Rail Shipper Fairness Act of 2015

To improve the efficiency and reliability of rail transportation by reforming the Surface Transportation Board, and for other purposes. 1. Short title This Act may be cited as the Rail Shipper Fairness Act of 2015 2. Improving rail service (a) Common carrier obligations Section 11101(a) of title 49, United States Code, is amended by inserting , as necessary for the efficient and reliable transportation based on the shipper’s reasonable service requirements, the transportation or service (b) Emergency service orders Section 11123(b) of such title is amended by adding at the end the following: (4) The Board may issue emergency service orders that cover shipments moving under contract if such shipments are part of a regional service order issued in accordance with this section. . (c) Reports Section 11145(a) of such title is amended— (1) in paragraph (1), by striking and (2) by redesignating paragraph (2) as paragraph (3); and (3) by inserting after paragraph (1) the following: (2) reports, service plans, or other documents that cover shipments moving under contract if such shipments are part of a general report, service plan, or other document that generally covers the geographic area or commodity; and . (d) Equitable relief; damages Section 11704 of such title is amended— (1) in subsection (a), by inserting or subjected to inadequate or deficient service injured (2) by amending subsection (b) to read as follows: (b) A rail carrier providing transportation subject to the jurisdiction of the Board under this part is liable— (1) for damages sustained by a person as a result of an act or omission of that carrier in violation of this part; (2) to a person for amounts charged to that person that exceed the applicable rate for the transportation; and (3) to a person for damages or equitable relief as a result of inadequate or deficient service in violation of this part. ; and (3) in subsection (c), by adding at the end the following: (3) The Board may order a rail carrier to pay damages or to provide equitable relief, as appropriate, to a person subjected to inadequate or deficient service as a result of a violation of this part by that carrier. . (e) Fines Section 11901 of such title is amended— (1) in subsection (a), by striking $5,000 $25,000 (2) in subsection (c), by striking $5,000 $25,000 (3) in subsection (e), by striking $100 $1,000 3. Improving rail competition (a) Rail transportation policy Section 10101 of title 49, United States Code, is amended— (1) by redesignating paragraphs (14) and (15) as paragraphs (15) and (16), respectively; and (2) by inserting after paragraph (13) the following: (14) to provide for and promote the protection of the shipping public; . (b) Rates Section 10705 of such title is amended by adding at the end the following: (d) Shippers may obtain rates to or from any interchange points of 2 or more rail carriers. . (c) Market dominance Section 10707(b) of such title is amended by inserting A rail carrier could have market dominance even in circumstances in which a shipper is served by 2 carriers. the rate applies. (d) Terminal facilities Section 11102(c) of such title is amended to read as follows: (c) (1) Except as provided in paragraph (2), the Board shall require a Class 1 rail carrier to enter into a competitive switching agreement if a shipper or receiver, or a group of shippers or receivers, files a petition with the Board that demonstrates, to the satisfaction of the Board, that— (A) the facilities of the shipper or receiver for whom such switching is sought are served by rail only by a single, Class I rail carrier; and (B) subject to paragraph (4), there is, or can be a working interchange between— (i) the Class I rail carrier serving the shipper or receiver for whom such switching is sought; and (ii) another rail carrier within a reasonable distance of the facilities of such shipper or receiver. (2) Competitive switching may not be imposed under this subsection if— (A) either rail carrier between which such switching is to be established demonstrates that the proposed switching is not feasible or is unsafe; or (B) the presence of reciprocal switching will unduly restrict the ability of a rail carrier to serve its own shippers. (3) The requirement set forth in paragraph (1)(B) is satisfied if each facility of the shipper or receiver for which competitive switching is sought is— (A) within the boundaries of a terminal of the Class I rail carrier; or (B) within a 100-mile radius of an interchange between the Class I rail carrier and another carrier at which rail cars are regularly switched. . 