"REVOCATION OF CERTIFICATES AND PERMITS

"SEC. 312a. (1) Certificates and permits shall be effective from the date specified therein, and shall remain in effect until suspended or revoked as provided in this section.

"(2) Any certificate or permit issued under this part may, upon application of the holder thereof, in the discretion of the Commission, be amended or revoked, in whole or in part, or may, upon complaint, or on the Commission's own initiative, after reasonable notice and opportunity for hearing, be suspended, changed, or revoked, in whole or in part, for willful failure to engage in, or to continue to engage in, the operation authorized by such certificate or permit. "(3) The Commission shall, upon complaint or on its own initiative, after reasonable notice and opportunity for hearing, in any case of willful failure to engage in any operation authorized by any such certificate for a period of three or more years (whether occurring before or after the date of enactment of this section), revoke the part of such certificate authorizing such operation." (2) The table of contents in section 301 of the Interstate Commerce Act, as amended (49 U.S.C. 901), is amended by inserting immediately after and below "Sec. 312. Transfer of certificates and permits."

the following:

"Sec. 312a. Revocation of certificates and permits.".

(b) Section 309 of the Interstate Commerce Act is further amended by adding at the end thereof the following:

"(h) No person shall be required to obtain a certificate under subsection (a) in order to perform transportation subject to the provisions of this part over any route or routes or between any ports with respect to which no such certificate is in effect, and on and after the effective date of this subsection no such certificates shall be issued to perform such transportation over any route or routes or between any ports with respect to which no certificate is then in effect. Any person performing such transportation under the provisions of this subsection shall be deemed to be a common carrier by water for the purposes of this part. The Commission may not suspend any initial schedule of rates filed by any person performing transportation under the provisions of this subsection for which such person has never had rates on file with the Commission."

SEC. 9. The amendments made by this Act shall take effect on the ninetieth day after the date of enactment of this Act.

Passed the House of Representatives May 6, 1965.

S. 1142

RALPH R. ROBERTS,

Clerk.

Recommendation No. 1

"This proposed bill would give effect to legislative recommendation No. 1 of the Interstate Commerce Commission as set forth on page 60 of its 78th annual report as follows:

"We recommend that sections 20a and 214 be amended so as expressly to exempt from the Commission's jurisdiction thereunder, securities issued by States, municipalities, or other governmental bodies which are carriers as defined in part I or II of the act."

JUSTIFICATION

The purpose of the draft bill is to make certain that securities issued by the Federal Government, States, municipalities, or other governmental bodies which acquire the status of common carriers are not subject to the requirements of sections 20a or 214 of the Interstate Commerce Act. Although these requirements do not apply to securities issued for nontransportation purposes such as highway, school, and housing bonds, it is doubtful whether securities issued to finance the construction, acquisition, and operation of interstate common carrier transportation facilities are likewise exempt.

Under sections 20a and 214 of the act carriers must obtain Commission approval and authorization for stock and security issues and for assumptions of obligations. Except for certain relatively minor transactions, neither section exempts nor authorizes the Commission to exempt, any issues or assumptions. When section 20a was enacted into law as a part of the Transportation Act of 1920, interstate rail transportation was almost exclusively performed by private individuals or corporations. In recent years, however, public owner

ship and operation of common carriers has become more common. A number of port authorities are now served by publicly owned and operated carriers such as the State-owned California Belt Railroad and by subsidiary corporations such as the Port Authority Trans-Hudson Corp., a wholly owned subsidiary of the Port of New York Authority. In addition, a number of cities own and operate rail lines. The city of Galveston, Tex., operates a line of railroad in interstate commerce known as the Galveston Wharves. The city of Cincinnati, Ohio, owns a railroad line and recently floated a sizable bond issue in connection therewith, without requesting or receiving authorization from the Commission. Moreover, in view of the recent passage of the Urban Mass Transportation Act of 1964 (Public Law 88-365) the number of such instances is almost certain to increase.

The Commission believes that its approval should not be required for the issuance of transportation securities and the assumption of obligations by political entities or their instrumentalities. Financial transactions of this nature are generally backed by the credit of a governmental body and are not as subject to manipulation as those of private corporations.

