[Senate Report 104-176]
[From the U.S. Government Publishing Office]
104th Congress 1st SENATE Report
Session
104-176
_______________________________________________________________________
INTERSTATE COMMERCE COMMISSION SUNSET ACT OF 1995
----------
R E P O R T
OF THE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
together with
ADDITIONAL VIEWS
on
S. 1396
November 21, 1995.--Ordered to be printed
Filed, under authority of the order of the Senate of November 20, 1995
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred fourth congress
first session
LARRY PRESSLER, South Dakota,
Chairman
ERNEST F. HOLLINGS, South Carolina TED STEVENS, Alaska
DANIEL K. INOUYE, Hawaii JOHN MCCAIN, Arizona
WENDELL H. FORD, Kentucky CONRAD BURNS, Montana
J. JAMES EXON, Nebraska SLADE GORTON, Washington
JOHN D. ROCKEFELLER IV, West VirginiaTRENT LOTT, Mississippi
JOHN F. KERRY, Massachusetts KAY BAILEY HUTCHISON, Texas
JOHN B. BREAUX, Louisiana OLYMPIA SNOWE, Maine
RICHARD H. BRYAN, Nevada JOHN ASHCROFT, Missouri
BYRON L. DORGAN, North Dakota BILL FRIST, Tennessee
Patric G. Link, Chief of Staff
Kevin G. Curtin, Democratic Chief
Counsel and Staff Director
(ii)
Calendar No. 247
104th Congress Report
SENATE
1st Session 104-176
_______________________________________________________________________
INTERSTATE COMMERCE COMMISSION SUNSET ACT OF 1995
_______
November 21, 1995.--Ordered to be printed
Filed, under authority of the order of the Senate of November 20, 1995
_______________________________________________________________________
Mr. Pressler, from the Committee on Commerce, Science, and
Transportation, submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany S. 1396]
The Committee on Commerce, Science, and Transportation to
which was referred the bill (S. 1396) to amend title 49, United
States Code, to provide for the regulation of surface
transportation, reports favorably thereon with an amendment in
the nature of a substitute and recommends that the bill
joint resolution deg. do pass.
Purpose of the Bill
This legislation is in response to the Fiscal Year (FY)
1996 Budget Resolution which assumes the elimination of the
Interstate Commerce Commission (ICC) and the FY 1996 DOT
Appropriations bill, H.R. 2002, which provides no funding for
the ICC effective December 31, 1995. Prior to the Committee's
approval of S. 1396 on November 9, 1995, H.R. 2002 had not been
signed into law. H.R. 2002 has since been signed by the
President (P.L. 104-50).
S. 1396, as reported, would sunset two federal agencies,
the ICC and the Federal Maritime Commission (FMC). The ICC
would terminate effective January 1, 1996, and the FMC would
terminate one year later, January 1, 1997. The bill provides
that, upon enactment, obsolete or unnecessary ICC regulatory
functions would be repealed and residual functions would be
transferred partly to a newly established independent
Intermodal Surface Transportation Board (Board) within the U.S.
Department of Transportation (DOT) and partly to the Secretary
of Transportation (Secretary). When the FMC sunsets, its
remaining functions would be transferred to the new Board.
The bill also significantly reduces regulation of surface
transportation industries in this country. It sorts through the
panoply of laws currently administered by the ICC and repeals
or modernizes those that have become outdated. In the process,
the bill revamps subtitle IV of title 49 of the United States
Code, commonly known as the Interstate Commerce Act (ICA), by
dividing it into two parts:
Part A (comprised of revised chapters 101 through 119 of
title 49), which contains the provisions applicable to
transportation by rail or pipeline (other than oil, gas, or
water pipelines), and
Part B (new chapters 113 through 149 of title 49), which
contains the provisions applicable to the trucking, intercity
bus, domestic water carriage, and transportation intermediary
(broker and freight forwarder) industries.
Part A would be administered by the Board. Part B would be
administered by the Secretary except for those provisions that
are more adjudicatory in nature, which would be administered by
the Board.
As reported, the bill would authorize appropriations of
$8.4 million for the Board for FY 1996, and $12 million in each
of FYs 1997 and 1998. The Committee notes the appropriation
levels for FY 1997 and 1998 were set prior to accepting an
amendment to sunset the FMC. Therefore, amended authorization
levels will be needed to ensure the transferred FMC functions
can be carried out effectively.
Background and Needs
Established by the Act to Regulate Commerce in 1887, the
ICC is the oldest independent regulatory agency. It originally
was created to protect shippers from the monopoly power of the
railroad industry. Between 1840 and 1880, the U.S. railroad
network grew from 2,800 to 93,000 miles. This boom brought
indiscriminate construction, market manipulation, rate abuses,
and discriminatory practices against certain types of freight
customers and passengers. In some areas, rail monopolies were
able to direct the fate of communities, shippers, and entire
industries.
Farmers and consumers demanded rate controls, and merchants
and shippers demanded equal treatment with their competitors.
Congress responded by enacting a ten-page bill. It stipulated
that all rates be ``reasonable and just'' and prohibited
certain railroad practices, such as rate discrimination, price
fixing, and rebating. A five-member Commission was set up to
administer the Act.
Various subsequent Acts through 1920 broadened and
strengthened the ICC's regulatory authority over railroads. The
ICC's regulatory authority also expanded to other modes,
including pipeline transportation by the Hepburn Act of 1906.
Responding to railroad complaints about unfair competition,
Congress brought the nascent truck and bus industries under the
ICC's regulatory authority by the Motor Carrier Act of 1935. In
1940, inland and coastal water carriers were brought under the
jurisdiction of the ICC, which then consisted of eleven
members. At one point, the ICC even regulated telegraph,
telephone, cable and radio communications, as well as standard
time.
By the 1960's, the ICC's regulatory structure was viewed as
unduly burdensome and restrictive and the federal government
moved to create new agencies to deal with emerging
transportation problems. In 1967, the DOT was created and
virtually all of the ICC's safety oversight functions were
transferred to the new agency. However, economic regulation
remained at the ICC. By 1970, in spite of the ICC's continued
broad regulatory powers, six major northeastern railroads and
one midwestern line were bankrupt. Bankruptcies continued
throughout the rail industry, including the collapse of more
Northeastern railroads which ultimately resulted in the
creation of Conrail. In 1977, citing the ineffectiveness of the
ICC, President Carter created a task force that was charged
with streamlining the ICC and reducing regulation.
Since the mid-1970's, the following laws have been enacted
which have contributed to the substantial deregulation of
transportation industries:
Railroad Industry
The first major rail regulation reform legislation, The
Railroad Revitalization and Regulatory Reform (4-R) Act of
1976, provided (as a national policy goal) for the earnings of
``adequate revenues'' by rail carriers as functioning private
sector companies. This was to be accomplished by providing
increased flexibility for rail carriers to raise or lower rates
to conform to market forces.
The Staggers Rail Act of 1980 provided far-reaching
comprehensive reform, providing the rail industry with many of
the same market freedoms available to other competitive
industries. The Staggers Act provided for increased competition
by removing antitrust immunity over collective ratemaking,
reducing rail rate regulation, and easing the way for mergers.
The Staggers Act is considered the most successful rail
transportation legislation ever produced, resulting in the
restoration of financial health to the rail industry.
Motor Carrier Industry
The Motor Carrier Act of 1980 promoted greater rate setting
flexibility and began to ease entry restrictions in the
trucking industry. As a result, 25,000 new carriers started up
between 1982 and 1990.
The Household Goods Transportation Act of 1980 promoted
competition by increasing carrier freedom to set prices and
quality options. Consumers appear to have been well-served by
increased competition. Since 1980, complaints to the ICC
concerning household goods carriers have dropped each year.
The Bus Regulatory Reform Act of 1982 encouraged industry
entrance and growth, allowed easier abandonment of unprofitable
routes, and increased flexibility in rate setting. Deregulation
of the bus industry resulted in an increase in small companies
in operation. However, public preference for private automobile
travel, competitive lower cost fares made available by airline
deregulation, and Amtrak subsidization together have resulted
in discontinuation of regular-route bus service to many
communities.
The Surface Freight Forwarder Deregulation Act of 1986
further deregulated the non-household goods segment of the
motor carrier industry. The transportation intermediary sector
has flourished. By 1991, the ICC had licensed more than 7,000
brokers, up from the 50 authorized prior to enactment of the
new law.
The Negotiated Rates Act of 1993 provided a mechanism to
resolve the on-going undercharge crisis which arose when
bankruptcy trustees or receivers demanded payments from
shippers for the difference between a negotiated rate for
transportation services which were paid in full by a shipper
and the higher tariff rate on file at the ICC.
In further response to the undercharge problem, the
Trucking Industry Regulatory Reform Act (TIRRA) of 1994 reduced
tariff filing requirements in the motor carrier industry by
eliminating filed tariff requirements for independently set
rates. This reduced paperwork burdens and precluded future
undercharge claims for that category of traffic. Further, TIRRA
expanded the ICC's exemption authority to embrace many aspects
of the trucking industry.
In view of the deregulation legislation described above and
the resultant decline in ICC responsibilities, Congress cut the
number of ICC Commissioners from 11 to 5 in 1985. Since 1980,
the agency's appropriations have dropped from $80 million to
$30.3 million in the FY 1995 DOT Appropriations bill. During
that same period of time, the ICC's staffing has dropped from
nearly 2,000 employees to approximately 350. Today,
approximately 300 employees remain at the ICC.
Even with the considerable deregulation of the surface
transportation industries, the ICC continues to maintain a
formidable regulatory presence. The ICC determines policy
through its rulemaking and adjudicative proceedings to ensure
the effective administration of the Interstate Commerce Act
(ICA), related statutes, and regulations. The ICC maintains
jurisdiction over the rail industry, certain pipelines, barge
operators, bus lines, freight forwarders, household goods
movers and approximately 60,000 ``for-hire'' motor carriers.
Legislative History
S. 1396, the Interstate Commerce Commission Sunset Act of
1995, was introduced by Chairman Pressler and Senator Exon on
November 3, 1995. As stated earlier, this legislation is in
direct response to the FY 1996 Budget Resolution which assumes
the elimination of the ICC and the FY 1996 DOT Appropriations
bill, H.R. 2002, which provides no funding for the ICC
effective December 31, 1995. Specifically, the Conference
Report to H.R. 2002, P.L. 104-50, provides $13,379,000 for the
first quarter of FY 1996 for salaries and expenses as well as
severance and closing costs of the ICC and $8,421,000 is
appropriated to an unspecified successor agency.
During an open executive session on November 9, 1995, the
full Committee reported favorably an amendment in the nature of
a substitute to S. 1396. The bill, as reported, identifies
which of the ICC's functions should continue to be carried out,
and by which agency or agencies, within the constraints of the
funding approved. The Committee also approved two amendments to
the substitute amendment. One amendment, offered by Senator
Burns, would allow an individual with a background in
``agriculture'' to be appointed to the Board. The other
amendment, offered by Chairman Pressler, and Senators Hollings,
Lott, Breaux, and Exon, would sunset the FMC effective January
1, 1997, at which time two members with professional standing
and demonstrated knowledge in the fields of maritime
transportation or its regulation would be added to the Board.
Summary of Major Provisions
As reported, the bill continues the deregulation theme of
the past 15 years by providing further regulatory reductions in
the surface transportation industries. Overall, the bill is
designed to repeal unnecessary regulations and authorize the
transfer of residual functions to DOT. Many broader
transportation policy proposals viewed by the Committee to be
re-regulatory were not included in this bill. The Committee
intentionally limited the bill to matters related to sunsetting
the ICC and FMC and transferring essential functions to a
successor.
The bill as reported includes the following major
provisions:
1. Governmental Efficiency and Savings.--The bill would
reduce the Federal bureaucracy by eliminating two free-standing
government agencies--the ICC and FMC. Numerous unnecessary or
obsolete regulations would be repealed and residual functions
would be redistributed within the DOT. It creates an
independent ``Intermodal Surface Transportation Board'' (Board)
to administer regulations retained over rail carriers, certain
pipeline carriers, and the maritime, and domestic water carrier
industries. The Board also would maintain limited adjudicatory
responsibilities over the motor carrier, freight forwarder,
transportation broker, and intercity bus industries. All non-
adjudicatory functions of these latter industries would be
transferred to the Secretary.
The Committee notes the increasing emphasis on
intermodalism and providing seamless transportation via rail,
motor, and water modes in the transportation industry. The
Committee believes the remaining Federal government oversight
of these transportation modes should be housed within a single
agency with the expertise and perspective to view the
transportation industry as increasingly intermodal. The
Committee believes the consolidation of remaining ICC and FMC
functions in the Board accomplishes this goal.
By placing the Board within DOT, it would be relieved of
separate administrative costs currently borne by both the ICC
and the FMC. The Committee intends that, given the very limited
appropriations level for the Board and the numerous
responsibilities assigned to the Board, the costs of these
administrative functions would be absorbed by DOT. The Board
would be instructed to carry out within six months a study to
determine the authority necessary to assess fees to cover the
costs incurred to carry out the Board's functions.
The Committee understands that upon enactment of this bill,
the transferor agency, the ICC, shall determine which functions
to be transferred to the Secretary are new functions to DOT and
which functions are currently performed by DOT. The DOT would
then have to agree with the ICC as to which functions transfer
and which do not. Any disagreements would be resolved by the
Office of Management and Budget. Since the bill makes no change
to current civil service severance personnel laws, the transfer
of personnel will occur under existing rules. ICC personnel
that perform new functions transferred to DOT have transfer
rights. ICC personnel that perform functions which are not
transferred to DOT, such as motor carrier dispute resolution,
have no transfer rights.
The Committee intends that any personnel and functions
transferred to DOT outside the Board should be integrated and
performed within DOT's existing FY 1996 funding allocation. The
Committee expects that any ICC personnel transferred to DOT
could be funded from the transfer of existing fees derived from
transferred ICC functions. The FY 1996 DOT Appropriations Bill,
P.L. 104-50, permits the Secretary to utilize any fees
collected to fund ICC personnel transferred to DOT. This bill
provides the Secretary similar authority.
The ICC has informed the Committee that, upon preliminary
review of the motor carrier licensing, insurance, data
collection and NAFTA enforcement functions transferred to DOT
in this bill, it expects that approximately 60 ICC personnel
will be transferred to DOT (separate from the Board). These are
the employees that would perform functions new to DOT. The ICC
estimates that these personnel will result in a cost of $3.743
million for the remainder of FY 1996 (annualized cost of $5
million). The ICC estimates that continued fees in FY 1996 will
total $5.27 million.
2. Rail Transportation.--Beyond weeding out outdated and
unnecessary provisions, the bill generally does not attempt to
substantively redesign rail regulation. Rather, it would
preserve the careful balance put in place by the 4R Act and the
Staggers Act that led to a dramatic revitalization of the rail
industry while protecting significant shipper and national
interests.
Outdated Regulatory Provisions. The bill would eliminate
many outdated, unnecessary, and burdensome regulatory
requirements and restrictions on the rail industry. These
include, for example, the elimination of all regulation of rail
passenger transportation, all tariff filings, tariffs for non-
agricultural commodities, special provisions favoring
recyclable commodities, and restrictions against carriers
transporting their own commodities.
The bill would also eliminate Federal certification and
review procedures for State regulation of intrastate rail
transportation. However, nothing in this bill should be
construed to authorize States to regulate railroads in areas
where Federal regulation has been repealed by this bill.
Further, the Committee intends that those States regulating
intrastate rail transportation continue to be required to
regulate only in a manner consistent with the ICA. The railroad
system in the United States is a nationwide network. The
hundreds of rail carriers that comprise the railroad industry
rely on a nationally uniform system of economic regulation.
Subjecting rail carriers to regulatory requirements that vary
among the States would greatly undermine the industry's ability
to provide the ``seamless'' service that is essential to its
shippers and would waken the industry's efficiency and
competitive viability.
National Rail Network.--The bill would retain those
provisions needed to preserve an efficient national rail
network comprised of numerous individual carriers. These
include Federal regulatory oversight of line constructions,
line abandonments, line sales, leases, and trackage rights,
mergers and other consolidations (under a broad public interest
standard and with ongoing regulatory oversight), car supply and
interchange, antitrust immunity for certain collective
activities (including pooling of equipment and services),
competitive access, financial assistance, feeder line
development, emergency service orders, and recordation of
equipment liens.
Shipper Protections.--In reviewing the ICA, the Committee
is impressed with the positive effects rail deregulation has
had on the railroad industry since enactment of the Staggers
Act and has carefully avoided alteration of the fundamental
premises of the Staggers Act in this bill. At the same time,
however, the Committee is aware captive shippers--particularly
grain shippers whose traffic originates from country
elevators--continue to need protections under the ICA.
The bill as reported would retain provisions that are
necessary to protect rail shippers. These include the common
carrier obligation, regulatory oversight of the reasonableness
of rail practices, maximum rate regulation for captive traffic,
advance notice of rate increases, and rate tariffs for
agricultural commodities and fertilizer.
