STB reauthorization and PTC extension bills take positive steps forward

It was a busy day for railroad-related legislation yesterday, with the United States Senate Commerce, Science, and Transportation Committee approving two bills with a railroad focus by a voice vote.

The respective bills are S. 808, the Surface Transportation Board Reauthorization Act of 2015 and S. 650, the Railroad Safety and Positive Train Control Extension Act.

Legislation regarding both bills has been introduced frequently in recent years.

In the case of the STB bill, S. 808, railroad service issues and rates remain front and center, as has been the case in previous incarnations. The bill is focused on addressing inefficiencies within the STB, which serves as the federal regulatory body responsible for economic oversight of the U.S. rail system, with regulatory jurisdiction over railroad rate reasonableness, mergers, line acquisitions, new rail-line construction, line abandonment, and other issues.

“The major rail service issues experienced in 2013 and 2014 in South Dakota, the Upper Midwest, and across the country are fresh in my mind, including the grain car backlogs, the storage constraints, and the increased rail car premiums shippers and businesses faced,” said Sen. John Thune (R-S.D.), committee chairman, in a statement. “While the Surface Transportation Board has been working diligently to ensure these issues do not happen again, the recent service crisis highlighted inefficiencies at the agency that Congress has the ability to address. This legislation will help the STB address such issues and operate with increased transparency, accessibility, and efficiency.”

Some of the highlights of S. 808 include:
-setting timelines for rate reviews and expanding voluntary arbitration procedures when railroads and rail shippers want a quick and efficient resolution;
-grant the STB authority to proactively resolve problems before they can escalate into expensive disputes;
-grant the STB new authority to avoid lengthy and expensive disputes and enhance transparency to benefit shippers and consumers in the U.S.; and
-expand board membership from three members to five, and, with proper disclosure, allow board members to talk with one another without a prior public hearing notice as long as it complies with certain scope and participation limitations

If signed into law, S. 808 would authorize the STB through Fiscal Year 2020.

While similar attempts to improve the STB have been proposed in recent years, this effort is different in that rail service, going back to the winter of 2013-2014, saw major delays in various parts of the country even while Class I railroad carriers continue to make record capital expenditure investments, with much of that capital allocated for infrastructure improvements.

The bill was soundly endorsed by Cal Dooley, president and CEO of the American Chemistry Council, whom noted it will make various changes that will streamline what he described as the STB’s “overly burdensome rate review standards, provide reasonable arbitration procedures to resolve rate disputes, and allow the STB to be more proactive in resolving freight rate issues.”

And the Association of American Railroads (AAR) was also positive in its thoughts regarding S. 808.

“The STB reauthorization measure as passed today takes into account the vital need for freight railroads to earn revenues that allow for billions of dollars in private spending each year to build, maintain and grow the nationwide rail network, so taxpayers don’t have to,” said AAR President and CEO Ed Hamberger.

The AAR’s top executive has said repeatedly that the record private investments that the rail industry makes every year in the nation’s rail network have well positioned today’s continued economic recovery, adding that the industry invests the revenue it earns, not government funding, to grow and modernize the rail network, meeting the needs of customers, large and small.

Class I railroad executives have said repeatedly over the years that the existing regulatory railroad environment has produced—for North American railroad shippers—a freight railroad system that is the envy of the world.  And while it not perfect, depriving the industry of its ability to earn its cost of capital could have a chilling effect on capital investments to support traffic growth and it could begin to reverse the great strides the rail freight sector has made after Staggers in the areas of rail safety and service reliability.

PTC extension: As recently reported by LM, early this month a bill, entitled “S.650 - A bill to extend the positive train control system implementation deadline, and for other purposes,” was introduced, and like S. 808, it was also approved by a voice vote.

S. 650 pledges to extend the PTC deadline to 2020. While the Federal Railroad Administration (FRA) has long stated its goal of having Positive Train Control (PTC) technology installed on 40 percent of its network by December 31, 2015, railroad industry stakeholders have repeatedly stated that reaching that deadline would be a stretch.

The objective of PTC systems is to prevent train-to-train collisions, overspeed derailments, and incursions into roadway work limits. PTC sends and receives a continuous stream of data transmitted by wireless signals about the location, speed, and direction of trains, according to the Federal Railroad Administration (FRA). PTC systems, added the FRA, utilize advanced technologies including digital radio links, global positioning systems and wayside computer control systems that aid dispatchers and train crews in safely managing train movements.

The AAR and its Class I railroad members have made it clear for some time that its chances of meeting the original deadline were less than likely, often citing how the process has lacked the certainty needed to get PTC tested, fully functioning and certified.
Senate members have previously issued similar legislation in the past, entitled the Positive Train Control Extension Bill, which also called to push back the statutory deadline for PTC implementation on roughly 50,000 miles of U.S. railroads to December 31, 2020 as well as offer up an optional two-year extension should approval from the Federal Railroad Administration be granted. Also covered in this bill, according to its language, was an extension for short line railroads that operate on PTC-mandated track.