SURFACE TRANSPORTATION BOARD

REAUTHORIZATION ACT OF 1999

Section 1. Section 1 provides that the Act may be cited as the Surface Transportation Board Reauthorization Act of 1999.

Section 2. This section authorizes appropriations for fiscal year 2001, and provides that, beginning with fiscal year 2000, funds available to the Surface Transportation Board (Board) each year would be derived from fees imposed by the Board for the services it provides. The Board would be authorized to assess and collect fees on the basis of methods that the Board determines, by rule, to be fair and equitable. Fees would be collected in each fiscal year and would be collected and available for obligation and expenditure only as provided in advance in appropriations acts. Any fees that the Board might collect in a particular fiscal year in excess of the authorized amount would remain available until expended.

Section 3. In December 1996, the Board issued its decision in Ex Parte 347 (Sub-No.2) Rate Guidelines--Non-Coal Proceedings. In this decision, the Board issued its simplified and expedited procedure for determining the reasonableness of challenged rates in non-coal cases, as required by 49 U.S.C. 10701(d)(3). In issuing its decision, the Board did not identify which rate cases would be appropriate for consideration using these simplified guidelines. Since then very few cases have been considered under these procedures. This section would make the Board’s simplified procedures applicable to all rate challenges involving shippers whose shipping costs under the specific rate being challenged do not exceed $500,000 during the preceding year. The Board would retain discretion to also apply these procedures to rates involving larger shipments.

Section 4. Under current law, the Board must maintain standards for establishing revenue levels for rail carriers which are adequate to cover expenses and to provide a profit. Based on these procedures the Board must determine which rail carriers are revenue adequate on an annual basis. While the revenue adequacy of a rail carrier should be considered by the Board in making rate reasonableness determinations, such consideration must be based on an evaluation of the costing, competitive, and other factors specific to the move. The financial strength or weakness of the rail carrier, now determined by the revenue adequacy calculation, should not be a basis for imposing a rate which is not otherwise justified. Therefore, this section would remove the requirement that the Board maintain standards for determining revenue adequacy and that it determine which carriers are revenue adequate. Although the Board would no longer need to determine the revenue adequacy of rail carriers, the Board is encouraged to continue to provide supporting calculations necessary to administer its regulatory responsibilities and to continue to support, as a policy goal, a financially viable railroad industry.

Section 5. This section would remove the Board’s authority to provide antitrust immunity for the negotiation and implementation of rate agreements. Other carriers, notably air carriers, have for years decided their rates without the burden of Federal regulatory oversight or the benefit of antitrust immunity. In short, they have functioned in this regard like the other sectors of the economy. There is no reason to continue to treat rail carriers differently; their rate agreements can and should be governed by market conditions and the dictates of antitrust law. However, in order to permit organizations who are operating under agreements previously approved by the Board to amend their operating practices so they may operate without antitrust immunity, this section will permit the continuation of current approved agreements until their expiration date or until two years after the enactment of this section, whichever is first.

Section 6. The Board currently has statutory authority to require rail carriers to enter into reciprocal switching agreements where it finds such agreements to be practical and in the public interest or where they are necessary to provide competitive rail service. The Board has required carriers to enter into such agreements only when it has found evidence of anticompetitive conduct. This section will require the Board to order rail carriers to enter into reciprocal switching agreements where such agreements will be in the public interest and where they are necessary to provide competitive rail service without regard to whether the carrier who owns the rail line is engaging in anticompetitive conduct. Further, the Board must decide all issues of compensation where the carriers involved fail to agree.

Section 7. This section would provide the Board with authority to maintain emergency service orders in effect for a total of 365 days if necessary. In view of recent experience and growing congestion in the national rail system such an extension may be necessary to solve long-term problems.

