Implementation of Section 4 of the Negotiated Rates Act of 1993

INTERSTATE COMMERCE COMMISSION

49 CFR Parts 1002, 1011, and 1130

[Ex Parte No. MC-219]

Implementation of Section 4 of the Negotiated Rates Act of 1993

AGENCY: Interstate Commerce Commission (ICC).

ACTION: Notice of proposed rules.

-----------------------------------------------------------------------

SUMMARY: The Commission is proposing regulations to implement section 4

of the Negotiated Rates Act of 1993. The proposed regulations would

establish a mechanism for obtaining ICC review and approval for motor

carriers (other than household goods carriers) and shippers to resolve,

by mutual consent, overcharge and undercharge claims resulting from

incorrect tariff provisions or billing errors arising from inadvertent

failure to properly and timely file and maintain agreed-upon rates,

rules, or classifications in compliance with 49 U.S.C. 10761 and 10762.

DATES: Comments are due on April 11, 1994.

ADDRESSES: Send comments (an original and 10 copies) referring to [Ex

Parte No. MC-219] to: Interstate Commerce Commission, Office of the

Secretary, Case Control Branch, Washington, DC 20423.

FOR FURTHER INFORMATION CONTACT: Larry Herzig or James Manning (202)

927-5180. TDD for hearing impaired: (202) 927-5721.

SUPPLEMENTARY INFORMATION: Section 4 of the Negotiated Rates Act of

1993 (Pub. L. 103-180), to be codified at 49 U.S.C. 11712, provides

that:

Subject to Commission review and approval, motor common carriers

subject to the jurisdiction of the Commission * * * [other than

household goods carriers] and shippers may resolve, by mutual

consent, overcharge and undercharge claims resulting from incorrect

tariff provisions or billing errors arising from the inadvertent

failure to properly and timely file and maintain agreed upon rates,

rules, or classifications in compliance with [49 U.S.C.] 10761 and

10762 * * * 49 U.S.C. 11712(a).

Under this language, the Commission may approve a departure from

the filed rate when the shippers and carriers agree, and the departure

is needed to settle claims resulting from incorrect tariff provisions

or billing errors arising from the carrier's inadvertent failure to

properly and timely file and maintain agreed upon rates, rules, or

classifications.1

---------------------------------------------------------------------------

\1\Carriers are otherwise required by law to collect only the

filed rate. Where the carrier has collected a rate higher than the

applicable filed rate, and the filed rate is the rate the parties

intended, the carrier may continue, as it would prior to the NRA, to

repay the excess amount without recourse to the Commission. Carriers

do not require court or Commission approval when merely conforming

to that requirement.

---------------------------------------------------------------------------

A shipper might consent to waive carrier payment of overcharges if,

for example, the charges collected at the time of shipment were the

charges the shipper had agreed to pay, and later the parties determined

that a lower rate was in fact the applicable filed rate.2

Similarly, a carrier might consent to waive undercharges where the

applicable filed rate is higher than the rate the parties had intended.

For example, the carrier might have inadvertently failed to file the

rate it had negotiated and intended to apply. In other cases, the filed

tariff provision may have been incorrect; for example, the commodity

description might not be sufficiently inclusive or the shipment origin

might be described as within a commercial zone when it is actually

several miles outside the zone.3

---------------------------------------------------------------------------

\2\``Overcharge'' has traditionally meant the amount by which

the collected rate exceeds the legally applicable filed rate. See 49

U.S.C. 11706(b) and 11705(b)(1).

\3\In some cases where there are incorrect tariff provisions or

an inadvertent carrier failure to properly and timely file and

maintain the agreed upon rates, rules, or classifications, the

shipper may have already paid charges that were based on a higher

rate than the one the parties had intended. In this situation, the

proposed rules would permit carriers to pay back the excess amounts.

---------------------------------------------------------------------------

To implement the provisions of Section 11712(a), we are proposing

rules that are similar to our Special Docket rules at 49 CFR 1130.2(e),

which allow rail and water carriers to waive collection of undercharges

or pay reparations for similar reasons.4 These proposed motor

``Tariff Reconciliation'' rules provide a process that will in most

cases require the carrier to file only a letter of intent and an

appropriate filing fee. (If a protest is filed or the Commission

initiates an investigation on its own motion, the carrier could reply.)