However, in the absence of an explicit statutory exemption, the legality of such transactions accomplished without Commission approval and authoriza tion is susceptible to challenge in the courts. Enactment of the draft bill would eliminate this vulnerability by exempting these transactions from the require ments of sections 20a and 214 of the act.

S. 1143

Recommendation No. 4

This proposed bill would give effect to legislative recommendation No. 4 of the Interstate Commerce Commission as set forth on page 62 of its 78th annual report as follows:

"We recommend that part III of the act be amended to provide for revocation of water carrier certificates or permits for nonuse."

JUSTIFICATION

The purpose of the attached draft bill is to grant the Interstate Commerce Commission specific authority to revoke water carrier certificates and permits. for nonuse. It would also specifically authorize the Commission, in its discretion, to amend or revoke, in whole or in part, a certificate or permit upon the application of the holder thereof.

At present 268 water carrier certificates and permits issued by the Commission remain in effect. Of this number, 84 or 31.2 percent are not being used, 10 of which have been dormant since World War II. Although the Commission may, upon proper application, grant identical operating authority to other carriers, the mere existence of these dormant certificates and permits under which operations can be lawfully reactivated at any time acts as a deterrent to the institution of new operations by other carriers and in some instances is a threat to the economic well-being of the transportation industry. While water carriers should have reasonable protection against loss of their operating rights where abnormal or special conditions have hindered resumption or continuance of operations, it is not in the public interest that unused operating authorities be allowed to remain in effect indefinitely.

Part III of the Interstate Commerce Act does not specifically provide revocation authority and procedure such as are found in parts II and IV thereof, which apply to motor carriers and freight forwarders, respectively. In this connection, the Supreme Court, in United States v. Seatrain Lines, Inc., 329 U.S. 424, indicated that in the absence of express authority granted by Congress the Commission does not have the authority to revoke, in whole or in part, water carrier certificates or permits issued under part III of the act, once they have become effective and the time for requesting rehearing or reconsideration has expired.

Accordingly, the proposed measure would give the Commission specific authority to determine upon the facts in each case whether a certificate or permit should be revoked for nonuse. It would also confirm the Commission's power to revoke water carrier certificates and permits when tendered by the holder for cancellation.

The authority sought is limited to the revocation of certificates and permits only in those cases of willful failure to operate or when requested by the holder. It is not contemplated that operating authorities would be revoked

for nonuse without allowing a reasonable period of time for resumption of service.

Recommendation No. 5

S. 1144

This proposed bill would give effect to legislative recommendation No. 5 of the Interstate Commerce Commission as set forth on page 62 of its 78th annual report as follows:

"We recommend that the Medals of Honor Act applicable to outstanding acts of heroism involving railroads and motor carriers be repealed."

JUSTIFICATION

The Medals of Honor Act was enacted in 1905 and, as amended, it has adequately served its purpose of providing a means of according due recognition to unusual acts of heroism which might have otherwise gone unnoticed.

At the present time, however, a much more comprehensive recognition of heroism is afforded by the Carnegie Hero Fund Commission-an organization having a permanent staff of investigators constantly in travel status who investigate all reported acts of heroism. Potential recipients of Carnegie Awards are not required to file applications.

As of the end of 1963 pecuniary awards by the Carnegie Hero Fund Commission covering acts of heroism in all types of situations totaled nearly $10 million, and 4,694 medals (bronze, silver, or gold) have been awarded. Only a bronze medal may be awarded under the Medals of Honor Act, and no pecuniary award is possible.

In these circumstances, we believe that repeal of the Medals of Honor Act would avoid needless duplication of effort and expense to the Commission without depriving deserving individuals of the recognition and honor due them for their heroic acts.

Recommendation No. 7

S. 1145

This proposed bill would give effect to legislative recommendation No. 7 of the Interstate Commerce Commission as set forth on page 64 of its 78th annual report as follows:

"It is recommended (a) that section 1(22) be amended so as expressly to include within the exemption from the Commission's jurisdiction contained in that section, the construction, acquisition, operation, abandonment, and joint ownership or joint use of spur, industrial, team, switching, or side tracks, and terminals incidental thereto, whether located in one or more States, and (b) that section 5(2)(a)(ii) be amended so as to conform to section 1(22), as so amended, and to section 1 (18)."