The Committee believes the common carrier obligation is
particularly critical, especially in light of the needs of
grain shippers and others who continue to experience
difficulties in obtaining rail cars and service. According to a
September 1995 report by the U.S. Department of Agriculture
entitled ``Assessing the Impact of Railcar Availability on
Grain Prices,'' rail car shortages lower farm prices and reduce
the competitiveness of U.S. grain exports.
Rate Reasonableness.--The bill includes several new
provisions regarding the handling of challenges to the
reasonableness of rates charged on captive traffic, to ensure
that such cases are resolved more expeditiously. The Committee
is concerned non-coal shippers, particularly grain shippers and
smaller volume bulk shippers, have been deterred from utilizing
the rate reasonableness provisions in the ICA in part because
of the complex nature of the full stand-alone cost presentation
adopted by the ICC and the resulting expenses associated with
pursuing that test.
The bill would require the Board to complete the pending
Non-Coal Rate Guidelines proceeding, ICC Docket Ex Parte No.
347 (Sub-No. 2), establishing a simplified method to be used
where a full stand-alone cost presentation is impractical,
within one year. Also, the bill instructs the Board to adopt
procedures that would avoid undue delay in both the discovery
and evidentiary phases of rate cases and to otherwise expedite
proceedings. The bill would require the Board to establish
procedures, within 6 months, for expeditiously processing all
rate cases. It would require the Board to decide individual
rate complaints within 6 months after the close of the
administrative record in cases in which a stand-alone cost
presentation is made, and within 3 months after the close of
the record in cases using a simplified evidentiary
presentation.
The Committee intends the simplified methodology directed
to the Board to complete would apply to cases in which the full
stand-alone cost presentation, which encompasses elaborate
evidentiary presentations, are impractical. The Committee seeks
to assure that the rate complaint process is accommodating of
small cases. However, the Committee does not intend to erode
the Constrained Market Pricing principles adopted by the ICC
for full stand-alone cost presentations.
Market Dominance.--Before the ICC can consider whether a
rail rate is unreasonably high, the rail carrier must be shown
to have market dominance over the transportation to which the
challenged rate applies. The statute defines ``market
dominance'' as ``an absence of effective competition from other
carriers or modes of transportation for the transportation to
which a rate applies.'' The ICC has adopted various rules
governing market dominance presentations, including rules which
permit the consideration of intermodal and intramodal
transportation and product and geographic competition.
The bill does not preclude the Board from considering
product and geographic competition and recognizes the
Commission's policies are based on principles that have been
upheld by the courts. However, the Committee expects the Board
to take into account all competitive transportation factors
that affect the rate at issue, by adding a clarifying provision
to reflect that the statutory standard could also be
implemented through the consideration of the availability of
other economic and practical transportation alternatives.
Exemption Authority.--The exemption provisions of the ICA
have directed the ICC to exempt persons, classes of persons,
transactions, and services from regulation when it determines
regulations are not necessary to protect shippers from abuse of
market power. The ICC has used exemption authority aggressively
over the past 15 years, deregulating the transportation of
various commodities and types of rail service when competitive
factors have been found to restrain the economic behavior of
rail carriers. These exemptions have proven highly beneficial
to shippers and railroads.
This bill continues the exemption provision that has
allowed the ICC to identify and respond to changing
circumstances and needs more quickly and precisely than the
legislative process permits, so as to limit the remaining
regulatory activities to those situations where they are
necessary to advance the national rail transportation policy.
The bill would also strengthen that exemption authority, and
enhance its effectiveness, by modifying it in several respects.
First, it would clarify that the Board may use the
exemption authority to change the way in which a provision
applies (and not simply whether it applies). Second, it would
place time limits on Board deliberations as to whether to grant
or revoke an exemption. Third, it would clarify the exemption
revocation process, by directing the Board to consider ``the
availability of other economic transportation alternatives, in
addition to any other factors it deems relevant,'' when
considering a request that regulation is needed and therefore
an exemption should be revoked. This is to help focus the
disposition of revocation requests on practical transportation
alternatives. Specifically, in considering a revocation
request, the Board should continue to require demonstrated
abuse of market power that can be remedied only by reimposition
of regulation or that regulation is needed to carry out the
national transportation policy. This would include examination
by the Board of all competitive transportation factors that
restrain rail carriers' actions and that affect the market for
transportation of the particular commodity or type of service.
In addition, the Board would consider any dilatory railroad
practices in determining whether damages should be awarded when
an exemption is revoked.
Labor protection.--The bill as reported continues statutory
labor protection arrangements for Class I railroad employees
adversely affected by mergers, abandonments, and other inter-
carrier transactions such as transfers of trackage rights or
rail lines. Under the current ICC administrative standards
(``New York Dock''), this means one year of labor protection
for each year of service, up to a maximum of six years. While
some Committee members support fundamental policy changes in
this area, it was agreed to postpone amendments in this area in
an effort to lessen controversy over the bill.
Currently under Section 10901 (line sales and small carrier
transactions), labor protection is optional on proposals to
construct and operate new railroad lines by non-carriers, and,
as interpreted by the ICC, protection has rarely been imposed.
To encourage transactions conducted under Section 10901--
transactions which result in the continuation of rail service
to communities that otherwise could lose service--the bill
establishes a special rule for transactions involving non-Class
I rail carriers.
This new rule allows any Class II or Class III freight rail
carrier or non-carrier that is not owned or controlled by a
Class I rail carrier (and is not a commuter, switching or
terminal railroad) to acquire, operate or provide
transportation over a railroad line pursuant to the provisions
of Section 10901. Section 11343 et seq. of the Act does not
apply to such transactions. The rule limits the salary
protection the Board could impose to a severance amount not to
exceed one year's salary to employees who are adversely
affected and who are not offered full time employment. If the
Board, as under the current standards, believes that
``exceptional circumstances'' exist, it then has a range from
notification to one year of salary protection--not six years--
to apply for the protection of displaced rail employees. The
bill also includes a standard that labor protections may only
be imposed when to do so is consistent with the public
interest. It should be clear, however, that the public interest
standard should not result in the imposition of labor
protection conditions in circumstances other than were found to
warrant such protection under the class exemption procedures
adopted and applied by the ICC after the enactment of the
Staggers Act.
In the Committee's view, railroad operations and the jobs
that go with them must be preserved on light density lines
wherever possible. The Committee expects the Board to continue
the existing exemption practice.
Rail-Shipper Transportation Advisory Council.--The
Committee recognizes that certain affected groups--most notably
smaller shippers and smaller railroads--believe that further
legislative changes are necessary or desirable to more fully
protect their interests. However, the Committee is concerned
that such additional measures would necessarily cast an overly
broad regulatory net and even then might be ineffective to
solve the underlying concerns (e.g. car supply, market access,
etc.). The Committee believes that the better approach, at this
juncture, is to establish a mechanism which would (1) define
and prioritize the most compelling problems faced by shippers
and others today, (2) encourage those problems to be addressed
without resorting to reregulation or some other governmental
action in an area that might be more effectively addressed in
the private sector, and (3) in the event those concerns could
not be addressed in the private sector, develop a systematic
record demonstrating specific problems along with specific
recommendations for legislative or regulatory action. In short,
the Committee decided to turn to practicing small shippers and
small railroads to further pinpoint not only whether, but what
kind of, government intervention might be warranted.
This bill would create a Rail-Shipper Transportation
Advisory Council (Council) for that purpose. The Council would
be funded primarily by private sources. It would be composed of
15 members, appointed by the Board's Chairman, to report to the
Board, the Secretary, and Congress on rail transportation
policy issues it deems significant. The Council would be
directed to consider specific issues including rates, car
supply (in consultation with the existing Grain Car Council),
competition, and effective procedures for addressing shipper
concerns to the greatest extent possible within private sector
mechanisms.
3. Motor Carrier Transportation.--
Open Entry.--The bill would eliminate all vestiges of
restrictive entry barriers, based either on a gauging of public
demand or need for the service or on protecting existing
carriers in a market. However, the bill would retain needed
safety oversight and insurance requirements, by converting the
existing ICC licensing program into a DOT-administered
registration program based solely on a carrier's fitness to
operate. The bill would retain State involvement in the process
through the existing single-State registration system, but
would direct the Secretary to study and report back to Congress
on the possibility of merging that system into a new
streamlined Federal system.
Common carriage.--The bill would eliminate the
regulatorily-created distinction between common and contract
motor carriers. Such categorizations have lost their meaning,
because most carriers now operate in a dual capacity. Under the
bill, all motor carriers would have a common carrier
obligation, but would be free to contract for individual
shipments.
Tariffs and rate regulation.--The bill would eliminate
tariffs and rate regulation for general trucking. Such
regulation, introduced in the 1930's when trucking was a new
and struggling industry, has outlived all usefulness. The
trucking industry today is a mature, highly competitive
industry where competition disciplines rates far better than
tariff filing and regulatory intervention. Only 2 specialized
categories of trucking operations would still require tariffs
and be subject to potential rate regulation. These are
residential household goods movements (discussed below) and
certain joint motor-water shipments involving Alaska, Hawaii,
or U.S. territories (where the water portion of the movement is
generally not as competitive and where advance notice and
certainty of rates is particularly needed).
Operations.--The bill would retain the collective activity
provisions that allow trucking companies to pool and coordinate
their services. It would also retain the existing useful
background commercial rules for the trucking industry,
involving such matters as owner-operator leasing, lumping, and
cargo liability. However, it directs the Secretary to conduct a
study and report to Congress within a year as to whether the
cargo liability provisions should be updated.
The Committee also contemplates that, while the Federal
government would establish the background rules applicable to
trucking operations, the ICC's traditional function of
informally resolving disputes in these areas would not be
continued. The bill enables aggrieved parties to take such
disputes directly to the courts.
Undercharges.--The bill would continue, and transfer to the
Board, the undercharge resolution functions of the ICC. The
Committee expects this work to taper off within a few years, as
the rash of undercharge claims that arose in the late-1980's
and early 1990's are concluded. To further assist in the
resolution of those undercharge claims, this bill would extend
the unreasonable practice relief provided in the Negotiated
Rates Act of 1993 by removing the September 30, 1990 cut-off
date for qualifying shipments.
4. Household Goods Transportation.--
Tariffs and rate regulation.--The bill would retain special
regulatory provisions for residential household goods movements
in view of the special consumer impacts associated with them.
Because the individual householder moves infrequently, usually
has little market information about such moves, and generally
lacks bargaining power, the householder has little self-help
ability in a transaction with a large personal impact. To
prevent unfair rate advantages and abuses against this least-
sophisticated class of shippers, the bill would retain tariff
and rate reasonableness requirements for residential household
goods moves. It would prohibit carriers from circumventing fair
and uniform rates for residential moves by offering contract
rates when dealing directly with the householder. The bill
would retain the highly successful binding-estimate provisions
applicable to household goods moves.
Rate oversight would be limited to residential moves, which
is where the special consumer considerations apply with most
force. Office and trade show moves would be treated no
differently than general freight.
Mandatory arbitration.--Because the ICC's informal dispute
resolution services would no longer be available, the bill
would require household goods carriers to offer impartial
arbitration of disputes arising out of individual residential
moves. This would provide an inexpensive and effective means of
dealing with the typical household goods loss or damage claim,
which is often so small that any litigation requirement becomes
unduly expensive and burdensome.
5. Intercity Bus Transportation.--The bill would remove
most remaining regulatory requirements and restrictions from
the intercity bus industry. The safety-oriented carrier
registration and insurance requirements would be applied to the
bus industry, and certain limited restrictions against
subsidized carriers competing with unsubsidized carriers would
be retained. Also, the bill would retain the special public-
interest merger standards and advance approval procedures for
the intercity bus industry.
6. Transportation Intermediaries.--(Brokers and Freight
Forwarders). The bill would continue the licensing
(registration) and bond requirements for transportation
brokers, which are needed to protect the public from
unscrupulous brokers. The bill would also apply the same
requirements to all freight forwarders. Currently freight
forwarders of shipments other than household goods are not
required to obtain a license from the ICC, but they are
required to maintain a minimum level of cargo liability
insurance. The insurance requirement has been difficult to
monitor and enforce without a Federal licensing requirement. By
extending the registration requirement to all freight
forwarders, the bill would fill an inappropriate regulatory
gap.
7. Pipeline Transportation.--The bill would retain
regulation of pipeline transportation insofar as it involves
commodities other than oil and gas (which are regulated by the
Federal Energy Regulatory Commission) or water (which is not
now regulated). Because the pipeline industry has the same
monopolistic characteristics as the rail industry, such
regulatory oversight must be retained to protect against
abuses.
8. Domestic Water Carriage.--The bill would effectively
deregulate domestic water carriage in the contiguous-States
markets, where there is ample competition to render such
regulation unnecessary. However, the bill would retain residual
authority over such water carriage for preemptive purposes, to
prevent this transportation from being subjected to regulation
under other laws.
The extent of maritime regulation that would be transferred
to the Board is as yet undetermined. The Committee expects
there will be intervening legislation within the next year
paring back the FMC's functions before they are transferred to
the Board. The bill requires the Chairman of the Board to meet
with the Chairman of the FMC to develop a plan for the orderly
transition of FMC functions to the Board. The Chairman of the
Board would then submit the plan to the Director of the Office
of Management and Budget, the Senate Committee on Commerce,
Science, and Transportation, and the House of Representatives
Committee on Transportation and Infrastructure not later than
six months after enactment of this bill. The Committee expects
this plan would address any changes in FMC functions that may
be legislated after enactment of this bill, the effect of this
transfer on Board funding requirements, personnel matters, and
other matters relevant to the transfer of remaining FMC
functions on January 1, 1997.
9. Tow-Truck Operations.--This bill would correct a serious
problem that has been an unintended consequence of legislation
last year preempting State and local motor carrier regulation.
Specifically, the bill would enable State and local governments
to regulate the price and related conditions of non-consensual
tows by tow-truck operators, so as to preclude exorbitant
prices and unreasonable conditions from being imposed on
unwilling parties.
10. Intermodal Transportation.--This bill would remove all
existing restrictions that specifically limit or preclude
intermodal ownership and intermodal operations. Moreover, by
combining the remaining functions of the existing
transportation regulatory bodies, the bill should further
foster intermodalism.
11. Transportation of Foreign Carriers Under NAFTA.--The
bill would retain the registration and insurance requirements
for foreign motor carriers operating in the United States
pursuant to the North American Free Trade Agreement. The bill
would transfer the ICC's existing oversight and enforcement
responsibilities in this area to DOT.
Estimated Costs
In accordance with paragraph 11(a) of rule XXVI of the
Standing Rules of the Senate and section 403 of the
Congressional Budget Act of 1974, the Committee provides the
following cost estimate, prepared by the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, November 17, 1995.
Hon. Larry Pressler,
Chairman, Committee on Commerce, Science, and Transportation, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1396, the Interstate
Commerce Commission Sunset Act of 1995.
Enacting S. 1396 would affect both direct spending and
receipts; therefore, pay-as-you-go procedures would apply.
If you wish further details on this estimate, we will be
pleased to provide them.
Sincerely,
Paul Van de Water
(For June E. O'Neill, Director).
Enclosure.
Congressional Budget Office Cost Estimate
1. Bill number: S. 1396.
2. Bill title: Interstate Commerce Commission Sunset Act of
1995.
3. Bill status: As ordered reported by the Senate Committee
on Commerce, Science, and Transportation on November 9, 1995.
4. Bill purpose: The bill would terminate the Interstate
Commerce Commission (ICC) by:
Eliminating various functions of the commission;
transferring the remaining functions to a newly
created Intermodal Surface Transportation Board (the
board) within the Department of Transportation (DOT)
and to the Federal Highway Administration (FHWA);
authorizing appropriations of $13.4 million for
fiscal year 1996 to close down the ICC and $8.4 million
for fiscal year 1996 and $12 million for each of fiscal
years 1997 and 1998 for the board;
updating railroad and motor carrier regulations to
reflect the termination of the ICC and other revisions;
and
requiring registration by motor carriers every five
years rather than only once.
In addition, the bill would create a Rail-Shipper
Transportation Advisory Council and require the Secretary of
Transportation to study the possibility of consolidating the
federal and state motor carrier registration systems into one
system.
Finally, the bill would terminate the Federal Maritime
Commission on January 1, 1997, and transfer is remaining
functions to the Intermodal Surface Transportation Board.
5. Estimated cost to the Federal Government: The bill would
authorize the appropriation of about $13 million to shut down
the ICC and $32 million for the board over the next three
fiscal years. In addition, S. 1396 would change the amount of
civil and criminal penalties collected by the federal
government, and thus would affect spending from the Crime
Victims Fund; however, CBO expects any change in revenues and
direct spending would be insignificant.
