Congressional Leaders Introduce Bill Directing STB to Consider Public Interest in Proposed Rail Transactions

WASHINGTON — The Surface Transportation Board (STB) would be required to take into account the safety and environmental effects on local communities when considering a merger or acquisition proposal by a railroad, under legislation introduced last night by Rep. James L. Oberstar, D-Minn., Chairman of the Committee on Transportation and Infrastructure.

The Taking Responsible Action for Community Safety Act clarifies that, prior to approval of a merger or acquisition proposal by a Class I railroad of a Class II or Class III railroad, the STB must consider factors such as public safety, emergency response time, and noise impacts.

The legislation comes in response to an application filed last year by the Canadian National Railway (CN) seeking the STB’s approval to acquire control of the 198-mile Elgin, Joliet, and Eastern (EJ&E) rail line encircling Chicago from Waukegan, Illinois to Gary, Indiana. CN plans to use the EJ&E rail line to establish a continuous route around Chicago, which would significantly increase traffic for more than 40 communities along the rail line.

The communities impacted by this proposed transaction have raised serious concerns about public safety in regard to grade crossings and hazardous materials transportation, as well as the potential for job losses and excessive noise.

“While the STB does have some authority to ensure that transactions are consistent with the public interest, that authority is not well spelled out in current law,” Oberstar said. “Our bill simply clarifies that the STB must consider, in a merger or consolidation proceeding, the potential adverse impacts on safety and the environment, including possible negative consequences on local communities. Specifically, the STB must evaluate potential adverse effects on public safety, grade crossing safety, hazardous materials transportation safety, emergency response time, noise, and economic impacts.

Under this legislation, the STB would also have the authority to consider the effects of the proposed transaction on intercity passenger rail and commuter rail.”

Under current law, the STB is required to approve all mergers and consolidations that are not between two Class I railroads, unless the Board finds that the merger is likely to cause a substantial lessening of competition, create a monopoly, or restrain trade in freight surface transportation in any region of the United States; or that the anticompetitive effects of the transaction outweigh the public interest in meeting significant transportation needs.

“Our bill clarifies that the STB cannot approve or authorize a merger or consolidation if it finds that the transaction is inconsistent with the public interest, or if the transaction’s impacts on safety and on the affected communities outweigh the transportation benefits. It also authorizes the STB to impose conditions to mitigate the effects of the transaction on local communities when those conditions are in the public interest,” said Oberstar. “It is just plain common sense that the STB should thoroughly consider the public interest when evaluating a proposed transaction. I urge my colleagues to join with me in supporting this reasonable, rational legislation that will help local communities that may be facing a serious threat to their quality of life.”