II 

Calendar No. 624 

113TH CONGRESS 

2D SESSION S. 2777 

To establish the Surface Transportation Board as an independent 

establishment, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 8, 2014 

Mr. ROCKEFELLER (for himself, Mr. THUNE, and Ms. BALDWIN) introduced 

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

on Commerce, Science, and Transportation 

DECEMBER 8, 2014 

Reported by Mr. ROCKEFELLER, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

A BILL 

To establish the Surface Transportation Board as an 

independent establishment, 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 ‘‘Surface Transpor5 tation Board Reauthorization Act of 2014’’. 


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1 SEC. 2. REFERENCES TO TITLE 49, UNITED STATES CODE. 

2 Except as otherwise expressly provided, wherever in 

3 this Act an amendment or repeal is expressed in terms 

4 of an amendment to, or repeal of, a section or other provi5 sion, the reference shall be considered to be made to a 

6 section or other provision of title 49, United States Code. 

7 SEC. 3. ESTABLISHMENT OF SURFACE TRANSPORTATION 

8 BOARD AS AN INDEPENDENT ESTABLISH9 MENT. 

10 (a) IN GENERAL.—Section 701(a) is amended to 

11 read as follows: 

12 ‘‘(a) ESTABLISHMENT.—The Surface Transportation 

13 Board is an independent establishment of the United 

14 States Government.’’. 

15 (b) CONFORMING AMENDMENTS.— 

16 (1) ADMINISTRATIVE PROVISIONS.—Section 703 

17 is amended— 

18 (A) by striking subsections (a), (c), (f), 

19 and (g); 

20 (B) by redesignating subsections (b), (d), 

21 and (e) as subsections (a), (b), and (c), respec22 tively; and 

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

24 ‘‘(d) SUBMISSIONS AND TRANSMITTALS.—Whenever 

25 the Board submits or transmits any budget estimate, 

26 budget request, supplemental budget estimate, or other 


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1 budget information, legislative recommendation, prepared 

2 testimony for a congressional hearing, or comment on leg3 islation to the President or to the Office of Management 

4 and Budget, it shall concurrently transmit a copy thereof 

5 to the Committee on Commerce, Science, and Transpor6 tation of the Senate and the Committee on Transportation 

7 and Infrastructure of the House of Representatives. No 

8 officer or agency of the United States shall have any au9 thority to require the Board to submit its budget estimates 

10 or requests, legislative recommendations, prepared testi11 mony for congressional hearings, or comments on legisla12 tion to any officer or agency of the United States for ap13 proval, comments, or review, prior to the submission of 

14 the recommendations, testimony, or comments to Con15 gress.’’. 

16 (2) ADMINISTRATIVE SUPPORT.— 

17 (A) REPEALER.—Section 725 is repealed. 

18 (B) CONFORMING AMENDMENT.—The 

19 table of contents for chapter 7 is amended by 

20 striking the item relating to section 725. 

21 SEC. 4. SURFACE TRANSPORTATION BOARD MEMBERSHIP. 

22 (a) IN GENERAL.—Section 701(b) is amended— 

23 (1) in paragraph (1)— 

24 (A) by striking ‘‘3 members’’ and inserting 

25 ‘‘5 members’’; and 


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1 (B) by striking ‘‘2 members’’ and inserting 

2 ‘‘3 members’’; and 

3 (2) by striking paragraph (2) and inserting the 

4 following: 

5 ‘‘(2) At any given time, at least 3 members of 

6 the Board shall be individuals with professional 

7 standing and demonstrated knowledge in the fields 

8 of transportation, transportation regulation, or eco9 nomic regulation, and at least 2 members shall be 

10 individuals with professional or business experience 

11 (including agriculture or other rail customers) in the 

12 private sector.’’. 

13 (b) REPEAL OF HOLDOVER LIMITATION.—Section 

14 701(b)(3) is amended by striking ‘‘qualified, but for a pe15 riod not to exceed one year’’ and inserting ‘‘qualified’’. 

16 (c) REPEAL OF OBSOLETE PROVISION.—Section 

17 701(b) is amended— 

18 (1) by striking paragraph (4); 

19 (2) by redesignating paragraphs (5), (6), and 

20 (7) as paragraphs (4), (5), and (6), respectively; and 

21 (3) by striking ‘‘In the case of an individual 

22 who becomes a member of the Board pursuant to 

23 paragraph (4), or an individual’’ in paragraph (4), 

24 as redesignated, and inserting ‘‘In the case of an in25 dividual’’. 


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1 SEC. 5. NONPUBLIC COLLABORATIVE DISCUSSIONS. 

2 Section 703(a), as redesignated by section 3 of this 

3 Act, is amended to read as follows: 

4 ‘‘(a) OPEN MEETINGS.— 

5 ‘‘(1) IN GENERAL.—The Board shall be deemed 

6 to be an agency for purposes of section 552b of title 

7 5. 

8 ‘‘(2) NONPUBLIC COLLABORATIVE DISCUS9 SIONS.— 

10 ‘‘(A) IN GENERAL.—Notwithstanding sec11 tion 552b of title 5, a majority of the members 

12 may hold a meeting that is not open to public 

13 observation to discuss official agency business 

14 if— 

15 ‘‘(i) no vote or other disposition of of16 ficial agency business is taken at the meet17 ing; 

18 ‘‘(ii) each individual present at the 

19 meeting is a member or an employee of the 

20 Board; and 

21 ‘‘(iii) the General Counsel of the 

22 Board is present at the meeting. 

23 ‘‘(B) DISCLOSURE OF NONPUBLIC COL24 LABORATIVE DISCUSSIONS.—Except as provided 

25 under subparagraph (C), not later than 2 busi26 ness days after the conclusion of a meeting 


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1 under subparagraph (A), the Board shall make 

2 available to the public, in a place easily acces3 sible to the public— 

4 ‘‘(i) a list of the individuals present at 

5 the meeting; and 

6 ‘‘(ii) a summary of the matters dis7 cussed at the meeting, except for any mat8 ters the Board properly determines may be 

9 withheld from the public under section 

10 552b(c) of title 5. 

