The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“THE RAILROAD COMPETITION ACT OF 2003” mentioning the U.S. Dept of Agriculture was published in the Extensions of Remarks section on pages E1638-E1639 on July 25, 2003.
The publication is reproduced in full below:
THE RAILROAD COMPETITION ACT OF 2003
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HON. RICHARD H. BAKER
of louisiana
in the house of representatives
Friday, July 25, 2003
Mr. BAKER. Mr. Speaker, today I am joined by Representatives Chris John, David Vitter, and Earl Pomeroy to introduce the Railroad Competition Act of 2003, a bill designed to restore a measure of competition to our nation's freight rail marketplace. This bill, I believe, captures the true intentions of railroad deregulation.
Like all Americans, Mr. Speaker, I want our national railroad industry to remain the most efficient in the world. Indeed, our railroad system is a model for other national systems. My home state of Louisiana in particular relies heavily on efficient railroads to deliver product to market and provide the feedstock for our manufacturing base. Without reliable rail service, Louisiana--and all of America--would be economically hamstrung.
Congress deregulated the railroad industry in 1980 when it passed the Staggers Act. This law revitalized the industry, built efficiencies in the system, and bolstered the railroads as a critical component to America's transportation infrastructure. As Chairman of the Louisiana House Committee on Transportation and Highways, I observed closely the implementation and success of the Act.
However, one lingering element of the Staggers Act provides for
``differential pricing,'' which in effect allows railroads to ``price gouge'' customers served by a single railroad in order to help make up for revenue that is lost to customers served by more than one railroad. In other words railroads can overcharge a customer where the railroad is a monopoly to help recover the revenue it loses in a competitive, multiple-railroad environment.
Prior to the Staggers Act, the federal government administered the finances of railroads by imposing price controls. But by allowing railroads to institutionalize price gouging, are we not continuing the practice of price controls? Indeed, is differential pricing the thriving legacy of regulatory control? I believe it is. I assert that differential pricing is no more ``deregulation'' than the artificially imposed government price controls that existed before 1980.
I do not believe Congress intended to institutionalize price gouging when it passed the Staggers Act in 1980. Rather, the Staggers Act was an attempt to revive an important industry in America's economy. It was not enacted to allow the industry to thrive at its customers' expense. When the 108th Congress reflects back on the success of the Staggers Act, we can indeed take pride in ``getting it right.'' Congress achieved its goal of resuscitating the ailing railroad industry, but Congress did not intend to sustain the life of this industry at the growing, unfair expense of other industries.
When Congress passed the Staggers Act in 1980 there were over 40 Class I railroads competing for business. Today, after over 50 mergers and consolidations there are only 7 Class I railroads in North America and four of them control over 95 percent of the railroad business.
This unprecedented consolidation has led to whole states, regions and entire industries becoming captive to a single railroad. This level of concentration and the lack of competition it has brought were never envisioned by Congress in the 1980 Act.
Over this same period the agency that administers rail law, the Surface Transportation Board, has produced rulings, which have skewed the freight rail market place to the point that it is now a Federally protected monopoly. Railroads are operating within the law, but that law is outdated given the current number of railroads and market conditions of the new century.
Mr. Speaker, as you may know, Louisiana industry is in dire straits. Every month companies announce closures, lay offs, and moves--depriving our economically struggling state of hundreds of important jobs. When these jobs are lost, so are the workers' pensions, salaries, and health benefits. When hundreds of jobs are lost, it affects other small businesses that rely on workers to keep them viable.
Though Louisiana industry faces many financial challenges, premier among them is the cost to do business--and aside from energy supply, the most expensive cost of business is the artificially inflated rates imposed on Louisiana companies that, through no fault of their own, exist under a railroad monopoly.
Mr. Speaker, this situation is not exclusive to Louisiana. It exists in West Virginia, North Dakota, Idaho, Georgia, Florida, Montana, Minnesota--in fact, Mr. Speaker, there is not a state in the union free from this blemish on the free enterprise system.
The bill we are introducing today will truly match the deregulation goals of the Staggers Act with the tried and true American tradition of a competitive free market.
Our bill takes deregulation to a higher level by fortifying healthy market competition. The bill would remove artificial protections maintained by an outdated policy which allows freight railroads to operate in an atmosphere which no other business in the country enjoys--including exemption from anti-trust law.
Mr. Speaker, I urge all pro-market, pro-consumer, pro-deregulation, pro-fairness, projobs, pro-economy, pro-transportation, and pro-
railroad Members to join me in completing the deregulation goals of the Staggers Act of 1980 by cosponsoring the Railroad Competition Act of 2003.
The Railroad Competition Act of 2003
Clarification of National Rail Policy: Clarifies that the STB has the following primary objectives: (1) ensuring effective competition among rail carriers at origins and destinations; (2) maintaining reasonable rates in the absence of effective competition; (3) maintaining consistent and efficient rail transportation service for rail shippers, including the timely provision of rail cars; and (4) ensuring that small carload and intermodal shippers are not precluded from accessing the rail system.
Requirement that Railroads Must Quote Rates to Their Customers: In order to increase rail customer access to competition, railroads must quote rates between any two points on their systems where freight movements can originate, terminate or be transferred, when requested by the customer.
Arbitration of Certain Rail Rate, Service and Other Disputes: Provides final offer arbitration (baseball arbitration), at the choice of the non-rail parry to a dispute, for all rail rate matters and other disputes at the STB involving a railroad charge.
Removal of ``Paper Barriers'': Prohibits including paper barriers in future sales or leases of rail line to short line or regional railroads and allows the STB to invalidate such provisions that have been in existence for 10 years.
Removal of ``Anti-Competitive Conduct'' Test from Terminal Area and Switching Agreements Policy of ICC/STB: Changes the
``antitrust'' test added in mid-1980s by the former Interstate Commerce Commission to the statutory ``public interest'' test included in the terminal area and switching agreement provisions of the ICC Termination Act.
Tri-Annual DOT Study of Extent of Rail-to-Rail Competition.
Areas of Inadequate Rail Competition: On petition of a state, the STB may declare all or part of a state to be an area of inadequate rail competition. Special rail customer remedies apply in such areas.
Rail Customer Advocacy Office Established at Department of Agriculture.
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