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Compromise Senate bill might reinvent STB, end rail monopoly

By TIM ALEXANDER
Illinois Correspondent

WASHINGTON, D.C. — Though Sen. Herb Kohl (D-Wis.) had hoped his legislation aimed at ending U.S. railroads’ exemptions from antitrust law would have come before the Senate in early June, the bill – and the ongoing freight rail antitrust saga affecting rural Americans – will keep on rolling.

Just days ahead of a planned June 2 Senate debate regarding Kohl’s Railroad Antitrust Enforcement Act of 2009 (S. 146), co-sponsor Sen. John Rockefeller (D-W.Va.) backed off his support of the bill and urged Congress to delay action on the measure. Rockefeller, chair of the Senate Commerce Committee (SCC), indicated Kohl’s legislation would conflict with his own bill aimed at reforming the Surface Transportation Board (STB), which controls rail competition.

The surprise move caused rancor between Rockefeller and Kohl, whose bill was approved by a 14-0 vote in the Judiciary Committee in March. Both parties eventually reconciled and announced that a new compromise bill including components of both bills will be introduced this fall, according to Bob Szabo, executive director and lead counsel for the Washington, D.C.-based Citizens United for Rail Equity (CURE).

“The solution will include fixing the STB, making a stronger STB going forward and S. 146,” said Szabo, whose group feels consolidations in the railroad industry since the passage of the Staggers Act in 1980 have resulted in monopoly power over rural areas. “It elevated the issue in the Senate, so in the end the result is good.”

Szabo said the “collision” between the two senators came about because Rockefeller was convinced the Senate would vote on only one rail policy bill this year.

“Senator Rockefeller has been trying to get (STB reform) issue addressed since he first came to the Senate in 1984. As (SCC) chairman he said one of his first priorities was to get this captive rail issue fixed,” said Szabo. “(Rockefeller) felt he needed to combine his bill with Senator Kohl’s to get it on the floor of the Senate.”

Kohl’s S. 146 faced a pending cloture petition before he and Rockefeller forged a compromise. In what Szabo described as an “unusual move,” the senators issued a “Dear Colleague” letter dated June 1, asking Sen. Harry Reid (D-Nev.), who serves as Senate majority leader, to withdraw the cloture petition on S. 146.
“We hope to shortly have a bipartisan package that reforms the (STB) and repeals the railroads’ antitrust exemption available for the consideration by the full Senate,” the letter read, in part. “We are working on harmonizing our two efforts to produce a robust reform package. This is a high priority for both of us and we are absolutely committed to finding real solutions that can be enacted into law this year.”

Szabo said both components of the bill are important to farmers and rural communities in that freight rail carries both a price and service issue. More competition and regulation designed to support shippers will be necessary to alter the railroads’ captive rail advantage, he added.

In response to the news of a compromise bill, 17 ag groups lent their support to the agreement between Kohl and Rockefeller to work together for comprehensive rail reform.

“We are pleased that efforts to achieve a comprehensive bill are moving forward and U.S. agriculture stands ready to work with senators Rockefeller, Kohl and others toward the goal of comprehensive legislation that is critical to the agriculture community,” read the letter.

The letter was undersigned by the American Soybean Assoc., National Corn Growers Assoc., National Assoc. of Wheat Growers, U.S. Rice Federation and others.

“We recognize and appreciate the multiple efforts ongoing to improve competitive conditions in the rail industry, including the efforts of Sen. Kohl and his colleagues to strengthen the application of antitrust laws to the railroad industry and the efforts of Sen. Rockefeller and his colleagues to craft comprehensive legislation that would provide meaningful reform to the STB and address concerns of rail shippers.”

Szabo said the collaborative bill should come to the Senate floor this fall.

6/17/2009