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
----------------------------------------------------------------------------------------------------------------
Additional Revenues and Direct Spending
Revenues: Estimated revenues.................................... ...... (\1\) (\1\) (\1\) (\1\) (\1\)
Direct spending:
Estimated budget authority.................................. ...... ...... (\1\) (\1\) (\1\) (\1\)
Estimated outlays........................................... ...... ...... (\1\) (\1\) (\1\) (\1\)
Spending Subject to Appropriations
Spending under current law:
Budget authority \2\........................................ 33 22 ...... ...... ...... ......
Outlays..................................................... 38 23 2 ...... ...... ......
Proposed changes:
Authorization changes....................................... ...... ...... 12 12 ...... ......
Estimated outlays........................................... ...... ...... 11 12 1 ......
Spending under S. 1396:
Authorization level......................................... 33 22 12 12 ...... ......
Estimated outlays........................................... 38 23 13 12 1 ......
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.
\2\ The 1996 appropriations bill for the Department of Transportation and related agencies, which was recently
enacted (Public Law 104-50), provides $8.4 million for the board and $13.4 million to shut down the ICC--
amounts equal to the authorization levels in S. 1396.
The costs of this bill fall within budget function 400.
In addition to the amounts shown in the table, the bill
would allow FHWA and the board to continue collecting
registration and other fees currently collected by the ICC;
spending of these fees is subject to appropriations action. The
deregulatory provisions of S. 1396 would reduce annual fee
collections and spending from such collections from about $8
million to about $5 million. However, by requiring motor
carrier registration every five years rather than only once,
the bill would cause fee collections and registration costs to
rise over time as current registrations expire. Because CBO
expects fee collections and spending from the fees to be equal,
the changes in the amount of fees collected should have no
impact on the budget.
6. Basis of estimate: Revenues and direct spending.--If S.
1396 is enacted into law, the amount of civil and criminal
penalties collected by the federal government would change. The
bill would deregulate some of the activities for which the
federal government currently collects civil penalties but also
would increase the fines for some of the remaining activities.
The ICC currently collects about $500,000 annually in both
civil and criminal penalties, and we estimate that the net
change in such penalties would be significantly less than
$500,000 a year.
Criminal penalties are deposited in the Crime Victims Fund
and are spent the following year. Because the amount of
criminal penalties collected would change, spending from the
Crime Victims Fund would also change. The amounts involved,
however, would be insignificant.
Spending Subject to Appropriations.--This estimate assumes
that the full amounts authorized to be appropriated for the ICC
and the board would be appropriated for each fiscal year. (As
shown in the table, the amounts authorized for 1996 have been
appropriated in Public Law 104-50.) The outlay estimates are
based on the historical spending rate for the ICC.
The ICC and DOT have not determined how many people would
be transferred if this bill is enacted into law. According to
federal regulations, if a function is transferred from one
agency to another, the people performing that function are
automatically transferred. CBO assumes that 160 to 190 people
would be transferred to DOT--100 to 130 people to the board and
about 60 people to FHWA. If fewer than 160 people are
transferred from the ICC to DOT, the ICC might need more than
$13 million to shut down the agency (because of higher
severance payments). If significantly more than 190 people are
transferred, the board and FHWA might need more funding than
authorized in S. 1396 to handle the additional personnel. If
additional funds are not provided, the board and FHWA would
have to cut back on spending and possibly lay off some
personnel. S. 1396 would allow the board to use any unobligated
ICC funds for severance costs.
Fees.--The bill does not authorize any additional funds to
be appropriated to FHWA for the functions and personnel
transferred to the agency. Such funding would come from the
fees currently collected by the ICC. The ICC collections about
$8 million of fees annually for both rail and motor carrier
activities, but the collection would initially drop if this
bill is enacted because some of the functions that generate
fees would be eliminated. However, fee collections would later
increase as motor carriers would have to register every five
years rather than once. Fees assessed to railroads by the board
would total less than $1 million a year.
FHWA would need to collect at least $5 million a year from
motor carrier activities to pay the 60 people that would likely
be transferred and to carry out its new functions. FHWA has
doubts about its ability to collect sufficient funds initially
to cover these costs under the ICC's fee structure. If the fees
are not increased, additional funds would have to be
appropriated or FHWA would have to cut back in other areas.
7. Pay-as-you-go considerations: Section 252 of the
Balanced Budget and Emergency Deficit Control Act of 1985 sets
up pay-as-you-go procedures for legislation affecting direct
spending or receipts through 1998. CBO estimates that enacting
S. 1396 would change the amount of civil and criminal penalties
collected by the federal government and spending from the Crime
Victims Fund. Therefore, pay-as-you-go procedures would apply
to the bill. However, the changes in both receipts and outlays
would be less than $500,000 a year.
------------------------------------------------------------------------
1996 1997 1998
------------------------------------------------------------------------
Change in outlays.................................. 0 0 0
Change in receipts................................. 0 0 0
------------------------------------------------------------------------
8. Estimated cost to State and local governments: S. 1396
contains a number of provisions that would affect state and
local governments. One provision would result in direct costs
to such governments, primarily in the form of lost future
revenues. Other sections would expand the ICC's regulatory
scope to include several types of vehicles previously exempt
and attach penalties to certain existing regulations. The bill
also has elements that would ease requirements and regulatory
burdens on state and local transportation agencies. While there
is some uncertainty over the impact of the bill's deregulatory
measures at the state and local level, CBO estimates that the
bill would likely result in a net cost to state and local
governments. This cost, however, would be insignificant.
Provisions with the most direct effect on state and local
governments are discussed below.
Potential Costs.--S. 1396 would preempt a state's ability
to collect taxes or fees on interstate bus travel. The state of
Oklahoma is currently the only state with such a tax in place.
The Oklahoma Tax Commission estimates that the tax generates
approximately $400,000 a year in revenue for the state. The
state of Utah recently approved a tax on interstate bus service
that is scheduled to go into effect January 1, 1996. The Utah
Tax Commission estimates the tax would raise about $150,000 in
revenue annually.
S. 1396 would place certain types of vehicles currently
exempt from motor carrier regulation by the ICC under the
regulation of the replacement Intermodal Surface Transportation
Board. To the extent that state or local governments operate
vehicles over state lines that carry school children or
teachers, transport less than 16 commuters to and from work,
provide transportation entirely within a municipality or
contiguous municipalities, or are performing emergency towing
functions, these governments could be subject to new safety and
insurance requirements. Two factors, however, would mitigate
the cost such governments might incur. First, some of these
vehicles are already subject to safety regulation under
subtitle VI of title 49. Second, the bill would authorize the
Secretary to grant exemptions from the registration and
insurance requirements where appropriate.
The bill would require states to cooperate in the
enforcement of certain registration and insurance requirements.
While current law requires state participation in these
efforts, it does not include a penalty for non-compliance. S.
1396 would make a state's annual grant allocation for
commercial vehicle safety programs conditional on its pledge of
cooperation in enforcing these registration and financial
responsibility requirements. The amount available for these
grant programs in fiscal year 1996 is $77.2 million.
Potential savings.--S. 1396 contains at least two
provisions that would directly benefit state governments. The
bill would exempt interstate transportation services funded
with federal mass transportation block grants or grants for
rural, elderly, or disabled populations from federal
requirements governing minimum financial responsibility as long
as they meet state standards. According to state transit
officials and interest groups contacted, this provision would
make running these services substantially easier and cheaper
for state and local governments. While the exemption would
confer measurable benefit to individual agencies and
operations, its overall impact would be limited because of the
small size and number of carriers (roughly 200 nationwide)
affected.
The bill would also eliminate the federal certification
procedures for states seeking to regulate intrastate rail
transportation. Twenty-two are currently certified by the ICC.
These states would no longer be required to seek approval to
amend their practices or need to reapply for certification
every five years. The resulting savings would be small.
9. Estimate comparison: None.
10. Previous CBO estimate: On November 6, 1995, CBO
transmitted a cost estimate for H.R. 2539, the ICC Termination
Act of 1995, as ordered reported by the House Committee on
Transportation and Infrastructure on November 1, 1995. S. 1396
and H.R. 2539 are quite similar, and CBO's federal estimates
for the two bills are essentially identical.
The primary difference between the state and local
estimates is that S. 1396 directs the Secretary to study the
desirability of creating a single, federal on-line motor
carrier registration and information system. In contrast, H.R.
2539 requires that the Secretary actually establish one. A
consolidated system would move the current Single State
Registration System functions to the federal level and close
off about $89 million annually in fees to states.
11. Estimate prepared by: Federal cost estimate: John
Patterson, and Stephanie Weiner. State and local government
cost estimate: Karen McVey.
12. Estimate approved by: Robert A. Sunshine for Paul N.
Van de Water, Assistant Director for Budget Analysis.
Regulatory Impact Statement
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported.
NUMBER OF PERSONS COVERED
A wide variety of businesses and consumers would be covered
and potentially impacted by this bill. They include rail
carriers, certain pipeline carriers (those transporting
commodities other than oil, gas, or water), trucking companies,
intercity bus companies, water carriers, freight forwarders,
and transportation brokers, and their various customers.
Government employees who work for the ICC and FMC would also be
affected by this bill.
ECONOMIC IMPACT
This bill would significantly reduce regulation of surface
transportation industries and concomitantly reduce regulatory
costs; for that reason, the overall economic impact of the bill
should be beneficial. Some limited regulation would be retained
to assure a safe and adequate transportation network and to
protect transportation customers who do not have competitive
alternatives available to them. Accordingly, the bill would
have either a neutral or beneficial economic impact on
transportation customers and the public at large. There would
be an adverse economic impact on employees of the ICC and FMC,
many of whom would lose their employment.
PRIVACY
This bill would have no adverse impact on the personal
privacy of individuals.
PAPERWORK
With one exception, no new regulation and no additional
paperwork requirements would be created by this bill. To the
contrary, the bill would substantially reduce paperwork
requirements by eliminating tariffs for most surface
transportation. The exception is that freight forwarders of
commodities other than household goods would be reregulated to
fill an inappropriate regulatory gap. The primary impact on
those carriers would be the requirement to register with the
Secretary.
Section-by-Section Analysis
Section 1. Short title
The short title of this bill is the ``Interstate Commerce
Commission Sunset Act of 1995.''
Sec. 2. Amendment of title 49
This section provides that, unless otherwise stated, the
amendments or repeals in this bill are to title 49 of the
United States Code.
Sec. 3. Table of sections
This section contains a table of sections for the bill.
This bill is organized into the following seven titles:
Title I would terminate the ICC and FMC and repeal those
provisions of the Interstate Commerce Act (ICA) that would not
be retained in Part A of subtitle IV, title 49, United States
Code.
Title II would establish the Intermodal Surface
Transportation Board (Board).
Title III would amend those provisions of the ICA that
would remain in Part A to further modernize and streamline rail
regulation.
Title IV would enact Part B of subtitle IV, title 49,
United States Code, containing the reduced and modernized
oversight provisions applicable to transportation by motor
carriers, water carriers, brokers, and freight forwarders.
Title V would make conforming amendments to other laws to
reflect the termination of the ICC and the transfer of
functions to the Board and the Secretary.
Title VI would authorize appropriations for the new Board.
Title VII would set the effective date for this bill.
Title I--Termination of the Interstate Commerce Commission; Repeal of
Obsolete and Unnedessary Provisions of Law
SUBTITLE A--TERMINATION OF COMMISSION
Section 101. Agency terminations
This section would terminate the ICC upon the transfer of
its remaining functions to the Board and the Secretary, on
January 1, 1996. It would terminate the FMC one year later, on
January 1, 1997.
Sec. 102. Savings provisions
Subsection (a) would preserve all orders, determinations,
rules, regulations, licenses, and privileges currently in
effect until changed by the Board or the Secretary, within
their respective jurisdictions. Subsection (b) would preserve
proceedings pending before the ICC, insofar as they relate to
functions that are retained, and would provide for their
transfer to the Board or the Secretary. Subsection (c) would
preserve pending suits and subsection (d) would preserve
actions by or against the ICC or its officials. Subsection (e)
would substitute the Board or the Secretary, as applicable, for
the ICC in suits involving a transferred function.
Sec. 103. References to the ICC in other laws
This section would treat references to the ICC in other
Federal laws as references to the Board or Secretary, as
applicable, and would treat references to the ICC as a
governmental agency as references to the Board.
Sec. 104. Transfer of functions
This section would transfer ICC personnel and property to
the Board or Secretary, as applicable, and unexpended ICC funds
to the Board. The Committee intends that the functions are
assumed in accordance with Congressional intent.
Sec. 105. References to the FMC in other laws
This section provides that, effective January 1, 1997,
references to the FMC in other Federal laws would be deemed to
refer to the Board.
SUBTITLE B--REPEAL OF OBSOLETE, ETC. PROVISIONS
Sec. 121. Repeal of provisions
This section would repeal those portions of the ICA that
are not retained in Part A of Subtitle IV. These repeals
includes numerous rail provisions that would be removed from
the statute; those motor and water provisions that would be
amended and reenacted in Part B; those motor and water
provisions that would be removed from the statute; and various
administrative provisions relating to the ICC that would be
removed from the statute. The repeals from Part A include the
following provisions:
(1) Section 10101--which contains the national
transportation policy (applicable to transportation
other than rail)--would be moved to Part B as section
13101.
(2) Section 10322--which contains various procedural
provisions for nonrail proceedings--would be removed,
allowing the Board and the Secretary to fashion
appropriate procedures for future handling of the
transferred functions.
(3) Section 10326--which contains time limits for
rail rulemaking proceedings--would be removed as
unnecessary.
(4) Section 10327--which contains procedural
provisions for rail adjudicatory proceedings--would be
removed, allowing the Board to fashion appropriate
procedures for the future.
(5) Section 10328--which governs intervention in ICC
proceedings--would be removed from Part A, allowing the
Board to determine intervention in its proceedings. A
portion would be moved to Part B, as section 13302, to
provide for public participation in proceedings
involving functions transferred to the Secretary.
(6) Subchapter III of chapter 103 (sections 10341-
10344)--which provides for joint boards with State
regulatory bodies--would be removed as outdated.
(7) Subchapter IV of chapter 103 (sections 10361-
10364)--which authorizes the now-defunct Rail Services
Planning Office--would be removed. It is outdated and
could not be accommodated within the budgetary
constraints of the Board. A conforming amendment would
be made to 49 U.S.C. 24505(b).
(8) Subchapter V of chapter 103 (sections 10381-
10388)--which authorizes the Office of Rail Public
Counsel--would be removed. That function could not be
continued given the budgetary constraints of the Board.
(9) Section 10502--which relates to rail express
carriers--would be removed as outdated. There are no
rail express carriers today.
(10) Section 10504--which provides a partial
exemption for rail mass transportation--would be
removed. It would no longer be needed because this bill
would remove federal regulation of rail passenger
transportation.
(11) Subchapters II, III and IV of chapter 105
(sections 10521-10531, 10541-10544, and 10561)--which
establish jurisdiction over transportation and services
of motor carrier and brokers, domestic water carriers,
and freight forwarders, respectively--would be moved,
in large part, to Part B as subchapter I, II, and III,
respectively, of chapter 135.
Some of the provisions would be removed, however, as
unnecessary and inappropriate. This includes many of
the exemption provisions of subchapter II, which would
no longer be needed because the only Part B
requirements applicable to such transportation would be
those addressed to safety and insurance. Placing such
requirements on this transportation may not be unduly
burdensome; indeed, this transportation is already
subject to safety regulation under subtitle VI of title
49 where vehicle size requirements are met. In any
event, the Secretary would be authorized under section
13505(e) to relieve such previously exempt
transportation from the registration and insurance
requirements, where appropriate, and the Committee
expects that the Secretary would promptly do so where
appropriate. Accordingly, sections 10526 (miscellaneous
motor carrier transportation exemptions) and 10528
(mixed loads of regulated and unregulated property)
would be removed from the ICA, as well as all of
section 10525 (transportation entirely in one state)
except for subsection (e). (The discretionary exemption
authority contained in section 10525(a)-(d) would be
subsumed into the broad exemption power of section
13505. The finding contained in former section
10525(f), to the extent not mooted by the repeal of
section 10525(a)-(d), is implicit in the Hawaiian
exemption retained in section 13505.)
Other provisions of subchapter II that would be
removed include section 10524 (which exempts motor
carriage furthering a primary business other than
transportation); section 10527 (which requires written
contracts pertaining to certain interstate agricultural
truck movements); section 10529 (which provides for
close regulatory oversight over the trucking operations
of otherwise-exempted agricultural cooperative
associations); and section 10531 (a discretionary
individual exemption procedure for mass transit
operators).
The exemption provisions of subchapter III of chapter
105 would also be removed, because the jurisdiction
over domestic water carriage would be residual and
preemptive and would not entail active regulation.
Accordingly, sections 10542 (exempt bulk
transportation), 10543 (exempt incidental water
transportation), and 10544 (miscellaneous water carrier
transportation exemptions) would be removed from the
ICA.
