Written by

Marybeth Luczak, Government Editor

Laws to reauthorize the Floor Transportation Board (STB) and “create a good market” for railroads and shippers was launched within the U.S. Home of Representatives on Aug. 2. Whereas the Affiliation of American Railroads (AAR) known as it an “untenable invoice that might additional exacerbate present provide chain and repair challenges,” the American Chemistry Council (ACC) welcomed the “wise legislative bundle.”

The Freight Rail Transport Truthful Market Act was introduced ahead by Rep. Donald M. Payne Jr. (D-N.J.), Chair of the Home Subcommittee on Railroads, Pipelines, and Hazardous Supplies; Rep. Peter DeFazio (D-Ore.), Chair of the Home Committee on Transportation and Infrastructure; Rep. David Scott (D-Ga.), Chair of the Home Committee on Agriculture; and Rep. Jim Costa (D-Calif.), Chair of the Subcommittee on Livestock and International Agriculture.

In line with a launched section-by-section evaluation, invoice provisions embrace:

• Authorizing $256 million over 5 years for the STB, with required set-asides of 5% for the institution of a Passenger Rail Program, together with the addition of as much as 10 full-time workers to help with program actions, as outlined below Part 22309 of the Infrastructure Funding and Jobs Act; and of as much as $1 million per yr for 2 years “for research on freight rail competitors, figuring out the environmental advantages of rail, and provide chain knowledge.”

• Increasing the Railroad-Shipper Transportation Advisory Council (RSTAC) from 19 to 24 members. Three new non-voting positions can be created—one every representing labor, railcar lessors and port authorities—and all 5 STB members can be approved to take part, somewhat than simply the present three.

Rep. Donald M. Payne, Jr. (D-N.J.)

• Requiring the STB “to assessment exempt commodities one yr after [bill] enactment and each 10 years thereafter to find out whether or not market competitors sufficiently exists to maintain the commodity on the exemption record. Exempt commodities are assumed to have entry to aggressive transportation markets and subsequently the STB doesn’t regulate these transportation providers.”

• Requiring the STB, inside 9 months of invoice enactment, to undergo Congress a report on steps it may well take “to hurry up consideration of fee assessment instances.”

• Requiring “railroad-shipper contracts, which embody 80% of rail quantity, to incorporate service supply requirements and applicable treatments on account of a failure to satisfy service supply requirements. Summaries of every agricultural product contract should additionally embrace service supply requirements and requisite treatments.”

• Requiring railroads, non-public automobile homeowners and lessees to report demurrage earnings quarterly to the STB. Moreover, the invoice notes “the rising shift in railcar possession towards shippers requires an replace in who can cost premiums to satisfy the nationwide want associated to environment friendly freight automobile use and distribution,” so it “expands this monetary mechanism to personal automobile homeowners and lessees that transport agricultural commodities and different important commodities.”

• Together with a coverage assertion in help of freight automobile GPS and different telemetry programs that “inform shippers the place within the freight rail system their cargo is situated. It additionally requires the STB and the Federal Railroad Administration (FRA), in coordination with the Division of Homeland Safety (DHS), to submit a report on the security and different regulatory challenges and alternatives of such a system.”

Rep. Peter DeFazio (D-Ore.)

• Directing the Authorities Accountability Workplace (GAO) “to conduct a research not later than two years after [bill] enactment on present contractual prohibitions and restrictions between Class I railroad carriers and Class II and III carriers on interchange agreements.”

• Prohibiting rail fee will increase “throughout rail service emergencies declared by the STB.”

• Creating an 18-member Railroad-Passenger Rail Transportation Advisory Council (RPRTAC) comprising the 5 STB members, 10 senior govt officers of “organizations engaged within the freight railroad and passenger rail industries; states that fund intercity passenger rail providers; and non-voting illustration from the Secretary of Transportation, rail passengers and labor.”

• Requiring that “present and future passenger rail service be accommodated in STB railroad merger and acquisition concerns.”

• Including “magnetic levitation applied sciences” to the definition of a rail line.

(Scroll down for full invoice textual content, plus its section-by-section evaluation.)

“I’m proud to introduce the Freight Rail Transport Truthful Market Act with Chair DeFazio, Chair Scott and Chair Costa to enhance rail delivery nationwide,” Chair Donald M. Payne, Jr. stated. “The freight rail corporations have targeted on income as an alternative of efficiency and it has led to delays and issues in how we transport commodities to farms, factories and shops throughout the nation. My invoice provides the Floor Transportation Board the facility to ban rail fee will increase throughout a rail emergency and resolve rail emergencies after they happen. This invoice will enhance the velocity and reliability of rail service and assure that freight rail delivery continues to enhance sooner or later with out pointless rules.” 

Business Response

AAR on Aug. 2 launched this assertion following the invoice’s debut:

AAR President and CEO Ian Jefferies

“The Home Railroads Subcommittee as we speak launched the ‘Freight Rail Transport Truthful Market Act,’ an untenable invoice that might additional exacerbate present provide chain and repair challenges and that threatens the long-term viability of the nation’s freight rail system.

“‘This imprudent proposal turns the clock again greater than 40 years and reinstates an unbalanced regulatory framework that replaces free-market rules with unjustified authorities mandates,’ stated AAR President and CEO Ian Jefferies. ‘Because the trade was partially de-regulated in 1980, freight railroads have invested almost $760 billion to enhance the security, competitiveness and sustainability of their operations. Their potential to proceed this degree of spending is vital to assembly as we speak’s and tomorrow’s freight calls for. Protected, dependable, cost-effective and fuel-efficient freight rail transportation is crucial to our future. Overreaching re-regulation will take us backward and gained’t do a factor to resolve present service challenges and provide chain issues.’

