Key Legislation, Issues and Proceedings
FRCA Issue Priorities for the 116th Congress: During the current 116th Congress, the Freight Rail Customer Alliance (FRCA) supports the following legislation and/or issues the implementation of recently enacted public laws, and regulatory proceedings. Additional information, including FRCA’s position papers, follows the following listing.
- Congressional Oversight – Implementation of the Surface Transportation Board Reauthorization (STB) Act of 2015
Continued STB implementation and Congressional oversight of the first authorization for the STB since 1998 which is establishing basic reforms and process enhancements for the Board.
- Annual Appropriation Levels for the Surface Transportation Board
For FY 2020, FRCA supports at a minimum, $37.1 million for the Surface Transportation Board (STB) as recommended by President Trump in the Administration’s FY 2020 Budget. This is the same amount recommended and enacted for the current FY 2019 which is allowing the STB to continue its IT upgrades.
The Consolidated Appropriations Act, 2019 (P.L. 116-6) funds the STB at $37.1 million which is equal to the amount recommended in the FY 2019 Trump Budget. The Administration’s Budget also noted that $2.797 million of the amount was for IT upgrades. The Consolidated Appropriations Act 2018, P.L. 115-141, of which $2.401 million was recommended for IT upgrades. These actions follow the record level funding provided to the STB in the FY 2017 Consolidated Appropriations Act, P.L. 115-31, of $37 million where $2.046 million was directed to IT upgrades in accompanying report language.
- Emergency Fuel Supply Coordination
Legislation that would establish efforts to prevent disruptions, uncertainties and delays in commodities – such as fuel, grains, and chemicals – reaching the market.
- Railroad Antitrust Exemption
Legislation that would remove the 91-year-old special freight railroad antitrust exemption.
- Positive Train Control Implementation, Surface Transportation Extension Act, P.L. 114-73
The railroad industry’s efforts to implement PTC systems by December 31, 2018, including alternative schedules up to December 31, 2020 as approved by the Federal Railroad Administration.
Proceedings before the Surface Transportation Board
- Revenue Adequacy Considerations Before the STB
STB efforts in Docket No. EP 722, Railroad Revenue Adequacy, exploring its methods in determining railroad revenue adequacy. As a part of this review, FRCA strongly opposes the use of replacement cost methodologies.
- Rate-Reasonableness Standards and Expediting Rate Cases Before the STB
Actions to review the Board’s three tests when used to determine railroad revenue adequacy in EP Docket No. 733, Expediting Rate Cases.
- Commodity Exemption Review Before the STB
The Advanced Notice of Proposed Rulemaking in Docket No. EP 704 (Sub-No. 1) that would allow certain commodities to seek rate and/or service relief before the Board.
- Competitive Switching (Access)
The Notice of Proposed Rulemaking to determine the pros and cons of requiring railroads to provide requested switching arrangements in Docket No. EP 711 (Sub No. – 1).
Supporting Published Reports
“Modernizing Freight Rail Regulation,” Transportation Research Board/National Academy of Sciences. June 2015. View FRCA’s Position Paper, “TRB Report”
“Freight Rail Pricing: Contracts Provide Shippers and Railroads Flexibility, but High Rates Concern Some Shippers”, General Accountability Office. December 2016.
View FRCA’s Position Paper, “GAO-Freight Rail Pricing and Contracts”
Quadrennial Energy Review, U.S. Department of Energy. April 2015.
View FRCA’s Position Paper, “Quadrennial Energy Review”.
The information below discusses the above issues and supporting reports in further detail, including access to FRCA’s Position Papers. Contact FRCA for further details.
SURFACE TRANSPORTATION REAUTHORIZATION
Surface Transportation Board (STB) Reauthorization Act of 2015, S. 808 (S. Rpt. 114-52), was signed into law (P.L. 114-110) on December 11, 2015. It was approved by the U.S. House of Representatives under Suspension of the Rules on December 10, 2015 and approved earlier by the U.S. Senate on June by Unanimous Consent on June 18th.
Introduced by Commerce Committee Chair John Thune (R-SD) and Ranking Member Bill Nelson (D-FL), the law:
- Increases the Board members from 3 to 5 and allow non-public meetings
- Creates authority for the Board to initiate investigations without shipper complaints and creates new guidelines for the investigations.
- Requires a report on rate case methodologies by the STB looking at whether rate cases are too complex and expensive and whether alternative methods could be used to address the complexity and expense.
- Create new quarterly public reports for the Board on pending cases and a compilation of complaints on the public website.
- Creates timelines for rate cases.
- Creates a new voluntary arbitration process at the Board that can be used for rate cases with judgments up to $25 million.
- Requires a study by GAO of rail contracts proposals containing multiple origin and destination pairs.
