. We have been acting as if we have been governed by NEPA for many years. We are 

acting currently as if we are governed by NEPA in all of its entirety. 

The bill, unfortunately, does a lot more than that and sets up 

kind of a parallel regime that is very similar on the one hand, but 

on the other hand looks to be crafted, perhaps by some—it may be 

not the intention of the Chair by any means—but to add litigation, 

add points to argue over in addition to the NEPA issues which we 

very thoroughly address and are addressing. 

Mr. OBERSTAR. Well, that hearing that I referred to in the Senate 

was a review a year after enactment of Staggers on the issues, on 

the concerns, the problems, try and raise issues about what might 

need further to be addressed. 

Chairman Taylor said that transactions involving smaller railroads was a problem area in the legislation possibly in need of redrafting. That was rather insightful at the time, foreshadowing the 

issue we are dealing with today. 

It wasn’t specifically on NEPA, but the hearing was generally on 

the issues involved in implementing the Staggers Act. 

What unintended consequences do you think there are of this 

legislation, since you made that statement, and how would you propose we address them? 

Mr. NOTTINGHAM. I have some concerns about the retroactivity 

of the bill, the fact that it would reach back and apply to matters 

that are currently before the Board. We have at least three goodsized—I use that phrase because I don’t think it gets me in legal 

trouble, good-sized. We have words like ‘‘significant’’ and ‘‘minor’’ 

and ‘‘major’’ that all have these special technical meetings, I have 

24 

learned at the STB—we have at least three good-sized mergers 

pending with us now. 

It is a little awkward for the Board, although absolutely fully 

within Congress’ discretion to reach back in a situation like this 

and address something retroactively. We respect that completely. 

We will implement whatever regime the Congress asks us to. 

What we are currently doing is our best to implement the regime 

that currently is in law. 

I do worry that having set up a parallel structure that on the one 

hand is very similar to NEPA but goes by a different name and 

was put forward into the record with a lot of statements, both in 

the record and also in the media about intent, the intention to affect one particular transaction that we heard about in the first 

panel and we will hear about in later panels. It is of concern to me. 

I think we will see more litigation, not less. 

It could in cases, future merger cases where there really aren’t 

major environmental issues, it could be taken advantage of to basically have a dampening effect on transactions. 

In a hypothetical case, it could really be a win-win-win merger, 

but you can always find someone who, for whatever reason, wants 

to object to or take advantage of a new second opportunity, a second bite at the apple, so to speak. 

Mr. OBERSTAR. Well, your statements are on the record, and I 

appreciate that. If you have further thoughts, we welcome your 

written submission subsequently, and we will take those into consideration when we eventually move to a markup on the bill. 

Our purpose is not to stop transactions necessarily but to give 

Board authority to adjust those transactions to accommodate the 

public interest. 

Now, Mr. Mulvey, is there any reason we should not have or the 

Board should not have authority to deal with a transaction of a 

Class I and a Class II or III as it does with transactions between 

two Class Is? 

Mr. MULVEY. No. I don’t think it is the size. It is not so much 

the size of the transaction or the size of the railroads. It is the impact of the transaction that we should be looking at. 

It can be a situation where although the railroad is relatively 

small, if the environmental impacts are large, then we ought to be 

able to impose the mitigations that are necessary to protect the 

public interest. So we should always be balancing the public interest versus the benefits of the transaction. 

As I have said in my statement, I am not opposed to us having 

this authority. The question, of course, is whether or not we already have the authority, and that is the question that is unanswered. 

In light of what you were mentioning before about Commissioner 

Taylor, this was right after the Staggers Act, and as you recall, in 

those days the interest was making sure that the railroads were 

free from excessive regulation, as Chairman Nottingham mentioned 

a few moments ago. 

I think the focus was on making it as easy as possible or focusing 

on making it easier for railroads to merge and to rationalize the 

system because the ICC had been seen as a barrier to rationalizing 

the rail system, and in those days there were too many railroads. 

25 

So, focusing on that, one can understand why that would be the 

case. 

NEPA, I think, wasn’t thought of at the time, but I think he was 

pressured in realizing there could be problems coming up later on. 

Mr. OBERSTAR. Thank you very much. 

I will withhold further questions at this time and recognize the 

gentleman from Pennsylvania, Mr. Shuster. 

Mr. SHUSTER. Thank you, Mr. Chairman. 

I thank the members of the Board for being here today. 

Could each of you just briefly clarify? Do you believe that you can 

decline an approval on transactions between Class Is with a Class 

II or a Class III? What is your position? 

I am not sure I understand what your thoughts are. Do you 

think that, the three of you? 

I know you are going to go to court, but your view today is can 

you decline an approval at this point under the current law? 

Mr. NOTTINGHAM. Congressman Shuster, you asked the question 

generally, which I appreciate, because generally the answer is very 

simple: Yes. 

What is untested, though, is whether or not we can invoke NEPA 

to deny. 

We can certainly, if the right facts and circumstances exist. It is 

unquestioned that we can invoke our other governing statute if the 

facts are present. 

But I need to just refrain. We are going to be in court soon, we 

expect, fighting this out. Despite what you might have heard in the 

first panel, the railroad, at least one of the railroads with a pending matter seems pretty inclined to express unhappiness with the 

Board and take us to court, and we need to be prepared to protect 

the public interest in that setting. 

Mr. SHUSTER. Right. Mr. Buttrey? 

Mr. BUTTREY. I have really nothing to add substantively, Congressman, to what the Chairman said. 

It is clear, I think, if you look at all the reports, statements and 

opinions and decisions in this matter up until this point and the 

fact that we are going through this environmental process right 

now where we are having public hearings in the areas that are affected by this proposed action, that the Board has assumed all 

along that it had that authority. 

Mr. SHUSTER. Right. Mr. Mulvey? 

Mr. MULVEY. Well, the authority is what we can do about environmental impacts. We certainly have said that we have the authority to require mitigation of environmental impacts, and this 

was for non-double Class I merge. This is one of the first times that 

we have actually done such an extensive environmental review of 

a merger. 

I might add, by the way, it was mentioned earlier about the 

Board’s environmental review being somewhat cursory. I think if 

you took a look at our draft Environmental Impact Statement, it 

looks far from cursory. The thing looks like New York City phone 

books. It is a fairly extensive look at this. 

The issue really is whether or not we can turn down the merger 

based on environmental impacts alone or whether there also has to 

be competitive considerations or whether we are limited to only reVerDate Aug 31 2005 15:15 Apr 23, 2009 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 P:\DOCS\44651.TXT JASON
26 

quiring reasonable environmental mitigations of the merger, and 

that is something which is before the courts. We will have to see 

how the courts rule on that, whether or not we have the authority 

or not. 

Mr. SHUSTER. Right. That brings me to, when you mentioned 

that environmental study, the law states that the STB shall approve transactions if it does not involve two Class I railroads unless it impacts competition. Can you talk a little bit about that? 

You are doing a full environmental review. As you have said, it is no little thing. I understood it is $20 million and several hundred, if not a thousand, pages. Can you give the rationale of why 

you went through that and what? 

Mr. MULVEY. Although that transaction was classified as a minor 

transaction, and I disagreed with that—I thought it was at least 

a significant transaction—we did feel, however, the potential environmental impacts of all these communities that would be affected 

and the number of trains that would be increased certainly met the 

threshold for requiring an Environmental Impact Analysis. 

And so, we said that despite the fact that it is a minor transaction we are going to go ahead and a full Environmental Impact 

Analysis, and a contractor was employed. 

I believe they have a couple hundred people working out there, 

looking at all these grade crossings and calculating the safety impacts, the pollution impacts and the like. Then, depending upon 

their report, at some point we would have the responsibility of recommending appropriate mitigations. 

The question as to whether or not we can actually turn it down 

based solely on that is one that is open and hasn’t been decided 

yet. 

Mr. SHUSTER. Right. 

Mr. NOTTINGHAM. I can just add, Mr. Shuster, that our decision 

to conduct a full blown NEPA Environmental Impact Statement 

has at least two rounds of public comment. We are in our second 

round of public hearings now. We did some in January. We did 

some a couple weeks ago. We are doing more this week in the communities that are impacted. 

We have had record turnout, thousands and thousands of 

attendees. The record is being well developed and is open until 

September 30th. 

That wasn’t an accident. We didn’t do that by some oversight. It 

was a thoughtful step and, frankly, a step to keep us from losing 

a NEPA lawsuit because we fully anticipated that unhappy stakeholders would see our ignoring NEPA as very consequential if we 

were to do that. 

Mr. SHUSTER. Right. Thank you. 

Mr. Chairman, I see my time has wound down, but I have one 

more question. 

Mr. OBERSTAR. The gentleman may proceed. 

Mr. SHUSTER. Thank you. 

Concerning the proposed changes in this legislation, have you 

looked at it? What do you feel will happen to the review process 

and the work load at the STB? Do you have the resources? 

It would be my view that it would significantly increase the time 

to review something, the manpower to do these reviews on what 

27 

are much smaller transactions. Can you just address that a little 

bit? 

Mr. NOTTINGHAM. I want to be careful not to overstate the impact on the Agency. That is not a big concern to me. It very often 

is, as the Chief Executive of the Agency. As Chairman, I have to 

keep a very keen eye on resource allocation and staff work burdens. 

It is fair to say we do most, if not, I believe, all of this type of 

analysis that is referenced in the bill when we do a full-fledged EIS 

as we currently are with the pending merger of the CN/EJ&E. So, 

in many respects, the bill is not asking us to do work that we don’t 

always do. 

It is just, by setting up a parallel regime, it gives parties who 

want to object to our work kind of two bites. They can attack us 

on whether or not we followed NEPA perfectly. Then they can attack and say, well, we didn’t cross-reference it to this other statute. 

It creates something that you don’t see. I am not familiar in the 

highway sector or other transport sectors where you have NEPA 

review, which governs all the sectors across the board of the government and an additional environment review. 

Now, with this bill we will pick on the railroad sector in particular and have this only for the railroad sector, this one additional review, implying that there is not adequate review currently. 

We think, of course, there is adequate review currently. 

If the concern truly is about whether or not NEPA in its full 

glory applies to every action the Board takes, that can be stated 

in a congressional statement in about 12 words or less. 

Mr. SHUSTER. Okay. Mr. Mulvey, how do you feel? You look like 

you were needing to add. 

Mr. MULVEY. I wanted to add that we do a lot of environmental 

analysis above and beyond these kinds of mergers. Every time 

there is a major abandonment or a significant abandonment of a 

mile or two of railroad, we make sure that that line of railroad is 

abandoned in accordance with the environmental laws to make 

sure that the tracks or the ties are taken away and that they are 

not allowed to pollute streams and what the impact of abandoning 

a line would be on fisheries and historic sites, et cetera. 

So we are very much involved in doing environmental analysis 

with abandonments, and it is also true for any new construction. 

If we have any new railroad construction, for example, the new 

construction by the DM&E into the Powder River Basin, we do a 

very, very thorough environmental analysis. We did so for PRB as 

we will also do if the Yucca Mountain project goes forward. So we 

already do environmental analyses for new constructions. 

Mr. SHUSTER. Thank you. 

Thank you, Mr. Chairman. 

Mr. OBERSTAR. I thank the gentleman for his questions and the 

Board for their response. 

Ms. Brown, the Chair of our Rail Subcommittee. 

Ms. BROWN. Thank you, Mr. Chairman, and thank you for holding this hearing. 

I guess I will go right to you, Mr. Chairman. How does the Board 

define public interest? 

Has the Board ever denied any merger application on public interest grounds such as adverse safety and environmental condiVerDate Aug 31 2005 15:15 Apr 23, 2009 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6633 P:\DOCS\44651.TXT JASON
28 

tions since the enactment of the Staggers Act? To the Chairman 

and then the others can respond. 

Mr. NOTTINGHAM. I don’t believe the Board has ever denied a 

merger on environmental or community impact or safety grounds. 

The first part of your question about how do we define. 

Ms. BROWN. Public interest. 

Mr. NOTTINGHAM. Public interest and was it reasonable mitigation? Was that the question? 

Ms. BROWN. No. Has the Board ever denied any merger application on public interest grounds such as safety or environmental 

conditions? 

Mr. NOTTINGHAM. Not on environmental. Occasionally, I believe 

in the past, distant past, the public interest could have been cited 

in sort of the economic analysis and sort of the traditional non-environmental analysis of a merger or two but not on environmental 

or community impact grounds. 

Ms. BROWN. Anyone that is going to respond to that? 

Mr. MULVEY. No. That’s is an accurate statement. We have 

never. As I said in my own statement, we have never turned down 

a merger on environmental bases. 

Ms. BROWN. The panel just before you had serious concerns 

about safety and the number of accidents. It seems as if it is not 

addressed, and I guess that would be the concerns of any Member, 

of the safety. It just doesn’t seem to be in place. 

In reading, reviewing the information, I understand that accidents will go up, but overall it will go down. 

I know you don’t want to talk specifically about this particular 

case. But the safety, it is not being addressed? That is what it 

seems. 

Mr. NOTTINGHAM. Chairwoman Brown, if I could just say, generally speaking, I am not speaking on any particular case here. 

Ms. BROWN. Right. 

Mr. NOTTINGHAM. When we review transactions at the STB, we 

absolutely consider safety impacts. We, and the Federal Railroad 

Administration, look carefully at the rail safety integration plan as 

we have done in the pending merger that has been discussed today. 

We absolutely look at any safety benefits or dis-benefits and assess 

those. We look at historic data. 

We have a draft, very voluminous as Vice Chairman Mulvey 

pointed out, a draft Environmental Impact out for the public right 

now, and it spotlights and flags a number of issues. 

I just want to be careful. We are not at the point in the process 

where we are announcing the Board’s action based on those issues. 

Some of the first panelists, I worry, confuse the fact that there 

is a draft out and they haven’t seen action out yet with the belief 

that we would never take corrective action or appropriate action. 

That couldn’t be further from accurate. I just want to make sure 

we have a chance to clarify that. 

Ms. BROWN. Back to public interest, what is your definition? 

Has the Board ever denied any merger application on public interest grounds and you are saying? 

Mr. NOTTINGHAM. Not in terms of invoking environmental or 

community impact. 

29 

What I don’t know is whether back, and this Agency has a 100 

plus 20-some year history going back to the ICC. I don’t know 

whether I can turn to counsel. 

I am advised, excuse me, that it bears correction. A predecessor 

board did deny the Santa Fe Railroad/Southern Pacific proposed 

merger sometime in the past, before my time, on public interest 

grounds. 

Ms. BROWN. Okay. I yield back. 

Mr. OBERSTAR. I thank the gentlewoman for those remarks. 

Mr. Lipinski. 

Mr. LIPINSKI. Thank you, Mr. Chairman. 

I thank Chairman Nottingham and Vice Chairman Mulvey and 

Mr. Buttrey for their testimony here today. 

As you all know, I represent a district in Chicago, in the suburbs 

of Chicago. I grew up living less than a football field’s length away 

from railroad tracks, and I now live in a village of a little under 

13,000 that is bisected by a railroad line that has between 160 and 

170 trains per day going through, 3 of which had me stuck on the 

way to the airport yesterday. 