4. Improving reasonable rate standards (a) Stand-Alone cost cases Section 10702 of title 49, United States Code, is amended— (1) by inserting (a) A rail carrier (2) by adding at the end the following: (b) (1) The Board shall prohibit a rail carrier providing transportation subject to the jurisdiction of the Board under this part to charge the challenged rate for providing such transportation to rail customers while a maximum reasonable rate case brought by such rail customers is pending before the Board. (2) A rail customer may file a maximum reasonable rate case with the Board after the date that is 2 years before the date on which a common carrier shipment rate is anticipated to begin. (3) The Board may not use cross-subsidy tests in deciding stand-alone cost cases. (4) The Board shall use market-based revenue divisions methodology in deciding stand-alone cost cases. (5) In a stand-alone cost case, if the Board determines that the rail carrier is revenue adequate, the rail carrier shall have the burden of proof to demonstrate that the railroad carrier is charging a reasonable rate. . (b) Market dominance Section 10707 of such title, as amended by section 3(c), is further amended— (1) in subsection (d)(1)(B), by adding at the end the following A shipper may introduce movement-specific Uniform Rail Costing System cost calculations. (2) by adding at the end the following: (e) In making a determination under this section, the Board may not utilize a qualitative analysis in which the Board attempts to identify any feasible transportation alternatives that could be used by the shipper. . 5. Revenue adequacy (a) Elimination of revenue adequacy test Section 10704(a) of title 49, United States Code, is amended by striking paragraph (3). (b) Railroad cost of capital Section 10704(a) of such title, as amended by subsection (a), is further amended by adding at the end the following: (3) In calculating a rail carrier’s cost of capital, the Board shall multiply the value of the capital by the sum of— (A) the current annual yield on a 10-year United States Treasury Bond; and (B) a prospective market risk premium, which shall not exceed 5 percent per year. . 6. Surface Transportation Board structural changes Chapter 7 (1) in section 701(b)— (A) in paragraph (1)— (i) by striking 3 members 5 members (ii) by striking 2 members 3 members (B) in paragraph (2)— (i) by striking time, at least 2 members (A) at least 2 members ; and (ii) by striking regulation, and at least one member (B) at least 2 members shall have a background in shipping or consumer advocacy; and (C) at least 1 member ; and (2) in section 703, by amending subsection (b) to read as follows: (b) Meetings (1) Regular meetings The Board shall meet regularly. (2) Open meetings The Board shall be deemed to be an agency of the United States Government and subject to the provisions set forth in section 552b of title 5. .

Summary: Rail Shipper Fairness Act of 2015 The Surface Transportation Board (STB) may: issue emergency service orders covering rail carrier shipments moving under contract only if they are part of a regional service order; and require reports, service plans, or other documents that cover shipments moving under contract if such shipments are part of a general report, service plan, or other document that generally covers the geographic area or commodity. Rail carriers shall be liable to any person in federal district court for damages or equitable relief as a result of inadequate or deficient service in violation of federal law. Civil monetary penalties for rail carriers increase from $5,000 to $25,000 per violation. It is U.S. transportation policy to provide for and promote the protection of the shipping public. Shippers may obtain rates to or from any interchange points of two or more rail carriers. When determining whether a rail carrier proposing a rate challenged as unreasonably high has market dominance over the transportation to which the rate applies, the STB shall consider that the rail carrier could have market dominance even in circumstances in which a shipper is served by two carriers. The circumstances involving mandatory reciprocal switching agreements are changed. The STB shall now require a Class 1 rail carrier to enter into a competitive switching agreement if a shipper or receiver (or a group of shippers or receivers) files a petition that satisfies the Board that: the facilities of the shipper or receiver are served by rail only by a single, Class I rail carrier; and there is or can be a working interchange between the Class I rail carrier serving the shipper or receiver in question and another rail carrier within a reasonable distance of the facilities of such shipper or receiver. Competitive switching may not be imposed, however, if: either rail carrier between which such switching is to be established demonstrates that the proposed switching is not feasible or is unsafe, or the presence of reciprocal switching will unduly restrict the ability of a rail carrier to serve its own shippers. The STB must observe specified rules when deciding stand-alone cost cases with respect to a maximum reasonable rate. The STB shall apply a certain formula to calculate a rail carrier's cost of capital. This replaces the current requirement that the STB determine annually which rail carriers are earning adequate revenues. The number of STB members increases from 3 to 5, with no more than 3 of them (currently no more than 2 of them) from the same party. At least 2 members must have a background in shipping or consumer advocacy. The STB must meet regularly.