I 
108TH CONGRESS 
1ST SESSION H. R. 2924
To amend title 49, United States Code, to enhance competition among and 
between rail carriers in order to ensure efficient rail service and reason-
able rail rates, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 25, 2003
Mr. BAKER (for himself, Mr. JOHN, Mr. VITTER, and Mr. POMEROY) intro-
duced the following bill; which was referred to the Committee on Trans-
portation and Infrastructure 
A BILL 
To amend title 49, United States Code, to enhance competi-
tion among and between rail carriers in order to ensure 
efficient rail service and reasonable rail rates, and for 
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; AMENDMENT OF TITLE 49, 
UNITED STATES CODE. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Railroad Competition Act of 2003’’. 
(b) AMENDMENT
OF TITLE 49, UNITED STATES 
CODE.—Except as otherwise expressly provided, whenever
in this Act an amendment or repeal is expressed in terms 
of an amendment to, or a repeal of, a section or other 
provision, the reference shall be considered to be made to 
a section or other provision of title 49, United States 
Code. 
SEC. 2. CLARIFICATION OF RAIL TRANSPORTATION POL-
ICY. 
Section 10101 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 are 
as follows: 
‘‘(1) To promote effective competition among 
rail carriers at origins and destinations. 
‘‘(2) To maintain reasonable rates in the ab-
sence of effective competition. 
‘‘(3) To maintain consistent and efficient rail 
transportation service for shippers, including the 
timely provision of rail cars requested by shippers. 
‘‘(4) To ensure that smaller carload and inter-
modal shippers are not precluded from accessing rail 
systems due to volume requirements.’’.
SEC. 3. ARBITRATION OF CERTAIN RAIL RATE, SERVICE, 
AND OTHER DISPUTES. 
(a) IN GENERAL.—
(1) AUTHORITY.—Chapter 117 is amended by 
adding the following section after section 11707: 
‘‘§ 11708. Arbitration of certain rail rate, service, and 
other disputes 
‘‘(a) ELECTION
OF ARBITRATION.—A dispute de-
scribed in subsection (b) shall be submitted for resolution 
by arbitration upon the election of any party to the dispute 
that is not a rail carrier. 
‘‘(b) COVERED DISPUTES.—(1) Except as provided 
in paragraph (2), subsection (a) applies to any dispute be-
tween a party described in subsection (a) and a rail carrier 
that—
‘‘(A) arises under section 10701(c), 10701(d), 
10702, 10704(a)(1), 10707, 10741, 10745, 10746, 
11101(a), 11102, 11121, 11122, or 11706 of this 
title; and 
‘‘(B) involves—
‘‘(i) the payment of money; 
‘‘(ii) a rate or charge imposed by the rail 
carrier; or 
‘‘(iii) transportation or other service by the 
rail carrier.
‘‘(2) Subsection (a) does not apply to a dispute if the 
resolution of the dispute would necessarily involve the pro-
mulgation of regulations generally applicable to all rail 
carriers. 
‘‘(c) ARBITRATION PROCEDURES.—The Secretary of 
Transportation shall prescribe in regulations the proce-
dures for the resolution of disputes submitted for arbitra-
tion under subsection (a). The regulations shall include 
the following: 
‘‘(1) Procedures, including time limits, for the 
selection of an arbitrator or panel of arbitrators for 
a dispute from among arbitrators listed on the ros-
ter of arbitrators established and maintained by the 
Secretary under subsection (d)(1). 
‘‘(2) Policies, requirements, and procedures for 
the compensation of each arbitrator for a dispute to 
be paid by the parties to the dispute. 
‘‘(3) Procedures for expedited arbitration of a 
dispute, including procedures for discovery author-
ized in the exercise of discretion by the arbitrator or 
panel of arbitrators. 
‘‘(d) SELECTION OF ARBITRATORS.—(1) The Sec-
retary of Transportation shall establish, maintain, and re-
vise as necessary a roster of arbitrators who—
‘‘(A) are experienced in transportation or eco-
nomic issues within the jurisdiction of the Board or 
issues similar to those issues; 
‘‘(B) satisfy requirements for neutrality and 
other qualification requirements prescribed by the 
Secretary; 
‘‘(C) consent to serve as arbitrators under this 
section; and 
‘‘(D) are not officers or employees of the 
United States. 
‘‘(2) For a dispute involving an amount not in excess 
of $1,000,000, the regulations under subsection (c) shall 
provide for arbitration by a single arbitrator who—
‘‘(A) is selected by the parties to the dispute; 
or 
‘‘(B) if the parties cannot agree, is selected by 
the Secretary from among the arbitrators listed on 
the roster of arbitrators under paragraph (1). 