(12) Section 10705a--which governs rail joint-rate
surcharges and cancellation--would be removed. This
section has already achieved its purpose (to provide
carriers an avenue of relief from unremunerative joint
rates) and would not be needed with the elimination of
most rail tariffs.
(13) Section 10710--which directs the elimination of
rate (or other forms of) discrimination against
transportation of recyclable materials--would be
removed. Future concerns can be brought to the Board
under the general provisions regarding discrimination.
(14) Section 10711--which merely confirms the
independent effect of various provisions of the ICA--
would be removed as unnecessary.
(15) Section 10712--which provides a mechanism for
inflation-based rate increases--would be removed. It
has not been used and similar provisions would remain
available under section 10707a.
(16) Most of subchapter II of chapter 107 (sections
10722-10726, 10278, 10731, and 10733-10734)--which
contain various special rate provisions--would be
removed. Sections 10722-10724--which allow free or
reduced rates for certain categories of passengers, for
charitable purposes, for emergency situations, and for
carrier employees--would not be needed with the
elimination of tariffs dictating uniform rates. Section
10725--which allows special rates for assembling and
distribution services--would be removed for the same
reason. Section 10726--which prohibits higher rates for
shorter movements over the same route as a longer
movement at a lower rate--is counter to the highly
individualized pricing appropriate to the rail industry
today. Section 10728--which expressly permits separate
pricing for distinct rail services--is similarly
unnecessary.
Section 10731--which establishes special rate caps
for recyclable or recycled materials--would be removed
so as not to require rail shippers generally to cross-
subsidize such traffic. Section 10733--which deals with
motor carrier rates for transporting recyclable
materials--would be removed for the same reason.
Section 10734--which allows tariffs to contain premium
charges for special services--would be unnecessary with
the elimination of most tariffs in part A.
Several provisions of subchapter II of chapter 107
would not be removed from the ICA. Section 10721--
relating to government traffic--would be retained in
Part A and also replicated in Part B as section 13711.
Section 10730--relating to cargo liability--would be
retained in Part A. Section 10732--allowing sellers of
food and grocery products to use a uniform zone
delivered pricing system--would be moved to Part B as
section 13712. Similarly, section 10735--relating to
estimates and service guarantees for household goods
movements--would be moved to Part B as section 13704.
(17) Section 10743--which governs the extension of
credit by carriers--would be removed as undue
regulation.
(18) Section 10746--which prohibits a rail carrier
from transporting freight that it produces or owns--
would be removed. Such restrictions are not warranted
and have been easily circumvented.
(19) Section 10748--which imposes requirements
related to rail transportation of livestock--would be
removed as unnecessary.
(20) Section 10749--which addresses (a) mutual
arrangements between carriers and communications
companies and (b) the types of carriers that can be
used by a household goods freight forwarder--would be
removed as undue regulation.
(21) Section 10751--which addresses carrier business
entertainment expenses--would be removed as
unnecessary.
(22) Section 10764--which requires the filing of
certain intercarrier arrangements--would be removed as
undue regulation.
(23) Section 10765--which imposes regulatory
requirements upon certain domestic water carrier
transportation, including domestic shipments moving
through another country--would be removed as undue
regulation.
(24) Section 10766--which governs certain freight
forwarder traffic agreements--would be removed as undue
regulation.
(25) Section 19767--which governs certain motor
carrier billing and collecting practices--would be
moved to Part B as section 13707.
(26) Subchapter V of chapter 107 (sections 10781-
10786)-- which provides for government valuation of
railroad property (a regulatory function that has not
been performed in many years)--would be removed as
unnecessary. Property values contained in carriers'
annual reports are sufficient for most purposes and any
valuation issues that arise in individual cases may be
adequately addressed in the context of such cases.
(27) Section 10908--which governs discontinuing or
changing interstate passenger train and ferry services
by carriers other than Amtrak--would be removed as
unnecessary. In a conforming change, 49 U.S.C. 24705(d)
would also be repealed.
(28) Section 10909--which governs discontinuing or
changing intrastate passenger train and ferry services
by carriers other than Amtrak--would be removed as
unnecessary.
(29) All of subchapter II of chapter 109 (sections
10921-10936)--which contains licensing provisions for
motor carrier, domestic water carrier, broker, and
freight forwarder operations--would be removed from
Part A. Portions would be moved to Part B and portions
removed from the statute altogether. More specifically,
sections 10921-10925 (licensing provisions), 10927
(insurance requirements), and 10934 (household goods
agents) would be moved to Part B as sections 13901-
13905 (with safety-oriented registration substituted
for economic-based restrictive licensing), 13906, and
13907, respectively. Because the licensing requirement
as applied to domestic water carriers does not include
safety oversight, it would not be included in the new
registration requirements.
Sections 10926 (transfer of licenses) would be
removed as inconsistent with the carrier-specific
nature of the safety-focused registration. Sections
10928-10929 (temporary licensing of motor and domestic
water carriers) and 10932 (various grandfather
provisions) would be removed as unnecessary under the
new registration system. Sections 10930 (intermodal
restrictions), 10933 (discontinuing household goods
freight forwarder service), and 10935 (discontinuing
intrastate bus service) would be removed as undue
regulation. Sections 10931 (licensing of intrastate
transportation) and 10936 (preemption of state
regulation of intrastate bus fares on interstate
routes) would be removed as unnecessary given the broad
preemptions contained in section 14501 of Part B.
(30) Section 11102--which expressly authorizes the
ICC to specify classifications for different nonrail
carriers--would be removed as unnecessary.
(31) Section 11105--which governs rail carrier
arrangements for refrigeration or heat services to
protect freight--would be removed as undue regulation.
(32) Section 11106--which authorizes the use of
regulatory identification plates on motor vehicles--
would be removed as undue.
(33) Section 11107--which governs leasing
arrangements between motor carriers and owner-
operators--would be moved to Part B as section 14102.
(34) Section 11108--which addresses discrimination
against domestic water carriers--would be removed as
unneeded in today's competitive domestic water carrier
industry.
(35) Section 11109--which addresses what is commonly
known as ``lumping practices'' involving the loading
and unloading of motor vehicles--would be moved to Part
B as section 14103.
(36) Section 11110--which provides for performance
standards of household goods carriers--would be moved
to Part B as section 14104.
(37) Section 11111--which governs the use of citizen-
band radios on buses--would be removed as undue
regulation.
(38) Section 11126--which addresses the distribution
of rail coal cars--would be removed. The more general
car-supply provisions of the statute are adequate to
cover this subject.
(39) Section 11127--which contains certain emergency
authority over freight forwarder operations--would be
removed as unnecessary.
(40) Section 11142--which provides for prescribing a
uniform accounting system of nonrail carriers--would be
removed as unnecessary.
(41) Section 11161--which established the now-defunct
Railroad Accounting Principles Board (RAPB)--would be
removed. The RAPB has completed its work and been
disbanded.
(42) Section 11162--which directed the RAPB to
establish cost accounting principles for railroads--
would be removed. That work has been completed.
(43) Section 11163--which directed the ICC to
implement the RAPB rail cost accounting principles--
would be removed. That objective also has been met. The
Committee intends that the new Board generally adhere
to the RAPB's principles and recommendations as set
forth in the RAPB's Railroad Accounting Principles--
Final Report (dated September 1, 1987), as did the ICC.
(44) Section 11164--which requires advance
certification by the ICC of individual railroads'
accounting systems--would be removed as an undue
regulatory procedure.
(45) Section 11167--which required the RAPB to issue
a report on its work--would be removed. That report has
been issued.
(46) Section 11168--which authorized appropriations
for the RAPB for the years 1981-1983--would be removed.
(47) Section 11304--which governs the recording of
security interests in trucks and buses--would be moved
to Part B as section 14301.
(48) Section 11321--which restricts intermodal
ownership of water carriers by rail carriers--would be
removed in order to break down barriers between modes
and promote intermodal transportation.
(49) Section 11323--which restricts ownership of
other carriers by a household goods freight
forwarders--would be removed as unduly restrictive.
(50) Section 11345a--which governs consolidations by
nonrail carriers--would be moved to Part B as section
14303 and limited in its application to intercity bus
companies.
(51) Section 11346--an expedited rail merger
provision that has expired--would be removed.
(52) Section 11349--which provides for temporary
authorization of nonrail mergers--would be removed as
unnecessary.
(53) Section 11350--another expired rail merger
provision--would be removed.
(54) Subchapter IV of chapter 113 (sections 11361-
11367)--which governs changes in a railroad's financial
structure--would be removed as undue regulation.
(55) Section 11502--which addresses conferences and
joint hearings with state authorities--would be removed
as no longer needed.
(56) Section 11503a--which governs state and local
tax discrimination against motor carrier property--
would be moved to Part B as section 14502.
(57) Section 11505--which authorizes States to bring
certain injunctive actions--would be removed. As it
relates to unlawful rail line abandonments or
construction projects, it is unnecessary and
duplicative of federal enforcement authority. As it
relates to the cessation of service by a household
goods freight forwarder, it would become outdated
because the underlying restrictions would be removed.
(58) Section 11506--which establishes a single-state
registration system for motor carriers--would be moved
to Part B as section 14506. (It should be noted,
however, that in section 13908, the Secretary would be
directed to conduct a study of whether, and to what
extent, this system should be merged into the federal
carrier registration and insurance filing systems.)
(59) Section 11507--which addresses the status of
prison-made property--would be removed as unneeded.
(60) Section 11704--which provides a private right of
action for unlawful cessation of household goods
freight forwarder service--would be removed because the
underlying restrictions would be removed.
(61) Section 11708--which provides a private right of
action for unlicensed motor carrier and household goods
freight forwarder operations--would be moved to Part B
as section 14707.
(62) Section 11709--which contains specific liability
provisions for unauthorized railroad security
issuances--would be removed as unnecessary.
(63) Section 11711--which provides a dispute
resolution program for household goods carriers--would
be moved to Part B as section 14708.
(64) Section 11712--which contains tariff
reconciliation rules designed to avoid undercharge
claims where possible--would be moved to Part B as
section 14709.
(65) Section 11902a--which sets specific penalties
for ``lumping'' violations--would be moved to Part B as
section 14905.
(66) Section 11905--which sets penalties for carrying
passengers without charge--would be removed because the
underlying restrictions would also be removed.
(67) Section 11906--which contains specific penalties
for evading regulation of motor carriers or brokers--
would also be removed. The general penalties are
adequate.
(68) Section 11908--which sets penalties for
unauthorized cessation of service by a household goods
freight forwarder--would be removed because the
underlying restrictions would also be removed.
(69) Section 11911--which sets specific penalties for
unauthorized rail securities issuances--would be
removed. The general penalties are adequate.
(70) Section 11913a--which sets penalties for a
railroad's failure to obtain the certification of its
cost accounting system--would be removed because the
underlying certification requirement would also be
removed.
(71) Section 11917--which contains specific penalties
for ``weight-bumping'' by household goods carriers--
would be moved to Part B as section 14912.
Sec. 122. Coverage of certain entities under other, unrelated acts not
affected.
This section provides that this bill would not affect the
status of employers for purposes of the Railroad Retirement
Act, the Railroad Unemployment Insurance Act, or the Railroad
Retirement Tax Act.
Title II--Intermodal Surface Transportation Board
subtitle a--organization
Section 201. Amendment to subchapter I
This section would replace subchapter I of chapter 103 (49
U.S.C. 10301-10311), which contains the organizational
provisions for the ICC, with those needed for the Board.
Amended 49 U.S.C. 10301 (Establishment of Board) would
establish the Intermodal Surface Board. The Board would be
placed within the Department of Transportation, for
administrative support.
The Board would start out as a 3-member body, but would
increase to a 5-member body in 1997, when it inherits the
remaining FMC functions. The Board would be bipartisan, with
members appointed by the President, confirmed by the Senate,
and removable by the President only for neglect of duty or
malfeasance in office. At least 2 members would be required to
have a background in rail or motor transportation,
transportation regulation, or agriculture. At least 1 member
would be required to have private-sector professional or
business experience. Starting in 1997, at least 2 members would
be required to have professional standing and demonstrated
knowledge in the fields of maritime transportation or its
regulation. Board members could not have an interest in, or
official relation with, any carrier, and could not engage in
any outside business.
Seats on the Board would be for 5-year fixed terms. A
member would not be allowed to serve more than two terms, nor
remain in office for more than one year after the term expires.
Board seats would initially be filled by the current sitting
ICC Commissioners. On January 1, 1997, the 2 new seats would be
filled by 2 sitting FMC Commissioners of different political
parties, in order of the length of term remaining.
The President could appoint one of the Board members as the
Chairman, with the administrative and supervisory powers for
managing the Board. Significantly, the Board would retain the
ICC's longstanding independent litigating authority and the
Board could submit appropriations requests to Congress
independently.
Under amended 49 U.S.C. 10302 (Functions), the Board could
perform all the functions of the ICC, except those repealed or
transferred to the Secretary by this Act, and to perform the
transferred functions of the FMC as of January 1, 1997. Amended
49 U.S.C. 10303 (Administrative provisions) would make the
Board an independent agency, free from supervision or direction
by DOT. The open meeting requirements of the Sunshine Act would
apply to the Board. The Board would be authorized to appear in
its own right, and be represented by its own attorneys, in any
civil suits related to a function vested in the Board. It could
regulate the admission of individuals to practice before it.
Its budget request would be sent to Congress, and the Board
could communicate with Congress and make legislative requests
without interference.
Amended 49 U.S.C. 10304 (Annual report) would require the
Board to submit an annual report to Congress on the Board's
activities.
Sec. 202. Administrative support.
This section directs the Secretary to provide
administrative support to the Board. While the Board is
authorized to receive a separate appropriation and the Board's
Chairman has discretion as to how those resources are
allocated, the Committee intends that the goal of minimizing
administrative bureaucracy should be advanced. For example,
once established within DOT, the Board should not be required
to maintain separate payroll, facilities and supplies, or equal
employment opportunity offices. The Committee expects the
administrative functions assumed by the Secretary to be covered
by DOT's current funding authorization.
Sec. 203. Reorganization
This section authorizes the Board's Chairman to change the
organizational structure of the Board from that of the ICC or
the FMC.
Sec. 204. Transition plan for Federal Maritime Commission functions.
This section provides for the Board's Chairman to meet with
the Chairman of the FMC to develop a plan, within 6 months, for
the orderly transition of functions from the FMC to the Board.
The Chairman would then submit the plan to the Director of the
Office of Management and Budget, the Senate Committee on
Commerce, Science, and Transportation, and the House of
Representatives Committee on Transportation and Infrastructure
not later than six months after enactment of this Act. The
Committee expects this plan would address any changes in FMC
functions that may be legislated after enactment of this Act,
the effect of this transfer on Board funding requirements,
personnel matters, and other matters relevant to the transfer
of remaining FMC functions on January 1, 1997.
SUBTITLE B--ADMINISTRATIVE
Sec. 211. Powers
This section would amend 49 U.S.C. 10321--enumerating the
ICC's powers--in order to apply to the Board, to condense the
language, and to remove references to entities and matters not
regulated under Part A.
Sec. 212. Commission Action
This section would amend 49 U.S.C. 10324--governing the
ICC's adjudicatory actions--to apply to the Board. Section
10324(c) (making ICC actions enforceable unless stayed or
postponed) would be replaced with the reopening and final
agency action provisions from 49 U.S.C. 10327(g)-(h).
Sec. 213. Service of notice in commission proceedings
This section would amend 49 U.S.C. 10329--governing service
of notice in ICC proceedings--to apply to the Board, to remove
provisions regarding entities not regulated under Part A, and
to make other conforming changes.
Sec. 214. Service of process in court proceedings
This section would amend 49 U.S.C. 10330--governing service
of process on regulated carriers in court proceedings--to apply
to the Board, to remove provisions regarding entities not
regulated under Part A, and to make other conforming changes.
Sec. 215. Study on the authority to collect charges
This section would direct the Board to conduct a study,
within 6 months, on the authority needed to assess and collect
fees (other than user fees) and annual charges that would be
sufficient to make the Board self-funding.
Sec. 216. Federal Highway Administration rulemaking
This section would direct the Federal Highway
Administration to conduct a rulemaking dealing with issues
related to truck driver fatigue, and imposes time limits for
that rulemaking.
Title III--Rail and Pipeline Transportation
Sec. 301. General changes in references to commission, etc.
This section would make certain generic changes to those
provisions of subtitle IV that are retained in part A. It would
replace all mention of the ICC and ICC Commissioners with the
Board and Board members, respectively, and all mention of
subtitle IV with part A. It also would supply a heading and
index of chapters for Part A.
Sec. 302. Rail transportation policy
This section would amend 49 U.S.C. 10101a--which states the
rail transportation policy underlying Part A--to add an
additional national policy of providing expeditious remedies
for traffic and facilities lacking effective transportation
competition. The Committee recognizes that where competition
exists, statutory remedies are not necessary. However, when
competition does not exist, timely remedies are needed to
protect captive shippers against market abuse. The Committee
intends the Board to handle all matters brought before it in a
timely manner.