11 ‘‘(C) ONGOING PROCEEDINGS.—If a dis12 cussion under subparagraph (A) relates, di13 rectly or indirectly, to an ongoing proceeding 

14 before the Board, the Board shall make the dis15 closure under subparagraph (B) on the date of 

16 the final Board decision. 

17 ‘‘(D) PRESERVATION OF OPEN MEETINGS

18 REQUIREMENTS FOR AGENCY ACTION.—Noth19 ing in this paragraph shall limit the applica20 bility of section 552b of title 5 with respect to 

21 a meeting of the members other than that de22 scribed in this paragraph. 

23 ‘‘(E) STATUTORY CONSTRUCTION.—Noth24 ing in this paragraph— 


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1 ‘‘(i) shall limit the applicability of sec2 tion 552b of title 5 with respect to any in3 formation which is proposed to be withheld 

4 from the public under subparagraph 

5 (B)(ii); and 

6 ‘‘(ii) authorizes the Board to withhold 

7 from any individual any record that is ac8 cessible to that individual under section 

9 552a of title 5, United States Code.’’. 

10 SEC. 6. INVESTIGATIVE AUTHORITY. 

11 (a) AUTHORITY TO INITIATE INVESTIGATIONS.— 

12 Section 11701(a) is amended by striking ‘‘only on com13 plaint’’ and inserting ‘‘on the Board’s own initiative or 

14 on complaint’’. 

15 (b) RATE PROCEEDINGS.—Section 10704(b) is 

16 amended by striking the first sentence and inserting ‘‘The 

17 Board may begin a proceeding under subsection (a)(1) on 

18 its own initiative or upon complaint, except that a pro19 ceeding to determine the reasonableness of the level of a 

20 rate charged by a carrier may only be initiated upon com21 plaint.’’. 

22 (c) ANNUAL REPORT; INVESTIGATIONS.—Section 

23 704 is amended by striking ‘‘on its activities.’’ and insert24 ing ‘‘on its activities, including each instance in which the 


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1 Board has initiated an investigation on its own initiative 

2 under this chapter or subtitle IV.’’. 

3 SEC. 7. PROCEDURES FOR RATE CASES. 

4 (a) SIMPLIFIED PROCEDURE.—Section 10701(d)(3) 

5 is amended to read as follows: 

6 ‘‘(3) The Board shall maintain a simplified and 

7 expedited method for determining the reasonableness 

8 of challenged rates in those cases in which a full 

9 stand-alone cost presentation is too costly, given the 

10 value of the case.’’. 

11 (b) EXPEDITED HANDLING.—Section 10704(d) is 

12 amended by striking the first sentence and inserting ‘‘The 

13 Board shall maintain procedures to ensure expeditious 

14 handling of challenges to the reasonableness of railroad 

15 rates.’’. 

16 SEC. 8. RATE REVIEW TIMELINES. 

17 Section 10704(d), as amended by section 7 of this 

18 Act, is further amended— 

19 (1) by striking ‘‘(d) The’’ and inserting ‘‘(d)(1) 

20 The’’; and 

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

22 ‘‘(2)(A) Except as provided under subparagraph 

23 (B), in a stand-alone cost rate challenge, the Board 

24 shall comply with the following timeline: 


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1 ‘‘(i) For discovery, completion not 

2 later than 150 days after the date that the 

3 challenge is initiated. 

4 ‘‘(ii) For development of the evi5 dentiary record, completion not later than 

6 155 days after the date that discovery is 

7 complete under clause (i). 

8 ‘‘(iii) For submission of a closing 

9 brief, submission not later than 60 days 

10 after the date that development of the evi11 dentiary record is complete under clause 

12 (ii). 

13 ‘‘(iv) For a final Board decision, 

14 issuance not later than 180 days after the 

15 date that the last closing brief is submitted 

16 under clause (iii). 

17 ‘‘(B) The Board may extend a timeline 

18 under subparagraph (A) after a request from 

19 any party or in the interest of due process.’’. 

20 SEC. 9. EFFECT OF RATE BUNDLING. 

21 Not later than 180 days after the date of enactment 

22 of this Act, the Surface Transportation Board shall ini23 tiate an ex parte proceeding on whether contract proposals 

24 for multiple origin-to-destination movements have ad25 versely impacted the intent of Congress that the Surface 


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1 Transportation Board’s rate challenge procedures remain 

2 available to shippers that are subject to railroad market 

3 dominance, and how the Board can prevent such practices 

4 in the future. 

5 SEC. 10. REPORT ON RATE CASE METHODOLOGY. 

6 Not later than 1 year after the date of enactment 

7 of this Act, the Surface Transportation Board shall report 

8 to the Committee on Commerce, Science, and Transpor9 tation of the Senate and the Committee on Transportation 

10 and Infrastructure of the House of Representatives on— 

11 (1) whether current methodologies are sufficient 

12 to address the complexity of large rate cases; and 

13 (2) alternative methodologies that could stream14 line and expedite large rate cases. 

15 SEC. 11. ARBITRATION OF CERTAIN RAIL RATES, PRAC16 TICES, AND COMMON CARRIER SERVICE EX17 PECTATION DISPUTES. 

18 (a) IN GENERAL.—Chapter 117 is amended by add19 ing at the end the following: 

20 ‘‘§ 11709. Arbitration of certain rail rates, practices, 

21 and common carrier service disputes 

22 ‘‘(a) IN GENERAL.—Not later than 1 year after the 

23 date of enactment of the Surface Transportation Board 

24 Reauthorization Act of 2014, the Board shall promulgate 

25 regulations to establish a binding arbitration process to 


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1 resolve rail rate, practice, and common carrier service ex2 pectation complaints subject to the jurisdiction of the 

3 Board. 

4 ‘‘(b) COVERED DISPUTES.—The binding arbitration 

5 process— 

6 ‘‘(1) shall apply to disputes involving rates, 

7 practices, and common carrier service expectations 

8 subject to the jurisdiction of the Board; and 

9 ‘‘(2) shall not apply to— 

10 ‘‘(A) disputes to obtain the grant, denial, 

11 stay, or revocation of any license, authorization, 

12 or exemption, or to prescribe for the future any 

13 conduct, rules, or results of general, industry14 wide applicability, or to enforce a labor protec15 tive condition; and 

16 ‘‘(B) disputes solely between 2 or more rail 

17 carriers. 

