II

107TH CONGRESS

1ST SESSION S. 1103

To amend title 49, United States Code, to enhance competition among and

between rail carriers in order to ensure efficient rail service and reasonable rail rates in any case in which there is an absence of effective

competition, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 26, 2001

Mr. ROCKEFELLER (for himself, Mr. DORGAN, and Mr. BURNS) introduced

the following bill; which was read twice and referred to the Committee

on Commerce, Science, and Transportation

A BILL

To amend title 49, United States Code, to enhance competition among and between rail carriers in order to ensure

efficient rail service and reasonable rail rates in any

case in which there is an absence of effective competition,

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; AMENDMENT OF TITLE 49,

4 UNITED STATES CODE.

5 (a) SHORT TITLE.—This Act may be cited as the

6 ‘‘Railroad Competition Act of 2001’’.
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1 (b) AMENDMENT OF TITLE 49, UNITED STATES

2 CODE.—Except as otherwise expressly provided, whenever

3 in this Act an amendment or repeal is expressed in terms

4 of an amendment to, or a repeal of, a section or other

5 provision, the reference shall be considered to be made to

6 a section or other provision of title 49, United States

7 Code.

8 SEC. 2. PURPOSES.

9 The purposes of this Act are as follows:

10 (1) To clarify the rail transportation policy of

11 the United States by requiring the Surface Trans12 portation Board to accord greater weight to the need

13 for increased competition between and among rail

14 carriers and consistent and efficient rail service in

15 its decisionmaking.

16 (2) To eliminate unreasonable barriers to com17 petition among rail carriers serving the same geo18 graphic areas.

19 (3) To ensure reasonable rail rates for captive

20 rail shippers by removing unnecessary regulatory

21 burdens from the rate reasonableness procedures of

22 the Surface Transportation Board.
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1 TITLE I—INCREASED RAIL-TO2 RAIL COMPETITION

3 SEC. 101. FOSTERING OF RAIL-TO-RAIL COMPETITION.

4 Section 11101(a) is amended—

5 (1) by inserting ‘‘(1)’’ after ‘‘(a)’’; and

6 (2) by striking ‘‘A rail carrier’’ at the beginning

7 of the second sentence and inserting the following:

8 ‘‘(2) Upon the request of a shipper, a rail carrier

9 shall establish a rate for transportation and provide serv10 ice requested by the shipper between any two points on

11 the system of that carrier where traffic originates, termi12 nates, or may reasonably be interchanged. A carrier shall

13 establish a rate and provide service upon such request

14 without regard to—

15 ‘‘(A) the location of the movement on the rail

16 system, including terminal areas;

17 ‘‘(B) whether the rate established is for only

18 part of a movement between a point of origin and

19 a destination;

20 ‘‘(C) whether the shipper has made arrange21 ments for transportation for any other part of that

22 movement; or

23 ‘‘(D) whether the shipper has a contract with

24 any rail carrier for part or all of its transportation

25 needs over the route of movement, in which case the
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1 rate established by the carrier shall not apply to

2 transportation covered by the contract.

3 ‘‘(3) A rail carrier’’.

4 SEC. 102. PROMOTION OF COMPETITIVE RAIL SERVICE OP5 TIONS.

6 (a) APPROVALS OF COMBINATIONS.—Section 11324

7 is amended—

8 (1) in subsection (b)—

9 (A) by striking ‘‘and’’ at the end of para10 graph (4);

11 (B) by striking the period at the end of

12 paragraph (5) and inserting ‘‘; and’’; and

13 (C) by adding at the end the following:

14 ‘‘(6) means and methods to encourage and ex15 pand competition between and among rail carriers in

16 the region affected by the transaction or in the na17 tional rail system.’’; and

18 (2) in subsection (c), by inserting after the first

19 sentence the following: ‘‘The Board shall impose any

20 conditions that the Board considers appropriate to

21 encourage and expand competition between and

22 among rail carriers in the region affected by the

23 transaction or in the national rail system.’’.

24 (b) APPLICABILITY.—The amendments made by this

25 section shall apply with respect to proceedings of the Sur-
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1 face Transportation Board that are initiated on or after

2 the effective date specified in section 401.

