96306.docx

MEMORANDUM
TO:RON LAW
TONYA CLARK
SUSAN HAMLIN
BRAD PURDY
FROM:DON HOWELL
DATE:MARCH 6, 1996
RE:SUMMARY OF RAIL ISSUES IN THE ICC TERMINATION ACT
On December 29, 1995, the President signed into law the ICC Termination Act of 1995.  The Act abolished the Interstate Commerce Commission (ICC) on January 1, 1996 and transferred its rail regulatory responsibilities to the Surface Transportation Board (STB or Board).  The STB is a three-member independent body within the U.S. Department of Transportation.  The Board performs certain adjudicatory functions involving rail, motor, and water carriers. The Act comports with other recent trends to reduce the regulation of basic industries within the United States.  Various provisions of the new Act streamline the regulatory tasks retained by the Board.  A brief overview of the Act’s rail issues is set below.  
∙Abandonment—authority of railroad abandonments is still retained by the Board.  The historical standard of determining when lines may be abandoned—the public convenience and necessity standard—has been retained.  Although the new Act eliminates the requirements to file an advanced Notice of Intent to Abandon, most abandonment procedures are retained.
∙Intrastate Rail Ratemaking—the Act eliminates the certification system whereby states may regulate intrastate rail rates.  Instead, intrastate transportation that is part of the interstate rail network is regulated by the Board.  The Board still regulates the rates of carriers that have market dominance.  Rate tariffs are eliminated.  However, a carrier must make its non-contract rates and service terms available to anyone on request.  A rail carrier may not increase a non-contract rate or change its common carrier service terms without 20 days’ advance notice to those who have requested such notice or who have used that rate within the prior 12 months.
∙Railroad Consolidation—the Act shortens the period of review in which the Board may examine the merger of Class I railroads to 15 months.  The “public interest” standard for consolidations is augmented by the Department of Justice’s recommendation.
∙Advisory Council—to assist the Board in its regulatory role, the chairman must appoint 15 members of a railroad-shipper transportation advisory council.  Members of the council include railroads and shippers but may not include members from governmental agencies.  This advisory council must be appointed no later than March 1, 1996.
Don Howell
vld/M:icta1995.dh