18 ‘‘(c) ARBITRATION PROCEDURES.— 

19 ‘‘(1) IN GENERAL.—The Board— 

20 ‘‘(A) may make the binding arbitration 

21 process available only to the relevant parties— 

22 ‘‘(i) after the filing of a formal com23 plaint; or 

24 ‘‘(ii) upon petition by a party at the 

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1 tion process provided by the Board for a 

2 complaint subject to this section; 

3 ‘‘(B) with respect to rate disputes, may 

4 make the binding arbitration process available 

5 only to the relevant parties if the rail carrier 

6 has market dominance, as determined under 

7 section 10707 of this title; and 

8 ‘‘(C) shall determine whether to pursue the 

9 binding arbitration process not later than 30 

10 days after the date that a petition or formal 

11 complaint is filed. 

12 ‘‘(2) LIMITATION.—Initiation of the binding ar13 bitration process shall preclude the Board from sep14 arately reviewing a complaint or dispute related to 

15 the same rail rate, practice, or common carrier serv16 ice expectation in a covered dispute involving the 

17 same parties. 

18 ‘‘(3) RATES.—In resolving a covered dispute in19 volving the reasonableness of a rail carrier’s rates, 

20 the arbitrator or panel of arbitrators, as applicable, 

21 shall consider the Board’s methodologies for setting 

22 maximum lawful rates, giving due consideration to 

23 the need for differential pricing to permit a rail car24 rier to collect adequate revenues within the meaning 

25 of section 10704(a)(2). 


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1 ‘‘(4) SERVICE EXPECTATIONS.—In resolving a 

2 dispute involving common carrier service expecta3 tions, the arbitrator or panel of arbitrators, as appli4 cable, shall consider the rates and service terms, and 

5 any changes thereto, as published or otherwise made 

6 available under subsection (b), (c), or (d) of section 

7 11101. 

8 ‘‘(d) ARBITRATION DECISIONS.—Any decision 

9 reached in an arbitration process under this section— 

10 ‘‘(1) shall— 

11 ‘‘(A) be consistent with subtitle IV; 

12 ‘‘(B) be in writing; 

13 ‘‘(C) contain findings of fact and conclu14 sions; and 

15 ‘‘(D) be binding upon the parties; and 

16 ‘‘(2) shall not have any precedential effect in 

17 any other or subsequent arbitration dispute. 

18 ‘‘(e) TIMELINES.— 

19 ‘‘(1) SELECTION.—An arbitrator or panel of ar20 bitrators shall be selected not later than 14 days 

21 after the date of the Board’s decision to initiate ar22 bitration. 

23 ‘‘(2) EVIDENTIARY PROCESS.—The evidentiary 

24 process of the binding arbitration process shall be 

25 completed not later than 90 days after the date that 


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1 the arbitration process is initiated, unless a party re2 quests an extension and the arbitrator or panel of 

3 arbitrators, as applicable, grants it. 

4 ‘‘(3) DECISION.—The arbitrator or panel of ar5 bitrators, as applicable, shall issue a decision not 

6 later than 30 days after the date that the evi7 dentiary record is closed. 

8 ‘‘(4) EXTENSIONS.—The Board may extend any 

9 of the timelines in this subsection upon the agree10 ment of all parties in the dispute. 

11 ‘‘(f) ARBITRATORS.— 

12 ‘‘(1) IN GENERAL.—Arbitration under this sec13 tion shall be conducted by an arbitrator, or a panel 

14 of arbitrators, selected from a roster, maintained by 

15 the Board, of persons with rail transportation, eco16 nomic regulation, professional or business experi17 ence, including agriculture, in the private sector. 

18 ‘‘(2) SELECTION.— 

19 ‘‘(A) IN GENERAL.—If the parties cannot 

20 mutually agree on an arbitrator, or the lead ar21 bitrator of a panel of arbitrators, the parties 

22 shall select the arbitrator or lead arbitrator 

23 from the roster by alternately striking names 

24 from the roster until only 1 name remains. 


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1 ‘‘(B) PANEL OF ARBITRATORS.—For pur2 poses of this section, a panel of arbitrators shall 

3 be selected as follows: 

4 ‘‘(i) Notwithstanding subparagraph 

5 (A), each party to a dispute shall select 1 

6 arbitrator from the roster. 

7 ‘‘(ii) The parties to a dispute may 

8 mutually select 1 arbitrator from the ros9 ter to serve as the lead arbitrator of the 

10 panel of arbitrators. 

11 ‘‘(3) COST.—The parties shall share the costs 

12 of the arbitration equally. 

13 ‘‘(g) RELIEF.—An arbitral decision under this sec14 tion may award the payment of damages or rate prescrip15 tive relief, but the value of the award shall be limited as 

16 follows: 

17 ‘‘(1) For common carrier service and practice 

18 disputes, the damage award may not exceed 

19 $2,000,000. 

20 ‘‘(2) For rate disputes, the damage award, in21 cluding any rate prescription, may not exceed 

22 $25,000,000, and any rate prescription shall be lim23 ited to not longer than 5 years from the date of the 

24 arbitral decision. 


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1 ‘‘(h) BOARD REVIEW.—If a party appeals a decision 

2 under this section to the Board, the Board may review 

3 the decision under this section to determine if— 

4 ‘‘(1) the decision is consistent with subtitle IV 

5 as applied by the Board; or 

6 ‘‘(2) the award limitation under subsection 

7 (g).’’. 

8 (b) CONFORMING AMENDMENT.—The table of con9 tents for chapter 117 is amended by adding at the end 

10 the following: 

‘‘11709. Arbitration of certain rail rate, practice, and common carrier service 

disputes.’’. 