This line also cuts off my side of town from the fire station, and 

there are no grade separations there. So I know all too well the 

safety issues and the inconveniences that can be caused by trains. 

But I also know that Chicago is the rail hub of North America. 

As you well know, it is also a very bad choke point for rail in North 

America. So that is why I was happy to get $100 million in the 

SAFETEA-LU bill a few years ago to begin phase one of the CREATE program, the public-private partnership to help ease congestion on the rails and on the roads in Chicagoland. 

I am very proud of that earmark. No matter what people are saying about earmarks right now, I am very happy about that, and I 

want to thank Chairman Oberstar for support in that. You all 

know how important that program is for not just Chicagoland but 

the Country. 

So when the CN acquisition plan was announced, I immediately 

wanted to know two things: first, the regional impact on safety and 

on affected communities and, second, the economic harm and benefits to the region due to the effect on the congested rail lines. 

Now, while I commend the STB for holding a series of public 

meetings in Chicagoland, I do want to express my strong concern 

that the attention and focus has been on the communities along the 

EJ&E while communities in Chicago and inner suburbs such as 

those in my district have largely been left on the sidelines. 

Analysis by two faculty members at University of Chicago’s Harris School of Public Policy Studies points out some interesting facts. 

Professor Berry and Professor Bueno de Mesquita note in their 

analysis that the majority of the public meetings have largely been 

held in communities along the EJ&E. 

There were seven scoping meetings. Six were held in the outer 

suburbs, only one in Chicago. 

There were 22 outreach meetings for minorities. Only one was 

held in Chicago. 

And, there were eight public hearings to comment on the draft 

EIS, and only one was held in Chicago. 

30 

I would like to ask unanimous consent to include this report in 

the record. 

Mr. OBERSTAR. Without objection, so ordered. 

Mr. LIPINSKI. It is also my concern that 45 of the about 60 pages 

of draft EIS Executive Summary concentrated impacts in communities that might see an increase in train traffic. 

Bridgeport, Beverly, Mount Greenwood, Garfield Ridge, Clearing, 

Chicago Ridge, LaGrange Park, North Riverside, Berwyn, Riverside, Oak Lawn, these are some of the communities in my district 

that are going to see fewer trains as a result of this transaction. 

There are more than 60 communities, densely populated communities that will see fewer trains. 

Now I believe that all voices need to be heard. A loud minority 

should not drown out a silent majority especially when there may 

be issues here of environmental justice. 

Now to better understand where we are at right now, I sat down 

and reviewed Section 11324 of Title 49, U.S. Code, as we have been 

talking about here today. 

Subsection A says the Board shall hold a public hearing. It also 

speaks to the issue of public interest. As Chairwoman Brown just 

suggested, public interest here is unclear, what that means. 

The statute does not speak to the issue of community concerns 

and impacts, and it does not specifically direct that all voices be 

heard. So that is why I believe we need to clarify the current statute to ensure that all voices are heard. 

I want to applaud Chairman Oberstar for his leadership on this 

issue and for introducing this bill because of this needed clarification. 

Now, with a little bit of time left, I wanted to just ask the Board 

what is the methodology that is used in determining where hearings will be held and how can we ensure that all voices are adequately heard in the future on any railroad acquisitions? 

Mr. NOTTINGHAM. I will take a stab at that, Mr. Lipinski, if I 

could. 

We don’t have any printed established methodology per se on 

holding hearings. It is a case by case decision. The Chairman typically collaborates with the other Board Members on matters like 

that. 

I will say we have had more public involvement opportunities in 

this proceeding, this EJ&E application, than I believe the Board 

ever has in the past. I believe eight scoping meetings, eight meetings on the draft EIS that are going on currently. When the record 

closes September 30th, we will get together and decide what, if 

any, additional hearings might be appropriate. 

The record, based on the mail I am getting and I read every 

day—and those letters all go into the record—the record, as I have 

reviewed it, it is extensive. I don’t get the impression as I sit here 

today that too many people are not being heard, but I will reserve 

judgment on that until the end of the comment period. 

I know that the team is working on the EIS, and I won’t speak 

substantively about it. I can’t. 

But you asked a process question. They are very aware and focusing a lot on both the benefits and dis-benefits, potentially, of 

this merger, costs and benefits, looking at the safety data and 

31 

whether or not safety is improved in some places and not improved 

in others and trying to quantify that. 

So these are incredibly important considerations that you flag 

that are definitely getting into the record appropriately, and they 

will definitely be considered. 

On hearings, we are open to suggestions. We have received a lot 

of mail about hearings, and we will keep an open mind on that. 

Mr. LIPINSKI. Any way that you could see that you could see 

changing the statute to ensure that all voices across the board are 

heard, all that may be impacted? 

I can understand that usually when you are looking at a situation just as this, maybe the first thing is you look at where is there 

going to be a negative impact caused by more trains going through. 

I think this may be a unique situation where there really is a need 

for a regional view rather than just looking at the impact on that 

one line that may be purchased. 

So is there anything specific that you might recommend to make 

sure that all voices will be heard, any changes in the statute to be 

more clear to the STB in the future how this should be done? 

Mr. NOTTINGHAM. I just think NEPA is very comprehensive on 

this point. It has been very well litigated. The agencies are required to make informed considerations of significant environmental impacts, both positive impacts and negative, and we are 

doing that. 

I don’t see the problem here. It is a little bit like voting, I guess, 

to a certain extent. It would be nice if every single person always 

voted in every election, but some people opt not to. I don’t know 

why. 

But we think we have gotten comments, believe me, thousands 

on all perspectives. 

Mr. LIPINSKI. I truly believe that. 

Mr. NOTTINGHAM. On all perspectives and viewpoints on this. So 

we will wait to see after September 30th to cast judgment whether 

we think it has been a failed public comment and interaction process or not. So far, I don’t think it is. 

Mr. MULVEY. I think it is a judgment call, and I think you have 

to rely upon making good judgments as to when and where to hold 

these hearings. We do work with the contractor who helps put together these hearings. 

And, I think you are absolutely right, that the concern starts out 

being, well, where are the negative impacts, and perhaps you have 

many more hearings where you are expecting negative impacts and 

not having a sufficient number where there are, as you say, positive impacts. 

That is something I think is a learning process. If this comes 

again, one could expect that perhaps you would be sympathetic to 

making sure that we have a better balance in where we are holding 

these hearings. 

Mr. NOTTINGHAM. If I could just add, Mr. Lipinski, under the National Environmental Policy Act, what an agency cannot do is just 

tally up the comments, put them in different piles—pro, anti, neutral—and then you vote for the tallest stack. 

That is not how it works. That just would reward people who 

have the money to hire consultants and lobbying teams and grassVerDate Aug 31 2005 15:15 Apr 23, 2009 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 P:\DOCS\44651.TXT JASON
32 

roots teams to go out and flush neighborhoods with flyers and get 

people to sign petitions. 

We look at the thoughtfulness of the comments, have experts 

double-check those for accuracy. One or two very salient, thoughtful comments can make more difference than one or two thousand 

comments that were just ginned up by some grassroots consulting 

firm with people not even knowing what they are signing onto. 

But we look. We try to get beyond the numbers and look at the 

actual data impacts. 

Mr. LIPINSKI. I appreciate your understanding of how this process oftentimes will work and that all the voices are heard, not just 

the ones that do have the extra cash to hire the consultants. 

So I thank the Board for their comments and thank the Chairman for his indulgence. 

Mr. OBERSTAR. I thank the gentleman. 

The gentlewoman from California, Ms. Richardson. 

Ms. RICHARDSON. Thank you, Mr. Chairman. It is good to be 

back and see you. 

Gentlemen, both the Port of Los Angeles and Long Beach are 

just one block outside of my district. So 45 percent of the entire Nation’s cargo goes through my district. 

And, Mr. Chairman, I thought I would bring out a point of something we haven’t talked about today. 

In a letter dated from the Port of Long Beach, it says: According 

to the statements made by CN, the EJ&E merger will allow the 

railway to expedite cargo moving from Canada to the U.S., resulting in cargo diversion from the U.S. ports to Canadian ports. Such 

statements and their implications must be studied by STB in detail 

when assessing the value of this proposal. 

The Port of Long Beach knows firsthand the environmental and 

transportation impacts of goods movement as well as the benefits 

of ports and what they have on the national economy. That is why 

we respectfully ask that you contact—they are asking me to contact—the STB to ensure that they review all available information 

to determine the impacts this proposed project will have on the Nation’s economy, the job market, the environmental and the movement of goods throughout the United States ports. 

So, therefore, my question is how much business do you anticipate the ports would lose? 

Have you conducted a job analysis, job loss analysis, and would 

the U.S. gain any real jobs as a result of this merger? 

Mr. NOTTINGHAM. I am afraid, Congresswoman Richardson, I am 

not going to be able to answer that question partly because it relates to a pending proceeding. 

I will say we are getting a lot of information along the lines of 

the statement you just made on the record. The record will close 

September 30th, and we will be reviewing it after that intensely. 

We already are reviewing aspects of it now. 

So I don’t want to say anything. If I say anything further, I think 

I would be stepping over the line of saying something that sounds 

like I think the merger is a terrific idea or not a terrific idea or 

what have you. I just need to check myself there, and I apologize 

for that. I hope you can understand. 

33 

Ms. RICHARDSON. Sure. Then my only request would be that due 

diligence would be met to address the concerns that I brought forward for the record. 

Thank you, Mr. Chairman. 

Mr. OBERSTAR. I thank the gentlewoman. 

I just have a follow-up question. We need to get on to the other 

witnesses. 

Mr. Mulvey made a very pertinent observation, that the size of 

the railroad should not be the determinant on whether action is 

taken on environmental or other public interest factors. 

Has the Board ever rejected or ordered a modification of a proposal involving a Class I and non-Class I railroad, Mr. Nottingham? 

Mr. NOTTINGHAM. Well, your question raises a couple quick 

issues, Mr. Chairman. One is, first, let me say it is not our position 

that the size of the railroads involved in the transaction dictate the 

level of environmental scrutiny. 

Two of the smallest railroads in the world could get together in 

the wrong place at the wrong time and trigger all of NEPA and its 

implementing regulations, that we follow. We don’t check or curtail 

our level of NEPA review based on the size of the railroads involved. 

But, as Vice Chairman Mulvey pointed out, the statute has two 

different processes on what I will call the economic impact analysis, the effect on shippers and competition and the market. I don’t 

want to speak for Mr. Mulvey, but I think he said smaller looking 

transactions can trigger pretty serious competition and marketplace and shipper impacts. 

So I won’t speak for you any further than that. 

Mr. MULVEY. That is fine. No. That is what I was saying. 

In light of what you were saying before, by the way, with regard 

to when taking into account public interest, the only time we have 

taken into account public interest was an economic interest in that 

merger. 

I don’t want to leave the impression that that public interest was 

environmental or safety in that case. It was, to respond to Ms. 

Brown’s question, it was an economic interest. 

Mr. OBERSTAR. Sure. There are a range of public interests and 

concerns, yes. 

But the Board, in fact, has not exercised authority to modify, has 

it, a transaction involving a Class I and non-Class I railroad? 

Mr. NOTTINGHAM. Excuse me, Mr. Chairman, if I could confer 

with counsel because I want to make sure I get this right. There 

is a long history here, and I want to make sure. 

Mr. MULVEY. Since 1966. 

Mr. OBERSTAR. We have not been able to find any. Maybe in the 

recesses of your memory over there, maybe you do have some. 

Mr. NOTTINGHAM. I’m sorry to be delayed. I do need to say that 

in the not too distant past our review of the DM&E/Canadian Pacific merger, we imposed very significant mitigating conditions. 

If your question is denial. 

Mr. OBERSTAR. No. The question is modification, and the DM&E 

was denied subsequently on other grounds by the Secretary of 

Transportation on the financing side. 

34 

Mr. MULVEY. The loan was. 

Mr. NOTTINGHAM. The financing, yes. We prevailed in the court 

of appeals on the quality of our review, and we will be doing a fullfledged EIS of that in due course if they actually proceed with their 

new line construction. 

Mr. OBERSTAR. All right. I welcome your thoughts, collectively, 

on our proposed legislation or introduced legislation, I should say, 

and any recommendations you have for further clarification or clarity and wording of the legislation would be welcome. 

In a precedent I am thinking of in France, in the TGV line between Paris and Tours, a 220-some mile line, Ms. Brown will remember this. She was on the tour with us when Florida was considering their high-speed line from Sanford to Miami. 

As the line approached this rich wine-growing region of France, 

the vintners, raised vigorous objection that the train was going to 

cause vibrations in the substrata that would affect the bottled wine 

in the caves, in the limestone caves where it was aging, and they 

were concerned it was going to deteriorate the quality of this very 

rich, especially white, wine in the Tours region. 

That is a language I speak fluently, French, and I had quite an 

engaging discussion with the mayor of the town, the president of 

the oldest vineyard in the region and the TGV authority, government authority who was there with us. 

I won’t go into all the details. But after a year of testing of vibrating wines in bottles, aging, there was a test, a blindfolded test 

in which the vintners themselves were required to taste wine that 

had been vibrated with the sensitivity of the vibration would be 

emitted by the TGV and those that were not. 

At the end, they were asked to grade the wine. The one that got 

the highest value was the wine that had been vibrated. 

[Laughter.] 

Mr. OBERSTAR. These are people who that is their business. That 

is their livelihood. 

Mr. NOTTINGHAM. Mr. Chairman, you may have just identified a 

point where we would, I think, all agree that there is an opportunity for expanded STB jurisdiction, if you want to have us help 

with that dispute resolution. 

Mr. OBERSTAR. I think you should have that authority over there 

in Tours. 

Mr. NOTTINGHAM. I thought you were making a Buy America 

statement until you got to the end there. 

Mr. OBERSTAR. No, no. In the end, they said: We don’t care 

whether it makes the wine better or not. We don’t want the vibrations. 

So they built a tunnel, and they built huge blocks of styrofoam 

into that, feet in depth blocks of styrofoam into that tunnel to absorb any possible mitigation. 

Mr. MULVEY. Mr. Chairman, we had the same issue with regard 

to the Mayo Clinic and the DM&E. The Mayo Clinic was concerned 

that the vibrations from the increased traffic on the DM&E would 

affect the MRI machines, and so that was a concern even though 

these trains were six blocks away. 

As you also remember, with the Maglev, people were concerned 

about electromagnetic fields coming from the Maglev trains that 

35 

would affect the milk production of the cows along the area. Of 

course, as you know, the Germans spent a lot of time looking at 

whether or not EMF would affect the cows and their milk production. 

So these are always concerns, and they do deserve to be studied. 

Mr. OBERSTAR. They certainly do, and we want to give you authority to be able to deal with those problems, and that is the purpose of this legislation. 

I thank you all. 

Mr. Shuster, do you have anything further? 

Mr. SHUSTER. No. 

Mr. OBERSTAR. Thank you for your presentation this morning. 

