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other carriers which are parties to such through route and joint rate. In the event of undue delinquency in the settlement of such divisions or interline settlements, such through routes and joint rates may be suspended or canceled under rules prescribed by the Commission.

(Pub. L. 95-473, Oct. 17, 1978, 92 Stat. 1375; Pub. L. 96-296, § 22(b)-(g), July 1, 1980, 94 Stat. 813; Pub. L. 96-448, title II, § 218(a), Oct. 14, 1980, 94 Stat. 1925; Pub. L. 97-449, § 5(g)(4), Jan. 12, 1983, 96 Stat. 2443.)

AMENDMENT OF SUBSECTION (f)(1)

Pub. L. 96-448, title II, § 218(b), title VII, § 710(c), Oct. 14, 1980, 94 Stat. 1926, 1966, provided that, effective Oct. 1, 1983, subsection (†)(1) of this section is amended to read as follows:

(1) The Commission may begin a proceeding under subsection (a) or (b) of this section on its own initiative or on complaint. The Commission must complete all evidentiary proceedings to adjust the division of joint rates for transportation by a rail carrier within 9 months after the complaint is filed if the proceeding is brought on complaint or within 18 months after the commencement of a proceeding on the initiative of the Commission. The Commission must take final action by the 180th day after completion of the evidentiary proceedings, except that—

(A) when the proceeding involves a railroad in reorganization or a contention that the divisions at issue do not cover the variable costs of handling the traffic, the Commission shall give the proceedings preference over all other proceedings and shall take final action at the earliest practicable time, which in no event may exceed 100 days after the completion of the evidentiary proceedings; and

(B) in all cases other than those specified in subparagraph (A) of this paragraph, the Commission may decide to extend such a proceeding to permit its fair and expeditious completion, but whenever the Commission decides to extend a proceeding pursuant to this clause, it must report its reasons to Congress.

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HISTORICAL AND REVISION NOTES

Source (U.S. Code)

49:15(3) (1st sentence less words between 2d and 3d commas).

49:316(e) (2d
sentence 2d cl.
less words
between 2d and
3d commas).
49:907(d) (1st

sentence less words between 2d and 3d commas, 2d sentence). 49:15(4) (1st

sentence).

Source (Statutes at Large)

Feb. 4, 1887, ch. 104, § 15(3), (4), (6), 24 Stat. 384; June 29, 1906, ch. 3591, § 4, 34 Stat. 589; June 18, 1910, ch. 309, 12, 36 Stat. 551; Feb. 28, 1920, ch. 91, § 418, 41 Stat. 484; Aug. 9, 1935, ch. 498, 1, 49 Stat. 543; Sept. 18, 1940, ch. 722, § 10(b), 54 Stat. 911; Feb. 5, 1976, Pub. L. 94-210, §§ 201, 203(a), 90 Stat. 34, 39.

Feb. 4, 1887, ch. 104, 24 Stat. 379, 216(e) (2d sentence 2d cl.), (f); added Aug. 9, 1935, ch. 498, § 1, 49 Stat. 558.

Feb. 4, 1887, ch. 104, 24 Stat. 379, 307(d), (e); added Sept. 18, 1940, ch. 722, §201, 54 Stat. 937.

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(1).

10705(e) (2). 10705(e)

(3).

sentence words
between 2d and
3d commas),

(6)(a) (1st

sentence words between 2d and 3d commas), (b), (c).

49:316(e) (2d

sentence words between 2d and 3d commas in 2d cl.), (f) (1st sentence words between 1st and 3d commas). 49:907(d) (1st sentence words between 2d and 3d commas), (e) (1st sentence words between 1st and 2d

commas).

49:15(6)(d) (1st

sentence).

49:15(6)(d) (less 1st

sentence).

10705(f)..... 49:15(4) (less 1st

and 2d sentences).

Throughout the section, the word "rates" is substituted for "rates, fares, or charges" in view of the definition of "rate" in section 10102 of the revised title. The words "of passengers or property" are omitted as surplus. The word "conditions" is substituted for "terms" and "conditions" to eliminate redundancy.