Section 8. Section 8 would remove from the Board the authority to grant immunity from the antitrust laws, as defined in the first section of the Clayton Act (15 U.S.C. 12), to pooling agreements, division of transportation or earnings agreements, all mergers, and other transactions involving combinations approved by the Board. Although such agreements would remain under the jurisdiction of the Board and would require its approval, as a result of this amendment they would become subject to the antitrust laws. Such transactions would become subject to review by the Department of Justice (DOJ) and the Federal Trade Commission (FTC), as is the case in other industries. In recognition of the fact that the possible competitive impacts of proposed transactions would be considered by DOJ or the FTC, this section would also remove from the Board’s authority consideration of the competitive effects of the proposed transaction on the rail carriers or the regional and national rail system. Of course, the merging entities would remain subject to all Federal rail safety and health laws, and this is made explicit.

Mergers approved under this section are also currently exempt from the Railway Labor Act (RLA) and all State and municipal laws, to the extent necessary to implement a transaction. The new subsection (a) would subject these transactions to Federal labor, safety, health and antitrust laws, and to State and municipal laws, not otherwise preempted under Federal law, that deal with labor, employment, employee safety, or railroad safety. If an exemption from any other laws is necessary it may be no broader than required to enable the transaction to be effected.

The new subsection (c) further clarifies that the Board has no authority to make changes to collective bargaining agreements negotiated under the RLA, the federal law governing labor relations in the railroad industry.

Section 9. Section 9 would amend 49 U.S.C. 11326(a), which deals with employee protective arrangements in railroad consolidations, mergers and acquisition of control proceedings ("railroad transactions"). The section would make two changes.

First, section 9 would codify the level of labor protection the Board currently imposes in approving railroad transactions covered by section 11326(a) (those transactions not involving either one Class II and one or more Class III rail carriers, or only Class III carriers). Section 11326(a) currently requires the Board to ensure that a rail carrier involved in a Board-approved railroad transaction provides a fair arrangement to protect the interests of its employees who are affected. Section 11326(a) goes on to provide that these arrangements cannot be less protective than the terms imposed by the Board’s predecessor, the Interstate Commerce Commission (ICC), before February 5, 1976, and those imposed by the Board under former section 24706(c). Section 24706(c) was repealed by the Amtrak Reform and Accountability Act of 1997 (Pub. L. No. 105-134, effective May 31, 1998); the Amtrak Reform Act provides that the repeal is not intended to affect the level of protections for freight employees. The ICC established the basic framework for mitigating the labor impacts of rail consolidations in its New York Dock decision, 360 I.C.C. 61 (1979). New York Dock conditions require that employees of an affected rail carrier not be put in a worse position related to their employment as a result of the transaction during the 6 years (or a period equal to the employee’s length of service, if less than 6 years) following the date the employee is adversely affected; the conditions also provide other benefits to adversely affected employees such as retraining and moving allowances. The Board has generally imposed the New York Dock conditions in rail consolidations under section 11326(a). The amendment codifies the Board’s practice of imposing six years of labor protection (or a period equal to the employee’s length of service, if less than 6 years) for an employee adversely affected by a section 11326(a) transaction.

Second, the bill would require that negotiations regarding the selection of forces or assignment of employees caused by railroad transactions approved by the ICC or the STB be conducted in accordance with the RLA. The STB would be precluded from being involved in the resolution of disputes concerning these negotiations or any negotiated implementing agreement unless expressly requested by the carrier and the representative of the employees. This change would be applicable to all protective conditions ever imposed by the ICC or the STB in railroad transactions, and to future railroad transactions that may be approved by the STB.

Under conditions typically imposed by the STB and its predecessor the ICC in railroad transactions, the carriers have been permitted to submit disputes regarding changes to collective bargaining agreements needed to implement the transaction to binding arbitration, and the arbitrator is permitted to override existing collective bargaining agreements as necessary to carry out the approved rail transaction. Sometimes this arbitration takes place many years after the transaction has been approved. The bill would preclude the STB from being involved in the resolution of disputes concerning these negotiations or any negotiated implementing agreement unless expressly requested by the carrier and the representative of the employees. This change would be applicable to all protective conditions ever imposed by the ICC or the STB in railroad transactions, and to future railroad transactions that may be approved by the STB. Implementing agreements that were either negotiated or arrived at through binding arbitration prior to the effective date of the bill would not be affected. The consolidation of all rail industry collective bargaining under the RLA and the jurisdiction of the National Mediation Board would end the inevitable conflict and tension that has developed from having labor contracts negotiated under the RLA overridden by STB administrative mandates.

