Washington, D.C. – The House Transportation and Infrastructure Committee today considered legislation to alter the process by which the Surface Transportation Board (STB) reviews railroad mergers and acquisitions.
Although the “Taking Responsible Action for Community Safety Act” (H.R. 6707) was approved by voice vote, some Committee Republicans expressed concerns with the bill’s potential to decrease the efficiency of the nation’s rail system at a time of increasing congestion and economic difficulties.
The following are the statements of Transportation and Infrastructure Committee Republican Leader John L. Mica (R-FL) and Railroads, Pipelines and Hazardous Materials Subcommittee Ranking Member Bill Shuster (R-PA) from today’s markup.
Mica Statement
“Although I agree that there is room for improvement in the current STB review process, some of my Republican colleagues are concerned that this bill could have some adverse effects on mergers and acquisitions.
“I believe the process laid out in the bill could make it more difficult for railroads to obtain STB approval to merge with or acquire other railroads.
“I am concerned that the bill requires a more extensive environmental review process than is currently in place, and may provide additional opportunities for litigation.
“At this point, I will not oppose the bill, but I look forward to continue working with Members from both sides of the aisle and both sides of the issue to improve this legislation.”
Shuster Statement
“I have to reluctantly oppose H.R. 6707 because I am concerned that altering the Surface Transportation Board’s merger and acquisition review process could have the unintended consequence of hampering the growth of our nation’s railroad industry. Mergers and acquisitions are an important part of the railroad industry’s growth because they allow railroads to invest in underutilized trackage.
“I appreciate that the Chairman and his staff worked in a bipartisan manner to improve the bill with the manager’s amendment that will be offered today. I do believe that we have improved the bill with this amendment by making it clear that the effects on all communities, both positive and negative, will be accounted for when the STB makes merger and acquisition decisions.
“But, after listening closely to the witnesses at our recent hearing on this issue, I remain concerned that this bill could have a chilling effect on rail mergers. We are living in an increasingly difficult economic climate, and the last thing we want to do is discourage investment that would improve capacity and decrease congestion.
“By 2035 we expect that freight rail demand will increase nearly 90% over today’s levels, and the industry will need to invest $135 billion in its infrastructure just to keep pace with this unprecedented growth.
“Furthermore, I remain unconvinced this bill is even necessary. I understand that the bill attempts to increase the importance of environmental review. But I am concerned that we could be raising the bar on environmental review to an impossible level. I understand that CN will spend an astounding $25 million to review the environmental impacts of their acquisition of the EJ&E line. What more can we ask of an acquiring company?
“Also, the law is clear that the STB has the authority to use the results of this analysis to order CN to mitigate the impacts of an increase in traffic. And there is nothing in the bill that would prevent the EJ&E from increasing the number of trains on the line it already owns.
“I am sympathetic to the needs of the communities that would be affected by this deal—and I am not in a position to judge whether this transaction should go forward. That is not Congress’ job, it is the STB’s.
“Our role here is to make sure that the STB has the tools it needs to make the right decisions. I believe they already do.”
Note: today the Committee also unanimously approved 35 General Services Administration Capital Investment and Leasing Program Resolutions and 28 U.S. Army Corps of Engineers Survey Resolutions.
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