In subsection (a)(1), the words "In case of a through route" in 49:907(d) are omitted as surplus.

In subsection (a)(2), the words "In establishing any such through route" are omitted as unnecessary in view of the restatement. The words "required under section 10741-10744 or 11103 of this title" are substituted for "except as provided in section 3 of this title" as being more appropriate. The word "include" is substituted for "embrace" as being more appropriate. The words "in conjunction" are omitted as surplus. The last sentence is substituted for 49:15(4) (proviso) for clarity. The words "so far as is consistent with the public interest" are omitted as unnecessary because they are included in "subject to this subsection."

In subsection (b), the words "applicable to the transportation of passengers or property" are omitted as unnecessary in view of the restatement. The words "unjust, unreasonable, inequitable, or unduly preferential or prejudicial" are omitted as unnecessary in view of the cross reference to section 10701 of the revised subtitle in which the standards for division of joint rates are restated. The words "by order" are omitted as surplus. The words "just, reasonable and equitable" are omitted as unnecessary in view of sec

TITLE 49-TRANSPORTATION

tion 10701 of the revised title. Also, see the revision note to section 10101 of the revised title. The word "traveled" is substituted for "haul" for clarity. The words "in accordance therewith" are omitted as surplus. The words "when prescribing" are substituted for "prescribing" and "determining" for consistency. The word "due" is omitted as surplus. The words "for transportation" are substituted for "in the service of transportation" for consistency. The words "among other things" are omitted as surplus.

In subsection (c), the word "retroactive" is substituted for "for the period subsequent" for clarity.

In subsection (d), the word "tariff” is substituted for "tariff or schedule" for consistency and in view of the definition of "tariff" in section 10102 of the revised title. The word “involving” is substituted for "With respect to" as being more appropriate. The words "proposed cancellation" are omitted as being included in "cancellation". The word "places" is substituted for "points" as being more appropriate.

In subsection (e)(1), the words "full hearing" are substituted for "hearing" in 49:316(f) (1st sentence words between 1st and 3d commas) 907(e) (1st sentence words between 1st and 2d commas) for consistency. The words "The Commission may decide to extend" are substituted for "unless the Commission finds that ... must be extended" in 49:15(6)(c) for clarity. The words "shall issue" in 49:15(6)(c) are omitted as surplus. The 1st sentence of 49:15(6)(b) is omitted as executed. The words "must take final action by the 270th day after completion of the evidentiary proceedings" are substituted for "shall issue a final order

...

within 270 days after the submission to the Commission of a case" for clarity. See, report of the committee of conference on S. 2718 (S. Rep. 94-595), pages 144-145.

In subsection (e)(2) and (3), the words "whether prescribed by the Commission or otherwise established" are omitted as surplus. The words "also file . . . with the complaint" are substituted for "attach thereto❞ as being more appropriate. The word "allow" is substituted for "accord" for clarity.

In subsection (f), the word "When" is substituted for "In time of" for clarity. The cross reference to subchapter II of chapter 103 of the revised title and to title 5 are substituted for "at once, if it so orders, without answer or other formal pleadings by the interested carrier or carriers, and with or without notice, hearing, or the making or filing of a report" for consistency.

AMENDMENTS

1983-Subsec. (c). Pub. L. 97-449 substituted "title" for "subtitle" following "chapter 105 of this". 1980-Subsec. (b). Pub. L. 96-296, § 22(b), added subsec. (b). Former subsec. (b) redesignated (c).

Subsec. (c). Pub. L. 96-296, § 22(b), (c), redesignated former subsec. (b) as (c), and in subsec. (c) as so redesignated, inserted "or (b)" following "subsection (a)" and substituted "carrier, water carrier, or motor common carrier of property" for "or water carrier". Former subsec. (c) redesignated (d).

Subsec. (d). Pub. L. 96-296, § 22(b), redesignated former subsec. (c) as (d). Former subsec. (d) redesignated (e).

Subsec. (e). Pub. L. 96-296, § 22(b), (d), redesignated former subsec. (d) as (e), and in subsec. (e) as so redesignated, substituted "a tariff of a rail carrier, water common carrier, or motor common carrier of property" for "a rail or water common carrier tariff". Former subsec. (e) redesignated (f).

