Rail Shipper Fairness Act of 2020

II 116TH CONGRESS 2D SESSION S. 4961 To improve the efficiency and reliability of rail transportation by reforming the Surface Transportation Board, and for other purposes. IN THE SENATE OF THE UNITED STATES DECEMBER 3, 2020 Ms. BALDWIN introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation A BILL To improve the efficiency and reliability of rail transportation by reforming the Surface Transportation Board, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Rail Shipper Fairness 4 Act of 2020’’. 5 SEC. 2. IMPROVING RAIL SERVICE. 6 (a) COMMON CARRIER OBLIGATIONS.—Section 7 11101(a) of title 49, United States Code, is amended by 8 inserting ‘‘, as necessary for the efficient and reliable 9 VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 4961 IS transportation based on the shipper’s reasonable service 1 requirements,’’ after ‘‘the transportation or service’’. 2 (b) EMERGENCY SERVICE ORDERS.—Section 3 11123(b) of such title is amended by adding at the end 4 the following: 5 ‘‘(4) The Board may issue emergency service orders 6 that include shipments moving under contract if such 7 shipments are part of a regional service order issued in 8 accordance with this section.’’. 9 (c) REPORTS.—Section 11145(a) of such title is 10 amended— 11 (1) in paragraph (1), by striking ‘‘and’’ at the 12 end; 13 (2) by redesignating paragraph (2) as para- 14 graph (3); and 15 (3) by inserting after paragraph (1) the fol- 16 lowing: 17 ‘‘(2) reports, service plans, or other documents 18 that cover shipments moving under contract if such 19 shipments are part of a general report, service plan, 20 or other document that generally covers the geo- 21 graphic area or commodity; and’’. 22 (d) EQUITABLE RELIEF; DAMAGES.—Section 11704 23 of such title is amended— 24 VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 4961 IS (1) in subsection (a), by inserting ‘‘or subjected 1 to inadequate or deficient service’’ after ‘‘injured’’; 2 (2) by amending subsection (b) to read as fol- 3 lows: 4 ‘‘(b) A rail carrier providing transportation subject 5 to the jurisdiction of the Board under this part is liable— 6 ‘‘(1) for damages sustained by a person as a re- 7 sult of an act or omission of that carrier in violation 8 of this part; 9 ‘‘(2) to a person for amounts charged to that 10 person that exceed the applicable rate for the trans- 11 portation; and 12 ‘‘(3) to a person for damages or equitable relief 13 as a result of inadequate or deficient service in viola- 14 tion of this part.’’; and 15 (3) in subsection (c), by adding at the end the 16 following: 17 ‘‘(3) The Board may order a rail carrier to pay dam- 18 ages or to provide equitable relief, as appropriate, to a 19 person subjected to inadequate or deficient service as a 20 result of a violation of this part by that carrier.’’. 21 (e) CIVIL PENALTIES.—Section 11901 of such title 22 is amended— 23 (1) in subsection (a), by striking ‘‘$5,000’’ and 24 inserting ‘‘$25,000’’; 25 VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 4961 IS (2) in subsection (c), by striking ‘‘$5,000’’ and 1 inserting ‘‘$25,000’’; and 2 (3) in subsection (e), by striking ‘‘$100’’ each 3 place such term appears and inserting ‘‘$1,000’’. 4 SEC. 3. IMPROVING RAIL COMPETITION. 5 (a) RAIL TRANSPORTATION POLICY.—Section 10101 6 of title 49, United States Code, is amended— 7 (1) by redesignating paragraphs (14) and (15) 8 as paragraphs (15) and (16), respectively; and 9 (2) by inserting after paragraph (13) the fol- 10 lowing: 11 ‘‘(14) to provide for and promote the protection 12 of the shipping public from the unreasonable exer- 13 cise of market power;’’. 14 (b) RATES.—Section 10705 of such title is amended 15 by adding at the end the following: 16 ‘‘(d) Shippers may obtain rates to or from any inter- 17 change points of 2 or more rail carriers.’’. 18 (c) MARKET DOMINANCE.—Section 10707 of such 19 title is amended— 20 (1) in subsection (a)— 21 (A) by striking ‘‘In this section, ‘market 22 dominance’ means’’ and inserting the following: 23 ‘‘(a) In this section— 24 VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 4961 IS ‘‘(1) ‘effective competition’ only includes modes 1 of transportation with existing and supporting infra- 2 structure; and 3 ‘‘(2) ‘market dominance’ means’’; and 4 (2) in subsection (b)— 5 (A) by inserting ‘‘A rail carrier could have 6 market dominance even in circumstances in 7 which a shipper is served by 2 carriers.’’ after 8 ‘‘the rate applies.’’; and 9 (B) by striking ‘‘rate or transportation’’ 10 and inserting ‘‘rate for transportation’’. 11 (d) TERMINAL FACILITIES.—Section 11102(c) of 12 such title is amended to read as follows: 13 ‘‘(c)(1) Except as provided in paragraph (2), the 14 Board shall require a Class I rail carrier to enter into a 15 competitive switching agreement if a shipper or receiver, 16 or a group of shippers or receivers, files a petition with 17 the Board that demonstrates, to the satisfaction of the 18 Board, that— 19 ‘‘(A) the facilities of the shipper or receiver for 20 whom such switching is sought are served by rail 21 only by a single, Class I rail carrier; and 22 ‘‘(B) subject to paragraph (3), there is, or can 23 be a working interchange between— 24 VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 4961 IS ‘‘(i) the Class I rail carrier serving the 1 shipper or receiver for whom such switching is 2 sought; and 3 ‘‘(ii) another rail carrier within a reason- 4 able distance of the facilities of such shipper or 5 receiver. 6 ‘‘(2) Competitive switching may not be imposed 7 under this subsection if— 8 ‘‘(A) either rail carrier between which such 9 switching is to be established demonstrates that the 10 proposed switching is not feasible or is unsafe; or 11 ‘‘(B) the presence of reciprocal switching will 12 unduly restrict the ability of a rail carrier to serve 13 its own shippers. 14 ‘‘(3) The requirement set forth in paragraph (1)(B) 15 is satisfied if each facility of the shipper or receiver for 16 which competitive switching is sought is— 17 ‘‘(A) within the boundaries of a terminal of the 18 Class I rail carrier; or 19 ‘‘(B) within a 100-mile radius of an interchange 20 between the Class I rail carrier and another carrier 21 at which rail cars are regularly switched.’’. 22 VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 4961 IS SEC. 4. IMPROVING REASONABLE RATE STANDARDS. 1 (a) BENCHMARK-BASED RATE REASONABLENESS 2 STANDARD.—Section 10701(d) of title 49, United States 3 Code, is amended by adding at the end the following: 4 ‘‘(4)(A) Not later than 90 days after the date of the 5 enactment of the Rail Shipper Fairness Act of 2020, the 6 Board shall initiate a rulemaking proceeding to develop 7 a methodology for determining the reasonableness of chal- 8 lenged rail rates based on competitive rate benchmarking 9 that predicts a competitive rate level based upon econo- 10 metric models. 11 ‘‘(B) Rather than utilizing its existing Three-Bench- 12 mark Methodology, the Board shall develop a methodology 13 that considers competitive markets or a proxy of such 14 markets. 15 ‘‘(C) In determining the reasonableness of a chal- 16 lenged rate under the new benchmarking methodology de- 17 veloped under this paragraph, the Board shall presume 18 that a rate above the benchmark rate level is unreasonable 19 unless the rail carrier proves that the margin above the 20 competitive rate benchmark is necessary to allow the rail 21 carrier to earn adequate revenues. 22 ‘‘(D) Relief under the new benchmarking method 23 shall have no monetary limit and any rate prescription set 24 by the Board shall remain in effect not less than 5 years. 25 VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 4961 IS ‘‘(E) The Board’s rulemaking under this paragraph 1 shall set a standard procedural schedule for such cases, 2 subject to necessary adjustments in particular adjudica- 3 tions, which may not exceed 1 year.’’. 4 (b) STAND-ALONE COST CASES.—Section 10702 of 5 such title is amended— 6 (1) by inserting ‘‘(a)’’ before ‘‘A rail carrier’’; 7 and 8 (2) by adding at the end the following: 9 ‘‘(b)(1) The Board shall prohibit a rail carrier pro- 10 viding transportation subject to the jurisdiction of the 11 Board under this part from increasing the challenged rate 12 for providing such transportation to rail customers while 13 a maximum reasonable rate case brought by such rail cus- 14 tomers is pending before the Board. 15 ‘‘(2) A rail customer may file a maximum reasonable 16 rate case with the Board after the date that is 2 years 17 before the date on which a common carrier shipment rate 18 is anticipated to begin. 19 ‘‘(3) The Board may not use cross-subsidy tests in 20 deciding stand-alone cost cases. 