II

105TH CONGRESS

1ST SESSION S. 1429

To enhance rail competition and to ensure reasonable rail rates in any

case in which there is an absence of effective competition.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 7, 1997

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

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

on Commerce, Science, and Transportation

A BILL

To enhance rail competition and to ensure reasonable rail

rates in any case in which there is an absence of effective

competition.

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 ‘‘Railroad Shipper Pro5 tection Act of 1997’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—

8 (1) the railroad industry has consolidated dra9 matically since passage of the Staggers Rail Act of
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1 1980 (94 Stat. 1895 et seq.), leaving the railroad in2 dustry with only a few major carriers and providing

3 shippers with limited competitive options;

4 (2) the financial health of the railroad industry

5 has improved substantially since the passage of the

6 Staggers Rail Act of 1980;

7 (3) due partly to the continued consolidation of

8 the railroad industry, captive rail shippers—

9 (A) continue to exist; and

10 (B) are increasing in number; and

11 (4) rail shippers, including captive rail shippers,

12 will benefit from increased competition among rail13 roads and a streamlined process under which the

14 Surface Transportation Board determines the rea15 sonableness of captive rail shipper rates.

16 SEC. 3. DEFINITIONS.

17 In this Act:

18 (1) SECRETARY.—The term ‘‘Secretary’’ means

19 the Secretary of Transportation.

20 (2) SURFACE TRANSPORTATION BOARD.—The

21 term ‘‘Surface Transportation Board’’ or ‘‘Board’’

22 means the Surface Transportation Board established

23 under section 701 of title 49, United States Code.

24 SEC. 4. PURPOSES.

25 The purposes of this Act are—
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1 (1) to clarify the rail transportation policy of

2 the United States;

3 (2) to ensure rail competition for shippers in

4 geographic areas in which rail competition is phys5 ically available;

6 (3) to ensure reasonable rates for captive rail

7 shippers; and

8 (4) to remove unnecessary regulatory burdens

9 from the rate reasonableness process of the Surface

10 Transportation Board.

11 SEC. 5. CLARIFICATION OF RAIL TRANSPORTATION POL12 ICY.

13 Section 10101 of title 49, United States Code, is

14 amended—

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

16 ‘‘In regulating’’; and

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

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

19 of the rail transportation policy of the United States shall

20 be—

21 ‘‘(1) to ensure effective competition among rail

22 carriers at origin and destination; and

23 ‘‘(2) to maintain reasonable rates in the ab24 sence of effective competition.’’.
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1 SEC. 6. REQUIREMENT OF RAILROADS TO ESTABLISH

2 RATES TO FACILITATE RAIL TO RAIL COM3 PETITION.

4 (a) ESTABLISHMENT OF RATE.—Section 11101(a) of

5 title 49, United States Code, is amended by inserting after

6 the first sentence the following: ‘‘Upon the request of a

7 shipper, a rail carrier shall establish a rate for transpor8 tation requested by the shipper between any 2 points on

9 the system of that rail carrier where traffic originates, ter10 minates, or may be interchanged. A rate established under

11 the preceding sentence shall apply to the shipper that

12 makes the request for the rate without regard to whether

13 the rate established is for part of a through transportation

14 route between an origin and a destination or whether the

15 shipper has made arrangements for transportation over

16 any other part of that through route.’’.

17 (b) REVIEW OF REASONABLENESS OF RATE.—Sec18 tion 10701(d) of title 49, United States Code, is amend19 ed—

20 (1) by redesignating paragraph (3) as para21 graph (4); and

22 (2) by inserting after paragraph (2) the follow23 ing:

24 ‘‘(3) If a rail carrier establishes a rate for transpor25 tation between any 2 points on the system of that rail car26 rier where rail traffic originates, terminates, or may be
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1 interchanged, the shipper may challenge the reasonable2 ness of—

3 ‘‘(A) that rate; or

4 ‘‘(B) the aggregate rate between origin and des5 tination (if the rate established is for part of a

6 through route).’’.

7 SEC. 7. SIMPLIFIED STANDARD FOR MARKET DOMINANCE.

8 Section 10707(d) of title 49, United States Code, is

9 amended—

10 (1) by striking paragraph (2);

11 (2) by striking ‘‘(1)(A)’’ and inserting ‘‘(3)’’;

12 (3) by striking ‘‘(B) For purposes’’ and insert13 ing ‘‘(4) For purposes’’; and

14 (4) by inserting before paragraph (3), as redes15 ignated, the following:

16 ‘‘(1) In making a determination under this section,

17 the Board shall find that the rail carrier establishing the

18 challenged rate referred to in subsection (b) has market

19 dominance over the transportation to which the rate ap20 plies if that rail carrier—

21 ‘‘(A) is the only rail carrier serving the origin,

22 destination, or intermediate portion of the route in23 volved; and
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1 ‘‘(B) does not prove to the Board that the rate

2 charged results in a revenue-variable cost percentage

3 for that transportation that is less than 180 percent.

4 ‘‘(2) In making a market dominance determination

5 under this section in any case in which 2 or more rail

6 carriers provide service at an origin or destination, the

7 Board shall consider only transportation competition at

8 that origin or destination.’’.

9 SEC. 8. REVENUE ADEQUACY DETERMINATIONS.

10 (a) RAIL TRANSPORTATION POLICY.—Section

11 10101(3) of title 49, United States Code, is amended by

12 striking ‘‘, as determined by the Board;’’.

13 (b) AUTHORITY FOR REVENUE ADEQUACY DETER14 MINATION.—Section 10704(a) of title 49, United States

15 Code, is amended—

16 (1) by striking ‘‘(a)(1)’’ and inserting ‘‘(a)’’;

17 and

18 (2) by striking paragraphs (2) and (3).

19 SEC. 9. REDUCTION OF PROCEDURAL BARRIERS FACED BY

20 SMALL SHIPPERS.

21 (a) ADMINISTRATIVE RELIEF.—Not later than 180

22 days after the date of enactment of this Act, the Surface

23 Transportation Board shall—
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1 (1) review the rules and procedures applicable

2 to rate complaints and other complaints filed with

3 the Board by small shippers;

4 (2) identify any such rules or procedures that

5 are unduly burdensome to small shippers; and

6 (3) take such action, including rulemaking, as

7 is appropriate to reduce or eliminate the aspects of

8 the rules and procedures that the Board determines

9 under paragraph (2) to be unduly burdensome to

10 small shippers.

11 (b) LEGISLATIVE RELIEF.—The Board shall notify

12 the Committee on Commerce, Science, and Transportation

13 of the Senate and the Committee on Transportation and

14 Infrastructure of the House of Representatives if the

15 Board determines that additional changes in the rules and

16 procedures described in subsection (a) are appropriate and

17 require commensurate changes in statutory law. In mak18 ing that notification, the Board shall make recommenda19 tions concerning those changes.

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