II 

115TH CONGRESS 

1ST SESSION S. 1233 

To improve the efficiency and reliability of rail transportation by reforming 

the Surface Transportation Board, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 25, 2017 

Ms. BALDWIN (for herself and Mr. FRANKEN) introduced the following bill; 

which was read twice and referred to the Committee on Commerce, 

Science, and Transportation 

A BILL 

To improve the efficiency and reliability of rail transportation 

by reforming the Surface Transportation Board, 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. 

4 This Act may be cited as the ‘‘Rail Shipper Fairness 

5 Act of 2017’’. 

6 SEC. 2. IMPROVING RAIL SERVICE. 

7 (a) COMMON CARRIER OBLIGATIONS.—Section 

8 11101(a) of title 49, United States Code, is amended by 

9 inserting ‘‘, as necessary for the efficient and reliable 


lotter on DSKBCFDHB2PROD with BILLS
2 

•S 1233 IS

1 transportation based on the shipper’s reasonable service 

2 requirements,’’ after ‘‘the transportation or service’’. 

3 (b) EMERGENCY SERVICE ORDERS.—Section 

4 11123(b) of such title is amended by adding at the end 

5 the following: 

6 ‘‘(4) The Board may issue emergency service orders 

7 that include shipments moving under contract if such 

8 shipments are part of a regional service order issued in 

9 accordance with this section.’’. 

10 (c) REPORTS.—Section 11145(a) of such title is 

11 amended— 

12 (1) in paragraph (1), by striking ‘‘and’’ at the 

13 end; 

14 (2) by redesignating paragraph (2) as para15 graph (3); and 

16 (3) by inserting after paragraph (1) the fol17 lowing: 

18 ‘‘(2) reports, service plans, or other documents 

19 that cover shipments moving under contract if such 

20 shipments are part of a general report, service plan, 

21 or other document that generally covers the geo22 graphic area or commodity; and’’. 

23 (d) EQUITABLE RELIEF; DAMAGES.—Section 11704 

24 of such title is amended— 


lotter on DSKBCFDHB2PROD with BILLS
3 

•S 1233 IS

1 (1) in subsection (a), by inserting ‘‘or subjected 

2 to inadequate or deficient service’’ after ‘‘injured’’; 

3 (2) by amending subsection (b) to read as fol4 lows: 

5 ‘‘(b) A rail carrier providing transportation subject 

6 to the jurisdiction of the Board under this part is liable— 

7 ‘‘(1) for damages sustained by a person as a re8 sult of an act or omission of that carrier in violation 

9 of this part; 

10 ‘‘(2) to a person for amounts charged to that 

11 person that exceed the applicable rate for the trans12 portation; and 

13 ‘‘(3) to a person for damages or equitable relief 

14 as a result of inadequate or deficient service in viola15 tion of this part.’’; and 

16 (3) in subsection (c), by adding at the end the 

17 following: 

18 ‘‘(3) The Board may order a rail carrier to pay dam19 ages or to provide equitable relief, as appropriate, to a 

20 person subjected to inadequate or deficient service as a 

21 result of a violation of this part by that carrier.’’. 

22 (e) CIVIL PENALTIES.—Section 11901 of such title 

23 is amended— 

24 (1) in subsection (a), by striking ‘‘$5,000’’ and 

25 inserting ‘‘$25,000’’; 


lotter on DSKBCFDHB2PROD with BILLS
4 

•S 1233 IS

1 (2) in subsection (c), by striking ‘‘$5,000’’ and 

2 inserting ‘‘$25,000’’; and 

3 (3) in subsection (e), by striking ‘‘$100’’ each 

4 place such term appears and inserting ‘‘$1,000’’. 

5 SEC. 3. IMPROVING RAIL COMPETITION. 

6 (a) RAIL TRANSPORTATION POLICY.—Section 10101 

7 of title 49, United States Code, is amended— 

8 (1) by redesignating paragraphs (14) and (15) 

9 as paragraphs (15) and (16), respectively; and 

10 (2) by inserting after paragraph (13) the fol11 lowing: 

12 ‘‘(14) to provide for and promote the protection 

13 of the shipping public;’’. 

14 (b) RATES.—Section 10705 of such title is amended 

15 by adding at the end the following: 

16 ‘‘(d) Shippers may obtain rates to or from any inter17 change points of two or more rail carriers.’’. 

