I
106TH CONGRESS
1ST SESSION
H. R. 2784
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.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 5, 1999
Mr. QUINN introduced the following bill; which was referred to the Committee
on Transportation and Infrastructure
A BILL
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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Railroad Competition
and Service Improvement Act of 1999’’.
SEC. 2. PURPOSES.
The purposes of this Act are—
(1) to clarify the rail transportation policy of
the United States by requiring the Surface Trans-
portation Board to accord greater weight to the need
for increased competition between and among rail
carriers and consistent and efficient rail service in
its decision making;
(2) to eliminate unreasonable barriers to com-
petition among rail carriers serving the same geo-
graphic areas and ensure that smaller carload or
intermodal shippers are not precluded from access-
ing rail systems due to volume requirements;
(3) to ensure reasonable rail rates for captive
rail shippers;
(4) to provide relief for certain agricultural fa-
cilities lacking effective competitive alternatives; and
(5) to remove unnecessary regulatory burdens
from the rate reasonableness procedures of the Sur-
face Transportation Board.
SEC. 3. FINDINGS.
The Congress makes the following findings:
(1) Prior to 1976, the Interstate Commerce
Commission regulated most of the rates that rail-
roads charged shippers. The Railroad Revitalization
and Regulatory Reform Act of 1976 and the Stag-
gers Rail Act of 1980 limited the regulation of the
rail industry by allowing the Interstate Commerce
Commission to regulate rates only where railroads
have no effective competition and established the
Interstate Commerce Commission’s process for re-
solving rate disputes.
(2) In 1976, when the Congress began the proc-
ess of railroad deregulation, there were 63 class I
railroads in the United States. By 1997, through
mergers and other factors, the number of class I
railroads shrunk to nine.
(3) The nine class I carriers accounted for more
than 90 percent of the industry’s freight revenue
and 71 percent of the industry’s mileage operated in
1997.
(4) Rail industry consolidation has diminished
competition, creating an even greater dependence
upon a rate relief process through a regulatory body
such as the Surface Transportation Board.
(5) Agricultural, chemical, and utility industries
in particular rely heavily upon rail transportation,
and unreasonable rail rates and inadequate service
have a dramatic impact on these important indus-
tries.
(6) According to a report issued by the General
Accounting Office, ‘‘ . . . [t]he Surface Transpor-
necessary to provide them with the ability to seek
the rate relief:
(A) The Surface Transportation Board’s
time limit for deciding a rate relief case should
be shortened.
(B) The complaint fee required upon filing
should be eliminated or reduced.
(C) The market dominance requirement
should be simplified.
(D) Mandatory binding arbitration should
be used to resolve rate disputes.
(E) The Surface Transportation Board’s
jurisdictional threshold of 180% revenue-to-
variable cost should be lowered.
(11) According to the General Accounting Of-
fice report, shippers believe that increasing competi-
tion in the railroad industry would lower rates and
diminish the need for a rate complaint process. Pro-
posals to increase railroad competition identified in
the report include the following:
(A) Require the Surface Transportation
Board to grant trackage rights; require recip-
rocal switching at the nearest junction or inter-
change upon request of a shipper or competing
railroad; and increase rail access for shortline
and regional railroads.
(B) Overturn the Surface Transportation
Board’s ‘‘bottleneck’’ decision by requiring rail-
roads to quote a rate for all route segments.
(12) Consolidation in the railroad industry has
diminished competition, thwarting the intended ob-
jectives of deregulation to allow competition to lower
rates and improve service.
(13) The rate protection intended for shippers
without effective competition has been derailed by a
complex, costly, and time-consuming maze of dis-
covery, findings, and appeals that take years and
cost millions of dollars.
(14) Because of diminished rail competition, a
rate relief process plagued with unsurmountable bar-
riers and blanket antitrust immunity unique to the
railroad industry, captive shippers have no effective
recourse under the current system.
SEC. 
4. 
CLARIFICATION 
OF 
RAIL 
TRANSPORTATION
POLICY.