11 SEC. 12. COMPILATION OF COMPLAINTS AT SURFACE 

12 TRANSPORTATION BOARD. 

13 (a) IN GENERAL.—Section 704, as amended by sec14 tion 6 of this Act, is further amended— 

15 (1) by striking the section heading and insert16 ing the following: 

17 ‘‘§ 704. Reports’’; 

18 (2) by inserting ‘‘(a) ANNUAL REPORT.—’’ be19 fore ‘‘The Board’’ and indenting appropriately; and 

20 (3) by adding at the end the following: 

21 ‘‘(b) COMPLAINTS.— 

22 ‘‘(1) IN GENERAL.—The Board shall establish 

23 and maintain a database of complaints received by 

24 the Board. 


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1 ‘‘(2) QUARTERLY REPORTS.—The Board shall 

2 post a quarterly report of formal and informal serv3 ice complaints received by the Board during the pre4 vious quarter that includes— 

5 ‘‘(A) a list of the type of each complaint; 

6 ‘‘(B) the geographic region of each com7 plaint; and 

8 ‘‘(C) the resolution of each complaint, if 

9 appropriate. 

10 ‘‘(3) WRITTEN CONSENT.—The quarterly report 

11 may identify a complainant that submitted an infor12 mal complaint only upon the written consent of the 

13 complainant. 

14 ‘‘(4) WEBSITE POSTING.—Each quarterly re15 port shall be posted on the Board’s public website.’’. 

16 (b) CONFORMING AMENDMENT.—The table of con17 tents for chapter 7 is amended by striking the item relat18 ing to section 704 and inserting the following: 

‘‘704. Reports.’’. 

19 SEC. 13. QUARTERLY REPORTS. 

20 Not later than 60 days after the date of enactment 

21 of this Act, the Surface Transportation Board shall begin 

22 providing quarterly reports to the Committee on Com23 merce, Science, and Transportation of the Senate and the 

24 Committee on Transportation and Infrastructure of the 

25 House of Representatives on the Surface Transportation 


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1 Board’s progress toward addressing the issues raised in 

2 each unfinished regulatory proceeding, regardless of 

3 whether the proceeding is subject to a statutory or regu4 latory deadline. 

5 SEC. 14. SENSE OF CONGRESS. 

6 It is the sense of Congress that— 

7 (1) as part of Docket No. EP 722, the Surface 

8 Transportation Board should consider the costs and 

9 benefits of the annual determinations of revenue 

10 adequacy for Class I railroads; 

11 (2) the Surface Transportation Board should 

12 review the methodology employed to define the busi13 ness cycle in its annual determination of revenue 

14 adequacy and consider undertaking, if necessary, a 

15 rulemaking to define the business cycle; 

16 (3) as part of Docket No. EP 711, the Surface 

17 Transportation Board should consider if a rule18 making proceeding on mandatory competitive switch19 ing is needed to ensure a viable competitive national 

20 rail system; and 

21 (4) if the Surface Transportation Board deter22 mines a rulemaking proceeding on mandatory com23 petitive switching is needed, the Surface Transpor24 tation Board should ensure that such rulemaking is 

25 completed in as timely a manner as possible. 


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1 SEC. 15. AUTHORIZATION OF APPROPRIATIONS. 

2 Section 705 is amended by striking paragraphs (1) 

3 through (3) and inserting the following: 

4 ‘‘(1) $33,000,000 for fiscal year 2015; 

5 ‘‘(2) $35,000,000 for fiscal year 2016; 

6 ‘‘(3) $35,500,000 for fiscal year 2017; 

7 ‘‘(4) $35,500,000 for fiscal year 2018; and 

8 ‘‘(5) $36,000,000 for fiscal year 2019.’’. 

9 SEC. 16. REPEAL OF EXPIRED AND OBSOLETE PROVISIONS. 

10 (a) EXPIRED RAIL SERVICE CONTRACT LIMITA11 TION.—Section 10709 is amended by striking subsection 

12 (h). 

13 (b) AGENT IN THE DISTRICT OF COLUMBIA.— 

14 (1) DESIGNATION OF AGENT AND SERVICE OF

15 NOTICE.—Section 72 is amended— 

16 (A) in subsection (a), by striking ‘‘in the 

17 District of Columbia,’’; and 

18 (B) in subsection (c), by striking ‘‘in the 

19 District of Columbia’’. 

20 (2) SERVICE OF PROCESS IN COURT PRO21 CEEDINGS.—Section 724(a) is amended by striking 

22 ‘‘in the District of Columbia’’ each place it appears. 

23 SEC. 17. CONSTRUCTION. 

24 Nothing in this Act shall be construed to affect any 

25 suit commenced by or against the Surface Transportation 

26 Board, or any proceeding or challenge pending before the 


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1 Surface Transportation Board, prior to the date of enact2 ment of this Act. 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Surface Transportation 

5 Board Reauthorization Act of 2014’’. 

6 SEC. 2. REFERENCES TO TITLE 49, UNITED STATES CODE. 

7 Except as otherwise expressly provided, wherever in 

8 this Act an amendment or repeal is expressed in terms of 

9 an amendment to, or repeal of, a section or other provision, 

10 the reference shall be considered to be made to a section or 

11 other provision of title 49, United States Code. 

12 SEC. 3. ESTABLISHMENT OF SURFACE TRANSPORTATION 

13 BOARD AS AN INDEPENDENT ESTABLISH14 MENT. 

15 (a) IN GENERAL.—Section 701(a) is amended to read 

16 as follows: 

17 ‘‘(a) ESTABLISHMENT.—The Surface Transportation 

18 Board is an independent establishment of the United States 

19 Government.’’. 

20 (b) CONFORMING AMENDMENTS.— 

21 (1) ADMINISTRATIVE PROVISIONS.—Section 703 

22 is amended— 

23 (A) by striking subsections (a), (c), (f), and 

24 (g); 


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1 (B) by redesignating subsections (b), (d), 

2 and (e) as subsections (a), (b), and (c), respec3 tively; and 

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

5 ‘‘(d) SUBMISSIONS AND TRANSMITTALS.—Whenever 

6 the Board submits or transmits any budget estimate, budget 

7 request, supplemental budget estimate, or other budget in8 formation, legislative recommendation, prepared testimony 

9 for a congressional hearing, or comment on legislation to 

10 the President or to the Office of Management and Budget, 

11 it shall concurrently transmit a copy thereof to the Com12 mittee on Commerce, Science, and Transportation of the 

13 Senate and the Committee on Transportation and Infra14 structure of the House of Representatives. No officer or 

15 agency of the United States shall have any authority to re16 quire the Board to submit its budget estimates or requests, 

17 legislative recommendations, prepared testimony for con18 gressional hearings, or comments on legislation to any offi19 cer or agency of the United States for approval, comments, 

20 or review, prior to the submission of the recommendations, 

21 testimony, or comments to Congress.’’. 