Following the protest period and Commission review, the Commission will

issue an order either approving or disapproving the agreement.

---------------------------------------------------------------------------

\4\Unlike the rail rules, the proposed rules for motor carriers

do not provide for the tolling of a statute of limitations. The

reason is that for proceedings involving motor carriers, the statute

of limitations can be tolled only by the filing of a court (not a

Commission) action. 49 U.S.C. 11706(a), 11706(b), and 11706(c)(2).

Since the section 11706 limitations periods apply only to civil

actions, not to matters brought to the Commission under section

11712, the Commission proposes to accept letters of intent for motor

shipments without regard to the dates of the shipments. This will

allow carriers to adjust their charges even after the time for civil

actions has passed, so as to avoid exposure to penalties for

departure from the filed rate. See 18 U.S.C. 3282 (setting a five

year period for enforcement actions against carriers) and 49 U.S.C.

11902 (six years for actions against shippers who have received

rebates).

---------------------------------------------------------------------------

The letter of intent must describe the action intended (i.e.,

departure from the filed rate). While we are not proposing any

particular format for these letters, they must contain, at a minimum,

the following information:

1. The name(s) and address(es) of the payer(s) of the freight

charges;

2. The name(s) of the carrier(s) involved in the traffic;

3. The amount(s) involved;

4. The tariff authority(ies) for the charged and sought rates;

5. The date(s) when the shipment(s) involved were delivered or

tendered for delivery;

6. The point(s) of origin and destination of the shipment(s) and the

route(s) of movement;

7. The commodity(ies) transported;

8. A statement certifying that the carrier(s) participating in the

shipment(s) or the payer(s) of the freight charges (if waiver of

overcharge is involved) concur(s) with the intent to depart from the

filed rate;

9. A brief explanation of the incorrect tariff provision(s) or

billing error(s) causing the request to depart from the filed rate;

and

10. The reason(s) why the Commission should approve the proposed

resolution.

Letters of intent would be made available for public inspection in

the Special Docket Board Public File, Room 4313, at our offices in

Washington, DC. Letters of objection may be filed within 30 days of the

filing of the petition. Following filing of the letter of intent, the

proposed rules would provide separate procedures for the processing of

uncontested and contested cases. With respect to uncontested petitions

(letters of intent) on which the Commission does not initiate a formal

investigation the Commission proposes two alternative procedures and

requests comments from interested parties as to which procedure the

Commission should adopt.

One procedure would adapt the Special Docket procedures. Under

these procedures, objections could be lodged against a petition for a

period of 30 days following its filing. If none were received and if by

the 45th day following the filing date of the petition the Commission

did not institute an investigation on its own motion, the petition

would be considered to have been approved by the Commission. This would

be consistent with the Special Docket Procedures where, unless

objections are filed within 45 days after a petition is filed, the

petition is thereafter considered to be ``an order of the Commission

authorizing the action contemplated in the petition.'' See 49 CFR

1130.2(e)(4). Under an alternative procedure for processing uncontested

petitions, where the Commission decides not to investigate, the

Commission would issue an order, through its Special Docket Board

either approving or disapproving the petition.

Both procedures would meet section 11712's requirement for

Commission ``review and approval'' of the consensual resolution of

overcharge and undercharge claims resulting from incorrect tariff

provisions or billing errors arising from the inadvertent failure to

properly and timely file and maintain agreed upon rates, rules, or

classifications by providing for careful Commission monitoring to

assure that the new process is not misused or abused. Both procedures

would do this by providing sufficient time for Commission consideration

of each petition and the opportunity for a formal Commission

investigation. The procedures differ in whether a final order will be

issued granting approval of a petition not investigated by the

Commission in an uncontested case. Under these circumstances, the first

procedure would assure parties of a resolution of their case within 45

days. The second procedure would assure receipt of a written order

confirming approval of a petition. This would also be accomplished in a

short time, but the rules would not establish a standard deadline. In

proposing these rules, the Commission notes that departures from the

filed rate are not to be usual or expected activities. For any petition

approved, under either of the procedures described above, or the other

procedures proposed for contested and investigated cases, the claims to

overcharges or undercharges would then be deemed to be waived (and,

where refunds are involved, the carrier could then return to the

shipper the excess amounts already collected).