Mr. NOTTINGHAM. Thank you, Mr. Chairman. 

Mr. OBERSTAR. Our next panel will include Mr. E. Hunter Harrison, President and CEO of the Canadian National Railway; Ms. 

Karen Darch, President of the Village of Barrington; the Honorable 

Tom Weisner, Mayor of the City of Aurora; Mr. John Swanson, Executive Director of the Northern Indiana Regional Planning Commission; and Mr. Mark Yagelski, Chairman of the Board of Trustees of the Northern Indiana Commuter Transportation District; 

and the Honorable Elaine Nekritz, State of Illinois of the State 

Legislature; and Peter Silvestri, President of the Village of Elmwood Park, Illinois. 

Welcome and thank you very much for your patience. 

Chairman Harrison, good to see you again. Thank you for being 

with us. We welcome your statement. 

TESTIMONY OF E. HUNTER HARRISON, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, CANADIAN NATIONAL RAILWAY; 

KAREN DARCH, PRESIDENT, VILLAGE OF BARRINGTON, ILLINOIS; THE HONORABLE TOM WEISNER, MAYOR, CITY OF AURORA, ILLINOIS; JOHN SWANSON, EXECUTIVE DIRECTOR, 

NORTHERN INDIANA REGIONAL PLANNING COMMISSION; 

MARK YAGELSKI, CHAIRMAN OF THE BOARD OF TRUSTEES, 

NORTHERN INDIANA COMMUTER TRANSPORTATION DISTRICT AND MEMBER OF THE LAPORTE COUNTY COUNCIL; 

THE HONORABLE ELAINE NEKRITZ, STATE OF ILLINOIS; 

AND PETER SILVESTRI, PRESIDENT, VILLAGE OF ELMWOOD 

PARK, ILLINOIS 

Mr. HARRISON. Thank you. Mr. Chairman and Members of the 

Committee, I want to thank you for the opportunity to offer CN’s 

perspective on H.R. 6707. 

Allow me briefly to introduce myself. I have spent over 40 years 

in the railroad industry from my first job in the freight yards of 

the Frisco Railroad as a laborer in Memphis, Tennessee, to my 

present job as CEO of CN. 

CN operates from the Atlantic to the Pacific in Canada and all 

the way to the Gulf of Mexico in the U.S. We have operated in the 

U.S. since the 1870s. 

In the last 10 years, the STB has approved three acquisitions by 

CN, and each has smoothly and safely integrated into our family 

of 6,500 employees in the U.S. We understand U.S. railroad operations, especially operations in Chicago, very well. 

36 

I lived in Chicago for 20 years, ironically, in the western suburbs 

and am proud of the fact that I helped nurse Illinois Central back 

from the brink of bankruptcy to a high level of efficiency before it 

was acquired by CN. 

Back then, we had to struggle with congestion in Chicago every 

day, and things have only gotten worse. Chicago is the most congested area in the North American rail system. 

All of the railroads, both freight and passenger, will operate better and more effectively if we can, and I emphasize together, find 

ways to relieve congestion. Relieving that congestion should be a 

national priority. 

Rail is inherently safer, more environmentally friendly, more fuel 

efficient than our competition, the truck. Every time we improve efficiency so that freight stays on a rail, our Country is better off. 

Accordingly, we strongly support the national goal reflected in the 

Staggers and ICC Termination Acts of promoting railroad acquisitions that encourage efficiency. 

We are seeking to make our railroad and the national system 

more efficient by acquiring EJ&E. This small acquisition would 

permit us to remove trains from the congested lines that run 

through urban Chicago by shifting traffic onto the under-utilized 

EJ&E. Our $300 million investment would greatly help decongest 

the Chicago gateway. 

Our acquisition is strongly supported by a range of shippers, by 

the NIT League, chambers of commerce and by the communities in 

which we would remove trains in Chicago. 

However, because CN would put new trains on the EJ&E lines, 

the transaction is opposed by some suburban communities that 

have built up around those lines. 

In response to that opposition, the transaction is being subjected 

to the most intensive environmental review ever undertaken by the 

STB. The Board is studying the environmental impacts of our acquisition of 158 route miles in 2 States, but it will take longer to 

do than it took for a 10,500 route mile, $10 billion Conrail transaction that spanned 13 States and the District of Columbia. 

And, it will be extremely costly. Assuming the transaction is approved, the roughly $25 million that we will pay for the environmental review, together with the cost of our comprehensive voluntary mitigation, will total more than 20 percent of the cost of the 

acquisition, a portion clearly unprecedented. 

This experience has provided us with a perspective on the issues 

raised by the legislation under consideration. I just want to touch 

on some key points here. 

First, I believe that CN shares the same goals as this Committee. 

We want the most efficient rail network possible, and we want to 

assure that when railroads take steps to improve efficiency there 

are ways to address environmental impacts. 

Second, we believe that Congress has properly required independent analysis of transportation efficiency and environmental 

impacts in railroad transactions. We recommend you maintain that 

distinction. 

Our industry is one of the few for which acquisitions are subject 

to both competition and NEPA review. However, what concerns us 

is not environmental review itself but the lack of predictability and 

37 

the significant costs and delays that the Board’s regulatory review 

process imposes. 

This Committee understands well the capacity issues facing our 

industry as well as the challenging congestion in Chicago. If CN 

and other railroads are going to fix these issues, we need to be able 

to predict and get confirmation as to whether our initiatives will 

be permitted. Together, predictability and early confirmation 

strengthen our ability to direct our energy to the most productive 

alternatives. 

For smaller transactions especially, the key test is whether a 

transaction is anti-competitive. If we fail that test, then there is no 

need to complete any environmental review. If we pass, then we 

know that the investment in environmental review is likely to 

produce real benefits. 

Unfortunately, we have been denied this regulatory certainty. 

After 10 months of review, while no substantial competition concerns have been raised, the STB has still not made a determination 

whether the EJ&E transaction passes the competition test. 

Meanwhile, our strategic plan remains in regulatory limbo, and 

we are paying huge sums to consultants employed by the STB for 

an environmental review that would not be needed if the transaction failed the competition test. 

Accordingly, our hope is that Congress would not direct the STB 

to mix its competition and environmental reviews. Instead, we suggest that it would better serve the Nation’s transportation policy if 

the Board were to conduct its competition review as expeditiously 

as possible so long as any environmental impacts are deferred, 

pending a final environmental review. 

Now we are confident that our transaction, if considered on the 

merits, will ultimately pass the competition test. We, therefore, 

continue to participate in the environmental review process. 

This leads me to my third point. There is no need to add a new 

requirement to determine whether approving a transaction is consistent with environmental considerations. What is needed is a 

more structured way for the STB to make those determinations. 

Relying on its current authority, the Board conducts a thorough 

review of any significant environmental effects arising from a control transaction. No further legislation is required to accomplish 

this goal. 

We respectfully disagree with those who want the Board to compare transportation merits with environmental impacts before deciding whether to approve a transaction. If a transaction that is in 

the public interest has significant adverse environmental impacts, 

the answer is to reasonably mitigate those impacts. The railroad’s 

fair share of those costs should be determined in light of any offsetting environmental benefits, the causes of the impacts to be mitigated and the relative benefits to be realized by the parties. 

In any event, the environmental review process should be disciplined. It should be conducted on a well-defined schedule. 

As long as the environmental review if open-ended, it may encourage some people who place their local interest above the national transportation interest to abuse the process. They can seek 

to defeat the transaction or attempt to extract unreasonable mitigation. 

38 

The STB should have in place the resources to assess potential 

environmental impacts thoroughly, yet expeditiously. In this way, 

the board can encourage the timely development of mitigation to 

address reasonable local concerns while precluding opponents from 

unduly dragging out the process. 

This process should be more balanced. In our case, the SEA’s voluminous draft EIS is far more concerned with adverse impacts 

than with positive impacts. The focus implicitly favors the interest 

of suburbs over those of urban communities in Chicago that will 

benefit enormously from our transaction. 

Unfortunately, it is too late to improve the process in our case 

and, at this point in our transaction, delay is taking its toll. Our 

focus recently has been on finding a practical solution to the fact 

that regulatory delays have created a substantial risk that the 

transaction will be terminated. 

In order to avoid this risk, we asked the Board to decide our case 

on competition grounds, so we can close before the year’s end. If we 

are allowed to close, we would agree with the Board of maintaining 

effectively an environmental status quo, not moving any trains 

from the present routes that they take and until the Board completed its environmental review, we would stay with that plan. 

Now the fact that some of the suburban interests oppose that request even though it fully protected the environment and protected 

their rights may suggest that the true goal is not to mitigate but 

to terminate. 

Late yesterday, however, the Board denied our request, and we 

are assessing our options. 

In any event, given the status of our transaction, I urge that you 

not apply this bill retroactively. H.R. 6707’s overall purpose is to 

ensure sufficient environmental review of rail transactions. The 

STB’s extraordinary environmental review of the EJ&E has already met that purpose. 

Even though the adverse environmental impacts are largely outweighed by the benefits that will be realized by the millions of Chicago residents who will see fewer trains, we have volunteered to 

provide mitigation for all the significant adverse impacts as measured by the sound standards used by the Board in prior cases. In 

other words, we have already committed to mitigate more than the 

net adverse impacts of our transaction. 

For these reasons, no useful public purpose could be served by 

retroactive application of the legislation that could cause the death 

of our transaction. 

Mr. Chairman, thank you again and we would welcome questions 

of you or any of your panel. 

Mr. OBERSTAR. Thank you very much. We will have questions 

later on, and we will go on with the other witnesses. 

Ms. Darch, thank you for coming. Good to see you again. 

Ms. DARCH. Good afternoon, Chairman Oberstar and Members of 

the Committee. I would like to thank the Chairman and the Congressional proponents of H.R. 6707, particularly from the Illinois 

and Indiana delegations and my Congresswoman, Melissa Bean, for 

your leadership on this issue. 

My name is Karen Darch, and I am the President of the Village 

of Barrington, Illinois, and Co-Chair of a bipartisan coalition of 

39 

local and county elected officials in northern Illinois and Indiana 

who have formed in response to a proposed rail transaction by Canadian National that will have devastating environmental and 

safety impacts on many of the collar suburbs of the greater Chicago 

area. 

I am pleased to have the opportunity to speak to this distinguished Committee in support of H.R. 6707, the Taking Responsible Action for Community Safety Act. 

The legislation would make it absolutely clear to the railroad industry and to the Surface Transportation Board that the public interest of residents and communities threatened by the negative environmental and safety impacts of railroad merger and acquisition 

transactions involving a Class I railroad must be considered on an 

equal basis with the alleged transportation benefits of any such 

transaction. 

As a municipal elected official responsible for developing local ordinances that balance the needs of our residents with business development goals, I know full well that the Members of this Committee have an important and challenging responsibility when it 

comes to establishing public policies that facilitate freight movement while protecting the interests of communities. 

The economic and system benefits that may accrue to a large 

railroad company from a particular merger or acquisition need to 

be carefully weighed against other equally valid safety and environmental impacts that will result from any such transaction. This 

is particularly important if significant volumes of freight traffic will 

be rerouted through high density residential areas that were not 

designed and do not have the infrastructure to accommodate such 

drastic changes. 

Based on my experience over the last 11 months since the CN 

proposed to acquire the EJ&E, it has become evident that CN and 

other large railroads do not believe the STB has the authority 

under current law to consider the environmental impacts of such 

railroad transactions on an equal footing with rail and shipper 

competition issues. 

In reviewing the STB’s treatment of past merger and acquisition 

transactions involving large railroads, one finds that the STB has 

never rejected a comparable transaction on environmental impact 

grounds and has never shifted the burden of meaningful mitigation 

to the railroad applicant. It seems that as a practical matter the 

STB, itself, appears to doubt whether it has the authority to reject 

such a transaction on environmental grounds. 

This ambiguity needs to be clarified through H.R. 6707 if environmental review process mandated by NEPA is to have any significance in large railroad transactions subject to STB review. 

Since CN applied to the STB for approval of its plan to purchase 

and reroute the significant volumes of freight traffic, my village 

has been actively involved in the STB process. 

The line that CN wants to buy and transform into a high density 

corridor for mile or two-mile long intermodal trains runs right 

through the heart of Barrington, intersecting at grade level with 

four busy roads in the center of the village that are used by our 

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40 

cilities, local schools and that serve as regional commuter corridors. 

This issue is life-changing for my community. 

Numerous other communities along the EJ&E line have joined 

together in the TRAC Coalition to protect our shared interests in 

avoiding the significant environmental and safety harms that our 

constituents will experience as a result of the proposal. The TRAC 

communities are facing harms that any community across this 

Country can face, absent the TRACS Act. 

Much of our U.S. rail infrastructure was laid when vast stretches 

of the Country were sparsely populated, and rail served as a vital 

point of connectivity for small outposts. Today, we confront a vastly 

different landscape. 

The STB should be required to disapprove of proposed acquisition 

involving a large railroad and major traffic shifts if community 

harms outweigh the transportation benefits. Federal Agencies are 

not authorized under NEPA to contemplate environmental impacts 

as an abstract exercise but instead must consider those environmental impacts as an important component of the Agency’s process 

of deciding whether to approve a Federal action. 

Under H.R. 6707, the STB would be required to conduct an environmental review. This will be money well spent when the communities may live with the transaction for a lifetime. 

Rail law that makes American communities second-class citizens 

in the regulatory review process is a relic of another era. 

The railroads today are highly profitable, and they can well afford to make the investment necessary to integrate their operations 

into our communities. They will not do so, however, unless they are 

incentivized to do so by a law like H.R. 6707 that makes it clear 

that environmental and safety impacts on affected communities 

will be considered fairly on a level playing field with purported 

transportation benefits. 

It is a law that’s time has come, and communities of TRAC speak 

in one voice for our communities and communities across America 

that will find themselves in similar circumstances. We ask this 

Committee to take the first step in making this bill the law of the 

land before Congress adjourns. 

I thank you for your time and attention and would be happy to 

answer questions. 

Mr. OBERSTAR. Thank you for your testimony and for your 

thoughtful comments. 

Before I go to the next witness, I just want to observe for the 

record the presence of your able Washington counsel, Mr. Harrison, 

Karen Phillips who represents your railroad with great effectiveness. 

Mr. HARRISON. Thank you. 

Mr. OBERSTAR. Mr. Weisner. 

Mr. WEISNER. Good afternoon, Chairman Oberstar, Mr. Shuster 

and Members of the Committee. 

My name is Tom Weisner, and I am the Mayor of Aurora, the 

second largest city in the State of Illinois. I have the pleasure to 

serve as Co-Chair of TRAC, a bipartisan coalition of suburban municipalities and counties in the Chicagoland area who are opposed 

to the proposed acquisition of the EJ&E line by Canadian National 

Railway. 

41 

I would like to thank you, Chairman Oberstar, as well as Members of the Illinois delegation, particularly Representatives Bean, 

Biggert and Foster, and other Congressmen responsible for initiating this needed legislation. 