- Accompanying report language, Section 16 (Criteria), clarifies standards and procedures for evaluating revenue adequacy and emphasizes the infrastructure needed in order for rail carriers to be able to meet the present and future demand for rail service. This section does not require any change to how the STB determines railroad revenue adequacy.
View FRCA’s Position Paper, Congressional Oversight: Implementation of the Surface Transportation Board Reauthorization Act of 2015.
Additional FRCA Background Information: Supports P.L. 114-110 and is actively engaged in proper implementation of the measure. FRCA STB Reauthorization Act of 2015 Side-by-Side and FRCA 2015 Surface Transportation Board Reauthorization Principles.
During the legislative process, FRCA expressed concerns to key Senators and staff that Section 16 could allow the STB to utilize “replacement cost methodologies” when evaluating current and future needs for railroad revenue adequacy purposes. Also on July 21st, FRCA submitted written testimony to the STB stating opposition to using “replacement cost methodologies”. [July 22-23, 2015 Hearing: Docket No. EP 722, Railroad Revenue Adequacy and Docket No. EP 664 (Sub-No. 2), Petition of the Western Coal Traffic League to Institute a Rulemaking Proceeding to Abolish the Use of the Multi-Stage Discounted Cash Flow Model in Determining the Railroad Industry’s Cost of Capital.]
Surface Transportation Board Reauthorization Act of 2015 and Related Statements/Documents
Quarterly Correspondence to U.S. Senate and House Oversight Committees
- STB Report Transmittal Letter to U.S. House Appropriations Subcommittee on Transportation, Housing, Urban Development and Related Agencies, April 1, 2019
- STB Report Transmittal Letter to U.S. House Committee on Transportation and Infrastructure, April 1, 2019
- STB Report Transmittal Letter to U.S. Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, and related Agencies, April 1, 2019
- STB Report Transmittal Letter to U.S. Senate Committee on Commerce, Science, and Transportation, April 1, 2019
- STB Report Transmittal Letter to U.S. House Appropriations Subcommittee on Transportation, Housing, Urban Development and Related Agencies, January 30, 2019
- STB Report Transmittal Letter to U.S. House Committee on Transportation and Infrastructure,January 30, 2019
- STB Report Transmittal Letter to U.S. Senate Appropriations Subcommittee on Transportation Housing and Urban Development and related Agencies, January 30, 2019
- STB Report Transmittal Letter to U.S. Senate Committee on Commerce, Science and Transportation, January 20, 2019
Quarterly Reports on Unfinished Regulatory Proceedings
- Report on Unfinished Regulatory Proceedings, First Quarter, April 1, 2019
- Report on Unfinished Regulatory Proceedings, Fourth Quarter, January 20, 2019
Quarterly Reports on Rate Case Review Metrics
- Report on Rate Case Review Metrics, First Quarter, April 1, 2019
- Report on Rate Case Review Metrics, Fourth Quarter, January 20, 2019
Quarterly Reports on Formal and Informal Service Complaints
- Report on Form and Informal Service Complaints, First Quarter, April 1, 2019
- Report on Formal and Informal Service Complaints, Fourth Quarter, January 20, 2019
Additional STB Reauthorization Implementation progress reports, and other communications from 2016, 2017 and 2018 can be found via www.stb.dot.gov/stb/rail/ReauthorizationAct.html
Fiscal Year 2020 – budget and Appropriations
Surface Transportation Board
For FY 2020,. FRCA supports the $37.1 million level for the Surface Transportation Board (STB) and the resources necessary for the STB to continue its information technology (IT) upgrades – as recommended by President Trump in the Administration’s FY 2020 Budget released on March 11, 2019.
For Fiscal Year 2019, FRCA supported the $37.1 million for the STB that was included in the Consolidated Appropriations Act, 2019 (P.L. 116-6). This is equal to the $37.1 million funding level proposed by President Trump in his FY 2018. Budget released to the U.S. Congress on February 12, 2018. As noted in the Administration’s Budget, the STB requires adequate resources to perform key functions, including rail rate reasonableness oversight; the processing of rail consolidations, licensing, and other restructuring proposals; and, the resolution of non-rail matters. Out of the $37.1 million, the Budget requested $2.797 million to continue implementing extensive upgrades to the STB’s information technology (IT) infrastructure and capabilities. minimum, $37.1 million
For background, in Fiscal Year 2018, FRCA strongly advocated before the U.S. Congress the $37.1 million as realized in the Consolidated Appropriations Act 2018 which was the same amount recommended by President Trump in the Administration’s FY 2018 Budget released to the U.S. Congress on May 5, 2017. This Budget also recommended out of the $37.1 million, $2.401 million was identified for continued IT upgrades.
