[Federal Register Volume 61, Number 59 (Tuesday, March 26, 1996)]
[Proposed Rules]
[Pages 13147-13148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7238]



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DEPARTMENT OF TRANSPORTATION
49 CFR Part 1313

[STB Ex Parte No. 541]


Railroad Contracts

AGENCY: Surface Transportation Board.

ACTION: Advance Notice Of Proposed Rulemaking.

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SUMMARY: Because the ICC Termination Act of 1995 (ICCTA) abolished the 
Interstate Commerce Commission (ICC) and revised the law respecting 
transportation contracts entered into by rail carriers to provide 
specified rail services under specified rates and conditions, the 
contract regulations formerly issued by the ICC are no longer in 
complete harmony with the applicable law. The Surface Transportation 
Board (Board) is issuing this advance notice of proposed rulemaking to 
solicit suggestions from the transportation community for appropriate 
regulations. Following the receipt of comments, the Board will issue a 
notice of proposed rulemaking.

DATES: Comments are due on April 25, 1996.

ADDRESSES: Send comments (an original and 10 copies) referring to STB 
Ex Parte No. 541 to: Surface Transportation Board, Office of the 
Secretary, Case Control Branch, 1201 Constitution Avenue NW., 
Washington, DC 20423.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 927-5610. [TDD for 
the hearing impaired: (202) 927-5721.]

SUPPLEMENTARY INFORMATION: The ICC Termination Act of 1995, Pub. L. No. 
104-88, 109 Stat. 803 (ICCTA), enacted on December 29, 1995, abolished 
the ICC and transferred the responsibility for regulating rail 
transportation to the Board. See ICCTA Section 101 (abolition of the 
ICC). See also new 49 U.S.C. 701(a) (establishment of the Board), as 
enacted by ICCTA Section 201(a). The transfer took effect on January 1, 
1996. See ICCTA Section 2 (effective date).
    The new law (i.e., the law in effect on and after January 1, 1996) 
differs in several important respects from the former law (i.e., the 
law in effect prior to January 1, 1996). This notice concerns the 
differences between new 49 U.S.C. 10709 and former 49 U.S.C. 10713 as 
respects contracts entered into by rail carriers to provide specified 
rail services under specified rates and conditions.
    New Sec. 10709(a) provides that rail carriers may enter into 
contracts to provide specified rail services under specified rates and 
conditions. This is a reenactment of former Sec. 10713(a).
    New Sec. 10709(b) relieves a party to such a contract from any 
duties other than those specified by the contract. This is a 
reenactment of former Sec. 10713(h).
    New Sec. 10709(c) relieves transportation provided under such 
contract from the regulatory provisions of new 49 U.S.C. 10101-11908, 
and makes the exclusive remedy for any alleged breach of such a 
contract an action in an appropriate state court or United States 
district court, unless the parties agree otherwise. This is a 
reenactment of former Sec. 10713(i). New Sec. 10709(c)(2) adds a 
clarification that this provision does not, in and of itself, confer 
original jurisdiction on the United States district courts.
    New Sec. 10709(d)(1) requires that a summary of each contract for 
the transportation of fertilizer and agricultural products, including 
grain as defined in 7 U.S.C. 75 1 and products thereof, be filed 
with the Board, containing such nonconfidential information as the 
Board prescribes. This represents a substantial narrowing from the 
prior filing requirement. Under former Sec. 10713(b)(1), the filing 
requirement applied to all rail transportation contracts (not just 
contracts to transport agricultural products), and carriers were 
required to file the complete contract with the ICC (in addition to the 
summary of nonconfidential information).

    \1\ 7 U.S.C. 75 is the codification of section 3 of the United 
States Grain Standards Act.
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    New Sec. 10709(d)(1) directs the Board to establish rules for such 
contracts for agricultural products, to ensure that the essential terms 
of such contracts are available to the general public. But, unlike 
former Sec. 10713(b)(2)(A), the new statute does not list the minimum 
essential terms; it leaves that matter for Board implementation. 
Similarly, unlike former Sec. 10713(b)(2)(B), the new statute does not 
address whether a new filing is required for amendments, supplements, 
or changes to such contracts; that too is a matter left to the Board.
    New Sec. 10709(d)(2) provides that documents, papers, and records 
relating to a rail transportation contract are not subject to 
disclosure under the Freedom of Information Act, 5 U.S.C. 552 (FOIA). 
This is a new provision, with no analogue in former Sec. 10713.
    New Sec. 10709(e) reenacts the ``grandfathering'' provision of 
former Sec. 10713(j) for rail transportation contracts that predate the 
Staggers Rail Act of 1980.
    New Sec. 10709(f) specifies that a rail carrier that enters into a 
transportation contract remains subject to the common carrier 
obligation, as set forth in new