3 SEC. 103. COMPETITIVE RAIL SERVICE IN TERMINAL

4 AREAS.

5 (a) USE OF TERMINAL AREAS.—Section 11102(a) is

6 amended—

7 (1) by inserting ‘‘(1)’’ after ‘‘(a)’’;

8 (2) by striking ‘‘may’’ in the first sentence and

9 inserting ‘‘shall’’;

10 (3) by inserting after the first sentence the fol11 lowing: ‘‘In making any determination for the pur12 poses of the preceding sentence, the Board may not

13 require evidence of anticompetitive conduct by a rail

14 carrier from which access is sought.’’;

15 (4) by striking ‘‘The rail carriers’’ at the begin16 ning of the sentence following the sentence inserted

17 by paragraph (3) and inserting the following:

18 ‘‘(2) The rail carriers’’; and

19 (5) by striking ‘‘may establish conditions’’ in

20 the penultimate sentence and inserting ‘‘shall estab21 lish conditions’’.

22 (b) RECIPROCAL SWITCHING.—Section 11102(c) is

23 amended—

24 (1) in paragraph (1)—
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1 (A) by striking ‘‘may require’’ in the first

2 sentence and inserting ‘‘shall require’’; and

3 (B) by striking ‘‘may establish’’ in the last

4 sentence and inserting ‘‘shall establish’’; and

5 (2) by adding at the end the following new

6 paragraph:

7 ‘‘(3) In making any determination for the purposes

8 of the first sentence of paragraph (1), the Board may not

9 require evidence of anticompetitive conduct by a rail car10 rier from which access is sought.’’.

11 TITLE II—IMPROVEMENTS IN

12 THE RATE REASONABLENESS

13 PROCESS OF THE SURFACE

14 TRANSPORTATION BOARD

15 SEC. 201. FILING FEES.

16 Section 721 is amended by adding at the end the fol17 lowing new subsection:

18 ‘‘(f) LIMITATION ON FEES.—The Board may not

19 charge a fee for the filing of a complaint, protest, or other

20 request for relief in an amount greater than fees charged

21 by district courts of the United States for a comparable

22 filing.’’.
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1 SEC. 202. SIMPLIFIED STANDARDS FOR MARKET DOMI2 NANCE DETERMINATIONS.

3 Section 10707 is amended by adding at the end the

4 following new subsection:

5 ‘‘(e) The Board may not consider evidence of product

6 or geographic competition in making a market dominance

7 determination under this section.’’.

8 SEC. 203. REVIEW OF RATES.

9 (a) REASONABLENESS.—Section 10701(d) is amend10 ed by striking paragraph (3) and inserting the following:

11 ‘‘(3) Upon a challenge made by a shipper to the rea12 sonableness of any rate established by a rail carrier in ac13 cordance with subsection (c) or section 11101(a) of this

14 title, the Board shall determine the reasonableness of the

15 rate without regard to whether—

16 ‘‘(A) the rate is for only part of a movement be17 tween a point of origin and a destination;

18 ‘‘(B) the shipper has made arrangements for

19 transportation for any other part of that movement;

20 or

21 ‘‘(C) the shipper currently has a contract with

22 a rail carrier for any part of the rail traffic involved,

23 except that any rate prescribed by the Board shall

24 not apply to transportation covered by such a con25 tract.’’.

26 (b) BURDEN OF PROOF.—
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1 (1) PROVING REASONABLENESS.—Section

2 10701(d), as amended by subsection (a), is further

3 amended by adding at the end the following new

4 paragraphs:

5 ‘‘(4) In the determining of whether a rate established

6 by a rail carrier is reasonable for the purposes of this sub7 section, the rail carrier shall have the burden of proving

8 that the maximum rate set forth in the complainant’s evi9 dence does not exceed the reasonable maximum rate.

10 ‘‘(5) The sequence for the presentation of evidence

11 by the complainant and the defendant that is provided

12 under the rules of the Board governing the procedural

13 schedule for cases under this subsection, as in effect on

14 the date of the enactment of the Railroad Competition Act

15 of 2001, shall apply in such cases.’’.

16 (2) APPLICABILITY.—The amendment made by

17 this section shall apply with respect to proceedings

18 of the Surface Transportation Board that are initi19 ated on or after the effective date specified in sec20 tion 401.
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1 TITLE III—IMPROVEMENTS IN

2 THE OVERSIGHT OF THE RAIL

3 INDUSTRY AND IN THE OPER4 ATION OF THE SURFACE

5 TRANSPORTATION BOARD

6 SEC. 301. CLARIFICATION OF RAIL TRANSPORTATION POL7 ICY.

8 Section 10101 is amended—

9 (1) by inserting ‘‘(a) IN GENERAL.—’’ before

10 ‘‘In regulating’’; and

11 (2) by adding at the end the following:

12 ‘‘(b) PRIMARY OBJECTIVES.—The primary objectives

13 of the rail transportation policy of the United States are

14 as follows:

15 ‘‘(1) To ensure effective competition among rail

16 carriers at origins and destinations.

17 ‘‘(2) To maintain reasonable rates in the ab18 sence of effective competition.

