WASHINGTON — The House of Representatives on Dec. 10 passed by voice vote the Surface Transportation Board Reauthorization Act of 2015 (S.808). The Senate passed the bill on June 18. The bill was sent to President Barack Obama, who was expected to sign it into law soon. The bill reauthorizes and strengthens the oversight functions of the Surface Transportation Board (STB), the federal agency responsible for regulating freight railroads, through 2020.
“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 Randy Gordon, president, National Grain and Feed Association. “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 legislation grants the STB the power to initiate investigations of freight rail practices that have national or regional significance on its own authority, without having to wait for a shipper to first file a formal complaint against a carrier, which may be a cumbersome, time-consuming and costly process.
Additionally, the bill contains several other provisions important to companies that ship and receive agricultural products by rail, the NGFA said, including the following:
1. A requirement that the STB retain one or more streamlined processes for considering shipper rail rate challenges, in which the full stand-alone cost method is too costly, given the value of the rate case.
2. Requirements that the STB issue various reports to Congress, including an annual report on its activities, including each instance in which it initiates an investigation on its own authority; quarterly reports of rail rate review cases pending or completed; quarterly reports of formal and informal service complaints received by the agency (including the type, geographic origin and resolution of each complaint); and quarterly reports on the status of unfinished STB regulatory proceedings.
3. Expand the STB from three to five members and enable individual STB members to converse and otherwise communicate about pending proceedings and issues to provide for a more informed and deliberative process. Currently, because there are only three STB members, any two members cannot communicate directly with each other on pending matters unless a public meeting is called.
4. Establish a voluntary arbitration process for resolving disputes involving rail rates, charges, rules and practices. The arbitration process would be available only if the rail carrier has market dominance (as defined under the Staggers Rail Act of 1980), and the relevant parties involved voluntarily opt-in. Further, the STB arbitration process could not be used for issues having industrywide applicability, labor-protective conditions, or disputes solely between two or more railroads. Monetary relief would be capped at $2 million for disputes involving rail practices, and $25 million for rail rate damages.
5. The Government Accountability Office would be required to conduct a study reviewing rail contract proposals containing rail movements involving multiple origin-destination pairs.