Disclosure, Publication, and Notice of Change of Rates and Other Service Terms for Rail Common Carriage

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Chapter X

[STB Ex Parte No. 528]

Disclosure, Publication, and Notice of Change of Rates and Other

Service Terms for Rail Common Carriage

AGENCY: Surface Transportation Board, DOT.

ACTION: Advance Notice Of Proposed Rulemaking.

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SUMMARY: The ICC Termination Act of 1995 (ICCTA) eliminated the tariff

and tariff filing requirements formerly applicable to rail carriers,

but imposed in lieu thereof certain obligations to disclose common

carriage rates and service terms as well as a requirement

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for advance notice of an increase in such rates or change in service

terms. The ICCTA requires the Board to promulgate regulations to

administer these new obligations by June 29, 1996. The Board seeks

public comment on appropriate regulations for that purpose, and

encourages the affected interest groups to discuss and seek mutually

agreeable regulations to propose.

DATES: Comments are due on April 8, 1996.

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

Ex Parte No. 528 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 Interstate Commerce Commission (ICC) and transferred responsibility

for the economic regulation of rail transportation to a new Surface

Transportation Board (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).1

\1\ The ICCTA also made several changes to the rail regulatory

authority that had been administered by the ICC. In this notice,

when referring to the provisions of the United States Code affected

by ICCTA we use the word former to refer to the law in effect prior

to January 1, 1996, and the word new to refer to the law in effect

on and after January 1, 1996.

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The substantive provisions of the new law differ in several

important respects from the former law. As pertinent here, the former

law required that rail carriers file with the ICC tariffs containing

the specific rates and charges (or the basis for calculating them) for

their common carriage transportation services. Rail carriers had to

adhere to the rates and terms contained in their tariffs. See former 49

U.S.C. 10761 and 10762. See also 49 CFR part 1314 (1995).

The ICCTA eliminated the rail tariff requirements, effective

January 1, 1996. Accordingly, no new rail carrier tariffs are to be

filed with the Board, and the rail carrier tariffs that were previously

filed with the ICC are no longer effective tariffs as of January 1,

1996. The ICC regulations at 49 CFR part 1314, governing rail carrier

tariffs, are likewise not effective as of that date and are being

formally repealed in another proceeding recently initiated by the

Board.

Nevertheless, new 49 U.S.C. 11101(b) and (d) require disclosure of

rail common carriage rates and service terms. New 49 U.S.C. 11101(c)

further requires that rail carriers, when providing common carriage,

not increase their rates or change their service terms without advance

notice. Finally, new 49 U.S.C. 11101(e) requires rail carriers to

adhere to the rates and service terms published or otherwise made

available under new 49 U.S.C. 11101(b)-(d).2

\2\ A central feature of both the old and new law is the

requirement that a rail carrier adhere to its established rates.

Therefore, as a transition matter, a question that arises is whether

a rail carrier must continue to adhere to its established rates and

service terms--those that were in effect (in tariffs on file with

the ICC) on December 31, 1995--unless and until changed in a manner

consistent with the requirements of new section 11101. Otherwise, it

could be argued that there could be a break in the continuity of

rates that Congress did not intend.

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New 49 U.S.C. 11101(f) directs the Board to establish rules to

implement the requirements of new 49 U.S.C. 11101. In accordance with

this directive, we intend to promulgate new regulations to implement

the requirements of new 49 U.S.C. 11101(b), (c), and (d). We do not

believe that implementing rules are required for new 49 U.S.C.

11101(a), which simply reenacts the longstanding common carrier

obligation that the carrier provide transportation or service on

reasonable request. We believe that this obligation, which has been

well developed through case law, is best addressed on a case-by-case

basis.

Similarly, our preliminary view is that implementing rules are not

required for new 49 U.S.C. 11101(e), which requires a rail carrier to

provide transportation or service in accordance with the rates and

service terms, and any changes thereto, as published or otherwise made

available under new 49 U.S.C. 11101(b), (c), or (d). This requirement

appears to be clear on its face.

The regulations implementing new section 11101 would appear to

apply to any transportation or service provided by a rail carrier

subject to our jurisdiction under new 49 U.S.C. 10501, with two

exceptions. They would not apply, it would seem, to transportation or

service provided by a rail carrier (1) under a contract pursuant to

former 49 U.S.C. 10713 or new 49 U.S.C. 10709, or (2) covered by an

exemption issued under former 49 U.S.C. 10505 or new 49 U.S.C. 10502,

to the extent that such exemption remains in effect and applies to rate

notice and disclosure requirements.