19 ‘‘(3) To maintain consistent and efficient rail

20 transportation service for shippers, including the

21 timely provision of rail cars requested by shippers.

22 ‘‘(4) To ensure that smaller carload and inter23 modal shippers are not precluded from accessing rail

24 systems due to volume requirements.’’.
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1 SEC. 302. ADEQUACY OF REVENUE.

2 (a) REPEAL OF AUTHORITY TO ESTABLISH REV3 ENUE STANDARDS AND PROCEDURES.—Section 10704(a)

4 is amended by striking paragraphs (2) and (3).

5 (b) CONFORMING AMENDMENTS.—

6 (1) RAIL TRANSPORTATION POLICY.—Section

7 10101 is amended by striking ‘‘, as determined by

8 the Board’’ in paragraph (3) of subsection (a), as

9 designated by section 3(1).

10 (2) REASONABLENESS OF RATES.—Section

11 10701(d)(2) is amended by striking ‘‘, as established

12 by the Board under section 10704(a)(2) of this

13 title’’.

14 (3) CLERICAL AMENDMENT.—Section 10704(a),

15 as amended by subsection (a), is further amended by

16 striking ‘‘(1)’’ after ‘‘(a)’’.

17 SEC. 303. ARBITRATION.

18 (a) AUTHORITY.—Chapter 105 is amended by adding

19 at the end the following new section:

20 ‘‘§ 10503. Arbitration of qualifying controversies

21 ‘‘(a) AUTHORITY.—(1) Subject to subsection (b), dis22 putes subject to the statutory jurisdiction of the Board

23 that involve the reasonableness of rates or other charges

24 or the provision of service may be resolved under the alter25 native dispute resolution process prescribed by the Board

26 for the arbitration of such disputes upon the election of
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1 a party filing with the Board a written complaint regard2 ing the rates, charges, or service, as the case may be.

3 ‘‘(2) Discovery shall be authorized in a case sub4 mitted to arbitration under this section if requested by a

5 party to the arbitration.

6 ‘‘(b) DISPUTES INVOLVING RATES AND OTHER

7 CHARGES.—In an arbitration of a dispute on a rate or

8 other financial charge under the process applied under

9 subsection (a), each party to the dispute shall submit to

10 the arbitrator the party’s final proposal regarding what

11 level of rate or charge is appropriate. All such proposals

12 shall be submitted simultaneously. The arbitrator shall se13 lect one of the submitted proposals, without modification,

14 to be the arbitrator’s final decision on the disputed rate

15 or charge.

16 ‘‘(c) JUDICIAL REVIEW.—(1) The district courts of

17 the United States shall have jurisdiction to review the final

18 decision of an arbitrator in a proceeding conducted under

19 subsection (a).

20 ‘‘(2) An action for review of a final decision of an

21 arbitrator referred to in paragraph (1) may be brought

22 only in the district court of the United States for the dis23 trict in which the party electing the arbitration under sub24 section (a) has its principal place of business.
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1 ‘‘(3) An action for review of the final decision of an

2 arbitrator may not be commenced under this subsection

3 more than 30 days after the date on which the arbitrator

4 issues the decision.

5 ‘‘(4) In an action brought under this subsection for

6 review of the decision of an arbitrator, the district court

7 may—

8 ‘‘(A) vacate the decision on any ground set

9 forth in section 10 of title 9; or

10 ‘‘(B) modify or correct the decision on any

11 ground set forth in section 11 of title 9.’’.

12 (b) CLERICAL AMENDMENT.—The table of sections

13 at the beginning of such chapter is amended by adding

14 at the end the following new item:

‘‘10503. Arbitration of qualifying controversies.’’.

15 SEC. 304. RAIL CARRIER SERVICE QUALITY PERFORMANCE

16 REPORTS.

17 (a) IN GENERAL.—Chapter 111 is amended by add18 ing at the end of subchapter III the following new section:

19 ‘‘§ 11146. Service quality reports

20 ‘‘(a) MONTHLY REPORT OF CARRIERS.—(1) Regula21 tions prescribed by the Secretary of Transportation shall

22 require each rail carrier to submit to the Secretary a

23 monthly report on the quality of the service provided by

24 the rail carrier.
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1 ‘‘(2) The report shall contain, for the month covered

2 by the report, information about—

3 ‘‘(A) the carrier’s on-time performance;

4 ‘‘(B) the carrier’s car availability deadline per5 formance;

6 ‘‘(C) the average speed at which the carrier’s

7 trains were operated;

8 ‘‘(D) the average time that the carrier’s trains

9 dwelled in terminals;

10 ‘‘(E) the number of the carrier’s cars that were

11 loaded (expressed separately for each major com12 modity group); and

13 ‘‘(F) any other aspects of the carrier’s perform14 ance (as a rail carrier) that the Secretary may re15 quire.