22 (2) ADMINISTRATIVE SUPPORT.— 

23 (A) REPEALER.—Section 725 is repealed. 


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1 (B) CONFORMING AMENDMENT.—The table 

2 of contents for chapter 7 is amended by striking 

3 the item relating to section 725. 

4 (c) DEPARTMENT OF TRANSPORTATION INSPECTOR

5 GENERAL AUTHORITY.— 

6 (1) IN GENERAL.—Subchapter II of chapter 7 is 

7 amended— 

8 (A) by redesignating section 727 as section 

9 728; and 

10 (B) by inserting after section 726 the fol11 lowing: 

12 ‘‘§ 727. Authority of the Inspector General 

13 ‘‘(a) IN GENERAL.—The Inspector General of the De14 partment of Transportation, in accordance with the mission 

15 of the Inspector General to prevent and detect fraud and 

16 abuse, shall have authority to review only the financial 

17 management, property management, and business oper18 ations of the Surface Transportation Board, including in19 ternal accounting and administrative control systems, to 

20 determine compliance with applicable Federal laws, rules, 

21 and regulations. 

22 ‘‘(b) DUTIES.—In carrying out this section, the In23 spector General shall— 

24 ‘‘(1) keep the Chairman of the Board and the 

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1 tation of the Senate and the Committee on Transpor2 tation and Infrastructure of the House of Representa3 tives fully and currently informed about problems re4 lating to administration of the internal accounting 

5 and administrative control systems of the Board; 

6 ‘‘(2) issue findings and recommendations for ac7 tions to address such problems; and 

8 ‘‘(3) report periodically to the Committee on 

9 Commerce, Science, and Transportation of the Senate 

10 and the Committee on Transportation and Infrastruc11 ture of the House of Representatives on any progress 

12 made in implementing actions to address such prob13 lems. 

14 ‘‘(c) ACCESS TO INFORMATION.—In carrying out this 

15 section, the Inspector General may exercise authorities 

16 granted to the Inspector General under subsections (a) and 

17 (b) of section 6 of the Inspector General Act of 1978 (5 

18 U.S.C. App.). 

19 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.— 

20 ‘‘(1) FUNDING.—There are authorized to be ap21 propriated to the Secretary of Transportation for use 

22 by the Inspector General of the Department of Trans23 portation such sums as may be necessary to cover ex24 penses associated with activities pursuant to the au25 thority exercised under this section. 


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1 ‘‘(2) REIMBURSABLE AGREEMENT.—In the ab2 sence of an appropriation under this subsection for 

3 an expense referred to in paragraph (1), the Inspector 

4 General and the Board shall have a reimbursable 

5 agreement to cover such expense.’’. 

6 (2) CONFORMING AMENDMENT.—The table of 

7 contents for subchapter II of chapter 7 is amended— 

8 (A) by redesignating the item relating to 

9 section 727 as relating to section 728; and 

10 (B) by inserting after the item relating to 

11 section 726 the following: 

‘‘727. Authority of the Inspector General.’’. 

12 SEC. 4. SURFACE TRANSPORTATION BOARD MEMBERSHIP. 

13 (a) IN GENERAL.—Section 701(b) is amended— 

14 (1) in paragraph (1)— 

15 (A) by striking ‘‘3 members’’ and inserting 

16 ‘‘5 members’’; and 

17 (B) by striking ‘‘2 members’’ and inserting 

18 ‘‘3 members’’; and 

19 (2) by striking paragraph (2) and inserting the 

20 following: 

21 ‘‘(2) At any given time, at least 3 members of the 

22 Board shall be individuals with professional standing 

23 and demonstrated knowledge in the fields of transpor24 tation, transportation regulation, or economic regula25 tion, and at least 2 members shall be individuals with 


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1 professional or business experience (including agri2 culture or other rail customers) in the private sec3 tor.’’. 

4 (b) REPEAL OF HOLDOVER LIMITATION.—Section 

5 701(b)(3) is amended by striking ‘‘qualified, but for a pe6 riod not to exceed one year’’ and inserting ‘‘qualified’’. 

7 (c) REPEAL OF OBSOLETE PROVISION.—Section 

8 701(b) is amended— 

9 (1) by striking paragraph (4); 

10 (2) by redesignating paragraphs (5), (6), and (7) 

11 as paragraphs (4), (5), and (6), respectively; and 

12 (3) in paragraph (4), as redesignated, by strik13 ing ‘‘In the case of an individual who becomes a 

14 member of the Board pursuant to paragraph (4), or 

15 an individual’’ and inserting ‘‘In the case of an indi16 vidual’’. 

17 SEC. 5. NONPUBLIC COLLABORATIVE DISCUSSIONS. 

18 Section 703(a), as redesignated by section 3 of this Act, 

19 is amended to read as follows: 

20 ‘‘(a) OPEN MEETINGS.— 

21 ‘‘(1) IN GENERAL.—The Board shall be deemed 

22 to be an agency for purposes of section 552b of title 

23 5. 

24 ‘‘(2) NONPUBLIC COLLABORATIVE DISCUS25 SIONS.— 


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1 ‘‘(A) IN GENERAL.—Notwithstanding sec2 tion 552b of title 5, a majority of the members 

3 may hold a meeting that is not open to public 

4 observation to discuss official agency business 

5 if— 

6 ‘‘(i) no vote or other disposition of offi7 cial agency business is taken at the meeting; 

8 ‘‘(ii) each individual present at the 

9 meeting is a member or an employee of the 

10 Board; and 

11 ‘‘(iii) the General Counsel of the Board 

12 is present at the meeting. 

