Comments on H.R. 1157, A Bill To Provide Cargo Security for Property Transported in Interstate and Foreign Commerce

Published by the Government Accountability Office on 1977-03-29.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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                             DOCUNbff   BaU1
01786 - C 10518921 (Restricted)
(Comments on R.3.  1157, A Bill to Provide Cargo Security for
Property Transported in- !'terstate and. Foreign ComeEtce]..
B-169347. Blach 29, 191i.         W9.
Report to Rep. John s.o ruphy. Chirman, ouose ComiCttee on
merchant marine and fieries -byb tobert P. Keller, Deput!
Comptcoller goneral.
Issue A*ra: Transportation System a4 Policelss: anagesent
    Practices in Transportation ricus    (2605).
Contacts Office of the General Coua 'lstransportation iew.
Budget Function:. COserCOe and Trmsopottati ra: Other Advacesent
     and Regulat o0n of Commerce (403).
Organizatio Concorned: Office of tSaeqooat and Budget;
    Interstate Commerce Commission; Deoprtment of the Treamsr';
    Department of Trnsportation.
Congressional Relevance: louse Committee on merchant   a'aIne and
Authority: Interstate Commerce Act, sec. 206, 220 (49 U.S.C. 304
    _; 9 U.S.C. 320); 49 C.f.R. 1249; 40 Ped. lg. 51645.
    Federal Aviation Act (49 B.S.C. 13261 49 0.S.C. 1372: 49
    U.S.C. 1377); 1- C.P.R. 239. rFderal Reports Act (P.L.
    93-153; 64 U.S.C. 3501 (Supp. *)). 1.3. 10473 (96th Cong.).
    B.R.   T17t   (9Sth Cong.).
         3R.. 1157, a bill to provide for improved cargo
security for property transporCed nlinterstate and foreign,
commerce, woual impose a degree of unreasonable and unnecesoary
regulation and reporting on catrsle.    Findings/Conclusions:
Bzxsting statutory provisions e-pouer regulatory aqecies 'to
requix fron carriers whatever loss and damage reports would be
considered neeessary by the bill, The regulatory agencies would
have no apparent use for the infonaotion they would colloct
under certain sections of the bill. he. agencies that would use
such infornation ought to collect it in. order to accomplish the
purpose intended by the bill.. ke doubl. tier reporting
requirements by two different agmRcies aS suggested in the
proposed bill would perilt posible apl$i.tion and conflicts in
standards of control. the responsibility for program evaluation
should rest initally upon the responsible agencies, since such
evaluation is a fundamental part of effective progasm
administration. Recomaen-ations: Since the Office of Management
and Budget (0B3) would review initial Department of
Transportation plans requiring los and damage reports to be
made to the regulatory agencies, OM ought to review all plans
for the collection of loss and damage information. Congress
should attempt to specify the kinds of information and tests
needed to enable it to better assoa how such programs are
working. (3RS)
    ·O          ·at
                      -r           .                      Robert ghitsm

                           2g~~R            .


The Honorable John M. Murphy
Chairman, Cmtittee on Merchant.
  Narine and Fkherles
House of Represuntatives
Dear Ir. Chairman:
                                        .       I

     Your letter of Feor*;sy 3, 1977, requested our views and comments
on H.R. 1157, 95th Congress, a bill To provide a comprehensive program-
to improve cargo security for property being transported in interstate
and foreign'commerce.
       H.R. 1157 is identical -to H.R. 10473, 94th Congress, on which our
Office commented in a letter dated March 8, 1976, to the former
Chairman of the Committee, the Honorable Leonor K. Sullivan. We believe
 '-hat our comments on H.R. 10473 are applicable to H.R. 1157, and these
-mments are summarized herein.
      We recognize the probable need forincreased Federal-.involvement
 in the cargo security field in order to preserve the free flow of
 commerce. However, in our overall -view, the bill as drafted would
 Impose a degree of unreasonable and unnecessary regulation and reporting
 because of a decentralized flow. of information, possible duplication of
 reporting requirements, and duplication of review under the Federal
 Reports Act. Public Caw 93-153, 44 U.S.C. 3501 (Supp. V 1975).
       There are statutory provisions that seem to empower the regulatory
  agenc' es to require from carriers whatever loss and damage reports would
  be considered necessary by the bill; these agencies have published
  regulations, subject to our review, requiring such reports from many
  carriers. Examples include the ICC's regulations in 49 C.F.R. 1249.15
 -(1974) as lmended 40 Fed. Reg. 51645, November 6, 1975, published under
  authority of sections 204 and 220 of the Interstate Commerce Act,. 49
'U.S.C. 304, 320; the.-FMC's regulations published under authority of
 46 U.S.C. 812, 816, 820, and 841a in C.F.R. Part 546; and the CAB's
 regulations published in 14 C.F.R. Part 239 under sections 204, 402
 and 407 of the Federal Aviation Act, 49 U.S.C. 1324, 1372 and 1377.