JUSTIFICATION

Section 1(22) of the Interstate Commerce Act, among other things, exempts from the Commission's jurisdiction the construction or abandonment of spur, industrial, team, switching, or side tracks located wholly within one State.

The proposed measure would expand this exemption to include the acquisition, operation, joint ownership or joint use of such intrastate trackage and would extend this broadened exemption to trackage of this nature located in two or more States.

Applications seeking Commission approval of the acquisition and operation of spur, industrial, team, etc., tracks located wholly within one State are nearly always granted. They are filed for the purpose of rendering necessary service to a particular industry or industries. The type of trackage involved generally is located in terminal or station areas, and is short in length and of relatively little monetary value. Under these circumstances, we believe that the processing and consideration of such applications unnecessarily adds to the workload of the Commission, and requires the expenditure of time and money by carriers and the Commission which could be devoted to other purposes.

Since, as a practical matter, the essential characteristics of spur, industrial, team, switching, or side tracks are the same whether they are located wholly within a single State or in two or more States, we also urge that the exemption be made applicable without regard to the number of States involved. The number of transactions relating to such interstate trackage is negligible and, in our judgment, the public interest would not be adversely affected if they were accomplished without the Commission's approval.

The last sentence of section 1(18) specifically excludes from the Commission's jurisdiction, both under that paragraph and under section 5, transactions between two or more railroads for the joint ownership or joint use of spur, industrial, team, switching, or side tracks. However, in section 5(2)(a)(ii) authority is conferred over such acquisition and operation without mention of the limitation on our jurisdiction under section 1(18). Also, it should be noted (1) that the exclusion in section 1(18) applies regardless of whether the involved trackage is located in one or more States, (2) that the section 1(22) exemption does not embrace terminals incidental to spur, industrial, team, etc., tracks, and (3) that section 1(22) refers to trackage of "street, suburban, or interurban electric railways ***," while section 5(a) (2) (ii) does not. We believe it most desirable that the language of these three sections be as comparable as possible. The proposed measure would accomplish this result.

Recommendation No. 8

S. 1146

This proposed bill would give effect to legislation recommendation No. 8 of the Interstate Commerce Commission as set forth on page 64 of its 78th annual report as follows:

"We recommend that section 5(1) be amended so as to exempt contracts, agreements, or combinations affecting the transportation of household goods to which any common carrier by motor vehicle may be a party with other such carrier or carriers for the pooling or division of traffic, service, or earnings."

JUSTIFICATION

Cooperative practices of household goods carriers were described by the Commission in Practices of Property Brokers, 53 M.C.C. 633, 636-637, as follows: "The transportation of small shipments at reasonable rates and the relatively high ratio of empty to loaded mileage are persistant economic problems with which the industry has always been faced and which it has had to overcome. This has required constant efforts within the industry for cooperative handling of shipments. Extremes in light and heavy traffic of individual carriers are frequent and are met by arrangements whereby inactive vans and trained personnel are diverted to those carriers who are experiencing above-normal demands for service. The carriers are unable to predict in advance the amount of equipment and personnel they will need to meet demands for service. They are especially confronted with the problem of maintaining employment for personnel who have to be trained for several years before being assigned to vehicles which operate for extended periods away from their home terminals. The drivers' character and their skill in handling valuable and fragile shipments are said to be more important than their ability to drive and, since the number of qualified drivers is limited, the carriers are interested in keeping them in gainful employment.