Subsec. (f). Pub. L. 96-448 substituted in par. (1) provision authorizing the Commission to begin proceedings under subsecs. (a) or (b) of this section on its own initiative or on complaint, to complete all evidentiary proceedings within 9 months after a complaint is filed or 18 months if the Commission acted on its own initiative, and to take final action by the 180th day after completion of all evidentiary proceedings, with specific exceptions, and exempting from the time limits im

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posed on Commission action in any division proceeding involving a joint rate participated in by a class III rail carrier for provision authorizing the Commission to begin a proceeding under subsecs. (a), (b), or (c) of this section on its own initiative or own complaint, to take action only after a full hearing, to complete all evidentiary proceedings within one year after a complaint is filed or two years if the Commission acted on its own initiative, and to take final action by the 270th day after completion of the evidentiary proceedings.

Pub. L. 96–296, § 22(b), (e), redesignated former subsec. (e) as (f), and in subsec. (f) as so redesignated, substituted in par. (1), “subsection (a), (b), or (c)" for "subsection (a) or (b)". Former subsec. (f) redesignat ed (g).

Subsec. (g). Pub. L. 96-296, § 22(b), (g), redesignated former subsec. (f) as (g), and in subsec. (g) as so redesignated, substituted "subsection (f)" for "subsection (e)".

Subsec. (h). Pub. L. 96-296, § 22(f), added subsec. (h).

EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96-448 effective Oct. 1, 1980, see section 710(a) of Pub. L. 96-448, set out as a note under section 10101 of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 10705a, 10910, 11705 of this title.

§ 10705a. Joint rate surcharges and cancellations

(a)(1)(A) Except as provided in subparagraph (B) of this paragraph, a rail carrier providing transportation subject to the jurisdiction of the Interstate Commerce Commission under subchapter I of chapter 105 of this title may publish and apphy a surcharge increasing or decreasing the through charge applicable to any movement between points designated by the surcharging carrier subject to a joint rate. Such a surcharge may be applied without the concur rence of the other carriers that are party in such joint rate.

(B) A carrier earning adequate revenues, as determined under section 10704(a)(2) of this title, may not apply such a surcharge to any movement on a line operated by such carrier which carried more than 3,000,000 gross ton miles of traffic per mile in the preceding calendar year.

(C) Any surcharge applied pursuant to this subsection must be applied in equal dollar amounts to the movement subject to the surcharge over all routes between the points designated by the surcharging carrier which such carrier participates in under the joint rate involved, and when the surcharge increases the through charges, under any of such carrier's single line rates between the same points.

(2)(A) Whenever a rail carrier applies a surcharge increasing a through charge pursuant to paragraph (1) of this subsection, any other rail carrier that participates in any movement subject to such surcharge may cancel the applica tion of such surcharge to any route participated in by such other carrier, if such carrier makes the demonstration described in subparagraph (B) of this paragraph.

(B) A rail carrier may cancel the application of a surcharge under this paragraph if such carrier demonstrates to the Commission that the surcharging carrier's share of the revenues, at the time the surcharge was filed with the Com

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mission, from its participation in the movement over the route involved would have been equal to or greater than 110 percent of its variable costs of providing service over such route, under either

(i) the applicable joint rate in effect at the time the surcharge was filed with the Commission, without the surcharge;

(ii) a new rate division increasing the share of the surcharging carrier;

(iii) a new higher lawful rate published by the canceling carrier; or

(iv) a new, lesser surcharge which shall be prescribed by the Commission upon and in conformity with the request of the carrier proposing to cancel the surcharge. Any such prescribed surcharge shall, in conjunction with the surcharging carrier's division of the joint rate in effect on the date the original surcharge was filed with the Commission, provide the carrier proposing the original surcharge revenues equal to or greater than 110 percent of such surcharging carrier's variable cost of providing service over such route.

(C)(i) The canceling tariff shall only become effective if the rail carrier proposing to cancel the application of the surcharge makes the demonstration described in subparagraph (B) of this paragraph.