13 ‘‘(B) DISCLOSURE OF NONPUBLIC COLLABO14 RATIVE DISCUSSIONS.—Except as provided 

15 under subparagraph (C), not later than 2 busi16 ness days after the conclusion of a meeting under 

17 subparagraph (A), the Board shall make avail18 able to the public, in a place easily accessible to 

19 the public— 

20 ‘‘(i) a list of the individuals present at 

21 the meeting; and 

22 ‘‘(ii) a summary of the matters dis23 cussed at the meeting, except for any mat24 ters the Board properly determines may be 


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1 withheld from the public under section 

2 552b(c) of title 5. 

3 ‘‘(C) ONGOING PROCEEDINGS.—If a discus4 sion under subparagraph (A) relates, directly or 

5 indirectly, to an ongoing proceeding before the 

6 Board, the Board shall make the disclosure under 

7 subparagraph (B) on the date of the final Board 

8 decision. 

9 ‘‘(D) PRESERVATION OF OPEN MEETINGS

10 REQUIREMENTS FOR AGENCY ACTION.—Nothing 

11 in this paragraph shall limit the applicability of 

12 section 552b of title 5 with respect to a meeting 

13 of the members other than that described in this 

14 paragraph. 

15 ‘‘(E) STATUTORY CONSTRUCTION.—Nothing 

16 in this paragraph— 

17 ‘‘(i) shall limit the applicability of sec18 tion 552b of title 5 with respect to any in19 formation which is proposed to be withheld 

20 from the public under subparagraph (B)(ii); 

21 and 

22 ‘‘(ii) authorizes the Board to withhold 

23 from any individual any record that is ac24 cessible to that individual under section 

25 552a of title 5, United States Code.’’. 


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1 SEC. 6. INVESTIGATIVE AUTHORITY. 

2 (a) AUTHORITY TO INITIATE INVESTIGATIONS.—Sec3 tion 11701(a) is amended by striking ‘‘only on complaint’’ 

4 and inserting ‘‘on the Board’s own initiative or on com5 plaint’’. 

6 (b) RATE PROCEEDINGS.—Section 10704(b) is amend7 ed by striking the first sentence and inserting ‘‘The Board 

8 may begin a proceeding under subsection (a)(1) on its own 

9 initiative or upon complaint, except that a proceeding to 

10 determine the reasonableness of the level of a rate charged 

11 by a carrier may only be initiated upon complaint.’’. 

12 (c) ANNUAL REPORT; INVESTIGATIONS.—Section 704 

13 is amended by striking ‘‘on its activities.’’ and inserting 

14 ‘‘on its activities, including each instance in which the 

15 Board has initiated an investigation on its own initiative 

16 under this chapter or subtitle IV.’’. 

17 SEC. 7. PROCEDURES FOR RATE CASES. 

18 (a) SIMPLIFIED PROCEDURE.—Section 10701(d)(3) is 

19 amended to read as follows: 

20 ‘‘(3) The Board shall maintain a simplified and 

21 expedited method for determining the reasonableness 

22 of challenged rates in those cases in which a full 

23 stand-alone cost presentation is too costly, given the 

24 value of the case.’’. 

25 (b) EXPEDITED HANDLING.—Section 10704(d) is 

26 amended by striking the first sentence and inserting ‘‘The 


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1 Board shall maintain procedures to ensure expeditious han2 dling of challenges to the reasonableness of railroad rates.’’. 

3 SEC. 8. RATE REVIEW TIMELINES. 

4 Section 10704(d), as amended by section 7 of this Act, 

5 is further amended— 

6 (1) by striking ‘‘(d) The’’ and inserting ‘‘(d)(1) 

7 The’’; and 

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

9 ‘‘(2)(A) Except as provided under subparagraph 

10 (B), in a stand-alone cost rate challenge, the Board 

11 shall comply with the following timeline: 

12 ‘‘(i) For discovery, completion not later 

13 than 150 days after the date that the chal14 lenge is initiated. 

15 ‘‘(ii) For development of the evi16 dentiary record, completion not later than 

17 155 days after the date that discovery is 

18 complete under clause (i). 

19 ‘‘(iii) For submission of a closing brief, 

20 submission not later than 60 days after the 

21 date that development of the evidentiary 

22 record is complete under clause (ii). 

23 ‘‘(iv) For a final Board decision, 

24 issuance not later than 180 days after the 


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1 date that the evidentiary record is complete 

2 under clause (ii). 

3 ‘‘(B) The Board may extend a timeline 

4 under subparagraph (A) after a request from 

5 any party or in the interest of due process.’’. 

6 SEC. 9. EFFECT OF RATE BUNDLING. 

7 Not later than 180 days after the date of enactment 

8 of this Act, the Surface Transportation Board shall initiate 

9 an ex parte proceeding on whether contract proposals for 

10 multiple origin-to-destination movements have adversely 

11 impacted the intent of Congress that the Surface Transpor12 tation Board’s rate challenge procedures remain available 

13 to shippers that are subject to railroad market dominance, 

14 and how the Board can prevent such practices in the future. 

15 SEC. 10. REPORT ON RATE CASE METHODOLOGY. 

16 Not later than 1 year after the date of enactment of 

17 this Act, the Surface Transportation Board shall report to 

18 the Committee on Commerce, Science, and Transportation 

19 of the Senate and the Committee on Transportation and 

20 Infrastructure of the House of Representatives on— 

21 (1) whether current large rate case methodologies 

22 are sufficient, not unduly complex, and cost effective; 

23 and 

24 (2) alternative methodologies that could stream25 line and expedite large rate cases. 


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1 SEC. 11. ARBITRATION OF CERTAIN RAIL RATES, PRAC2 TICES, AND COMMON CARRIER SERVICE EX3 PECTATION DISPUTES. 

4 (a) IN GENERAL.—Chapter 117 is amended by adding 

5 at the end the following: 

6 ‘‘§ 11708. Voluntary arbitration of certain rail rates, 

7 practices, and common carrier service dis8 putes 

9 ‘‘(a) IN GENERAL.—Not later than 1 year after the 

10 date of enactment of the Surface Transportation Board Re11 authorization Act of 2014, the Board shall promulgate regu12 lations to establish a voluntary, but binding, arbitration 

13 process to resolve rail rate, practice, and common carrier 

14 service expectation complaints subject to the jurisdiction of 

15 the Board. 

