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PREFACE

This bluebook is designed to assist the Members in their consideration of the major railroad and surface transportation legislative proposals under review.

While the Committee may wish to consider regulatory bills separate from the rail freight car bills, for the purposes of this staff presentation, all related proposals are considered together.

The staff recommends for background study the hearings conducted by the Committee's Special Subcommittee on Investigations conducted during the 92nd Congress, entitled, "Inquiry Into Freight Car Shortages (Serial 92–81, 92–82); and hearings by the Subcommittee on Transportation on the “Transportation Act of 1972" (92–76, 92–77, 92–78, 92–79). The Senate Commerce Committee Report on S. 1149 (The Rolling Stock Utilization and Financing Act of 1973 is available from the Document Room of the House (Report No.

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THE TRANSPORTATION IMPROVEMENT ACT OF 1974
THE SURFACE TRANSPORTATION ACT OF 1973

AND
FREIGHT CAR LEGISLATION

H.R. 12891_TRANSPORTATION IMPROVEMENT ACT OF

1974
SECTION-BY-SECTION ANALYSIS

To amend the Interstate Commerce Act, as amended, to assure that rates are

compensatory, to allow more flexibility in establishing rates, to facilitate the abandonment of uneconomic rail lines, and for other purposes; to assist in the financing of rail transportation and to develop a rolling stock scheduling and control system.

Section 1. Cites the proposed Act as the "Transportation Improvement Act of 1974."

RAILROAD RATEMAKING AND ABANDONMENT

Sec. 2(a)(1). Amends section 1(5) of the Act by (i) incorporating the definition of rates and, with some modification, certain ratemaking considerations now appearing in Section 15a(1) of the Act; (ii) adding to the existing requirement that rates be just and reasonable, a provision that a compensatory rate may not be held to be unjust or unreasonable because it is too low; (iii) incorporating provisions for subsections 15a (2) and (3) requiring the Commission to consider the effects of rates on the movement of traffic and the need for adequate and efficient railway transportation service, and prohibiting the Commission from holding up to a particular level the rate of a carrier of a mode subject to Parts I, II, III, or IV to protect the traffic of a carrier of another mode; (iv) providing that a rate is compensatory when it equals or exceeds the variable cost of providing the service to which it applies; and (v) requiring the Commission to identify traffic moving at a rate below variable cost and to raise the rate at least to the variable cost level.

(2). Amends section 1(18) by (i) striking certification provisions relating to abandonment; (ü) designating the existing paragraph (18) as subparagraph (18)(a); (iii) adding a new subparagraph (b)(1) to provide that, when a line of railroad is abandoned, a person may apply to the Commission for a certificate of convenience and necessity to operate as a common carrier over a route necessary to provide service (i) between any points on the abandoned line and (ii) between any point or points on the abandoned line and the nearest appropriate transfer point for movement by rail beyond; (iv) by adding a new subparagraph (b)(2) which requires the Commission to issue a cer

(1)

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