(ii) If the demonstration described in clause (i) of this subparagraph is made on the basis of the applicable joint rate in effect at the time the surcharge was filed with the Commission, without the surcharge, the tariff shall become effective on one day's notice after such determination is made.

(iii) If the demonstration described in clause (i) of this subparagraph is made on the basis of a new rate, division, or surcharge prescribed pursuant to subparagraph (B)(iv) of this paragraph, the tariff shall become effective on the date such new rate, division, or surcharge becomes effective.

(D) The remedy available to a rail carrier canceling the application of a surcharge under this paragraph shall be in addition to any other remedy available to such carrier under this chapter.

(3)(A) The Commission may cancel the application of a surcharge to a route to which such surcharge applies if a shipper moving traffic over such route demonstrates to the Commission that

(i) there is no competitive alternative to such route for the movement of the traffic involved that is not subject to such surcharge; and

(ii) the surcharging carrier's share of the revenues from its participation in the movement over the route to which such surcharge applies, under the applicable joint rate in effect at the time the surcharge was filed with the Commission, with the surcharge, would be greater than 110 percent of its variable cost of providing service over such route. (B) If the Commission cancels the application of a surcharge to a particular route pursuant to subparagraph (A) of this paragraph, the Commission shall determine the level of surcharge which, in conjunction with the surcharging car

rier's division of the joint rate in effect at the time the surcharge was filed with the Commission, would equal 110 percent of the surcharging carrier's variable cost of providing service over such route, and shall authorize such carrier immediately to apply such a surcharge without any further proceedings under this subsection.

(4) A rail carrier may not apply a surcharge under this subsection unless, for the one-year period preceding the surcharge, such carrier has concurred in all rate increases of general applicability applicable to the joint rate to which such surcharge applies and agreed to by all other carriers that are party to such joint rate.

(5) A rail carrier may not apply a surcharge under this subsection increasing a through charge applicable to a particular movement more than once each calendar year.

(6) Notwithstanding any other provision of this subsection, a rail carrier may, by tariff, reduce the total charges applicable to a movement over any specific joint line or single line route or routes in which such carrier participates, if such reduction does not lower the total charges applicable to such movement to a level that is less than the lowest total charges applicable to the same movement over a competing route. Any such reduction may be made without the concurrence of any other rail carrier, and shall be borne solely by the carrier reducing the charge. Nothing in this paragraph shall be construed to limit the right of a carrier to reduce rates over routes not in direct competition between the same points with routes to which it has applied a surcharge.

(b)(1) Notwithstanding subsection (a) of this section

(A) a rail carrier not earning adequate revenues, as determined under section 10704(a)(2) of this title, may publish and apply a surcharge applicable to traffic originating or terminating upon any of its lines that carried less than 3,000,000 gross ton miles of traffic per mile in the most recent calendar year for which traffic data is available; and

(B) a rail carrier earning adequate revenues, as so determined, may publish and apply a surcharge applicable to traffic originating or terminating upon any of its lines that carried less than 1,000,000 gross ton miles of traffic per mile in such most recent calendar year. Such a surcharge may be applied without the concurrence of any rail carrier. Any such surcharge may be allocated, subject to the provisions of paragraph (4) of this subsection, in different amounts among different movements between different origins and destinations, and shall accrue solely to the surcharging carrier.

(2) A rail carrier may apply a surcharge under this subsection if, prior to the application of such surcharge, that portion of the charges applicable to traffic to and from the line to which the surcharge applies and accruing to the surcharging carrier does not provide such carrier revenues adequate to cover

(A) 110 percent of such carrier's variable cost of transporting the traffic involved to or from such line; plus

(B) 100 percent of such carrier's reasonably expected costs of continuing to operate such line, which shall include all costs necessary to sustain service on the line.

The Commission shall, within 120 days after the effective date of the Staggers Rail Act of 1980, complete a proceeding to define the term "reasonably expected costs” as used in subparagraph (B) of this paragraph. In the interim, the term shall be construed in accordance with Rail Services Planning Office subsidy standards.