21 ‘‘(4) The Board shall use a market-based revenue di- 22 visions methodology in deciding stand-alone cost cases. 23 ‘‘(5) In a stand-alone cost case, if the Board deter- 24 mines that the rail carrier is revenue adequate, the rail 25 VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 4961 IS carrier shall have the burden of proof to demonstrate that 1 the railroad carrier is charging a reasonable rate.’’. 2 (c) CONFORMING AMENDMENT.—Section 10704 of 3 such title is amended— 4 (1) by striking subsection (c); and 5 (2) by redesignating subsection (d) as sub- 6 section (c). 7 (d) MARKET DOMINANCE.—Section 10707(d)(1)(B) 8 of such title is amended by adding at the end the following 9 ‘‘A shipper may introduce movement-specific Uniform Rail 10 Costing System cost calculations.’’. 11 SEC. 5. PROTECTIONS FROM UNREASONABLE PRACTICES. 12 Section 10701 of title 49, United States Code, as 13 amended by section 4(a), is further amended by adding 14 at the end the following: 15 ‘‘(e)(1) A rail carrier providing transportation subject 16 to the jurisdiction of the Board under this part may not 17 use an index when establishing fuel surcharges. 18 ‘‘(2) Any fuel surcharges imposed by the rail carrier 19 shall be directly accounted for by changes to the carrier’s 20 actual fuel prices. The carrier’s fuel surcharge may not 21 be greater than the amount necessary to recover the car- 22 rier’s incremental fuel cost increases. 23 VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 4961 IS ‘‘(3) The Board is authorized to require any rail car- 1 rier to report actual fuel prices as necessary to carry out 2 the purposes of this subsection. 3 ‘‘(4) A shipper may challenge a fuel surcharge as an 4 unreasonable practice under section 10702(2) if such 5 charges, as applied to that shipper, exceed the carrier’s 6 incremental fuel costs.’’. 7 SEC. 6. REPLACEMENT OF REVENUE ADEQUACY TEST. 8 Section 10704(a)(3) of title 49, United States Code, 9 is amended to read as follows: 10 ‘‘(3) In calculating a rail carrier’s cost of capital, the 11 Board shall multiply the value of the capital by the sum 12 of— 13 ‘‘(A) the current annual yield on a 10-year 14 United States Treasury Bond; and 15 ‘‘(B) a prospective market risk premium, which 16 shall not exceed 5 percent per year.’’. 17 SEC. 7. GAO STUDY ON CHANGES IN FREIGHT RAILROAD 18 OPERATING AND SCHEDULING PRACTICES. 19 (a) STUDY.—The Comptroller General of the United 20 States shall conduct a study of the impact on freight rail 21 shippers, Amtrak, commuter railroads, railroad employees, 22 and other affected parties of changes in freight railroad 23 operating and scheduling practices as a result of the im- 24 plementation of the precision scheduled railroading model. 25 VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 4961 IS (b) CONTENTS.—The study conducted pursuant to 1 subsection (a) shall examine— 2 (1) the impacts of the precision scheduled rail- 3 roading model on the operation of longer trains; 4 (2) the safety impacts of the reduction in work- 5 force, including occupational injury rates, impacts to 6 inspection frequencies and repair quality, and 7 changes in workforce demands; 8 (3) the elimination or downsizing of yards, re- 9 pair facilities, and other operational facilities; 10 (4) increases in demurrage or accessorial 11 charges or other costs to shippers; 12 (5) capital expenditures for rail infrastructure; 13 and 14 (6) the effect of changes to dispatching prac- 15 tices and locations of dispatching centers on— 16 (A) the on-time performance of passenger 17 trains; and 18 (B) the quality and reliability of service to 19 freight shippers. 20 (c) REPORT.—Not later than 1 year after the date 21 of the enactment of this Act, the Comptroller General of 22 the United States shall submit a report to the Committee 23 on Commerce, Science, and Transportation of the Senate 24 and the Committee on Transportation and Infrastructure 25 VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 4961 IS of the House of Representatives summarizing the results 1 of the study conducted pursuant subsection (a), including 2 recommendations for addressing any negative impacts of 3 precision scheduled railroading on freight shippers or pas- 4 senger railroads. 5 Æ VerDate Sep 11 2014 04:12 Dec 11, 2020 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6301 E:\BILLS\S4961.IS S4961 pbinns on DSKJLVW7X2PROD with BILLS