[[Page 13148]]
Sec. 11101, with respect to rail transportation not provided under such 
a contract. This is a new provision that clarifies prior law.
    New Sec. 10709(g) reenacts the complaint provisions of former 
Sec. 10713(d), but limits their applicability. Under new Sec. 10709(g), 
complaints may only be filed against contracts for the transportation 
of agricultural products. As to such contracts, four grounds of 
complaint are available. They are: (1) a complaint by any shipper 
alleging that it will be harmed because the contract will unduly impair 
the ability of the contracting carrier to meet its common carrier 
obligations to the complainant under new Sec. 11101 (new 
Sec. 10709(g)(2)(A)(i)); (2) a complaint by a port alleging that it 
will be harmed because the contract will result in unreasonable 
discrimination against it (new Sec. 10709(g)(2)(A)(ii)); (3) a 
complaint by an agricultural shipper seeking matching terms (new 
Sec. 10709(g)(2)(B)(i)); and (4) a complaint by an agricultural shipper 
alleging that the contract constitutes a destructive competitive 
practice (new Sec. 10709(g)(2)(B)(ii)).
    Such complaints must be filed within 30 days after the contract 
summary is filed (new Sec. 10709(g)(1)), and the Board has 30 days to 
resolve complaints (new Sec. 10709(g)(3)). It should be noted that, in 
contrast to former Sec. 10713(b)(2)(A), new Sec. 10709(g) does not 
address discovery by agricultural shippers seeking remedies. This is a 
matter left to the Board's discretion.
    New Sec. 10709(h) retains the fleetwide equipment limitation of 
former Sec. 10713(k), which prohibits a carrier from committing more 
than 40 percent of its equipment capacity (by car type) in contracts 
for the transportation of agricultural commodities (including forest 
products, but not including wood pulp, wood chips, pulpwood or paper), 
without special permission from the Board. However, that limitation is 
set to expire on September 30, 1998. (A further limitation in former 
Sec. 10713(k), on the amount of equipment that could be committed by 
contract to an individual shipper, was not reenacted.)
    It is important to note that a rail carrier may enter into 
transportation contracts only to the extent that such contracts do not 
impair that carrier's ability to meet its common carrier obligations. 
New Sec. 11101(a) provides that a rail carrier does not violate its 
common carrier obligations merely because it fulfills reasonable 
contractual commitments before responding to reasonable requests for 
common carrier service. New Sec. 11101(a) further provides, however, 
that contractual commitments which deprive a carrier of its ability to 
respond to reasonable requests for common carrier service are not 
reasonable.
    New Sec. 10709 does not retain the railroad contract rate advisory 
service of former Sec. 10713(m).

Request for Comments

    The ICC's regulations implementing former Sec. 10713, set forth at 
49 CFR Part 1313, are not appropriate for implementing new Sec. 10709. 
Therefore, we invite all interested persons to submit suggestions for 
regulations that would be appropriate to implement new Sec. 10709. We 
encourage the various sectors of the transportation community to 
discuss these matters and present a proposal for the Board's 
consideration.
    Comments (an original and 10 copies) must be in writing, and are 
due on April 25, 1996.
    We encourage any commenter that has the necessary technical 
wherewithal to submit its comments as computer data on a 3.5-inch 
floppy diskette formatted for WordPerfect 5.1, or formatted so that it 
can be readily converted into WordPerfect 5.1. Any such diskette 
submission (one diskette will be sufficient) should be in addition to 
the written submission (an original and 10 copies).

Small Entities

    Because this is not a notice of proposed rulemaking within the 
meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), we 
need not conduct at this point an examination of impacts on small 
entities. We will certainly welcome, of course, any comments respecting 
whether any regulations that commenters may suggest would have 
significant economic effects on any substantial number of small 
entities.

Environment

    The issuance of this advance notice of proposed rulemaking will not 
significantly affect either the quality of the human environment or the 
conservation of energy resources. Furthermore, we would not expect that 
regulations suggested for implementing new 49 U.S.C. 10709 would 
significantly affect either the quality of the human environment or the 
conservation of energy resources. We certainly welcome, of course, any 
comments respecting whether any suggested regulations would have any 
such effects.

    Authority: 49 U.S.C. 721(a) and 10709.

    Decided: March 12, 1996.

    By the Board, Chairman Morgan, Vice Chairman Simmons, and 
Commissioner Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 96-7238 Filed 3-25-96; 8:45 am]
BILLING CODE 4915-00-P