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SECTION-BY-SECTION ANALYSIS Discrimination

Sec. 14. This amendment clarifies present law regarding the standing to raise the question of discrimination between various shippers. This amendment prohibits carriers from raising the issue of discrimination against another carrier. Since the possible discrimination is against a shipper, it should be raised by the shipper. In addition, this amendment would restrict the standing of shippers to allege discrimination to those shippers directly affected by the rate change. In other words, a shipper may not protest a rate change as the basis of discrimination unless the protesting shipper is also being served by the motor carrier in question and that motor carrier is transporting for the protesting shipper the commodity which is the subject of the rate change. This would insure that a shipper could not forestall rate changes afforded competitors by carriers more efficient than the carrier used by the shipper. Both of these changes should serve to expedite the rate hearing process.

SECTION-BY-SECTION ANALYSIS Back Hauls

SEC. 15. Present regulation has restricted the ability of the motor carrier industry to use its resources efficiently. Many trucks move only partially loaded or entirely empty, and valuable fuel is wasted. This problem is particularly acute with respect to "exempt agricultural" trucking. Section 203(b) (6) of the IC Act exempts from regulation movements of certain agricultural goods. Thus, truckers may move agricultural items out of rural areas without certificates of public convenience and necessity. These same truckers, however, may not move regulated commodities on their return trip because they are not certificated.

This amendment is designed to reduce the problem of empty back hauls. It would allow "agricultural exempts” to carry regulated commodities, but only subsequent to a movement of agricultural items. It would apply only to small businesses of 3 or less trucks, and to avoid unfair competition with the regulated industry, all back haul movements of regulated commodities would have to move at a rate equal to the lowest rate filed by a regulated carrier for that same transportation. In addition, to ensure that this amendment applies only to true agricultural exempts, the revenue derived from hauling regulated commodities for any year could not exceed the revenue from agricultural items for that same year.

SECTION-BY-SECTION ANALYSIS

State Filing Requirements

SEC. 16. In addition to the federal economic regulations imposed upon the motor carrier industry, the States also impose many requirements for registration and filings upon interstate trucking. While it is recognized that the States have a legitimate interest in such activities, it must also be recognized that many of the State requirements are unnecessarily duplicative and lacking in uniformity. Because of this, many times, the carriers' cost for filing far outweigh the fee paid to an individual State. This section would direct the Secretary to work with the industry and the States to develop legislative or other recommendations for providing a more efficient and equitable system of State regulation.

SECTION-BY-SECTION ANALYSIS Motor Carrier Safety

SEC. 17. Originally, Part II of the Interstate Commerce Act gave the Commission the authority to regulate certain motor carriers with respect to safety. Section 6(e) of the Department of Transportation Act removed that authority from the Commission and placed it with the Secretary. This section amends Part II to strengthen the authority to govern the safety of motor carriers.

Even-handed enforcement is a basic starting point for any safety program, but such even-handed treatment must be based upon a consistent and logical statutory framework. The Secretary's present authority for motor carrier safety has many statutory gaps. The Secretary has broad authority to issue regulations for all carriers, but he may impose criminal penalties for some carriers and some violations, and civil penalties for others. Moreover, one of the prime deterrents to violating a safety regulation is the possible removal of a carrier's operating authority. But while the Secretary has the authority to regulate motor carrier safety, the Commission has the sole authority to revoke a carrier's permit because of safety violations. Unfortunately, because of a lack of interest or expertise, the Commission has not utilized this deterrent to its full potential. This amendment would broaden the authority of the Secretary and essentially fill in these gaps.

Subsections (a) and (d) of this amendment would extend the authority of the Secretary to impose civil penalties to all persons subject to regulation and for all violations. At present, this authority exists only with respect to common and contract carriers and only for record-keeping and filing offenses. Private carriers and general safety violations are covered by way of criminal sanctions, but such sanctions have been found to be inflexible and inappropriate in many cases and very difficult to process to adjudication. These subsections would also increase the maximum civil penalty to $1,000 for a single violation, or $500 a day for a continuing violation.