16 ‘‘(b) COVERED DISPUTES.—The binding arbitration 

17 process— 

18 ‘‘(1) shall apply to disputes involving rates, de19 murrage, accessorial charges, misrouting or mis20 handling of rail cars, and disputes involving a car21 rier’s published rules and practices as applied to par22 ticular rail transportation; 

23 ‘‘(2) shall not apply to— 

24 ‘‘(A) disputes to obtain the grant, denial, 

25 stay, or revocation of any license, authorization, 

26 or exemption, or to prescribe for the future any 


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1 conduct, rules, or results of general, industry2 wide applicability, or to enforce a labor protec3 tive condition; and 

4 ‘‘(B) disputes solely between 2 or more rail 

5 carriers; and 

6 ‘‘(3) shall not prevent parties from independ7 ently seeking or utilizing private arbitration services 

8 to resolve any disputes they may have. 

9 ‘‘(c) ARBITRATION PROCEDURES.— 

10 ‘‘(1) IN GENERAL.—The Board— 

11 ‘‘(A) may make the voluntary, but binding, 

12 arbitration process available only to the relevant 

13 parties— 

14 ‘‘(i) after the filing of a formal com15 plaint; 

16 ‘‘(ii) upon petition by all parties at 

17 the conclusion of any informal dispute reso18 lution process provided by the Board for a 

19 complaint subject to this section; or 

20 ‘‘(iii) through current or future proce21 dures adopted by the Board to facilitate vol22 untary, but binding, arbitration; 

23 ‘‘(B) with respect to rate disputes, may 

24 make the binding arbitration process available 

25 only to the relevant parties if the rail carrier has 


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1 market dominance, as determined under section 

2 10707 of this title; and 

3 ‘‘(C) shall determine whether to pursue the 

4 binding arbitration process not later than 30 

5 days after the date that a petition or formal 

6 complaint is filed. 

7 ‘‘(2) LIMITATION.—Initiation of the binding ar8 bitration process shall preclude the Board from sepa9 rately reviewing a complaint or dispute related to the 

10 same rail rate, practice, or common carrier service 

11 expectation in a covered dispute involving the same 

12 parties. 

13 ‘‘(3) RATES.—In resolving a covered dispute in14 volving the reasonableness of a rail carrier’s rates, the 

15 arbitrator or panel of arbitrators, as applicable, shall 

16 consider the Board’s methodologies for setting max17 imum lawful rates, giving due consideration to the 

18 need for differential pricing to permit a rail carrier 

19 to collect adequate revenues within the meaning of 

20 section 10704(a)(2). 

21 ‘‘(4) SERVICE EXPECTATIONS.—In resolving a 

22 dispute involving common carrier service expecta23 tions, the arbitrator or panel of arbitrators, as appli24 cable, shall consider the rates and service terms, and 

25 any changes thereto, as published or otherwise made 


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1 available under subsection (b), (c), or (d) of section 

2 11101. 

3 ‘‘(d) ARBITRATION DECISIONS.—Any decision reached 

4 in an arbitration process under this section— 

5 ‘‘(1) shall— 

6 ‘‘(A) be in writing; 

7 ‘‘(B) contain findings of fact and conclu8 sions; and 

9 ‘‘(C) be binding upon the parties; and 

10 ‘‘(2) shall not have any precedential effect in any 

11 other or subsequent arbitration dispute. 

12 ‘‘(e) TIMELINES.— 

13 ‘‘(1) SELECTION.—An arbitrator or panel of ar14 bitrators shall be selected not later than 14 days after 

15 the date of the Board’s decision to initiate arbitra16 tion. 

17 ‘‘(2) EVIDENTIARY PROCESS.—The evidentiary 

18 process of the binding arbitration process shall be 

19 completed not later than 90 days after the date that 

20 the arbitration process is initiated, unless a party re21 quests an extension and the arbitrator or panel of ar22 bitrators, as applicable, grants it. 

23 ‘‘(3) DECISION.—The arbitrator or panel of arbi24 trators, as applicable, shall issue a decision not later 


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1 than 30 days after the date that the evidentiary 

2 record is closed. 

3 ‘‘(4) EXTENSIONS.—The Board may extend any 

4 of the timelines in this subsection upon the agreement 

5 of all parties in the dispute. 

6 ‘‘(f) ARBITRATORS.— 

7 ‘‘(1) IN GENERAL.—Unless otherwise agreed by 

8 all of the parties, an arbitration under this section 

9 shall be conducted by a panel of arbitrators, selected 

10 from a roster, maintained by the Board, of persons 

11 with rail transportation, economic regulation, profes12 sional or business experience, including agriculture, 

13 in the private sector. 

14 ‘‘(2) SELECTION.— 

15 ‘‘(A) IN GENERAL.—If the parties cannot 

16 mutually agree on an arbitrator, or the lead ar17 bitrator of a panel of arbitrators, the parties 

18 shall select the arbitrator or lead arbitrator from 

19 the roster by alternately striking names from the 

20 roster until only 1 name remains. 

21 ‘‘(B) PANEL OF ARBITRATORS.—For pur22 poses of this section, a panel of arbitrators shall 

23 be selected as follows: 

24 ‘‘(i) The parties to a dispute may mu25 tually select 1 arbitrator from the roster to 


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1 serve as the lead arbitrator of the panel of 

2 arbitrators. 

3 ‘‘(ii) If the parties cannot mutually 

4 agree on a lead arbitrator, the parties shall 

5 select a lead arbitrator using the process de6 scribed in subparagraph (A). 

7 ‘‘(iii) In addition to the lead arbi8 trator selected under this subparagraph, 

9 each party to a dispute shall select 1 addi10 tional arbitrator from the roster. 

11 ‘‘(3) COST.—The parties shall share the costs of 

12 the arbitration equally. 