Sec. 303. Definitions
This section would amend 49 U.S.C. 10102--which defines
terms used in Part A--to remove terms that are not pertinent to
Part A, to update and clarify the term ``rail carrier'', and to
remove references to passenger transportation.
Sec. 304. General jurisdiction.
This section would amend 49 U.S.C. 10501--which establishes
jurisdiction over rail and pipeline transportation and
intermodal rail-water or pipeline-water transportation--in
several respects. The exclusive nature of the Board's
regulatory authority under Part A would be clarified (paragraph
1). The Board's rail jurisdiction would be limited to freight
transportation (paragraph 2 and 4), because rail passenger
transportation today (other than service by Amtrak, which is
not regulated under the ICA) is now purely local or regional in
nature and should be regulated (if at all) at that level.
Outdated references to express and sleeping car carriers,
which no longer exist, would be removed (paragraph 3).
References to the regulation of intrastate rail transportation
would be updated (paragraph 5 and 6).
Sec. 305. Railroad and water transportation connections and rates
This section would amend 49 U.S.C. 10503--which provides
for rail-water connections--to remove references to passenger
transportation.
Sec. 306. Authority to exempt rail carrier and motor carrier
transportation
This section would amend 49 U.S.C. 10505--which authorizes
discretionary exemptions from the application of the provisions
of Part A--to comport with the scope of Part A, by excluding
entities and matters not regulated under Part A (paragraph 1,
2, 4, and 5) and by embracing pipeline carriage (paragraph 1).
The exemption authority would be further modified to afford the
Board flexibility to change the way in which a provision
applies (and not simply whether it applies) through exemption
(paragraph 1).
A 180-day time limit would be imposed for decisions to
grant (paragraph 2) or revoke (paragraph 3) an exemption in
response to concerns that both exemption applications and
revocation applications have not been processed with sufficient
expedition. The revocation provision would also be clarified
(paragraph 3), by directing the Board to revoke an exemption to
the extent that regulation is needed and by directing the Board
to consider the availability of other economic transportation
alternatives, among other factors. In considering monetary
damages upon revocation of an exemption, the Board would be
directed to take into account any dilatory railroad practices.
Outdated restrictions against intermodal ownership would be
removed (paragraph 5).
Sec. 307. Standards for rates, classifications, etc.
This section would amend 49 U.S.C. 10701--which requires
that a carrier's classifications, rules, practices, through
routes, and divisions of joint rates be reasonable, that
pipeline rates also be reasonable, and that rates (of both rail
and pipeline carriers) not unreasonably discriminate against
connecting carriers--to remove provisions addressed to entities
not regulated under Part A.
Sec. 308. Standards for rates for rail carriers
This section would amend 49 U.S.C. 10701a--which requires
that rail rates be reasonable if the carrier has market
dominance over the transportation involved--to impose time
limits on the Board's handling of rate reasonableness cases
(and to make other changes of a conforming nature). It would
require the Board to complete the pending Non-Coal Rate
Guidelines proceeding to establish, within 1 year, a simplified
method to be used where a full stand-alone cost presentation is
impractical. Within 6 months, the Board would be required to
establish procedures for expeditiously processing rate cases.
It would be required to decide individual rate complaints
within 6 months after the close of the administrative record in
cases in which a stand-alone cost presentation is made, and
within 3 months after the close of the record in cases using
the simplified methodology the bill directs the Board to adopt.
Sec. 309. Authority for carriers to establish rates, classifications,
etc.
This section would amend 49 U.S.C. 10702--which states a
carrier's right to establish its own rates, classifications,
rules, and practices--to remove unnecessary language and
provisions regarding entities not regulated under Part A.
Sec. 310. Authority for carriers to establish through routes
This section would amend 49 U.S.C. 10703--which directs
rail and pipeline carriers to establish through routes with
other such carriers, and also directs rail carriers to
establish through routes with water common carriers--to remove
provisions regarding entities not regulated under Part A and to
make other conforming changes.
Sec. 311. Authority and criteria for prescribed rates, classifications,
etc.
This section would amend 49 U.S.C. 10704--under which
rates, classifications, rules, and practices can be prescribed
to correct violations of Part A--in various respects. Most
significantly, the Board's authority to review the
reasonableness of a rate, classification, rule, or practice
would be limited to instances where it receives a complaint
(paragraph 8). An unnecessary restatement of requirements for a
complaint would be removed (paragraph 9). A provision to
protect existing rate relationships between commodities, ports,
or geographic areas would also be removed (paragraph 6).
A long-past initial deadline for establishing railroad
revenue adequacy standards and an unnecessary statement of the
Board's authority to revisit that standard would be removed
(paragraph 4). A similar initial deadline for annually
determining which rail carriers are earning adequate revenues
would also be removed (paragraph 5). Finally, provisions
regarding entities not regulated under part A (paragraph 6 and
7), and other unnecessary language (paragraph 1 and 3) would be
removed, and conforming changes would also be made (paragraph 1
and 2).
Sec. 312. Authority for prescribed through routes, joint
classifications, etc.
This section would amend 49 U.S.C. 10705--under which
through routes (and the conditions under which they must be
operated) and joint rates (and the division of the joint rate
received by each participating carrier) can be prescribed--in
several respects. A reference to tariffs would be replaced with
a reference to proposed rate changes (paragraph 5), given that
tariff requirements would be eliminated for most
transportation.
Provisions regarding carriers not regulated under part A
would be removed (paragraph 3, 4, 6 and 9), as would
unnecessary language (paragraph 1). Other conforming changes
would reflect the removal of authority to investigate a
proposed rate on the agency's own initiative (paragraph 7, 8)
and the removal of federal regulatory authority over rail
passenger transportation (paragraph 2).
Sec. 313. Antitrust exemption for rate agreements
This section would amend 49 U.S.C. 10706--which allows
discretionary approval of certain collective activity by
carriers and confers antitrust immunity on such approved
activity. It would remove as unnecessary a requirement for
periodic review of approvals granted for collective activities
(paragraph 9). This change would not affect the Board's
authority to reconsider an approval at any time as the need
arises. Similarly, it would remove a requirement for the
Federal Trade Commission, in consultation with the Antitrust
Division of the Department of Justice, to periodically assess
(and report to the Board on) collective activity authorized by
the Board (paragraph 9). Such assessments and reports may be
made at any time.
Other changes would remove expired provisions (paragraph 1-
2), remove provisions regarding entities not regulated under
Part A (paragraph 6-8), correct a typographical error
(paragraph 3), supply an actual date (paragraph 5), and make
conforming changes (paragraph 4).
Sec. 314. Investigation and suspension of new rail carrier rates, etc.
This section would amend 49 U.S.C. 10707--under which new
rail rates, classifications, rules, and practices may be
investigated and suspended--to reflect the elimination of the
tariff requirement for most transportation under Part A and the
removal of authority for a Board-initiated investigation of a
proposed rate (paragraph 1). The amendments would also remove
regulatory oversight over rate decreases (paragraph 2-3).
Finally, the amendments would remove unnecessary regulatory
procedural requirements (paragraph 4).
Sec. 315. Zone of rail carrier rate flexibility
This section would amend 49 U.S.C. 10707a--which
establishes a zone of rate flexibility (ZORF) that gives
carriers limited freedom to increase rates with immunity from
suspension or ICC-instituted investigations. The ZORF itself
would be removed (paragraph 3 and 6), because it has outlived
its usefulness. However, the so-called Long-Cannon Factors to
be considered when evaluating the reasonableness of rates would
be retained (paragraph 6), along with criteria for
investigating a proposed rate increase (paragraph 7). In
addition, language would be clarified (paragraph 2 and 4), a
date that has already been complied with would be removed
(paragraph 1), and reference to a repealed provision would be
removed (paragraph 5).
Sec. 316. Investigation and suspension of new pipeline carrier rates
This section would amend 49 U.S.C. 10708--under which new
nonrail rates, classifications, rules, and practices may be
investigated and suspended--to remove authority for Board-
initiated investigations (paragraph 1), to remove provisions
regarding carriers not regulated under Part A (paragraph 3), to
reflect the elimination of tariff requirements for most
transportation (paragraph 1), and to make other conforming
changes (paragraph 2).
Sec. 317. Determination of market dominance.
This section would amend 49 U.S.C. 10709--which governs the
determination of whether a carrier has market dominance over
traffic and thus whether the rates for that traffic are subject
to the maximum rate regulation--in several respects. To clarify
Congressional intent regarding market dominance, the Board
would be directed to consider the availability of other
economic transportation alternatives (paragraph 1). The cost-
recovery percentage, which was meant to serve as an adjustable
jurisdictional floor, would be removed (paragraph 3) because as
a practical matter it has not been capable of calculation due
to data limitations. In addition, the phase-in of the revenue-
variable cost percentage floor for market dominance would be
deleted (paragraph 3); the phase-in has already served its
purpose of dampening the precipitousness of rate increases
prompted by the Staggers Rail Act of 1980. Finally, conforming
changes would be made (paragraph 2).
Sec. 318. Contracts
This section would amend 49 U.S.C. 10713--which authorizes
rail carriers to enter into contracts for transportation that
is thereby removed from regulation--to retain the filing
requirements for, and regulatory restrictions upon, rail
transportation contracts only for agricultural products
(paragraph 2, 5-8, and 12). Except as to those commodities, the
contract limitations represent unneeded and unduly burdensome
regulation, particularly given the elimination of tariffs for
other traffic. Any egregious equipment and discrimination
concerns could be brought to the Board under other remaining
statutory provisions.
In the case of agricultural commodity contracts, only a
contract summary, and not the contract itself, will be filed.
In other respects, jurisdiction over agricultural commodity
contracts remain as under the Staggers Act. The purpose for
retaining this jurisdiction is primarily due to concerns
brought before the Committee about enforcement of the common
carrier obligation.
The amendments would also clarify that, in the absence of
tariffs, a rate would be immune from regulation only if the
shipper had expressly waived its regulatory rights and remedies
(paragraph 10). The Railroad Contract Rate Advisory Service
would be removed in light of the Board's budgetary constraints
(paragraph 4 and 11). Unnecessary language would be eliminated
(paragraph 9 and 11) and conforming language changes would be
made (paragraph 1 and 3).
Sec. 319. Government traffic
This section would amend 49 U.S.C. 10721--which provides
special treatment for rates paid by the United States
government--to reduce the language to what would be needed in
the absence of tariff rates.
Sec. 320. Rates and liability based on value
This section would amend 49 U.S.C. 10730--which authorizes
carriers to charge rates under which cargo liability is limited
to an amount specified in advance by the shipper--to remove
redundancies and provisions regarding carriers not regulated
under Part A (paragraph 1 and 2) and for conforming changes
(paragraph 3 and 4).
Sec. 321. Prohibitions against discrimination by common carriers
This section would amend 49 U.S.C. 10741--which prohibits
kickbacks and unreasonable discrimination--only for conforming
changes, thus retaining the present standards governing
discrimination by common carriers.
Sec. 322. Facilities for interchange of traffic
This section would amend 49 U.S.C. 10742--which requires a
carrier to provide reasonable facilities for interchange of
traffic--only for conforming changes.
Sec. 323. Liability for payment of rates
This section would amend 49 U.S.C. 10744--which governs
liability for payment as between the shipper and the consignor
or consignee--to remove provisions regarding carriers not
regulated under Part A and to make conforming changes.
Sec. 324. Continuous carriage of freight
This section would amend 49 U.S.C. 10745--which prohibits
carrier combinations or arrangements that prevent the
continuous movement of freight--only for conforming changes.
Sec. 325. Transportation services of facilities furnished by shipper
This section would amend 49 U.S.C. 10747--under which
carrier allowances for shipper-furnished services and equipment
or facilities may be prescribed--to reflect the elimination of
most tariffs (paragraph 1) and to limit the Board's authority
to instances in which a complaint is filed (subsection 2) .
Sec. 326. Demurrage charges
This section would amend 49 U.S.C. 10750--which directs
carriers to set demurrage charges and demurrage rules so as to
fulfill the nation's needs with respect to freight car supply,
use, and distribution--only for conforming changes. The bill
retains jurisdiction over rail demurrage in recognition of the
fact that consignees require regulatory recourse to ensure
against the imposition of unwarranted demurrage charges.
Sec. 327. Transportation prohibited without a tariff
This section would amend 49 U.S.C. 10761--which prohibits
(non-contract) rail transportation without a tariff--to limit
the tariff requirement to the transportation of agricultural
products and fertilizer, and to remove the tariff requirement
for all other transportation. Because the transportation costs
are a substantial component of the market price of agricultural
products, the advance publication and certainty of rates that
is provided by public tariffs is particularly important in
determining the value of those commodities. Shippers of other
commodities, however, generally do not rely on tariff
information. Their transportation rate concerns are adequately
met by either a competitive transportation market or the other
rate protections that are retained in the statute.
Sec. 328. General elimination of tariff filing requirements
This section would similarly amend 49 U.S.C. 10762--which
governs rail tariffs--to apply only to the transportation of
agricultural products and fertilizer, and to remove the
requirement of filing those tariffs with the Board. It would
direct the Board to establish, within 180 days, appropriate
rules for publishing, keeping open, furnishing to the public,
and retaining for public inspection such tariffs.
Sec. 329. Designation of certain routes.
This section would amend 49 U.S.C. 10763--which governs
shipper routing of rail shipments--only for conforming changes.
Sec. 330. Authorizing construction and operation of railroad lines
This section would amend 49 U.S.C. 10901--under which the
construction of new rail lines and the operations of new rail
carriers must be authorized--to reduce the level of employee
protection that may be imposed by the Board on smaller carriers
and noncarriers. While employee protective conditions have not
often been required for such new operations, the minimum level
of protection available, if protection was imposed, was
inordinately high (up to 6 years of salary protection). As
amended, the maximum level of protection that could be imposed
on smaller carriers and noncarrier entities is reduced to a
more realistic level: advance notice (the same requirement
imposed on other industries) and up to one year's salary
protection, unless the parties voluntarily agree otherwise. In
addition, labor protection arrangements could only be imposed
when consistent with the public interest.
Sec. 331. Authorizing action to provide facilities
This section would amend 49 U.S.C. 10902--which requires
carriers to provide adequate, efficient, and safe facilities to
meet their service obligations--only for conforming changes.
Sec. 332. Authorizing abandonment and discontinuance
This section would amend 49 U.S.C. 10903--under which
carriers must receive advance authorization to abandon a rail
line--only for conforming changes.
Sec. 333. Filing and procedure for applications to abandon or
discontinue
This section would amend 49 U.S.C. 10904--which contains
the procedural requirements for applications to abandon a rail
line--to remove outdated provisions for rail restructuring
plans sponsored by the Secretary and to make conforming
changes.
Sec. 334. Exceptions
This section would amend 49 U.S.C. 10907--which exempts
spur, industrial, team, switching, and side tracks from the
approval requirement for constructions and abandonments--only
for conforming changes.
Sec. 335. Railroad development
This section would amend 49 U.S.C. 10910--containing the
feeder line development forced-sale provisions--to remove
expired and executed provisions and to supply a date.
Sec. 336. Providing transportation, service, and rates
This section would amend 49 U.S.C. 11101--which sets forth
a carrier's obligation to provide service on reasonable
request--to require that a rail carrier establish common
carriage rates and other service terms (of the type requested
for specified service between specified points) within 30 days
of a reasonable request. A carrier may not refuse to provide a
common carriage rate on grounds that there is a transportation
contract covering the traffic. The amended section also
requires a carrier to provide 20 days' advance notice of rate
increases.
Sec. 337. Use of terminal facilities
This section would amend 49 U.S.C. 11103--under which a
carrier may be compelled to provide competitive access to
terminal facilities or switching arrangements--only for
conforming changes.
Sec. 338. Switch connections and tracks
This section would amend 49 U.S.C. 11104--which requires
rail carriers to maintain switch connections with other
carriers--only for conforming changes.
Sec. 339. Criteria
This section would amend 49 U.S.C. 11121--which provides
regulatory oversight over rail car service--to reflect the
elimination of most tariffs (paragraph 2), and to provide for
the Board to consult with the National Grain Car Council as
necessary (paragraph 4). The National Grain Car Council is an
advisory group formed by the ICC in 1994, composed of
representatives of railroads of varying size, shippers,
manufacturers, and government officials. Conforming changes are
also made.
Sec. 340. Rerouting traffic on failure of rail carrier to serve public
This section would amend 49 U.S.C. 11124--under which
traffic can be ordered to be rerouted when a carrier cannot
provide service--only for conforming changes.
Sec. 341. Directed rail transportation
This section would amend 49 U.S.C. 11125--under which a
carrier can be directed to operate the lines of an
incapacitated carrier--only for conforming changes.
Sec. 342. War emergencies; embargoes
This section would amend 49 U.S.C. 11128--under which
preferences and priorities in traffic can be directed in
wartime--only for conforming changes.