(3)(A) Upon petition of a shipper located upon a line to which a surcharge under this subsection is applied, the Commission may cancel the application of a surcharge under this subsection if such shipper demonstrates to the Commission that, after application of the surcharge, the surcharging carrier's revenues from all traffic originating or terminating upon the line to which the surcharge applies exceed 110 percent of such carrier's variable cost of transporting all traffic to or from such line plus such carrier's reasonably expected costs of continuing to operate such line.

(B)(i) A rail carrier's revenue from all traffic originating or terminating upon a line shall be presumed to exceed 110 percent of its variable cost of transporting all traffic to or from such line plus its reasonably expected costs of continuing to operate such line if the complaining shipper demonstrates that the carrier is earning revenues from all traffic originating or terminating upon such line that result in a revenue-variable cost percentage that is equal to or greater than the revenue-variable cost percentage applicable in that year under section 10709(d) of this title.

(ii) A surcharging carrier may rebut the presumption set forth in clause (i) of this subparagraph by demonstrating to the Commission that its reasonably expected costs for operating the line to which the surcharge applies exceed the percentage of variable cost set forth in such clause (i).

(C) Upon a finding by the Commission that application of the surcharge will produce revenues in excess of 110 percent of the surcharging carrier's variable cost of transporting traffic to or from the line plus its reasonably expected costs for operating the line, the Commission shall determine the level of surcharge which would produce revenues equal to such figure and shall authorize such carrier immediately to apply such surcharges as will generate such revenues without any further proceedings, subject only to the right of a shipper to proceed under paragraph (4) of this subsection.

(4)(A) A rail carrier may not apply a surcharge under this subsection that results in any shipper being required to bear more than a reasonable proportion of the reasonably expected costs of continuing to operate the line to which such surcharge applies.

(B) Upon complaint of a shipper, the Commission shall determine whether the shipper is being required to bear more than a reasonable proportion of the costs described in subparagraph (A) of this paragraph.

(C) If the Commission finds that a complaining shipper is being required to bear more than a reasonable proportion of the costs described in subparagraph (A) of this paragraph, the Commission may reallocate the surcharge among the traffic originating or terminating on the line to which the surcharge applies, but may not order relief which would result in the surcharging carrier earning revenues less than those which the carrier would have earned had the surcharge been applied as filed.

(5) A shipper may, in a single complaint, seek relief under paragraphs (3) and (4) of this subsection. In any such complaint, the Commission shall first determine the right to relief under paragraph (3) and shall grant such relief as is appropriate under such paragraph.

(6) In any proceeding brought before the Commission challenging the application or amount of a surcharge under this subsection, whether the surcharge is claimed to violate this subsection or some other provision of this chapter, the Commission shall not suspend the application of any such surcharge unless the person filing the verified statement required by section 10707(c) of this title, in addition to the matters required by such section, also makes the demonstration required by paragraph (3)(A) of this subsection. If the demonstration required by such paragraph (3)(A) is made, the Commission may suspend the application of only so much of the surcharge as will produce revenues in excess of the amount so demonstrated.

(c)(1) Notwithstanding any other provision of this title, any prior agreement in effect on the effective date of the Staggers Rail Act of 1980, or any requirement of the Commission, a rail carrier may cancel the application of a joint rate to a through route in which it participates, without the concurrence of any other rail carrier that is a party to such joint rate, unless another rail carrier that participates in such through route or a shipper that has no competitive alternative to such route makes the demonstration described in paragraph (2) of this subsection.

(2) The application of a joint rate to a through route may not be canceled under this subsection if a rail carrier that participates in such through route or a shipper that has no competitive alternative to such route from an origin or destination served by such route demonstrates to the Commission that the canceling carrier's share of the revenues, under the joint rate in effect at the time the application of the joint rate is canceled, is equal to or greater

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(A) a complaining carrier publishes a new rate division or a new higher lawful rate which increases the canceling carrier's share of the revenues over such route to the amount calculated under paragraph (2)(A) or (2)(B) of this subsection, whichever is less; or (B) a complaining carrier or shipper petitions the Commission and the Commission imposes a surcharge, in conformity with such petition, upon the joint rate which will accrue solely to the canceling carrier and which, in conjunction with the canceling carrier's division of the joint rate in effect on the date the tariff canceling the joint rate was filed, will provide the canceling carrier revenues equal to or greater than 110 percent of its variable cost of providing service over such route. Unless a new rate, division, or surcharge described in this paragraph becomes effective within 120 days after the proposed effective date of the rate cancellation, the canceling tariff shall, nevertheless, become effective.

