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PRINTER'S NO. 2747
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE RESOLUTION
No.
649
Session of
2015
INTRODUCED BY PYLE, TAYLOR, W. KELLER, MATZIE, DRISCOLL,
QUIGLEY, PICKETT, JAMES, IRVIN, KOTIK, PASHINSKI, DAVIS,
ELLIS, WHEELAND, McNEILL, OBERLANDER, SCHLEGEL CULVER,
D. COSTA, MARSHALL, LONGIETTI, READSHAW, WATSON AND JOZWIAK,
JANUARY 22, 2016
REFERRED TO COMMITTEE ON TRANSPORTATION, JANUARY 22, 2016
A RESOLUTION
Memorializing the United States Surface Transportation Board,
the United States Department of Justice, the United States
Department of Transportation and the Congress of the United
States to examine plans submitted to the Surface
Transportation Board by Canadian Pacific Railway to acquire
Norfolk Southern Corporation and to further consider any
potential negative impact of the proposal with respect to
building a more efficient freight network in the Commonwealth
of Pennsylvania.
WHEREAS, Norfolk Southern Corporation employs more than 5,200
Pennsylvania residents, operates over 2,300 route miles of track
and 22 rail yards and intermodal terminals throughout the
Commonwealth of Pennsylvania, has operating division
headquarters in Pittsburgh and Harrisburg, maintains its primary
locomotive repair shop in Altoona and connects with 48 Class 2
and Class 3 railroads throughout this Commonwealth; and
WHEREAS, In 2014 Norfolk Southern Corporation invested $151
million in its tracks and facilities in Pennsylvania, purchased
more than $1 billion in goods and services from Pennsylvania
vendors, was responsible for $34.4 million in State and local
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taxes and originated or terminated more than 1.7 million freight
shipments; and
WHEREAS, The Commonwealth of Pennsylvania has more freight
railroads than any other state in the nation and has worked
successfully with Norfolk Southern Corporation on a series of
significant public-private partnerships to further strengthen
this Commonwealth's freight rail network; and
WHEREAS, Canadian Pacific Railway submitted an unsolicited
proposal to acquire Norfolk Southern Corporation on November 9,
2015, and has subsequently made public statements that through
the acquisition a projected $1.8 billion in "synergies" would be
achieved through both locomotive and rolling stock fleet
reductions, rationalization of rail yards and other facilities
and a lower tax rate, all of which could result in significant
employment reductions, decreased investment in transportation
infrastructure and poor freight rail service to shippers doing
business in Pennsylvania; and
WHEREAS, During the United States Surface Transportation
Board's review of the transaction, the chief operating officer
of Canadian Pacific Railway expressed his intent to immediately
assume control of Norfolk Southern Corporation by taking over as
the chief operating officer of Norfolk Southern Corporation
through a voting trust; and
WHEREAS, Congress has given the Surface Transportation Board
the power to promote the public interest of consumers and
shippers when considering proposed mergers, especially an
acquisition of this scale; and
WHEREAS, Any attempt to circumvent the role of the Surface
Transportation Board and threaten the franchise of a competing
railroad should be taken seriously; and
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WHEREAS, The Commonwealth of Pennsylvania and its residents
are not served by ill-conceived actions that would result in
poor freight rail service to shippers doing business in this
Commonwealth; and
WHEREAS, The men and women of Pennsylvania who serve in the
United States Armed Forces benefit from American-owned
infrastructure used to transport military equipment, and that
infrastructure should not be jeopardized by a sale to a foreign-
owned company; and
WHEREAS, A recent joint letter from the heads of the Alliance
of Automobile Manufacturers and the Association of Global
Automakers pointed out that "previous rail mergers of this
magnitude have been followed by prolonged periods of poor
service levels and higher rates. We urge [Canadian Pacific] to
abandon its merger ambitions and to focus its attentions upon
enhancing its current levels of customer service"; and
WHEREAS, The manufacturers' associations of Kentucky, Indiana
and West Virginia, the Michigan Agri-Business Association and
the Palmetto AgriBusiness Council wrote to the Surface
Transportation Board, stating their concerns about Canadian
Pacific Railway's promised stripped-down railroad; and
WHEREAS, The chief executive officer of the Kentucky
Association of Manufacturers said, "We are justifiably concerned
that Canadian Pacific's proposal to slash resources available to
the current Norfolk Southern threatens the economy of our
state"; and
WHEREAS, The chief executive officer of Xcoal Energy &
Resources wrote that he was "concerned that the short-term
nature of [Canadian Pacific's] operating plan would be
detrimental to the long-term requirements of the U.S. coal
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industry and energy sector"; and
WHEREAS, In another letter, the head of a holding company for
short line railroads said, "The proposed [Canadian Pacific-
Norfolk Southern] merger likely would result in a national
duopoly, which would dramatically reduce competitive rail
options for customers"; and
WHEREAS, Experts have stated that there are indications this
transaction may serve as a catalyst or domino effect for more
consolidation, eventually leading to just two transcontinental
carriers in the railroad industry and leaving shippers with
fewer choices, less competition and prolonged service
disruptions; therefore be it
RESOLVED, That the House of Representatives of the
Commonwealth of Pennsylvania memorialize the United States
Surface Transportation Board, the United States Department of
Justice, the United States Department of Transportation and the
Congress of the United States to examine plans submitted to the
Surface Transportation Board by Canadian Pacific Railway to
acquire Norfolk Southern Corporation and to further consider any
potential negative impact of the proposal with respect to
building a more efficient freight network in the Commonwealth of
Pennsylvania; and be it further
RESOLVED, That the House of Representatives of the
Commonwealth of Pennsylvania urge the Surface Transportation
Board to view approval of any voting trust as triggering a
domino effect and to stop the first domino from falling by
rejecting Canadian Pacific Railway's voting trust; and be it
further
RESOLVED, That any transaction proposed by Canadian Pacific
Railway be carefully reviewed to protect the citizens of the
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Commonwealth of Pennsylvania from shifts in the transportation
of hazardous materials, including crude oil; and be it further
RESOLVED, That the House of Representatives of the
Commonwealth of Pennsylvania urge the Congress of the United
States to review the rail industry's current antitrust
exemption, which prevents the United States Department of
Justice from stopping the merger even if a review produces
evidence of restricted competition; and be it further
RESOLVED, That the House of Representatives of the
Commonwealth of Pennsylvania urge Congress to exercise due
diligence on behalf of the citizens of Pennsylvania and of this
nation by exercising regulatory control and oversight in order
to maintain fair competition, adequate connections with short
line railroads and efficient, low-cost service for rail
shippers; and be it further
RESOLVED, That copies of this resolution be transmitted to
the members of the United States Surface Transportation Board,
the United States Secretary of Transportation, the United States
Attorney General, the presiding officers of each house of
Congress and to each member of Congress from Pennsylvania.
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