[Federal Register Volume 61, Number 248 (Tuesday, December 24, 1996)]
[Rules and Regulations]
[Pages 67876-67917]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32229]



[[Page 67875]]

_______________________________________________________________________

Part II





Department of Transportation





_______________________________________________________________________



Surface Transportation Board



_______________________________________________________________________



49 CFR Parts 1105 and 1152



Abandonment and Discontinuance of Rail Lines and Rail Transportation 
Under 49 U.S.C. 10903; Final Rule

  Federal Register / Vol. 61, No. 248 / Tuesday, December 24, 1996 / 
Rules and Regulations  

[[Page 67876]]



DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Parts 1105 and 1152

[STB Ex Parte No. 537]


Abandonment and Discontinuance of Rail Lines and Rail 
Transportation Under 49 U.S.C. 10903

AGENCY: Surface Transportation Board, DOT.

ACTION: Final rules.

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SUMMARY: The ICC Termination Act of 1995 revised the law governing 
applications by rail carriers to abandon or discontinue service over 
lines of railroad and related offers of financial assistance that would 
continue rail service after approval of abandonment or discontinuance 
by the Surface Transportation Board (Board). The Board now revises part 
1152 to implement the changes and update the pertinent regulations, and 
to streamline the abandonment and discontinuance processes consistent 
with the new law. While making a number of changes, both substantive 
and conforming, the Board has not undertaken a comprehensive revision 
or rewrite of all of the existing regulations at part 1152 in this 
proceeding. The Board also is making conforming changes to the 
environmental rules at part 1105.

EFFECTIVE DATE: The rules are effective January 23, 1997.

FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 927-5660. 
[TDD for the hearing impaired: (202) 927-5721.]

SUPPLEMENTARY INFORMATION: The ICC Termination Act of 1995, Public Law 
104-88, 109 Stat. 803 (1995) (ICCTA), abolished the Interstate Commerce 
Commission (ICC) and transferred the responsibility for regulating rail 
transportation, including the proposed abandonment and discontinuance 
of rail lines, to the Surface Transportation Board (Board). Section 
204(b)(1) of the ICCTA provides that proceedings and applications 
pending before the ICC on January 1, 1996, insofar as they involve 
functions retained by the ICCTA, including abandonment proceedings and 
applications, shall be decided under the law in effect prior to January 
1, 1996. Abandonment applications and proceedings filed on or after 
January 1, 1996, shall be decided under the law as revised in the 
ICCTA. Under section 204(a), regulations, including those at 49 CFR 
part 1152, issued by the ICC and effective as of January 1, 1996, shall 
remain in effect ``until modified, terminated, superseded, set aside, 
or revoked in accordance with law by the Board * * *.''
    On March 15, 1996, we served a Notice of Proposed Rulemaking (NPR) 
in this proceeding, published at 61 FR 11174 (March 19, 1996). In that 
notice, we proposed to revise part 1152 to implement the changes 
brought about by the ICCTA and to streamline and update the 
regulations. Included in the proposed revisions were deletions of 
obsolete references. We stated that, while we were not proposing major 
revisions at this time to our environmental rules at 49 CFR part 1105, 
or our National Trails System Act (Trails Act) rules at 49 CFR 1152.29, 
we were proposing some notice and timing changes to those regulations 
in this proceeding, because the changes were directly related to our 
efforts to streamline and improve the abandonment process. For the same 
reason, we proposed some conforming changes to our procedures for 
handling abandonments exempted as a class, and petitions for individual 
abandonment exemptions, to reflect statutory changes resulting from the 
ICCTA.
    Comments in response to the NPR were received from various 
categories of entities. The Association of American Railroads (AAR) 
filed on behalf of its member railroads. The Rails to Trails 
Conservancy (RTC) filed as an advocate of trail use/rail banking. 
Comments were filed by the National Association of Reversionary 
Property Owners (NARPO), which is a nationwide organization with 
members interested in reversionary and other property rights. In 
addition, comments were filed by: (1) Numerous Federal, state, and 
local government agencies and entities; (2) labor unions; (3) trade 
associations; and (4) a large number of individual landowners and 
institutions representing landowners. Basically, the commenters, while 
expressing certain reservations and having questions concerning certain 
sections, embrace the changes and revisions to the abandonment 
regulations that we have proposed.
    Before addressing the specific comments, some matters bear 
repeating from the NPR. We continue to view the ICCTA as reform 
legislation and thus our effort has been to reform and streamline the 
existing rules and process. As we stated in the NPR, our goal has been 
to revise part 1152 to meet the letter and spirit of the ICCTA and to 
update the regulations to improve notice to the public and ensure ample 
opportunity for full public participation early in our proceedings. We 
continue to believe that this will result in a timely, expeditious 
resolution of abandonment cases and allow all interested parties to 
participate fully. We emphasize, however, that the purpose of this 
rulemaking proceeding is to implement the changes mandated by the ICCTA 
along with conforming amendments; we have not attempted to conduct a 
comprehensive revision or rewrite of all of the existing regulations at 
part 1152. Also, we note that the parties themselves in their comments 
have not suggested a wholesale ``cleanup'' of these regulations.
    We now turn to the major issues raised by the commenting 
parties.1
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    \1\  All comments have been carefully considered. Due to the 
large number of filings, however, not every specific issue raised by 
the commenters will be discussed here.
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    1. Uniform schedule. In the NPR, we proposed a new time schedule 
for processing abandonment applications:

Day 0--Application filed, including applicant's case in chief.
Day 10--Due date for oral hearing requests.
Day 15--Due date for Board decision on oral hearing requests.
Day 20--Due date for Notice of Application to be published in the 
Federal Register.
Day 45--Due date for protests and comments, including opposition case 
in chief, and for public use and trail use requests.
Day 60--Due date for applicant's reply to opposition case and for 
applicant's response to trail use requests.
Day 110--Due date for service of decision on the merits.
Day 120--Due date for offers of financial assistance, except that if an 
application has been granted by decision issued sooner than Day 110, 
the offer of financial assistance shall be due 10 days after service of 
the decision granting the application.

    We also stated that we viewed the notice of intent requirement as 
an important early warning of proposed abandonments and intended to 
retain its use. Accordingly, an applicant would be required to file 
with the Board a notice of intent to abandon a line no more than 30 
days and no less than 15 days before the application is filed. In 
addition, we proposed to update the list of entities due to receive the 
notice, including the addition of RTC and NARPO, to provide the 
earliest possible notice that a particular right-of-way might be used 
as a trail.
    Although several parties raised concerns about the time frames in 
their comments, we find no reason to alter the proposed time frames. We 
continue to believe that the schedule we had

[[Page 67877]]

proposed will allow for full public participation and timely 
resolution, thus benefiting all interested parties. For instance, some 
commenters urged that the notice of intent be submitted up to 120 days 
before the filing of the application. While that would obviously allow 
additional time for parties to gather information and formulate 
strategy for offers of financial assistance (OFAs), trail use, etc., it 
would also unnecessarily delay many proceedings and has no statutory 
basis.\2\ Moreover, the shorter time frame we proposed is in keeping 
with the spirit of the ICCTA, which (in section 10904) establishes a 4-
month deadline after an application is filed for the submission of 
OFAs. Also, as stated in the NPR, the 110-day outer limit for the Board 
to issue a final decision is just that--a maximum time frame. In some 
instances, the Board will be able to render a final decision well 
before the 110th day.
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    \2\ Rather, section 10903(a)(3)(E) requires merely that a rail 
carrier certify to the Board with its application that the carrier 
has satisfied the notice requirements of section 10903(a)(3) (A)--
(D) within the most recent 30-day period prior to the filing date of 
the application.
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    NARPO and RTC both oppose our proposal to include them in the list 
of entities due to receive the notice of intent. Since notice to these 
organizations apparently would not further our goal of achieving the 
earliest possible notice that a particular right-of-way might be used 
as a trail (and neither expresses willingness or ability to take on 
notification responsibilities to persons interested in, or potentially 
interested in, trails), we will not include this requirement in our 
final rules.
    Contrary to the position of RTC and NARPO, the Transportation 
Trades Department of the AFL-CIO requests that carriers provide this 
advance notice to the duly certified labor organizations that represent 
employees on the affected rail line. The request is reasonable and we 
will include these organizations on the list of entities to receive the 
notice of intent.
    A number of individuals, presumably adjoining property owners or 
their supporters, argue that applicants should be required to provide 
actual notice to each adjoining landowner when filing for abandonment 
or when a trail condition is requested. However, actual notice has not 
been shown to be feasible or necessary to ensure that affected 
landowners and other interested parties receive adequate notice. Our 
current procedures ensure extensive notice to the public of proposed 
abandonments and the possibility that the right-of-way may be used as a 
trail. A notice of every abandonment proposal is published in the 
Federal Register. A local newspaper notice also must be published in 
every abandonment case in each county affected. Furthermore, local 
public hearings on trail use proposals typically are held and there is 
usually widespread local publicity. Also, landowners can contact the 
Board, the railroad, or the trail group for information on particular 
abandonment or trail use plans.
    Moreover, it would be difficult to identify, locate and 
individually identify each landowner along a line proposed for 
abandonment and/or trail use. Hundreds if not thousands of landowners 
could potentially be interested in a single line. More importantly, no 
available source provides readily ascertainable information on the 
chain of title, the names and addresses of current landowners, the 
nature of their property interests, and the circumstances, if any, that 
might trigger a reversion in a particular state. Thus, there simply is 
no practical way to name and locate all of the landowners that might 
have a reversionary interest in a railroad right-of-way, as the ICC 
concluded in Rail Abandonments--Use of Rights-of-Way as Trails--
Supplemental Trails Act Procedures, Ex Parte No. 274 (Sub-No. 13) (ICC 
served May 26, 1989, Feb. 21, 1990, and July 28, 1994), 1994 decision 
aff'd mem. 70 F.3d 638 (D.C. Cir. 1995), cert. denied, 116 U.S. 1323 
(1996).
    While we will not require actual notice to landowners, we will make 
other changes to facilitate and improve notice to the public. For 
example, RTC recommends that the newspaper and Federal Register notices 
we require should specifically alert the public of the possibility 
that, following the abandonment of rail service and salvage of the 
line, the line may be suitable for other public use, including interim 
trail use, and advise how the public may participate in the Board 
proceeding (pro or con). We agree with RTC. As RTC states, newspaper 
notice and Federal Register notice containing this information will 
give adequate notice to the public of the Board's abandonment 
proceedings and ensure that interested parties can take such action as 
they deem appropriate, if they wish to participate.
    In the NPR, we also proposed to change the environmental rules by 
amending 49 CFR 1105.7 and 1105.8 to require railroads to serve their 
environmental and/or historic reports on the required agencies at least 
20 days prior to filing their case in chief with the Board. Also, we 
proposed that railroads, in order to facilitate identification of lines 
proposed for abandonment, be required to identify those lines by United 
States Postal Service Zip Codes. We will adopt both changes. The 
earlier distribution of environmental and historic reports will 
expedite the environmental review process (by giving participating 
agencies additional lead time to conduct their analysis) without being 
unduly burdensome on the railroads. While comments on the use of Zip 
Codes were mixed, the use of Zip Codes is a means to provide notice to 
the public that a line near them has been proposed to be abandoned. 
Therefore, we will require use of Zip Codes in the final rules.
    Finally, the Department of the Army has requested that the Military 
Traffic Management Command Transportation Engineering Agency (MTMCTEA) 
continue to receive a copy of abandonment notices. It states that 
MTMCTEA is responsible for maintaining a rail network for national 
defense purposes and that MTMCTEA must receive notice to determine if 
the line designated for abandonment is an essential element in the rail 
network.
    We have retained MTMCTEA on the list of agencies on which notices 
must be served. See Secs. 1152.20(a)(2) (requiring service of notice of 
intent on MTMCTEA) and 1152.50(d)(1). We have also assured that MTMCTEA 
will receive copies of petitions for exemption in new Sec. 1152.60(d).
    2. Federal Register Publication. Commenters overwhelmingly 
supported our proposal to publish a notice of an abandonment 
application or a petition for an individual exemption in the Federal 
Register 20 days after the application or petition is filed.3 
Accordingly, we will adopt that proposal in our final rules. The 
Federal Register notice will describe the proposal, advise the public 
about the due dates for offers of financial assistance and requests for 
public use and trail use conditions, and explain how to participate 
(pro or con) in the Board's proceeding. Abandonment applicants and 
petitioners will be required to file draft Federal Register notices 
that can be used to announce the filing.
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    \3\ We proposed no changes for the publication of Federal 
Register notices for the procedural timing of abandonments covered 
by the class exemption embraced in subpart F.
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    RTC argues that, in addition, we should continue our current 
practice of publishing another Federal Register notice when, and if, 
the abandonment authority is granted. We disagree. Because there will 
be Federal Register notice and newspaper notice at the beginning of the 
process specifically advising the public as to how to

[[Page 67878]]

participate (pro or con), any interested person can become a party or 
can ask to be put on the service list of a proceeding and thus receive 
copies of all subsequent decisions in the case.4 Moreover, Federal 
Register notice is extremely costly; we lack the financial and staff 
resources to publish multiple Federal Register notices in abandonment 
cases.
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    \4\ We note that the timing for Federal Register notices we are 
adopting for applications and petitions for exemption is similar to 
what has been done under the class exemption at subpart F for many 
years. Under the class exemption, as here, the only Federal Register 
notice is at the beginning of the process.
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    Also RTC suggests that we not use the term ``must'' in the portion 
of the draft Federal Register notice informing requesters of a public 
use condition or trail use condition that such requests are due within 
45 days of the filing of the application, 40 days of the filing of a 
petition, or 10 days after the publication of a notice of exemption. 
RTC argues that the use of ``must'' will lead to claims by anti-trail 
groups that no late-filed requests should ever be granted. We have not 
made the suggested change. Trail use requests, like all other requests, 
need to be timely filed if at all possible so our uniform schedule can 
be met.5 Moreover, we will specifically retain our current policy 
of accepting filings after the due date when good cause is shown.
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    \5\  We see no reason why trail use requests cannot typically be 
filed on time. Filing a trail use request is not onerous. Moreover, 
a party can request a trail condition before there is an arrangement 
for interim trail use; the condition simply provides time to 
negotiate.
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    Finally, the comments received regarding changes to our rules for 
abandonments covered by the class exemption embraced in subpart F raise 
issues that are inappropriate for resolution on the current record. 
Accordingly, we will not attempt to change or modify our regulations 
concerning the class exemption at this time but reserve the right to 
address these issues further in a separate proceeding at a later date.
    3. System Diagram Maps. The ICCTA retains the requirement that rail 
carriers prepare, file, and amend, as appropriate, system diagram maps 
(SDMs) that identify lines that are, or soon will be, the subject of an 
abandonment application. In the NPR we proposed several changes to part 
1152 regarding SDMs to eliminate unnecessary regulatory and paperwork 
burdens. These changes include the following:
    (1) Because of the potential burden on small carriers, we proposed 
to require only Class I and Class II railroads to prepare and file 
SDMs.
    (2) In lieu of an annual filing of these maps, we proposed a one-
time filing of a complete and current set of maps within 60 days of the 
effective date of these regulations. The carrier would decide when 
changes have been extensive enough to warrant the filing of a new, 
updated SDM, but the Board would retain the discretion to require an 
updated SDM if that became necessary.
    (3) We proposed to require only 3 (instead of 6) copies whenever an 
SDM or an update is filed.
    (4) We proposed to reject an abandonment application of a Class I 
or Class II railroad for a line that has not been identified on a SDM 
in category 1 for at least 30 days.
    Many commenters expressed views on this subject. First, there was 
strong opposition to our excusing Class III carriers from filing SDMs. 
Commenters pointed out that Class III carriers now comprise a 
substantial portion of the rail network, both in numbers of carriers 
and length of track operated.6 Commenters (including several state 
agencies) argued that to excuse such a large portion of the rail 
network from these filing requirements would work a severe hardship 
upon parties opposing abandonments. Moreover, commenters argued that, 
because rail lines by statute may qualify for feeder line applications 
under 49 U.S.C. 10907 if they have been identified on an SDM, our 
proposal would in effect limit the use of the feeder line provisions 
for lines owned by Class III carriers.
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    \6\ According to the National Grain and Feed Association, as of 
1994, there were 487 Class III carriers operating 25,999 miles of 
track. This was approximately 21 percent of the total track operated 
by Class I railroads (123,355 miles in 1994).
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    Based on the comments, we have decided to continue to require Class 
III carriers to file the information normally found in an SDM. Because 
we recognize, however, that the extensive SDM filing requirements under 
our current rules could be unnecessarily burdensome on smaller 
entities, we will give Class III carriers the option of filing a map or 
filing only a narrative description of its lines as provided under 
Sec. 1152.11.
    A number of commenters also opposed our proposal to shorten the 
period of time that a carrier must identify a line in category 1 of its 
SDM before filing an application to abandon the line. Because the ICCTA 
deleted the 4-month requirement under the prior law, we proposed 
requiring that a carrier identify a line in category 1 at least 30 days 
prior to filing an abandonment application, believing that period to be 
adequate to meet the various parties' planning needs. A significant 
number of parties maintained that 30 days was too short a period of 
time to properly notify persons who might wish to file statements in 
opposition to an abandonment or for public agencies and shippers to 
prepare an OFA for the line or otherwise plan for alternative 
transportation. Many commenters supported retention of the 4-month 
period provided under prior law and implementing regulations.
    We are persuaded by the comments that 30 days may be insufficient 
time for parties to properly oppose an abandonment or to make 
alternative service plans. At the same time, we continue to believe 
that 4 months is too long and unduly delays the overall process. 
Therefore, our final rules provide for rejection of any abandonment 
application for a line that has not been identified on an SDM 7 in 
category 1 for at least 60 days. The additional time should be adequate 
to meet the planning needs of shippers and state and local governments 
while avoiding unnecessary delay.
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    \7\ For Class III carriers, the term SDM shall include the 
filing of a narrative description without an actual map.
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    Some commenters, including AAR, recommend that we eliminate 
categories (2), (3), and (4) from the SDM. We see no need to do so. By 
adopting a one-time filing requirement (unless extensive changes 
occur), we have already eliminated much of the extensive work and 
burdensome procedures required under our prior rules.
    A number of parties have also argued that we should retain the 
prior requirement concerning the annual filing of updated maps or at 
least require updates on a specific, periodic basis. We believe these 
requirements would result in more burdens on the carriers than benefits 
to the shipping public. We emphasize that carriers must continue to 
file revisions when changing the category of a line, and must file 
updated SDMs as appropriate or when ordered by us.
    MTMCTEA asks that it continue to receive updated copies of SDMs. We 
have provided copies of SDMs and updates to MTMCTEA in the past on an 
informal basis. As this procedure apparently has worked well, we will 
continue to provide the information to MTMCTEA as before.
    4. Summary application. Absent meaningful opposition, we will 
finalize our intention to delete the ``Summary Application'' 
provisions. By doing so, we will have a uniform, streamlined process 
for all applications.