Sec. 343. Definitions for subchapter III
This section would amend 49 U.S.C. 11141--which provides
definitions for subchapter III of chapter 111, title 49
(covering carrier reports and records)--to limit coverage to
entities regulated under Part A.
Sec. 344. Depreciation charges
This section would amend 49 U.S.C. 11143--under which
appropriate depreciation charges are prescribed--to remove a
reference to entities not regulated under Part A and to make
other conforming changes.
Sec. 345. Records, etc.
This section would amend 49 U.S.C. 11144--which provides
for prescribing and inspecting carrier records--to remove
references to entities not regulated under Part A, to reflect
an earlier repeal (paragraph 6), and to make other conforming
changes.
Sec. 346. Reports by carriers, lessors, and associations
This section would amend 49 U.S.C. 11145--which addresses
carrier reports--to remove provisions regarding entities not
regulated under part A and to make conforming changes.
Sec. 347. Accounting and cost reporting
This section would amend 49 U.S.C. 11166--under which rail
carrier expense and revenue accounting and reporting
requirements may be prescribed--to remove a reference to a
repealed provision, make other conforming changes, and condense
the language.
Sec. 348. Securities, obligations, and liabilities
This section would amend 49 U.S.C. 11301--which requires
advance approval for certain railroad securities issuances and
financial obligations--only for conforming changes. Because the
ICC has exempted such transactions as a class, this is residual
authority only.
Sec. 349. Equipment trusts
This section would amend 49 U.S.C. 11303--which provides
for centralized recordation of liens on railroad cars,
locomotives, and other rolling stock--to require continuation
of the ICC's current railway equipment register and to give
equal effect to foreign registration of such equipment.
Sec. 350. Restrictions on officers and directors
This section would amend 49 U.S.C. 11322--which contains
restrictions on officers and directors holding positions with
multiple carriers--to import a referenced definition from a
repealed provision (paragraph 2) and to make conforming
changes.
Sec. 351. Limitation on pooling and division of transportation or
earnings
This section would amend 49 U.S.C. 11342--under which
carrier arrangements to pool traffic, services, or earnings can
be authorized and immunized from other laws--to remove
provisions regarding entities not regulated under Part A and to
make conforming changes.
Sec. 352. Consolidation, merger, and acquisition of control
This section would amend 49 U.S.C. 11343--under which
advance approval is required for certain intercarrier mergers,
control acquisitions, or other forms of consolidations--to
remove provisions regarding entities not regulated under part
A.
Sec. 353. General procedure and conditions of approval for
consolidation, etc.
This section would amend 49 U.S.C. 11344--which contains
the administrative procedures, decisional criteria, and
conditioning authority for carrier consolidation proposals--to
remove unnecessary and inappropriate limitations on railroad
acquisitions of motor carriers (paragraph 4) and on a
railroad's ability to provide motor carrier transportation
prior or subsequent to rail transportation (paragraph 7). It
would also remove outdated provisions regarding restructurings
that are sponsored by the Secretary (paragraph 6) or that
involve only passenger carriers (paragraph 3 and 6). In
addition, motor carrier provisions would be removed (paragraph
1 and 3) and other conforming changes would be made (paragraph
2 and 5).
Sec. 354. Rail carrier procedure for consolidation, etc.
This section would amend 49 U.S.C. 11345--which further
specifies administrative procedures for handling rail carrier
consolidation proposals--to provide for receiving the comments
of the Secretary and the Attorney General at the same time as
other parties and to make conforming changes.
Sec. 355. Employee protective arrangements
This section would amend 49 U.S.C. 11347--which provides
employee protection for approved rail consolidations--only for
conforming changes.
Sec. 356. Authority over noncarrier acquirers
This section would amend 49 U.S.C. 11348--which covers
noncarriers that acquire control of carriers--for conforming
changes only.
Sec. 357. Authority over intrastate transportation
This section would amend 49 U.S.C. 11501--which contains
preemptive authority over intrastate transportation--to remove
unnecessary Federal certification procedures for States seeking
to regulate intrastate rail transportation (paragraph 2-3), to
remove provisions regarding entities not regulated under Part A
(paragraph 1 and 7), and to make conforming changes.
Sec. 358. Tax discrimination against rail transportation property
This section would amend 49 U.S.C. 11503--which prohibits
state or local tax discrimination against rail transportation
property--only for conforming changes.
Sec. 359. Withholding state and local income tax by certain carriers
This section would amend 49 U.S.C. 11504--which governs
withholding of state and local income taxes for carrier
employees--to remove provisions regarding entities not
regulated under Part A and to make conforming changes.
Sec. 360. General authority for enforcement, investigations, etc.
This section would amend 49 U.S.C. 11701--which contains
general authority to conduct administrative investigations and
hear complaints--to remove language and provisions regarding
entities not regulated under Part A and to make conforming
changes.
Sec. 361. Enforcement
This section would amend 49 U.S.C. 11702--which authorizes
civil enforcement actions by the regulatory agency--to remove
provisions regarded entities and matters not regulated under
Part A and to make conforming changes.
Sec. 362. Attorney General enforcement
This section would amend 49 U.S.C. 11703--which authorizes
civil and criminal enforcement actions by the Attorney
General--to remove language unrelated to Part A.
Sec. 363. Rights and remedies
This section would amend 49 U.S.C. 11705--which specifies
the rights and remedies of persons injured by carrier actions--
to remove language regarding entities not regulated under Part
A and to make conforming changes.
Sec. 364. Limitation on actions
This section would amend 49 U.S.C. 11706--which contains
time limits for bringing actions by and against carriers--to
remove provisions related to carriers not regulated under Part
A.
Sec. 365. Liability of common carriers under receipts and bills of
lading
This section would amend 49 U.S.C. 11707 (commonly referred
to as the Carmack Amendment)--governing cargo liability--to
remove provisions regarding entities not regulated under Part A
(paragraph 1-6 and 8-12), to reflect the elimination of tariffs
for most traffic (paragraph 7), and to remove provisions
regarding passenger transportation (paragraph 10).
Sec. 366. Liability when property is delivered in violation of routing
instructions
This section would amend 49 U.S.C. 11710--which makes rail
carriers liable for violating shipper routing instructions--
only for conforming changes.
Sec. 367. General civil penalties
This section would amend 49 U.S.C. 11901--which contains
general civil penalties for violating Part A--to remove
penalties related to provisions that are repealed from Part A
and to make conforming changes.
Sec. 368. Civil penalties for accepting rebates from common carrier
This section would amend 49 U.S.C. 11902--which contains
civil penalties for accepting rebates--to reflect the
elimination of tariff requirements for most transportation.
Sec. 369. Rate, discrimination, and tariff violations
This section would amend 49 U.S.C. 11903--which contains
penalties for rate violations--to reflect the elimination of
tariffs for most transportation.
Sec. 370. Additional rate and discrimination violations
This section would amend 49 U.S.C. 11904--which contains
additional penalties for rate and discrimination violations--to
reflect the elimination of tariffs for most transportation
(paragraph 6), to remove provisions regarding entities not
regulated under Part A (paragraph 1-4), and to make conforming
changes.
Sec. 371. Interference with railroad car supply
This section would amend 49 U.S.C. 11907--which contains
penalties for interference with railroad car supply--only for
conforming changes.
Sec. 372. Record keeping and reporting violations
This section would amend 49 U.S.C. 11909--which contains
penalties for record keeping and reporting violations--to
remove provisions regarding entities not regulated under Part A
and to make conforming changes.
Sec. 373. Unlawful disclosure of information
This section would amend 49 U.S.C. 11910--which contains
penalties for unlawful carrier disclosure of confidential
shipper information--to remove provisions regarding entities
not regulated under Part A and to make conforming changes.
Sec. 374. Consolidation, merger, and acquisition of control
This section would amend 49 U.S.C. 11912--which contains
penalties for violating the carrier consolidation provisions of
the statute--to remove a reference to a repealed provision.
Sec. 375. General criminal penalty
This section would amend 49 U.S.C. 11914--which contains
general criminal penalties when specific penalties are not
provided--to remove provisions regarding entities not regulated
under part A and to make conforming changes.
Sec. 376. Financial assistance for State projects
This section would amend 49 U.S.C. 22101--which requires
authorization of abandonment or discontinuance as a
prerequisite for federal financial assistance for State
projects to continue rail service--only for conforming changes.
Sec. 377. Status of Amtrak and applicable laws
This section would amend 49 U.S.C. 24301--containing
certain limited regulatory authority over Amtrak--only for
conforming changes.
Sec. 378. Rail-Shipper Transportation Advisory Council
This section would establish a Rail-Shipper Transportation
Advisory Council, in 49 U.S.C. 10391, to advise the government
on significant rail transportation policy issues of concern to
small shippers and small railroads, including car supply,
rates, competition, and effective procedures for addressing
legitimate shipper and other claims. The Council would be
directed to prevent or address obstacles to effective and
efficient transportation through private-sector mechanisms,
where possible, and, where unsuccessful, to suggest appropriate
regulatory or legislative relief.
The Council would be composed of 15 members outside of the
federal government, to be appointed by the Board's Chairman
within 60 days. The 9 voting members would include at least 4
representatives of small shippers and at least 4
representatives of small (Class II or III) railroads. The 6
nonvoting members would include 3 from Class I railroads and 3
from large shipper organizations. In addition, the Secretary
and the Board members would serve as ex officio members. The
Council would meet at least semi-annually and would be required
to prepare an annual report of its activities.
Title IV--Motor Carrier, Water Carrier,
Broker, and Freight Forwarder Transportation
SUBTITLE A--ADDITION OF PART B
Section 401. Enactment of part B of subtitle IV, title 49, United
States Code
This section would amend Subtitle IV of title 49 by
inserting after chapter 119 a new Part B relating to motor
carriers, water carriers, brokers, and freight forwarders. Part
B would be administered by the Secretary, except for those
provisions specifically assigned to the Board.
New chapter 131 (General provisions) would import pertinent
provisions from existing chapter 101. Specifically, new 49
U.S.C. 13101 (Transportation policy) would set out the national
transportation policy from existing 49 U.S.C. 10101. New 49
U.S.C. 13102 (Definitions) would import those definitions from
existing 49 U.S.C. 10102 that would be applicable to Part B.
However, no distinction between contract and common carriers
would be retained in light of the elimination of restrictive
licensing and tariff filing requirements for most
transportation. Because all motor carriers could freely
contract, separate categories of carriers would not be needed.
The definitions of foreign motor carriers and foreign motor
private carriers, which are needed for enforcement of the
provisions of the North American Free Trade Agreement (NAFTA),
would be imported from existing 49 U.S.C. 10530. The definition
of residential household goods would be subdivided between
those transported for the individual householder (for which
contract rates would be precluded) and those transported under
an arrangement with a third party (which would not be so
restricted). New 49 U.S.C. 13103 (Remedies are cumulative)
would import the existing provisions of 49 U.S.C. 10103, so as
to preserve the current relationship between those remedies
provided for in the ICA and other remedies that may be
available.
New chapter 133 (Administrative provisions) would import
those administrative provisions of existing subchapter II of
chapter 103 that would be needed for the regulatory and
oversight functions placed in Part B, but with greater leeway
for the Secretary and Board to fashion appropriate
administrative procedures. More specifically, new 49 U.S.C.
13301 (Powers) would give the Secretary the general powers that
the ICC has under existing 49 U.S.C. 10321 and, in subsection
(f), would provide the Board with the same powers when
exercising functions assigned to it in Part B.
New 49 U.S.C. 13302 (Intervention) would incorporate from
existing 49 U.S.C. 10328 the notice requirement and opportunity
for public participation. New 49 U.S.C. 13303 (Service of
notice in proceedings under this part) would import from
existing 49 U.S.C. 10329 the provisions requiring regulated
entities to designate agents on whom notice of administrative
proceedings can be served. New 49 U.S.C. 13304 (Service of
process in court proceedings) would import from existing 49
U.S.C. 10330 the provisions requiring carriers and brokers to
designate an agent on whom notice of court proceedings can be
served.
New chapter 135 (Jurisdiction) would import from existing
chapter 105 the jurisdictional provisions applicable to
transportation other than by rail and pipeline. The
jurisdiction over motor carriers and brokers, from existing
Subchapter II of chapter 105, would be set forth in subchapter
I (Motor carrier transportation) of chapter 135. New 49 U.S.C.
13501 (General jurisdiction) would import the basic
jurisdictional statement from existing 49 U.S.C. 10521(a),
except for the (unnecessary) introductory clause and the
savings provisions of 49 U.S.C. 10521(b). Existing 49 U.S.C.
10521(b)(1)-(3) has been mooted by a more recent broad
preemption of intrastate regulation. Existing 49 U.S.C.
10521(b)(4) would be needless surplusage given the
unquestionable right of states to tax motor carriers and the
retention of the provisions of 49 U.S.C. 11503(a) and 11504(b)
in Part B.
New 49 U.S.C. 13502 (Exempt transportation between Alaska
and other States) would preserve the existing exclusion, in 49
U.S.C. 10522, for the portion of interstate transportation
conducted in a foreign country. New 49 U.S.C. 13503 (Exempt
motor vehicle transportation in terminal areas) would preserve
the jurisdictional allocations in existing 49 U.S.C. 10523 for
terminal area operations. New 49 U.S.C. 13504 (Exempt motor
carrier transportation entirely in one State) would preserve
the exemption of existing 49 U.S.C. 10525(e) for transportation
(other than of household goods) within Hawaii.
Residual jurisdiction over domestic water carriage, from
Subchapter III of chapter 105, would be set forth in subchapter
II of chapter 135. This bill does not provide for active
regulation of domestic water carriage (other than for joint
rates in noncontiguous domestic trade), in view of the highly
competitive nature of that industry and the already limited
nature of regulation of domestic water carriage. The bill
retains residual jurisdiction over such transportation,
however, to ensure that this transportation would not be
subjected to similar regulation under other laws. For that
purpose, new 49 U.S.C. 13521 (General jurisdiction) would
import the basic jurisdictional statement of existing 49 U.S.C.
10541(a) (except for the introductory clause that allowed
regulation through other laws).
Jurisdiction over freight forwarder service, imported from
Subchapter IV of chapter 105, would be placed in subchapter III
of chapter 135. Specifically, new 49 U.S.C. 13531 (General
jurisdiction) would incorporate the provisions of existing 49
U.S.C. 10561, but would expand that jurisdiction to include all
freight forwarders (not just those providing service for
shipments of household goods), in order to fill an
inappropriate regulatory gap. Because freight forwarders act as
carriers in the assembling and delivery of shipments, they
should be subject to the registration requirements to ensure
that they are fit to operate and are insured. Freight
forwarders of commodities other than household goods would not
be subjected to any further regulation of their activities
beyond the registration requirement.
Subchapter IV of chapter 135 would contain new 49 U.S.C.
13461 (Authority to exempt transportation or service), which
would give broad exemption authority, comparable to that of the
Board under 49 U.S.C. 10505, to both the Secretary and the
Board, for each to apply to the portions of Part B that it is
charged with administering. This exemption authority could not
be used to relieve an entity from the cargo liability,
insurance, or safety fitness requirements of Part B, however,
unless that entity would have been eligible for a statutory
exemption available prior to this bill.
New chapter 137 (Rates) would import certain provisions of
existing chapter 107 that relate to the rates and interline
arrangements of entities that would be covered by Part B. New
49 U.S.C. 13701 (Requirements for rates, classifications,
through routes, rules, and practices for certain
transportation) would retain rate regulation for only two
categories of traffic under Part B: (1) residential household
goods movements and (2) joint-rate water-motor movements in
non-contiguous domestic trade. Other types of traffic that are
handled by the motor carrier and freight forwarder industries
today are sufficiently competitive that those shippers can
adequately protect their interests without such regulation. For
the two categories of traffic for which rates would be
regulated, new 49 U.S.C. 13701(a) would import the basic rate
reasonableness requirement from existing 49 U.S.C. 10701, while
new 49 U.S.C. 13701(b) would import from existing 49 U.S.C.
10704 and 10705 the regulatory authority to prescribe a rate
when the carrier's rate is unreasonable. The responsibility for
administering these provisions would be placed with the Board.
New 49 U.S.C. 13702 (Tariff requirement for certain
transportation) would retain a tariff requirement only for the
same two limited categories of traffic: (1) joint rates for
motor-water movements in non-contiguous domestic trade and (2)
residential movements of household goods. New 49 U.S.C.
13702(a) would import from existing 49 U.S.C. 10761 the
requirement for a tariff and the prohibition against charging
an amount different from that contained in the tariff. New 49
U.S.C. 13702(b)-(e) would import the applicable tariff filing
requirements of existing 49 U.S.C. 10762 for joint-rate
movements in the non-contiguous domestic trade. The tariffs for
such movements would be filed with the Board.
