5.4. ERMUSR 03-20-2007 - Laserfiche WebLink

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and concerns over the ability of the national rail svstem to provide sufficient, reliable service in the future. ~Nhile the railroads will argue that any rail customer legislation is an attempt at re-regulation, the goal of rail customers is not re-regulation, but rather a national rail policy that will ensure reliable rail transportation and reasonable rates for all rail customers - particularly for those rail customers without access to competitive transportation alternatives. Because of the entrenched policies at the STB and the long record of inaction, legislation is needed to institute stronger protective mechanisms at the S`I'B and allow for competitively priced rates for rail customers. Legislation to address the concerns of rail customers was introduced in 2005 in both the House and Senate and is expected to be reintroduced in the first several weeks of the 110th Congress, with some changes. The upcoming legislation is expected to require railroads to quote rates to their customers, upon request, between any two points on their system where traffic can originate, terminate or be interchanged, and to remove "paper" barriers that prevent short line railroads from connecting to more than one major railroad (e.g., ensuring that contracts between the major railroads and short-line carriers allow short-line carriers to engage in competition w2thout being penalized). The legislation is also expected to contain a clear statement of the railroads' "obligation to serve" given that their function is essential to many sectors of the economy, and give the STB the power to enforce that obligation to serve while also empowering and directing the STB to r<1ke action to investigate railroad practices that the STB believes to be abusive of railroad market power. Additionally, the bills will seek to develop a workable rate challenge process at the STB. In addition, last Congress, legislation was introduced in both the House and Senate to eliminate the exemptions from antitrust law that the railroads currently enjoy -including those under mergers and acquisitions, collective ratemaking and private antitrust lawsuits. These bills are expected to be reintroduced for the 110th Congress in the coming weeks. 1 1 Irr the spring of 2006, the railroads began to express interest in receiving a federal Investment M Tax Credit (ITC) of 25 percent to apply to new investment in rail infrastructure. Given that www.APPAnet.org the railroads have reported record profits in recent months with continued service reliability problems, an additional federal subsidy for infrastructure improvement should not come without guarantees that dollars will be spent to enhance reliability, especially in captive shipper corridors. APPA and captive shipper groups like Consumers United for Rail Equity (CURE), of which APPA is a member, have indicated that we would be willing to support an ITC for the railroads only if STB reforms providing relief for rail customers are enacted at the same time. In the 110th Congress, some Members in the House and Senate have indicated their intention to support railroad ITC legislation. APPA will continue to work with CURE to ensure that these efforts do not advance without STB reform measures. APPA supports legislation that encourages structural and policy changes to promote competitive transportation alternatives for rail customers and improvements in the rail customer protection mechanisms that are implemented by the STB. APPA opposes enactment of a federal ITC for the railroads without these STB reforms. APPA also supports legislation removing the antitrust exemptions for the railroads. 1