[[Page 67879]]

    5. Abandonment procedures for bankrupt railroads. As part of our 
proposal to adopt a streamlined process appropriate for all 
applications, we preliminarily indicated in the NPR that no need 
existed to continue to have separate procedures in subpart E for 
bankrupt railroads. However, we did propose to include as special 
provisions for bankrupt railroads in the general abandonment procedures 
the requirements that abandonment applications filed by bankrupt 
railroads, and protests or other public responses to the applications, 
be filed with the bankruptcy court; that Board decisions or reports on 
abandonment applications by bankrupt railroads be filed with the 
bankruptcy court; and that special processing schedules would be 
established to meet court deadlines, so long as a reasonable period of 
time is allowed to obtain public responses and build a record in an 
abandonment application by a bankrupt railroad. The commenters either 
support, or fail to show harm from, these proposals, and we will adopt 
them as part of our final regulations.
    6. Due date for filing public use requests and trail use requests. 
In the NPR, we proposed changes in due dates for these filings to 
further our goal of compiling a full record for disposition as early as 
possible. In abandonment applications, we proposed that trail use 
requests and public use requests be filed at the same time as protests 
and other written comments (within 45 days after the application is 
filed). An applicant would then be required to respond regarding 
willingness to negotiate for trail use within 15 days (or within 60 
days after the application is filed). For abandonments covered by the 
class exemption at subpart F, we proposed to continue to require trail 
use/rail banking requests to be filed within 10 days after Federal 
Register publication of the exemption and public use requests to be 
filed within 20 days after Federal Register publication. For petitions 
for individual exemption, we proposed to require that trail use/rail 
banking requests and public use requests be filed within 20 days after 
Federal Register publication of the notice of the filing of the 
petition (40 days from the filing of the petition). For both class 
exemptions and petitions for exemption, we proposed to require the rail 
carrier to respond to trail use/rail banking requests within 10 days 
after the request is filed.
    Commenters have for the most part agreed with our proposed rules, 
which we will adopt. Some have sought additional or more comprehensive 
changes to the regulations governing public use and trail use 
conditions. We will not, however, address those requests here, because 
we did not set out in this proceeding to undertake a detailed re-
examination of all aspects of our handling of public use and trail use 
requests. In short, our purpose in proposing to modify these due dates 
was to find a way to complete a full record as early as practicable to 
expedite and streamline the abandonment process.
    Finally, several commenters suggest that we should undertake a 
``takings implication assessment'' whenever we issue a trail condition, 
pursuant to Executive Order 12630, Governmental Actions And 
Interference With Constitutionally Protected Property Rights. See 53 FR 
8859 (March 18, 1988). But, as the ICC had explained, the Executive 
Order applies only to executive agencies, and not to independent 
agencies like the ICC.8 The Executive Order does not apply to the 
Board, which was created as the successor agency to the ICC.9
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    \8\ Burlington Northern Railroad Company--Aband. Exemption--In 
Skagit County, WA, Docket No. AB-6 (Sub. No. 299X) (ICC served June 
23, 1989).
    \9\  While the Board is lodged within the Department of 
Transportation, just as the Federal Energy Regulatory Commission is 
lodged within the Department of Energy, the Board was created as an 
independent establishment of the United States Government. See 49 
U.S.C. 703(a).
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    7. Notice of consummation. To arrive at more definitive standards 
to be used in resolving the issue of when an abandonment has been 
consummated, or fully exercised, we proposed in the NPR to require that 
carriers file with the Board a notice of consummation, and to give 
conclusive effect to the filing of such notice.10 We did not 
propose a deadline for filing, or a penalty for failure to file. We 
indicated that, if no notice of consummation of abandonment had been 
filed, we would continue to look at the other facts and circumstances 
to determine if consummation of the abandonment had occurred.
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    \10\ Until 1984, the ICC required a railroad to send the agency 
a letter confirming that it had consummated an abandonment within 1 
year after the abandonment was authorized. Since then, some carriers 
have continued to send in these letters. Moreover, the courts have 
considered these letters in determining whether the line is still 
part of the interstate rail network, and thus available for interim 
trail use under 16 U.S.C. 1247(d), or public use under 49 U.S.C. 
10905.
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    After considering the comments, we continue to believe that a 
notice of consummation requirement would help clarify the consummation 
issue and prevent consummation disputes from arising in the future. 
Several commenters, however, criticize our failure to include a filing 
deadline in our proposal, on grounds that it would leave the railroad 
free never to consummate an abandonment and thus would be unfair to 
adjoining landowners with a reversionary interest in the right-of-way. 
Based on the comments, we have decided to set a 1-year time limit by 
which time a railroad must exercise the authority to abandon and inform 
us that it has done so by sending us a consummation notice.11 
Accordingly, our final rules provide that, if after 1 year from the 
date of service of a decision permitting abandonment, consummation has 
not been effected by the railroad's filing of a notice of 
consummation--and there are no legal or regulatory barriers to 
consummation (i.e., outstanding conditions, including Trails Act 
conditions)--the authority to abandon will automatically expire. That 
means that a new proceeding would have to be instituted if the railroad 
wanted to abandon the line.12
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    \11\  Several parties suggest shorter time periods ranging from 
30 to 180 days. AAR supports our initial decision to have no time 
period at all, noting that a railroad may have reason to delay 
consummation of an abandonment for a substantial period of time. We 
believe that a 1-year time period is appropriate. That time period 
ensures that the consummation issue will not be left open 
indefinitely. At the same time, it is long enough to give carriers 
that do not want to exercise their abandonment authority immediately 
time to hold open the possibility that new shippers will seek rail 
service or that the right-of-way could be used for interim 
recreational or conservation purposes under 16 U.S.C. 1247(d), or 
public use under 49 U.S.C. 10905.
    \12\  There is nothing inconsistent about this approach and our 
rules that permit states to acquire lines that have not been fully 
abandoned upon the mere filing of a notice. See 49 CFR 1150.22. If 
the line is acquired during the first year after we authorize 
abandonment, and before a notice of consummation is filed, the line 
has not been fully abandoned and can be acquired under our rules. 
After a year has passed, if there is no notice of consummation, the 
railroad's abandonment authority lapses, and the line cannot be 
abandoned (or acquired by a state or any one else) without further 
authority from us.
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    We reject the suggestion of some commenters that we should not 
adopt a notice of consummation requirement because the issue of when 
abandonment has been consummated has been settled by Fritsch v. ICC, 59 
F.3d 248 (D.C. Cir. 1995), cert. denied, 116 S. Ct. 1262 (1996). In 
Fritsch, the court held that a public use condition imposed under 
former section 10906 (now 49 U.S.C. 10905) did not prevent consummation 
of the abandonment and the vesting of reversionary interests in the 
right-of-way in the circumstances of that case. The courts, however, 
have expressly declined to read Fritsch as holding that abandonment is 
necessarily triggered upon a showing of any single piece of

[[Page 67880]]

evidence indicative of an intent to abandon. See Conrail v. STB, 93 
F.3d 793, 799 (D.C. Cir. 1996); Birt v. STB, 90 F.3d 580, 588 n.15 
(D.C. Cir. 1996); Grantwood Village v. Missouri Pacific RR, 95 F.3d 
654, 659 n.6 (8th Cir. 1996). Moreover, the court in Fritsch 
essentially viewed the railroad's letters to the ICC declaring that it 
had abandoned the line as conclusive evidence that abandonment had been 
consummated, therefore depriving the ICC of jurisdiction to impose a 
trail condition. See 59 F.3d at 253. Thus, our adoption of a notice of 
consummation requirement here will codify that portion of the court's 
ruling in Fritsch and prevent similar disputes from arising in the 
future.
    Finally, the Oregon and Montana Departments of Transportation 
suggest that we require notices of consummation to be filed with the 
appropriate state agencies (DOT, Public Service Commission) as well as 
with us. We will grant that request, and require that the railroads 
file notices of consummation with the State Public Service Commission 
(or equivalent agency) in each state through which the line passes, 
because it will help keep the states apprised of the status of lines 
authorized to be abandoned and is not unduly burdensome.
    8. Certificate of abandonment. Since the ICCTA does not 
specifically require that ``certificates'' be issued when abandonment 
applications are granted, in the NPR we proposed to dispense with the 
issuance of certificates and instead simply issue ``decisions 
granting'' an application. However, we proposed to continue to refer to 
``Certificates of Interim Trail Use or Abandonment'' in the trail use 
context in part to distinguish an application proceeding from an 
exemption proceeding. We received a few comments regarding this issue 
but no commenter presents strong objections to our proposal. Because 
the term ``certificate'' is widely known in the trail use context, we 
will continue to use it for trail use purposes alone.
    9. Contents of the application. In the NPR, we initially determined 
that applicants should be required to submit their entire case as part 
of the application. We then indicated that applicants must include all 
relevant workpapers and supporting documents with each application. 
AAR, in its comments, objects to the necessity of supplying all 
workpapers and supporting documents. It argues that this would be a 
step backward in our effort to streamline the application process. AAR 
explains that differences of opinion would arise concerning what 
constitutes ``workpapers'' and that the gathering of all materials 
would be an unnecessary burden on applicants and produce copious 
documents with little practical use. We agree with the comments and 
emphasize that we did not intend to create a more burdensome process 
than exists today. We clarify that what we meant by the use of the word 
``all'' was that we expect each applicant to submit sufficient (or all 
that the applicant believes is necessary) workpapers and supporting 
documents to present a complete or prima facie case. We will modify the 
regulations accordingly, but we emphasize that the burden is on the 
applicant to show that the proposed abandonment or discontinuance is in 
the public interest.
    a. Service data. In the NPR we proposed to streamline the 
requirements for abandonment applications by excluding all branch line 
(line proposed for abandonment) service data for time periods prior to 
the Base Year period, with the exception of data on changes in train 
service. The current regulations require data for the 2 preceding 
calendar years and that portion of the current calendar year for which 
data are available.13
---------------------------------------------------------------------------

    \13\  As we stated in the NPR, this change had been proposed by 
the ICC in a notice of proposed rulemaking in Abandonment 
Proceedings: Elimination of the Revenue and Cost Data for All Years 
Prior to the Base Year Period, Ex Parte No. 274 (Sub-No. 26) (ICC 
served Nov. 9, 1992), to reduce the reporting burden on the 
carriers. Comments were received but a final rule was never issued.
---------------------------------------------------------------------------

    We also proposed changes to the service and traffic data required 
to be provided in three specific areas. First, we proposed that the 
carload data on the line would have to show only the total carloads for 
each commodity group. Second, we proposed that data pertaining to 
overhead or bridge traffic would have to be included only if the 
serving carrier would not retain this traffic after approval of the 
abandonment. Finally, we proposed that only changes in train service in 
the last 2 years (instead of the last 5 years) would need to be 
discussed.
    A number of commenters raised concerns about the proposed exclusion 
of historic operational data in the application. Reasons for their 
concern vary but include: (1) Base Year data could be intentionally 
distorted; (2) historical calendar year evidence reflects trends in 
rail line profitability; (3) 1 or 2 years of data are inadequate to 
make a determination on the viability of a rail line; and (4) without 
the data from past periods, it will be difficult to determine if 
intentional downgrading has occurred.
    We do not entirely agree with the commenters that urge that there 
is a need for more historical data. Under our proposed rules, 
applicants would have to include and discuss changes in train service 
for the last 2 years. In addition, applicants would also be required to 
supply, under proposed Sec. 1152.22(e)(2), a list of significant 
shippers and their tonnage and/or carload data for the last 2 calendar 
years and, under proposed Sec. 1152.22(c)(4), total carloads by each 
commodity group on the line during the Base Year. This information 
should give protestants sufficient data to address alleged downgrading 
and the other concerns outlined above.
    Nevertheless, in response to commenters and their concerns, we have 
decided to expand our traffic data requirements somewhat. Specifically, 
the data required for significant users under Sec. 1152.22(e)(2) of our 
final rules will include the tonnage and carloads for each commodity 
group for the last 2 calendar years, any part of the current calendar 
year for which data are available, and the Base Year. In addition, we 
will require that the total tonnages and carloads for each commodity 
group originating and/or terminating on the line segment (not limited 
to significant users) be shown for the same time periods as those for 
the significant users. Consistent with these changes, we also will 
expand proposed Sec. 1152.22(c)(4) to require inclusion of total tons 
and carloads by each commodity group on the line. With these changes, 
we believe that an application will contain sufficient service and 
traffic data to allow appropriate analysis of all issues relevant to 
service on the subject line.
    b. Financial data. In the NPR, we proposed to exclude computations 
for the revenue and cost data developed for the branch line for the 
prior 2 calendar years and any portion of the current year. Revenue and 
cost data would be computed only for the Base Year, Forecast Year, and 
Subsidy Year.14
---------------------------------------------------------------------------

    \14\  These changes also had been proposed in the ICC's 
rulemaking in Ex Parte No. 274 (Sub-No. 26).
---------------------------------------------------------------------------

    We also proposed to delete the requirements that the impact of the 
abandonment on the carrier's net railway operating income (NROI) for 
the past 2 calendar years be developed and that the impact on the NROI 
of other carriers operated under common control of the abandoning 
railroad be submitted. In addition, we proposed to delete the 
requirement that the railroad's balance sheet and income statements be 
filed.
    Commenters voice concern regarding the absence of financial 
operating results in prior years and object to the

[[Page 67881]]

proposal to delete the requirements concerning NROI and the filing of 
balance sheets and income statements. They make the same arguments 
against the elimination of these data as they make regarding the 
elimination of historic service data. Regarding common control, some 
commenters argue that the financial effect of abandonment by one 
``family'' member affects another. Also, they argue that financial 
statements are needed because they show the overall financial condition 
of the applicant, which can be important in the Board's weighing of the 
evidence under its public convenience and necessity standard.
    We do not believe that the benefits of requiring a carrier to 
submit all of these data justify the very real burden on the applicant 
of preparing the data. Profits or losses on a line segment in prior 
years typically do not provide a proper basis on which to judge the 
line's current and future financial viability. The Board's primary 
measures of financial condition are the operations in the Base Year and 
Forecast Year, which recognize the current and future financial 
viability of the line segment. Moreover, changes in traffic are in most 
instances the main cause of changes in operating results from a profit 
to a loss, and necessary traffic information is included in the data 
applicant is required to file. For these reasons, we will not make the 
requested changes to our proposal.
    c. Other application changes. In the NPR, we proposed to delete the 
requirements that the carrier identify in detail the sources of 
alternate transportation available and describe its efforts to solicit 
traffic on the line. Instead, we proposed to require only a general 
description of alternative transportation sources. We also proposed 
that the carrier no longer be required to describe its efforts to 
solicit traffic on the branch line in every case, but that we would 
permit the carrier instead to provide a description of its efforts if 
it believes that the information would aid its case regarding 
protestants' claims of either potential increases in traffic or 
deliberate downgrading. Comments specifically addressing these points 
were unpersuasive. Accordingly, we will incorporate these changes in 
our final rules.
    d. Summary. We will adopt in our final rules the modifications 
discussed in subparts a-c above. We believe that the information 
required to be provided in the application, along with information that 
the parties already have, or may readily obtain, will afford all 
interested parties a fair opportunity to analyze and present argument 
on every issue relevant to the abandonment process that is related to 
the above data. Moreover, we remind applicants that the burden of proof 
in these proceedings remains on them, and that they may wish to provide 
additional data with their applications where doing so would help 
assure that they have met their burden regarding anticipated challenges 
such as, for example, challenges claiming deliberate downgrading of the 
line.
    10. Offers of financial assistance. As discussed in the NPR, in 
addition to the time limits explained above, new 49 U.S.C. 10904 
contains other changes in the way OFAs are handled. Initially, the 
Board need only find that the offeror is a financially responsible 
person before the negotiating process can begin. We proposed to revise 
the rules accordingly. Under new section 10904, the Board has 30 days, 
rather than 60 as before, from the date requested to issue a decision 
establishing the conditions and amount of compensation for the purchase 
or subsidy of the line. To meet the new deadline, we proposed to 
require the requesting party to submit its case in chief at the time it 
makes its request and to serve the other party(ies) with a copy by 
overnight mail. The other party(ies) would have 5 days from the date of 
filing to file a reply. As before, we proposed that our new rules would 
automatically stay the effective date of (or revoke as necessary for a 
class exemption) the underlying abandonment decision. We will adopt 
these changes in our final rules. The final rules also continue to 
provide that, if a request to set terms and conditions is not made to 
the Board, a decision making the underlying abandonment approval (or 
exemption) effective would be served within 10 days of the due date for 
making the request.
    The statute now places a 1-year limit on operating subsidies 
imposed by the Board, unless otherwise mutually agreed by the parties. 
As a result, we proposed in the NPR that: (1) Subsidy agreements 
imposed by the Board would end after 1 year, and (2) beyond this period 
any subsidy would be strictly a contractual agreement between the 
carrier and the subsidizer without the involvement of the Board.
    Also regarding subsidies, we proposed that the new rules continue 
to provide for interim financial status reports, as presently included 
in the abandonment regulations. However, with certain exceptions, the 
subsidizer's final responsibility would be limited to a maximum of 15% 
over the agreed-to amount of the operating subsidy. The exceptions 
would be: (1) If the subsidizer is notified of a higher amount within 
the first 10 months of the agreement; and (2) the increase results from 
an expense that has been preapproved by the subsidizer. We explained in 
the NPR that we believed that the limitation is needed to provide a 
degree of certainty to a party that seeks to subsidize operation of a 
line approved for abandonment. Our final rules include all of these 
provisions.
    We have considered the concern of some commenters regarding the 
shortening of the 120-day statutory period for submission of OFAs when 
an abandonment is granted by decision issued sooner than 110 days after 
the application is filed. (Our uniform schedule provides that in such 
cases the OFA will be due 10 days after service of the decision 
granting the application, which could be sooner than 4 months after the 
application is filed.) However, given our goal of expediting the 
process where possible, we have decided not to change our proposed 
Uniform Schedule. We recognize that 49 U.S.C. 10904(c) sets 4 months as 
the outer limit for the filing of OFAs. At the same time, we believe 
that the expanded notice that will be provided at the outset of 
abandonment proceedings under our new rules typically will allow 
adequate time for parties to consider filing an OFA, and marshal the 
funds necessary to do so, within the Uniform Time Frames, even if in 
some cases this results in something less than the full 120 day period 
to file an OFA. Accordingly, we do not read the statute to require that 
we delay in all cases abandonment proceedings that can be decided in 
less time than the full 110 days. However, in light of the time frames 
in 49 U.S.C. 10904(c), parties that can show that they would be 
materially prejudiced by having less than the full 4 months may 
petition the Board for the full time provided by the statute for 
application proceedings.15
---------------------------------------------------------------------------