16 ‘‘(3) The information shall be set forth in the month17 ly report in a uniform format prescribed by the Secretary.

18 ‘‘(b) AVAILABILITY OF MONTHLY REPORT TO BOARD

19 AND PUBLIC.—(1) The Secretary shall furnish a copy of

20 the monthly reports of rail carriers to the Surface Trans21 portation Board not later than the next business day fol22 lowing receipt by the Secretary.

23 ‘‘(2) The Secretary shall make the monthly reports

24 of rail carriers available to the public.
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1 ‘‘(c) ANNUAL REPORT TO CONGRESS.—The Sec2 retary shall transmit to Congress an annual report con3 taining a summary and discussion of the information in

4 the reports submitted under this section to the Secretary

5 for the months of the year covered by the annual report.’’.

6 (b) CLERICAL AMENDMENT.—The table of sections

7 at the beginning of such chapter is amended by inserting

8 after the item relating to section 11145 the following:

‘‘11146. Service quality reports.’’.

9 SEC. 305. PERIODIC STUDY OF COMPETITION AMONG RAIL

10 CARRIERS.

11 (a) REQUIREMENT FOR STUDY.—

12 (1) TRIENNIAL STUDY.—Chapter 101 is

13 amended by adding at the end the following new sec14 tion:

15 ‘‘§ 10103. Periodic study of rail carrier competition

16 and processes of the Surface Transpor17 tation Board

18 ‘‘(a) REQUIREMENT FOR STUDY.—Every three years,

19 the Secretary of Transportation shall conduct a com20 prehensive study of rail carrier competition and the proc21 esses of the Board. The study shall include an assessment

22 of the following:

23 ‘‘(1) The availability of effective competitive op24 tions among and between rail carriers.
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1 ‘‘(2) The effectiveness of the processes of the

2 Surface Transportation Board, including the process

3 used for determining the reasonableness of rates of

4 rail carriers.

5 ‘‘(3) The availability to rail users of effective

6 regulatory dispute resolution options.

7 ‘‘(b) STUDY TO INCLUDE ASSESSMENT OF RAIL-TO8 RAIL COMPETITION.—In carrying out the study, the

9 Board shall assess the overall level of rail-to-rail competi10 tion in the rail carrier industry in the United States. In

11 making the assessment, the Board shall consider the views

12 of users of the services of rail carriers.

13 ‘‘(c) REPORT TO CONGRESS.—Not later than Novem14 ber 15 of each year in which a study is conducted under

15 subsection (a), the Secretary shall submit a report on the

16 results of the study to Congress. The report shall include

17 the following:

18 ‘‘(1) The Board’s assessment of the overall level

19 of rail-to-rail competition in the rail carrier industry

20 in the United States.

21 ‘‘(2) The markets that have limited rail-to-rail

22 competition.

23 ‘‘(3) Any recommendations for enhancing rail24 to-rail competition, particularly in markets identified

25 as having limited rail-to-rail competition.
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1 ‘‘(4) An assessment of the Board’s performance

2 of its purpose to promote and enhance competition

3 among and between railroads by—

4 ‘‘(A) addressing complaints regarding rates

5 and service; and

6 ‘‘(B) promulgating regulations of general

7 applicability or taking other actions.

8 ‘‘(5) Any recommendations for modification of

9 any of the decisions of the Surface Transportation

10 Board (or decisions of the former Interstate Com11 merce Commission continuing in effect) or for modi12 fication of the general authority or jurisdiction of

13 the Board.

14 ‘‘(6) Any other findings, analyses, assessments,

15 and recommendations that result from the study.’’.

16 (2) CLERICAL AMENDMENT.—The table of sec17 tions at the beginning of such chapter is amended

18 by adding at the end the following:

‘‘10103. Periodic study of rail carrier competition and processes of the Surface

Transportation Board.’’.

19 (b) TIME FOR FIRST STUDY.—The first study under

20 section 10103 of title 49, United States Code (as added

21 by subsection (a)), shall be carried out not later than two

22 years after the effective date specified in section 401.
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1 TITLE IV—EFFECTIVE DATES

2 SEC. 401. EFFECTIVE DATE.

3 Except as provided in section 402, this Act and the

4 amendments made by this Act shall take effect on October

5 1, 2001.

6 SEC. 402. EXCEPTIONS.

7 The following provisions shall take effect on the date

8 of the enactment of this Act:

9 (1) Section 303 and the amendments made in

10 that section.

11 (2) Section 305.

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