18 (c) MARKET DOMINANCE.—Section 10707 of such 

19 title is amended— 

20 (1) in subsection (a)— 

21 (A) by striking ‘‘In this section, ‘market 

22 dominance’ means’’ and inserting the following: 

23 ‘‘(a) In this section: 


lotter on DSKBCFDHB2PROD with BILLS
5 

•S 1233 IS

1 ‘‘(1) ‘effective competition’ only includes modes 

2 of transportation with existing and supporting infra3 structure; and 

4 ‘‘(2) ‘market dominance’ means’’; and 

5 (2) in subsection (b)— 

6 (A) by inserting ‘‘A rail carrier could have 

7 market dominance even in circumstances in 

8 which a shipper is served by two carriers.’’ after 

9 ‘‘the rate applies.’’; and 

10 (B) by striking ‘‘rate or transportation’’ 

11 and inserting ‘‘rate for transportation’’. 

12 (d) TERMINAL FACILITIES.—Section 11102(c) of 

13 such title is amended to read as follows: 

14 ‘‘(c)(1) Except as provided in paragraph (2), the 

15 Board shall require a Class I rail carrier to enter into a 

16 competitive switching agreement if a shipper or receiver, 

17 or a group of shippers or receivers, files a petition with 

18 the Board that demonstrates, to the satisfaction of the 

19 Board, that— 

20 ‘‘(A) the facilities of the shipper or receiver for 

21 whom such switching is sought are served by rail 

22 only by a single, Class I rail carrier; and 

23 ‘‘(B) subject to paragraph (3), there is, or can 

24 be a working interchange between— 


lotter on DSKBCFDHB2PROD with BILLS
6 

•S 1233 IS

1 ‘‘(i) the Class I rail carrier serving the 

2 shipper or receiver for whom such switching is 

3 sought; and 

4 ‘‘(ii) another rail carrier within a reason5 able distance of the facilities of such shipper or 

6 receiver. 

7 ‘‘(2) Competitive switching may not be imposed 

8 under this subsection if— 

9 ‘‘(A) either rail carrier between which such 

10 switching is to be established demonstrates that the 

11 proposed switching is not feasible or is unsafe; or 

12 ‘‘(B) the presence of reciprocal switching will 

13 unduly restrict the ability of a rail carrier to serve 

14 its own shippers. 

15 ‘‘(3) The requirement set forth in paragraph (1)(B) 

16 is satisfied if each facility of the shipper or receiver for 

17 which competitive switching is sought is— 

18 ‘‘(A) within the boundaries of a terminal of the 

19 Class I rail carrier; or 

20 ‘‘(B) within a 100-mile radius of an interchange 

21 between the Class I rail carrier and another carrier 

22 at which rail cars are regularly switched.’’. 


lotter on DSKBCFDHB2PROD with BILLS
7 

•S 1233 IS

1 SEC. 4. IMPROVING REASONABLE RATE STANDARDS. 

2 (a) BENCHMARK-BASED RATE REASONABLENESS

3 STANDARD.—Section 10701(d) of title 49, United States 

4 Code, is amended by adding at the end the following: 

5 ‘‘(4)(A) Not later than 90 days after the date of the 

6 enactment of this paragraph, the Board shall initiate a 

7 rulemaking proceeding to develop a methodology for deter8 mining the reasonableness of challenged rail rates based 

9 on competitive rate benchmarking that predicts a competi10 tive rate level based upon econometric models. 

11 ‘‘(B) Rather than utilizing its existing Three-Bench12 mark Methodology, the Board shall develop a methodology 

13 that considers competitive markets or a proxy of such 

14 markets. 

15 ‘‘(C) In determining the reasonableness of a chal16 lenged rate under the new benchmarking methodology de17 veloped under this paragraph, the Board shall presume 

18 that a rate above the benchmark rate level is unreasonable 

19 unless the rail carrier proves that the margin above the 

20 competitive rate benchmark is necessary to allow the rail 

21 carrier to earn adequate revenues. 

22 ‘‘(D) Relief under the new benchmarking method 

23 shall have no monetary limit, but any rate prescription 

24 set by the Board shall remain in effect not less than 5 

25 years. 


lotter on DSKBCFDHB2PROD with BILLS
8 

•S 1233 IS

1 ‘‘(E) The Board’s rulemaking under this paragraph 

2 shall set a standard procedural schedule for such cases, 

3 subject to necessary adjustments in particular adjudica4 tions, which may not exceed 365 days.’’. 

