Rail reform bill introduced in Senate

Legislation would give Surface Transportation Board more members and additional powers.    Sen. John Thune, R-S.D., and Sen. Bill Nelson, D-Fla., the chairman and ranking member of the Senate Committee on Commerce, Science, and Transportation, introduced the S. 808, the Surface Transportation Board Reauthorization Act of 2015. The bill is similar to legislation introduced last year by Thune and former West Virginia Sen. Jay Rockefeller.
   Thune said the bill will “address some inefficiencies in the agency. Oversight efforts have identified causes of wasteful and unnecessary delays in adjudicating cases that harm rail shippers, freight operators, and ultimately consumers who pay higher costs. These reforms will help make the STB a more efficient, effective, and accountable agency for the benefit of shippers and railroads alike.”
   The bill would expand the size of the board from three to five members and reform the STB rate review process, including the “stand-alone cost test” the Senators say is “used in situations where a railroad has market dominance for a given customer and uses complex economic modeling to examine how hypothetical competition from another railroad might affect prices in order to determine whether or not current rates fall within the legal definition of ‘reasonable.’” They say a case before the STB can often cost over $3 million to litigate and take over three years to resolve.
    S.808 will set timelines for rate reviews and expands voluntary arbitration procedures when both parties want a quick and efficient resolution in order to resolve rate cases faster and at less cost. The bill sets timelines for stand-alone cost test evaluations to avoid overly lengthy delays and also requires STB to study more efficient and simplified rate review methodologies to further alternatives to the stand alone cost test.
   The STB will get authority to initiate investigations on matters other than rate cases
   The Senators noted in a press release announcing the introduction that the U.S. Department of Agriculture “reported that surging demand and winter weather conditions in 2014 created major issues with grain car backlogs, storage constraints, and rail car premiums, and these issues raised transportation and commodity costs. The STB, however, did not have the authority to proactively investigate rail delay issues and does not have a systematized, publicly available database of complaints.”
   The bill “Grants STB new authority to avoid lengthy and expensive disputes and enhances transparency to benefit shippers, businesses and consumers across the country.
   For the first time STB will be required to establish a database of complaints and quarterly reports on them to provide more public accountability for ongoing problems.
   Five STB members are needed, the Senators say because with only three “members cannot have nonpublic collaborative discussions — which automatically form a majority — without a public hearing notice. For example, one board member reported staff-level budget briefings are conducted separately for each member.” 
   Structural reform will allow for direct discussion to improve efficiency of operations.
   The Surface Transportation Board Reauthorization Act of 2015 is scheduled for consideration by the Commerce Committee on Wednesday, March 25, 2015.
   Bruce Carlton, the chief executive officer of the National Industrial Transportation League noted “it’s been over 15 years since the STB had attention from the Congress. 
   “The proposed reforms are sensible and moderate. If enacted this legislation will go a long way toward making the STB more efficient, effective and responsive to all of its constituents: railroads, shippers and American consumers,” he said.