    \15\  Parties may seek relief under 49 CFR part 1117.
---------------------------------------------------------------------------

    In addition, RTC contends that we should retain the requirement 
that, in addition to being made by a financially responsible person, 
the offer must be ``bona fide.'' RTC requests that we include such 
language in the regulations. We find no merit in RTC's request. New 49 
U.S.C. 10904 clearly does not retain that aspect of the prior statute. 
Accordingly, we will not add such a requirement in our regulations. Our 
final rules adopt the changes proposed in the NPR.
    11. Return on investment. In the NPR, we stated that we believed 
several problem areas existed with the rules for establishing return on 
investment. To address these issues, we proposed

[[Page 67882]]

various changes regarding the determination of the net liquidation 
value (NLV) of road properties on the branch line, a component used in 
calculating return on investment. These proposed changes involved the 
inclusion of assets with negative net salvage values, adjustments to 
right-of-way land values, and the bases used to value right-of-way 
land.
    Very few comments were received regarding these proposed changes. 
However, AAR has raised concerns about the proposed inclusion of 
negative salvage values for those assets where the cost of dismantling 
exceeds the value of the materials salvaged. There are three situations 
where this value has implications. These situations are: (1) 
Calculation of the operating and economic loss on the line, i.e., the 
merits of the application; (2) the continuation subsidy payment 
calculation; and (3) selling price in OFA purchase determinations.
    Regarding the merits of the application, a negative return on value 
would distort the loss from operations being borne by the serving 
railroad. This could, according to AAR, result in the application being 
denied.
    AAR also is concerned that inclusion of a negative NLV and a 
negative return on properties would reduce the subsidy amount below the 
operating loss being incurred by the serving carrier. Additionally, AAR 
states that in OFA proceedings a negative value for the properties 
could result in an artificially low value being placed on the assets 
that are to be purchased. This situation, it claims, would also reverse 
the burden of proof from the offeror to the railroad in proving the 
value of the line's assets.
    In light of the concerns of AAR as to the potential implications of 
including both a negative NLV and calculating a negative return on 
value, we have made appropriate changes to our proposed regulations 
regarding the calculation of subsidy payments or purchase price in OFA 
proceedings.
    First, to amplify what we said in the NPR, no asset on the branch 
line will have a negative value unless the railroad intends to remove 
the structure, or it is proven by protestants, that the structure must 
be dismantled to comply with a Federal law, state law, or a local 
ordinance.
    Moreover, in assessing the merits of the application, if a negative 
value results for the composite NLV of all branch line properties, the 
negative value will be inserted in the submission of the Forecast Year 
revenue and cost data, Exhibit 1 to the application. However, the 
return on value will be calculated at zero. This will allow the Board 
to compare the loss from operations with the negative opportunity cost 
of the railroad. The cost to the railroad for dismantling the 
structure(s) is recognized by the Board as a one time expense whereas 
the operating loss will reoccur each year, if nothing changes.
    We will amend Sec. 1152.34 of the proposed regulations to include 
changes in developing the NLV of road property and the return on value 
requested by AAR. Under our final rules, in calculating a continuation 
subsidy payment, assets with negative value will be handled in the 
following manner. Any individual asset with a negative value will be 
valued at zero. The balance of the assets will have their NLV 
calculated in the normal manner. A continuation subsidy must recognize 
the line segment as a going concern and a return should be earned by 
the railroad on those assets with value. Under no circumstances will 
the subsidy payment be less than the loss from operations incurred by 
the railroad from providing service on the line.
    With regard to OFAs to purchase a line segment, the NLV of the 
line's assets will be determined in the same manner as that used in 
calculating continuation subsidy payments.
    Finally, AAR favors the use of the comparable sales method for 
valuing real estate. We reject that approach, as the ICC did in the 
past. Accordingly, the proposed rules will be adopted concerning this 
issue.
    12. Holding gains and losses. In the NPR, we proposed the use of 
the Gross Domestic Product as a replacement for the Gross National 
Product used in estimating holding gains and losses (computed for 
freight cars, locomotives, and road property accounts). We suggested 
this change to bring our rules in line with the current measures used 
at the U.S. Department of Commerce, Bureau of Economic Analysis. 
Commenters generally approve of this modification, and we will include 
it in our final regulations.
    13. Appendix listing of carriers and AB numbers. In the NPR, we 
proposed to delete the Appendix to part 1152 that lists carriers and 
their assigned AB numbers. We preliminarily concluded that the list 
serves no useful purpose, noting that interested persons could instead 
contact the Board's Office of the Secretary if they have a need to 
ascertain a particular carrier's assigned AB number.
    The lack of comments regarding this change confirms our preliminary 
conclusion that the listing does not continue to serve a useful 
purpose. Accordingly, it will be deleted from part 1152 as proposed.
    14. Filing fees. Several commenters address the issue of filing 
fees. However, we will not address those comments here as fees issues 
were considered and resolved by the Board in Regulations Governing Fees 
for Service, 1 S.T.B. 179 (1996).

Small Entities

    In the NPR, we sought comments on our preliminary conclusion that 
these regulations, if adopted, would not have effects on small entities 
that should be considered in a regulatory flexibility analysis. No 
comments provided information showing that there would be significant 
effects on small entities. Accordingly, the Board certifies that these 
rules will not have a significant economic effect on a substantial 
number of small entities. They should result in streamlining, 
improving, and updating the abandonment process while ensuring the 
opportunity for full public participation in our proceedings.

Environmental Finding

    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.

List of Subjects

49 CFR Part 1105

    Environmental impact statements, Reporting and recordkeeping 
requirements.

49 CFR Part 1152

    Administrative practice and procedure, Conservation, Environmental 
protection, National forests, National parks, National trails system, 
Public lands-grants, Public lands rights-of-way, Railroads, Recreation 
and recreation areas, Reporting and recordkeeping requirements.

    Decided: December 9, 1996.

    By the Board, Chairman Morgan, Vice Chairman Simmons, and 
Commissioner Owen.
Vernon A. Williams,
Secretary.
    For the reasons set forth in the preamble, title 49, chapter X, 
parts 1105 and 1152 of the Code of Federal Regulations are amended as 
follows:

PART 1105--PROCEDURES FOR IMPLEMENTATION OF ENVIRONMENTAL LAWS

    1. The authority citation for part 1105 is revised to read as 
follows:

    Authority: 5 U.S.C. 553 and 559; 16 U.S.C. 470f, 1451, and 1531; 
42 U.S.C. 4332 and

[[Page 67883]]

6362(b); and 49 U.S.C. 701 note (1995) (section 204 of the ICC 
Termination Act of 1995), 721(a), 10502, and 10903-10905.

    2. Section 1105.7 is amended as follows:
    a. In paragraph (a), after the words ``must submit'' add the words 
``to the Board'';
    b. In paragraph (a), after the words ``notice of exemption'' add 
the words ``, except as provided in paragraph (b) for abandonments and 
discontinuances'';
    c. Paragraph (b), introductory text is revised;
    d. In paragraph (b)(11) the last sentence is removed;
    e. Paragraph (c), first sentence, after the words ``to the agencies 
listed'' add the words ``and within the time period specified'';
    f. In paragraph (c) the third sentence is removed.
    The revision to the introductory text in paragraph (b) reads as 
follows:


Sec. 1105.7  Environmental reports.

* * * * *
    (b) At least 20 days prior to the filing with the Board of a notice 
of exemption, petition for exemption, or an application for abandonment 
or discontinuance, the applicant must serve copies of the Environmental 
Report on:
* * * * *
    3. In Sec. 1105.8, paragraph (c) is revised to read as follows:


Sec. 1105.8  Historic Reports.

* * * * *
    (c) Distribution. The applicant must send the Historic Report to 
the appropriate State Historic Preservation Officer(s), preferably at 
least 60 days in advance of filing the application, petition, or 
notice, but not later than 20 days prior to filing with the Board.
* * * * *


Sec. 1105.12  [Amended]

    4. Section 1105.12, the appendix, is amended as follows:
    a. In the first paragraph of the sample newspaper notice for out-
of-service abandonment exemptions after the words ``(station name),'' 
add the following words: ``which traverses through United States Postal 
Service ZIP Codes (ZIP Codes).''
    b. In the first paragraph of the sample newspaper notice for 
petitions for abandonment exemptions, after the words ``(station 
name),'' add the following words: ``which traverses through United 
States Postal Service ZIP Codes (ZIP Codes).''
    5. Part 1152 is revised to read as follows:

PART 1152--ABANDONMENT AND DISCONTINUANCE OF RAIL LINES AND RAIL 
TRANSPORTATION UNDER 49 U.S.C. 10903

Subpart A--General

Sec.
1152.1  Purpose and scope.
1152.2  Definitions.

Subpart B--System Diagram

1152.10  System diagram map.
1152.11  Description of lines to accompany the system diagram map or 
information to be contained in the narrative.
1152.12  Filing and publication.
1152.13  Amendment of the system diagram map or narrative.
1152.14  Availability of data.
1152.15  Reservation of jurisdiction.

Subpart C--Procedures Governing Notice, Applications, Financial 
Assistance, Acquisition for Public Use, and Trail Use

1152.20  Notice of intent to abandon or discontinue service.
1152.21  Form of notice.
1152.22  Contents of application.
1152.23  [Reserved]
1152.24  Filing and service of application.
1152.25  Participation in abandonment or discontinuance proceedings.
1152.26  Board determination under 49 U.S.C. 10903.
1152.27  Financial assistance procedures.
1152.28  Public use procedures.
1152.29  Prospective use of rights-of-way for interim trail use and 
rail banking.
Subpart D--Standards for Determining Costs, Revenues, and Return on 
Value
1152.30  General.
1152.31  Revenue and income attributable to branch lines.
1152.32  Calculation of avoidable costs.
1152.33  Apportionment rules for the assignment of expenses to on-
branch costs.
1152.34  Return on investment.
1152.35  [Reserved]
1152.36  Submission of revenue and cost data.
1152.37  Financial status reports.

Subpart E--[Reserved]

Subpart F--Exempt Abandonments and Discontinuances of Service and 
Trackage Rights
1152.50  Exempt abandonments and discontinuances of service and 
trackage rights.

Subpart G--Special Rules Applicable to Petitions for Abandonments or 
Discontinuances of Service or Trackage Rights Filed Under the 49 U.S.C. 
10502 Exemption Procedure

1152.60  Special rules.

    Authority: 5 U.S.C. 553, 559, and 704; 11 U.S.C. 1170; 16 U.S.C. 
1247(d) and 1248; and 49 U.S.C. 701 note (1995) (section 204 of the 
ICC Termination Act of 1995), 721(a), 10502, 10903-10905, and 11161.

Subpart A--General


Sec. 1152.1  Purpose and scope.

    (a) 49 U.S.C. 10903 et seq. governs abandonment of rail lines and 
discontinuance of rail service by common carriers. Section 10903(d) 
provides that no line of railroad may be abandoned and no rail service 
discontinued unless the Board finds that the present or future public 
convenience and necessity require or permit the abandonment or 
discontinuance.
    (b) Part 1152 contains regulations governing abandonment of, and 
discontinuance of service over, rail lines. This part also sets forth 
procedures for providing financial assistance to assure continued rail 
freight service under 49 U.S.C. 10904, for acquiring rail lines for 
alternate public use under 49 U.S.C. 10905, and for acquiring or using 
a rail right-of-way for interim trail use and rail banking.


Sec. 1152.2  Definitions.

    Unless otherwise provided in the text of the regulations, the 
following definitions apply in this part:
    (a) Account means an account in the Board's Uniform System of 
Accounts for Railroad Companies (49 CFR part 1201).
    (b) Act means the ICC Termination Act of 1995 (Pub. L. 104-88, 109 
Stat. 803), as amended.
    (c) Base Year means the latest 12-month period, ending no earlier 
than 6 months prior to the filing of the abandonment or discontinuance 
application, for which data have been collected at the branch level as 
prescribed in Sec. 1152.30(b).
    (d) Board means the Surface Transportation Board.
    (e) Branch means a segment of line for which an application for 
abandonment or discontinuance, pursuant to 49 U.S.C. 10903, has been 
filed.
    (f) Carrier means a railroad company or the trustee or trustees of 
a railroad company subject to regulation under 49 U.S.C., Subtitle IV, 
chapter 105.
    (g) Designated state agency means the instrumentality created by a 
state or designated by appropriate authority to administer or 
coordinate its state rail plan.
    (h) Forecast Year means the 12-month period, beginning with the 
first day of the month in which the application is filed with the 
Board, for which future revenues and costs are estimated.
    (i) Form R-1 means the railroad's annual report filed with the 
Board in accordance with the requirements of 49 U.S.C. 11145.
    (j) Offeror means a shipper, a state, the United States, a local or 
regional transportation authority, or any

[[Page 67884]]

financially responsible person offering rail service continuation 
assistance under 49 U.S.C. 10904.
    (k) URCS means the Uniform Railroad Costing System.
    (l) Significant user means: (1) Each of the 10 rail patrons which 
originated and/or received the largest number of carloads (or each 
patron if there are less than 10); and
    (2) Any other rail patron which originated and/or received 50 or 
more carloads, on the line proposed for abandonment or discontinuance, 
during the 12-month period preceding the month in which notice is given 
of the abandonment or discontinuance application.
    (m) Subsidy year means any 12-month period for which a subsidy 
agreement has been negotiated and is in operation.

Subpart B--System Diagram


Sec. 1152.10  System diagram map.

    (a) Each carrier shall prepare a diagram of its rail system on a 
map, designating all lines in its system by the categories established 
in paragraph (b) of this section. A Class III carrier shall either 
prepare the aforementioned map of its rail system or file only a 
narrative description of its lines that provides all of the information 
required in this subpart.
    (b) All lines in each carrier's rail system shall be separated into 
the following categories:
    (1) All lines or portions of lines which the carrier anticipates 
will be the subject of an abandonment or discontinuance application to 
be filed within the 3-year period following the date upon which the 
diagram or narrative, or any amended diagram or narrative, is filed 
with the Board;
    (2) All lines or portions of lines which are potentially subject to 
abandonment, defined as those which the carrier has under study and 
believes may be the subject of a future abandonment application because 
of either anticipated operating losses or excessive rehabilitation 
costs, as compared to potential revenues;
    (3) All lines or portions of lines for which an abandonment or 
discontinuance application is pending before the Board on the date upon 
which the diagram or narrative, or any amended diagram or narrative, is 
filed with the Board;
    (4) All lines or portions of lines which are being operated under 
the rail service continuation provisions of 49 U.S.C. 10904 (and former 
49 U.S.C. 10905) on the date upon which the diagram or narrative, or 
any amended diagram or narrative, is filed with the Board; and
    (5) All other lines or portions of lines which the carrier owns and 
operates, directly or indirectly.
    (c) The system diagram map shall be color-coded to show the 5 
categories of lines as follows:
    (1) Red shall designate those lines described in 
Sec. 1152.10(b)(1);
    (2) Green shall designate those lines described in 
Sec. 1152.10(b)(2);
    (3) Yellow shall designate those lines described in 
Sec. 1152.10(b)(3);
    (4) Brown shall designate those lines described in 
Sec. 1152.10(b)(4); and
    (5) Black or dark blue shall designate those lines described in 
Sec. 1152.10(b)(5).
    (d) The system diagram map shall also identify, and shall be drawn 
to a scale sufficient to depict clearly, the location of:
    (1) All state boundary lines;
    (2) Boundaries of every county in which is situated a rail line 
owned or operated by the carrier which is listed in categories 1 thru 4 
(Sec. 1152.10(b)(1) thru (4));
    (3) Every Standard Metropolitan Statistical Area (SMSA) any portion 
of which is located within 5 air miles of a rail line owned or operated 
by the carrier; and
    (4) Every city outside an SMSA which has a population of 5,000 or 
more persons (according to the latest published United States census 
reports) and which has any portion located within 5 air miles of a rail 
line owned or operated by the carrier. A series of interrelated maps 
may be used where the system serves a very large or congested area. An 
explanation of the interrelationship must be furnished.