New 49 U.S.C. 13702(f) would require household goods
carriers to maintain tariffs applicable to those residential
moves, but would not require that those tariffs be filed with
the Board. Rather, those tariffs would be required to be
published and kept open and available for inspection. The
carrier would be bound by the terms of its tariffs, and would
be prohibited from transporting residential household goods
movements for individual householders without a tariff. The
Board would be charged with administering and enforcing these
requirements.
New 49 U.S.C. 13703 (Certain collective activities:
exemption from antitrust laws), imported from existing 49
U.S.C. 10706, would provide for Board approval of, and
concomitant antitrust immunity for, certain motor carrier
collective activities. It would add several new features,
however. New 49 U.S.C. 13703(d) would make Board approval
effective only for a 3-year period; an approval would expire at
the end of the 3-year period if not reapproved at the request
of the carriers. New 49 U.S.C. 13703(e) would contain a
``grandfather'' provision allowing existing approved agreements
to continue in effect (unless earlier withdrawn or revoked) for
an initial 3 years (at the end of which the renewal requirement
would apply). New 49 U.S.C. 13703(f) would preclude the
approval of collective activity from providing a basis for an
undercharge claim and it would provide, more particularly, that
an undercharge claim could not be based solely on a commodity
classification established pursuant to that section. New 49
U.S.C. 13703(g) would codify the existing ICC requirement,
upheld by the courts, that a carrier must participate in a
mileage guide established under an approved collective-action
agreement in order to enforce mileage rates using such a guide.
New 49 U.S.C. 13704 (Household goods rates--estimates;
guarantees of service) would import the special provisions of
existing 49 U.S.C. 10735, allowing household goods carriers to
use binding estimates and guaranteed pick-up and delivery
times. New 49 U.S.C. 13705 (Requirements for through routes
among motor carriers of passengers) would preserve the
requirement from existing 49 U.S.C. 10703(a)(3) that intercity
bus companies establish through routes with each other, and the
requirement from existing 49 U.S.C. 10701 that those through
routes be reasonable. Drawing from existing 49 U.S.C. 10705, it
would authorize the Board to prescribe through routes and the
conditions under which they are operated, when necessary to
enforce the requirement of reasonable through routes.
New 49 U.S.C. 13706 (Liability for payment of rates) would
import the useful provisions of 49 U.S.C. 10744 regarding
liability, as between a consignor or consignee, for payment for
transportation. New 49 U.S.C. 13707 (Billing and collecting
practices) would preserve the beneficial truth-in-billing
requirement of existing 49 U.S.C. 10767(b), enacted for motor
carriers in the Negotiated Rates Act of 1993. It would also
retain the prohibition against rate reductions to someone other
than the person ultimately responsible for paying the
transportation charges.
New 49 U.S.C. 13708 (Procedures for resolving claims
involving unfiled, negotiated transportation rates) would
import, and place under the Board's administration, the
undercharge resolution provisions of existing 49 U.S.C.
10701(f), as enacted in the Negotiated Rates Act of 1993,
except for the now-moot tariff adherence provision of 49 U.S.C.
10701(f)(7). New 49 U.S.C. 13709 (Additional motor carrier
undercharge provisions) would import, and place under the
Board's administration, the further billing and undercharge
procedures of existing 49 U.S.C. 10762(a)(3)-(5), enacted in
the Transportation Regulatory Reform Act of 1994 (TIRRA). New
Section 13710 (Alternative procedure for resolving undercharge
disputes) would codify the undercharge relief provided in
section 2(e) of the Negotiated Rates Act of 1993 (NRA). It
would expand that unreasonable practice relief by removing the
September 30, 1990, cut-off date.
New 49 U.S.C. 13711 (Government traffic) would contain
appropriate provisions specific to government traffic under
Part B, in place of existing 49 U.S.C. 10721. New 49 U.S.C.
13712 (Food and grocery transportation) would retain the
provisions of existing 49 U.S.C. 10732 enabling sellers of food
and groceries to provide for compensated customer pick-ups in
conjunction with a uniform zone delivered pricing system.
New chapter 139 (Registration) would revise and incorporate
certain provisions of subchapter II of chapter 109 governing
the authorization needed for entities to engage in
transportation and services covered by Part B. It would convert
the required authorization from a licensing process to a
registration process. All vestiges of restrictive licensing,
based either on a gauging of public demand or need for the
service or on protecting existing carriers in a market, would
be removed. The registration process would be based solely on
an entity's fitness to operate. The fitness determination would
consist of three elements: safety record (for carriers and
freight forwarders operating trucks), insurance coverage, and
willingness to comply with applicable laws and regulations.
New 49 U.S.C. 13901 (Requirement for registration), drawn
from existing 49 U.S.C. 10921, would make clear that a person
could operate as a motor carrier, broker, or freight forwarder
only if registered with the Secretary under new chapter 139.
New 49 U.S.C. 13902 (Registration of motor carriers), distilled
from existing 49 U.S.C. 10922, would contain the registration
provisions for motor carriers (in subsection (a)). With respect
to intercity bus operations, it would retain the current
restrictions on subsidized operations to prevent them for
competing unfairly with unsubsidized operations (in subsections
(b)(1)-(2), (8)). It would retain the current provisions
authorizing intrastate service to be provided in conjunction
with interstate bus operations (in subsections (b)(3)-(6)). It
would retain the existing preemption for intercity bus
operators providing pickup and delivery of express packages,
newspapers or mail (in subsection (b)(7)). Finally, it would
contain special registration provisions for foreign carriers,
drawn from existing 49 U.S.C. 10530 and 10922(m), to reflect
the special foreign policy implications in that area (in
subsection (c)).
New 49 U.S.C. 13903 (Registration of freight forwarders),
drawn from existing 49 U.S.C. 10923(a), would contain the
registration provisions for freight forwarders. As explained
above, the registration requirement would be extended to all
freight forwarders (not just those handling household goods),
so as to fill an inappropriate regulatory gap. Because freight
forwarders act as carriers in the assembling and delivery of
shipments, they should be subject to the registration
requirements to ensure that they are fit to operate and
maintain the required insurance coverage. Freight forwarders of
commodities other than household goods are not subjected to any
further regulation of their activities beyond the registration
requirement, however. It would continue the current requirement
that, when a freight forwarder acts in the capacity of a
carrier for the entire move, it must be registered as a carrier
as well. New 49 U.S.C. 13904 (Registration of motor carrier
brokers), drawn from existing 49 U.S.C. 10924, would contain
the registration provisions for brokers.
New 49 U.S.C. 13905 (Effective periods of registration),
drawn from existing 49 U.S.C. 10925, would provide for a
registration generally to remain in effect for five years so
long as the registrant maintains its insurance coverage
(subsection a). However, the Secretary could amend or revoke a
registration on request of the holder (subsection (b)), or
suspend or revoke a registration on complaint or on the
Secretary's own initiative for cause (subsections (b)-(d)).
Cause for suspension or revocation could be unsafe operations,
lack of the required insurance coverage, or failure to comply
with regulatory requirements. The new section would eliminate
any advance notice requirement for the Secretary to address
imminent safety hazards, given the nature of the hazards in
such situations.
New 49 U.S.C. 13906 (Security of motor carriers, brokers,
and freight forwarders), drawn from existing 49 U.S.C. 10927,
would contain the minimum insurance or bonding requirements
needed for a motor carrier, broker, or freight forwarder to
obtain and keep a registration to operate. It would specify
that a registration would remain in effect only as long as the
registrant continues to satisfy these security requirements.
The Secretary would determine the type and amount of security
required, and under what circumstances a carrier could self-
insure. It would maintain the ICC's current requirements that
insurance carriers provide advance notice of any cancellation
of insurance, and that full (``first-dollar'') coverage be
provided.
New 49 U.S.C. 13907 (Household goods agents), incorporating
existing 49 U.S.C. 10934, would retain a household goods
carrier's responsibility for its agents and their actions. It
would also retain federal regulatory oversight over the agents
used by such carriers, and continue the antitrust immunity for
discussions and agreements between such carriers and their
agents.
New 49 U.S.C. 13908 (Registration and other reforms) would
direct the Secretary to conduct a study of whether, and to what
extent, the various existing overlapping motor carrier
registration provisions should be modified or replaced with a
single, on-line federal system. The existing systems to be
studied would include the DOT identification number system, the
single-State registration system under new 49 U.S.C. 14505, the
system for administering the registration requirements of new
49 U.S.C. 13901-13905, and the system for administering the
insurance provisions of new 49 U.S.C. 13906. New 49 U.S.C.
13908 would enumerate some of the factors to be considered by
the Secretary. It would also permit the Secretary to impose
user fees that cover the full costs of maintaining these
systems. Finally, it would direct the Secretary to conclude the
study within 18 months and report to Congress on the findings
and any appropriate legislative changes needed.
New chapter 141 (Operations of carriers) would incorporate
certain provisions of existing chapter 111 for entities covered
by Part B. Subchapter I (General requirements) would contain
operational provisions. New 49 U.S.C. 14101 (Providing
transportation and service), taken from existing 49 U.S.C.
11101, would continue the basic common carrier obligation to
provide transportation or service on reasonable request and to
provide safe and adequate service, equipment, and facilities.
It would expressly allow carriers to enter contracts for
specific shipments (other than for residential household goods
movements arranged and paid for directly by the householder)
under which both parties may waive their ICA rights and
remedies.
New 49 U.S.C. 14102 (Leased motor vehicles) would preserve
the provisions of existing 49 U.S.C. 11107, enabling the
Secretary to regulate the relationship between registered
carriers and the owner-operators engaged by them to provide the
transportation. New 49 U.S.C. 14103 (Loading and unloading
motor vehicles) would preserve the provisions of existing 49
U.S.C. 11109, which govern ``lumping'' (the utilization of
other persons to load or unload freight from a truck) in the
trucking industry, whether or not the carriers involved are
regulated under Part B. New 49 U.S.C. 14104 (Household goods
carrier operations) would preserve the provisions of existing
49 U.S.C. 11110, governing the performance of household goods
carriers.
Subchapter II (Reports and records) of new chapter 141
would provide for data collection by the Secretary and the
Board, as needed to carry out their respective functions. New
49 U.S.C. 14121 (Definitions), taken from existing 49 U.S.C.
11141, would provide that the data requirements extend to
receivers, trustees, and associations. New 49 U.S.C. 14122
(Records: form; inspection; preservation), imported from
existing 49 U.S.C. 11144, would allow the Secretary and the
Board, as appropriate, to prescribe the form of records to be
kept by carriers and brokers, to inspect those records, and to
set how long those records must be retained by the carrier. New
49 U.S.C. 14123 (Reports by carriers, brokers, and
associations), drawn from existing 49 U.S.C. 11145, would
require carriers to file annual reports with the Secretary, but
would allow the Secretary to waive that requirement for
individual carriers where necessary to avoid competitive harm
and preserve confidential business information that is not
otherwise publicly available.
New Chapter 143 (Finance) would incorporate two provisions
of existing chapter 113. New 49 U.S.C. 14301 (Security
interests in certain motor vehicles), imported from existing 49
U.S.C. 11304, would govern the recordation of security
interests in trucks, tractors, and trailers. New 49 U.S.C.
14302 (Pooling and division of transportation or earnings),
drawn from existing 49 U.S.C. 11342, would provide for Board
supervision of pooling arrangements among motor carriers. It
would retain the immunity from antitrust and other laws
currently in 49 U.S.C. 11341. It would also include a
grandfather provision for existing approved arrangements. New
49 U.S.C. 14303 (Consolidation, merger, and acquisition of
control of motor carriers of passengers), drawn from existing
provisions in 49 U.S.C. 11341, 11343, 11344 and 11345a, would
require Board review of mergers or other consolidations of
intercity bus carriers having combined annual gross operating
revenues greater than $2 million. It would confer antitrust
immunity on Board-approved consolidations.
New chapter 145 (Federal-State relations) would preserve
the broad preemptions of intrastate regulation for carriers
regulated under Part B. New 49 U.S.C. 14501 (Federal authority
over intrastate transportation) would incorporate existing
prohibitions against intrastate regulation. Subsection (a),
imported from 49 U.S.C. 11501(e), would cover intercity bus
rates, scheduling, and discontinuances or reductions in
service. Subsection (b), imported from 49 U.S.C. 11501(g),
would cover the rates, routes, or services of freight
forwarders and transportation brokers. Subsection (c), imported
from 49 U.S.C. 11501(h), would cover trucking prices, routes,
and services. The preemption would be narrowed, however, to
allow State and local governments to regulate the price and
related conditions of non-consensual tows by tow-truck
operators, so as to preclude exorbitant prices and unreasonable
conditions from being imposed on unwilling parties in such
situations.
New 49 U.S.C. 14502 (Tax discrimination against motor
carrier transportation property) would incorporate the
restrictions of existing 49 U.S.C. 11503a on State and local
authority to tax property used to provide interstate trucking
service. New 49 U.S.C. 14503 (Withholding State and local
income tax by certain carriers) would preserve the restrictions
of existing 49 U.S.C. 11504 on State and local authority to tax
the earnings of employees of motor carriers and water carriers.
New 49 U.S.C. 14504 (State tax) is a new provision that
would prohibit State and local governments from imposing a tax
on the sale of intercity bus tickets. This provision is
intended to override a recent court decision permitting such a
tax. New 49 U.S.C. 14505 (Registration of motor carriers by a
State) would import, from 49 U.S.C. 11506, the existing single-
State registration system for evidencing motor carrier
insurance coverage. That system would remain intact for the
time being, but would be impacted by the system reform called
for by new 49 U.S.C. 13908.
New chapter 147 (Enforcement; investigations; rights;
remedies) would incorporate into Part B the appropriate
provisions of existing chapter 117. New 49 U.S.C. 14701
(General authority) would give the Secretary and the Board the
same general authority to conduct investigations and hear
complaints, with respect to the functions assigned to each, as
the ICC has had under 49 U.S.C. 11701. New 49 U.S.C. 14702
(Enforcement by the regulatory authority) would preserve for
the Secretary and the Board, as to those functions transferred
to each under Part B, the ICC's longstanding authority in 49
U.S.C. 11702 to bring civil enforcement actions in court. New
49 U.S.C. 14703 (Enforcement by the Attorney General) would
preserve the Attorney General's authority under 49 U.S.C. 11703
to bring civil or criminal enforcement actions relating to Part
B, including orders or regulations of the Secretary or the
Board.
New 49 U.S.C. 14704 (Rights and remedies of persons injured
by carriers or brokers) would incorporate from 49 U.S.C. 11705
the right of an injured person to bring a civil action to
enforce an order of the Secretary or the Board under Part B. It
would remove any requirement that an injured person bring the
complaint to the agency first. New 49 U.S.C. 14705 (Limitation
on actions by and against carriers) would incorporate from 49
U.S.C. 11706 relevant time limits for bringing court suits by
or against carriers and makes those time limits uniform for all
types of traffic under Part B.
New 49 U.S.C. 14706 (Liability of carriers under receipts
and bills of lading) would preserve in Part B the ``Carmack
Amendment'' contained in 49 U.S.C. 11707, which makes carriers
and freight forwarders fully liable for loss or damage except
to the extent the parties agreed in advance to limit the
carrier's liability. New 49 U.S.C. 14707 (Private enforcement
of registration requirement), imported from 49 U.S.C. 11708,
would authorize private enforcement of the registration
requirement by persons injured by unregistered transportation
or service. New 49 U.S.C. 14708 (Dispute settlement program for
household goods carriers) would modify the existing arbitration
provisions of 49 U.S.C. 11711, by requiring all household goods
carriers to offer shippers the option of neutral arbitration as
a means of settling disputes over household goods
transportation. New 49 U.S.C. 14709 (Tariff reconciliation
rules for motor carriers of property) would preserve the
undercharge relief contained in 49 U.S.C. 11712(a), enabling
the Board to authorize departures by mutual consent from the
tariff rate for past shipments so as to avoid or resolve both
undercharge and overcharge claims.
New chapter 149 (Civil and criminal penalties) would
preserve the provisions of existing chapter 119 that are
applicable to Part B, but would update the level of fines. New
49 U.S.C. 14901 (General civil penalties), imported from
existing 49 U.S.C. 11901, would contain civil penalties for
violating reporting and registration requirements, household
goods consumer-protection requirements, and the prohibitions
against rate reductions to third parties.
Several provisions from chapter 149 would be applicable
only to the narrow set of transportation for which tariffs
would still be required under Part B. Specifically, new 49
U.S.C. 14902 (Civil penalty for accepting rebates from
carriers), 14903 (Tariff violations), 14904 (Additional rate
violations), and 14913 (Conclusiveness of rates in certain
prosecutions) would import the tariff observance provisions of
existing 49 U.S.C. 11902, 11903, 11904, and 11916,
respectively.
