Railroad Competition Act of 2005

Railroad Competition Act of 2005 - Amends Federal transportation law to specify the primary objectives of U.S. rail transportation policy.

Requires a rail carrier, upon shipper request, to establish a rate for transportation and provide requested service between any two points on the carrier's system where traffic originates, terminates, or may reasonably be interchanged. Specifies matters the carrier must disregard when establishing such rate.

Prohibits the Surface Transportation Board (STB) from issuing a certificate authorizing construction and operation of railroad lines, or exempt from such certificate requirement any related activity, that involves a transfer of interest in a line of railroad, from a Class I rail carrier to a Class II or III rail carrier, if the activity directly or indirectly would result in a restriction of: (1) the ability of the Class II or Class III rail carrier to interchange traffic with other carriers; or (2) competition between or among rail carriers in the region affected by the activity in a manner or to an extent that would violate Federal antitrust laws.

Prescribes a procedure for shipper petition and STB review of any activity alleged to have resulted in a restriction of competition for at least ten years.

Changes from discretionary to mandatory the authority of the STB to require rail carriers to enter into reciprocal switching agreements. Prohibits the STB from requiring evidence of anticompetitive conduct by a rail carrier from which access is sought.

Requires the STB to designate any State or part of a State as an area of inadequate rail competition after making certain findings.

Requires the STB to post rail service complaints on its website.

Requires submission to arbitration of certain rail rate, service, and other disputes.

Requires the STB, with respect to the filing of a complaint, to adopt an alternative method of determining the reasonableness of rail rates using the railroad's actual costs.

Amends the Department of Agriculture Reorganization Act of 1994 to establish within the Department of Agriculture an Office of Rail Customer Advocacy with respect to rail transportation of agricultural and forestry commodities or products.

Amends the Railroad Revitalization and Regulatory Reform Act of 1976 to make mandatory the Secretary's authority to provide direct loans and loan guarantees to State and local governments, approved agreements or interstate compacts, sponsored authorities and corporations, railroads, and joint ventures that include at least one railroad for railroad rehabilitation and improvement projects.