Sec. 1152.11  Description of lines to accompany the system diagram map 
or information to be contained in the narrative.

    Each carrier required to file a system diagram map or narrative 
shall list and describe, separately by category and within each 
category by state, all lines or portions of lines identified on its 
system diagram map or to be included in its narrative as falling within 
categories 1 thru 3 (Sec. 1152.10(b)(1) thru (3)) as follows:
    (a) Carrier's designation for each line (for example, the 
Zanesville Secondary Track);
    (b) State or states in which each line is located;
    (c) County or counties in which each line is located;
    (d) Mileposts delineating each line or portion of line; and
    (e) Agency or terminal stations located on each line or portion of 
line with milepost designations.


Sec. 1152.12  Filing and publication.

    (a) Each carrier required to file a system diagram map or a 
narrative shall file with the Board three copies of a complete and up-
dated color-coded system diagram map or narrative (identified by its 
``AB number'') and the accompanying line descriptions in conformance 
with the filing and publication requirements of this section. If a 
revised map or narrative is filed, the line descriptions for the lines 
which were revised must be filed.
    (b) The color-coded system diagram map or narrative, any 
amendments, and accompanying line descriptions shall be served upon the 
Governor, the public service commission (or equivalent agency) and the 
designated state agency of each state within which the carrier operates 
or owns a line of railroad.
    (c) The carrier shall: (1) Publish in a newspaper of general 
circulation in each county containing category 1 through 3 lines or 
lines being revised, a notice containing:
    (i) A black-and-white copy of the system diagram map (or a portion 
of the map clearly depicting its lines in that county); and
    (ii) A description of each line (in the case of Class III carriers 
only the line description is required);
    (2) Post a copy of the newspaper notice:
    (i) In each agency station or terminal on each line in categories 1 
through 3 and on each line which has been revised; or
    (ii) If there is no agency station on the line, at any station 
through which business for the line is received or forwarded;
    (3) Furnish, at reasonable cost, upon request of any interested 
person, a copy of its system diagram map (either color-coded or black-
and-white) or narrative; and
    (4) Notify interested persons of this availability through its 
publication in the appropriate county newspaper.
    (d) Each carrier required to file a system diagram map or narrative 
shall file with the Board an affidavit of service and publication 
stating the date each was accomplished. A copy of each newspaper notice 
published shall be attached to the affidavit. The effective date of the 
filing of the initial system diagram map or narrative and each amended 
system diagram map or narrative as required in paragraph (a) of this 
section shall be deemed to be the date upon which the Board receives 
the affidavit required in this paragraph.
    (e) The Board shall require republication of the notice if it is 
found to be inadequate.

[[Page 67885]]

Sec. 1152.13  Amendment of the system diagram map or narrative.

    (a) Each carrier shall be responsible for maintaining the 
continuing accuracy of its system diagram map and the accompanying line 
descriptions or narrative. Amendments may be filed at any time and will 
be subject to all carrier filing and publication requirements of 
Sec. 1152.12.
    (b) By March 24, 1997, each carrier shall file with the Board a 
revised and updated color-coded system diagram map and line 
descriptions or narrative which shall be subject to the filing and 
publication requirements of Sec. 1152.12. Thereafter, each carrier 
shall file amendments as line designations change and update its map or 
narrative, as appropriate. Also, each carrier shall file an updated or 
amended map or narrative upon order of the Board. Each new rail carrier 
shall comply with the requirements of this subsection within 60 days 
after it becomes a carrier.
    (c) The Board will reject an abandonment or discontinuance 
application filed by a rail carrier if any part of the application 
includes a line that has not been identified and described, by 
amendment or otherwise, on the carrier's system diagram map or 
narrative, as appropriate, as a line in category 1 (Sec. 1152.10(b)(1)) 
for at least 60 days.


Sec. 1152.14  Availability of data.

    Each carrier shall provide to the designated state agency, upon 
request, information concerning the net liquidation value (as defined 
in Sec. 1152.34(c)) of any line placed in category 1 
(Sec. 1152.10(b)(1)) on its system diagram map or narrative together 
with a description of such a line and any appurtenant facilities and of 
their condition.


Sec. 1152.15  Reservation of jurisdiction.

    49 U.S.C. 10903(c)(1) authorizes the Board, at its discretion, to 
provide for designation of lines as ``potentially subject to 
abandonment'' under standards which vary by region of the United 
States, by railroad, or by group of railroads. The Board expressly 
reserves the right to adopt such varying standards in the future.

Subpart C--Procedures Governing Notice, Applications, Financial 
Assistance, Acquisition for Public Use, and Trail Use


Sec. 1152.20  Notice of intent to abandon or discontinue service.

    (a) Filing and publication requirements. An applicant shall give 
Notice of Intent to file an abandonment or discontinuance application 
by complying with the following procedures:
    (1) Filing. Applicant must serve its Notice of Intent on the Board, 
by certified letter, in the format prescribed in Sec. 1152.21. The 
Notice shall be filed in accordance with the time requirements of 
paragraph (b) of this section.
    (2) Service. Applicant must serve, by first-class mail (unless 
otherwise specified), its Notice of Intent upon:
    (i) Significant users of the line;
    (ii) The Governor (by certified mail) of each state directly 
affected by the abandonment or discontinuance;
    (iii) The Public Service Commission (or equivalent agency) in these 
states;
    (iv) The designated state agency in these states;
    (v) The State Cooperative Extension Service in these states;
    (vi) The U.S. Department of Transportation (Federal Railroad 
Administration);
    (vii) Department of Defense (Military Traffic Management Command, 
Transportation Engineering Agency, Railroads for National Defense 
Program);
    (viii) The U.S. Department of Interior (Recreation Resources 
Assistance Division, National Park Service);
    (ix) The U.S. Railroad Retirement Board;
    (x) The National Railroad Passenger Corporation (``Amtrak'') (if 
Amtrak operates over the involved line);
    (xi) The headquarters of the Railroad Labor Executives' 
Association;
    (xii) The U.S. Department of Agriculture, Chief of the Forest 
Service; and
    (xiii) The headquarters of all duly certified labor organizations 
that represent employees on the affected rail line. For purposes of 
this subsection ``directly affected states'' are those in which any 
part of a line sought to be abandoned is located.
    (3) Posting. Applicant must post a copy of its Notice of Intent at 
each agency station and terminal on the line to be abandoned. (If there 
are no agency stations on the line, the Notice of Intent should be 
posted at any agency station through which business for the involved 
line is received or forwarded.)
    (4) Newspaper publication. Applicant must publish its Notice of 
Intent at least once during each of 3 consecutive weeks in a newspaper 
of general circulation in each county in which any part of the involved 
line is located.
    (b) Time limits. (1) The Notice of Intent must be served at least 
15 days, but not more than 30 days, prior to the filing of the 
abandonment application;
    (2) The Notice must be posted and fully published within the 30-day 
period prior to the filing of the application; and
    (3) The Notice must be filed with the Board either concurrently 
with service or when the Notice is first published (whichever occurs 
first).
    (c) Environmental and Historic Reports. Applicant must also submit 
the Environmental and Historic Reports described at Secs. 1105.7 and 
1105.8 at least 20 days prior to filing an application.


Sec. 1152.21  Form of notice.

    The Notice of Intent to abandon or to discontinue service shall be 
in the following form:

STB No. AB ________(Sub-No. ________)
Notice of Intent to Abandon or to Discontinue Service

    (Name of Applicant) gives notice that on or about (insert date 
application will be filed with the Board) it intends to file with 
the Surface Transportation Board, Washington, D.C. 20423, an 
application for permission for the abandonment of (the 
discontinuance of service on), a line of railroad known as 
____________ extending from railroad milepost near (station name) to 
(the end of line or rail milepost) near (station name), which 
traverses through United States Postal Service ZIP Codes (ZIP 
Codes), a distance of ____________ miles, in [County(ies), 
State(s)]. The line includes the stations of (list all stations on 
the line in order of milepost number, indicating milepost location).
    The reason(s) for the proposed abandonment (or discontinuance) 
is (are) ____________ (explain briefly and clearly why the proposed 
action is being undertaken by the applicant). Based on information 
in our possession, the line (does) (does not) contain federally 
granted rights-of-way. Any documentation in the railroad's 
possession will be made available promptly to those requesting it.
    This line of railroad has appeared on the system diagram map or 
included in the narrative in category 1 since (insert date).
    The interest of railroad employees will be protected by (specify 
the appropriate conditions).
    The application will include the applicant's entire case for 
abandonment (or discontinuance) (case in chief). Any interested 
person, after the application is filed on (insert date), may file 
with the Surface Transportation Board written comments concerning 
the proposed abandonment (or discontinuance) or protests to it. 
These filings are due 45 days from the date of filing of the 
application. All interested persons should be aware that following 
any abandonment of rail service and salvage of the line, the line 
may be suitable for other public use, including interim trail use. 
Any request for a public use condition under 49 U.S.C. 10905 
(Sec. 1152.28 of the Board's rules) and any request for a trail use 
condition under 16 U.S.C. 1247(d) (Sec. 1152.29 of the Board's 
rules) must also be filed within 45 days from the date of filing of 
the application. Persons who may oppose the abandonment or 
discontinuance but who

[[Page 67886]]

do not wish to participate fully in the process by appearing at any 
oral hearings or by submitting verified statements of witnesses, 
containing detailed evidence, should file comments. Persons 
interested only in seeking public use or trail use conditions should 
also file comments. Persons opposing the proposed abandonment or 
discontinuance that do wish to participate actively and fully in the 
process should file a protest.
    Protests must contain that party's entire case in opposition 
(case in chief) including the following:
    (1) Protestant's name, address and business.
    (2) A statement describing protestant's interest in the 
proceeding including:
    (i) A description of protestant's use of the line;
    (ii) If protestant does not use the line, information concerning 
the group or public interest it represents; and
    (iii) If protestant's interest is limited to the retention of 
service over a portion of the line, a description of the portion of 
the line subject to protestant's interest (with milepost 
designations if available) and evidence showing that the applicant 
can operate the portion of the line profitably, including an 
appropriate return on its investment for those operations.
    (3) Specific reasons why protestant opposes the application 
including information regarding protestant's reliance on the 
involved service [this information must be supported by affidavits 
of persons with personal knowledge of the fact(s)].
    (4) Any rebuttal of material submitted by applicant.
    In addition, a commenting party or protestant may provide a 
statement of position and evidence regarding:
    (i) Intent to offer financial assistance pursuant to 49 U.S.C. 
10904;
    (ii) Environmental impact;
    (iii) Impact on rural and community development;
    (iv) Recommended provisions for protection of the interests of 
employees;
    (v) Suitability of the properties for other public purposes 
pursuant to 49 U.S.C. 10905; and
    (vi) Prospective use of the right-of-way for interim trail use 
and rail banking under 16 U.S.C. 1247(d) and Sec. 1152.29.

A protest may demonstrate that: (1) the protestant filed a feeder 
line application under 49 U.S.C. 10907; (2) the feeder line 
application involves any portion of the rail line involved in the 
abandonment or discontinuance application; (3) the feeder line 
application was filed prior to the date the abandonment or 
discontinuance application was filed; and (4) the feeder line 
application is pending before the Board.
    Written comments and protests will be considered by the Board in 
determining what disposition to make of the application. The 
commenting party or protestant may participate in the proceeding as 
its interests may appear.
    If an oral hearing is desired, the requester must make a request 
for an oral hearing and provide reasons why an oral hearing is 
necessary. Oral hearing requests must be filed with the Board no 
later than 10 days after the application is filed.
    Those parties filing protests to the proposed abandonment (or 
discontinuance) should be prepared to participate actively either in 
an oral hearing or through the submission of their entire opposition 
case in the form of verified statements and arguments at the time 
they file a protest. Parties seeking information concerning the 
filing of protests should refer to Sec. 1152.25.
    Written comments and protests, including all requests for public 
use and trail use conditions, should indicate the proceeding 
designation STB No. AB ________ (Sub-No. ________) and must be filed 
with the Secretary, Surface Transportation Board, Washington, DC 
20423, no later than (insert the date 45 days after the date 
applicant intends to file its application). Interested persons may 
file a written comment or protest with the Board to become a party 
to this abandonment (or discontinuance) proceeding. A copy of each 
written comment or protest shall be served upon the representative 
of the applicant (insert name, address, and phone number). The 
original and 10 copies of all comments or protests shall be filed 
with the Board with a certificate of service. Except as otherwise 
set forth in part 1152, each document filed with the Board must be 
served on all parties to the abandonment proceeding. 49 CFR 
1104.12(a).
    The line sought to be abandoned (or discontinued) will be 
available for subsidy or sale for continued rail use, if the Board 
decides to permit the abandonment (or discontinuance), in accordance 
with applicable laws and regulations (49 U.S.C. 10904 and 49 CFR 
1152.27). No subsidy arrangement approved under 49 U.S.C. 10904 
shall remain in effect for more than 1 year unless otherwise 
mutually agreed by the parties (49 U.S.C. 10904(f)(4)(B)). Applicant 
will promptly provide upon request to each interested party an 
estimate of the subsidy and minimum purchase price required to keep 
the line in operation. The carrier's representative to whom 
inquiries may be made concerning sale or subsidy terms is (insert 
name and business address).
    Persons seeking further information concerning abandonment 
procedures may contact the Surface Transportation Board or refer to 
the full abandonment or discontinuance regulations at 49 CFR part 
1152. Questions concerning environmental issues may be directed to 
the Board's Section of Environmental Analysis.
    A copy of the application will be available for public 
inspection on or after (insert date abandonment application is to be 
filed with Board) at each agency station or terminal on the line 
proposed to be abandoned or discontinued [if there is no agency 
station on the line, the application shall be deposited at any 
agency station through which business for the line is received or 
forwarded (insert name, address, location, and business hours)]. The 
carrier shall furnish a copy of the application to any interested 
person proposing to file a protest or comment, upon request.
    An environmental assessment (EA) (or environmental impact 
statement (EIS), if necessary) prepared by the Section of 
Environmental Analysis will be served upon all parties of record and 
upon any agencies or other persons who commented during its 
preparation. Any other persons who would like to obtain a copy of 
the EA (or EIS) may contact the Section of Environmental Analysis. 
EAs in these abandonment proceedings normally will be made available 
within 33 days of the filing of the application. The deadline for 
submission of comments on the EA will generally be within 30 days of 
its service. The comments received will be addressed in the Board's 
decision. A supplemental EA or EIS may be issued where appropriate.


Sec. 1152.22  Contents of application.