The new regulations would first need to address the requirement of

new 49 U.S.C. 11101(b) that a rail carrier promptly provide to any

person, on request, its rates and other service terms. It would appear

that this requirement applies both to the disclosure of an existing

rate (and related service terms) and to the establishment of a new rate

(and related service terms) where none exists.

In the situation where the carrier has existing rates covered by

the rate information request, the provisions of 49 U.S.C. 11101(b) and

(f) require the carrier ``immediate[ly]'' to disclose its ``rates and

service terms, including classifications, rules, and practices'' to any

person requesting such information. We seek suggestions for a rule that

would implement these provisions in a way that would provide the rate

requester with complete information about all relevant terms and

conditions. We also seek input on whether we should attempt to define

the word immediately, or instead should simply establish general

guidelines to be applied on a case-by-case basis, setting up broad

parameters governing disclosure.

There may be instances in which a shipper or prospective shipper

requests the carrier to establish a rate for a type of traffic for

which no existing rate is in place. Again, the provisions of 49 U.S.C.

11101(b) appear to require that the rail carrier provide a rate, as

well as any related charges and service terms, promptly. We seek input

on whether we ought to define the word promptly, or instead should

simply adopt broadly applicable guidelines.

The new regulations also need to address the requirement of new 49

U.S.C. 11101(c) that a rail carrier may not increase a common carriage

rate or change a common carriage service term without first giving 20

days' notice to any person who, within the previous 12 months, (1) has

requested that rate or term under new subsection (b), or (2) has made

arrangements with the carrier for a shipment that would be subject to

the increased rate or changed term. It seems to us that the advance

notice requirement would apply to known users of the transportation or

service to which the increase or change is applicable (i.e., a person

who has made a shipment within the past year or has already made

arrangements for a future shipment) and also to known prospective users

of such transportation or service (i.e., a person who has requested

that rate to be established). Our preliminary view is that it would not

be necessary or appropriate to require a carrier to keep a record of

and notify all persons who have requested rate information but are not

users of the

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affected transportation service. We request comment on what guidance,

if any, should be given for determining which members of the shipping

public are covered by the 20-day notice period.

We note that the notice requirement does not apply to a rate

decrease, which a carrier may apply without notice. Similarly, it would

not seem that the notice requirement should apply to, and hence delay,

a change in service terms that is clearly beneficial to shippers. Our

initial view is that it is not necessary to establish rules addressing

how to determine whether a service change is clearly beneficial to

shippers. Commenters may wish to address this issue.

The new regulations also need to address the publication

requirement of new 49 U.S.C. 11101(d), which requires railroads to

``publish, make available, and retain for public inspection [their]

common carrier rates, schedule of rates, and other service terms,'' and

any changes thereto, for the transportation of agricultural products

(including grain, as defined in 7 U.S.C. 75, and all products thereof)

and fertilizer. It should be noted that the publication requirement for

these commodities is in addition to the disclosure and notification

requirements of new subsections (b) and (c). This additional

requirement reflects Congress' concern that broad dissemination of

market information on a timely basis is particularly critical to the

agricultural sector of the economy, given the seasonal nature of its

transportation needs and the short time frame within which such needs

must be met.

It would seem that the required publication could be provided by

the rail carrier itself or by an agent (e.g., a publishing service or

another rail carrier) acting at the rail carrier's direction. It would

also seem that these publications would need to be made available to

all interested persons, but that the rail carrier or its agent should

be able to impose reasonable charges for such publications.3 We

seek comment on how best to implement this provision. Again, we request

input on how to interpret the requirement that publication of any

proposed or actual changes be made promptly.

\3\ Of course, to accommodate particular segments of the

agricultural sector, it would seem that carriers could, at their

discretion, continue to issue more narrowly focused publications as

well.

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Finally, the new regulations should provide for the required

information to be supplied either in writing or in electronic form. It

would appear that the form chosen would depend upon the technical

capacities of the carrier to transmit, and of the requester to receive,

the information.

Request for Comments

We invite all interested persons to comment and to offer

suggestions for the new regulations. We encourage affected interest

groups to discuss these new requirements with each other and to seek a

mutually agreeable set of regulations that would meet the needs of all

affected interests--both shipper and carrier, and both large and small.

Comments (an original and 10 copies) must be in writing, and are

due on April 8, 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 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. 11101 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 suggested revisions would have any such

effects.

Authority: 49 U.S.C. 721(a) and 11101.

Decided: February 29, 1996.

By the Board, Chairman Morgan, Vice Chairman Simmons, and

Commissioner Owen.

Vernon A. Williams,

Secretary.

[FR Doc. 96-5515 Filed 3-7-96; 8:45 am]

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