Subsection (c) of the Section would increase the minimal fine for violating the Motor Carrier Safety Regulations (49 C.F.R. Parts 390–396) to a range of $250 to $1,000 for first offenses and $500 to $2,000 for subsequent offenses. The present minimal penalties are insufficient to serve as an adequate deterrent for violations of these Motor Carrier Safety Regulations. In addition, the existing criminal penalty provisions require the Government to show knowledge and willfulness on the part of defendants. Some courts have interpreted the willfulness provision under the present statute so narrowly that ignorance of the law or the regulations constitutes a defense to prosecution for violating them. This is clearly an inappropriate requirement where the unsafe practice, rather than the intent to commit it, is what is proscribed for the public's protection. This amendment removes the word "willfully," but retains the word “knowingly' and thus the requirement to prove intent.

Subsection (e) of this amendment would authorize the Secretary to suspend or revoke the certificates or permits of common or contract carriers, respectively, if he determined after a formal administrative hearing subject to the Administrative Procedures Act that the carrier had violated Motor Carrier or Hazardous Materials safety regulations promulgated by the Secretary and that the operation of the carrier constituted an unreasonable risk to the public safety.

Private carriers do not operate via any certificate or permit, but this subsection would also authorize the Secretary to prohibit a private carrier from future operations as a private carrier, under the same standards and procedures as applies to common and contract carriers. This subsection also allows the Secretary after an informal hearing to prohibit carriers from operating pursuant to the special backhaul exemption provided in this bill if he determines their operation is unsafe and that they have violated safety regulations issued by the Secretary.

SECTION-BY-SECTION ANALYSIS Motor Carrier Mergers

SEC. 18. (a) Presently, the ICC has jurisdiction under Section 5(2) and 5(13) of the Interstate Commerce Act to approve mergers involving motor carriers and to immunize such acquisitions from the antitrust laws. This subsection is designed to eliminate the ICC's power to approve and thereby to immunize such acquisitions from the antitrust law. The result of this amendment is to vest exclusive jurisdiction in the Federal courts to test the legality of such transactions.

(b) The ICC presently has jurisdiction to enforce Sections 7 and 8 of the Clayton Act in respect of acquisitions and interlocking directorates involving motor carriers. This subsection would revoke the ICC's authority to enforce these sections of the Clayton Act in connection with motor carriers.

(c) It has been argued in ICC enforcement proceedings under Section 7 of the Clayton Act that because of language regarding common carrier acquisitions of branch lines in that section, trucking mergers ought to be given more liberal treatment under Section 7 than mergers between other kinds of firms. This subsection would make explicit the fact that such language is to be applied only to railroads and would thereby remove any basis basic litigation on this point.

(d) This subsection provides that acquisitions involving motor carriers are subject to a test of legality under Section 7 of the Clayton Act which is slightly different than that applied to non-transportation firms. Such acquisitions otherwise violative of the Clayton Act could be defended as clearly necessary to meet the transportation convenience and needs of the community or communities to be served. To satisfy this standard, the acquisition must be proved to be the least anticompetitive alternative for the achievement of transportation convenience and needs. Moreover, it would be the burden of the party defending the legality of the acquisition to establish that it was the least anticompetitive alternative for the accomplishment of the necessary transporation convenience and needs.

[Whereupon, at 1:25 p.m., the subcommittee adjourned to reconvene subject to call of the Chair.)

REGULATORY PROBLEMS OF THE INDEPENDENT

OWNER-OPERATOR IN THE NATION'S TRUCKING
INDUSTRY (PART 1)

SATURDAY, JUNE 5, 1976

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON ACTIVITIES OF REGULATORY AGENCIES
OF THE COMMITTEE ON SMALL BUSINESS,

Sioux City, Iowa. The subcommittee met at 9 a.m. in the City Council Chambers, City Hall, 6th and Douglas Streets, Sioux City, Iowa, Hon. William L. Hungate (chairman of the subcommittee) presiding.

Mr. HUNGATE. The hearing will be in order. We would first recognize city councilman, Mr. Lawrenson.