‘‘(3)(A) For a dispute involving an amount in excess 
of $1,000,000, the regulations under subsection (c) shall 
provide for arbitration by a panel of three arbitrators se-
lected as follows: 
‘‘(i) One arbitrator selected by the party elect-
ing the arbitration.
‘‘(ii) One arbitrator selected by the rail carrier 
or all of the rail carriers who are parties to the dis-
pute, as the case may be. 
‘‘(iii) One arbitrator selected by the two arbitra-
tors selected under clauses (i) and (ii). 
‘‘(B) If a selection of an arbitrator is not made under 
clause (ii) or (iii) of subparagraph (A) within the time lim-
its prescribed in the regulations, then the Secretary shall 
select the arbitrator from among the arbitrators listed on 
the roster of arbitrators under paragraph (1). 
‘‘(e) DISPUTES OVER RATES OR CHARGES.—(1) The 
requirements of this subsection apply to a dispute sub-
mitted under this section concerning a rate or charge im-
posed by a rail carrier. 
‘‘(2)(A) Subject to subparagraph (B), the decision of 
an arbitrator or panel of arbitrators in a dispute on an 
issue described in paragraph (1) shall be the final offer 
of one of the parties to the dispute. 
‘‘(B) A decision under subparagraph (A) may not 
provide for a rate for transportation by a rail carrier that 
would result in a revenue-variable cost percentage for such 
transportation that is less than 180 percent, as deter-
mined under standards applied in the administration of 
section 10707(d).
‘‘(3) If the party electing arbitration of a dispute de-
scribed in paragraph (1) seeks compensation for damages 
incurred by the party as a result of a specific rate or 
charge imposed by a rail carrier for the transportation of 
items for the party and the party alleges an amount of 
damages that does not exceed $500,000 for any year as 
a result of the imposition of the specific rate or charge, 
the arbitrator, in making a decision on the dispute, shall 
consider the rates or charges, respectively, that are im-
posed by rail carriers for the transportation of similar 
items under similar circumstances in rail transportation 
markets where there is effective competition, as deter-
mined under standards applied by the Board in the admin-
istration of section 10707(a). 
‘‘(f) TIME FOR ISSUANCE OF ARBITRATION DECI-
SION.—Notwithstanding any other provision of this sub-
title limiting the time for the taking of an action under 
this subtitle, the arbitrator or panel of arbitrators for a 
dispute submitted for resolution under this section shall 
issue a final decision on the dispute within the maximum 
period after the date on which the arbitrator or panel is 
selected to resolve the dispute under this section, as fol-
lows: 
‘‘(1) In the case of a dispute involving 
$1,000,000 or less, 120 days.
‘‘(2) In the case of a dispute involving more 
than $1,000,000, 180 days. 
‘‘(g) AUTHORIZED RELIEF.—A decision of an arbi-
trator or panel of arbitrators under this section shall grant 
relief in either or both of the following forms: 
‘‘(1) Monetary damages, to the extent author-
ized to be provided by the Board in such a dispute 
under this subtitle. 
‘‘(2) An order that requires specific perform-
ance under any applicable law, including any law 
limiting rates to reasonable rates, for any period not 
in excess of two years beginning on the date of the 
decision. 
‘‘(h) JUDICIAL CONFIRMATION AND REVIEW.—The 
following provisions of title 9 shall apply to an arbitration 
decision issued in a dispute under this section: 
‘‘(1) Section 9 (relating to confirmation of an 
award in an arbitration decision), which shall be ap-
plied as if the parties had entered into an agreement 
under title 9 to submit the dispute to the arbitration 
and had provided in that agreement for a judgment 
of an unspecified court to be entered on the award 
made pursuant to the arbitration. 
‘‘(2) Section 10 (relating to judicial vacation of 
an award in an arbitration decision).’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of such chapter is amended 
by inserting after the item relating to section 11707 
the following:
‘‘11708. Arbitration of certain rail rate, service, and other disputes.’’.
(b) TIME FOR IMPLEMENTING CERTAIN REQUIRE-
MENTS.—Not later than 180 days after the date of the 
enactment of this Act, the Secretary of Transportation 
shall promulgate regulations, prescribe a roster of arbitra-
tors, and complete any other action that is necessary for 
the implementation of section 11708 of title 49, United 
States Code (as added by subsection (a)). 
SEC. 4. ELIMINATION OF BARRIERS TO COMPETITION BE-
TWEEN CLASS I CARRIERS AND CLASS II AND 
CLASS III RAIL CARRIERS. 
