Critic: House bill could chill rail investment

Critic: House bill could chill rail investment The House Transportation and Infrastructure Committee last week cleared for House floor consideration a bill, H.R. 6707, which would direct the Surface Transportation Board to consider the environmental impact and other public interest concerns prior to approving a proposed rail transaction such as a merger.
   But an attempt to suspend House rules and have the full House approve the “Taking Responsible Action for Community Safety,” or TRACS Act, failed Saturday when less than two-thirds of the House voted in favor of it (243-175, with 15 not voting).
   If passed, the proposed law might present another hurdle to Canadian National Railway’s proposed purchase of the Elgin, Joliet & Eastern Railroad encircling Chicago. CN said purchase of the 198-mile EJ&E could cut a day of transit time off trains moving through the Chicago area.
   “In what may be our committee’s final markup in the 110th Congress, we have taken steps to help local communities that may be facing a serious threat to their quality of life. The communities impacted by CN’s proposed transaction have raised serious concerns about public safety in regard to grade crossings and hazardous materials transportation, as well as the potential for job losses and excessive noise,” said Committee Chairman James Oberstar, D-Minn.
   “We have made it clear that the STB must consider, in a merger or consolidation proceeding, the potential adverse impacts on safety and the environment, including possible negative consequences on local communities,” Oberstar said. “The purpose of this bill is not to prevent mergers, but to give residents more input on a proposed rail transaction that will affect their communities.”
   The TRACS Act would require the STB to evaluate potential adverse effects on public safety, grade crossing safety, hazardous materials transportation safety, emergency response time, noise, and economic impacts. The bill also authorizes the STB to impose conditions to mitigate the effects of the transaction on local communities when those conditions are in the public interest.
   Speaking on the House floor, Rep. William Shuster, R-Pa., said, “Changing the Surface Transportation Board’s merger and acquisition review process could have unintended consequences of hampering the growth of our nation’s railroad industry.”
   He said expanding rail capacity was important, and “one of the ways to do that is through mergers and acquisitions. It is an important part of how the industry has to grow and needs to grow because it allows railroads to invest in underutilized trackage around the country.”
   He said the bill was “likely to have a chilling effect on rail transactions.”
   “We are living in an increasingly difficult economic climate, and the last think that we want to do is discourage investment that will improve capacity, and especially in Chicago,” Shuster said. “Anybody that ships across this country knows that Chicago is the most congested area in the country. It is a bottleneck and it is not only a bottleneck in the upper Midwest, it is a bottleneck to the entire system because so much of our freight goes through Chicago.”
   The National Industrial Transportation League, which represents U.S. shippers, said it supports CN’s attempt to acquire the EJ&E.