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.
“INTRODUCTION OF THE RAIL MERGER REFORM AND CUSTOMER PROTECTION ACT” mentioning the U.S. Dept of Agriculture was published in the Extensions of Remarks section on pages E350 on March 13, 2001.
The publication is reproduced in full below:
INTRODUCTION OF THE RAIL MERGER REFORM AND CUSTOMER PROTECTION ACT
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HON. EARL POMEROY
of north dakota
in the house of representatives
Tuesday, March 13, 2001
Mr. POMEROY. Mr. Speaker, I am pleased today to introduce the Rail Merger Reform and Customer Protection Act. This legislation would extend the reach of the antitrust laws to the railroad industry while providing the Surface Transportation Board (STB) with additional criteria on which to evaluate future railroad mergers.
For virtually every business in the United States, mergers and acquisitions in excess of $10 million are subject to antitrust review by the Antitrust Division of the Department of Justice. Railroads, however, are treated differently. Under current law, the STB has exclusive jurisdiction over most matters concerning rail transportation including mergers and acquisitions. In exercising that authority, the STB has approved a series of mergers over the past 20 years since passage of the Staggers Act which has resulted in widespread consolidation in the rail industry. This consolidation has reduced the number of rail carriers from 63 Class I railroads to just 7, resulting in significant service disruptions, negative impacts on shippers and a reduction in competition.
Mr. Speaker, believe it or not, the railroad industry is the only industry, except for America's favorite pastime, baseball, that is almost entirely exempt from the substance of the antitrust laws. With the rail industry now consolidated to seven major railroads, and the stage set for a possible final consolidation, there is an increased potential for the rail industry to exercise market power and monopoly abuse against shippers. In order to protect shippers and promote true competition, it makes sense to treat the railroads like other industries and subject them to the jurisdiction of the Department of Justice and full application of antitrust laws.
Currently, the Department of Justice can only comment on proposed mergers. In previous mergers the recommendations of DOJ were ignored. For example, the Department of Justice pegged the Union Pacific-
Southern Pacific merger ``most anti-competitive rail merger in history.'' In that merger, the STB ignored not only the concerns expressed by Department of Justice, but also the concerns of rail customers, organized labor, and the United States Department of Agriculture. I believe that the Department of Justice, an agency that can objectively evaluate the impact of mergers and protect shippers from the continual decrease in competition, needs to have a strong voice in mergers reviewed by the Surface Transportation Board.
My legislation would require both the Department of Justice and the STB to review and approve future rail mergers. Under this proposed regulatory framework, the DOJ would approve a merger unless it substantially restrains commerce in any section of the country or tends to create a monopoly in any line of commerce. The STB would still be required to review and approve a merger under a similar standard but it would also judge the proposed merger by a broader public interest standard. However, my legislation would not allow a merger to move forward without approval from both Department of Justice and Surface Transportation Board.
In this day and age, there is no public policy reason to justify the industry's special treatment, particularly since the railroads have enjoyed considerable deregulation under the Staggers Act and the Interstate Commerce Commission (ICC) Termination Act. The passage of these laws which reduced the scope and effectiveness of the regulatory agency, makes it more necessary than ever for shippers to have the full panoply of remedies available against monopolistic activities.
Under my legislation, the STB would also be required to examine several additional criteria before approving a merger. Future mergers and consolidations would not be approved unless it was shown that the merger: (1) provides additional rail to rail competition and competitive options for rail customers; (2) improves service to customers; and (3) will not reduce competitive rail routes available to current railroad customers. Additionally, the legislation ensures that relief can be sought under the current regulatory framework or through the antitrust laws.
I am pleased that the Alliance for Rail Competition, the Consumers United for Rail Equity, National Farmers Union, American Farm Bureau Federation, National Association of Wheat Growers, the American Forest and Paper Association, the Transportation Intermediaries Association, Otter Trail Power, Minnesota Power, the National Association of Chemical Distributors, and the American Chemistry Council have endorsed this legislation.
I urge my colleagues to join me in this effort to ensure that the railroad industry is subject to the same laws as every other industry. It is in the public interest to raise the bar for review of the last few remaining mergers and to have oversight by the Department of Justice on the actions of the railroads.
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