(a) RESTRICTION ON APPROVAL OR EXEMPTION OF 
RAIL CARRIERS’ ACTIVITIES
BY SURFACE TRANSPOR-
TATION BOARD.—Section 10901 is amended by adding at 
the end the following new subsection: 
‘‘(e)(1) The Board may not issue under this section 
a certificate authorizing an activity described in subsection 
(a), or exempt from the applicability of this section under 
section 10502 such an activity, that involves a transfer 
of interest in a line of railroad, from a Class I rail carrier 
to a Class II or III rail carrier, if the activity directly or 
indirectly would result in—
‘‘(A) a restriction of the ability of the Class II 
or Class III rail carrier to interchange traffic with 
other carriers; or 
‘‘(B) a restriction of competition between or 
among rail carriers in the region affected by the ac-
tivity in a manner or to an extent that would violate 
antitrust laws of the United States (notwithstanding 
any exemption from the applicability of antitrust 
laws that is provided under section 10706 of this 
title or any other provision of law). 
‘‘(2) Any party to an activity referred to in paragraph 
(1) that has been carried out, or any rail shipper affected 
by such an activity, may request the Board to review the 
activity to determine whether the activity has resulted in 
a restriction described in that paragraph. If, upon review 
of the activity, the Board determines that the activity re-
sulted in such a restriction and the restriction has been 
in effect for at least 10 years, the Board shall declare the 
restriction to be unlawful and terminate the restriction un-
less the Board finds that the termination of the restriction 
would materially impair the ability of an affected rail car-
rier to provide service to the public or would otherwise 
be inconsistent with the public interest. 
‘‘(3) In this subsection:
‘‘(A) The term ‘antitrust laws’ has the meaning 
given that term in subsection (a) of the first section 
of the Clayton Act (15 U.S.C. 12(a)), except that 
such term also means section 5 of the Federal Trade 
Commission Act (15 U.S.C. 45) to the extent that 
such section 5 applies to unfair methods of competi-
tion. 
‘‘(B) The terms ‘Class I rail carrier’, ‘Class II 
rail carrier’, and ‘Class III rail carrier’ mean, re-
spectively, a rail carrier classified under regulations 
of the Board as a Class I rail carrier, Class II rail 
carrier, and Class III rail carrier.’’. 
(b) APPLICABILITY TO PREVIOUSLY APPROVED OR 
EXEMPTED
ACTIVITIES.—Paragraph (2) of section 
10901(e) of title 49, United States Code (as added by sub-
section (a)), shall apply with respect to any activity re-
ferred to in that paragraph for which the Surface Trans-
portation Board issued a certificate authorizing the activ-
ity under section 10901 of such title, or exempted the ac-
tivity from the necessity for such a certificate under sec-
tion 10502 of such title, before, on, or after the date of 
the enactment of this Act. 
SEC. 5. COMPETITIVE RAIL SERVICE IN TERMINAL AREAS. 
(a) USE OF TERMINAL AREAS.—Section 11102(a) is 
amended—
(1) by inserting ‘‘(1)’’ after ‘‘(a)’’; 
(2) by striking ‘‘may’’ in the first sentence and 
inserting ‘‘shall’’; 
(3) by inserting after the first sentence the fol-
lowing: ‘‘In making any finding for the purposes of 
the preceding sentence, the Board may not require 
that there be evidence of anticompetitive conduct by 
a rail carrier from which access is sought.’’; 
(4) by striking ‘‘The rail carriers’’ at the begin-
ning of the sentence following the sentence inserted 
by paragraph (3) and inserting the following: 
‘‘(2) The rail carriers’’; and 
(5) by striking ‘‘may establish conditions’’ in 
the penultimate sentence and inserting ‘‘shall estab-
lish conditions’’. 
(b) RECIPROCAL SWITCHING.—Section 11102(c) is 
amended—
(1) in paragraph (1)—
(A) by striking ‘‘may require’’ in the first 
sentence and inserting ‘‘shall require’’; and 
(B) by striking ‘‘may establish’’ in the sec-
ond sentence and inserting ‘‘shall establish’’; 
and 
(2) by adding at the end the following new 
paragraph:
‘‘(3) In making any finding for the purposes of the 
first sentence of paragraph (1), the Board may not require 
that there be evidence of anticompetitive conduct by a rail 
carrier from which access is sought.’’. 
SEC. 6. REQUIREMENT FOR RATE QUOTES. 