New 49 U.S.C. 14905 (Penalties for violations of rules
relating to loading and unloading motor vehicles), imported
from existing 49 U.S.C. 11902a, would contain specific civil
and criminal penalties for violating the lumping provisions of
new 49 U.S.C. 14103. New 49 U.S.C. 14906 (Evasion of regulation
of motor carriers and brokers), imported from existing 49
U.S.C. 11906, would contain penalties for evading regulation
under Part B. New 49 U.S.C. 14907 (Record keeping and reporting
violations), imported from existing 49 U.S.C. 11909, would
contain specific penalties for withholding or falsifying
records or reports that the Secretary or Board requires. New 49
U.S.C. 14908 (Unlawful disclosure of information) would
preserve those provisions of existing 49 U.S.C. 11910
prohibiting entities that would be covered by Part B (or anyone
receiving information from entities covered by Part B) from
disclosing confidential shipper information.
New 49 U.S.C. 14909 (Disobedience to subpoenas), imported
from existing 49 U.S.C. 11913, would contain penalties for
disobeying a subpoena issued by the Secretary or the Board
under Part B. New 49 U.S.C. 14910 (General criminal penalty
when specific penalty not provided), imported from existing 49
U.S.C. 11914, would contain general criminal penalties when
specific penalties are not provided for violations under Part
B. New 49 U.S.C. 14911 (Punishment for violations committed by
certain individuals), imported from existing 49 U.S.C. 11915,
would extend the penalties of new chapter 149 to corporate
officials, agents, and successors in interest. New 49 U.S.C.
14912 (Weight-bumping in household goods transportation) would
preserve the penalties for weight-bumping now contained in 49
U.S.C. 11917.
SUBTITLE B--MOTOR CARRIER REGISTRATION AND INSURANCE REQUIREMENTS
Sec. 451. Amendment of Section 31102
This section would amend 49 U.S.C. 31102(b)(1) to provide
that States receiving Federal grants under the Commercial Motor
Vehicle Safety program cooperate in the enforcement of the
registration and insurance requirements of 49 U.S.C. 31140 and
31146.
Sec. 452. Amendment of section 31138
This section would amend 49 U.S.C. 31138 to incorporate the
existing ICC practice of allowing carriers to use multiple
sources for satisfying the required level of insurance
coverage, and to exclude from the Federal minimum insurance
requirements certain subsidized mass transportation services,
including specialized transportation for the elderly and
disabled.
This section continues the current exemption from Federal
insurance requirements for transit operators who operate in
cities or metropolitan areas that are divided by a state line
(49 U.S.C. 10526 (b)). The bill requires these transit
operators, when they cross a state line, meet the insurance
requirements of the higher of the states in which they provide
transit service. With the relief provided, transit operators,
particularly in smaller communities, will now be better able to
provide cross-State transportation service to nearby medical or
other facilities. The Federally imposed insurance requirements,
which are designed for commercial interstate carriers, have
been financially burdensome for operators providing this needed
service.
Sec. 453. Self-insurance rules
This section would direct the Secretary to continue the
existing ICC practice of allowing carriers to meet the
insurance requirements through self-insurance where
appropriate.
Sec. 454. Safety fitness of owners and operators
This section would amend 49 U.S.C. 31144 for conforming
changes.
Title V--Amendments to Other Laws
Section 501. Federal Election Campaign Act of 1971
This section would amend 2 U.S.C. 451--under which the ICC
regulates credit extended to candidates for carriers'
services--to substitute the Board for the ICC and to eliminate
a long-past date for issuing regulations.
Sec. 502. Agricultural Adjustment Act of 1938
This section would amend 7 U.S.C. 1291--which authorizes
the Secretary of Agriculture to bring to the ICC a complaint of
an unreasonable rate or practice relating to transportation of
farm products--to substitute the Board for the ICC.
Sec. 503. Agricultural Marketing Act of 1946
This section would amend 7 U.S.C. 1622(j)--which authorizes
the Secretary of Agriculture to bring petitions or complaints
before the ICC regarding transportation rates, practices, and
services--to substitute the Board for the ICC.
Sec. 504. Animal Welfare Act
This section would amend 7 U.S.C. 2145(a)--which directs
the ICC to take appropriate action to implement regulations of
the Secretary of Agriculture governing the handling of animals
in transportation--to substitute the Board for the ICC.
Sec. 505. Title 11, United States Code
This section would amend the Bankruptcy Code in several
places to substitute the Board for the ICC. The affected
sections are 11 U.S.C. 1164 (authorizing the ICC to be heard in
railroad bankruptcy reorganization proceedings), 1170
(requiring ICC action before a bankruptcy court may authorize
the abandonment of a line), and 1172 (requiring ICC approval
for transfer of a bankrupt railroad's line).
Sec. 506. Clayton Act
This section would amend 3 provisions of the Clayton Act to
substitute the Board for the ICC. The affected sections are 15
U.S.C. 18 (which exempts ICC-approved mergers and acquisitions
from the antitrust laws), 21 (which authorizes the ICC to
enforce provisions of the Clayton Act), and 26 (which precludes
private enforcement of the antitrust laws against regulated
carriers).
Sec. 507. Consumer Credit Protection Act
This section would amend several administrative enforcement
provisions of the Consumer Credit Protection Act to substitute
the Board and the Secretary (for carriers subject to their
respective jurisdictions) for the ICC and to otherwise conform
to the changes made by this Act. The affected provisions are in
15 U.S.C. 1681s (fair credit reporting requirements), 1691c
(equal credit opportunity requirements), and 1692l (fair debt
collection practice requirements).
Sec. 508. National Trails System Act
This section would amend two provisions of the National
Trails System Act to substitute the Board for the ICC. The
affected sections are 16 U.S.C. 1247(d) (which directs the ICC
to provide for interim use of railroad rights-of-way as trails)
and 1248(d) (which directs the ICC to cooperate with the
Secretary of Interior and Secretary of Agriculture to ensure
that properties suitable for trails are made available for such
use).
Sec. 509. Title 18, United States Code
This section would amend 18 U.S.C. 6001--which provides
immunity from prosecution for testimony before certain
agencies--by substituting the Board for the ICC.
Sec. 510. Internal Revenue Code of 1986
This section would amend various provisions of the Internal
Revenue Code to conform the language to changes made by this
Act and others. Notwithstanding these changes, this bill is not
intended to affect the status of employers for purposes of the
Railroad Retirement Act, the Railroad Unemployment Insurance
Act, or the Railroad Retirement Tax Act, as section 122 of this
bill clarifies.
Subsection (a) would amend two railroad retirement tax
provisions. First, it would amend 26 U.S.C. 3231(a)--which
directs the ICC to determine whether a line operated by
electric power comes under the tax--to substitute the Board for
the ICC. Second, it would amend 26 U.S.C. 3231(g) to conform
the language defining a carrier to reflect this bill.
Subsection (b) would amend the definition of ``regulated
public utility'' in 26 U.S.C. 7701(a). More specifically, it
would amend 26 U.S.C. 7701(a)(33)(B) (dealing with gas pipeline
carriers) to reflect that the duties of the Federal Power
Commission have been transferred to the Federal Energy
Regulatory Commission (FERC). It would amend 26 U.S.C.
7701(a)(33)(C)(i) (dealing with railroads) to substitute the
Board for the ICC. It would amend 26 U.S.C. 7701(a)(33)(C)(ii)
(dealing with oil pipelines) to substitute FERC (which now has
jurisdiction over such pipelines) for the ICC. It would amend
26 U.S.C. 7701(a)(33)(F) (dealing with water carriers) to
substitute the Secretary for the ICC. It would amend 26 U.S.C.
7701(a)(33)(G) & (H) (dealing with railroad lessors and parent
corporations, respectively) to conform references to the ICA to
changes made by this bill.
Sec. 511. Title 28, United States Code
This section would amend title 28 of the United States Code
to substitute the Board for the ICC and to conform references
to the ICA to changes made by this bill. Subsection (a) would
change the heading for chapter 157, which governs review and
enforcement of ICC orders. Subsection (b) would amend 28 U.S.C.
2321, which provides for review of ICC decisions in Federal
courts of appeals and enforcement of ICC orders (other than
orders for the payment of money) in Federal district court.
Subsection (c) would amend 28 U.S.C. 2323, which provides for
the ICC to appear and be represented by its counsel in a court
action involving the validity of its order, and provides for
interested persons to intervene. Subsection (d) would amend 28
U.S.C. 2341, which lists the federal agencies covered by the
judicial review provisions of the Hobbs Act. Subsection (e)
would amend 28 U.S.C. 2342, which assigns to the Federal courts
of appeals exclusive jurisdiction to review the rules,
regulations, or final orders of agencies covered by the Hobbs
Act.
Sec. 512. Migrant and Seasonal Agricultural Worker Protection Act
This section would amend 29 U.S.C. 1841(b)--dealing with
motor vehicle safety in the transportation of migrant and
seasonal agricultural workers--to reflect the structural
changes made to subtitle IV of title 49 by this bill.
Sec. 513. Title 39, United States Code
This section would amend various postal provisions of title
39. Subsection (a) would amend 39 U.S.C. 5005--providing for
public availability of Postal Service contracts for the
transportation of mail--to substitute the Board for the ICC.
Subsection (b) would amend 39 U.S.C. 5203--governing the Postal
Service's use of regulated carriers--to remove subsection (f)
(a provision for an ICC finding that providing mail
transportation would be detrimental to a motor carrier or that
the carrier would not be suitable for providing such
transportation) and to revise subsection (g) to reflect the
transfer to the Board of the ICC's oversight responsibilities
for mail transportation under 39 U.S.C. 5207-5208. Subsection
(c) amends 39 U.S.C. 5207--which authorizes the ICC to
determine reasonable rates for mail transportation--to
substitute the Board for the ICC. Subsection (d) would amend 39
U.S.C. 5208--which provides procedures for reconsideration of
ICC determines under 49 U.S.C. 5207--to substitute the Board
for the ICC. Subsection (e) would make a conforming amendment
to the index for Chapter 52 of Title 39.
Sec. 514. Energy Policy Act of 1992
This section would amend 42 U.S.C. 13369--which directs the
Secretary of Energy to obtain data from, and consult with, the
ICC in establishing a data base on rates for transportation of
coal, oil, and gas--to substitute the Board for the ICC.
Sec. 515. Railway Labor Act
This section would amend 45 U.S.C. 151--which defines terms
used in the Railway Labor Act--to conform the definition of
``carrier'' to changes made by this bill and to substitute the
Board for the ICC in various references.
Sec. 516. Railroad Retirement Act of 1974
This section would amend 45 U.S.C. 231--which defines terms
used in the Railroad Retirement Act of 1974--to conform the
definition of ``carrier'' to comport with changes made in this
bill and to substitute the Board for the ICC in various
references. Notwithstanding these changes, this bill is not
intended to affect the status of employers for purposes of the
Railroad Retirement Act, as section 122 of the bill clarifies.
Sec. 517. Railroad Unemployment Insurance Act
Subsection (a) would amend 45 U.S.C. 351 to conform the
definition of ``carrier'' to comport with changes made in this
bill and to substitute the Board for the ICC in references.
Subsection (b) would amend 45 U.S.C. 352(h)(3) to substitute
the Board for the ICC in one place and to clarify that the
Board referred to next in that sentence is the Railroad
Retirement Board. Notwithstanding these changes, this bill is
not intended to affect the status of employers for purposes of
the Railroad Unemployment Insurance Act, as section 122 of the
bill clarifies.
Sec. 518. Emergency Rail Services Act of 1970
This section would amend 45 U.S.C. 662--which requires ICC
approval of the terms of purchase or lease when the Secretary
procures track of a railroad in reorganization--to substitute
the Board for the ICC.
Sec. 519. Regional Rail Reorganization Act of 1973
This section would amend 45 U.S.C. 744--which requires ICC
approval for changes in rail service in the Northeast by
carriers other than Consolidated Rail Corporation (Conrail)--to
substitute the Board for the ICC.
Sec. 520. Railroad Revitalization and Regulatory Reform Act of 1976
This section would amend 45 U.S.C. 830--which involves
government railroad loan programs--to update a reference to the
railroad security issuance provisions of the ICA.
Sec. 521. Alaska Railroad Transfer Act of 1982
This section would amend 45 U.S.C. 1207--which brings the
Alaska Railroad under the ICC's jurisdiction--to substitute the
Board for the ICC.
Sec. 522. Merchant Marine Act, 1920
Subsection (a) would amend section 8 of the Merchant Marine
Act, 1920 (46 U.S.C. App. 867)--under which the Secretary is to
report to the ICC regarding detrimental effects on ports of
rail rates and practices--to substitute the Board for the ICC.
Subsection (b) would amend section 28 of the same Act (46
U.S.C. App. 884)--under which the ICC is charged with enforcing
a requirement that railroads may not prefer foreign flag water
carriers by charging them a lower rate than American flag water
carriers--to substitute the Board for the ICC.
Sec. 523. Service Contract Act of 1965
This section would amend 41 U.S.C. 356(3)--which exempts
motor carriers from the Davis-Bacon Act--to reflect the
elimination of tariffs for most motor carriage under this bill.
Sec. 524. Federal Aviation Administration Authorization Act of 1994
This section would amend section 601(d) of Pub. L. 301-305
to continue Hawaii's regulation of motor carriers in that
state.
Title VI--Authorization
Section 601. Authorization of appropriations
This section would authorize funding for (1) the closedown
of the ICC and severance costs for its personnel, (2) the Board
for fiscal year 1996, and (3) the Board for fiscal years 1997
and 1998 for the functions transferred from the ICC.
Title VII--Effective Date
Section 701. Effective date.
This section would make this bill effective on January 1,
1996.
ADDITIONAL VIEWS OF SENATOR PRESSLER
I do not believe there should be federally-mandated labor
protection provisions in any railroad transaction. My initial
plan was to propose that all labor protection requirements be
dropped to the six month standard as proposed in the Amtrak
legislation and to ensure no labor protection on Class II or
Class III railroad transactions.
In deference to my Democratic colleagues and in the hopes
of moving this legislation forward, I have agreed to include in
S.1396 a labor protection standard. While this provision makes
a modest step forward, it does not go nearly far enough. I
believe that all federally-mandated labor protection should be
eliminated for short line and regional railroads.
I do want to acknowledge, however, that our Committee-
passed bill does include positive features. It promotes the
line sale process and limits the discretion of the Board to
impose labor protection. While we have not eliminated the
option to impose labor protection on these transactions.
However, we have lowered the ceiling on labor protection. If
the Commission, as under the current standards, believes that
``exceptional circumstances'' exist, they then have a range
from notification to one year severance payments--not six
years. I expect the Board to continue the existing exemption
practice.
The bill allows Class II and Class III freight railroads to
directly acquire, construct, operate or provide transportation
over rail line with the one year cap on labor protection. This
will eliminate the need to set up ``new companies'' every time
a line is acquired. Further, this will supersede section 11343
requirements for these transactions which currently require the
imposition of 6 year labor protection. For the first time it
will be possible for a regional railroad to directly buy a line
and operate it as a part of the system.
If there is any question of a trade-off between federally-
mandated protection payments and service preservation, the
dollars must go to service preservation. Only the most
exceptional line sale cases should even present a question of
whether labor protection should be imposed. This bill is
intended to all but eliminate challenges so that the current
exemption process can continue with few interruptions.
Finally, in terms of labor protection, it is my view that
an adversely affected employee is one who has lost his job
because he is not hired by the acquiring carrier or retained by
the selling carrier. We want the motivation to be to keep
employees and their skills in the railroad industry, not to
provide a pay off to leave it.
Larry Pressler.
ADDITIONAL VIEWS OF SENATOR ASHCROFT
One issue which I feel needs to be examined further is that
of remedies. Specifically, Congress must determine whether or
not the Federal law for remedies should be exclusive and
preempt remedies based on statutory or common law. The
prevailing case law, as developed by courts across the country,
has long interpreted the Interstate Commerce Act to prohibit
remedies based on statutory or common law. However, recent
court decisions have allowed action against carriers to proceed
under other laws. I believe that Congress should be concerned
about these decisions because they have the potential of
undermining uniform federal policy. In fact, the Department of
Transportation's ``Report on the Future of the Interstate
Commerce Commission'' published in July of 1995 stated
specifically that ``repeals or cutbacks in ICC's current
regulatory authority should not revive common law or state
jurisdiction.''
Exclusive preemption of other remedies would prevent a
confusing situation where legal actions are instituted under a
variety of laws. This could result in similar claims being
treated differently from one state to another and would likely
encourage forum shopping. In order to avoid this, exclusive
remedies are needed to provide a consistent method of resolving
disputes and prevent needless litigation.
I believe the Committee should continue to examine this
issue before S.1396 is brought to the floor of the Senate. I
believe it has been, and continues to be, the intent of
Congress to establish a uniform federal standard for the
benefit of interstate commerce and this nation's economy.
John Ashcroft.
Changes in Existing Law
In the opinion of the Committee, it is necessary in order
to expedite the business of the Senate to dispense with the
requirement of paragraph 12 of rule XVI of the Standing Rules
of the Senate (relating to the showing of changes in existing
law made by the bill reported by the Committee).