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the Commission decision has been obtained pending a final resolution by the court.

Deregulation of Credit

As we reported last year, several of the Commission's deregulation efforts are not concerned with entry or ratemaking. Foremost among these is the i.C.C. proposal to eliminate the uniform regulations governing the extension of credit by carriers to shippers. The Commission's proposal has been generally opposed by carriers and shippers alike, including the Minority Truckers Development Council who viewed the proposal as constructing insurmountable financial barriers to the entry of minority and other small businessmen into the industry.

The elimination of these rules, especially at a time when the industry is beset by unprecedented financial problems, would appear to be in contravention of the national transportation policy to foster an economically sound motor carrier industry. Their elimination would work a tremendous drain on carrier working capital. It would also encourage discrimination among shippers, destroy bank payment plans, and have a detrimental effect on carriers utilizing owner operators who must comply with the 15-day pay rule of the Commission's leasing regulations.

There are significant legal problems involved in the

elimination of the credit rules. The statute itself, 49 U.S.C. $10743, prohibits carriers from surrendering possession of property transported by it, subject to the Act, before payment of charges, except under regulations of the Commission governing

the payment for transportation and service and the prevention of discrimination. It is the opinion of many of the responding parties that the Commission's proposed non-regulations would not satisfy the statutory requirement for a regulation of the 1.C.C. governing the payment for transportation services and would result in carriers having to operate on a "cash only" basis, an arrangement that is neither practical or desirable in the modern practices of shippers and carriers.

In light of this, it is inexplicable why the 1.c.c. has failed to respond to a petition filed in December, 1981, by

the Transportation Association of America, with the support of

several major carrier and shipper groups, to dismiss the current

proceeding. The petition suggests a revision of the current regulations by extending the permissible credit period from the current seven (7) working days to fourteen (14) calendar

days.

The Commission, however, continues to consider the

possibility of eliminating the uniform credit rules rather than revising them. Its refusal to conclude the proceeding in a manner satisfactory to all the parties appears to be simply an unwillingness to curtail its efforts to deregulate yet another area of the motor carrier industry, no matter how unreasonable the proposal or dire the foreseeable consequences.

The Commission also continues to consider the elimination of the uniform rules governing detention and c.0.0. services.

Administrative Exemption of Motor Carrier Service

In last year's report, we discussed the 1.c.c.'s exemption of motor carrier service performed by a rail carrier

as part of a trailer-on-flatcar (TOFC) movement and the

Commission's proposal to extend that exemption in a subsequent

proceeding, Ex Parte No. 230 (Sub-No. 5), Improvement of TOFC/COFC Regulation, to include performance by a rail-affiliated motor carrier or other motor carrier as the agent of a rail carrier. Both of these proceedings appear to be attempts on the part of the Commission to evade the Motor Carrier Act of 1980's proscription on general findings of public convenience and necessity developed in a rulemaking proceeding4 by utilizing its rail exemption authority as amended by the Staggers Rail Act of 1980, 49 U.S.C. 10505.

Unfortunately, we again found ourselves faced with

the burden of overcoming the judicial presumption favoring the reasonableness of agency action. The U.S. Court of Appeals

for the Fifth Circuit found that our arguments that the provisions service provided by trucks owned and operated by railroads, did not nullify the licensing and other applicable provisions

of the Staggers Act exemption did not apply to motor carrier service and that the exemption was in violation of the general

licensing scheme of the Interstate Commerce Act, as amended,

were "not without force."

Nevertheless, the court went on to

find that the limited scope of the exemption, i.e. motor carrier

4 Prior to passage of the Motor Carrier Act of 1980, the 1.c.c. had in fact proposed to publish a master certificate for all motor carrier service which was part of a TOFC movement. In the current proceedings, the Commission has merely substituted the exemption approach for the master certificate approach to accomplish the same end.

of the Act.

The court thus upheld the I.C.C.'s first

proceeding in this area.

The Commission now appears intent upon moving forward with its second proceeding--the proposed extension of the exemption. By its actions, the 1.c.c. is removing the fastest growing segment of the transportation industry, TOPC service,

from any regulatory controls. It will be placing almost all TOFC

service in the exclusive hands of the railroads.

Elimination of "Special Circumstances" Doctrine

Last year we described to you the attempts by the

1.C.C. to eliminate, by administrative fiat, the special

requirements applicable to the licensing of a motor carrier affiliate of a rail carrier. After citing several instances in which the Commission had licensed rail-affiliated motor carriers without any consideration of the "special circumstances" doctrine, we requested that this Committee direct the 1.c.c. to

continue to apply the test in order to carry out the National

Transportation Policy's requirement for separation of the various transportation modes.

Undeterred, the I.C.C. published in October of last year a policy statement proposing to eliminate or reconsider the "special circumstances" doctrine. Ex Parte No. 156, Applications For Motor Carrier Operating Authority by Railroads and Rail Affiliates. While this proceeding is still pending before the

Commission, the I.C.C. continues to grant unrestricted motor

carrier operating authority to rail-affiliated motor carriers,

either without consideration of the "special circumstances"

doctrines or with mere lip-service being afforded the test.6

As discussed in our comments submitted to this Committee last year, there has been no change in the provisions of the Act which pertain to the "special circumstances" doctrine.

Moreover, continuation and enforcement of the "special

circumstances" doctrine have become of paramount importance due

to the liberalized entry requirements of the 1980 Act and the continuing recession in the motor carrier industry. With an I.C.C. which continues to ignore the legal restraints of the Interstate

Commerce Act, the railroads have continued to take advantage of

the situation in seeking to expand their motor carrier operations. As a result, the safeguards against domination of one mode of

transportation by another have become all the more necessary.

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the administrative level and failed to conclude its proceedings,

5 Docket No. MC-139960 (Sub-No. 48), WPX Freight System, Inc. Ext.-Regular Routes.

6 Docket No. MC-139960 (Sub-Nos. 5 & 6), WPX Freight System, Ext. and No. MC-126034 (Sub-No. 6), McHugh Brothers Heavy Hauling, Ext.-Nationwide Service.

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