Section 11101(a) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(a)’’; and 
(2) by striking ‘‘A rail carrier’’ at the beginning 
of the second sentence and inserting the following: 
‘‘(2) Upon the request of a shipper, a rail carrier 
shall establish a rate for transportation and provide serv-
ice requested by the shipper between any two points on 
the system of that carrier where traffic originates, termi-
nates, or may reasonably be interchanged. A carrier shall 
establish a rate and provide service upon such request 
without regard to—
‘‘(A) the location of the movement on the rail 
system, including terminal areas; 
‘‘(B) whether the rate established is for only 
part of a movement between a point of origin and 
a destination; 
‘‘(C) whether the shipper has made arrange-
ments for transportation for any other part of that 
movement; or
‘‘(D) whether the shipper has a contract with 
any rail carrier for part or all of its transportation 
needs over the route of movement, in which case the 
rate established by the carrier shall not apply to 
transportation covered by the contract. 
‘‘(3) A rail carrier’’. 
SEC. 7. REVIEW OF RATES FOR REASONABLENESS. 
Section 10701(d) is amended by striking paragraph 
(3) and inserting the following: 
‘‘(3) Upon a challenge made by a shipper to the rea-
sonableness of any rate established by a rail carrier in ac-
cordance with subsection (c) or section 11101(a), the 
Board shall determine the reasonableness of the rate with-
out regard to whether—
‘‘(A) the rate is for only part of a movement be-
tween a point of origin and a destination; 
‘‘(B) the shipper has made arrangements for 
transportation for any other part of that movement; 
or 
‘‘(C) the shipper currently has a contract with 
a rail carrier for any part of the rail traffic involved, 
except that any rate prescribed by the Board shall 
not apply to transportation covered by such a con-
tract.’’.
SEC. 8. FILING FEES. 
Section 721 is amended by adding at the end the fol-
lowing new subsection: 
‘‘(f) LIMITATION ON FEES.—The Board may not 
charge a fee for the filing of a complaint, protest, or other 
request for relief in an amount greater than fees charged 
by district courts of the United States for a comparable 
filing.’’. 
SEC. 9. PERIODIC STUDY OF COMPETITION AMONG RAIL 
CARRIERS. 
(a) REQUIREMENT FOR STUDY.—
(1) 
TRIENNIAL
STUDY.—Chapter 
101 
is 
amended by adding at the end the following new sec-
tion: 
‘‘§ 10103. Periodic study of rail carrier competition 
and processes of the Board 
‘‘(a) REQUIREMENT FOR STUDY.—Every three years, 
the Secretary of Transportation shall conduct a com-
prehensive study of rail carrier competition and the proc-
esses of the Board. The study shall include an assessment 
of the following: 
‘‘(1) The availability of effective competitive op-
tions among and between rail carriers. 
‘‘(2) The effectiveness of the processes of the 
Board, including the process used for determining 
the reasonableness of rates of rail carriers.
‘‘(3) The availability to rail users of effective 
regulatory dispute resolution options. 
‘‘(b) STUDY TO INCLUDE ASSESSMENT OF RAIL-TO-
RAIL COMPETITION.—In carrying out the study, the Sec-
retary shall assess the overall level of rail-to-rail competi-
tion in the rail carrier industry in the United States. In 
making the assessment, the Secretary shall consider the 
views of users of the services of rail carriers. 
‘‘(c) REPORT TO CONGRESS.—Not later than Novem-
ber 15 of each year in which a study is conducted under 
subsection (a), the Secretary shall submit a report on the 
results of the study to Congress. The report shall include 
the following: 
‘‘(1) The Secretary’s assessment of the overall 
level of rail-to-rail competition in the rail carrier in-
dustry in the United States. 
‘‘(2) The markets that have limited rail-to-rail 
competition. 
‘‘(3) Any recommendations for enhancing rail-
to-rail competition, particularly in markets identified 
as having limited rail-to-rail competition. 
‘‘(4) An assessment of the Board’s performance 
of its purpose to promote and enhance competition 
among and between railroads by—
‘‘(A) 
addressing 
complaints 
regarding 
rates, charges, and service; and 
‘‘(B) promulgating regulations of general 
applicability or taking other actions. 
‘‘(5) Any recommendations for modification of 
any of the decisions of the Board (or decisions of the 
former Interstate Commerce Commission continuing 
in effect) or for modification of the general authority 
or jurisdiction of the Board. 
‘‘(6) Any other findings, analyses, assessments, 
and recommendations that result from the study.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of such chapter is amended 
by adding at the end the following:
‘‘10103. Periodic study of rail carrier competition and processes of the Board.’’.
(b) TIME FOR FIRST STUDY.—The first study under 
section 10103 of title 49, United States Code (as added 
by subsection (a)), shall be carried out not later than two 
years after the date of the enactment of this Act . 
