House approves STB reauthorization bill

President expected to sign bill that reforms and reauthorizes the Surface Transportation Board.

Thursday the U.S. House of Representatives approved S. 808—the Surface Transportation Board Reauthorization Act of 2015. This action follows the Senate passing the legislation by unanimous consent in June. The bill now heads to the President who is expected to sign it soon.

 The STB is the federal regulatory body responsible for economic oversight of the nation’s freight rail system. Run by a three-member bipartisan board, the agency has regulatory jurisdiction over railroad rates, mergers, line acquisitions, new rail-line construction, line abandonment, and other rail issues.

This legislation, authored by Senate Commerce Committee Chairman John Thune (R., S.D.) and ranking member Bill Nelson (D., Fla.), contains several important changes to the structure of the STB, including an increase in its members from three to five members; transparency requirements to ensure the reporting of the nature and disposition of complaints considered by the Board; the establishment of a voluntary arbitration process to resolve disputes; and the new ability of the Board to initiate investigations without having to wait for a formal complaint to be filed.

"Shippers and receivers of agricultural products rely heavily on rail transportation and partner with the nation's rail carriers to get commodities to market," said National Grain and Feed Assn., president Randy Gordon. "However, the STB needs to have the right tools to provide the necessary oversight of freight railroads. This legislation goes a long way in improving and strengthening the STB so it can carry out its statutory responsibilities and provide the meaningful safeguards intended under existing law."

The bill includes requirements that the STB issue various reports to Congress and, in most cases, to the public via its website. These include: 1) an annual report on its activities, including each instance in which it initiates an investigation on its own authority; 2) quarterly reports of rail rate review cases pending or completed; 3) quarterly reports of formal and informal service complaints received by the agency (including the type, geographic origin and resolution of each complaint); and 4) quarterly reports on the status of unfinished STB regulatory proceedings.

Edward R. Hamberger, Assn. of American Railroads president and chief executive officer said in reauthorizing the STB for the first time since the agency was created, the “ legislation strikes the right balance of preserving a market-based structure for shippers and railroads, while also providing commonsense process improvements that will allow the STB to work more efficiently.” 

The bill also calls on the rail industry to invest appropriate resources to maintain rail service levels to prevent the types of service breakdowns such as were experienced in 2013 and 2014. AAR said since 1980, the freight rail industry has spent over $600 billion on private infrastructure and equipment.

 “The industry invests revenue it earns, not government funding, to grow the nation’s rail system and respond to the shipping needs of customers, large and small,” said Hamberger. “Congress has reaffirmed balanced economic regulations that allow market-based competition to establish rate and service standards, with a regulatory safety net available to rail customers.”

National Farmers Union president Roger Johnson added, “Freight rail is essential for family farmers across the country in both getting their crops to market and staying competitive in a global environment. Adoption of these reforms is an important step towards ensuring a more appropriate balance between the rail industry and their customers.”

Train service delays over the past two years significantly impacted family farmers and rural communities, noted Johnson. “Freight rates have continued to increase while service had badly deteriorated for a significant portion of two harvest seasons. This dynamic has illustrated the need for serious reform. We are optimistic that the reforms included in this bi-partisan bill will be a positive step for family farmers that depend on freight rail for the movement of their crops,” Johnson said.  

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