CITIES REQUIRING SPECIAL CONSIDERATION

It is clear that the commercial zone of a particular municipality determined by the general population-mileage formula is automatically extended by either an upward revision of the official population figures or by the expansion of its corporate limits. Commercial Zones, supra, 54 M.C.C. 21, 97, and Central Freight Lines, Inc. v. East Texas Motor Freight, 96 M.C.C. 150 (1964). Once a commercial zone is established by application of the formula, it is not automatically contracted by a decrease in population of the base municipality. Commercial Zones and Terminal Areas, 115 M.C.C. 882, 887 (1972). 20 In this cited case, seeking interpretation of the status of the Wilmington, Del., commercial zone, this Commission noted that when commercial zones are established, many shipping and receiving facilities relocate outside of the corporate limits but within the commercial zone. These businesses rely on the base municipality to provide a variety of services, and such reliance is not necessarily influenced by a subsequent reduction in its population. In sum, the commercial integrity of a particular area need not be affected by a population shift from city to suburbs.

We are convinced that the above reasoning is equally applicable where a city with individually defined commercial zone limits would experience contraction of those limits if the proposed expanded population-mileage formula were to be applied. It is not our intent in this proceeding to exclude from a commercial zone described under the proposed formula areas which we have previously determined to be commercially a part of a particular municipality. In this regard, we have made a preliminary examination of those cities with specifically defined commercial zones set forth in 49 CFR 1048.1 et seq., and it appears that the proposed formula would not adequately describe the commercial zones of at least nine cities. Consistent with the principles discussed above, we have undertaken to redescribe the zones for these cities along readily identifiable lines, in order to assure that no unintended contraction of commercial zone limits will occur by application of the proposed formula. The redescribed zones are set forth in the notice attached to this report. Inasmuch as they constitute a preliminary proposal and are not necessarily meant to be a complete and exhaustive list of all cities similarly situated, we hereby invite the comments of inter

However, de annexation by the base municipality will result in a corresponding contraction of the zone. See Houston, Tex., Commercial Zone, 92 M.C.C. 325 (1963).

ested parties to aid in the formulation of appropriate descriptions along readily identifiable boundaries (we are seeking to avoid such designations as streets, rights-of-way, and small waterways) and to point out any other cities which are either similarly situated to those set forth in the notice or require special consideration. Interested persons are requested to submit clear maps demonstrating the limits of the commercial zones they suggest and to provide the Commission with economic data in support of such suggestions.

The Twin City concept.-This Commission has recognized the economic and social fact that two adjacent municipalities, being separate political entities, can be in reality a single commercial unit. Commercial zone and terminal area definitions traditionally have taken this factor into consideration. No evidence has been submitted in this proceeding to warrant a different approach. Therefore, the following sets of cities shall be considered to have a $ingle uniform commercial zone and terminal area measuring from the outer boundaries of each of the involved municipalities and using the combined population of the involved municipalities: (1) St. Louis, Mo.-East St. Louis, Ill., (2) Kansas City, Mo.-Kansas City, Kans., (3) Davenport, Iowa, and Rock Island and Moline, Ill., (4) Minneapolis-St. Paul, Minn., (5) Bluefield, Va.-W. Va., (6) Bristol, Va.-Tenn., (7) Delmar, Del.-Md., (8) Harrison, Ohio-West Harrison, Ind., (9) Junction City, Ark.-La., (10) Texarkana, Ark.-Tex., (11) Texhoma, Tex.-Okla., and (12) Union City, Ind.-Ohio.

Consolidated governments.-In the past decade, a number of municipalities have opted to consolidate all, or substantially all of their governmental and corporate functions with the governmental. and corporate functions vested in the counties in which such municipalities are located and to create a new governmental entity combining these functions. See Interpretation of Operating Authorities, 112 M.C.C. 829, 831 (1971). We are aware of a number of cities which have unified with their county governments including Baton Rouge, La., Miami and Jacksonville, Fla., Carson City, Nev., Indianapolis, Ind., Columbus, Ga., Lexington, Ky., and Nashville, Tenn. We have previously concluded that these consolidated governments constitute municipalities for the purposes of 203(b)(8) of the act. Interpretation of Operating Authorities, supra, at p. 841. In those instances where we have been asked to define the zones of such municipalities, we have concluded that the commercial zone includes all points within the involved county and no points beyond. See Indianapolis, Ind. Commercial

Zone, 115 M.C.C. 893 (1972). We believe that this should be the general rule as to all consolidated governments. Should any such municipality (or any other interested person) believe that a greater commercial zone is warranted it may present pertinent data in its comments to this proposal or if expansion becomes necessary in the future, petition the Commission at that time. See Commercial Zones and Terminal Areas, 119 M.C.C. 853 (1974).

New York, N. Y.-The New York metropolitan area has been the subject of numerous proceedings before this Commission. The meaning of the 203(b)(8) exemption in relation to this area has become quite confusing. The New York City Commercial Zone was first defined in New York, N. Y., Commercial Zone, 1 M.C.C. 665 (1937) and 2 M.C.C. 191 (1937). The Commission, former Division 5, specifically described the limits of the New York City commercial zone and removed the exemption of 203(b)(8) with respect to transportation between New York City, on the one hand, and, on the other, "Elizabeth, Linden, and Perth Amboy, N.J., and that part of New Jersey east of U.S. Highway 9 extending southward from the city limits of Linden to the city limits of Perth Amboy." After the development of the population-mileage formula, it was necessary to examine its application in relation to the heavily urbanized and congested New York-New Jersey area. In the Fifth Supplemental Report to Ex Parte No. MC-37, Commercial Zones and Terminal Areas, 53 M.C.C. 451 (1951), former Division 5 considered the following issues: (1) whether the limits of the then existing New York commercial zone should be expanded in light of urban development; (2) whether it would be appropriate to remove, in whole or in part, the 203(b)(8) exemption as to transportation between points in the New York City commercial zone in accordance with the dictates of the national transportation policy; and (3) the proper scope of commercial zones about municipalities in New Jersey within 5 miles of New York City and Westchester and Nassau Counties, N.Y.