5 (b) STAND-ALONE COST CASES.—Section 10702 of 

6 such title is amended— 

7 (1) by inserting ‘‘(a)’’ before ‘‘A rail carrier’’; 

8 and 

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

10 ‘‘(b)(1) The Board shall prohibit a rail carrier pro11 viding transportation subject to the jurisdiction of the 

12 Board under this part to change the challenged rate for 

13 providing such transportation to rail customers while a 

14 maximum reasonable rate case brought by such rail cus15 tomers is pending before the Board. 

16 ‘‘(2) A rail customer may file a maximum reasonable 

17 rate case with the Board after the date that is 2 years 

18 before the date on which a common carrier shipment rate 

19 is anticipated to begin. 

20 ‘‘(3) The Board may not use cross-subsidy tests in 

21 deciding stand-alone cost cases. 

22 ‘‘(4) The Board shall use a market-based revenue di23 visions methodology in deciding stand-alone cost cases. 

24 ‘‘(5) In a stand-alone cost case, if the Board deter25 mines that the rail carrier is revenue adequate, the rail 


lotter on DSKBCFDHB2PROD with BILLS
9 

•S 1233 IS

1 carrier shall have the burden of proof to demonstrate that 

2 the railroad carrier is charging a reasonable rate.’’. 

3 (c) CONFORMING AMENDMENT.—Section 10704 of 

4 such title is amended— 

5 (1) by striking subsection (c); and 

6 (2) by redesignating subsection (d) as sub7 section (c). 

8 (d) MARKET DOMINANCE.—Section 10707 of such 

9 title, as amended by section 3(c), is further amended— 

10 (1) in subsection (d)(1)(B), by adding at the 

11 end the following ‘‘A shipper may introduce move12 ment-specific Uniform Rail Costing System cost cal13 culations.’’; and 

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

15 ‘‘(e) In making a determination under this section, 

16 the Board may not utilize a qualitative analysis in which 

17 the Board attempts to identify any feasible transportation 

18 alternatives that could be used by the shipper.’’. 

19 SEC. 5. PROTECTIONS FROM UNREASONABLE PRACTICES. 

20 Section 10701 of title 49, United States Code, is 

21 amended by adding at the end the following: 

22 ‘‘(e)(1) A rail carrier providing transportation subject 

23 to the jurisdiction of the Board under this part may not 

24 use an index when establishing fuel surcharges. 


lotter on DSKBCFDHB2PROD with BILLS
10 

•S 1233 IS

1 ‘‘(2) Any fuel surcharges imposed by the rail carrier 

2 shall be directly accounted for by changes to the carrier’s 

3 actual fuel prices. The carrier’s fuel surcharge may not 

4 be greater than the amount necessary to recover the car5 rier’s incremental fuel cost increases. 

6 ‘‘(3) The Board is authorized to require any rail car7 rier to report actual fuel prices as necessary to carry out 

8 the purposes of this subsection. 

9 ‘‘(4) A shipper may challenge a fuel surcharge as an 

10 unreasonable practice under section 10702(2) if such 

11 charges, as applied to that shipper, exceed the carrier’s 

12 incremental fuel costs.’’. 

13 SEC. 6. REVENUE ADEQUACY. 

14 (a) ELIMINATION OF REVENUE ADEQUACY TEST.— 

15 Section 10704(a) of title 49, United States Code, is 

16 amended by striking paragraph (3). 

17 (b) RAILROAD COST OF CAPITAL.—Section 10704(a) 

18 of such title, as amended by subsection (a), is further 

19 amended by adding at the end the following: 

20 ‘‘(3) In calculating a rail carrier’s cost of capital, the 

21 Board shall multiply the value of the capital by the sum 

22 of— 

23 ‘‘(A) the current annual yield on a 10-year 

24 United States Treasury Bond; and 


lotter on DSKBCFDHB2PROD with BILLS
11 

•S 1233 IS

1 ‘‘(B) a prospective market risk premium, which 

2 shall not exceed 5 percent per year.’’. 

Æ 


lotter on DSKBCFDHB2PROD with BILLS