Senators Re-Launch Rail Regulation Effort

Senators Re-Launch Rail Regulation Effort

Key senators who tried to push rail regulatory legislation in the last Congress re-introduced those measures this week, with one trying to toughen broad oversight powers while the other would strip railroads of a limited antitrust exemption.

Bills that are not passed expire at the end of each Congress, requiring backers to re-introduce them in a new session. But since these did not gain enough traction last time around, many industry observers doubt they will do better in a Congress filled with more anti-regulation members.

Sen. Herb Kohl, D-Wis., joined by Sen. David Vitter, R-La., offered a bill to put railroads under the same antitrust laws as most other industries. Now, rail lines are shielded from court challenges on many kinds of economic disputes with shippers since the Surface Transportation Board has primary jurisdiction for such cases.

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The Regulators Ramp Up

Railroad officials have argued that proposals like Kohl's would create a costly, layered and complex regulatory structure, since they would face challenges in district courts and reviews from the Justice Department or Federal Trade Commission while still dealing with the STB on a range of issues. Activist shipper groups say current treatment shields carriers from normal competitive pressures.

Separately, Sens. Jay Rockefeller, D-W.Va., and Kay Bailey Hutchison, R-Texas - the chairman and ranking member of the Commerce, Science and Transportation Committee -- introduced their rail competition bill that would expand and strengthen the STB, and put tougher competition rules on railroads. Rail CEOs resisted the measure after it passed the committee in December 2009, and it never reached the Senate floor for a vote.

The bills come the same week that rail CEOs were to visit the White House to discuss regulatory pressures with the president's chief economic adviser, and as President Obama tries to enlist business support for his infrastructure investment plans.

The new legislation also appears ahead of a key Feb. 24 STB hearing, in which the agency could begin to alter past policies that exempt intermodal and some other major cargo categories from regulation on rates and service.

-- Contact John D. Boyd at jboyd@joc.com.