By TIM ALEXANDER
Illinois Correspondent

WASHINGTON, D.C. — Agriculture commodity organizations, rural power providers and rail shippers have a vested interest in the outcome of legislation that has passed all but full Senate approval, which would reorganize the Surface Transportation Board (STB) and grant the agency increased powers to curtail monopolies in rail shipping.

Proponents of the bill say freight rail reform is needed to end artificially high transportation costs, especially for rural customers.
It appears that there may be a resolution to the STB Reauthorization Act of 2009 in 2010, via the Senate Commerce, Science and Transportation Committee’s voice vote approval of the measure on Dec. 17. The committee’s approval sends the bill to the full Senate when the second session of the 111th Congress resumes in full later this month.

Agricultural and agribusiness organizations, including the National Grain and Feed Assoc. (NGFA) and at least 15 others, were encouraged by the committee’s approval of what the NGFA calls the most significant freight rail legislation since the Staggers Rail Act of 1980.

“Nearly 30 years have passed since passage of the Staggers Rail Act, and our nation needs new rail transportation policy to reflect the reality of the marketplace in 21st century” for both railroads and shippers, the NFGA and other ag commodity and businesses urged in a statement issued on the eve of the Senate subcommittee’s vote.

The subcommittee responded to the agricultural community’s voice, passing legislation that would bring “needed reform” to the STB and “improve competitive conditions and transparency in the rail industry,” according to the statement. It would also “provide improved mechanisms” and greater opportunity for agricultural shippers and receivers to challenge rail rates, service and practices,” the NFGA stated.

Some aspects of the bill will likely be altered before final consideration by the Senate, including potential language key to the bill that could change the railroads’ antitrust exemption. The House Transportation and Infrastructure Committee is also expected to introduce its own rail reform bill in 2010.

NFGA President Kendall W. Keith said while the Senate bill contains “meaningful corrections” to U.S. freight rail policy that could set the stage for more meaningful reform, the measure falls short of the agriculture community’s hopes. Further enhancements to the bill are expected once the bill is considered on the Senate floor and then passed to the House.

Key provisions of the 63-page Senate bill central to agricultural interests include revamping the STB to grant the board new powers to investigate rail practices, including monopolies, “predatory” pricing and freight cost disputes.

A national revision of rail transportation, including an improved arbitration system, a service expectation mandate from rail carriers, established rates for “bottleneck” shipments and making terminals available to competing carriers, is called for in the bill, among other conditions.

The final version of the Senate bill came after months of compromise and negotiation by key members, including Sen. Jay Rockefeller (D-W.Va.), chair of the committee, who earned praise from the National Assoc. of Wheat Growers (NAWG) for his efforts in helping advance freight rail reform.

“We’ve been working on rail competition legislation for many years, and this is an issue that is vital to our members,” said NAWG President Karl Scronce, in a prepared statement. “We appreciate all the work done by Chairman Rockefeller and his staff to date and look forward to helping to push this one to the finish line.

“As industries that are dependent on a well-functioning rail system that is both efficient and competitive, we fully support the introduction of the (STB) Reauthorization Act of 2009.”

The NAWG stated many wheat growers face significant issues with rail rates and service, compelling the organization to work with members of Congress to develop fair and reasonable rail rates and service.

A coalition of freight rail customers, Consumers United for Rail Equity (CURE), was also quick to laud the Senate Subcommittee’s approval of the STB Reauthorization Act. “This legislation promises the first reauthorization of the STB since its creation in 1995 and the hope for an improved railroad regulatory program for rail customers,” said Glenn English, CURE chair.

“The current freight rail system lacks competition and effective oversight, resulting in excessive shipping rates that hurt the U.S. economy and cost American jobs. There is still much work to be done to see the consumer-oriented reforms included in this bill, as well as others advocated by freight rail shippers, enacted into law and implemented. But this bill is an important step forward in the long effort to increase fairness and competition in the nation’s freight rail system.”

The Senate was to convene for a pro forma session Jan. 5, before reconvening on Jan. 19.