If a letter is contested, or if the Commission decides on its own

motion to investigate a particular case, carriers would not be allowed

to take any action until the case is reviewed by the Special Docket

Board and an appropriate order either granting or denying the

application is issued. Carriers may file replies if objections are

filed, or if an investigation is initiated on the Commission's own

motion.

We are proposing a filing fee of $70.00. This is the same as the

current filing fee of $70.00 under the rail/water Special Docket letter

of intent procedures, and seems appropriate because each procedure

requires similar processing.

Unlike the rail/water Special Docket procedures, the proposed rules

would not require carriers to notify the Commission that the proposed

transaction has been consummated. We see no need for notification, as

carriers can be assumed to consummate the transactions for which they

seek agency approval.

Public comment is invited on the scope of application of the

proposed rules, the appropriateness of the letter of intent

requirements, the alternative procedures for uncontested petitions not

investigated by the Commission, the level of the fee, and on all other

aspects of the proposed rules. To obtain a copy of the decision, write

to, call, or pick up in person from: Office of the Secretary, room

2215, Interstate Commerce Commission, Washington, DC 20423. Telephone:

(202) 927-7428. [Assistance for the hearing impaired is available

through TDD services (202) 927-5721.]

Environmental Statement

This action will not significantly affect either the quality of the

human environment or the conservation of energy resources.

Regulatory Flexibility Certification

Pursuant to 5 U.S.C. 605(b), we conclude that our proposed action

in this proceeding would not have a significant economic impact on a

substantial number of small entities. The economic impact would be

minimal because the proposed rules merely provide a simple, voluntary

method to resolve certain billing problems that are likely to arise in

only a small proportion of the shipments transported by the motor

carrier industry. Thus the economic impact is unlikely to be

significant within the meaning of the Regulatory Flexibility Act.

List of Subjects

49 CFR Part 1002

Administrative practice and procedure, Common carriers, Freedom of

information, User fees.

49 CFR Part 1011

Administrative practice and procedure, Authority delegations

(Government agencies), Organization and functions (Government

agencies).

49 CFR Part 1130

Administrative practice and procedure.

Decided: March 4, 1994.

By the Commission: Chairman McDonald, Vice Chairman Phillips,

Commissioners Simmons and Philbin. Commissioner Philbin dissented.

Sidney L. Strickland, Jr.,

Secretary.

For the reasons set forth in the preamble, Title 49, Chapter X,

parts 1002, 1011 and 1130 are proposed to be amended as set forth

below.

PART 1002--FEES

1. The authority citation for part 1002 continues to read as

follows:

Authority: 5 U.S.C. 552(a)(4)(A), 5 U.S.C. 553, 31 U.S.C. 9701

and 49 U.S.C. 10321.

2. In Sec. 1002.2(f), in the table, a new No. 81 is added to read

as follows:

Sec. 1002.2 Filing fees.

* * * * *

(f) * * *

------------------------------------------------------------------------

Type of proceedings Fees

------------------------------------------------------------------------

(81) Tariff reconciliation petitions from motor common

carriers..................................................... $70

------------------------------------------------------------------------

* * * * *

PART 1011--COMMISSION ORGANIZATION; DELEGATIONS OF AUTHORITY

3. The authority citation for part 1011 continues to read as

follows:

Authority: 49 U.S.C. 10301, 10302, 10304, 10305, 10321; 31

U.S.C. 9701; 5 U.S.C. 553.

4. Section 1011.6(e) is proposed to be revised to read as follows:

Sec. 1011.6 Employee boards.

* * * * *

(e) Special Docket Board. Disposition of special docket and tariff

reconciliation proceedings under 49 CFR 1130.2 (e), (f), and (g).

* * * * *

PART 1130--INFORMAL COMPLAINTS

5. The authority citation for part 1130 is proposed to be revised

to read as follows:

Authority: 5 U.S.C. 553 and 559; 49 U.S.C. 10321, 10707 and

11712.

