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103D CONGRESS

1ST SESSION H. R. 2021

To establish procedures to resolve undercharge claims by motor carriers

based on negotiated but unfiled or illegal tariff rates, to ensure the

proper, timely, and accurate filing and enforcement of motor carrier

rates in tariffs, to reaffirm the requirement for written transportation

contracts, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 6, 1993

Mr. LIPINSKI introduced the following bill; which was referred jointly to the

Committees on Public Works and Transportation, the Judiciary, and

Education and Labor

A BILL

To establish procedures to resolve undercharge claims by

motor carriers based on negotiated but unfiled or illegal

tariff rates, to ensure the proper, timely, and accurate

filing and enforcement of motor carrier rates in tariffs,

to reaffirm the requirement for written transportation

contracts, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Undercharge Settle5 ment and Amnesty Act of 1993’’.
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1 SEC. 2. FINDINGS.

2 Congress finds that—

3 (1) over the past decade there have been ongo4 ing disputes between shippers of freight, on the one

5 hand, and motor carriers or their representatives in

6 bankruptcy and creditors, on the other hand, regard7 ing the proper resolution of claims for collection of

8 freight charges for transportation services that rep9 resent the difference between filed tariff rates and

10 rates that were negotiated with shippers for which

11 tariffs were not filed, not timely filed, or not legally

12 filed with the Interstate Commerce Commission as

13 required by law or for which lawful contract carriage

14 did not result;

15 (2) such disputes continue to remain unresolved

16 and have burdened the dockets of the Federal

17 courts, consumed the time and resources of the

18 Interstate Commerce Commission, caused shippers

19 and the motor carrier industry to engage in seem20 ingly endless debate and litigation, and prevented or

21 delayed the collection and distribution of the assets

22 of motor carrier bankruptcy estates to creditors, in23 cluding pension funds and former employees of the

24 bankrupt motor carriers;

25 (3) in order to resolve these disputes and allow

26 the proper administration of motor carrier bank-
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1 ruptcy estates through the prompt collection of as2 sets and distribution of funds to creditors, it is in

3 the public interest to establish a procedure authoriz4 ing persons to resolve these claims without fear of

5 violating the Interstate Commerce Act and without

6 the allocation of fault;

7 (4) the interests of motor carriers, shippers,

8 and the public are best served by the requirement

9 that the rates, charges, rules, and classifications of

10 motor common carriers continue to be filed with the

11 Interstate Commerce Commission and made avail12 able to the public in tariffs; and

13 (5) the filed rate doctrine continues to be a

14 valid principle governing all interstate common car15 riage conducted in the United States.

16 SEC. 3. PROCEDURE FOR RESOLVING CLAIMS INVOLVING

17 UNDERCHARGE CLAIMS.

18 Section 10701 of title 49, United States Code, is

19 amended by adding at the end the following:

20 ‘‘(f) PROCEDURE FOR RESOLVING CLAIMS INVOLV21 ING UNDERCHARGE CLAIMS.—

22 ‘‘(1) IN GENERAL.—

23 ‘‘(A) ELECTION AUTHORITY.—When an

24 undercharge claim is made by a motor carrier

25 of property (other than a household goods car-
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1 rier), by a nonhousehold goods freight for2 warder, or by a party representing or succeed3 ing to the rights of such a carrier or forwarder

4 (hereinafter in this subsection such a carrier,

5 freight forwarder, or party is referred to as a

6 ‘carrier claimant’), the person against whom the

7 claim is made may elect to satisfy such claim

8 in accordance with the procedures set forth in

9 paragraph (2).

