Rail regulation draft bill circulated

Rail regulation draft bill circulated    A long-awaited bill to reauthorize the Surface Transportation Board and modify railroad regulation could be introduced into the Senate in days following release of a draft last week.
   A draft of the bill was released last week by the staff of the Senate Commerce, Science and Transportation Committee and its chairman Sen. John 'Jay' D. Rockefeller IV, D-W.V., and has been circulated by a number of organizations including the National Industrial Transportation League.
   The law firm Thompson Hine said it expects the bill will be marked up and voted on Thursday.
   The bill would make the STB an independent agency instead of part of the Department of Transportation, and give it new powers, such as the power to initiate proceedings on its own rather than waiting for a complaint. The agency, which among tasks hears rate disputes between shippers and carriers, would also be expanded to five members, from three.

Rockefeller

   The bill could result in changes that improve shipper access to competitive rail service. It contains a provision aimed at giving the STB more power to review so-called “paper barriers” where a Class I railroad that has sold or leased track to a short line then limits or prohibits the short line from interchanging cars with other connecting railroads.
   The bill would also allow carriers to provide “bottleneck” rates to shippers so that they could use competing carriers for part of their haulage, regardless of whether a railroad could handle the move entirely on its own trackage. Shippers say past STB bottleneck policy has prevented them from taking advantage of competing carriers who might be able to carry their cargo for thousands of miles at savings of millions of dollars.
   For example, Terry Huval, director of the Lafayette Utilities System in Louisiana, told the House Judiciary Committee earlier this year that its Rodemacher generating station, which buys coal from the Powder River Basin in Wyoming, is captive to the Union Pacific Railroad because only the UP serves the last 20 miles to the plant. He said his firm cannot get quotes from competing carriers BNSF, which also has tracks into the Powder River Basin, and the Kansas City Southern Co., which could give a competing price for 99 percent of the 1,500 miles from the coal fields to the power plant.
   'We believe this has translated into over $65 million in captivity payments during the last 10 years,' Huval said.
   The NIT League noted that the bill, titled the “Surface Transportation Board Reauthorization Act of 2009, does not include antitrust provisions, but said they might be incorporated into the bill.
   Earlier this year Sen. Herb Kohl, D-Wis., chairman of the Judiciary Committee’s Antitrust Subcommittee, agreed to postpone this action on a railroad antitrust bill with Rockefeller, saying they were working on “harmonizing” their rail reform efforts.
   Attorneys at Thompson Hine posted a summary of the 64-page bill.