6. In Sec. 1130.2, paragraph (f) is proposed to be revised by

adding the words ``or tariff reconciliation petition'' after the word

``petition'' in the parenthetical phrase in the first sentence and by

adding the words ``or tariff reconciliation'' after the words ``Special

Docket'' in the second sentence, and by adding a new paragraph (g) to

read as follows:

Sec. 1130.2 When damages sought.

* * * * *

(g) Tariff reconciliation proceedings for motor common carriers.

(1) Petitions to waive collection or permit payment.

Pursuant to 49 U.S.C. 11712, subject to Commission review and

approval, motor common carriers (other than household goods carriers)

and shippers may resolve, by mutual consent, overcharge and undercharge

claims resulting from incorrect tariff provisions or billing errors

arising from the inadvertent failure to properly and timely file and

maintain agreed upon rates, rules, or classifications in compliance

with 49 U.S.C. 10761 and 10762. Under section 11712, the Commission may

approve a departure from the filed rate when the shipper and carrier

agree, and the departure is needed to settle claims resulting from

incorrect tariff provisions or billing errors arising from the

carrier's inadvertent failure to properly and timely file and maintain

agreed upon rates, rules, or classifications. Petitions for appropriate

authority should be filed by the carrier in the Commission's tariff

reconciliation docket by submitting a letter of intent to depart from

the filed rate. Copies of the petitions must be served on all parties

named in the petitions. The petitions will be deemed the equivalent of

an informal complaint and answer admitting the matters stated in the

petition. Petitions shall be sent to the Special Docket Board,

Interstate Commerce Commission, Washington, DC 20423. The petitions

shall contain, at a minimum, the following information:

(i) The name(s) and address(es) of the payer(s) of the freight

charges;

(ii) The name(s) of the carrier(s) involved in the traffic;

(iii) The amount(s) involved;

(iv) The tariff authority(ies) for the charged and sought rate;

(v) The date(s) when the shipment(s) involved were delivered or

tendered for delivery;

(vi) The point(s) of origin and destination of the shipment(s) and

the route(s) of movement;

(vii) The commodity(ies) transported;

(viii) A statement certifying that the carrier(s) participating in

the shipment(s) or the payer(s) of the freight charges (if waiver of

overcharges is involved) concur(s) with the intent to depart from the

filed rate;

(ix) A brief explanation of the incorrect tariff provision(s) or

billing error(s) causing the request to depart from the filed rate; and

(x) The reason(s) why the Commission should approve the proposed

resolution.

(2) Public notice and protest. Tariff reconciliation petitions

(letters of intent) shall be served on all parties named in the

petition and will be made available by the Commission for public

inspection in the Special Docket Board Public File Room, Room 4313,

Interstate Commerce Commission, Washington, DC 20423. Any interested

person may protest the granting of a petition by filing a letter of

objection with the Special Docket Board within 30 days of Commission

receipt of the petition. Letters of objection shall identify the tariff

reconciliation proceeding, shall clearly state the reasons for the

objection, and shall certify that a copy of the letter of objection has

been served on all parties named in the petition.

(As to uncontested petitions, not investigated by the Commission

two alternative rules are offered for comment. Comments from interested

parties are requested on which procedure the Commission should adopt.)

(First possible rule)

(3) Uncontested petitions. If a petition is not contested, and if

the Commission does not initiate an investigation of the petition on

its own motion, approval is deemed granted without further action by

the Commission, effective 45 days after Commission receipt of the

petition. (Second possible rule)

(3) Uncontested petitions. If a petition is not contested, the

Commission may initiate an investigation of the petition on its own

motion, or it may simply issue an order either approving or

disapproving the petition.

(4) Contested petitions. If a petition is contested or the

Commission initiates an investigation of the petition on its own

motion, 15 days will be allowed for reply. The 15 day period will

commence on the date of service of the objections or, if the Commission

initiates an investigation on its own motion, on the date of service of

the decision initiating the investigation. After the period for reply

has expired, the Commission will issue a decision approving or

disapproving the agreement, or requesting further submissions from the

parties.

[FR Doc. 94-5625 Filed 3-9-94; 8:45 am]

BILLING CODE 7035-01-P