“In testimony earlier than the Home T&I Rail Subcommittee this previous Could, STB Chairman Oberman agreed. He defined that increasing the Board’s oversight wouldn’t assist with the labor and provide chain challenges freight railroads are working to resolve and famous that ‘the Board can use its present authority to mitigate these issues in a significant manner.’

“Jefferies famous, ‘At the moment’s STB is exercising its oversight authority vigorously. Virtually half of the proposed invoice is already the topic of ongoing Board proceedings. Congress ought to be taught from classes of the previous: extra authorities management doesn’t lead to higher railroads. By advantage of as we speak’s balanced regulatory framework, America’s freight railroads are, by nearly any measure, the most effective nationwide freight rail system on the planet. Now greater than ever, we want that best-in-class system, and it’s not the time for railroads to be hamstrung by extreme regulation.’”

Whereas the American Brief Line and Regional Railroad Affiliation (ASLRRA) was “happy with a number of research and initiatives offered for within the invoice,” it stated it was “unable to help the invoice as launched.” In a press release issued Aug. 2, ASLRRA stated: “On behalf of the nation’s 600 Class II and III brief line freight railroads, the American Brief Line and Regional Railroad Affiliation (ASLRRA) appreciates the intent of the Home Transportation and Infrastructure Committee to search out methods to enhance the motion of freight on the nationwide rail community. The Freight Rail Transport Truthful Market Act comprises a number of research and initiatives which might be welcome and will support Class II and Class III railroads and the general freight rail trade. The invoice, nevertheless, comprises a myriad of mandates and dramatic authorities interventions into {the marketplace} that will hurt the general energy and viability of the freight rail enterprise over time and disrupt brief line railroads’ potential to serve their prospects. These provisions would insert aggressive authorities regulation into the complicated, interconnected freight rail community, create an array of unintended penalties, and in the end do extra hurt than good. ASLRRA alerted Congress to our considerations, and offered an in depth assessment of every provision and strategies because the invoice was being drafted. As launched, ASLRRA can’t help this laws.”

Additionally on Aug. 2, ACC President and CEO Chris Jahn launched this assertion: “Our trade is without doubt one of the greatest prospects of freight rail and our transportation wants proceed to develop with growth of U.S. chemical manufacturing. This ought to be excellent news for the freight railroads, however ongoing rail service issues are placing the brakes on manufacturing and future progress. This necessary laws comprises many considerate options that complement and line up effectively with the much-needed reforms being thought of by the STB. We urge Congress and the STB to work collectively on significant reforms that may incentivize the railroads to supply dependable and aggressive service and maintain them accountable after they fail to ship.”

Wilner Weighs In

Railway Age Capitol Hill Contributing Editor Frank N. Wilner

“The invoice now has no Republican help, however passage within the conventional method isn’t its goal,” commented Railway Age Capitol Hill Contributing Editor Frank N. Wilner, who’s a former assistant vice chairman for coverage on the AAR, former chief of workers on the STB, and a former UTU official. “There merely is inadequate time remaining on the congressional calendar on this election yr for public hearings the place, particularly, the STB would have alternative to elucidate why the invoice is stepping on their experience earlier than they even have alternative to finish progressing rulemakings addressing these very topics. Congressional oversight doesn’t imply usurping the features of administrative businesses as this invoice would do, however making certain administrative businesses comply with statutory directives.

“The evil lurking is the oldest trick within the legislative handbook. Rail labor and captive shippers have enlisted DeFazio to have it prepared for appending to ‘must-pass’ laws that Republicans could have problem opposing. The automobile is a back-to-work order ought to labor shutdown the nation’s rail community in mid-September if sad with Presidential Emergency Board suggestions due by mid-September to settle stalled wage and advantages contract talks. Making an attempt to separate non-germane provisions from an in any other case important back-to-work order will solely extend an already economy-jolting rail shutdown.

“To not be ignored is a high-probability last-moment addition to the invoice as it’s appended to a back-to-work order—a easy provision requiring, in perpetuity, two-person crews on each freight, passenger and commuter practice within the land regardless that some have already got been long-operating with out two-person crews and that advancing know-how will make the second crew member within the locomotive cab much less productive than working elsewhere.

“Shippers, in the meantime, have a fallback place ought to labor and administration settle with out a work stoppage and it turns into extra apparent that the DeFazio invoice is a legislative dead-end no matter whether or not labor strikes. Sen. Tammy Baldwin (D-Wis.) and Rep. Jim Costa (D-Calif.) are collaborating on a single-issue invoice—a now in draft type Widespread Provider Obligation Clarification Act—to require the STB to outline extra fully the railroads’ widespread service duty.

“Its present draft type is almost similar to Part 205 of the DeFazio invoice and was inserted by Costa who’s a co-sponsor of the DeFazio invoice. Part 205 would require service supply requirements by commodity and supply treatments for when these service supply requirements usually are not met. The language would seize from the STB a activity that Chairman Martin J. Oberman is on file as desiring to pursue in 2023—a activity extra competently and effectively carried out by STB economists and attorneys with far higher understanding of railroad/shipper interactions and rail operations than possessed by lawmakers.

“There’s chatter amongst shippers that whereas consideration is being directed on the complete DeFazio invoice, a single-issue widespread service definition would possibly really discover a path to Home-Senate passage in the course of the lame-duck session following November congressional elections. Costa represents home agriculture pursuits as chair of the Home Subcommittee on Livestock and International Agricultures, whereas Baldwin is a member of the Senate Commerce Committee.”

Obtain the Home invoice, plus its full section-by-section evaluation beneath: