§10701a. Standards for rates for rail carriers

(a) Except as provided in subsection (b) or (c) of this section and unless a rate is prohibited by a provision of this title, a rail carrier providing transportation subject to the jurisdiction of the Interstate Commerce Commission under subchapter I of chapter 105 of this title may establish any rate for transportation or other service provided by the carrier.

(b)(1) If the Commission determines, under section 10709 of this title, that a rail carrier has market dominance over the transportation to which a particular rate applies, the rate established by such carrier for such transportation must be reasonable.

(2) In any proceeding to determine the reasonableness of a rate described in paragraph (1) of this subsection-

(A) the shipper challenging such rate shall have the burden of proving that such rate is not reasonable if-

(i) such rate (I) is authorized under section 10707a of this title, and (II) results in a revenue-variable cost percentage for the transportation to which the rate applies that is less than the lesser of the percentages described in clauses (i) and (ii) of section 10707a(e)(2)(A) of this title; or

(ii) such rate does not meet the description set forth in clause (i) of this subparagraph, but the Commission does not begin an investigation proceeding under section 10707 of this title to determine whether such rate is reasonable; and

(B) the rail carrier establishing the challenged rate shall have the burden of proving that such rate is reasonable if-

(i) such rate (I) is greater than that authorized under section 10707a of this title, or (II) results in a revenue-variable cost percentage for the transportation to which the rate applies that is equal to or greater than the lesser of the percentages described in clauses (i) and (ii) of section 10707a(e)(2)(A) of this title; and

(ii) the Commission begins an investigation proceeding under section 10707 of this title to determine whether such rate is reasonable.

(3) In determining whether a rate established by a rail carrier is reasonable for purposes of this section, the Commission shall recognize the policy of this subtitle that rail carriers shall earn adequate revenues, as established by the Commission under section 10704(a)(2) of this title.

(c)(1) A rate for transportation or other service provided by a rail carrier subject to the jurisdiction of the Commission under subchapter I of chapter 105 of this title may not be established below a reasonable minimum. Any rate for transportation by such a rail carrier that does not contribute to the going concern value of such carrier is presumed to be not reasonable. A rate that contributes to the going concern value of such carrier is conclusively presumed not to be below a reasonable minimum.

(2) A rate for transportation by a rail carrier that equals or exceeds the variable cost of providing the transportation is conclusively presumed to contribute to the going concern value of such rail carrier.

(3)(A) Upon the filing of a complaint alleging that a rate is in violation of this subsection, the Commission shall take final action thereon by the 90th day after the date such complaint is filed.

(B) If the Commission determines, based on the record after opportunity for a hearing, that a rate is in violation of this subsection, the Commission shall order such rate to be raised, but only to the minimum level required by this subsection. The complainant shall have the burden of proving that such rate is in violation of this subsection.

(4)(A) For purposes of this subsection, variable costs shall be determined under formulas or procedures prescribed or certified by the Commission.

(B) In the determination of variable costs for purposes of minimum rate regulation, the Commission shall, on application of the rail carrier proposing the rate, determine only the costs of such carrier and only those costs of the specific service in question unless the specific information is not available. The Commission may not include in such variable costs an expense that does not vary directly with the level of transportation provided under the proposed rate.

(Added Pub. L. 96–448, title II, §201(a), Oct. 14, 1980, 94 Stat. 1898 ; amended Pub. L. 103–272, §4(j)(19), July 5, 1994, 108 Stat. 1369 .)

Amendments

1994-Subsec. (b)(3). Pub. L. 103–272 substituted "subtitle" for "title" after "policy of this".

Effective Date

Section effective Oct. 1, 1980, see section 710(a) of Pub. L. 96–448, set out as an Effective Date of 1980 Amendment note under section 10101 of this title.

Determination of Extent Product Competition To Be Considered in Rate Regulation Proceedings; Availability of Alternative Sources; Coal From Alternative Sources; Standards for Reasonableness Under Existing Laws and Meaning of Market Dominance Unaffected

Section 205(a) of Pub. L. 96–448 directed the Interstate Commerce Commission to commence a proceeding to determine whether, and to what extent, product competition, meaning the availability to a consignee of alternative sources of a product or commodity which could be effectively utilized by the consignee, without regard to origin, should be considered in proceedings under subtitle IV of this title to determine the reasonableness of rail carrier rates. Coal imported for generation of electricity by utilities was not to be considered, and the Commission's standards for determining reasonableness of rail carrier rates under existing laws and the meaning of the term "market dominance" as defined in section 10709(a) of this title were to remain unaffected. The Commission was to complete the proceeding within 230 days after Oct. 1, 1980.

Challenge of Existing Rail Carrier Rates; Grounds; Time Limitation; Exception; Burden of Proof

Section 229 of Pub. L. 96–448 provided that:

"(a) Any rate that is in effect on the effective date of this Act [Oct. 1, 1980] for transportation by a rail carrier providing transportation subject to the jurisdiction of the Interstate Commerce Commission under subchapter I of chapter 105 of title 49, United States Code, may, during the 180-day period beginning on such effective date, be challenged in a complaint filed with the Interstate Commerce Commission by any interested party alleging that the rail carrier has market dominance over the transportation to which the rate applies, as determined under section 10709 of such title, and that the rate is not reasonable under section 10701a of such title.

"(b) Any rate described in subsection (a) of this section-

"(1) which is not challenged in a complaint filed within the 180-day period provided in such subsection; or

"(2) which is challenged in such a complaint, but (A) the rail carrier is found not to have market dominance over the transportation to which the rate applies, or (B) the rate is found to be reasonable,

shall be deemed to be lawful and may not thereafter be challenged in the Commission or in any court (other than on appeal from a decision of the Commission).

"(c) The provisions of this section shall not apply to any rate under which the volume of traffic moved during the 12-month period immediately preceding the effective date of this Act did not exceed 500 net tons and has increased tenfold within the 3-year period immediately preceding the bringing of a challenge to the reasonableness of such rate.

"(d) The burden of proof in any proceeding under this section shall be on the complainant."

Section Referred to in Other Sections

This section is referred to in section 10705a of this title.