    Applications for the abandonment of railroad lines or the 
discontinuance of rail service shall contain the following information, 
including workpapers and supporting documents, and each paragraph (a) 
through (j) of this section shall be attested to by a person having 
personal knowledge of the matters contained therein:
    (a) General. (1) Exact name of applicant.
    (2) Whether applicant is a common carrier by railroad subject to 49 
U.S.C. Subtitle IV, chapter 105.
    (3) Relief sought (abandonment of line or discontinuance of 
service).
    (4) Detailed map of the subject line on a sheet not larger than 
8 x 10\1/2\ inches, drawn to scale, and with the scale shown thereon. 
The map must show, in clear relief, the exact location of the rail line 
to be abandoned or over which service is to be discontinued and its 
relation to other rail lines in the area, highways, water routes, and 
population centers.
    (5) Reference to inclusion of the rail line to be abandoned or over 
which service is to be discontinued on the carrier's system diagram map 
or narrative, in compliance with Secs. 1152.10 through 1152.13, and the 
date upon which such line was first listed on the system diagram map or 
included in the narrative in category 1 in accordance with 
Sec. 1152.10(b)(1). A copy of the line description which accompanies 
the system diagram map shall also be submitted.
    (6) Detailed statement of reasons for filing application.
    (7) Name, title, and address of representative of applicant to whom 
correspondence should be sent.
    (8) List of all United States Postal Service ZIP Codes that the 
line proposed for abandonment traverses.
    (b) Condition of properties. The present physical condition of the 
line including any operating restrictions and estimate of deferred 
maintenance and rehabilitation costs (e.g., number of ties that need 
replacing, miles of rail that need replacing and/or new ballast, bridge 
repairs or replacement needed,

[[Page 67887]]

and estimated labor expenses necessary to upgrade the line to minimum 
Federal Railroad Administration class 1 safety standards). The bases 
for the estimates shall be stated with particularity, and workpapers 
shall be filed with the application.
    (c) Service provided. Description of the service performed on the 
line during the Base Year (as defined by Sec. 1152.2(c)), including the 
actual:
    (1) Number of trains operated and their frequency.
    (2) Miles of track operated (include main line and all railroad-
owned sidings).
    (3) Average number of locomotive units operated.
    (4) Total tonnage and carloads by each commodity group on the line.
    (5) Overhead or bridge traffic by carload commodity group that will 
not be retained by the carrier.
    (6) Average crew size.
    (7) Level of maintenance.
    (8) Any important changes in train service undertaken in the 2 
calendar years immediately preceding the filing of the application.
    (9) Reasons for decline in traffic, if any, in the best judgment of 
applicant.
    (d) Revenue and cost data. (1) Computation of the revenues 
attributable and avoidable costs for the line to be abandoned for the 
Base Year (as defined by Sec. 1152.2(c) and to the extent such branch 
level data are available), in accordance with the methodology 
prescribed in Secs. 1152.31 through 1152.33, as applicable, and 
submitted in the form called for in Sec. 1152.36, as Exhibit 1.
    (2) The carrier shall compute an estimate of the future revenues 
attributable, avoidable costs and reasonable return on the value for 
the line to be abandoned, for the Forecast Year (as defined in 
Sec. 1152.2(h)) in the form called for in Exhibit 1. The carrier shall 
fully support and document all dollar amounts shown in the Forecast 
Year column including an explanation of the rationale and key 
assumptions used to determine the Forecast Year amounts.
    (3) The carrier shall also compute an ``Estimated Subsidy Payment'' 
for the Base Year in the form called for in Exhibit 1 and an alternate 
payment to reflect:
    (i) Increases or decreases in attributable revenues and avoidable 
costs projected for the subsidy year; and
    (ii) An estimate, in reasonable detail, of the cash income tax 
reductions, Federal and state, to be realized in the subsidy year. The 
bases for the adjustment, e.g., rate increase, changes in traffic 
level, necessary maintenance to comply with minimum Federal Railroad 
Administration class 1 safety standards, shall be stated with 
particularity.
    (e) Rural and community impact. (1) The name and population 
(identify source and date of figures) of each community in which a 
station on the line is located.
    (2) Identification of significant users, as defined in 
Sec. 1152.2(l), by name, address, principal commodity, and by tonnage 
and carloads for each of the 2 calendar years immediately preceding the 
filing of the abandonment or discontinuance application, for that part 
of the current year for which information is available, and for the 
Base Year. In addition, the total tonnage and carloads for each 
commodity group originating and/or terminating on the line segment 
shall also be shown for the same time periods as those of the 
significant users.
    (3) General description of the alternate sources of transportation 
service (rail, motor, water, air) available, and the highway network in 
the proximate area.
    (4) Statement of whether the properties proposed to be abandoned 
are appropriate for use for other public purposes, including roads or 
highways, other forms of mass transportation, conservation, energy 
production or transmission, or recreation. If the applicant is aware of 
any restriction on the title to the property, including any 
reversionary interest, which would affect the transfer of title or the 
use of property for other than rail purposes, this shall be disclosed.
    (f) Environmental impact. The applicant shall submit information 
regarding the environmental impact of the proposed abandonment or 
discontinuance in compliance with Secs. 1105.7 and 1105.8. If certain 
information required by the environmental regulations duplicates 
information required elsewhere in the application, the environmental 
information requirements may be met by a specific reference to the 
location of the information elsewhere in the application.
    (g) Passenger service. If passenger service is provided on the 
line, the applicant shall state whether appropriate steps have been 
taken for discontinuance pursuant to the Rail Passenger Service Act. 
(45 U.S.C. 501 et seq.)
    (h) Additional information. The applicant shall submit such 
additional information to support its application as the Board may 
require.
    (i) Draft Federal Register Notice. The applicant shall submit a 
draft notice of its application to be published by the Board. In 
addition to the regular number of copies that must be filed with the 
Board, the applicant must submit a copy of the draft notice as data 
contained on a computer diskette compatible with the Board's current 
word processing capabilities. The Board will publish the notice in the 
Federal Register within 20 days of the application's filing with the 
Board. The draft notice shall be in the form set forth below:

STB No. AB-________ (Sub-No. ________)
Notice of Application to Abandon or to Discontinue Service

    On (insert date application was filed with the Board) (name of 
applicant) filed with the Surface Transportation Board, Washington, 
D.C. 20423, an application for permission for the abandonment of 
(the discontinuance of service on) a line of railroad known as 
____________ extending from railroad milepost near (station name) to 
(the end of line or rail milepost) near (station name), a distance 
of ____________ miles, in [County(ies), State(s)]. The line includes 
the stations of (list all stations on the line in order of milepost 
number, indicating milepost location) and traverses through 
____________ (ZIP Codes) United States Postal Service ZIP Codes.

    The line (does) (does not) contain federally granted rights-of-
way. Any documentation in the railroad's possession will be made 
available promptly to those requesting it. The applicant's entire 
case for abandonment (or discontinuance) (case in chief) was filed 
with the application.
    This line of railroad has appeared on the applicant's system 
diagram map or has been included in its narrative in category 1 
since (insert date).
    The interest of railroad employees will be protected by (specify 
the appropriate conditions).
    Any interested person may file with the Surface Transportation 
Board written comments concerning the proposed abandonment (or 
discontinuance) or protests (including the protestant's entire 
opposition case), within 45 days after the application is filed. All 
interested persons should be aware that following any abandonment of 
rail service and salvage of the line, the line may be suitable for 
other public use, including interim trail use. Any request for a 
public use condition under 49 U.S.C. 10905 (Sec. 1152.28 of the 
Board's rules) and any request for a trail use condition under 16 
U.S.C. 1247(d) (Sec. 1152.29 of the Board's rules) must be filed 
within 45 days after the application is filed. Persons who may 
oppose the abandonment or discontinuance but who do not wish to 
participate fully in the process by appearing at any oral hearings 
or by submitting verified statements of witnesses, containing 
detailed evidence should file comments. Persons interested only in 
seeking public use or trail use conditions should also file 
comments. Persons opposing the proposed abandonment or 
discontinuance that do wish to participate actively and fully in the 
process should file a protest.
    In addition, a commenting party or protestant may provide:

[[Page 67888]]

    (i) An offer of financial assistance, pursuant to 49 U.S.C. 
10904 (due 120 days after the application is filed or 10 days after 
the application is granted by the Board, whichever occurs sooner);
    (ii) Recommended provisions for protection of the interests of 
employees;
    (iii) A request for a public use condition under 49 U.S.C. 
10905; and
    (iv) A statement pertaining to prospective use of the right-of-
way for interim trail use and rail banking under 16 U.S.C. 1247(d) 
and Sec. 1152.29.
    Parties seeking information concerning the filing of protests 
should refer to Sec. 1152.25.
    Written comments and protests, including all requests for public 
use and trail use conditions, must indicate the proceeding 
designation STB No. AB-____ (Sub-No. ____) and should be filed with 
the Secretary, Surface Transportation Board (Board), Washington, DC 
20423, no later than (insert the date 45 days after the date 
applicant intends to file its application). Interested persons may 
file a written comment or protest with the Board to become a party 
to this abandonment (or discontinuance) proceeding. A copy of each 
written comment or protest shall be served upon the representative 
of the applicant (insert name, address, and phone number). The 
original and 10 copies of all comments or protests shall be filed 
with the Board with a certificate of service. Except as otherwise 
set forth in part 1152, every document filed with the Board must be 
served on all parties to the abandonment proceeding. 49 CFR 
1104.12(a).
    The line sought to be abandoned (or discontinued) will be 
available for subsidy or sale for continued rail use, if the Board 
decides to permit the abandonment (or discontinuance), in accordance 
with applicable laws and regulations (49 U.S.C. 10904 and 49 CFR 
1152.27). No subsidy arrangement approved under 49 U.S.C. 10904 
shall remain in effect for more than 1 year unless otherwise 
mutually agreed by the parties (49 U.S.C. 10904(f)(4)(B)). Applicant 
will promptly provide upon request to each interested party an 
estimate of the subsidy and minimum purchase price required to keep 
the line in operation. The carrier's representative to whom 
inquiries may be made concerning sale or subsidy terms is (insert 
name and business address).
    Persons seeking further information concerning abandonment 
procedures may contact the Surface Transportation Board or refer to 
the full abandonment or discontinuance regulations at 49 CFR part 
1152. Questions concerning environmental issues may be directed to 
the Board's Section of Environmental Analysis.
    An environmental assessment (EA) (or environmental impact 
statement (EIS), if necessary) prepared by the Section of 
Environmental Analysis will be served upon all parties of record and 
upon any agencies or other persons who commented during its 
preparation. Any other persons who would like to obtain a copy of 
the EA (or EIS) may contact the Section of Environmental Analysis. 
EAs in these abandonment proceedings normally will be made available 
within 33 days of the filing of the application. The deadline for 
submission of comments on the EA will generally be within 30 days of 
its service. The comments received will be addressed in the Board's 
decision. A supplemental EA or EIS may be issued where appropriate.

    (j) Verification. The original application shall be executed and 
verified in the form set forth below by an officer of the carrier 
having knowledge of the facts and matters relied upon.

Verification

State of ____________ ss.
County of ____________
     ____________ (Name of affiant) makes oath and says that (s)he 
is the ____________ (title of affiant) of the ____________ (name of 
applicant) applicant herein; that (s)he has been authorized by the 
applicant (or as appropriate, a court) to verify and file with the 
Surface Transportation Board the foregoing application in STB AB-
____ (Sub-No. ____); that (s)he has carefully examined all of the 
statements in the application as well as the exhibits attached 
thereto and made a part thereof; that (s)he has knowledge of the 
facts and matters relied upon in the application; and that all 
representations set forth therein are true and correct to the best 
of his(her) knowledge, information, and belief.
      (Signature)

    Subscribed and sworn to before me ____________ in and for the 
State and County above named, this ____ day of ____, 19__.

My commission expires


Sec. 1152.23  [Reserved]


Sec. 1152.24  Filing and service of application.

    (a) An original and 10 copies of applications, typewritten or 
printed on paper approximately 8\1/2\ inches by 11 inches with 1\1/2\ 
inch left margin, shall be filed with the Secretary of the Surface 
Transportation Board, Washington, DC 20423. The original shall bear the 
date and signature and shall be complete in itself; the signature may 
be stamped or typed and the notarial seal may be omitted on the copies. 
A check or money order payable to the Surface Transportation Board must 
also be submitted to cover the applicable filing fee. If the applicant 
carrier is in bankruptcy, the application shall also be filed on the 
bankruptcy court.
    (b) The applicant shall tender with its application an affidavit 
attesting to its compliance with the notice requirement of 
Sec. 1152.20. The affidavit shall include the dates of service, 
posting, and publication of the notice.
    (c) When the application is filed with the Board, the applicant 
shall serve, by first class mail, a copy on the Governor, the Public 
Service Commission (or equivalent agency), and the designated state 
agency of each state in which any part of the line of railroad sought 
to be abandoned or discontinued is situated. A copy of the application 
will be available for public inspection, on or after the date the 
abandonment application is filed with the Board, at each agency station 
or terminal on the line proposed to be abandoned or discontinued (if 
there is no agency station on the line, the application shall be 
deposited at any agency station through which business for the line is 
received or forwarded). A certificate of service shall be promptly 
filed with the Board.
    (d) The applicant shall promptly furnish by first class mail a copy 
of the application to any interested person proposing to file a written 
comment or protest upon request. A certificate of service shall 
promptly be filed with the Board.
    (e)(1) The Board shall reject any abandonment or discontinuance 
application which does not substantially conform to the regulations in 
this subpart C regarding notice, form, and content, or which applies to 
a line which has not properly been published on the carrier's system 
diagram map (or included in a narrative in the case of a Class III 
carrier), in conformance with the regulations of subpart B of this 
part.
    (2) Upon the filing of an abandonment or discontinuance 
application, the Board will review the application and determine 
whether it conforms with all applicable regulations. If the application 
is substantially incomplete or its filing otherwise defective, the 
Board shall reject the application for stated reasons by order (which 
order will be administratively final) within 20 days from the date of 
filing of the application. If the Board does not reject the 
application, notice of the filing of the application shall be published 
in the Federal Register by the Board within 20 days of the filing of 
the application.
    (3) If the application is rejected, a revised application may be 
submitted, and the Board will determine whether the resubmitted 
application conforms with all prescribed regulations. A properly 
revised application submitted within 60 days of the order rejecting the 
incomplete or improper application need not be subjected to new notice 
and publication under Sec. 1152.20, unless the defect causing the 
rejection was in the notice and/or publication. A revised application 
submitted after such 60-day period must be newly published and noticed.
    (4) The resubmission of an abandonment or discontinuance 
application shall be considered a de novo filing for the purposes of 
computation of the time period for filing an offer of financial 
assistance under 49

[[Page 67889]]

U.S.C. 10904, and for other time periods prescribed in the regulations 
contained in this part (49 CFR part 1152), provided, that a resubmitted 
application is deemed complete and proper.
    (5) An applicant may seek waiver of specific regulations listed in 
subpart C of this part by filing a petition for waiver with the Board. 
A decision by the Director of the Office of Proceedings granting or 
denying a waiver petition will be issued within 30 days of the date the 
petition is filed. Appeals from the Director's decision will be decided 
by the entire Board. If waiver is not obtained prior to the filing of 
the application, the application may be subject to rejection under 
paragraphs (e) (1) and (2) of this section.
    (f) As provided in Sec. 1152.29(e)(2), rail carriers authorized to 
abandon a line under 49 U.S.C. 10903 must file with the Board a notice 
that abandonment has been consummated.


Sec. 1152.25  Participation in abandonment or discontinuance 
proceedings.

    (a) Public participation. (1) Protests and comments. Interested 
persons may become parties to an abandonment or discontinuance 
proceeding by filing written comments or protests with the Board. Any 
request for a public use condition under 49 U.S.C. 10905 (Sec. 1152.28 
of the Board's rules) and any request for a trail use condition under 
16 U.S.C. 1247(d) (Sec. 1152.29 of the Board's rules) must be included 
in these filings. Persons who may oppose the abandonment or 
discontinuance, but who do not wish to participate fully in the process 
by appearing at any oral hearings or by submitting verified statements 
of witnesses containing detailed evidence, should file comments. 
Persons interested only in seeking public use or trail use conditions 
should also file comments. Persons opposing the proposed abandonment or 
discontinuance that do wish to participate actively and fully in the 
process should file a protest. Protests shall include all evidence and 
argument in support of protestant's position (protestant's case in 
chief). Protests must contain the following information:
    (i) Protestant's name, address and business.
    (ii) A statement describing protestant's interest in the proceeding 
including:
    (A) A description of protestant's use of the line;
    (B) If protestant does not use the line, information concerning the 
group or public interest it represents; and
    (C) If protestant's interest is limited to the retention of service 
over a portion of the line, a description of the portion of the line 
subject to protestant's interest (with milepost designations if 
available) and evidence showing that the applicant can operate the 
portion of the line profitably, including an appropriate return on its 
investment for those operations.
    (iii) Specific reasons why protestant opposes the application 
including information regarding protestant's reliance on the involved 
service (this information must be supported by affidavits of persons 
with personal knowledge of the fact(s)).
    (iv) Any rebuttal of material submitted by applicant.
    (v) Any request for a public use condition under 49 U.S.C. 10905 
(Sec. 1152.28 of the Board's rules) and any request for a trail use 
condition under 16 U.S.C. 1247(d) (Sec. 1152.29 of the Board's rules).
    (2) Additional information. In addition to the information required 
in paragraph (a) (1) of this section, a commenting party or protestant 
may provide a statement of position and a summary of evidence 
regarding:
    (i) Intent to offer financial assistance under 49 U.S.C. 10904;
    (ii) Environmental impact;
    (iii) Impact on rural and community development;
    (iv) Recommended provisions for protection of the interests of 
employees;
    (v) A request for a public use condition under 49 U.S.C. 10905; and
    (vi) Prospective use of the right-of-way for interim trail use and 
rail banking under 16 U.S.C. 1247(d) and 49 CFR 1152.29.
    (3) Feeder line application for all or part of the line subject to 
the abandonment application. In addition to the information required in 
paragraphs (a)(1) and (2) of this section, a commenting party or 
protestant must provide information that:
    (i) The protestant filed a feeder line application under 49 U.S.C. 
10907 (or former 49 U.S.C. 10910);
    (ii) The feeder line application involves any portion of the rail 
line involved in the abandonment or discontinuance application;
    (iii) The feeder line application was filed prior to the date the 
abandonment or discontinuance application was filed; and
    (iv) The feeder line application is pending before the Board.
    (b) Employee or employee representative participation. Employees or 
their representatives may file protests or comments to an application. 
However, because the Board will impose employee protective conditions 
under 49 U.S.C. 10903(b)(2) if an application is granted, employees and 
their representatives need not file comments or protests seeking this 
protection.
    (c) Filing and service of written comments, protests, along with 
evidence and argument, and replies. (1) Written comments and protests, 
as well as public use and trail use requests, shall be filed with the 
Board (the Secretary, Surface Transportation Board, Washington, DC 
20423) within 45 days of the filing with the Board of an abandonment or 
discontinuance application.
    (2) An original and 10 copies of each written comment or protest 
shall be filed with the Board.
    (3) A copy of each written comment or protest shall be served on 
applicant or its representative at the time of filing with the Board. 
If the applicant carrier is in bankruptcy, each comment or protest 
shall also be filed on the Bankruptcy Court. Each filing shall contain 
a certificate of service.
    (4) Replies or rebuttal to written comments and protests shall be 
filed and served by applicants no later than 60 days after the filing 
of the application. An original and 10 copies of such replies shall be 
filed with the Board.
    (d) Time limits. (1) Pleadings, requests or other papers or 
documents (including any comments or protests and any appeal from a 
Board decision) required or permitted to be filed under this part must 
be received for filing at the Board's Offices at Washington, DC within 
the time limits, if any, for such filing. The date of receipt at the 
Board and not the date of deposit in the mail is determinative, 
provided, however, that if such document is mailed by certified, 
registered, or express mail, postmarked at least 3 days prior to the 
due date, it will be accepted as timely filed.
    (2) In computing any time period prescribed or allowed by this 
part, the day of the act, event, or default after which the designated 
period of time begins to run is not to be included.
    (3) Any filing under this part which falls due on a Saturday, 
Sunday, or a legal holiday in the District of Columbia, may be filed at 
the Board by the end of the next day which is neither a Saturday, 
Sunday, nor a holiday, except as indicated in paragraph (d)(4) of this 
section. A half holiday shall not be considered as a holiday.
    (4) Offers of financial assistance made pursuant to Sec. 1152.27(c) 
must be filed on or before their statutory or regulatory due date as 
computed in paragraph (d)(2) of this section, regardless of whether 
that date is a Saturday, Sunday,