Thank you for holding this hearing to examine legislation that 

would bring our Nation’s rail regulatory policy into the 21st Century. Current law remains grounded in the days when government 

would do almost anything to spur rail development as your citing 

of the land grants in the 1800s, Mr. Chairman, exemplified. 

While rail services remain important to us today, the impact of 

rail development on local communities must be considered equally 

and fully. Unfortunately, under the current interpretation of the 

law the U.S. Surface Transportation Board uses to review, analyze 

and issue a decision on rail industry mergers and acquisitions, impacted communities and residents are considered as an afterthought. 

We have learned this the hard way. Despite the enormous impact 

this deal would have on millions of residents and taxpayers along 

the EJ&E line, no study was guaranteed. Instead, President Darch 

and local communities had to pleased our case to the STB to order 

a draft environmental study. 

I would submit there is no better example than why this legislation is long overdue, not because our situation is unique, quite the 

contrary. The economic, environmental, safety and mitigation burden that looms before us could occur in any congressional district, 

perhaps yours. 

H.R. 6707, the TRACS Act simply asks for the public interest to 

be fairly and fully considered before any deal is approved. 

I would like to share with you some examples of how this acquisition would impact our communities and ask you to consider 

whether you would want your constituents heard if this were to 

happen in your district. 

As we speak, 55,000 vehicles per day pass over a particular 

grade crossing in my community along the EJ&E line. If, as proposed, the number of 10,000-foot freight trains triples, that will 

cause lengthy delays for commuters who are driving to work, taking their kids to school or businesses transporting goods and services. 

Further, our hospital is on one side of the tracks, and a third of 

our population is on the other. As a result, we may no longer be 

able to guarantee rapid emergency response to many of our residents. 

School administrators are rightfully concerned about the safety 

of our kids crossing busier at-grade crossings where children have 

already tragically died under current train volume. They are worried that the increased noise will affect student ability to learn, 

and they want answers as to whether there will be increases in 

hazardous material transport near schools. 

I believe their concerns deserve to be heard. 

The draft EIS lacked a real analysis of the impact on property 

values, instead simply guessing that property values would most 

likely be affected in a minor way. 

Our communities continue to grow tremendously as new families 

realize the American dream and transform our cities and villages 

42 

into bustling economic development engines with subdivisions, hospitals, schools and commerce. Do we now reverse that progress? 

If freight traffic increases by 400 percent, and let me be clear— 

that is not the high water mark but simply a jumping off point— 

these communities will literally be split in half by freight traffic, 

dividing residents, creating congestion and stalling economic development. I believe these impacts need to be carefully considered. 

There are multiple communities along the EJ&E that fall below 

the median household income level. Aurora’s population is 55 percent minority population with a considerable percentage of low income residents. 

For years, we have worked hard to encourage new commerce and 

development to keep property values up. They will now take two 

steps back instead of continuing to move on the economic ladder. 

I do not believe their efforts should be ignored. 

Canadian National told the Chicago Tribune that the bulk of 

costs for mitigation would be paid for by State and Federal Governments and should be paid for by State and Federal Governments. 

I am pretty sure that the Federal Government does not have millions of dollars of loose change to devote to mitigation of this particular instance or those that happen in the future, and I know 

that the State of Illinois has trouble filling its potholes. 

Our communities are not opposed to profitable companies or rail 

expansion, but we are opposed to profitable companies becoming 

more profitable at the expense of our taxpayers in terms of mitigation, not to mention our quality of life. This is not, as some would 

argue, an issue of not in my back yard. It is more an issue of not 

in our back pocket. 

By the end of this week, eight open houses will occur in the affected region. Thousands of residents will have attended these 

hearings and providing oral and written testimony outlining their 

concerns over one acquisition. The STB is experiencing an unprecedented show of opposition to this acquisition which is further demonstrated by this hearing today. 

Our residents want to be considered, and I expect yours would 

too if their quality of life and safety were threatened. I hope you 

agree they deserve to have their concerns balanced with those of 

corporation who seek to profit at the expense of taxpayers who live, 

work and invest in these communities. 

H.R. 6707 represents an opportunity to recognize the shortcomings of the current process and update it to consider the paradigm that exists today. 

The Federal Government does not need to expedite mergers and 

acquisitions to jump-start rail activities. Those days are long over. 

The Federal Government needs to strike a balance that weighs the 

quality of life of the affected residents with the desire for more efficient and profitable rail systems. 

As I said earlier, this experience really showcases the need to update the current law to require full consideration of community impacts and greater powers to put mitigation costs on someone other 

than the American taxpayer. 

Thank you for your time and consideration. 

Mr. OBERSTAR. Thank you very much, Mr. Weisner. 

Mr. Swanson. 

43 

Mr. SWANSON. Thank you, Chairman Oberstar, Congressman 

Shuster and other Members of the Committee. I would especially 

like to thank our Congressman, Pete Visclosky, for his leadership 

on transportation and infrastructure throughout northwest Indiana. 

My name is John Swanson. I am the Executive Director of the 

Northwestern Indiana Regional Planning Commission commonly 

referred to as NIRPC. 

With me is Stan Dobosz from the town of Griffith. He is the 

Chair of NIRPC’s Transportation Policy Committee as well as a 

Councilman for the Town of Griffith. 

We are appreciative that you are holding this hearing and for the 

opportunity to testify on behalf of this important bill, H.R. 6707. 

NIRPC is a council of governments comprised of 52 elected local 

government officials plus 1 State Legislator appointed by the Governor of the State of Indiana. It serves as the designated metropolitan planning organization for transportation planning and programming for Lake, Porter and LaPorte Counties in northwest Indiana. We are located adjacent to the City of Chicago, and we are 

part of the larger metropolitan area for Chicago. 

Our northwest Indiana region is extremely concerned about the 

proposed CN acquisition of the EJ&E that is currently under consideration by the Surface Transportation Board. 

We believe this transaction will have a negative impact on five 

major issues in our region: one, our region’s air quality where we 

are already designated as a severe non-attainment area; two, the 

efforts to expand our commuter rail service; three, the efforts to expand the Gary-Chicago Airport; four, the redevelopment of our 

Lake Michigan shoreline; and five, the quality of life of our affected 

communities. 

The CN/EJ&E transaction would result in three to four times 

more trains running through our affected communities. The average train length is expected to increase from one-half mile to over 

a mile in length. 

During a 24-hour period, total vehicle delays would increase by 

a factor of 6 to 11 times, and these idling vehicles will emit more 

pollutants into our air. 

The Towns of Griffith, Dyer and Schererville will be bisected and 

unable to function effectively or safely. Impacted communities face 

considerable safety concerns due to an expected increase in crashes 

and longer routes for fire and police vehicles because of blocked 

crossings. 

Let me identify specific impacts on just one of our communities, 

the Town of Griffith. Griffith has a population of 17,000 residents. 

It has seven at-grade crossings at the EJ&E line. 

Average trains per day will increase from 7.6 to 28.6 a day. Total 

vehicle traffic will increase from 9 to 11 times during a 24-hour period. 

The transaction will effectively cut the town in two, and emergency delay response time could double for police, fire and ambulance service. All three fire stations and the police station located 

in Griffith are located on the west side of the tracks. If crossings 

are blocked, response times could double to the east side. 

44 

The environmental impacts—noise, vibration, whistle-blowing 

and air quality—will be disruptive to adjacent neighborhoods. A derailment could be catastrophic to residents. 

Finally, there are no economic benefits for the Town of Griffith 

with the increased train traffic. Indeed, this transaction will probably have an adverse effect on property values. 

Griffith is not alone. The same scenario exists for the Towns of 

Schererville and Dyer and the City of Gary, Indiana, and communities throughout suburban northeastern Illinois. 

During the course of our communications with the STB on the 

issue of the proposed CN and EJ&E transaction, we have come to 

understand that when the STB makes decisions on railroad transactions, it is mandated by Congress to focus on the impact on the 

railroad industry and overall transportation benefits. The STB does 

not appear to be required to focus as much on the impacts the 

transaction would have on our local communities and their quality 

of life. 

The result is that the STB could approve a transaction that 

shifts and indeed increases the transportation and economic burdens from communities to other communities, so long as it can be 

shown that over a large area there are some positive transportation 

benefits. 

Changes to railroad infrastructure and operations in northwest 

Indiana brought by the CN transaction will affect the daily lives 

and economic well being of our residents, workers and businesses 

and our entire transportation system for many decades to come. 

It should be in the Nation’s interest as well as the railroads’ interest to have an integrated surface transportation system that 

benefits everyone, including residents and businesses in the local 

communities that will be hosting and living with the railroads’ 

business decisions for many, many years to come. 

I believe that the TRACS bill under consideration today will significantly improve the Surface Transportation Board’s capacity to 

make decisions on railroad transactions that will be in the Nation’s 

interest as well as the interest of local communities and metropolitan areas. It will also help STB decision-making be more consistent 

with the spirit and intent of the Surface Transportation Act. 

On behalf of the communities and counties of the Northwestern 

Indiana Regional Planning Commission, I wish to express our support for the provisions of H.R. 6707 relating to certain railroad 

transactions that would require the STB to do the following: 

One, hold public hearings in the affected communities; 

Two, consider the safety and environmental effects of proposed 

railroad transactions on local communities; 

Three, consider the effects of proposed rail transactions on both 

intercity rail and commuter rail passenger transportation; 

Four, require conditions to mitigate the effects of the transaction 

on local communities; and, 

Five, reject transactions if the adverse impacts on the public outweigh the public benefits. 

Mr. Chairman and Members of the Committee, I appreciate this 

opportunity to show support for H.R. 6707 to require the Surface 

Transportation Board to consider the impacts of certain transactions on local communities and those of our region. Thank you. 

45 

Mr. OBERSTAR. Thank you for a very thoughtful, very succinct 

presentation. 

Mr. Yagelski. 

Mr. YAGELSKI. Good morning, Chairman Oberstar, Mr. Shuster 

and Members of the Committee. 

My name is Mark Yagelski, and I am the LaPorte County Councilman and Chairman of the Northwest Indiana Commuter Transportation District Board of Trustees. I am honored to appear before 

you today, and I appreciate the opportunity to offer NICTD’s strong 

support for H.R. 6707, the Taking Responsible Action for Community Safety Action. 

On behalf of NICTD, we applaud the Chairman’s common-sense 

approach to reforming the Surface Transportation Board’s, the 

STB, approval process of proposed mergers and acquisitions. Thank 

you for making these reforms a priority by introducing the critical 

legislation and holding this hearing today. 

NICTD would also like to thank Congressman Visclosky for his 

co-sponsorship of this important legislation and for being our constant and ardent champion here in Washington. 

This year, NICTD is celebrating its 100th Anniversary of the 

South Shore passenger service, and I pleased to share with you 

that the line is experiencing another record year of increased ridership. Even before gas prices reached a whopping $4 a gallon, more 

and more Hoosiers were turning to NICTD in search of non-automotive transportation alternatives. Since the mid-1970s, ridership 

has grown from 1.5 million to over 4.2 million passengers in 2007. 

This is an exciting time for commuter rail. However, we are 

deeply concerned that the STB’s current process will literally derail 

our efforts to provide even greater service to our communities. 

While the acquisition of the EJ&E railroad may be just one of 

the many that STB will review this year, our situation brings to 

light an urgent need for reform. 

In particular, NICTD supports the Chairman’s legislation which 

would give the STB the authority to consider the effects of the proposed transaction on the intercity passenger rail and commuter 

rail. Such authority is necessary to prevent worthwhile projects 

like the West Lake Corridor from being derailed by harmful, inaccurate conclusions and to ensure that the STB’s assessments accurately account for public interest in long-term transportation improvements. 

Already, we are feeling the negative effects of the draft EIS, and 

we will be working tirelessly to correct them and recover from the 

unnecessary setback. In fact, the draft EIS dismisses the future of 

transportation in northwest Indiana as ‘‘not reasonably foreseeable.’’ 

The statement is factually inaccurate and could not be further 

from the truth. It is a shame to see that, for the time being, our 

limited resources will be spent on clearing the West Lake Corridor’s good name and reputation rather than bolstering the project 

in preparation for the return of the Indiana legislators. 

NICTD is a critical piece of Indiana transportation infrastructure, and we represent the future of northwest Indiana. 

Let me set the record straight. The West Lake Corridor is alive 

and well. The project which has been in the forefront of planning 

46 

efforts for the past two decades has strong support at local, State 

and Federal levels and is moving ahead. 

We are about to complete an Alternatives Analysis on Phase 1 

which is a critical step in determining the eligibility in the Federal 

Transit Administrator’s New Start Process. As you are aware, this 

is a highly competitive process, and statements like those made by 

the STB only serve to undercut the project. 

In addition, earlier this year, legislation to help finance the 

project was approved one house of the Indiana Legislature. We expect the Legislature to continue these efforts during the next session. 

Most troubling is a draft EIS severely limits our ability to negotiate a right of way agreement with CN. Obtaining such an agreement is the linchpin between the expansion toward Valparaiso. 

Moving both goods and people is essential to the economy. 

However, the STB’s draft EIs is incredibly shortsighted and fails 

to recognize the need for increased transit capacity in the corridor. 

This is a significant shortfall and will cripple our economy should 

it ever become final. There is simply too much at risk, too much 

potential that will not be realized, too much previous work and 

planning that will be lost. 

The benefits of the West Lake Corridor are numerous and cannot 

be overstated. This type of transportation investments would spur 

local development, reduce vehicle miles traveled, VMT, therefore 

limiting the harmful production of greenhouse gases and open up 

thousands of good-paying jobs. 

It is good for the economy, it is good for the environment, and 

it is good for our pocketbooks. 

I recognize the focus of today’s hearing is not to espouse the benefits of transit. However, it is important for the Committee to appreciate exactly what is at stake. Even more so, it is essential that 

I highlight the tremendous benefits of the West Lake Corridor in 

my testimony as you will find this critical information absent from 

the STB’s draft EIS. 

In conclusion, H.R. 6707 is timely, much-needed legislation. It is 

essential that mergers of all railroads be treated the same way as 

Class I mergers are currently treated, and this legislation would 

provide a level playing field. 

I thank you for the opportunity to testify today, and I would look 

forward to any of your questions. 

Mr. OBERSTAR. Thank you very much, Mr. Yagelski. I just want 

to pick up on your reference to the Northern Indiana Economic Development Initiative. 

Mr. Shuster, who is very deeply engaged in economic development in his district and throughout the region of Pennsylvania he 

represents, would envy, as I did, the gathering of over 600 people 

at a meeting of the Northern Indiana Economic Development authorities and entities gathering with local development groups, 

mayors, councils, business people. 

I participated in that a couple of years ago. I was just blown over 

by the intensity of interest. They really care, and they are all engaged. 

Ms. Nekritz, a Representative, thank you. Good to see you again. 

Ms. NEKRITZ. Thank you, Mr. Chairman. Good to see you. 

47 

Mr. OBERSTAR. Thank you for being here. 

Ms. NEKRITZ. I appreciate being here and, Congressman Shuster, 

thank you for this opportunity. 

I am going to go ahead and deliver my testimony anyway even 

though I think Congressman Lipinski covered almost all the points 

that I was going to discuss. 