10 ‘‘(B) UNDERCHARGE CLAIM DEFINED.—

11 For the purposes of this subsection, the term

12 ‘undercharge claim’ means a claim for any un13 dercharges made by a carrier claimant arising

14 out of a rate, charge, classification or rule

15 agreed upon by the motor carrier or

16 nonhousehold goods freight forwarder and a

17 shipper that either allegedly was not legally or

18 timely filed in a tariff with the Commission or,

19 in the case of a claim of contract carriage,

20 where the contract or services performed there21 under did not constitute valid contract carriage,

22 and where a shipper tendered freight and made

23 payment to the motor carrier in reasonable reli24 ance upon the agreed upon rate, charge, classi25 fication, or rule.
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1 ‘‘(C) JURISDICTION OF COURTS.—The dis2 trict courts of the United States shall have ex3 clusive jurisdiction over an undercharge claim.

4 ‘‘(D) LIMITATION ON APPLICABILITY.—

5 This subsection does not apply to a claim based

6 upon the failure of a shipper to pay a tariff rate

7 where no undercharge claim is involved.

8 ‘‘(E) UNDERCHARGE DEFINED.—For the

9 purposes of this subsection, the term ‘‘under10 charge’’ means the difference between the al11 leged legally applicable tariff rate and the rate

12 paid by the shipper when the rate paid is less

13 than the tariff rate.

14 ‘‘(2) PROCEDURE.—

15 ‘‘(A) 35 PERCENT PAYMENT.—Subject to

16 subparagraph (B) and paragraphs (3) and (4),

17 the person against whom an undercharge claim

18 has been made may elect to satisfy such claim

19 by payment of 35 percent of the undercharge.

20 ‘‘(B) DEADLINE FOR ELECTION.—The

21 election must be made no later than the 90th

22 day after the carrier claimant has notified the

23 person from whom additional freight charges

24 are sought of the provisions of this subsection

25 and the person’s right of election thereunder.
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1 ‘‘(C) EFFECTIVE PERIOD.—The election to

2 satisfy undercharge claims provided for in this

3 paragraph shall apply to all undercharge claims

4 pending as of the date of the enactment of this

5 subsection and to all undercharge claims arising

6 from transportation shipments tendered on or

7 before the last day of the 12-month period be8 ginning on such date of enactment.

9 ‘‘(D) EFFECT OF CLAIM SATISFACTION.—

10 Satisfaction of a claim under this paragraph

11 shall be binding on the parties, and the parties

12 with respect to the claim shall not be subject to

13 chapter 119 of this title, relating to civil and

14 criminal penalties.

15 ‘‘(3) EFFECT OF NONELECTION.—

16 ‘‘(A) PRESERVATION OF EXISTING RIGHTS

17 AND REMEDIES.—In the event a shipper or per18 son against whom an undercharge claim has

19 been made does not elect to use the procedure

20 established under paragraph (2), the shipper or

21 person may pursue all existing rights and rem22 edies under this title.

23 ‘‘(B) DETERMINATION OF RATE REASON24 ABLENESS.—In the case of an undercharge

25 claim referred to in subparagraph (A), if the
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1 shipper or person asserts a counterclaim

2 against a carrier claimant arising out of the un3 dercharge claim on the ground of rate reason4 ableness, a court may stay proceedings so as to

5 permit the shipper or such other person to file

6 a complaint with the Commission challenging

7 the reasonableness of the rate being sought. In

8 the event the court permits the filing of such a

9 complaint, the Commission shall issue a ruling

10 thereon and report it to the court within 6

11 months of the date the complaint is filed unless

12 the court further extends its stay for an addi13 tional specified period. If the rate sought to be

14 collected is found unreasonable, the Commission

15 shall determine a maximum reasonable rate.

16 ‘‘(C) ATTORNEYS’ FEES.—If a carrier

17 claimant ultimately prevails in recovering any

18 part of an undercharge claim referred to in sub19 paragraph (A) following litigation of a rate rea20 sonableness complaint, the court shall award

21 such carrier claimant reasonable attorneys’ fees

22 and costs of litigation.

