Senate Unveils Draft Rail Legislation

Railroads and their customers are getting their first look at a long-anticipated bill that would overhaul federal regulations governing shippers' access to competitive service and how their disputes over freight rates would be handled.

The Senate Commerce, Science and Transportation Committee last week sent industry stakeholders what it called a bipartisan draft of legislation that would re-authorize and expand the Surface Transportation Board to five members from its current three. The long-awaited measure to overhaul rail regulation may be introduced as soon as this week.

If it becomes law, it would be the largest reform of rail regulations in a generation, since the 1980 deregulation. Jena Longo, the panel's deputy communications director, said the legislation is one of the "top priorities" of Sen. Jay Rockefeller (D-W.Va.), the committee chairman.

Rockefeller "believes at this critical time in our economy, our rail system must be elevated to 21st Century capacity and efficiency," Longo said. He expects to file the bill by Dec. 15 and have it considered by the full committee Dec. 17.

That would mean it could clear the full Senate this month or early in January, but the House must still act on the measure and observers don't expect a final version to come to a vote before mid-2010.

This bill "will provide real reform and address the problems that exist for shippers held captive to one railroad - problems such as bottlenecks, paper barriers and the STB's outdated processes and procedures," Longo said. "It will strengthen competition and oversight."

The draft released Dec. 9 does not address a key issue of whether to strip major railroads of a limited immunity from antitrust law, but the staff said key senators are still working on that portion and hope to add that language soon.

The measure proposes to overturn some railroad practices that hold some customers captive to a single rail line, both at terminals where other carriers connect and on long-distance routes, but empowers the STB to decide what types of rates railroads could charge when giving their shippers access to a competitor.

And in some small-shipment rate and service disputes customers take to the STB, the board could order the two sides into binding arbitration.

Click here to view the draft legislation.

---By John Boyd