Legislation to expand the scope and authority of the STB, the federal regulatory body responsible for economic oversight of the nation’s freight rail system, now goes to the president’s desk for approval.
The U.S. House of Representatives yesterday passed by voice vote legislation to expand the scope and power of the federal regulatory body responsible for economic oversight of the nation’s freight rail system.
The Surface Transportation Board (STB) Reauthorization Act of 2015, S. 808, which received unanimous approval from the Senate back in June, will now be sent to President Obama’s desk for his signature.
The STB has regulatory jurisdiction over railroad rates, mergers, line acquisitions, new rail-line construction, line abandonment, and other rail issues. The board would be responsible, for example, for U.S. government approval of the potential merger between Class I railroads Canadian Pacific Railway and Norfolk Southern Corp. CP has been very publicly pursuing a takeover bid for the fourth largest railroad in the U.S., but NS so far has rejected two separate offers, causing the Calgary-based railroad to speculate on the possibility of initiating a proxy battle and taking its offer directly to NS shareholders.
The bill represents the first reauthorization and significant reform of STB since the agency’s establishment in 1996.
Most notably, S. 808 expands the membership of the board from three to five and for the first time allows communication between STB members.
Also included in the measure are provisions to improve the STB’s current dispute resolution process by setting timelines for rate reviews and expanding voluntary arbitration procedures to address both rate and service disputes, and give the STB the authority to initiate investigations on matters other than rate cases, rather than wait for a complaint.
Sen. John Thune, R-S.D., chairman of Senate Committee on Commerce, Science, and Transportation and lead Senate sponsor of the STB reauthorization, and other supporters of the bill said it is an important step toward proper federal government oversight of the nation’s freight railways, which were legally deregulated in the 1980s.
“Enacting this legislation will make the Surface Transportation Board more accountable and effective in addressing rail service and other disputes,” Thune said in a statement. “Heading off problems between rail customers and carriers whenever possible, and quickly resolving them when they do occur, is at the heart of this effort to make the STB work better.”
“The STB is meant to provide oversight of the nation’s railroads in order to ensure rail shippers have a fair and impartial venue for their concerns about rail policy,” added Ann Warner, executive director of the Freight Rail Customer Alliance. “Enacting S. 808 is an essential first step in reforming the STB to help achieve that goal.”
“The STB plays an important role in ensuring a balanced, fair regulatory environment for both the railroads and its customers, but the agency hasn’t been reauthorized or reformed since it was created,” House Transportation and Infrastructure Committee Chairman Bill Shuster, R-Pa., said in a statement following the House vote.
“This bill makes common sense improvements to increase the efficiency of the agency’s processes and decision-making, and ensures that the successful U.S. freight rail transportation system is not smothered by unnecessary regulatory burdens.”
Association of American Railroads President Ed Hamberger also praised the legislation, saying, “In reauthorizing the Surface Transportation Board for the first time since the agency was created, Congress has clearly stated the critical need for railroads to be able to earn the revenues to build, maintain, and further modernize the nation’s 140,000-mile privately-owned rail network.
”These investments are needed to meet current and future freight transportation demands,” Hamberger added. “This 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.”
House passes Surface Transportation Board reauthorization