23 ‘‘(4) DEFENSE TO UNDERCHARGE CLAIM.—

24 ‘‘(A) IN GENERAL.—Notwithstanding

25 paragraphs (1), (2), and (3), a person shall not
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1 be liable for an undercharge claim made by a

2 carrier claimant if such person is a small-busi3 ness concern, a charitable organization, or the

4 cargo involved in the claim is recyclable mate5 rials, as defined in section 10733.

6 ‘‘(B) WAIVER.—The defense to liability

7 granted under subparagraph (A) shall be

8 waived unless asserted within 90 days of receipt

9 from the carrier claimant of notice of the provi10 sions of this subsection.

11 ‘‘(C) DEFINITIONS.—For purposes of this

12 paragraph—

13 ‘‘(i) the term ‘small-business’ concern

14 means a business whose average gross an15 nual revenues as evidenced by its Federal

16 income tax returns for its last 3 years of

17 operation were less than $5,000,000; and

18 ‘‘(ii) the term ‘charitable organization’

19 means any organization which is described

20 in section 501(c)(3) of the Internal Reve21 nue Code of 1986 and exempt from tax

22 under section 501(a) of such Code.

23 ‘‘(5) BURDEN OF PROOF.—In the case of any

24 claim to which the reasonableness of the rate filed

25 before, on, or after the date of the enactment of this
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1 subsection with the Commission is in question, the

2 Commission shall determine the reasonableness of

3 such rate for shipments of property made before, on,

4 or after such date of enactment in accordance with

5 the criteria set forth in subsection (e). The com6 plainant shall have the burden of proof in any action

7 challenging the reasonableness of such a rate. For

8 undercharge claims based upon shipments trans9 ported prior to January 1, 1992, the carrier claim10 ant shall have the burden of presenting evidence

11 supporting the reasonableness of its filed rate or a

12 maximum reasonable rate.

13 ‘‘(6) PRESERVATION OF DUTY TO FILE

14 RATES.—Except as authorized in paragraphs (2)

15 and (8) of this subsection, nothing in this subsection

16 shall relieve a motor carrier or nonhousehold goods

17 freight forwarder of the duty to file and adhere to

18 its rates, rules, and classifications as required by

19 sections 10761 and 10762.

20 ‘‘(7) CUSTOMER ACCOUNT CODE.—

21 ‘‘(A) LIMITATION ON ASSERTION OF UN22 DERCHARGE CLAIM.—Notwithstanding any

23 other provision in this subsection, motor car24 riers or nonhousehold goods freight forwarders

25 that transported property in interstate or for-
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1 eign commerce on or after July 1, 1992, pursu2 ant to a certificate or license issued by the

3 Commission shall not be permitted to assert

4 any undercharge claim against any person

5 based upon the illegality of a tariff filed with

6 the Commission containing a customer account

7 code.

8 ‘‘(B) DELETION.—Any tariff which does

9 not identify the recipient of the coded customer

10 account code rate shall be deleted by the motor

11 carrier from its tariff within 90 days of the

12 date of the enactment of this subsection.

13 ‘‘(C) CUSTOMER ACCOUNT CODE DE14 FINED.—For purposes of this subsection, the

15 term ‘customer account code’ means a rate filed

16 with the Commission in a tariff of a motor car17 rier or nonhousehold goods freight forwarder in

18 code form for the benefit of an unnamed ship19 per or other person.

20 ‘‘(8) ENFORCEABILITY OF CLAIMS.—

21 ‘‘(A) PRE-EFFECTIVE DATE.—Notwith22 standing any provision of this title, any settle23 ment or payment of an undercharge claim en24 tered into prior to the effective date of this sub-
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1 section shall be deemed binding, enforceable,

2 and not contrary to law.

3 ‘‘(B) POST-EFFECTIVE DATE.—Any settle4 ment of an undercharge claim on or after the

5 effective date of this subsection shall be bind6 ing, enforceable, and not contrary to law only if

7 such settlement is accomplished in conformity

8 with this subsection or is approved by a court

9 of competent jurisdiction.