I am a member of the Illinois House of Representatives, representing a suburban district with the current CN line running 

right through the heart of it, and I am also the Chair of the Illinois 

House Rail Committee. 

I don’t oppose giving the STB authority to hold public hearings, 

as long as it is in all affected communities as proposed by H.R. 

6707, nor do I oppose including safety and environmental concerns 

as part of the STB review process as well as impacts on intercity 

passenger or commuter rail. 

I am very concerned, however, that the local, regional and national benefits of a transaction will get lost in the clamor created 

by those who are opposed. I encourage the Committee to ensure 

that all impacts be considered and weighed as part of any STB review. 

I would like to point to Des Plaines, Illinois, which is a community I represent. It has about 60,000 people and is home to 3 Class 

I railroads along with a busy commuter rail line station. 

We have 32 at-grade crossings and only 2 grade separations. 

Frankly, it is impossible to go anywhere in Des Plaines without 

crossing railroad tracks. 

Up until the mid-1990s, railroads in Des Plaines were a minor 

inconvenience, but now we have approximately 140 trains a day 

rumbling through Des Plaines. So the 32 at-grade crossings are frequently, if not routinely, blocked. 

All the complaints that have been raised by the opponents of the 

EJ&E transaction are a daily reality in Des Plaines. Children getting to school are put in harm’s way. Emergency vehicles are delayed or rerouted. Daily commutes are longer, and local businesses 

suffer when customers find it difficult to get to their destination. 

And, it is going to get worse. According to AASHTO, freight rail 

will grow another 67 percent by 2020. Consequently, Des Plaines 

looks forward to even greater and greater delays. 

So when the CN seeks to reduce the number of trains it sends 

through Des Plaines from 19 per day to 2, this is a local benefit 

that should receive consideration on par with the concerns raised 

by others. As Congressman Lipinski said, our voices deserve to be 

heard. 

Des Plaines is a middle class community. Its residents include 

teachers, firefighters, electricians and many seniors who have come 

to the downtown condos in order to be able to afford to live on a 

fixed income. This is not a community that can hire influential lobbyists, expensive public relations firms or print thousands of yard 

signs or t-shirts. 

Furthermore, because the freight lines in Des Plaines are already 

owned by the Class I railroads, we never had any opportunity to 

object to increased traffic nor have we been offered any funding for 

mitigation. 

48 

I am deeply troubled by giving those who will only now feel the 

effects of increased train traffic an opportunity to jump to the front 

of the line for funding for much-needed safety equipment, grade 

separations and noise abatement while those who have been living 

with freight traffic for years, if not decades, continue to wait and 

wait. 

I urge the Committee to make it crystal clear that H.R. 6707 requires all local impacts, both positive and negative, to be taken into 

consideration in part of the STB decision-making process. 

There are also some very important regional and national considerations that should be weighed by the STB, and again I am going 

to use Chicagoland as an example. 

We are the world’s fifth largest intermodal hub. We have nearly $8 billion in economic activity as a result of the 6 Class I railroads 

traversing our region. We have over 9,000 railroad jobs with thousands more in warehousing, logistics and distribution. We are a 

rail hub, and the resulting economic activity is critical to maintaining our vibrant economic diversity. 

Unfortunately, as you well know, our regional rail system is antiquated and horribly congested. If we fail to address this congestion, 

shippers and freight railroads will ultimately decide to take their 

business and the corresponding trade and industrial activity to 

other locales, thus damaging our regional economy. 

Finally, I know this Committee is very aware of the CREATE 

program in Chicago. In the last Federal transportation bill, this 

Committee was instrumental in designating CREATE as a project 

of national significant. The problem of congestion in Chicago was 

acknowledge to have an impact on the national freight system. Ultimately, CREATE received $100 million toward the $1.5 billion cost which is not enough. I am not casting any stones because 

we at the State of Illinois have not been able to come up with anything. So, while we continue to haggle over taxpayer funding for 

critical congestion relief, the CN is offering a purely private solution to this congestion problem. 

Trains are the most economically and environmentally form of 

transportation. In the global economy which is dependent on transporting goods quickly and reliably, freight trains are a fact of life. 

The transactions to be considered under H.R. 6707 deserve a fair 

review that considers all factors including positive local, regional 

and national benefits. 

And, Chairman, I know you went out to visit the far out suburbs. 

If you would like to come visit communities that Commissioner 

Silvestri and I represent, we would welcome that so you could see 

what is going on there. 

Thank you. 

Mr. OBERSTAR. Thank you very much. It is quite evident why you 

are Chair of the Rail Safety Subcommittee. You know your subject 

matter well, and you are an articulate advocate for your communities and for the issue. You see the broader implications, and you 

can see both sides of the issue. 

I thank you very much. Good to see you again. 

Our next witness, I appreciate, Mr. Silvestri from Elmwood Park. 

Mr. SILVESTRI. Thank you. Mr. Chairman, Mr. Shuster, Members 

of the Committee, I thank you for this opportunity to appear before 

49 

you today to discuss H.R. 6707, the Taking Responsible Action for 

Community Safety Act, and I would like to thank you all for your 

leadership on this very important issue. 

I would also like to thank Congressman Dan Lipinski for his 

leadership and scholarly approach to reviewing this issue and all 

transportation-related issues as well as to thank our Representatives Jan Schakowsky, Rahm Emanuel, Danny Davis and Jesse 

Jackson who are supporting our coalition efforts to see this transaction approved. 

I would also like to acknowledge the presence of Rich Pellegrino 

who is the Executive Director of the West Central Conference of 

Municipalities which represents 35 west suburban communities in 

metropolitan Chicago. 

My name is Peter Silvestri. I am a member of the Cook County 

Board of Commissioners and serve as Village President or Mayor 

of the Village of Elmwood Park. 

My village is a community of about 25,000 residents who live in 

two square miles. We are located just west of the City of Chicago, 

and we are approaching our centennial year. It is crossed by a railroad track right down the middle of town, and let me assure, as 

many of my neighbors, have experienced firsthand the effects of 

rail benefits and problems. 

When I became Mayor in 1989, the Village of Elmwood Park— 

remember, a town with 12,500 residents per square mile—experienced 40 trains day. Today, that number has tripled, and more 

than 120 trains pass through Elmwood Park each and every day. 

At the same time, 24,000 vehicles travel across these tracks at 

its main intersection. Half of our public high school students, half 

of our middle school students and half of our preschoolers and kindergartners try to cross these tracks with their parents on a daily 

basis. 

With four crossings within a one-mile stretch through town, I believe the people of our community know the issues that surround 

trains. In fact, one of these crossings has been determined to be the 

most dangerous crossing in the State of Illinois by the National 

Transportation Safety Board after a commuter train slammed into 

thirteen vehicles trapped on these tracks at rush hour on the eve 

before Thanksgiving in 2006. 

The reduction of rail traffic in my community has been a major 

concern for years, and that is why I, along with 60 other suburban 

communities in the Chicagoland area, formed a group named 

START which supports the benefits that would result from the 

EJ&E purchase by the Canadian National. 

In my 1 community, this 1 transaction would result in a reduction of 7 to 10 trains, meaning that we would still suffer from over 

115 trains a day. Yet, we would welcome this reduction. 

Similar reductions in countless city neighborhood and inner core 

suburbs would be welcomed as an improvement in our collective 

lives in each and every case. Each of these communities have similar stories with respect to public safety issues, school transportation issues and issues surrounding trying to get these people 

across the railroad tracks. 

For example, in our communities, we have mutual aid agreements with all of our neighboring communities, as most suburban 

50 

communities in the Chicagoland region do, to help alleviate the impact of this crossing. 

The TRACS Act is a good idea because it looks at the specific 

concerns of a given area. In our region, for example, over 4.1 million people could potentially benefit from fewer and faster trains in 

60 suburban communities in comparison to the 30 communities 

that would increase in train traffic. 

Unfortunately, Mr. Chairman, as an aside, only one STB hearing 

was held in the parts of the Chicago region that would benefit from 

this transaction. We would encourage additional hearings in the 

inner suburbs and in the City of Chicago. 

As a County Commissioner representing 14 municipalities and 

countless neighborhoods on the northwest side of Chicago consisting of approximately 320,000 residents, I understand the importance of studying these sorts of things from a regional approach 

and taking both the negative and positive aspects of development 

of regional importance into account. In fact, the Cook County Board 

has passed a resolution supporting the CN purchase of the EJ&E 

as a benefit to the majority of the county residents. 

As Village President, I also understand the concerns of communities who would experience more train traffic due to a purchase 

such as this one and the reason behind including language in H.R. 

6707 that addresses adverse impacts on affected communities. Reasonable accommodations must be reached. This is not about transferring a problem. This is about a fair solution for all of us in all 

parts of the region. 

For example, we would still have 120 trains in our community, 

which would be 400 to 500 percent more than the anticipated impact in some of our neighbors to the west. Are the lives of the inner 

suburban city areas any less important than those of the further 

out suburbs along the EJ&E line? 

The likely number of rail accidents on the CN rail lines inside 

the EJ&E area estimated to approximately decline by 77 percent. 

Isn’t the safety of our children and our residents and our commuters who come through our villages to get home to the villages 

along the EJ&E line less important than those communities that 

do not want increases in rail traffic in their communities? 

In every case, relocating some of the freight traffic out of Chicago 

and the inner ring suburbs benefits the local, regional and national 

economy. Freight traffic, increasingly more important because of 

fuel costs, chokes in our region. This choking also results from 

these trains idling in our communities and polluting our neighborhoods. 

In effect, the EJ&E purchase helps reduce pollution as these 

trains will move through our region quicker and helps reduce our 

reliance on fuel oil as this alternative means of transportation is 

utilized. 

Mr. Chairman, this concludes my prepared remarks. I would like 

to thank you and the Members of the Committee for this opportunity and for your leadership, and I look forward to working with 

you and all of our suburban neighbors in continuing to enhance our 

rail systems. 

Thank you. 

51 

Mr. OBERSTAR. Well, thank you very much, Mr. Silvestri, for 

your statement. Together, you and Ms. Nekritz expressed the spectrum of concerns that the board has to continue, that we are trying 

to balance on the Committee in response to concerns of Members 

of Congress on the panel that you heard at the outset of this hearing. 

The positives, I think our legislation does, despite what Mr. Harrison seems to think, that our legislation seems to be far more concerned with adverse impacts than with positive impacts. I want to 

assure you that the legislation is balanced in requiring consideration of both the benefits as well as the adverse impacts. We certainly heard from those who feel adversely impacted. 

Mr. HARRISON. Mr. Chairman, if I could, that statement was in 

regard to the Environmental Impact Statement, not the proposed 

legislation, if I could clarify that. 

Mr. OBERSTAR. Thank you for that clarification. 

Now, Mr. Harrison, do you think, as your testimony seems to express, that the Board has authority under current law to deny the 

CN application on public interest grounds, safety and environmental considerations? I was just looking at your testimony. 

Do you think the Board has authority to modify substantially, to 

direct modifications on public interests grounds? That is safety and 

environmental considerations. 

Mr. HARRISON. Our view is that under the existing act, a minor 

transaction cannot be turned down on environmental issues. It can 

be mitigated or there can be conditions placed that say you can 

only merge if you will mitigate, if you will do the following. 

But the true test, if you look at it, is to review the anti-competitive nature of the transaction. If the transaction is pro-competitive 

and it is not anti-competitive, then the issue becomes—and we are 

perfectly willing to deal with that—to resolve the environmental 

issues, mitigate the environmental issues. 

We are just concerned about how the process would work, this 

open-endedness. 

One of the reasons that we are concerned about the retroactivity 

is we would never have structured this transaction like it was 

today if we had known this legislation could be passed and be retroactive. One of the reasons why is because we have a deal that 

runs out at the end of the year. 

The Act says that you will look at a minor transaction in 180 

days. Well, what does 180 days matter if you are going to take a 

year or two for environmental review? So this deal could go dead 

on us, and we could spend fifty or seventy-five million dollars for 

nothing. 

So I have no problem going forward, effectively, with the legislation and the purpose of the legislation. We cannot argue with public interest. We can’t argue with the environment. We can’t argue 

with anti-competitiveness. We are willing to deal with all of those, 

and we think that is a fair proposition. 

Mr. OBERSTAR. If the Board were to order modifications of your 

proposal to deal with the safety issues raised, to deal with the 

noise, to deal with the vibration, to deal with separation of towns, 

ordering or proposing to order the railroad to build rest areas, side 

lines, prior to or after a community mile or two-mile length accordVerDate Aug 31 2005 15:15 Apr 23, 2009 Jkt 000000 PO 00000 Frm 00067 Fmt 6633 Sfmt 6633 P:\DOCS\44651.TXT JASON
52 

ing to the length of the train, so that you had to stop a train and 

you wouldn’t be severing a community in case of fire or medical 

emergency, if they ordered you to do that for some number of these 

communities, would you comply or would you challenge that in 

court? 

You can say that is too speculative and you can’t make that decision, and that would be perfectly understandable. But do you have 

a general spirit of compliance? 

Mr. HARRISON. Yes, absolutely. I appreciate the question, and let 

me clarify a couple of things. 

Number one, we have never made a statement to the press of 

Chicago that we thought the State and Federal governments ought 

to pay for the bulk of the mitigation. The issue becomes confusing 

when it deals with grade crossings, and grade crossing separations. 

Mr. Chairman, as you well know, for 50 years or more the precedent has been that all grade crossings, if you add a grade crossing 

or if you do a separation, it is the Federal share, which is usually 

about 85 to 90 percent. It is the local and State with about 5 or 

10, and the railroad with about 5, and we maintain it in perpetuity. 

Now that has been that way for 50 years. If the Members of Congress earlier here today don’t think that is the right thing to do, 

they should have corrected it a long time ago, not to wait for this 

transaction. 

We have committed so far up to $40 million for mitigation in addition to the $100 million in improving the infrastructure with connections and crossings. 

And, I can say this: All the things that you mentioned, every one 

of them we would deal with if you could put them under the category of yes, they are reasonable. 

If they came to us and said the mitigation is going to be $2 billion, no, we couldn’t do that. The transaction wouldn’t happen. 

But we are reasonable people. We have employees that live in 

these affected communities. I lived in the western suburbs. I understand. 

But if you look at it, the same number of trains are coming to 

Chicago. It is just which route they are going to take. We are taking them off a congested route where there will still be trains there 

and putting them on a less congested route. 

I understand and am sympathetic with the people in the western 

suburbs. But if you really put a slide rule to it and you take an 

average train, our average train size of 6,000 to 7,000 feet, going 

40 miles an hour, they will go across the crossing. They will block 

it for two minutes from the time the gates start down on the approach. 

If you do that in some of the communities that have said they 

are going from 5 trains to 20, which is a 400 percent increase, 

okay, that is 15 trains. What happens effectively is the crossing is 

blocked 48 minutes a day, 2 minutes every hour. 

That is a long traffic light. 

I have been working 44 years, and I have never been accused of 

a train blocking causing a mother to have a baby in a car. 