TESTIMONY OF DON LAWRENSON, CITY COUNCILMAN,

SIOUX CITY, IOWA Mr. LAWRENSON. I am Don Lawrenson, one of the city councilmen of Sioux City. I just want the opportunity this morning to welcome you people to Sioux City and we are glad you could come in.

On behalf of the council and more specially, I think, the citizens of Sioux City, we want you to know that you are welcome to our town and visit. If you have an opportunity after a while to walk downtown, look around and see what we have done to our downtown in Sioux City.

We are glad we could make these facilities available to you. If there is anything we can do, be sure and ask around.

Thanks very much for coming to Sioux City, and we are glad to have you here.

Mr. HUNGATE. Thank you, Councilman.
Mr. Bedell?

Mr. BEDELL. I guess I would also like to welcome you people to this hearing. I think this is the way Government needs to work where we get out among the people rather than just sit in Washington for those that happen to have the wherewithal to get in to present their side to the various things that we have to consider in legislative affairs.

I know when we walked in here, Bill said, “My gosh,” when he saw the crowd that's here. I am very pleased that there is this type of interest in these matters and in various matters in Government here in this area.

Mr. HUNGATE. Thank you, Congressman. The Chair will first call Mr. Tim Bornholtz. Is Mr. Bornholtz here? [No response.]

76-102 0 - 77 - 26

Mr. HUNGATE. I want to say, we have had several days of hearings in Washington on this problem of independent owners and operators of trucks and trucklines, difficulties they have had with various Federal agencies.

This is a function of the Subcommittee on Small Business and in particular, the one on problems of small business of regulatory agencies. Highlighting these issues and sometimes putting a spotlight on a problem helps to cure it. If it doesn't, then we find what legislation will be needed.

We have a large number of witnesses. We are very pleased with that. It would also mean that we would have to restrict time somewhat. Now, we are going to restrict your direct statement to 10 minutes.

The questioning will be held to 5 minutes for Mr. Bedell and myself on each witness. Any written statements you have, we will welcome them. In other words, if you can't give us all the information you want to in that 10 minutes, you're perfectly free to file a written statement for further ideas.

The second witness scheduled is Ms. Joy Fitzgerald, Altoona, Iowa, with a panel of independent truckers. Please come forward.

If the witnesses will stand first and raise your right hand. Do you solemnly swear that the testimony you are about to give will be the truth, the whole truth, and nothing but the truth, so help you God?

Ms. FITZGERALD. I do.
Mr. FREYMILLER. Yes.
Mr. GRELL. Yes.
Mr. SCANDRIDGE. Yes.

Mr. HUNGATE. Please be seated. Since we have a panel, we will extend it to 15 minutes. We have a large number here.

Now, as you testify, please identify your name and address of record for the reporter and the subcommittee. First we will start with Ms. Fitzgerald. You may proceed as you see fit.

TESTIMONY OF JOY FITZGERALD, NATIONAL SECRETARY, INDE

PENDENT TRUCKERS ASSOCIATION; ACCOMPANIED BY DON FREYMILLER, FREYMILLER TRUCKING, INC., JIM SCANDRIDGE, INDEPENDENT TRUCKER, AND GARY GRELL, DONAHUE, IOWA

Ms. FITZERGALD. Thank you very much. I am Joy Fitzgerald, and my home address is Collins, Iowa. I am an attorney and for 13

years served as executive secretary of the Iowa Reciprocity Board. I resigned in July 1971, to start my own business as a license consultant. I am the national secretary of the Independent Truckers Association, and during this past year I was also secretary of the Iowa Division of the ITA.

I am speaking today for thousands of men and women who ask nothing more than the opportunity to be independent businessmen. These people do not have the funds to make propaganda films or to lobby. All they can do is write letters to their Congressmen, relying upon the integrity of Congress to listen to all sides.

While working for the State, I became aware how badly these people, the nonregulated truckers, needed help to understand and compĪy with the evergrowing maze of regulations being imposed by the State agencies.

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