10 ‘‘(9) COUNTERCLAIMS AND SETOFFS.—Not11 withstanding any other provision of this title or any

12 defense provided for in this subsection, motor car13 riers or nonhousehold goods freight forwarders may

14 assert undercharge claims as counterclaims or

15 setoffs to any action commenced or claim made by

16 a shipper unless the shipper has complied with the

17 provisions of paragraphs (2)(A) and (2)(B).’’.

18 SEC. 4. STATUTE OF LIMITATIONS.

19 (a) MOTOR CARRIER UNDERCHARGES.—Section

20 11706(a) of title 49, United States Code, is amended by

21 striking the period at the end and inserting the following:

22 ‘‘; except that a common carrier providing transportation

23 or service subject to the jurisdiction of the Commission

24 under subchapter II of chapter 105 of this title—
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1 ‘‘(1) must begin, within 24 months after the

2 claim accrues, a civil action to recover charges for

3 such transportation or service if such transportation

4 or service is provided by the carrier on or after the

5 date of the enactment of the Undercharge Settle6 ment and Amnesty Act of 1993 and before the date

7 that is 1 year after such date of enactment; and

8 ‘‘(2) must begin such a civil action within 18

9 months after the claim accrues if such transpor10 tation or service is provided by the carrier on or

11 after the date that is 1 year after such date of en12 actment.’’.

13 (b) MOTOR CARRIER OVERCHARGES.—Section

14 11706(b) is amended by striking the period at the end

15 of the first sentence and inserting the following: ‘‘; except

16 that a person must begin within 24 months after the claim

17 accrues a civil action to recover overcharges from a carrier

18 subject to the jurisdiction of the Commission under sub19 chapter II of chapter 105 of this title for transportation

20 or service taking place on or after the date of the enact21 ment of the Undercharge Settlement and Amnesty Act of

22 1993 and before the date that is 1 year after such date

23 of enactment and, for the transportation or service taking

24 place on or after the date that is 1 year following such
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1 date of enactment, a person must begin such a civil action

2 within 18 months after the claim accrues.’’.

3 (c) CONFORMING AMENDMENT.—Section 11706(d) is

4 amended—

5 (1) by striking ‘‘The three-year period’’ each

6 place it appears and inserting ‘‘A limitation period’’;

7 and

8 (2) by striking ‘‘that 3-year’’ and inserting

9 ‘‘that limitation’’.

10 SEC. 5. TARIFF RECONCILIATION RULES FOR MOTOR COM11 MON CARRIERS OF PROPERTY.

12 (a) IN GENERAL.—Chapter 117 of title 49, United

13 States Code, is amended by adding at the end the follow14 ing new section:

15 ‘‘§ 11712. Tariff reconciliation rules for motor com16 mon carriers of property

17 ‘‘(a) IN GENERAL.—Subject to Commission review

18 and approval, motor carriers subject to the jurisdiction of

19 the Commission under subchapter II of chapter 105 of

20 this title and shippers may, within 6 months after the date

21 of the shipment, resolve, by mutual consent in a writing

22 signed by both parties and retained by a motor carrier

23 for 3 years, overcharge and undercharge claims resulting

24 from billing errors or incorrect tariff provisions arising

25 from the inadvertent failure to properly and timely file and
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1 maintain agreed upon rates, rules, or classifications in

2 compliance with sections 10761 and 10762 of this title.

3 Resolution of such claims among the parties shall not sub4 ject any party to the penalties of chapter 119 of this title.

5 ‘‘(b) LIMITATION ON STATUTORY CONSTRUCTION.—

6 Nothing in this section shall be construed to relieve a

7 motor carrier of the duty to file and adhere to its rates,

8 rules, and classifications as required in sections 10761 and

9 10762, except as provided in subsection (a) of this section.