[[Page 67890]]

or a legal holiday in the District of Columbia.
    (5) The Board will reject any pleading filed after its due date 
unless good cause is shown why the pleading is filed late.
    (6) Oral Hearings: (i) If the Board decides to hold an oral 
hearing, the oral hearing shall be for the primary purpose of cross 
examination of witnesses filing verified statements in the proceeding. 
Any direct testimony, other than applicant's rebuttal evidence, shall 
be received at the discretion of the hearing officer.
    (ii) In addition to that contained in the application, the 
submission of written evidence prior to the commencement of the hearing 
shall be established by the Board.
    (iii) Post hearing legal briefs shall be due 10 days after the 
close of the oral hearing, or at an earlier date if established at the 
hearing by the hearing officer.
    (e) Appellate procedures. (1) Scope of rule. Except as specifically 
indicated below, these appellate procedures are to be followed in 
abandonment and discontinuance proceedings in lieu of the general 
procedures at 49 CFR 1115. Appeals of initial decisions of the Director 
of the Office of Proceedings determining:
    (i) Whether offers of financial assistance satisfy the standard of 
49 U.S.C. 10904(d) for purposes of instituting negotiations or, in 
exemption proceedings, for purposes of partial revocation and 
instituting negotiations;
    (ii) Whether partially to revoke or to reopen abandonment 
exemptions authorized, respectively, under 49 U.S.C. 10502 and 49 CFR 
part 1152 subpart F for the purpose of imposing public use conditions 
under the criteria in 49 CFR 1152.28 and/or conditions limiting salvage 
of the rail properties for environmental and historic preservation 
purposes; and
    (iii) The applicability and administration of the Trails Act [16 
U.S.C. 1247(d)] in abandonment proceedings under 49 U.S.C. 10903 (and 
abandonment exemption proceedings), issued pursuant to delegations of 
authority at 49 CFR 1011.8(c) (4) and (5), will be acted on by the 
entire Board as set forth at 49 CFR 1011.2(a)(7). An original and 10 
copies of all appeals, and replies to appeals, under this section must 
be filed with the Board.
    (2) Appeals criteria. Appeals to the Board's decision in 
abandonment or discontinuance proceedings will not be entertained. 
Those decisions are administratively final upon the date they are 
served.
    (i) Parties seeking further administrative action may file a 
petition to reopen the proceeding under paragraph (e)(4) of this 
section. If an abandonment or discontinuance is granted and a party 
wishes the Board to have the opportunity to consider a petition to 
reopen before the abandonment or discontinuance authorization becomes 
effective, it must file its petition within 15 days after the 
administratively final decision is served together with a request for a 
stay of effectiveness under paragraph (e)(7) of this section. If such a 
petition to reopen and stay request is received within that 15-day 
period, any replies to the petition to reopen must be filed no later 
than 25 days after the date the decision is served, and any reply to 
the stay request must reach the Board no later than 5 days after the 
stay request is filed.
    (ii) The Board will grant a petition to reopen only upon a showing 
that the action would be affected materially because of new evidence, 
changed circumstances, or material error.
    (3) Form. A petition to reopen and any reply shall not exceed 30 
pages in length, including the index of subject matter, argument, and 
appendices or other attachments.
    (4) Petitions to reopen administratively final actions. A person 
may file a petition to reopen any administratively final action of the 
Board. A petition to reopen shall state in detail the respects in which 
the proceeding involves material error, new evidence, or substantially 
changed circumstances. An original and 10 copies of such petitions must 
be filed with the Board.
    (5) Judicial review: (i) Parties may seek judicial review of a 
Board action in an abandonment or discontinuance proceeding on the day 
the action of the Board becomes final.
    (ii) If a petition seeking reopening is filed under this section, 
before or after a petition seeking judicial review is filed with the 
courts, the Board will act upon the petition after advising the court 
of its pendency unless action might interfere with the court's 
jurisdiction.
    (6) Petitions to vacate. In the event of procedural defects (such 
as the loss of a properly filed protest, the failure of the applicant 
to afford the public the requisite notice of its proposed abandonment, 
etc.), the Board will entertain petitions to vacate the abandonment or 
discontinuance authorization. An original and 10 copies of these 
petitions to vacate must be filed with the Board.
    (7) Petitions to stay. (i) The filing of a petition to reopen shall 
not stay the effect of a prior action. An original and 10 copies of any 
petitions to stay must be filed with the Board.
    (ii) A petition to reopen an administratively final action may be 
accompanied by a petition for a stay of the effectiveness of the 
abandonment or discontinuance. As provided in paragraph (e)(2) of this 
section, a petition to reopen must be accompanied by a stay request if 
the party wishes the Board to have the opportunity to consider the 
petition to reopen before the abandonment or discontinuance 
authorization becomes final.
    (iii) A party may petition for a stay of the effectiveness of 
abandonment or discontinuance authorization pending a request for 
judicial review. The reasons for the desired relief shall be stated in 
the petition, and the petition shall be filed not less than 15 days 
prior to the effective date of the abandonment authorization. No reply 
need be filed. If a party elects to file a reply, the reply must reach 
the Board no later than 5 days after the petition is filed.


Sec. 1152.26   Board determination under 49 U.S.C. 10903.

    (a) The following schedule shall govern the process for Board 
consideration and decisions in abandonment and discontinuance 
application proceedings from the time the application is filed until 
the time of the Board's decision on the merits:

Day 0--Application filed, including applicant's case in chief.
Day 10--Due date for oral hearing requests.
Day 15--Due date for Board decision on oral hearing requests.
Day 20--Due date for Notice of Application to be published in the 
Federal Register.
Day 45--Due date for protests and comments, including opposition case 
in chief, and for public use and trail use requests.
Day 60--Due date for applicant's reply to opposition case and for 
applicant's response to trail use requests.
Day 110--Due date for service of decision on the merits.
Day 120--Due date for offers of financial assistance, except that if an 
application has been granted by decision issued sooner than Day 110, 
the offer of financial assistance shall be due 10 days after service of 
the decision granting the application.

    (b) If an application for abandonment or discontinuance is filed by 
a bankrupt railroad, the Board shall base its decision (Report to the 
Bankruptcy Court) on the application and any responses to the 
application that are filed. In each such instance, the Board shall 
establish a reasonable period of

[[Page 67891]]

time for filing responses to the application so that public input can 
be included in the Board's decision (Report) and so that the Board will 
be able to meet a deadline imposed or requested by the Bankruptcy 
Court.


Sec. 1152.27   Financial assistance procedures.

    (a) Provision of information. An applicant must provide promptly 
upon request to a party considering an offer of financial assistance to 
continue existing rail service, and concurrently to the Board, the 
following:
    (1)(i) In an application or petition for exemption proceeding, an 
estimate of the annual subsidy and minimum purchase price required to 
keep the line or a portion of the line in operation;
    (ii) In a class exemption proceeding, either an estimate of the 
annual subsidy or the minimum purchase price, depending upon the type 
of financial assistance indicated in the potential offeror's formal 
expression of intent submitted under paragraph (c)(2)(i) of this 
section;
    (2) Its most recent reports on the physical condition of the 
involved line; and
    (3) Traffic, revenue, and other data necessary to determine the 
amount of annual financial assistance that would be required to 
continue rail transportation over that part of the railroad line. In an 
exemption proceeding, the data to be provided must at a minimum include 
the carrier's estimate of the net liquidation value of the line, with 
supporting data reflecting available real estate appraisals, 
assessments of the quality and quantity of track materials in a line, 
and removal cost estimates (including the cost of transporting removed 
materials to point of sale or point of storage for relay use), and, if 
an offer of subsidy is contemplated, an estimate of the cost of 
rehabilitating the line to Federal Railroad Administration class 1 
Safety Standards (49 CFR part 213).
    (b) Federal Register notice. (1) Abandonment and discontinuance 
applications. The Federal Register publication, which gives notice of 
the filing of the application 20 days after the application is filed, 
will serve as notice to persons intending to offer financial assistance 
to assure continued rail service under 49 U.S.C. 10904 and these 
regulations as they relate to abandonment and discontinuance 
applications. Offers of financial assistance will be due 120 days after 
the application is filed or 10 days after a decision granting the 
application is served, whichever occurs sooner.
    (2) Exemption proceedings. (i) If a petition for individual 
exemption from the prior approval requirements of 49 U.S.C. 10903 is 
filed with the Board for abandonment or discontinuance of a line of 
railroad, the Board will publish notice of the petition in the Federal 
Register within 20 days of the filing of the petition. The Federal 
Register publication will serve as notice to persons with a potential 
interest in providing financial assistance to assure continued rail 
service on the line under 49 U.S.C. 10904 and these regulations as they 
relate to exempt abandonments and discontinuances. Offers of financial 
assistance will be due 120 days after the filing of the petition for 
exemption or 10 days after service of a Board decision granting the 
exemption, whichever occurs sooner.
    (ii) If a notice of exemption is filed under the class exemption, 
the Board will publish notice of the exemption in the Federal Register 
within 20 days of filing. The Federal Register publication will serve 
as notice to persons with a potential interest in providing financial 
assistance to assure continued rail service on the line under 49 U.S.C. 
10904 and these regulations as they relate to exempt abandonments and 
discontinuances. Offers of financial assistance will be due no later 
than 30 days after the date of the Federal Register publication giving 
notice of the exemption.
    (c) Submission of financial assistance offer. (1) Abandonment and 
discontinuance applications and petitions for exemption. (i) Service 
and filing. An offeror must serve its offer of assistance on the 
carrier owning and operating the line and all parties to the 
abandonment or discontinuance application or exemption proceeding. The 
offer must be filed concurrently with the Secretary, Surface 
Transportation Board, Washington, DC 20423.
    (A) An offer may be filed and served at any time after the filing 
of the abandonment or discontinuance application or petition for 
exemption. Once a decision is served granting an application or 
petition for exemption, however, the Board must be notified that an 
offer has previously been submitted.
    (B) An offer, or notification of a previously filed offer, must be 
filed and served no later than 10 days after service of the Board 
decision granting the application or petition for exemption. This 
filing and service is subject to the requirements of 49 CFR 1152.25 
(d)(1), (d)(2), and (d)(4).
    (C) If, after a bona fide request, applicant or petitioner has 
failed to provide a potential offeror promptly with the information 
required under paragraph (a) of this section and if that information is 
not contained in the application or petition, the Board will entertain 
petitions to toll the 10-day period for submitting offers of financial 
assistance under paragraph (c)(1) of this section. Petitions must be 
filed with the Board within 5 days after service of the decision 
granting the application or petition for exemption. Petitions should 
include copies of the prior written request for information or an 
accurate outline of the specific information that was orally requested. 
Replies to these petitions must be filed within 10 days after service 
of the decision granting the application or petition for exemption. 
These petitions and replies must be filed on or before their actual due 
date under 49 CFR 1152.25(d)(4). The Board will issue a decision on 
petitions within 15 days after service of the decision granting the 
application or petition for exemption.
    (ii) Contents of offer. The offeror shall set forth its offer in 
detail. The offer must:
    (A) Identify the line, or the portion of the line, in question;
    (B) Demonstrate that the offeror is financially responsible; that 
is, that it has or within a reasonable time will have the financial 
resources to fulfill proposed contractual obligations; governmental 
entities will be presumed to be financially responsible; and
    (C) Explain the disparity between the offeror's purchase price or 
subsidy if it is less than the carrier's estimate under paragraph 
(a)(1) of this section, and explain how the offer of subsidy or 
purchase is calculated.
    (2) Class exemption proceedings. (i) Expression of intent to file 
offer. Persons with a potential interest in providing financial 
assistance must, no later than 10 days after the Federal Register 
publication described in paragraph (b)(2)(ii) of this section, submit 
to the carrier and the Board a formal expression of their intent to 
file an offer of financial assistance, indicating the type of financial 
assistance they wish to provide (i.e., subsidy or purchase). Such 
submissions are subject to the filing requirements of 
Sec. 1152.25(d)(1) through (d)(3). Submission of a formal expression of 
intent under this subsection will automatically stay the effective date 
of the notice of exemption under the class exemption for 40 days 
(normally, this will be 10 days beyond the date stated in the Federal 
Register publication).
    (ii) Service and filing. An offeror must serve its offer of 
assistance on the carrier that instituted the exempt filing as well

[[Page 67892]]

as all other parties to the proceeding. The offer must be filed 
concurrently with the Secretary, Surface Transportation Board, 
Washington, DC 20423.
    (A) An offer may be filed and served at any time after the filing 
of the notice of exemption. Once a notice of exemption is published in 
the Federal Register, however, the Board must be notified that an offer 
has previously been submitted.
    (B) An offer, or notification of a previously filed offer, must be 
filed and served no later than 30 days after the Federal Register 
publication described in paragraph (b)(2)(ii) of this section. This 
filing and service is subject to the requirements of 49 CFR 1152.25 
(d)(1), (d)(2), and (d)(4).
    (C) If, after a bona fide request, applicant has failed to provide 
a potential offeror promptly with the information required under 
paragraph (a) of this section and if that information is not contained 
in the notice of exemption, the Board will entertain petitions to toll 
the 30-day period for submitting offers of financial assistance under 
paragraph (c)(2) of this section. Petitions must be filed with the 
Board within 25 days after publication in the Federal Register 
(described in paragraph (b)(2)(ii) of this section). Petitions should 
include copies of the prior written request for information or an 
accurate outline of the specific information that was orally requested. 
Replies to these petitions must be filed within 30 days after the 
publication. These petitions and replies must be filed on or before 
their actual due date under 49 CFR 1152.25(d)(4). The Board will issue 
a decision on petitions to toll the offer period within 35 days after 
publication.
    (D) Upon receipt of a formal expression of intent to file an offer 
under paragraph (c)(2)(i) of this section, the rail carrier applicant 
may advise the Board and the potential offeror that additional time is 
needed to develop the information required under paragraph (a) of this 
section. Applicant shall expressly indicate the amount of time it 
considers necessary (not to exceed 60 days) to develop and submit the 
required information to the potential offeror. For the duration of the 
time period so indicated by the applicant, the 30-day period for 
submitting offers of financial assistance under paragraph (c)(2) of 
this section shall be tolled without formal Board action.
    (iii) Contents of offer. The offeror shall set forth its offer in 
detail. The offer must meet the requirements of paragraph (c)(1)(ii) of 
this section.
    (d) Access to documents. Upon receipt by the carrier of a written 
comment under Sec. 1152.25 or a formal expression of intent under 
paragraph (c)(2)(i) of this section indicating an intent to offer 
financial assistance, or upon receipt by the carrier of an offer of 
financial assistance, whichever occurs earlier, the carrier must make 
available to that party or offeror the records, accounts, appraisals, 
working papers, and other documents used in preparing Exhibit 1 
(Sec. 1152.36) or, if an exemption proceeding, those documents that 
would have been used in preparing Exhibit 1 had an abandonment or 
discontinuance application been filed, or other records, reports, and 
data in the possession of the carrier seeking the exemption that 
provide comparable data. These documents shall be made available during 
regular business hours at a time and place mutually agreeable to the 
parties.
    (e) Review of offers. (1) Abandonment and discontinuance 
applications. The Board will review each offer submitted to determine 
if a financially responsible person has offered assistance. If that 
criterion is met, the Board will issue a decision postponing the 
effective date of the authorization for abandonment or discontinuance. 
This decision will be issued within 15 days of the service of the 
decision granting the application (or within 5 days after the offer is 
filed if the time for filing has been tolled under paragraph 
(c)(1)(i)(C) of this section, or within 5 days after expiration of the 
120 day (4 month) period described in 49 U.S.C. 10904, if that occurs 
first). Under the delegation of authority at Sec. 1011.8, the Director 
of the Office of Proceedings will make the initial determination 
whether offers of financial assistance satisfy the standards of 49 
U.S.C. 10904(d) for purposes of instituting negotiations. Appeals of 
initial decisions determining whether offers of financial assistance 
satisfy the standards of 49 U.S.C. 10904(d) for purposes of instituting 
negotiations will be acted upon by the entire Board pursuant to 49 CFR 
1011.2(a)(7).
    (2) Exemption proceedings. The Board will review each offer 
submitted to determine if a financially responsible person has offered 
assistance. If that criterion is met, the Board will postpone the 
effective date either of the decision granting a petition for 
individual exemption or the notice of exemption under the class 
exemption and partially revoke the exemption or (in the case of a class 
exemption) the notice of exemption to the extent it applies to 49 
U.S.C. 10904. The decision to postpone and partially revoke will be 
issued within 15 days of the service date of a decision granting a 
petition for exemption, or within 35 days of the Federal Register 
publication described in paragraph (b)(2)(ii) of this section (or 
within 5 days after the offer is filed if the time for filing has been 
tolled under paragraph (c)(1)(i)(C) or (c)(2)(ii) (C) or (D) of this 
section). Under the delegation of authority at Sec. 1011.8, the 
Director of the Office of Proceedings will make the initial 
determination whether offers of financial assistance satisfy the 
standards of 49 U.S.C. 10904(d) for purposes of partial revocation and 
institution of negotiations. Appeals of initial decisions determining 
whether offers of financial assistance satisfy the standards of 49 
U.S.C. 10904(d) for purposes of partial revocation and institution of 
negotiations will be acted upon by the entire Board pursuant to 49 CFR 
1011.2(a)(7).
    (f) Agreement on financial assistance. (1) If the carrier and a 
person offering financial assistance enter into a subsidy agreement 
designed to provide for continued rail service, the Board will postpone 
the effective date of the abandonment or discontinuance. If a decision 
granting a petition for individual exemption, or a notice of exemption, 
has been issued, the Board will postpone the effective date of the 
decision or notice of exemption. The postponement will be for as long 
as the subsidy agreement is in effect.
    (2) If the carrier and a person offering to purchase a line enter 
into a purchase agreement which will result in continued rail service, 
the Board will approve the transaction and dismiss the application for 
abandonment or discontinuance, or the petition for exemption or notice 
of exemption. Board approval is not required under 49 U.S.C. 10901, 
10902, or 11323 for the parties to consummate the transaction or for 
the purchaser to institute service and operate as a railroad subject to 
49 U.S.C. 10501(a).
    (g) Failure to reach agreement on financial assistance. (1) If the 
carrier and a financially responsible person fail to agree on the 
amount or terms of subsidy or purchase, either party may request the 
Board to establish the conditions and amount of compensation. This 
request must be filed with the Board within 30 days after the offer is 
made and served concurrently by overnight mail on all parties to the 
proceeding. The request must be accompanied by the appropriate fee, 
codified at 49 CFR 1002.2(f)(26). Replies will be due 5 days later.
    (2) If no agreement is reached within 30 days after the offer of 
purchase or subsidy is made, and no request is made

