April 3, 2007

One Page Broadcast Fax

TO:  North Dakota Elevator Managers and all Allied Members

 ACTION ITEM - Restore Rail Rate and Service Complaint Fund

SB 2008 is the PSC budget.  As passed by the Senate it included $900,000 for an agriculture rail rate and service fund.  The House has now cut that in half.  By convention resolutions and past history, Grain Dealers supports the $900,000, but we’ll have to fight for it. 

The $900,000 is a continuation of the $800,000 authorized in the 2005 session to be available from the beginning farmer loan program to prosecute a rail rate complaint.  During 2005 PSC, Wheat Commission, Grain Growers, Farm Bureau, Farmers Union and Grain Dealers prepared for a complaint.  In January 2006 BNSF reduced some wheat rates eastbound.  ND parties believe the threat of a rate case prompted that.   CP followed the reductions.  Westbound bids responded.  It is estimated this meant at least $10 million to ND.   That was obtained without spending any of the state money made available.  Some minor legal and consultant costs were covered by the North Dakota parties.

HERE’S THE PROBLEM:  The House has now 1)cut in half the authorization from $900,000 to $450,000, 2)changed it from an "agriculture rail rate and service fund" to a "rail rate complaint case", thus eliminating a service complaint and presumably allowing the money to be used for a coal rate case or one on widgets, 3)set up the Budget Section interim committee as the final authority on expenditures over $20,000.  There are 45 legislators on that committee.  Imagine 45 politicians running a rail complaint case.

It has been a multi-year effort – back into the late 1990s - to get this state authorization.   It doesn’t make sense to abandon this potential weapon.  That tells the railroads this state no longer has the gumption to formally challenge them, on rates and other matters as well.  During the 2005 legislative session the railroads testified against money being set aside for a rate complaint.  It isn’t rocket science to figure out that railroads don’t want a fund available to challenge them on rates and service.  We need to keep our powder dry with this fund being available.  In this case half a loaf is no better than none because the PSC isn’t about to start a complaint without sufficient money to finish the job.  We need the full $900,000 requested by PSC and included in the Governor’s budget.

Fortunately the Senate has thus far refused to go along with the House amendments.  Senate members to a conference committee are Chistmann of Hazen, Kilzer of Bismarck and Krauter of Elgin.  Contact with these three to hold to the $900,000 Senate version is of immediate concern.  The House conferees are not yet appointed.  ALL legislators, Senate and House, should be contacted to support the Senate version.  Get your Boards of Directors and farmer-customers involved.