SEC. 10. AREAS OF INADEQUATE RAIL COMPETITION. 
(a) DESIGNATION AND REMEDIES.—
(1) IN GENERAL.—Chapter 105 is amended by 
adding at the end the following new section: 
‘‘§ 10503. Areas of inadequate rail competition 
‘‘(a) DESIGNATION.—The Board shall designate any 
State or part of a State as an area of inadequate rail com-
petition after finding either of the grounds set forth in 
subsection (b). An area of inadequate rail competition may 
be limited to be composed of the facilities of a group of 
shippers or receivers of one or more specific commodities 
within a geographic area. 
‘‘(b) GROUNDS FOR DESIGNATION.—The grounds for 
designating a State or part of a State as an area of inad-
equate rail competition are as follows: 
‘‘(1) The State or part of a State encompasses 
a significant number of rail shipping origins and 
destinations that are served exclusively by only one 
Class I railroad. 
‘‘(2) A significant number of the persons that 
ship by rail or receive rail shipments in the State or 
part of a State—
‘‘(A) usually find it necessary to pay rates 
for the rail shipments that exceed the rates nec-
essary to yield recovery by the rail carrier of 
180 percent of revenue-variable costs, as deter-
mined under standards applied in the adminis-
tration of section 10707(d); or 
‘‘(B) have experienced competitive dis-
advantage in the marketplace or other economic 
adversity because of high cost or poor quality of
rail service in the State or part of a State, as 
the case may be. 
‘‘(c) AUTHORIZED PETITIONERS.—The following per-
sons are authorized to petition the Board for a designation 
of a State or part of a State as an area of inadequate 
rail competition: 
‘‘(1) The Governor from the State. 
‘‘(2) A Member of Congress from the State. 
‘‘(3) As provided in section 10504, the Rail 
Customer Advocate of the Department of Agri-
culture and any State official referred to in sub-
section (a)(2) of such section. 
‘‘(d) ACTIONS.—Upon designating a State or a part 
of a State as an area of inadequate rail competition, the 
Board shall attempt to resolve, within 60 days after the 
date of the designation, the conditions described in sub-
section (b) that justify the designation. In addition to pro-
viding other remedies authorized by law, the Board may, 
when requested in a petition, order any of the following 
actions: 
‘‘(1) Provision of reciprocal switching and ac-
cess to tracks of another rail carrier beyond the lim-
its specified in section 11102(a) of this title. 
‘‘(2) Haulage transportation of railroad cars by 
a rail carrier to or from facilities that such carrier
alone physically serves on behalf of another rail car-
rier, for a fee prescribed by the Board. 
‘‘(3) Regarding rates on any rail segments 
within or connected to the area of inadequate rail 
competition on which rail service is susceptible to 
delay or interruption due to traffic congestion—
‘‘(A) expedited review of the reasonable-
ness of the rates under section 10701(d)(3); or 
‘‘(B) expedited final offer arbitration of 
the reasonableness of the rates under section 
11708(e). 
‘‘(4) 
Expedited 
review, 
under 
section 
10701(d)(3), of the reasonableness of—
‘‘(A) increases in rates or other charges; 
and 
‘‘(B) new transportation service tariffs. 
‘‘(5) Expedited review of whether a rate violates 
the prohibition against discriminatory rates con-
tained in section 10741, without regard to sub-
section (b)(2) of such section. 
‘‘(e) LIMITATIONS AND CONDITIONS APPLICABLE TO 
SPECIFIC REMEDIES.—(1) In the case of a petition for 
an order for reciprocal switching or access to tracks of 
another rail carrier under subsection (d)(1), the Board 
may not require that there be evidence of anticompetitive
conduct by a rail carrier as a prerequisite for ordering 
such action. 
‘‘(2) In the case of a petition for expedited review 
of rates or final offer arbitration of rates under subsection 
(d)(3)—
‘‘(A) the Board or arbitrator or panel of arbi-
trators, as the case may be, shall accord, with re-
spect to rail transportation of a specific commodity, 
significant persuasive weight to evidence com-
paring—
‘‘(i) rates charged for rail transportation of 
various quantities of that commodity within the 
area of inadequate rail competition; and 
‘‘(ii) rates charged for rail transportation 
of similar quantities of that commodity or any 
similar commodity or commodities in areas 
where there is competition among rail carriers 
for shipments of such commodity or commod-
ities; and 
‘‘(B) the Board or arbitrator or panel of arbi-
trators, as the case may be, shall not apply the 
stand-alone cost test that the Board applies in deter-
mining the reasonableness of rates reviewed in cases 
not involving rail service in an area of inadequate 
rail competition.