10 ‘‘(c) INSTITUTION OF RULEMAKING PROCEEDING.—

11 Within 90 days after the date of the enactment of this

12 section, the Commission shall institute a proceeding to es13 tablish rules pursuant to which the tariff requirements of

14 sections 10761 and 10762 of this title shall not apply

15 under circumstances described in subsection (a) of this

16 section.’’.

17 (b) CONFORMING AMENDMENT.—This analysis for

18 chapter 117 of such title is amended by adding at the end

19 the following:

‘‘11712. Tariff reconciliation rules for common carrier of property.’’.

20 SEC. 6. RATES AND CONTRACTS OF MOTOR CONTRACT

21 CARRIERS.

22 Section 10702 of title 49, United States Code, is

23 amended by adding at the end the following:

24 ‘‘(c) CONTRACTS OF MOTOR CONTRACT CARRIERS.—
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1 ‘‘(1) GENERAL RULE.—A motor contract car2 rier shall enter into a written agreement, separate

3 from the bill of lading, for each contract of carriage.

4 ‘‘(2) CONTENTS OF AGREEMENT.—The written

5 agreement shall, at a minimum—

6 ‘‘(A) identify the parties thereto;

7 ‘‘(B) commit the shipper to tender and the

8 carrier to transport a series of shipments;

9 ‘‘(C) contain the contract rate or rates for

10 the transportation service to be or being pro11 vided; and

12 ‘‘(D)(i) provide for the assignment of

13 motor vehicles for a continuing period of time

14 for the exclusive use of the shipper; or

15 ‘‘(ii) provide that the service is designed to

16 meet the distinct operational needs of the ship17 per.

18 ‘‘(3) PERIOD OF CONTRACT RETENTION.—All

19 written agreements entered into by a motor contract

20 carrier shall be retained by the carrier while in effect

21 and for a minimum period of 3 years thereafter and

22 made available to the Commission upon request.

23 Failure by a motor carrier to so retain its written

24 agreement with a shipper shall not, however, subject

25 such shipper to any undercharge or other liability.
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1 ‘‘(4) RANDOM AUDITS.—The Commission shall

2 conduct periodic random audits to ensure that motor

3 carriers are complying with this subsection and are

4 adhering to the rates set forth in their agreements.’’.

5 SEC. 7. TARIFF FILING ENFORCEMENT.

6 Subchapter IV of chapter 107 of title 49, United

7 States Code, is amended by adding at the end the follow8 ing:

9 ‘‘§ 10767. Tariff filing enforcement

10 ‘‘Not later than 90 days after the date of the enact11 ment of this section, the Commission shall issue final reg12 ulations prohibiting the filing of tariffs under this chapter

13 by motor carriers that fail to state clearly and concisely

14 the actual rates or charges for a transportation service or

15 a methodology for determining the rates or charges (such

16 as range and trigger tariffs) or that misapply freight clas17 sifications.’’.

18 SEC. 8. BILLING AND COLLECTION PRACTICES.

19 (a) IN GENERAL.—Subchapter IV of chapter 107 of

20 title 49, United States Code, is further amended by adding

21 at the end the following:

22 ‘‘§ 10768. Billing and collection practices

23 ‘‘Not later than 90 days after the enactment of this

24 section, the Commission shall issue final regulations pro25 hibiting a motor carrier subject to the jurisdiction of the
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1 Commission under subchapter II of chapter 105 of this

2 title—

3 ‘‘(1) from giving a reduction in a rate set forth

4 in its tariff or contract to any person other than the

5 person who is paying for the transportation service

6 and is indicated on the original bill of lading as the

7 person paying for such service; and

8 ‘‘(2) from failing to insert that reduction in the

9 rate on the freight bill or other document presented

10 for payment.