(4) If the demonstration described in paragraph (2) is made or a new rate, division, or surcharge described in paragraph (3) becomes effective, the tariff canceling the joint rate shall be considered by the Commission in accordance with section 10705 of this title. The existing joint rate or the new rate division, or surcharge, shall remain in effect during the pendency of the Commission's consideration.

(5) Whenever the application of a joint rate to a through route is canceled under this subsection and a rate other than a joint rate is or has been published by the canceling carrier to apply to such route, such rate shall thereafter apply in lieu of all other rates (except joint rates subsequently agreed to by such carrier) and any through rate of which such rate is a factor shall divide as the separate factors of such rate are made.

(6) Nothing in this subsection shall be construed to limit the authority of the Commission under section 10705(a) of this title to prescribe joint rates which provide a rail carrier participating in such joint rate revenues equal to or greater than 110 percent of its variable cost of providing service over each route to which such rate applies.

(d)(1) Except as provided in paragraph (2) of this subsection, any increase or decrease in revenue resulting from the application of a surcharge under subsection (a) of this section, or from the cancellation of the application of a joint rate under subsection (c) of this section, shall accrue solely to or be borne solely by the carrier applying the surcharge or canceling the application of the joint rate, as the case may be.

(2) Whenever a class III rail carrier which participates in a through route to which a surcharge has been applied under subsection (a) of this section by a carrier operating in the same rate territory as such class III carrier demonstrates to the Commission that the application of such surcharge to such route provides, in the absence of any increase in the joint rate in effect on the date the surcharge was filed with the Commission, revenues from traffic moving over such route to such surcharging carrier in excess of 110 percent of its variable costs over

such route, such surcharging carrier shall, from the date of such demonstration, share those revenues from such route, from the surcharge and the applicable joint rate in effect on the date the surcharge was filed with the Commission, in excess of 110 percent of its variable costs with all class III rail carriers in the same rate territory participating in such route, on the basis of their existing divisions of the joint rate to which the surcharge applies.

(e)(1) Except as provided in paragraph (2) of this subsection, whenever a rail carrier proposes to apply a surcharge under subsection (a) of this section or to cancel the application of a joint rate under subsection (c) of this section and another rail carrier subsequently agrees to a new rate division or a new lawful rate that increases the surcharging or canceling carrier's share of the total through charges for a movement over a particular through route subject to a joint rate, such other rail carrier shall also agree to any other new rate division and new lawful rate

(A) that is proposed within 120 days after the date of the first agreement; and

(B) that increases the surcharging or canceling carrier's share of the total through charges for movements over a competing through route subject to such joint rate.

(2) A rail carrier shall not be required to agree under this subsection to any proposed new division or new rate which would

(A) reduce such carrier's share of the total through charges for a movement over any through route to less than (i) 110 percent of its variable costs of providing service over such route, or (ii) such lesser percent of its variable costs as such carrier earns from such movement over a competing through route with respect to which such carrier has agreed to a new division or rate;

(B) increase the surcharging or canceling carrier's share of the total through charges for a movement over any through route to an amount in excess of 110 percent of its variable costs of providing service over such route;

(C) reduce such carrier's share of the total through charges for a movement over any through route by a dollar amount in excess of the greatest dollar reduction which such carrier has agreed to make, for purposes of increasing the surcharging or canceling carrier's share, to its share of the total through charges for a movement over any competing through route; or

(D) reduce such carrier's share of the total through charges for a movement over any through route in an amount in excess of such carrier's pro rata share (based on established divisions for movements over such route) of the increase of the surcharging or canceling carrier's share of the total through charges for movements over such route.

(f) A rail carrier applying a surcharge or canceling the application of a joint rate under this section shall file a tariff with the Commission in accordance with section 10762 of this title. Such a tariff may not become effective until

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