     The regulatory agencies would have no apparent use for the end
information they would collect pursuant to sections 101(a), 108,
109 of tne bill. These agencies would act as collecting agencies or
as corduits for the flow of information under section 107(a) to DOT
and section 207(a) to the Treasury for use in the preparation of section
standrds by DOT under section  101(a) and by the Treasury under
202(a); for use in the preparation of annual reports to the Congress
under sections 105 and 205; and for use by the Office of Cargo Security
for study and publication under section 302.
      To accomplish the purpose intended by the bill, perhaps the agencies
that ould use the information ought to collect      it. S;nce DOT and
Treasury  would promulgate the  regulations   containing  the security standards
with which the carriers would be required     to comply,  these Departments
 ~wold be in a better positon  to  know what  information   they wanted, and
they would obtain it  faster  by  obtaining  it directly  from  the sources.

      It ;;so'appears that the regulations that would be issued by DOT the
would be subject to review by OMB under the Federal Reports Act whileby
reporting requirements of the regulatory agencies would be reviewed
the Comptroller General. This double tier review of reporting require-
  ents by two different agencies would permit possible duplication         and
conflicts in standards of control and     mright compound  any duplication
and complexity in reporting requirements. To avoid this we recommend     loss
that, since the OMB wnld review the initial DOT plans requiring             ·
and damage reports to be made to the regulatory agencies,        COB  ought
to review all plans and forms for the     collection  of  loss and   damage
 information including those proposed'under the bill and those        that
 have been  reviewed  by  the Comptroller General  under  Public  Law  93-153
 since 1973.
       Following are certain ardttional comments for consideration by
 the Comi ttee.
       Sections 101 and 202 of the bill provide for the issuance of
 cargo security and safety regulations by the Secretaries of Transportation
 and Treasury, respectively. Section 202 states that regulations issued
 under this section shall become effective 6 months after publication
 (unless additional time is granted by the Secretary of the Treasury)
 and provides procedures for the withdrawal of regulations previously
  issued under the section. A'e believe that similar provisions should
 be included in Section 101 of the bill.
       We also note that sections 101 and 202 do not prescribe maximum
                                                                    by the
 time frames for the initial issuance of Federal regulationsnecessary
  Secretaries.   Since  the  issuance of such regulations   is a
  precedent for implementation of otner provisions of the bill, the


Coimttee my witsh to specify that the initial regulations be issued
within a certain period. Since the begnning of the present cargo s-cu-
rity program nearly 6 years ago, the epartment of Transportation has
issued only three Cargo Security Advisory Standards, *.e last in February
1974. A nuiber of others have been under consideration fbr several years.
     Consideration also should be given to Including In sections 101 and
202 provisions for individual waivers of regulations issued. Experience
with other regulatory program has shown that there are sometims circu-
stances which my warrant the issuance of individual waivers for good
cause, without doing violence '. the purpose of the act.
     Section 201 of the bill defines the tern person as used in title
II, sections 203 and 204. The term should also be defined for use in
title I, sections 102 and 103.
     Sections 105 and 205 of the bill would require separate annual re-
ports to the Congress on the administration of titles I and II. These
two titles pertain only tn the issuance and enforcment of regulations.
We suggest that the bitll be amnded to require the Secretary of Trans-
portation to subilt consolidated annual reports on the administration of
the entire act, including, and perhaps most Importantly, titles III and
IV which deal, respectively, with the establishment and operations of an
Office of Cargo Security and an Interagency Council on Cargo Security,
      It .s our view that program evaluation. is.a fundamental part of ef-
fective program administration and that the responsibility for evaluation
should rest initially upon the responsible agencies. In line with this
concept, we believe the Congress should attempt to specify the kinds of
Information and tests which will enable it to better assess how well pro-
gram are working and whether alternative approaches my offer greater
promitse. Such informationrmight include:
     -- A compilation of cargo losses and trends;
     -- A lsltt of the regulations Issued, withdrawn, or waived during
        the year;
     -An evaluation of compliance with the regulations, includ1i^ the
       status of enforcement actions taken;
     -An analysis and evaluation of the research and deveiopment,
       education, and cooperation activtttes that took place during
       the year; and
     -- A sumary of outstanding problems facing administration of the
        act, along with proposed solutions.

We will be happy to work with the Camittee in developing specific
language ifyou wish.
      Sections 108 and 109 of the bill would require reporting by water
and motor carriers. We believe these sections should be Imnded to
claritfy the following matters.
     (1) Will all cargo losses, by whatever mode of transportation,
         be reported in comparable tenrs (e.g.,   maged as a result
         of theft or atteapted theft, lost, mitssng, stolen, or pre-
         sumed stolen,' etc.), and in comparable time frames?
     (2) Siction 108, which deals with water carriers, speaks of
         'periodic' reports o' 'cargo damaged, lost...' There ap-
         pears to be a need to iDecify the required reporting'period
         (e.g., 'quarterly' or "'annually') and to modify the term
         "cargo damaged" to specifically require reporting of cargo
         'damaged as a result of theft or attemted theft.'
     (3) Similarly. section 109, which deals with motor carriers,
         speaks of reoorts of 'freight loss and damage claim.' We
         believe such reports should clearly show theft-related
         losss and cla'ms.
      Ti.le III of the bill would establish within the Department of
Transpnrtation a separate 'Office of Cargo Security,' and transfer to It
 the runctions, powers, and duties of the present Office of Transportation
 Serurity. From 3n administrative efficiency standpoint, the Comnmttee
'~sy wish to retain the present' Office of Transportato0n Security because
 i:s current responsibilities relate to both cargo and passenger security
 an'as. The passenger security activities are not involved in this bill.
                                      Sinsqly yours,

                              [kpmt7 Comptroller General
                                     of the United States