53 

You know we can cut crossings. We can react to emergencies. We 

are reasonable people, and we will try to deal with every one of 

these issues, but I will tell you that there will be issues. 

We can’t create, as you well know, a grade separation. I can’t go 

in and put a viaduct, an underpass in. I have to go all through environmental review. The State has to approve it. The funding has 

to be approved. We can’t do that individually. 

We will pay what we think—and we will work with the other 

communities—our fair share. That line is not drawn in the sand at 

$40 million. So, yes, we would take all those things under advisement reasonably. 

Mr. OBERSTAR. Going back to 1986, in this Committee, this very 

Committee room, we approved the first very substantial funding for 

railroad grade separation be done out of the Highway Trust Fund. 

In fact, it was my colleague from Minnesota who initially proposed it. He represented a large farm district in western Minnesota 

where many communities were just exasperated with the safety 

problems at grade crossings. We included that language in the 

1986 Surface Transportation Act. 

Of course, this Committee didn’t have direct jurisdiction over 

railroad issues until the Republican majority. One of the really 

good things the Republicans did was bring that total transportation 

authority into this Committee. 

In years past, the Committee never dealt with these issues, the 

previous Committee. That is the Energy and Commerce. This is the 

first time we are really taking a hard look at these issues. 

There are situations. They have happened in my district, a different railroad that simply blocked a town. A young child was choking on something that he swallowed the wrong way, and the train 

is sitting right here. 

The hospital emergency room is on the other side of the track, 

and the child is on this side of the track. Fortunately, there was 

a volunteer fire department person who was able to respond. 

The railroad wouldn’t move the train. That is not our problem. 

You have to go three or four miles north and then another three 

or four miles south in order to get to the clinic or to the hospital 

or to an emergency support. 

There are many cases. I have heard from these communities that 

the railroad just sat there and blocked the town, and the locomotive is idling and vibrating and the noise and the smell and particulate matter descending upon them. You hear these stories directly. 

Mr. HARRISON. I cannot justify that behavior. That is wrong. It 

is absolutely wrong. 

And, Mr. Chairman, we have been dealing with communities and 

trying to resolve some of these issues. We have said to them, we 

would talk about curfews during certain periods of time. We would 

work with you when you are going to have a big sports event or 

something where there is going to be a lot of traffic, that we could 

work and deal with that. 

We would agree that we would support legislation that if we 

blocked a crossing longer than X that we would be severely fined, 

that it would motivate us—if they think we are only motivated by 

dollars—not to block the crossings. 

54 

But some people have said to us: Look, we don’t want to mitigate. We don’t want you here. 

Someone has to decide where the trains are going in Chicago or 

they are going some place else. 

You have heard in the inner city, how many trains there are, 120 

trains through these communities that they deal with, effectively. 

Is it inconvenient? Sure, it is inconvenient. 

There is going to be some that would shift to the western suburbs. If the growth goes to the inner city, they are going to be 

worse. If you don’t want them in the western suburbs, where do 

you want trains? 

Not in Chicago? Then what is going to happen could happen to 

Chicago, and Chicago becomes the next St. Louis. 

St. Louis used to be the largest interchange gateway in the U.S. 

Because of similar issues of congestion, lack of improving infrastructure or service, now Chicago is king and St. Louis has slid to 

about three or four. It would have a devastating impact—a devastating impact on the economy. 

So what we are trying to encourage is all of us, collectively, work 

together. We’ve all got skin in this game. Let’s collectively work together. 

Let’s work with the communities, try to solve their issues, at the 

same time effectively move freight and do it in a fair-minded way, 

hopefully. 

Mr. OBERSTAR. That is a very strong appeal, Ms. Darch, Mr. 

Swanson, Mr. Yagelski. 

Mr. Weisner had to leave. He told us earlier he had a plane to 

catch, but his testimony says that average property loss of one 

neighborhood would be $60,000 per property. 

You are head of that coalition of which Mr. Weisner is a member. 

While there are adverse effects in the inner city now, in the Des 

Plaines area, there will be adverse effects in the future. In your 

area, what are those property losses while there may be property 

gains elsewhere? 

Ms. DARCH. Mr. Chairman, thank you for the question. 

As one of the panelists said in the first panel this morning, I 

think a huge issue is shifting a problem instead of solving a problem in our area. 

We definitely have information that says property values will go 

down substantially. We have homes, 8 percent of the homes in my 

community, that are within 300 feet of the rail. 

The issues of the block, the blockage times, the draft Environmental Impact Statement, while we have some issues with that, 

goes into some detail on vehicle waiting times. 

In communities that are traversed by commuter lines that would 

be now bisected by the EJ&E, mine is one, there will be substantial 

waiting times if a CN rail train arrives when a commuter train is 

supposed to be crossing. We are talking about 8, 9, 10-minute 

delays that could happen more than once, several times a day. 

Hours of delay multiplied for the communities up and down the 

line. 

A fundamental issue that we have come to understand in this 

and that you heard earlier is while some communities inside Chicago, a lot of them have three or four trains now a day on the CN 

55 

lines—the same amount that some of our communities have—everybody is not a Des Plaines with 19. 

Many of the inner city communities have six or eight or four or 

three, an average of four a day. So we are not talking about a huge 

impact. 

But we believe that even with the shift of those, if this transaction were proposed, that other rail will fill that space. Rather 

than create a huge regional problem by creating places where billions of dollars in infrastructure improvements need to be done because we don’t have overpasses and underpasses, the alternatives 

need to be reviewed by the STB. 

Certainly under this legislation, that would be confirmed. Under 

NEPA, that should be done. 

The CREATE program, which you have heard about today, was 

the decongestion alternative for Chicagoland. That is not being 

funded. That is not helping the communities like Elmwood Park 

and places that would have help. 

Although we can talk, if there is no money to do infrastructure 

improvements for those communities now, our communities, were 

this transaction to be approved, it is not a good situation. 

It is something that needs to be looked at by the STB under an 

H.R. 6707 or currently under NEPA, and if there is not appropriate 

mitigation and there really can’t be in the size of this transaction, 

then it really does need to be turned down. 

Mr. OBERSTAR. Thank you. 

Mr. Swanson? 

Mr. SWANSON. Yes, Mr. Chairman. We are a regional agency. We 

look at it not from the standpoint of just one particular community’s impacts but the total impact on the three-county area. 

There is one improvement in one of our communities should this 

happen. The Town of Munster would have a reduction in the number of trains through that community. I think it is about 25 to 3 

or 4 a day. So that would go to a Level of Service A in terms of 

roadway capacity. 

On the other hand, we have 15 at-grade crossings that will diminish from Level of Service A to Level of Service F unless you did 

something like grade separation. 

Now the numbers that are thrown around are downright scary. 

Forty to sixty million dollars per grade crossing would be needed 

to do this, and our communities are just now having to live with 

one percent property tax cap. In polls by our Indiana General Assembly, it is not realistic. 

Mr. OBERSTAR. I have many other questions, but I want to cede 

to Mr. Shuster, who I know has a number of concerns and questions that he wants to ask. 

Mr. SHUSTER. Thank you, Mr. Chairman. Many of my questions 

have been answered in your questioning and this lively discussion 

and passionate discussion, which I understand the passion. 

I certainly can sympathize with the communities. I had a community, Chambersburg, Pennsylvania, that was bisected by a rail 

line that has since been moved and the problem been solved. 

Also, the City of Altoona is the home to Norfolk Southern’s rebuild shop for locomotives. So I am constantly hearing about the 

56 

locomotives in the yard right across the way, running at night. So, 

again, I certainly can sympathize with those communities. 

Chicago is a problem. It has tremendous congestion, and we have 

to figure out a way to alleviate some of that congestion. Building 

a brand new line certainly would be wonderful, but again there are 

constraints with money and the environmental constraints. The 

litigation would take years if it all got done. 

So I guess, as I said, a lot of my questions have been answered. 

But I understand at the City of Joliet, there was something worked 

out there, and I wonder if, Mr. Harrison, you could talk a little bit 

about that. 

And, Ms. Darch, after he gets done, your thoughts on what they 

did in Joliet and is there a solution? 

Mr. HARRISON. We were able to sit down with our staff, with the 

Joliet officials and figure out what were their issues, what were 

their concerns. There were some infrastructure issues there that 

were going to cause the speed of the trains to be much slower than 

40 miles an hour, which would in turn block the crossings further, 

and they had some concerns. 

And so, we agreed to improve the infrastructure there to take 

some of the degrees out of the curve where we could run faster, 

where we would block the crossings less. We did some quid pro 

quo, and we came up with a cooperative agreement that they would 

support the merger. 

Joliet is a railroad town. There is a possibility there is a lot of 

infrastructure on the EJ&E that is right there in the Joliet area 

that could become a mixing center, an intermodal center. It could 

create a lot of jobs, and I think they see it from that standpoint 

as overall positive, given that we were able to deal with their local 

issues. 

Mr. SHUSTER. Ms. Darch? 

Ms. DARCH. Congressman, I am not privy to the specifics of the 

Joliet deal. I recognize that it is a unique community in terms of 

its railroad distribution centers. 

The other communities in TRAC have different issues that CN 

has not offered to mitigate to the satisfaction of the communities 

if they even could be. 

But again, with the dollars that we are talking about, looking at 

the reasonableness of the whole deal, that is clearly a question. 

I should say too that overall, so far in this draft Environmental 

Impact Statement, the regional benefit of this transaction is assumed by many people, but on its face the EIS is showing that the 

air quality impacts are worse for the regional as a whole because 

the train route is longer, more diesel and more cars idling at crossings, that there are more people who will be bothered by noise because there are more sensitive receptors along the miles of the 

EJ&E and then again the issue of this being a temporary benefit 

for the communities that are losing traffic. The EJ&E fills up at 

capacity by the time this deal goes through and where will those 

other trains go? 

So, top to bottom, all of our communities have many issues still. 

Mr. SHUSTER. As Mr. Harrison mentioned, is there a way to mitigate this for your community? Is it Barrington, I guess, is your 

community? 

57 

Ms. DARCH. Barrington. 

Mr. SHUSTER. I have a map. I have been looking at this map, trying to figure out where everybody is. 

Is there something that they can put on the table that will bring 

your community to the table to say, okay, let’s do it? 

Ms. DARCH. We have had some discussions actually along the 

way. I have 3 major strategic regional arterial roads crossing the 

EJ&E line and a commuter rail line crossing within 5,918 feet. 

They are within 5,918 feet of each other which is less than the 

length of a 6,000 regular CN train. 

There are 74,000 cars a day that pass through my community 

and 65 commuter trains at this point, a number expected to increase, that pass through. So, basically, without grade separation 

for those three roads and the rail, we are looking at tremendous 

issues well into the future. 

So the cost of that kind of mitigation is very substantial. It is 

several hundred million dollars, and this transaction is a $300 million transaction with $100 million in improvements that CN is 

making on its own line. 

Mr. SHUSTER. One of the components you left out there is if we 

don’t figure out a way how to get more capacity and have our system running more efficiently than it is, our freight rail system, we 

will have more trucks on the road. So you are going to have not 

only more cars but more trucks. 

Again, this is a national issue. Chicago is a choke point in the 

system. 

So I wonder, Mr. Harrison. Also, you said what you did in Joliet. 

You were able to get some economic development along these. I am 

sure not every community you can do what you did in Joliet, but 

are you looking at those ways to have a positive economic benefit 

to these communities? 

Mr. HARRISON. We are trying, but it is very, very difficult. I 

mean to some degree when you come out and say if the railroad 

moves to town, the housing prices are going to go down, they are 

going to go down. 

They predicted it, and they said our housing prices are going to 

go down. So there is nothing I can do about real estate prices going 

down. 

We have talked about curfews. We have talked about substantial 

fines if we block crossings. We have talked about emergency response plans where if a crossing is blocked and, God forbid, there 

is an emergency that we would make a call to this agency. They 

would reroute the ambulance or the fire. 

We have done just about everything we think that is reasonably 

possible to do. At some places we offered to put up berms, and they 

said, we don’t want a berm. It is not going to look pretty. 

Well, what can we do about the noise? Put up a baffle. We don’t 

want a baffle in our little town. Well, I can’t help you with the 

noise then. 

So all of those things and some of the people have just said to 

us very frankly, we just don’t want you here. If they don’t want us 

here, then there is nothing I can do to mitigate. So that is the issue 

we have. 

58 

You are absolutely right in your observations, and it is close at 

Chicago. We keep having to tell customers I don’t know when we 

are going to get your freight to Atlanta because I don’t know how 

long it is going to take to get through Chicago or Chicago traffic. 

I use the analogy: Some days, we get from Winnipeg, Manitoba 

to Chicago quicker than we get from North Chicago to South Chicago. 

That won’t last long. Traffic will come off the rails because of 

service. It will go on the highway. And, guess what? If you want 

to get delayed on the highway system, go to Chicago on the interstate system. The trains move faster than the cars on 294. 

If you are talking about fuel efficiency, if you are talking about 

environmental, it says you don’t want trucks, more of them, on the 

highway from a safety standpoint. 

So the issue becomes we have to figure out a way to do this, and 

people suggested in the western suburbs, build another railroad. 

Go out further. 

What do you think those people are going to say? What do you 

think the environmental studies then would be? Get that railroad 

out of here. 

People forget this Country was built on railroads. That the railroad was there a long time before those communities were. Those 

railroads created those communities. People moved there because 

that is the way you move people and commerce. 

Then people say: No more. We would like to be a bedroom community. Go some place else with your trains. 

It is hard to solve. 

Mr. SHUSTER. Mr. Darch, I will give you an opportunity. 

Ms. DARCH. To respond. 

Mr. OBERSTAR. Would the gentleman yield? 

Mr. SHUSTER. Certainly. 

Mr. OBERSTAR. On that point, Mr. Harrison, I have to observe 

that there is a symbiotic relationship between the railroad and the 

communities. They need each other. They needed each other from 

the very beginning, and I don’t think it is appropriate to say oh, 

well, these towns grew up after the railroad. They grew up together. 

Mr. HARRISON. Fair point. 

Ms. DARCH. In fact, Mr. Chairman, my town was there before the 

EJ&E line, and our community was built. 

On this issue of the congestion in Chicago and what is happening 

in this transaction, we recognize—and you heard from the Congresswoman from California in her letter from the Port of Long 

Beach and we heard from the Port of Seattle—the issue that a lot 

of this is through traffic, transporting the Asian goods from Port 

of Prince Rupert, Canada, down to Memphis, down to New Orleans. 

So the benefit to Chicago, it is going around. It is not feeding the 

economic engine of Chicago. 

The question of congestion in Chicago and these relative benefits 

are the reason really that H.R. 6707 needs to be the law, to confirm 

that the impacts on us, that they can be properly evaluated and 

measured against the benefit to a railroad of the transaction and 

that the communities aren’t on the losing end of the issue. 

Mr. SHUSTER. Well, thank you. 

59 

I don’t know if anybody else would want to comment. 

Ms. NEKRITZ. I thank you, Congressman Shuster. 