Stating that "the commercial zone of any particular municipality may change from time to time" and that "[n]ew limits should be recognized where warranted by changed conditions, including normal growth and development," the Division found the evidence convincing that the New York zone should be extended to the limits of the existing population-mileage formula, Commercial Zones and

"This includes municipalities in New York, Kings, Queens, Bronx, Richmond. Westchester, and Nassau Counties, N.Y., and Bergen, Hudson, Essex, Union, and Middlesex Counties, N.J. This has been referred to as the New York-New Jersey area.

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Terminal Areas, 53 M.C.C. at 471 and 475. This determination was solely based upon economic fact. The Division then considered the possible exemption from section 203(b)(8) of transportation in this area. With respect to this issue other matters are germane, such as the adequacy of the motor service being rendered in the zone and the competitive effect of zone expansion on the operations of existing regulated carriers. Finding that existing motor service was adequately meeting the transportation requirements of the shipping public in the New York commercial zone, the Division stated that zone expansion would "open the door to an influx of unneeded new operators," jeopardizing regulated carrier investment in equipment, facilities, and operating rights, Commercial Zones and Terminal Areas, 53 M.C.C. at 489. The Division removed the exemption with respect to transportation between points in the enlarged New York City commercial zone, except (a) transportation performed wholy within the New York, N.Y., zone as defined in 1 M.C.C. 665, or (b) transportation which is performed with respect to a shipment which has a prior or subsequent movement by water carrier and is performed wholly between points in the New York, N.Y., zone as defined in 1 M.C.C. 665, on the one hand, and, on the other, points in a contiguous pier area along Newark Bay within the city of Newark, N.J. (Port Newark).22 Recognizing that the New York City area is unique and that mechanical application of the populationmileage formula would include the entire city of New York within the commercial zones of certain outlying cities, the Division partially removed the exemption of 203(b)(8) with respect to New Jersey cities within 5 miles of New York City and municipalities in Westchester and Nassau Counties.

We feel that the rules relating to the New York-New Jersey area should be reconsidered in light of the evidence of record. The initial task is to analyze the economic data concerning the urban development of this area. The New York Port Authority has compiled statistical information showing the spread from 1939 to 1972 of manufacturing and wholesale trade establishments from New York City to outlying suburbs. Several maps displaying the concentrated locations of these establishments throughout the 19 county region23 have also been submitted. The pattern of

The following exceptions have subsequently been provide for: Port Elizabeth, 84 M.C.C. 747, Kearny, N.J. 88 M.C.C. 336, Lehigh Valley R.R. TOFC Terminal, 111 M.C.C. 123, Reading Railroad TOFC Terminal, 112 M.C.C. 203, and Central of N.J. TOFC Terminal, 113 M.C.C. 891.

Bronx, Kings, New York, Queens, Richmond, Nassau, Putnam. Rockland, Suffolk, and Westchester, N.Y., and Bergen, Essex, Hudson, Middlesex, Monmouth, Morris, Passaic. Somerset, and Union, N.J.

commercial activity that emerges corresponds to a high degree with the commercial zone that would be described by application of the proposed 20-mile radius measured from the corporate limits of New York City. We conclude, therefore, that the New York, N.Y., commercial zone is best defined by reference to the proposed population-mileage formula.

We must now decide if the exemption provided in 203(b)(8) should be restored to New York City. A number of affected regulated motor carriers argue that regulation of short-haul operations is still needed in the New York-New Jersey area in order to preserve their economic health and stable operations. They also point out that carriers possessing operating rights phrased in terms of authority to serve "the New York Commercial Zone as defined in 1 M.C.C. 665" will not benefit from zone expansion, although they presently have broader authority than carriers with certificates reading "New York, N.Y." or "the New York Exempt Zone." Nevertheless, we are persuaded by the arguments advanced by shippers and local interests that the national transportation policy would best be served by restoration of the 203(b)(8) exemption for local transportation in the New York metropolitan area. This will enable urban area shippers to utilize the flexibility of motor carriage to a greater degree in meeting their transportation needs. There is ample testimony by shippers beyond the present exempt zone concerning the unavailability of service by regulated carriers on a prompt basis. There appears to be little qualitative difference between exempt service within the present zone and regulated service to outlying points except that the removal of the exemption constricts the supply of available local cartage operators. Many New Jersey local interests testified to the economic hardships experienced due to their exclusion from the New York commercial zone. While the alleged effect on short-haul carriers of restoration of the exemption will probably be significant and adverse, it does not outweigh the present service problems experienced by shippers, especially when there is no evidence of chaotic or unstable local operations within existing exempt zones.

With respect to those carriers holding certificates authorizing service in terms of "the New York commercial zone as defined in 1 M.C.C. 665," we feel that they should be allowed to provide service to all points within the expanded commercial zone limits. Although arguably employing a territorial description, these certificates were intended to authorize service throughout the New York commercial zone. We have found that the scope of the New York commercial