Section 10101 of title 49, United States Code, is
amended—
(1) by inserting ‘‘(a) IN GENERAL.—’’ before
‘‘In regulating’’; and
(2) by adding at the end the following:
‘‘(b) PRIMARY OBJECTIVES.—The primary objectives
of the rail transportation policy of the United States shall
be—
‘‘(1) to ensure effective competition among rail
carriers at origin and destination;
‘‘(2) to maintain reasonable rates in the ab-
sence of effective competition;
‘‘(3) to maintain consistent and efficient rail
transportation service to shippers, including the
timely provision of railcars requested by shippers;
and
‘‘(4) to ensure that smaller carload and inter-
modal shippers are not precluded from accessing rail
systems due to volume requirements.’’.
SEC. 5. FOSTERING RAIL TO RAIL COMPETITION.
(a) ESTABLISHMENT OF RATE.—Section 11101(a) of
title 49, United States Code, is amended by inserting after
the first sentence the following: ‘‘Upon the request of a
shipper, a rail carrier shall establish a rate for transpor-
tation and provide service requested by the shipper be-
tween any two points on the system of that carrier where
traffic originates, terminates, or may reasonably be inter-
changed. A carrier shall establish a rate and provide serv-
ice upon such request without regard to—
‘‘(1) whether the rate established is for only
part of a movement between an origin and a destina-
tion;
‘‘(2) whether the shipper has made arrange-
ments for transportation for any other part of that
movement; or
‘‘(3) whether the shipper currently has a con-
tract with any rail carrier for part or all of its trans-
portation needs over the route of movement.
‘‘If such a contract exists, the rate established by the car-
rier shall not apply to transportation covered by the con-
tract.’’.
(b) REVIEW OF REASONABLENESS OF RATES.—Sec-
tion 10701(d) of title 49, United States Code, is
amended—
(1) by redesignating paragraph (3) as para-
graph (4); and
(2) by inserting after paragraph (2) the fol-
lowing:
‘‘(3) A shipper may challenge the reasonableness of
any rate established by a rail carrier in accordance with
section 11101(a) or with subsection (c) of this section.
The Board shall determine the reasonableness of the rate
so challenged without regard to—
‘‘(A) whether the rate established is for only
part of a movement between an origin and a destina-
tion;
‘‘(B) whether the shipper has made arrange-
ments for transportation for any other part of that
movement; or
‘‘(C) whether the shipper currently has a con-
tract with a rail carrier for any part of the rail traf-
fic at issue, provided that the rate prescribed by the
Board shall not apply to transportation covered by
such a contract.’’.
SEC. 6. SIMPLIFIED RELIEF PROCESS FOR CERTAIN AGRI-
CULTURAL SHIPPERS.
(a) LIMITATION
ON FEES.—Notwithstanding any
other provision of law, the Surface Transportation Board
shall not impose fees in excess of $1,000 for services col-
lected from an eligible facility in connection with rail max-
imum rate complaints under part 1002 of title 49, Code
of Federal Regulations.
(b) SIMPLIFIED RATE AND SERVICE RELIEF.—Sec-
tion 10701 of title 49, United States Code, is amended
by adding at the end thereof the following:
‘‘(e) SIMPLIFIED RATES AND SERVICES.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of law, a rail carrier may not charge a rate
for shipments from or to an eligible facility which
results in a revenue-to-variable cost percentage,
using system average costs, for the transportation
service to which the rate applies that is greater than
180 percent.
‘‘(2) ACCEPTANCE
OF
REQUESTS.—Notwith-
standing any other provision of law, a rail carrier
shall accept all requests for grain service from an el-
igible facility up to a maximum of 110 percent of
the grain carloads shipped from or to the facility in
the immediately preceding calendar year. If, in a
majority of instances, a rail carrier does not in any
45-day period, supply the number of grain cars so
ordered by an eligible facility or does not initiate
service within 30 days of the reasonably specified
loading date, the eligible facility may request that an
alternative rail carrier provide the service using the
tracks of the original carrier. If the alternative rail
carrier agrees to provide such service, and such serv-
ice can be provided without substantially impairing
the ability of the carrier whose tracks reach the fa-
cility to use such tracks to handle its own business,
the Board shall order the alternative carrier to com-
mence service and to compensate the other carrier
for the use of its tracks. The alternative carrier shall
Code, is amended by adding at the end thereof the fol-
lowing:
‘‘SUBCHAPTER III—PERFORMANCE REPORTS
‘‘541. Rail carrier service quality performance reports.’’.
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