Opinion ID: 413116
Heading Depth: 2
Heading Rank: 1

Heading: The Commission's Authority to Issue a Partial Exemption

Text: 22 The central issue presented by petitioner's appeal of the Commission's rulemaking proceeding is the scope of the Commission's authority to exempt states and subunits of state governments from the full panoply of Commission regulations. Under the authority granted the Commission in section 10505(a), the Commission can exempt a person from the effect of most Commission regulations, provided it finds that the exemption is not necessary to further the goals of the national transportation policy and is of limited scope or not needed to protect shippers from an abuse of market power. 34 In addition, any exemption can be limited in duration and revoked in whole or in part if later found unnecessary. 35 23 Petitioner argues that the Commission used an impermissible procedure to establish the modified certificate of public convenience and necessity. He argues that the statutory framework of section 10505 requires that the Commission first wholly exempt a party, after appropriate findings, and then make additional findings in a separate proceeding to revoke partially the previous exemption. We find this contention to be inconsistent with Congress's purpose in granting the Commission its exemptive authority and contrary to the intent of Congress in providing the Commission with this power. 24 The exemptive authority granted the Commission in section 10505(a) was first adopted in the 4-R Act. 36 The express purpose of Congress in enacting this section was to grant the Commission authority to review its regulations and withdraw any such regulations found to be unnecessary to effect the goals of national transportation policy or regulations that served little or no public purpose. 37 As noted in the conference report on the 4-R Act, the Commission would be able to exempt any person or services or transportation performed under this Act from all or part of the regulations under the Interstate Commerce Act .... 38 25 In explaining the Commission's exemptive authority, Congress noted that this provision was to be an important cornerstone 39 of a new, flexible approach to regulating the rail industry, adding that the Commission can grant partial and complete exemptions from remaining regulation. 40 Moreover, the very language of section 10505(a), as it existed in 1980 41 and as it exists today, 42 gives the Commission authority to limit an exemption to only part of existing regulations. The matters within the purview of section 10505 prior to the changes made by the Staggers Act were any regulation under the ICA. The Commission, further, has the power to limit the time an exemption is effective 43 and can revoke any part of an exemption after appropriate findings. 44 Since the Commission is empowered to revoke part of an exemption after appropriate findings, the Commission likewise is empowered to limit the scope of an exemption in the first instance. The requirement of section 10505(a) that before granting an exemption the Commission find that a provision of the ICA is not necessary to effect the policy goals expressed in the ICA 45 will ensure that congressional safeguards against unwarranted deregulation are observed. To impose a two-step process on the Commission, in which the Commission would first have to grant a total exemption and then revoke that exemption in part, would be to elevate form completely over substance. Given the clear congressional intent to grant the Commission regulatory flexibility, we hold that the Commission has authority under section 10505 to order a partial exemption from Commission regulations and to issue modified certificates of public convenience and necessity without first exempting the state programs entirely and then revoking only part of the exemption just granted. 26