During the FY 2017 budget and appropriation processes, FRCA strongly advocated before the U.S. Congress the importance of providing the STB with annual, appropriated funding levels needed to meet its longstanding responsibilities, new requirements of the STB Reauthorization Act of 2015, and to make vital upgrades to its IT systems and data collection capabilities. FRCA was pleased that the final FY 2017 Omnibus Appropriations provided a record level $37 million for the Board of which $2.046 million was directed to IT improvements in accompanying report language.
View FRCA’s Position Paper, “FY ’19 STB Approprs Position Paper-FINAL-May2019”, FRCA’s Side-by-Side, “FY 2019 Appropriations for Surface Transportation Board, FY ’19 Appropriations Side by Side-FINAL-May2019″.
Emergency Fuel Supply Coordination
FRCA continues to support legislation that would establish efforts to prevent disruptions, uncertainties and delays in commodities – such as fuel, grains, and chemicals – reaching the market.
View FRCA’s Position Paper, “Emergency Fuel Supply Coordination”.
Railroad Anti-Trust Exemption
FRCA continues to support legislation that would remove antitrust exemptions shielding freight railroads from the rules of fair competition that govern almost all other U.S. industries, including all other modes of transportation.View FRCA’s Position Paper “Railroad Anti-trust Exemption”.
Positive Train Control – Implementation of Surface Transportation Extension Act
FRCA continues to support the railroad industry’s efforts to implement Positive Train Control (PTC) systems by Dec. 31, 2018 or alternative schedules up to Dec. 31, 2020, as approved by the Federal Railroad Administration. View FRCA’s Position Paper, “PTC Implementation-FINAL-Apr-2019”.
FRCA supports the efforts of the Surface Transportation Board (STB or Board) in Docket No. EP 722, Railroad Revenue Adequacy.
A goal of the Staggers Rail Act of 1980 was to restore financial stability to the U.S. rail system. By all accounts, this goal has been achieved, as demonstrated by the industry’s continued high levels of capital investment and shareholder returns including dividends, buybacks, and stock appreciation. However, FRCA has long been concerned that the Board’s annual determinations of “revenue adequacy” for Class I carriers does not reflect the true health of the overall rail industry and its individual carriers.
As a part of this and other STB rulemakings, FRCA continues to:
- Support eliminating the statutory requirement for the annual determination because it believes that 1) the carriers’ falsely- perceived lack of adequate revenues has served to shield the railroads’ exercise of their monopoly pricing power from STB scrutiny; and 2) has prevented shippers from obtaining appropriate relief.
- Strongly oppose railroad efforts (via legislation or proceedings) to evaluate revenue adequacy on the basis of replacement costs.
View FRCA’S Position Paper “Revenue Adequacy”.
The Surface Transportation Board (STB) Reauthorization Act of 2015, P.L. 114-110 directs the STB (or Board) to review its three tests used when evaluating if a railroad is charging a reasonable rate for shipping goods or commodities when a rate is challenged before the Board. FRCA strongly supports this requirement.
Moreover, FRCA supports the efforts of the STB to meet this requirement in its Advanced Notice of Proposed Rulemaking (ANPRM), EP Docket No. 733, Expediting Rate Cases and the expected future public hearing in EP Docket No. 736, Intervistas Study. View FRCA’s Position Paper, “Rate Reasonableness Standards”.
FRCA supports efforts of the Surface Transportation Board (STB or Board), Docket No. EP 704 (Sub-No. 1), in giving meaningful consideration to reviewing, reducing, or eliminating most or all of its other existing commodity, boxcar, and Trailer on Flat Car (TOFC)/Container on Flat Car (COFC) exemptions.
FRCA supports the STB’s Notice of Proposed Rulemaking (NPRM), Docket No. EP 704 (Sub-No. 1),
Review of Commodity, Boxcar, and TOFC/COFC Exemptions, issued on March 23, 2016.
FRCA believes that exemptions for certain commodities are no longer needed and have become counterproductive especially given the market, statutory, and regulatory changes for both railroads and shippers. FRCA also advocates, that all freight rail shippers regardless of commodity, should be able to seek rate and/or service relief before the Board.
View FRCA’s Position Paper, “Commodity Exemption”.
Competitive Switching (Access)
FRCA supports allowing shippers with direct access to only one railroad to have that carrier provide a “switch” for a nearby rail carrier.
FRCA supports the Surface Transportation Board’s (STB or Board) Notice of Proposed Rulemaking (NPRM) to determine the pros and cons of requiring railroads to provide the requested switching arrangements (Docket No. EP 711 (Sub No.-1), Reciprocal Switching). This NPRM was issued on July 27, 2016.
Moreover, FRCA is a co-signer of the 201l National Industrial Transportation League (NITL) petition filed with the STB allowing competitive switching. View FRCA’s Position Paper “Competitive Switching (Access)”.