I would just like to say that Chicago isn’t an economic entity 

unto itself, neither is Memphis, neither is Atlanta. To the extent 

that we all rise and fall together, the freight traffic in the United 

States of America has to be addressed as the whole Country, not 

just what is good for Chicago, because what is good for Chicago is 

good for Memphis is good for Atlanta. 

Mr. SHUSTER. I heard once my predecessor actually said the Port 

of Seattle should actually be called the Port of Chicago because 70 

percent of something like that of the freight that hits the ground 

in Seattle goes right to Chicago. 

Ms. NEKRITZ. I actually just was in Prince Rupert last week and 

saw what is coming. I understand the Congresswoman’s perspective from California, but it is three days less shipping time to 

Prince Rupert than it is to Long Beach, and that is an economic 

advantage that is just geography. 

You can’t fight it necessarily, and we are not going to be able to. 

Unless we impose tariffs, we are not going to be able to change 

that. 

Mr. SHUSTER. Right. Thank you very much. 

Mr. OBERSTAR. I thank the gentleman for his observations and 

questions and the panel for their response. 

Before I go to Mr. Lipinski, on Prince Rupert Island, Prince Rupert is 345 miles further out in the Pacific Island than the Port of 

Long Beach-Los Angeles. It has the advantage of the great circle 

of the Pacific Ocean route, a faster transit time, plus it is further 

out into the ocean. 

It gives great economic opportunity and advantage for the railroad, and the CN is building on an already existing facility and expanding it. It has deep water capability. It doesn’t need dredging, 

and Mother Nature does that daily with the tide. 

It will provide a great advantage to shippers and consumers as 

well as to the railroad. I know the first point of entry in the United 

States for a good deal of that traffic will be northern Minnesota in 

my district, and therefore I would encourage the CN to consider a 

short-sea shipping initiative that would help avoid the congestion 

in Chicago. 

Mr. Lipinski. 

Mr. LIPINSKI. Thank you, Mr. Chairman. I want to note that Mr. 

Shuster just quoted his predecessor. His predecessor is a very wise 

man. 

Mr. SHUSTER. He likes to remind me of that. For those of you 

who don’t know, that is my father who was the Chairman of this 

Committee. 

[Laughter.] 

Mr. LIPINSKI. I will leave my predecessor out of this. 

I want to thank everyone here on the panel, all the witnesses. 

You really do provide the range of testimony that we really do need 

to hear in regard to what the impact is going to be all across the 

region in terms of the CN proposed acquisition. 

I wanted to start out by addressing Mr. Silvestri. You noted in 

your testimony that Elmwood Park has one of the most dangerous 

crossings or the most dangerous grade crossing in Illinois, and I 

60 

certainly remember in 2006 that horrific crash with 13 cars involved there. That is just one of the worst intersections I have ever 

seen that I think there could be. 

Now I understand that the Illinois Department of Transportation 

receives about $10 million a year specifically for grade separations. 

It comes from a $220 million set-aside from the Federal Highway 

Administration’s Highway Safety Improvement Program. 

This $10 million for Illinois can’t even pay for 1 grade separation. 

While States do have flexibility that they can spend other core 

highway program dollars for grade separations, with limited funds 

and unlimited needs, that usually does not happen. Money goes towards repaving, resurfacing a road or some other important 

project. 

Now I have been working on drafting a bill that would direct 

more Federal resources and dedicate funds for grade separations to 

improve safety and quality of life in the areas that are congested 

and have a high density of grade crossings. 

I was wondering if you could comment on this idea for more Federal funding, dedicating more Federal funding. Obviously, $220 

million is not that much. 

Now how could this potentially be helpful for Elmwood Park and 

other municipalities in your area? 

Mr. SILVESTRI. Well, as much as I would like to think Elmwood 

Park is unique as its Mayor, it is very similar to many of the communities in the inner ring suburbs or the older suburbs of Chicago 

in that we were built up on the railroad. As I mentioned, we have 

4 at-grade crossings within a mile and we get 127 trains per day 

that go through that, commuter and freight. 

When the commuter train traveling at 90 miles an hour hit the 

13 vehicles that were literally trapped on the crossing because of 

the direction of the crossing and the backed up traffic, which the 

NTSB also said was contributed to by the fact that there are so 

many delays on that road because of all these trains blocking traffic, the State initiated a study to determine the cost of putting an 

underpass at that crossing. 

The State was kind enough to pay for the analysis, and we received three proposals. The cheapest proposal is in excess of $70 

million to build the underpass, and the one that is least disruptive 

to the community, basically our downtown, would be approximately 

$90 million to build. 

So more Federal funding of crossings would, of course, be welcomed by communities like ours. As you know, Congressman, Illinois has the largest number of at-grade crossings of any State in 

the Union, most of them located in the metropolitan Chicago region. So more funding would obviously be welcomed by all of the 

leadership and I am sure all the residents and people of the greater 

Chicago region. 

Mr. LIPINSKI. Thank you. 

I wanted to just very briefly ask Ms. Nekritz as Chair of the Rail 

Safety Committee. I know you have the expertise, and you are 

charged, since you are doing this for the entire State of Illinois, 

with really looking at what solutions that there are to issues that 

we have with rail safety. 

61 

Now looking at what would happen, the impact of moving trains 

from some areas to other areas, what do you see as the difference? 

If we were just talking about reshuffling the deck, does that make 

a difference? 

Are we just moving trains from one congested area to another or 

by reshuffling the deck, opening up another line, overall when you 

look at the whole system does it make improvements? 

Ms. NEKRITZ. I think maybe the next panel would be more capable of answering that because to my understanding, yes, if we move 

off the already congested lines to a line that has capacity, excess 

capacity, like the EJ&E, it does open up the Chicago region and reduces the congestion and thus reduces the time that is necessary 

to get through the area. 

Mr. LIPINSKI. I was just trying to get at the point that it would 

seem that if you are taking trains from a very congested area to 

an area that is under-utilized, that there is a net gain when you 

do something like that. 

Ms. NEKRITZ. I believe that would be the case. I think the STB 

report—I have only read the Executive Summary, and I didn’t read 

the big stack—indicated that there would be fewer accidents overall and that safety would be improved overall by this. 

Mr. LIPINSKI. Chairman Oberstar was, a couple months ago, out 

in LaGrange which is right next to Western Springs. The same rail 

line runs through there, and there are about 160 to 170 trains a 

day. 

That area along that route, Ms. Biggert, who was testifying earlier, lives right next to Western Springs in Hinsdale. Those villages 

are doing very well. 

I just really think that there is an issue right here of, yes, there 

are problems that are caused and issues. Certainly, safety needs to 

be addressed. It needs to be worked out. 

There is a lot of mutual aid agreements in a lot of the villages 

as was mentioned here, and towns, but there is a possibility of 

making things as good as they can be while still having a rail line 

that goes through the area. Even when you have 160 trains a day 

going through, it is possible, and I think everything should be done. 

Everything possible should be done to try to mitigate where 

there are going to be issues, but we have to figure out where these 

trains are going. 

So, with that, I will yield back. 

Mr. OBERSTAR. I thank the gentleman. 

We are going to have votes on the floor in about 20 minutes, and 

I want to move to the next panel but before I do that, a question 

to Ms. Nekritz. 

Is the legislature of Illinois prepared to provide matching funds 

to those that we might have to consider in the spirit of Mr. Lipinski’s testimony and to respond to the concerns of others and to 

those of Mr. Harrison for all the mitigation that would be required? 

That could be several hundreds of millions of dollars. 

If we were to consider or enact legislation to provide, as Mr. Lipinski was just discussing, a Federal matching program, there 

would have to be some participation from the private sector, some 

from the State and local governments. Is the legislature of a mind 

to move such legislation? 

62 

Ms. NEKRITZ. I hesitate to get into the mind of our legislature 

right now. It is a very trying time in Illinois politics. 

That being said, we do have a grade crossing protection fund that 

takes in several million dollars every year, and it basically gets expended on safety crossing equipment because it is insufficient to 

address, to do grade separations. But if we were able to use that 

as matching funds for grade separations, then I would think yes. 

I think that the problem has become so bad in our region that 

there is lots of support for doing something to help the residents 

because we hear about it all the time. It is a very common problem 

throughout the Chicago region, and so I think if that opportunity 

arose there would be plenty of support for that. 

Mr. OBERSTAR. And, Mr. Swanson and Mr. Yagelski, do you 

think the Indiana Legislature would be of a similar mind? 

Mr. SWANSON. Indiana is somewhat unique in that due to the 

leasing of the toll road, it actually has a fully funded 10-year roads 

program. 

Mr. OBERSTAR. With your governor, they might find a way to sell 

off the railroad and lease it back and toll it and so on. 

Mr. SWANSON. Well, in any event though, I would have to say 

that for at least the 10-year program the money is not there. 

Frankly, the legislation passed this spring, HEA 1001, imposed 

a 1 percent limit on all property taxes on our local governments 

which is causing many of them to contract seriously, and some of 

them actually are almost entertaining distressed community status. So, even if the legislature were in its wisdom to come up with 

additional dollars, I don’t think the local funding is there, Congressman Oberstar. 

Mr. OBERSTAR. Thank you. 

Mr. Harrison, you responded with some enthusiasm and detail 

about the effect of an increased number of trains at certain grade 

crossings and saying it would be 2 minutes and a total of 48 minutes in certain circumstances. 

But reviewing the draft Environmental Impact Statement of the 

Board, the Surface Transportation Board, they reviewed 112 atgrade crossings on the EJ&E. Eighty-seven met the Board’s threshold for environmental analysis. The remainder either had no train 

increases or had less than 2,500 vehicles. 

And, they observed that if you delay 60 vehicles by 1 minute 

each, that is an hour total delay. If you delay 1,200 vehicles by 2 

minutes each, that equals 40 hours of delay. 

So the two minutes that you cite is of interest if there is only one 

vehicle at that railroad grade crossing. But if there are numerous, 

multiple vehicles, there is a cumulative substantial delay impact on 

the totality of the citizenry, is that not right? 

Mr. HARRISON. I guess it is kind of the devil is in the details. I 

don’t agree with necessarily all their analysis, but you can put your 

finger on exactly what it is, however many cars are stopped and 

however many feet there are from there to the crossing. 

I guess my point is this: The blockage at crossings is an issue. 

We understand it, and we are willing to deal with it, but we should 

deal with facts and not innuendo. 

63 

Mr. OBERSTAR. The Board has facts in here, a substantial number of facts. Increase in total vehicle delay in their analysis ranged 

from 50 minutes to 149 hours. So there is a range of impacts. 

Also, they say that 15 crossings would be substantially affected, 

and delay for all vehicles would be more than 40 hours a day. 

So there is and, in their appendix, there is a substantial amount. 

I raise that for the consideration. 

You point out, we will build a berm or we will build a noise barrier. 

Oh, we don’t want that. Citizens want this, don’t want the other 

thing, but communities have readily accepted noise barriers along 

highways that block noise from the interstate or from a portion of 

highway on the National Highway System. 

Somehow, those concerns have to be reconciled, and the railroad 

has to be prepared to take some action on its own where there is 

a conflict or potential conflict with passenger rail. 

Who has that cell phone? I have to say again the rules of the 

Committee are that there is no audible sound permitted on cell 

phones or Blackberries or any other communication device. 

What is the cost of building a siding? 

Mr. HARRISON. A siding? 

Mr. OBERSTAR. Yes, a mile or two-mile siding? 

Mr. HARRISON. A good round number today is a million dollars 

a mile. It could be a little more, could be a little less, depending 

on the grading you have to do and the location, but a million dollars is a pretty good number. 

And I would remind you, Mr. Chairman, that is part of the $100 

million is improving that improving that infrastructure where we 

can pick the speed up and then have faster turnouts and better 

connections where there will be less blockage. 

The issue, as we tried to deal with individual communities, is 

some communities—and I understand their issue—have decided 

that they like their little downtown the way it is, and they don’t 

want to put a viaduct in. They would rather not have us there. 

So I can’t create a viaduct. I can’t create an underpass. I mean 

the State or the local community has to be the moving party. The 

STB can direct me to pay so much money with one exception. The 

precedent has never been to be over what is in current law and 

practice. 

There was one exception in the Conrail transaction, I think, 

where they said that Conrail should fund 25 percent of that crossing. 

That is the problem we have. When I talk to the community, 

they say, well, the State doesn’t have any money and we are not 

going to get a grade crossing. 

That is where we are, and that is why we are trying to look at 

other ways to deal with it. 

Mr. OBERSTAR. I thank you for your response. 

I thank all the panel members for your contribution. We will 

have to evaluate all these factors. 

But I think it emerges, as the burden of the testimony comes 

along, that the Board needs some authority and clarity to deal with 

this issue of a large railroad acquiring a smaller railroad and the 

64 

effects and the authority the Board has to direct changes to mitigate those effects or if the burden exists to deny it. 

As for CREATE, if other parties had been willing to contribute as much to CREATE as our side did, it would have $200 million. 

That was close to the goal of getting 40 percent Federal funds into 

CREATE. We will deal with it next time. 

Ms. NEKRITZ. Well, it is seriously under consideration in the Illi- nois General Assembly, and we are looking at trying to get $500 

million for it. 

Mr. OBERSTAR. Thank you. Thank you very much. I look forward 

to your continuing participation in this process. 

Our fourth panel includes Dr. Joseph Schwieterman of the 

Chaddick Institute for Metropolitan Development at DePaul University; Dr. Phineas Baxandall, Senior Analyst for Tax and Budget 

Policy of the U.S. Public Interest Research Group; and John 

Tolman, a long-time presence in this Committee’s deliberations on 

rail issues, the Vice President and National Legislative Representative for the distinguished Brotherhood of Locomotive Engineers and 

Trainmen. 

Take up positions. 

Dr. Schwieterman, thank you for being with us, for your very 

scholarly work and testimony. Please begin. 

TESTIMONY OF DR. JOSEPH P. SCHWIETERMAN, PH.D., DIRECTOR OF THE CHADDICK INSTITUTE FOR METROPOLITAN DEVELOPMENT, DEPAUL UNIVERSITY; DR. PHINEAS 

BAXANDALL, PH.D., SENIOR ANALYST FOR TAX AND BUDGET 

POLICY, U.S. PUBLIC INTEREST RESEARCH GROUP, FEDERATION OF STATE PUBLIC INTEREST RESEARCH GROUPS; AND 

JOHN TOLMAN, VICE PRESIDENT AND NATIONAL LEGISLATIVE REPRESENTATIVE, BROTHERHOOD OF LOCOMOTIVE 

ENGINEERS AND TRAINMEN 

Mr. SCHWIETERMAN. Mr. Chairman, Members of the Committee, 

I am honored to be here today to express my views on the TRACS. 

I have written a great deal about community impacts of freight 

railroad projects. In 2000, I wrote a study at the request of Senator 

Durbin on railway whistle-blowing noise and implications of the 

new FRA’s quiet zone ruling. I have written a book on rail freight 

service, and I understand the concerns being voiced here today. 

My remarks are specifically on the Act itself and not on the CN/ 

EJ&E transaction per se. 