13 ‘‘(g) RELIEF.—An arbitral decision under this section 

14 may award the payment of damages or rate prescriptive 

15 relief, but the value of the award shall be limited as follows: 

16 ‘‘(1) For common carrier service and practice 

17 disputes, the damage award may not exceed 

18 $2,000,000. 

19 ‘‘(2) For rate disputes, the damage award, in20 cluding any rate prescription, may not exceed 

21 $25,000,000, and any rate prescription shall be lim22 ited to not longer than 5 years from the date of the 

23 arbitral decision. 


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1 ‘‘(h) BOARD REVIEW.—If a party appeals a decision 

2 under this section to the Board, the Board may review the 

3 decision under this section to determine if— 

4 ‘‘(1) a clear abuse of arbitral authority or discre5 tion occurred; 

6 ‘‘(2) the decision directly contravenes statutory 

7 authority; or 

8 ‘‘(3) the award limitation under subsection (g) 

9 was violated.’’. 

10 (b) CONFORMING AMENDMENT.—The table of contents 

11 for chapter 117 is amended by adding at the end the fol12 lowing: 

‘‘11708. Voluntary arbitration of certain rail rate, practice, and common carrier 

service disputes.’’. 

13 SEC. 12. COMPILATION OF COMPLAINTS AT SURFACE 

14 TRANSPORTATION BOARD. 

15 (a) IN GENERAL.—Section 704, as amended by section 

16 6 of this Act, is further amended— 

17 (1) by striking the section heading and inserting 

18 the following: 

19 ‘‘§ 704. Reports’’; 

20 (2) by inserting ‘‘(a) ANNUAL REPORT.—’’ before 

21 ‘‘The Board’’ and indenting appropriately; and 

22 (3) by adding at the end the following: 

23 ‘‘(b) COMPLAINTS.— 


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1 ‘‘(1) IN GENERAL.—The Board shall establish 

2 and maintain a database of complaints received by 

3 the Board. 

4 ‘‘(2) QUARTERLY REPORTS.—The Board shall 

5 post a quarterly report of formal and informal service 

6 complaints received by the Board during the previous 

7 quarter that includes— 

8 ‘‘(A) a list of the type of each complaint; 

9 ‘‘(B) the geographic region of each com10 plaint; and 

11 ‘‘(C) the resolution of each complaint, if ap12 propriate. 

13 ‘‘(3) WRITTEN CONSENT.—The quarterly report 

14 may identify a complainant that submitted an infor15 mal complaint only upon the written consent of the 

16 complainant. 

17 ‘‘(4) WEBSITE POSTING.—Each quarterly report 

18 shall be posted on the Board’s public website.’’. 

19 (b) CONFORMING AMENDMENT.—The table of contents 

20 for chapter 7 is amended by striking the item relating to 

21 section 704 and inserting the following: 

‘‘704. Reports.’’. 

22 SEC. 13. QUARTERLY REPORTS. 

23 Not later than 60 days after the date of enactment of 

24 this Act, the Surface Transportation Board shall begin pro25 viding quarterly reports to the Committee on Commerce, 


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1 Science, and Transportation of the Senate and the Com2 mittee on Transportation and Infrastructure of the House 

3 of Representatives on the Surface Transportation Board’s 

4 progress toward addressing the issues raised in each unfin5 ished regulatory proceeding, regardless of whether the pro6 ceeding is subject to a statutory or regulatory deadline. 

7 SEC. 14. SENSE OF CONGRESS. 

8 It is the sense of Congress that— 

9 (1) as part of Docket No. EP 722, the Surface 

10 Transportation Board should consider the costs and 

11 benefits of the annual determinations of revenue ade12 quacy for Class I railroads; 

13 (2) the Surface Transportation Board should re14 view the methodology employed to define the business 

15 cycle in its annual determination of revenue ade16 quacy and consider undertaking, if necessary, a rule17 making to define the business cycle; 

18 (3) as part of Docket No. EP 711, the Surface 

19 Transportation Board should consider if a rule20 making proceeding on competitive switching is needed 

21 to promote a viable competitive national rail system; 

22 and 

23 (4) if the Surface Transportation Board deter24 mines a rulemaking proceeding on competitive 

25 switching is needed, the Surface Transportation 


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1 Board should ensure that such rulemaking is com2 pleted in as timely a manner as possible. 

3 SEC. 15. AUTHORIZATION OF APPROPRIATIONS. 

4 Section 705 is amended by striking paragraphs (1) 

5 through (3) and inserting the following: 

6 ‘‘(1) $33,000,000 for fiscal year 2015; 

7 ‘‘(2) $35,000,000 for fiscal year 2016; 

8 ‘‘(3) $35,500,000 for fiscal year 2017; 

9 ‘‘(4) $35,500,000 for fiscal year 2018; and 

10 ‘‘(5) $36,000,000 for fiscal year 2019.’’. 

11 SEC. 16. REPEAL OF EXPIRED AND OBSOLETE PROVISIONS. 

12 (a) EXPIRED RAIL SERVICE CONTRACT LIMITATION.— 

13 Section 10709 is amended by striking subsection (h). 

14 (b) AGENT IN THE DISTRICT OF COLUMBIA.— 

15 (1) DESIGNATION OF AGENT AND SERVICE OF

16 NOTICE.—Section 723 is amended— 

17 (A) in subsection (a), by striking ‘‘in the 

18 District of Columbia,’’; and 

19 (B) in subsection (c), by striking ‘‘in the 

20 District of Columbia’’. 

21 (2) SERVICE OF PROCESS IN COURT PRO22 CEEDINGS.—Section 724(a) is amended by striking 

23 ‘‘in the District of Columbia’’ each place it appears. 


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1 SEC. 17. CONSTRUCTION. 

2 Nothing in this Act shall be construed to affect any 

3 suit commenced by or against the Surface Transportation 

4 Board, or any proceeding or challenge pending before the 

5 Surface Transportation Board, prior to the date of enact6 ment of this Act. 


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Calendar No. 624 

113TH CONGRESS 

2D SESSION S. 2777 

A BILL 

To establish the Surface Transportation Board as 

poses. an independent establishment, and for other purDECEMBER 8, 2014 

Reported with an amendment 


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