[[Page 67893]]

to the Board to set the conditions and amount of compensation under 
paragraph (g)(1) of this section, the Board will serve a decision 
vacating the prior decision, which postponed the effective date of the 
decision granting the application, the decision granting the exemption, 
or the notice of exemption and, which, if applicable, partially revoked 
either the decision granting the exemption or (in the case of a class 
exemption) the notice of exemption. The Board will issue the decision 
to vacate within 10 days of the due date for requesting the Board to 
set the conditions and amount of compensation, and the Board will make 
the decision to vacate effective on its date of service.
    (h) Request to establish conditions and compensation for financial 
assistance. (1) If the Board is requested to establish conditions and 
compensation for financial assistance under paragraph (g)(1) of this 
section, the Board will issue a decision within 30 days after the 
request is due.
    (2) If the applicant receives multiple offers of financial 
assistance, requests to establish conditions and compensation will not 
be permitted before the applicant selects the offeror with whom it 
wishes to transact business. (See paragraph (l)(1) of this section.)
    (3) A party requesting the Board to establish conditions and 
compensation for financial assistance must, within the time period set 
forth in paragraph (h)(4) of this section, provide its case in chief, 
including reasons why its estimates are correct and the other 
negotiating party's estimates are incorrect, points of agreement and 
points of disagreement between the negotiating parties, and evidence 
substantiating these allegations. The offeror has the burden of proof 
as to all issues in dispute.
    (4) The offeror must submit all evidence and information supporting 
the terms it seeks within 30 days after the offer is made. The 
carrier's reply to this evidence and support for the terms it seeks are 
due within 35 days after the offer is made. No rebuttal evidence will 
be permitted and evidence and information submitted after these dates 
will be rejected.
    (5) If requested, the Board will determine the amount and terms of 
subsidy based on the avoidable cost of providing continued rail 
transportation, plus a reasonable return on the value of the line. 
Under 49 U.S.C. 10904(f)(4)(B), no subsidy arrangement approved under 
section 10904 shall remain in effect for more than one year unless 
mutually agreed by the parties.
    (6) If requested, the Board will determine the price and other 
terms of sale. The Board will not set a price below the fair market 
value of the line (including, unless otherwise agreed upon by the 
parties, all facilities on the line or portion necessary to provide 
effective transportation services). Fair market value equals 
constitutional minimum value which is the greater of the net 
liquidation value of the line or the going concern value of the line. 
The constitutional minimum value is computed without regard to labor 
protection costs.
    (7) Within 10 days of the service date of the Board's decision, the 
offeror must accept or reject the Board's terms and conditions with a 
written notification to the Board and all parties to the proceeding. If 
the offeror accepts the terms and conditions set by the Board, the 
Board's decision is binding on both parties. If the offeror withdraws 
its offer or does not accept the terms and conditions set by the Board 
with a timely written notification, the Board will serve, within 20 
days after the service date of the Board decision setting the terms and 
conditions, a decision vacating the prior decision, which postponed the 
effective date of either the decision granting the application or 
exemption or the notice of exemption, and which, if applicable, 
partially revoked the exemption or (in the case of a class exemption) 
the notice of exemption (unless other offers are being considered under 
paragraph (l) of this section). The decision to vacate will be 
effective on its date of service.
    (i) Substitution of purchasers and disposition after sale. (1) 
Prior to the consummation of a purchase under this section, an offeror 
may substitute its corporate affiliate as the purchaser under an 
agreement, provided the Board has determined either:
    (i) The original offeror has guaranteed the financial 
responsibility of its affiliate; or
    (ii) The affiliate has demonstrated financial responsibility in its 
own right.
    (2) Except as provided in paragraph (i)(3) of this section, a 
purchaser under this section may not:
    (i) Transfer the line or discontinue service over the line prior to 
the end of the second year after consummation of the original sale 
under these provisions; or
    (ii) Transfer the line, except to the carrier from whom the line 
was purchased, prior to the end of the fifth year after consummation.
    (3) Paragraph (i)(2) of this section does not preclude a purchaser 
under this section from transferring the line to a corporate affiliate 
following the consummation of the original sale. Prior Board approval 
of the affiliate's acquisition and operation, however, is required 
under 49 U.S.C. 10901, 10902, or 11323. A corporate affiliate acquiring 
a line under this section is prohibited from discontinuing service over 
the line or transferring the line to a party that is not a corporate 
affiliate during the time periods prescribed in paragraph (i)(2) of 
this section.
    (j) Discontinuance of subsidy. A subsidizer may discontinue a 
subsidy under this section by giving 60 days notice of the 
discontinuance to the applicant and all other parties to the 
proceeding. Unless another financially responsible party enters into a 
subsidy agreement as beneficial to the carrier as the discontinued 
subsidy agreement in a situation where the 1-year time limit of 49 
U.S.C. 10904(f)(4)(B) has not yet run, the carrier may by filing a 
request with the Board and serving the request on all parties to the 
abandonment or exemption proceeding obtain a decision vacating the 
decision postponing the effective date of either the decision granting 
the application, or petition for individual exemption, or the notice of 
exemption. The Board will issue a decision to vacate within 10 days 
after the filing and service of the request. This decision to vacate 
will be effective on its service date.
    (k) Default on agreement. If any party defaults on its obligations 
under a financial assistance agreement, any other party to the 
agreement may promptly inform the Board of that default. Upon 
notification, the Board will take appropriate action.
    (l) Multiple offers of financial assistance. (1) If an applicant 
receives more than one offer to purchase or subsidize the line from 
offerors found to be financially responsible, the applicant must select 
the offeror from those with whom it wishes to transact business. In 
abandonment and discontinuance application and petition for exemption 
proceedings within 25 days after service of the decision granting the 
application or petition for exemption, and in class exemption 
proceedings within 45 days after the Federal Register publication 
described in paragraph (b)(2)(ii) of this section, the railroad must:
    (i) File a written notification of its selection with the Board; 
and
    (ii) Serve a copy of the notification on all parties to the 
proceeding.
    (2)(i) Abandonment and discontinuance applications and petitions 
for exemption. If the applicant has received multiple offers of 
financial assistance from persons found to be financially responsible 
and has selected the offeror with whom it wishes to transact business, 
the negotiating parties shall complete the sale or subsidy

[[Page 67894]]

agreement or request the Board to establish the conditions and amount 
of compensation within 40 days after the service date of the decision 
granting the application or petition for exemption. A request to the 
Board to set terms and conditions must be served concurrently on all 
parties to the proceeding. If no agreement on subsidy or sale is 
reached within the 40-day period and the Board has not been requested 
to establish the conditions and amount of compensation, any other 
financially responsible offeror may request the Board to establish the 
conditions and amount of compensation. This request must be filed at 
the Board within 50 days of the service date of the decision granting 
the application or petition for exemption and served concurrently on 
all parties to the proceeding. If no other request is filed, the Board 
will issue a decision authorizing abandonment or discontinuance within 
60 days of the service date of the decision granting the application or 
petition for exemption. This decision will be effective on the date of 
service.
    (ii) Class exemption proceedings. If the carrier seeking the 
exemption has received multiple offers of financial assistance from 
persons found to be financially responsible and has selected the 
offeror with whom it wishes to transact business, the negotiating 
parties shall complete the sale or subsidy agreement or request the 
Board to establish the conditions and amount of compensation within 60 
days after the Federal Register publication described in paragraph 
(b)(2)(ii) of this section. A request to the Board to set terms and 
conditions must be served concurrently on all parties to the 
proceeding. If no agreement on subsidy or sale is reached within the 
60-day period and the Board has not been requested to establish the 
conditions and amount of compensation, any other financially 
responsible offeror may request the Board to establish the conditions 
and amount of compensation. This request must be filed at the Board 
within 70 days of the Federal Register publication described in 
paragraph (b)(2)(ii) of this section and served concurrently on all 
parties to the proceeding. If no other request is filed, the Board will 
issue a decision vacating the decision postponing the effective date of 
the notice of exemption within 80 days of the Federal Register 
publication described in paragraph (b)(2)(ii) of this section. The 
decision to vacate will be effective on the date of service.
    (3) If the Board has established the conditions and amount of 
compensation, and the original offer is withdrawn under paragraph 
(h)(7) of this section, any other offeror found to be financially 
responsible may accept the Board's decision within 20 days after the 
service date of the Board's decision setting terms and conditions. If 
the decision is accepted by another such offeror, the Board will 
require the applicant to accept the terms incorporated in the Board's 
decision.
    (m) Additional time for filing. Notwithstanding the deadlines 
previously set forth in part 1152 for filing an offer of financial 
assistance, parties that can show that they would be materially 
prejudiced by having less than the full 4 months for filing an offer of 
financial assistance provided in 49 U.S.C. 10904(c) for application 
proceedings may seek relief under 49 CFR part 1117.


Sec. 1152.28  Public use procedures.

    (a)(1) If the Board finds that the present or future public 
convenience and necessity require or permit abandonment or 
discontinuance, the Board will determine if the involved rail 
properties are appropriate for use for other public purposes.
    (2) A request for a public use condition under 49 U.S.C. 10905 must 
be in writing and set forth:
    (i) The condition sought;
    (ii) The public importance of the condition;
    (iii) The period of time for which the condition would be effective 
(up to the statutory maximum of 180 days); and
    (iv) Justification for the imposition of the time period. A copy of 
the request shall be mailed to the applicant.
    (3) For applications filed under part 1152, subpart C, a request 
for a public use condition must be filed not more than 45 days after 
the application is filed. A decision on the public use request will be 
issued by the Board or the Director of the Office of Proceedings prior 
to the effective date of the abandonment. For abandonment exemptions 
under part 1152, subpart F or exemptions granted on the basis of an 
individual petition for exemption filed under 49 U.S.C. 10502, a 
request for a public use condition must be filed not more than 20 days 
from the date of publication of the notice of exemption in the Federal 
Register in the case of class exemptions under subpart F of this part, 
or not more than 20 days from the date of publication of notice of the 
filing of the petition for individual exemption in the Federal 
Register.
    (b) If the Board finds that the rail properties are appropriate for 
use for other public purposes, the railroad may dispose of the rail 
properties only under the conditions described in the Board's decision. 
The conditions imposed by the Board may include a prohibition against 
the disposal of the rail assets for a period of not more than 180 days 
from the effective date of the decision authorizing the abandonment or 
discontinuance, unless the properties have first been offered, on 
reasonable terms, for sale for public purposes. This period will run 
concurrently with any other postponements. Jurisdiction to impose such 
conditions expires after 180 days from the effective date of the 
decision authorizing the abandonment or discontinuance.


Sec. 1152.29  Prospective use of rights-of-way for interim trail use 
and rail banking.

    (a) If any state, political subdivision, or qualified private 
organization is interested in acquiring or using a right-of-way of a 
rail line proposed to be abandoned for interim trail use and rail 
banking pursuant to 16 U.S.C. 1247(d), it must file a comment or 
otherwise include a request in its filing (in a regulated abandonment 
proceeding) or a petition (in an exemption proceeding) indicating that 
it would like to do so. The comment/request or petition must include:
    (1) A map depicting, and an accurate description of, the right-of-
way, or portion thereof (including mileposts), proposed to be acquired 
or used;
    (2) A statement indicating the user's willingness to assume full 
responsibility: for managing the right-of-way; for any legal liability 
arising out of the use of the right-of-way (unless the user is immune 
from liability, in which case it need only indemnify the railroad 
against any potential liability); and for the payment of all taxes 
assessed against the right-of-way; and
    (3) An acknowledgment that interim trail use is subject to the 
user's continuing to meet its responsibilities described in paragraph 
(a)(2) of this section, and subject to possible future reconstruction 
and reactivation of the right-of-way for rail service. The statement 
must be in the following form:

Statement of Willingness To Assume Financial Responsibility

    In order to establish interim trail use and rail banking under 
16 U.S.C. 1247(d) and 49 CFR 1152.29, __________ (Interim Trail 
User) is willing to assume full responsibility for management of, 
for any legal liability arising out of the transfer or use of 
(unless the user is immune from liability, in which case it need 
only indemnify the railroad against any potential liability), and 
for the payment of any and all taxes that may be levied or assessed 
against the right-of-way owned by __________ (Railroad) and operated 
by __________ (Railroad). The property, known as __________ (Name of 
Branch Line), extends from railroad milepost __________ near 
__________ (Station Name), to railroad

[[Page 67895]]

milepost __________, near __________ (Station name), a distance of 
__________ miles in [County(ies), (State(s)]. The right-of-way is 
part of a line of railroad proposed for abandonment in Docket No. 
STB AB-______ (Sub-No. ______).
    A map of the property depicting the right-of-way is attached.
     ______ (Interim Trail User) acknowledges that use of the right-
of-way is subject to the user's continuing to meet its 
responsibilities described above and subject to possible future 
reconstruction and reactivation of the right-of-way for rail 
service. A copy of this statement is being served on the railroad(s) 
on the same date it is being served on the Board.

    (b)(1) In abandonment application proceedings under 49 U.S.C. 
10903, interim trail use statements are due within the 45-day protest 
and comment period following the date the abandonment application is 
filed. See Sec. 1152.25(c). The applicant carrier's response notifying 
the Board whether and with whom it intends to negotiate a trail use 
agreement is due within 15 days after the close of the protest and 
comment period (i.e., 60 days after the abandonment application is 
filed).
    (i) In every proceeding where a Trails Act request is made, the 
Board will determine whether the Trails Act is applicable.
    (ii) If the Trails Act is not applicable because of failure to 
comply with Sec. 1152.29(a), or is applicable but the carrier either 
does not intend to negotiate an agreement, or does not timely notify 
the Board of its intention to negotiate, a decision on the merits will 
be issued and no Certificate of Interim Trail Use or Abandonment will 
be issued. If the carrier is willing to negotiate an agreement, and the 
public convenience and necessity permit abandonment, the Board will 
issue a CITU.
    (2) In exemption proceedings, a petition containing an interim 
trail use statement is due within 10 days after the date the notice of 
exemption is published in the Federal Register in the case of a class 
exemption and within 20 days after publication in the Federal Register 
of the notice of filing of a petition for exemption in the case of a 
petition for exemption. When an interim trail use comment(s) or 
petition(s) is filed in an exemption proceeding, the railroad's reply 
to the Board (indicating whether and with whom it intends to negotiate 
an agreement) is due within 10 days after the date a petition 
requesting interim trail use is filed.
    (3) Late-filed trail use statements must be supported by a 
statement showing good cause for late filing.
    (c) Regular and NERSA abandonment proceedings. (1) If continued 
rail service does not occur pursuant to 49 U.S.C. 10904 and 
Sec. 1152.27, and a railroad agrees to negotiate an interim trail use/
rail banking agreement, then the Board will issue a CITU to the 
railroad and to the interim trail user for that portion of the right-
of-way to be covered by the agreement. The CITU will: Permit the 
railroad to discontinue service, cancel any applicable tariffs, and 
salvage track and material consistent with interim trail use and rail 
banking, as long as it is consistent with any other Board order, 30 
days after the date it is issued (10 days after issuance in NERSA 
proceedings); and permit the railroad to fully abandon the line if no 
trail use agreement is reached 180 days after it is issued, subject to 
appropriate conditions, including labor protection and environmental 
matters.
    (2) The CITU will indicate that any interim trail use is subject to 
future restoration of rail service, and subject to the user continuing 
to meet the financial obligations for the right-of-way. The CITU will 
also provide that, if the user intends to terminate trail use, it must 
send the Board a copy of the CITU and request that it be vacated on a 
specified date. The Board will reopen the abandonment proceeding, 
vacate the CITU, and issue a decision permitting immediate abandonment 
for the involved portion of the right-of-way. Copies of the decision 
will be sent to:
    (i) The abandonment applicant;
    (ii) The owner of the right-of-way; and
    (iii) The current trail user.
    (3) If an application to construct and operate a rail line over the 
right-of-way is authorized under 49 U.S.C. 10901 and 49 CFR part 1150, 
or exempted under 49 U.S.C. 10502, then the CITU will be vacated 
accordingly.
    (d) Exempt abandonment proceedings. (1) If continued rail service 
does not occur under 49 U.S.C. 10904 and Sec. 1152.27 and a railroad 
agrees to negotiate an interim trail use/rail banking agreement, then 
the Board will issue a Notice of Interim Trail Use or Abandonment 
(NITU) to the railroad and to the interim trail user for the portion of 
the right-of-way to be covered by the agreement. The NITU will: permit 
the railroad to discontinue service, cancel any applicable tariffs, and 
salvage track and materials, consistent with interim trail use and rail 
banking, as long as it is consistent with any other Board order, 30 
days after the date it is issued; and permit the railroad to fully 
abandon the line if no agreement is reached 180 days after it is 
issued, subject to appropriate conditions, including labor protection 
and environmental matters.
    (2) The NITU will indicate that interim trail use is subject to 
future restoration of rail service, and subject to the user continuing 
to meet the financial obligations for the right-of-way. The NITU will 
also provide that, if the user intends to terminate trail use, it must 
send the Board a copy of the NITU and request that it be vacated on a 
specific date. The Board will reopen the exemption proceeding, vacate 
the NITU, and issue a decision reinstating the exemption for that 
portion of the right-of-way. Copies of the decision will be sent to:
    (i) The abandonment exemption applicant;
    (ii) The owner of the right-of-way; and
    (iii) The current trail user.
    (3) If an application to construct and operate a rail line over the 
right-of-way is authorized under 49 U.S.C. 10901 and 49 CFR part 1150, 
or exempted under 49 U.S.C. 10502, then the NITU will be vacated 
accordingly.
    (e)(1) Where late-filed trail use statements are accepted, the 
Director (or designee) will telephone the railroad to determine whether 
abandonment has been consummated and, if not, whether the railroad is 
willing to negotiate an interim trail use agreement. The railroad shall 
confirm, in writing, its response, within 5 days. If abandonment has 
been consummated, the trail use request will be dismissed. If 
abandonment has not been consummated but the railroad refuses to 
negotiate, then trail use will be denied. If abandonment has not been 
consummated and the railroad is willing to negotiate, the abandonment 
proceeding will be reopened, the abandonment decision granting an 
application, petition for exemption or notice of exemption will be 
vacated, and an appropriate CITU or NITU will be issued. The effective 
date of the CITU or NITU will be the same date as the vacated decision 
or notice.
    (2) A railroad that receives authority from the Board to abandon a 
line (in a regulated abandonment proceeding under 49 U.S.C. 10903, or 
by individual or class exemption issued under 49 U.S.C. 10502) shall 
file a notice of consummation with the Board to signify that it has 
exercised the authority granted and fully abandoned the line (e.g., 
discontinued operations, salvaged the track, canceled tariffs, and 
intends that the property be removed from the interstate rail network). 
The notice shall provide the name of the STB proceeding and its docket 
number, a brief description of the line, and a statement that the 
railroad has consummated, or fully exercised, the abandonment authority 
on a certain date. The notice shall be filed within 1 year of the