"The practice of diverting small shipments from one carrier to other carriers has long been an inherent part of, and essential to, the economy and efficiency of the Nation's household-goods moving service. In many instances, economy and expeditious handling require the services of two carriers, although but seldom is joint carriage physically performed by both carriers over the highway. The services of one of the carriers may consist only of the use of its established terminal for the preparation of shipping documents, packing, and the performance of other services necessary to prepare the shipment for loading onto the line-haul vehicle. Whether or not two carriers are used is determined by the size of the shipment and the desired time of movement, and the relating of these factors to economy of operation by the booking carrier. For instance, a small shipment may be diverted, under a joint agency tariff, to a carrier satisfactory to the booking carrier which at the moment is in a position to provide immediate transportation and the use of which will save the shipper the cost of storage or the weight penalty assessed for so-called expeditious handling and obviate the operation by the booking carrier of empty return mileage. The compensation of commissions received in such cases by the booking carrier from the line-haul carrier are described as a division of the revenue based upon the performance by it of the terminal portion of the 'joint carriage.' Most shippers have but infrequent need for the services of a household-goods carrier and are unversed in how the carriers operate and the laws and regulations governing them. Accordingly, when a shipper requires service,

he usually consults and obtains the service of a local carrier with which he is acquainted and to which he will look for redress in case the shipment is not handled satisfactorily, the local booking carrier accepting with the line-haul carrier joint responsibility under the bill of lading for the safe delivery of the shipment."

The described practices provide the public with a more expeditious and economical service than would otherwise be possible, and the carriers are enabled to utilize their equipment more fully, maintain a more reasonable level of rates, hold down empty mileage, and otherwise bring stability to their operations. In short, the requirements for approval under the pooling provisions of section 5(1) of being "in the interest of better service to the public or of economy in operation" would seem to have been met generally by present cooperative practices among groups of households goods carriers.

The pooling provisions of the act require a hearing and approval by the Commission before agreements may lawfully be entered into. Strict enforcement of this provision as to household goods carriers has not been practicable. Combinations whereby they divert, surrender, or exchange shipments, allocate or control solicitation, use service facilities and instrumentalities or employees cooperatively, and divide proceeds of diverted traffic, are so flexible that before agreements can be filed and approved, many are terminated or changed and new arrangements entered into involving new or different participating carriers. At one time the Commission instituted a proceeding intended to prescribe general rules governing such arrangements under section 5(1), but, after further study, it was deemed impractical to prescribe general rules which would be workable and enforceable.

Under arrangements with noncarriers, and compliance with the leasing rules of the Commission, carriers may obtain most or all of the advantages of pooling arrangements with carriers, without the disadvantages incident to filing applications for approval under section 5(1). The proposed exemption would place carriers on an equal basis with noncarriers in making arrangements with other carriers essential to their economical and efficient operations.

Recommendation No. 9

S. 1147

This proposed bill would give effect to legislative recommendation No. 9 of the Interstate Commerce Commission as set forth on page 65 of its 78th annual report as follows: "We recommend that section 5(10) be amended so as to make gross operating revenue, instead of the number of vehicles owned or operated, the basis for determining whether a proposed unification or acquisition of control is exempt from the provisions of section 5."

JUSTIFICATION

The attached draft bill would provide a more reliable criterion for determining whether a proposed unification or acquisition of control involving only motor carriers comes within the exemption of subsection (10) of section 5 of the Interstate Commerce Act.

One of the tests for determining whether a proposed transaction is exempt from the requirements of section 5 is whether or not the aggregate number of motor vehicles owned, leased, controlled, or operated by the parties, for purposes of transportation subject to part II of the act exceeds 20. In applying this test, numerous questions have arisen as to whether certain vehicles should or should not be included, as, for example, (a) those used in intrastate commerce, exempt transportation, or private carriage, but which are available or suitable for regulated interstate service; (b) equipment of noncarrier affiliates; (c) vehicles leased for short periods; (d) disabled vehicles; and (e) combinations of vehicles. The amount of time and effort expended in establishing the number of vehicles on which jurisdiction depends, has, where the question is close, proved to be disproportionate to the benefits intended by the exemption. Moreover, in many instances, it has been virtually impossible to check whether the exemption was, in fact, applicable to transactions purportedly consummated thereunder.

The proposed amendment would substitute a more definite and practical basis for the exemption. Gross operating revenues are, in most cases, readily ascertainable from the annual reports which, with certain exceptions, are required of all for-hire carriers, and the quarterly reports required of such