Section 10. This section would ensure that competitive issues in motor carrier transportation are treated like those in other industries to the maximum extent feasible. Under this section, the Board would no longer consider competitive issues, and, accordingly, this section eliminates references to Federal regulatory approval requirements for collective motor carrier activities submitted to it for approval. Similarly, this section would also eliminate the ability of the Board to immunize transactions or conduct from the antitrust laws. Exposure to the antitrust laws would address the competitive consequences of such activities. Only mergers of passenger motor carriers would remain subject to Board review, out of concern for the effects of such transactions on the passengers served by this industry.

This section would also amend the Federal Trade Commission Act (15 U.S.C. 41 et seq.) to remove the exemption for common carriers now regulated by the Board. This would allow the FTC to enforce its consumer protection and antitrust authority under the FTC Act against these companies in the same way it does for most other industries.

Section 11. Section 11 would eliminate the ability of the Board to immunize motor passenger carrier merger, acquisition, and consolidation transactions from the antitrust laws.

This section would also amend the Clayton Act (15 U.S.C. 12 et seq.) in order to subject all mergers, acquisitions, corporate interlocks, and agreements among common carriers to the full operation of the antitrust laws. This section would amend section 7 of the Clayton Act, which currently applies to all stock acquisitions and mergers among all companies but only to asset acquisitions by companies "subject to the jurisdiction of the FTC," by deleting the paragraph which recognizes the authority of the Board to grant antitrust immunity in transactions that it has approved. This section would eliminate regulatory jurisdiction over mergers and acquisitions by all such carriers in favor of ordinary antitrust oversight.

Section 12. Section 12 would authorize appropriations for a study by the Department to gather factual data and conduct economic analysis on changes in the rail industry since the Staggers Act. This study could form the basis for future legislative proposals to streamline the STB and consider the efficacy of various competitive access proposals. It is essential that rail policy be based on a thorough knowledge of changes in railroad financial conditions, differentials in rate structure, capacity constraints, infrastructure investment, and characteristics of captive shippers before recommendations for competitive access can be developed to appropriately target problems. The Department would be required to complete the study and report to Congress within one year of the date of enactment.

Section 13. Section 13 corrects provisions of title 49, United States Code, that mistakenly refer to the former Interstate Commerce Commission (ICC) rather than the successor Surface Transportation Board (STB). In some cases, the provision or reference can be deleted entirely as obsolete because the ICC's statutory responsibility has been transferred to another agency. Additionally, other corrections to title 49 language are proposed, for the reasons set forth below.

Subsections (c) and (n) substitute a correct reference to the STB where current law incorrectly refers to the former ICC.

Subsection (b) would delete 49 U.S.C. 307 (Safety information and intervention in ICC proceedings) from the Code as obsolete. Section 307 addresses DOT's role in ICC freight forwarder and other motor carrier licensing proceedings. The Interstate Commerce Commission Termination Act of 1995 (Pub. L. 104-88; Dec. 29, 1995) (ICCTA) transferred the responsibility for licensing these activities to DOT itself (see, e.g., 49 U.S.C. 13903). DOT already reviews the safety compliance record of license applicants under its jurisdiction, and specific statutory authority to provide itself with safety information is unnecessary.

Subsection (d) would conform the section headings that appear in the analysis of chapter 53 for sections 5310 and 5311 to the actual section headings of these two provisions.

Subsection (e) would substitute the term "long-range transportation plan" for "long-range plan" each place the latter appears in section 5303, to conform to the identical change Congress made to the plural form of this phrase in section 3004(e)(6) of the Transportation Equity Act for the 21st Century (TEA-21) (112 Stat. 345).

Subsection (g) would, effective as of the June 9, 1998, effective date of TEA-21, redesignate (as subsection (f)) the new subsection (e) of section 5337 (Apportionment of appropriations for fixed guideway modernization) that was added by section 3028(b) of TEA-21. Section 5337 already contained a subsection (e), and the proposed redesignation is needed to resolve this unintended duplication.

Subsection (h) corrects the punctuation of a listing contained in 49 U.S.C. 5338(h)(5).