The idea of asking the Board to conduct more robust examinations of environmental impacts has many implications, and I will 

attempt to explain why I think there are many unintended consequences that we need to think two or three years down the road 

as cities, railroads, lawyers learn to work with the exact wording 

that is in the Act and why, if it is literally interpreted, does push 

us toward full-blown benefit-cost analysis which would greatly 

delay the approval of many railroad transactions. 

I believe without a more thorough reassessment of the STB’s resources and responsibilities, asking it to formally weigh the environmental costs and transportation benefits risks creating a systematic bias against railroad mergers and acquisitions. That is the 

Act may focus attention mostly on the immediate negative impacts 

65 

on communities on the line without offering a balanced presentation of any offsetting benefits which can only be understood with 

a more comprehensive analysis than that which is conducted today. 

Transportation markets are dynamic. When one carrier acquires 

another, of course, there are many indirect benefits: fewer trucks 

on the road, fewer highway accidents, less traffic on competing rail 

lines, less pollution from mobile sources. 

There are also competitive changes triggering a second round of 

investments which are not even subject to STB approval, which 

have implications for communities. 

This puts the STB in a very difficult position. If it limits its attention to the most obvious impacts, such as the environmental 

consequences on communities along the railroad to e acquired, its 

assessment will be incomplete and skewed against the transaction. 

But evaluating all the benefits, direct and indirect, will require 

comprehensive and scenario-based analysis that is not presently 

part of its work. 

For the analysis to be completed in a timely fashion, the STB 

would need to make many assumptions and subjective judgments 

which would make the process much less predictable. 

I am not suggesting the STB should not consider and vigorously 

deal with community impacts in its decisions. I do believe, however, that bringing greater formality to the process and the language as the Act is currently written would greatly change the nature of the Board’s, lengthen its investigations and trigger unintended consequences. 

Here is a simple example of the analysis that would be needed. 

Environmental impacts of a merger would need to include a 

counter-factual analysis of how traffic would change if the merger 

did not take place. 

In the case of the CN application, the STB would need to consider whether and when congestion in Chicago would otherwise result in greater use of the EJ&E bypass and how this would affect 

traffic on other routes. In order to do this right, the STB would 

need to make difficult assumptions and greatly elevate the level of 

analysis it provides. 

My second point: No other transportation mode providing intercity service in the United States, whether it is intercity trucking, 

airlines, barge operators, motor bus operators, even Amtrak, is subject to the kind of criteria established in H.R. 6707. 

The unintended consequence will likely be that the Act will become an impediment toward moving forward to cooperative solutions to community issues involving railroads. Let me articulate 

several of these potential unintended consequences which may result from pushing Federal policy into what I consider uncharted 

waters. 

Railroads and communities may have an incentive to be less 

than candid when discussing the impacts of a transaction. Thus, 

the Act may serve to place the two parties in a more naturally adversarial role. 

Railroads may sidestep the need for STB approval entirely by negotiating trackage rights and hauling rights agreements with other 

railroads rather than pursuing a merger and acquisition. 

66 

Railroads may be reluctant to let commuter agencies and intercity operators use their right of way, afraid that they may creating 

a new stakeholder who has incentive to fight for the status quo. 

A muddled political debate may result from the language in the 

Act that the socioeconomic impacts of railroad mergers and acquisitions be evaluated and weighed. Do we really think such impacts 

can be evaluated convincingly without opening the door to lengthy 

delays? 

My third point is the implication of greatly stepping up the 

transactions that require different levels of STB approval beyond 

Class I railroads greatly increases the STB work load. That, too, 

has implications. I am not saying the STB can’t deal with these implications, but I do feel a more vigorous assessment of the ramifications are warranted. 

The history of railroad regulation prior to the Staggers Act suggests the need for great caution here. 

And finally, as I think we heard in the previous panel, the Act 

risks shifting some responsibility for solving problems of rail transportation from their roots, which often is grounded in inadequate 

State and Federal funding, to private railroad companies. 

We are seeing a great deal of frustration being directed at Class 

I railroads. We have heard much of it today. In many respects, we 

are living with the consequences of inadequately funding CREATE, 

the congestion relief program for Chicago. 

Public agencies have also not brought forth, particularly in our 

State, the funds to support grade crossing separations, and communities now lack practical options to abate noise of locomotive horns 

through the creation of quiet zones in some situations. 

So, in summary, I urge caution in crafting any legislation that 

would change in mid-stream a policy process that has been in place 

for many years, that it certainly warrants greater discussion and 

evaluation before moving ahead. 

I believe the Act is well intended, and I have great respect for 

the sponsors. However, there is an immediate need here. It is the 

need to look systematically at the implications of the Act, so we 

don’t create a new set of policy problems. 

Mr. Chairman, I thank you for the chance to express my view. 

Mr. OBERSTAR. Thank you very much for those well-expressed 

thoughts and insights. We will come back to that in a moment. 

Mr. Baxandall. 

Mr. BAXANDALL. Chairman Oberstar, Members of the Committee, 

thank you for the invitation to present the views of the U.S. Public 

Interest Research Group. 

As you know, U.S. PIRG serves as the Federal lobbying office for 

State public interest research groups. We are non-profit and nonpartisan citizen advocacy groups who are active in over 20 States. 

U.S. PIRG believes that rail is critical to America’s transportation future and that Federal policy must ensure that key decisions affecting the Nation’s rail network consider the public interest. As such, U.S. PIRG speaks today in support of the TRACS Act. 

Transportation patterns have profound consequences that extend 

far beyond individual rail companies and their shareholders as we 

have heard today. Impacts also extend beyond the local communities that abut the transportation routes. 

67 

Rail plays an increasing role in addressing important national 

issues that extend beyond the development, local traffic, rights of 

way and the industry competitiveness that we have heard so much 

of. 

For instance, major decisions about our Nation’s rail network will 

significantly determine the extent of our Nation’s dependence on 

oil, much of which continues to come from unstable or unfriendly 

regimes. 

Our rail network will shape the regional patterns of residential 

and commercial development. It will profoundly affect the quantity 

of global warming pollution we emit, the range of travel choices 

available to our aging population and the integration of America’s 

dynamic urban centers with their surrounding suburbs. 

These are issues that are best considered by a national decisionmaking body, one such as the Surface Transportation Board. 

In the years ahead, America will need to greatly expand its rail 

network, not just the portion of freight tonnage hauled by rail that 

was mentioned earlier but also more and better commuter service 

on tracks often owned by freight companies and, finally, to build 

out our Nation’s designated high-speed rail networks in ways that 

will stimulate regional economies and relieve the short-haul traffic 

in our distressed air travel industry. 

U.S. PIRG takes no position on the application filed by CN to acquire EJ&ER. On the one hand, the merger will provide opportunity to relieve gridlock and other impacts. On the other hand, the 

abutting communities will be unprepared and adversely affected by 

the rail traffic. 

Over the long term, the most important implications for the 

broader public impact may be how this proposed acquisition could 

prevent attainment of a decades long vision to connect communities 

around Chicago’s circumference through the Suburban Transit Access Route, the STAR program. 

In the particular northeastern Illinois context, we applaud the 

fact that CN is striking voluntary deals with individual communities such as in Joliet to improve affected traffic crossings and reduce noise. We do not, however, think that these ad-hoc local deals 

can be a substitute for Federal level attention to national priorities. 

Beyond the local context, the broader issue is whether future 

mergers and acquisitions in the rail industry will serve the public 

interest or only the short-term interests of the rail company stockholders. These two interests often overlap, but we cannot treat 

them as identical. 

Like laws for other natural monopolies such as utilities or 

telecom, this Act before us would provide important oversight to 

ensure that mergers advance, rather than undermine, the public 

interest. 

Now since the 19th Century, we have often learned the hard way 

that railroad mergers can create society-wide impacts that harm 

the public interest. Rail mergers reshape the network because each 

route is typically a natural monopoly. There is virtually no means 

to compete for service on a particular route once another company 

owns the tracks, and it is highly inefficient for multiple firms to 

complete for the same route over duplicate tracks. 

68 

The issue is not just that the railroad acquisitions can be anticompetitive by extracting monopoly prices from shippers or consumers. Current law, in any event, already gives the STB authority 

to deny certain mergers that would be anti-competitive. 

We support the TRACS Act because it would address the fact 

that mergers can also undermine the public interest by affecting 

how railway companies reroute traffic, maintain existing tracks or 

develop new lines. 

The legislation, we believe, would appropriately empower the 

STB to consider the broader public interest including the impacts 

on commuter and intercity rail. This makes sense as we look forward toward the challenges of the future and the role that transportation must play in meeting those challenges. 

Thank you for the opportunity to share these comments with the 

Committee. 

Mr. OBERSTAR. Thank you very much for your comments. 

Mr. Tolman. 

Mr. TOLMAN. Good afternoon, Chairman Oberstar, Ranking 

Member Shuster and Members of the Committee. 

I would like to first take the opportunity to thank the Chairman 

for introducing H.R. 6707. 

Chairman Oberstar, for many years, you have been a tireless advocate for a sensible national transportation policy which includes 

both freight and passenger rail. I believe that your efforts, combined with the skyrocketing price of fuel and the discussions today 

about infrastructure investment in the railroad industry, may finally change the course of our Nation, and I applaud you for them. 

H.R. 6707 requires STB to address the public interest in railroad 

transactions, and we are fully supportive of this. 

Current law, as contained in the Staggers Act, does not provide 

STB with the authority to disapprove mergers or consolidations of 

Class I’s with a Class II or III railroad if it finds a transaction is 

not consistent with the public interest nor can the STB impose conditions to address legitimate community concerns. 

Growing sentiment regarding the safe transportation of hazardous materials and spent nuclear fuel along with opposition to 

various mergers and acquisitions was the impetus for this legislation. We live in an era where there is a ‘‘not in my back yard’’ aversion to such transactions which often causes them to be politicized. 

Two transactions which best illustrate the problem are the Canadian National’s purchase of EJ&E and the Department of Energy’s 

proposed Yucca Mountain repository. In each of these cases, the 

surrounding communities have voiced their concern for safety, just 

as we have, and have problems with these transactions. 

The BLET has not received enough information about the EJ&E 

merger to fully judge its impact to our members. However, our general committees, of which there are four involved in this particular 

transaction, they have not received enough information. 

Of the four general committees involved in this transaction, only 

one of them is fully supporting this. Another one is absolutely opposed to it, and the other two do not have enough information. 

I guess I ask this question: Is this any way to run a railroad? 

The BLET has a number of issues with the proposed plan to ship 

nuclear waste to Yucca Mountain which we have expressed 

69 

throughout the years and will continue to do so. We believe that 

this will have a negative impact on the safety of our members and 

the communities through which we run the trains. 

First and foremost among these problems is the lack of exposure 

protection for our members. Also training in handling these materials received by our members is almost nonexistent. 

Unquestionably, both these transactions directly impact the safety of the surrounding communities as well as causing fear and anxiety among their residents. 

However, while crafting and adjusting a national policy is a legislative matter, executing that policy should not take place in an 

overly politicized environment nor can it take place in a vacuum. 

The concern of localities impacted by rail transactions should be 

heard, considered and, where appropriate, addressed. 

The appropriate body for this input is the STB which has regulatory authority over these transactions. 

The BLET supports 6707 because it provides a mechanism to 

hear legitimate local concerns and also deal with unreasonable 

fears which often arise through the lack of information and community input. We feel this legislation would not overly burden the 

railroads with greater regulation but would provide a mechanism 

for communities to express their concerns about safety of the citizens in an appropriate manner, and it would do so in an orderly 

fashion. 

As for the discussion of highway grade crossing, separation technology today, we absolutely support it. It is extremely traumatic for 

a locomotive engineer or trainman to go through any highway 

grade crossing accident. 

Again, Mr. Chairman, I appreciate the opportunity to testify in 

front of you. Thank you. 

Mr. OBERSTAR. Well, you did a remarkable timing, all three of 

you. 

I have one observation, and you can see the votes that we have. 

Mr. Shuster and I are both going to have to rush off to the floor. 

The compilation of railroad laws provides in the case of construction of new line that the Board shall issue a certificate unless the 

Board finds that activities, building the new line, are inconsistent 

with the public convenience and necessity. The certificate may approve the application as filed or with modifications and may require compliance with conditions the Board finds necessary in the 

public interest. 

But there is no such requirement on the Board for merger or for 

acquisition. 

So I appreciate your observation, Dr. Schwieterman, that there 

may be unintended consequences, but let me read the language: 

‘‘The Board shall hold public hearings including public hearings 

in the communities unless the Board determines hearings are not 

necessary in the public interest’’—there is no unintended consequence there—‘‘and shall consider the safety and environmental 

effects of the proposed transaction.’’ 

It doesn’t say adverse safety. It says shall consider the safety and 

environmental effects ‘‘including the effects on local communities.’’ 

It doesn’t say negative or positive, but it presumes that the 

Board consider both negative and positive, ‘‘such as public safety, 

70 

grade crossing safety, hazardous materials transportation safety, 

emergency response time, noise and socioeconomic impacts.’’ 

Perhaps you are suggesting we should add the words, both positive and negative, to avoid unintended consequences. 

Mr. SCHWIETERMAN. I think my concern about the Act is not that 

environmental impacts be dealt with and considered, but there is 

very explicit language about weighing the environmental consequences with the transportation benefits which, to me, implies a 

level of analysis that requires a degree of quantification of the benefits and the costs, were it to be interpreted very literally, at least 

implicit. 

To do that right really requires a fairly expansive addition to the 

level of analysis the STB provides because currently, in its approach to evaluating a problem, it looks primarily at the implications of the community affected by the transaction itself. The secondary benefits to other cities, it is very difficult to measure those. 

My fear is that puts the negative impacts front and center where 

the positive impacts much more difficult to quantify. 

Mr. OBERSTAR. We don’t want to do that. If you have some suggestion of language to mitigate that effect and achieve more of balance, I would welcome your suggestion. 

But as for Mr. Harrison talked about how much time will be required to do this analysis, whatever that time is, the outcome is 

permanent for the communities. So they have to live forever. 

If there is a year or two years time for evaluation, that is small 

in comparison to the permanency of the decision, say, to proceed 

with the acquisition on the employees, the brotherhoods, on communities. That is there forever. 

Mr. SCHWIETERMAN. Yes, and my response there would be that, 

sure, more is good. I mean more analysis clearly yields some benefit. 

But there is a consequence, and the consequence is the railroad 

industry trying to make decisive decisions with a degree of predictability, that when you subject it to that kind of a process, there are 

all kinds of ways the process can be manipulated. There is difficulty in conducting analysis in a timely manner. 

Mr. OBERSTAR. You might also put a limitation on time within 

which to do that analysis as we have done in other transportation 

considerations. 

Mr. SCHWIETERMAN. Yes, yes. 

Mr. OBERSTAR. But thank you for that cautionary thought, for 

testimony. I wish we had a little more time to explore other issues, 

but any additional thoughts may be submitted in writing. 

The Committee is adjourned. 

[Whereupon, at 2:53 p.m., the Committee was adjourned.] 

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