11 It shall be a violation of chapter 119 for any carrier or

12 person knowingly to pay, accept, or solicit a reduced rate

13 in violation of this section. It shall also be a violation of

14 chapter 119 for any carrier or person knowingly to provide

15 false or misleading information about the actual rates or

16 charges for the transportation service in a freight bill or

17 document presented for payment.’’.

18 (b) CHAPTER ANALYSIS CONFORMING AMEND19 MENT.—The analysis for such subchapter is amended by

20 adding at the end the following:

‘‘10767. Tariff filing enforcement.

‘‘10768. Billing and collection practices.’’.

21 SEC. 9. REPORT ON ELECTRONIC TARIFF FILING.

22 Within 1 year after the date of the enactment of this

23 Act, the Interstate Commerce Commission shall submit a

24 report to Congress on the feasibility, costs, and benefits
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1 of implementation of a system for electronic tariff filing

2 of motor common carrier rates and charges and a program

3 for implementation thereof.

4 SEC. 10. PRIORITY PAYMENTS IN CASES INVOLVING THE

5 DEBTOR’S RECOVERY OF UNDERCHARGES.

6 Paragraphs (3) and (4) of section 507(a) of title 11,

7 United States Code, are each amended by adding at the

8 end the following:

9 ‘‘The limitations specified in subparagraphs (A) and

10 (B) shall not apply in a case in which the debtor is

11 a motor carrier (as defined in section 10102 of title

12 49) that asserts a right against any person or gov13 ernmental unit to a recovery of an undercharge (as

14 defined in section 10701(f) of title 49).’’.

15 SEC. 11. PROTECTION FOR PENSION FUND OBLIGATIONS

16 OF MOTOR CARRIERS.

17 Part 1 of subtitle D of title IV of the Employee Re18 tirement Income Security Act of 1974 is amended by add19 ing at the end the following:

20 ‘‘SEC. 4226. LIEN FOR LIABILITY IN FAVOR OF MOTOR CAR21 RIER PLANS.

22 ‘‘(a) IN GENERAL.—If any motor carrier that is sub23 ject to the jurisdiction of the Interstate Commerce Com24 mission under subtitle IV of title 49, United States Code,

25 is a debtor in a case under title 11, United States Code,
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1 and is liable to a multiemployer plan under section 4219

2 neglects or refuses to pay, after demand has been made

3 by the plan in accordance with section 4219(b)(1) or after

4 a default described in section 4219(c)(5), any installment

5 payment or any amount of accelerated withdrawal liability,

6 there shall be a lien in favor of the plan in the amount

7 of such payment or amount on all undercharges, as de8 fined in section 10701(f) of title 49, United States Code,

9 which such motor carrier then has or may have in the fu10 ture.

11 ‘‘(b) TIMING OF LIEN.—The lien imposed by sub12 section (a) arises on the date that any installment pay13 ment under section 4219(c)(1)(A) was due but not paid

14 or on the date that default occurs under section

15 4219(c)(5).

16 ‘‘(c) ADMINISTRATION AND ENFORCEMENT OF

17 LIEN.—For all purposes related to the administration and

18 enforcement of the lien established by subsection (a), the

19 provisions applicable to liens in favor of the corporation

20 under sections 4068(c) and 4068(d) shall apply to such

21 lien in connection with the multiemployer plan in the same

22 manner and to the same extent as such provisions apply

23 to liens in connection with the corporation.

24 ‘‘(d) RELEASE OF SUBORDINATION.—The lien estab25 lished under subsection (a) may be released or subordi-
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1 nated, in whole or in part, if and only if the plan, in its

2 judgment, issues a certification that such release or such

3 subordination will ultimately increase the likelihood of the

4 plan’s collection of the withdrawal liability obligations

5 which are the subject of the lien.’’.

6 (b) CLERICAL AMENDMENT.—The table of contents

7 in section 1 of such Act is amended by inserting after the

8 item relating to section 4225 the following new item:

‘‘Sec. 4226. Lien for liability in favor of motor carrier plans.’’.

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