Subsection (i) would delete an obsolete cross-reference to former section 5317 (Transportation centers) from sections 5313 and 5314.

Subsection (j) would correct section 5903(a) by changing the uppercase "To" that appears in the middle of a sentence to a lowercase "to".

Subsection (k) would correct a cross-reference to former section 24706(c) (which was repealed as of May 31, 1998) to reflect a point in time when it was effective.

Subsection (l) would revise the structure of section 13541(a) to resolve a logical inconsistency in the language and thereby conform to the intent of Congress. As the current language stands, an exemption under 13541(a) is allowed only if the STB (or the STB Chairman) can find that the application of the provision in question to the particular case "is in the public interest" (see section 13541(a)(3)). In fact, the STB must find that the exemption from the application of the provision is in the public interest, or the subsection has no meaning. The proposed modification would revise the language of the subsection to give it the latter meaning.

Subsection (m) would move subsection (a)(2) of section 14704 (Rights and remedies of persons injured by carriers or brokers) to subsection (b) of that section, and designate it as the second paragraph of that subsection. This language appeared as subsection (b)(2) in both the House and Senate bills that became ICCTA, see H.R. Rep. No. 104-311, 104th Cong., 1st Sess.(1995), at 62 (House bill); 141 Cong. Rec. S17573 (daily ed. Nov. 28, 1995) (Senate bill), as well as in the prior law, see former 49 U.S.C. 11705(b)(3) (1995); H.R. Rep. No. 104-422, 104th Cong., 1st Sess. (1995), at 246 (table in Conference Report showing disposition in ICCTA of former provisions of the Interstate Commerce Act). There is no indication in the Conference Report of any intent to substantively alter this provision. See H.R. Rep. No. 104-422, 104th Cong., 1st Sess. (1995), at 221. Furthermore, the change in placement to subsection (a) made certain cross-references invalid (see references to section 14704(b) contained in sections 14704(c)(1)-(2), (d)(1), and 14705(c) -- all of which were reenactments of identical references in the prior law. See former 49 U.S.C. 11705(c)(1)- (2), (d)(1), and 11706(c)(2) (1995), referencing former 49 U.S.C. 11705(b) or 49 U.S.C. 11705(b)(3) (1995).) A conforming change is also proposed to one of these cross-references.

Subsection (o) would delete an obsolete (and garbled) paragraph from section 31112(d).

Subsection (p) would amend section 31132(7) (definition of "State") to remove an obsolete reference to "section 31140," which was repealed by Section 4008(d) of TEA-21.

Subsection (q) would amend section 31304 (Employer responsibilities) by deleting an obsolete cross-reference to section 31302. The version of section 31302 that preceded TEA-21, which allowed more than one driver's license "during the 10-day period beginning on the date the individual is issued a driver's license," was replaced by new language that does not allow more than one driver's license at all (see Sec. 4011(b) of TEA-21).

Section 14. Section 14 corrects several provisions of federal law (other than title 49 provisions) that still refer to the former Interstate Commerce Commission (ICC) but should refer to the successor Surface Transportation Board (STB). There are other ICC references in federal law that are not changed, because they are correct, historical references to the ICC before it terminated. The changes conform with section 205 of the ICCTA, which provides that any reference to the ICC in any other federal law is deemed to refer to the STB. This section makes no changes in substantive law.

Subsections (a) and (b) amend two provisions of the Packers and Stockyards Act, 1921, to refer to the STB rather than the former ICC.

Subsection (c) amends a provision of the Perishable Agricultural Commodities Act, 1930, to refer to the STB rather than the former ICC.

Subsection (d) amends a provision of the Act of August 14, 1946 (relating to the distribution and marketing of agricultural products) to refer to the STB rather than the former ICC.

Subsection (e) amends 11 U.S.C. 1110 to refer to the STB rather than the former ICC.

Subsection (f) amends 28 U.S.C. 1398 (and its heading) to refer to the STB rather than the former ICC.

Subsection (g) amends 31 U.S.C. 1108(f) to refer to the STB rather than the former ICC.

Subsection (h) amends a provision of Public Law 91-621 to refer to the STB rather than the former ICC.