[[Page 67896]]

service date of the decision permitting the abandonment (assuming that 
the railroad intends to consummate the abandonment). Notices will be 
deemed conclusive on the point of consummation if there are no legal or 
regulatory barriers to consummation (such as outstanding conditions, 
including Trails Act conditions). If, after 1 year from the date of 
service of a decision permitting abandonment, consummation has not been 
effected by the railroad's filing of a notice of consummation, and 
there are no legal or regulatory barriers to consummation, the 
authority to abandon will automatically expire. In that event, a new 
proceeding would have to be instituted if the railroad wants to abandon 
the line. Copies of the railroad's notice of consummation shall be 
filed with the Secretary of the Board. In addition, the notice of 
consummation shall be sent to the State Public Service Commission (or 
equivalent agency) of every state through which the line passes.
    (f)(1) When a trail user intends to terminate trail use and another 
person intends to become a trail user by assuming financial 
responsibility for the right-of-way, then the existing and future trail 
users shall file, jointly:
    (i) A copy of the extant CITU or NITU; and
    (ii) A Statement of Willingness to Assume Financial Responsibility 
by the new trail user.
    (2) The parties shall indicate the date on which responsibility for 
the right-of-way is to transfer to the new trail user. The Board will 
reopen the abandonment or exemption proceeding, vacate the existing 
NITU or CITU; and issue an appropriate replacement NITU or CITU to the 
new trail user.
    (g) In proceedings where a timely trail use statement is filed, but 
due to either the railroad's indication of its unwillingness to 
negotiate interim trail use agreement, or its failure to timely notify 
the Board of its willingness to negotiate, a decision authorizing 
abandonment or an exemption notice or decision is issued instead of a 
CITU or NITU, and subsequently the railroad and trail use proponent 
nevertheless determine to negotiate an interim trail use agreement 
under the Trails Act, then the railroad and trail use proponent must 
file a joint pleading requesting that an appropriate CITU or NITU be 
issued. If the abandonment has not been consummated, the Board will 
reopen the proceeding, vacate the outstanding decision or notice (or 
portion thereof), and issue an appropriate CITU or NITU that will 
permit the parties to negotiate for a period agreed to by the parties 
in their joint filing, but not to exceed 180 days, at the end of which, 
the CITU or NITU will convert into a decision or notice permitting 
abandonment.

Subpart D--Standards for Determining Costs, Revenues, and Return on 
Value


Sec. 1152.30  General.

    (a) Contents of subpart. (1) 49 U.S.C. 10904 directs the Board to 
determine the extent to which the avoidable costs of providing rail 
service plus a reasonable return on the value of the line exceed the 
revenues attributable to the line. This subpart contains the 
methodology for such determinations and the standards necessary for 
application of those terms in the context of a particular proceeding. 
Such data will be used in reaching the Board's findings on the merits 
of an abandonment or discontinuance proceeding and in making the 
necessary financial assistance determinations.
    (2) This subpart also sets forth a method by which the carrier may 
establish its Forecast Year estimates and Estimated Subsidy Payment to 
be included in its application (Sec. 1152.22(d) of this part). 
Furthermore, an offeror of financial assistance may use this method to 
formulate a subsidy offer and/or Proposed Subsidy Payment under 49 
U.S.C. 10904 and Sec. 1152.27 of subpart C of this part.
    (b) Data collection. The owning or operating carrier shall 
establish a system to collect at branch level the data necessary to 
compute the base year data and the final subsidy payment. The 
collection and compilation of such data shall be in accordance with the 
Branch Line Accounting System (49 CFR part 1201).
    (c) Final payment of financial assistance. (1) When a financial 
assistance agreement is concluded, the final payment will be adjusted 
to reflect the actual revenues derived, avoidable costs incurred, and 
value of the properties used in the subsidy year.
    (2) Where an adjustment results in an increase in the Estimated 
Subsidy Payment upon which the financial assistance agreement is based, 
the amount of such increase is limited to 15 percent of the estimated 
payment. However, if the railroad notifies the subsidizer that the 
estimate will be exceeded by more than 15 percent in one of the 
Financial Status Reports (Sec. 1152.37) issued during the first 10 
months of the subsidy year or the increase results from an expense 
preapproved by the subsidizer, the adjusted amount shall be included in 
the final payment.


Sec. 1152.31  Revenue and income attributable to branch lines.

    The revenue attributable to the rail properties is the total of the 
revenues assigned to the branch in accordance with this section, plus 
any subsidy payments that would cease upon discontinuance of service on 
the branch, for the subsidy year. The revenues assigned shall be 
derived from the following accounts:
    (a) Account 101--Freight. The revenue assigned under this account 
shall be the actual revenues, including transit revenues, accruing to 
the railroad, derived from waybills and other source documents, for all 
traffic that:
    (1) Originates and terminates on the branch;
    (2) Originates or terminates on the branch and is handled off the 
branch on the system but not on another carrier; and
    (3) Originates or terminates on the branch and is handled on 
another carrier. All traffic that is received or forwarded through 
interchange at a point on the branch, including ferry operations, shall 
be considered as originating or terminating on the branch. The revenues 
of all other bridge or overhead traffic that will not be retained by 
the carrier shall be attributed to the branch on the ratio of miles 
moved on the branch to miles moved on the system, provided, however, 
that the parties may agree on a mutually acceptable usage charge for 
bridge traffic in lieu of the mileage apportionment.
    (b) Account 104--Switching; Account 105--Water transfers; Account 
106--Demurrage; Account 110--Incidental; Account 121--Joint Facility-
Credit; Account 122--Joint Facility-Debt; Account 506--Revenues from 
Properties Used in Other Than Carrier Operations; Account 510--
Miscellaneous Rent Income; Account 519--Miscellaneous Income. The 
revenues assigned under these accounts shall be the actual revenues 
accruing to the railroad that are directly attributable to the branch.
    (c) Chart For Revenue Accounts.

------------------------------------------------------------------------
           Revenue account title                     Account No.        
------------------------------------------------------------------------
Freight...................................  101                         
Switching.................................  104                         
Water transfers...........................  105                         
Demurrage.................................  106                         
Incidental................................  110                         
Joint facility-credit.....................  121                         
Joint facility-debt.......................  122                         
Revenues from property used in other than   506, 534                    
 carrier operations, less expenses.                                     
Miscellaneous rent income.................  510                         

[[Page 67897]]

                                                                        
Miscellaneous income......................  519                         
------------------------------------------------------------------------

Sec. 1152.32  Calculation of avoidable costs.

    This section defines: which cost elements are eligible for 
inclusion in the calculation of avoidable costs; the conditions under 
which certain cost elements become eligible for inclusion; and the 
basis of apportioning those cost elements which are not assigned to the 
branch on an actual expense basis. The avoidable costs of providing 
freight service on a branch shall be the total of the costs assigned to 
the branch in accordance with this section. The avoidable costs of 
providing freight service on a branch shall be just and reasonable, and 
shall not exceed those necessary for an honest and efficient operation. 
Those expenses apportioned under this section shall be derived from the 
latest Form R-1 Annual Report for Class I railroads filed with the 
Board prior to the conclusion of the subsidy year, and company records 
for all non-Class I railroads, and assigned to the branch according to 
the procedures set forth in Sec. 1152.33 of these regulations. When the 
term ``Actual'' is specified as the basis for assigning an expense, it 
shall mean that the only costs which can be assigned to the account are 
those costs which are incurred solely as a result of the continuation 
of rail freight service on the branch. The accounts in the following 
charts, which list only the ``freight-only'' account numbers, shall 
include the portion of common expenses that have been apportioned to 
freight service.

----------------------------------------------------------------------------------------------------------------
      Operating expense group and accounts         Account No.        Basis of assignment to on-branch costs    
----------------------------------------------------------------------------------------------------------------
(a) Maintenance of way and structures:                                                                          
  (1) Administration: Track:                                                                                    
    Salaries and wages.........................        11-13-02  Actual.                                        
    Materials..................................        21-13-02      Do.                                        
    Purchased services.........................        41-13-02      Do.                                        
    Other expenses.............................        61-13-02      Do.                                        
      Bridges and buildings                                                                                     
    Salaries and wages.........................        11-13-03      Do.                                        
    Materials..................................        21-13-03      Do.                                        
    Purchased services.........................        41-13-03      Do.                                        
    Other expenses.............................        61-13-03      Do.                                        
      Signals                                                                                                   
    Salaries and wages.........................        11-13-04      Do.                                        
    Materials..................................        21-13-04      Do.                                        
    Purchased services.........................        41-13-04      Do.                                        
    Other expenses.............................        61-13-04      Do.                                        
      Communications                                                                                            
    Salaries and wages.........................        11-13-05      Do.                                        
    Materials..................................        21-13-05      Do.                                        
    Purchased services.........................        41-13-05      Do.                                        
    Other expenses.............................        61-13-05      Do.                                        
      Other                                                                                                     
    Salaries and wages.........................        11-13-06      Do.                                        
    Materials..................................        21-13-06      Do.                                        
    Purchased services.........................        41-13-06      Do.                                        
    Other expenses.............................        61-13-06      Do.                                        
  (2) Repair maintenance and other roadway--                                                                    
   running:                                                                                                     
    Salaries and wages.........................        11-11-10      Do.                                        
    Materials..................................        21-11-10      Do.                                        
    Repairs by others--DR......................        39-11-10      Do.                                        
    Repairs for others--CR.....................        40-11-10      Do.                                        
    Purchased services.........................        41-11-10      Do.                                        
    Other expenses.............................        61-11-10      Do.                                        
      Roadway--switching                                                                                        
    Salaries and wages.........................        11-12-10      Do.                                        
    Materials..................................        21-12-10      Do.                                        
    Repairs by others--DR......................        39-12-10      Do.                                        
    Repairs for others--CR.....................        40-12-10      Do.                                        
    Purchased services.........................        41-12-10      Do.                                        
    Other expenses.............................        61-12-10      Do.                                        
      Tunnels and subways--running                                                                              
    Salaries and wages.........................        11-11-11      Do.                                        
    Materials..................................        21-11-11      Do.                                        
    Repairs by others--DR......................        39-11-11      Do.                                        
    Repairs for others--CR.....................        40-11-11      Do.                                        
    Purchased services.........................        41-11-11      Do.                                        
    Other expenses.............................        61-11-11      Do.                                        
      Tunnels and subways--switching                                                                            
    Salaries and wages.........................        11-12-11      Do.                                        
    Materials..................................        21-12-11      Do.                                        
    Repairs by others--DR......................        39-12-11      Do.                                        
    Repairs for others--CR.....................        40-12-11      Do.                                        
    Purchased services.........................        41-12-11      Do.                                        
    Other expenses.............................        61-12-11      Do.                                        
      Bridges and culverts--running                                                                             
    Salaries and wages.........................        11-11-12      Do.                                        
    Materials..................................        21-11-12      Do.                                        

[[Page 67898]]

                                                                                                                
    Repairs by others--DR......................        39-11-12      Do.                                        
    Repairs for others--CR.....................        40-11-12      Do.                                        
    Purchased services.........................        41-11-12      Do.                                        
    Other expenses.............................        61-11-12      Do.                                        
      Bridges and culverts--switching                                                                           
    Salaries and wages.........................        11-12-12      Do.                                        
    Materials..................................        21-12-12      Do.                                        
    Repairs by others--DR......................        39-12-12      Do.                                        
    Repairs for others--CR.....................        40-12-12      Do.                                        
    Purchased services.........................        41-12-12      Do.                                        
    Other expenses.............................        61-12-12      Do.                                        
Ties--running--material........................        21-11-13      Do.                                        
Ties--switching--material......................        21-12-13      Do.                                        
Rails--running--material.......................        21-11-14      Do.                                        
Rails--switching--material.....................        21-12-14      Do.                                        
Other track material--running--material........        21-11-15      Do.                                        
Other track material--switching--material......        21-12-15      Do.                                        
Ballast--running--material.....................        21-11-16      Do.                                        
Ballast--switching--material...................        21-12-16      Do.                                        
      Track laying and surfacing--running                                                                       
    Salaries and wages.........................        11-11-17      Do.                                        
    Materials..................................        21-11-17      Do.                                        
    Repairs by others--DR......................        39-11-17      Do.                                        
    Repairs for others--CR.....................        40-11-17      Do.                                        
    Purchased services.........................        41-11-17      Do.                                        
    Other expenses.............................        61-11-17      Do.                                        
      Track laying and surfacing--switching                                                                     
    Salaries and wages.........................        11-12-17      Do.                                        
    Materials..................................        21-12-17      Do.                                        
    Repairs by others--DR......................        39-12-17      Do.                                        
    Repairs for others--CR.....................        40-12-17      Do.                                        
    Purchased services.........................        41-12-17      Do.                                        
    Other expenses.............................        61-12-17      Do.                                        
      Road property damaged--running                                                                            
    Salaries and wages.........................        11-11-48      Do.                                        
    Materials..................................        21-11-48      Do.                                        
    Repairs by others--DR......................        39-11-48      Do.                                        
    Repairs for others--CR.....................        40-11-48      Do.                                        
    Purchased services.........................        41-11-48      Do.                                        
    Other expenses.............................        61-11-48      Do.                                        
      Road property damaged--switching                                                                          
    Salaries and wages.........................        11-12-48      Do.                                        
    Materials..................................        21-12-48      Do.                                        
    Repairs by others--DR......................        39-12-48      Do.                                        
    Repairs for others--CR.....................        40-12-48      Do.                                        
    Purchased services.........................        41-12-48      Do.                                        
    Other Expenses.............................        61-12-48      Do.                                        
      Road property damaged--other                                                                              
    Salaries and wages.........................         1-13-48      Do.                                        
    Materials..................................        21-13-48      Do.                                        
    Repairs by others--DR......................        39-13-48      Do.                                        
    Repairs for others--CR.....................        40-13-48      Do.                                        
    Purchased services.........................        41-13-48      Do.                                        
    Other expenses.............................        61-13-48      Do.                                        
      Signals and interlockers--running                                                                         
    Salaries and wages.........................        11-11-19      Do.                                        
    Materials..................................        21-11-19      Do.                                        
    Repairs by others--DR......................        39-11-19      Do.                                        
    Repairs for others--CR.....................        40-11-19      Do.                                        
    Purchased services.........................        41-11-19      Do.                                        
    Other expenses.............................        61-11-19      Do.                                        
      Signals and interlockers--switching                                                                       
    Salaries and wages.........................        11-12-19      Do.                                        
    Materials..................................        21-12-19      Do.                                        
    Repairs by others--DR......................        39-12-19      Do.                                        
    Repairs for others--CR.....................        40-12-19      Do.                                        
    Purchased services.........................        41-12-19      Do.                                        
    Other expenses.............................        61-12-19      Do.                                        
      Communications systems                                                                                    
    Salaries and wages.........................        11-13-20      Do.                                        
    Materials..................................        21-13-20      Do.                                        
    Repairs by others--DR......................        39-13-20      Do.                                        
    Repairs for others--CR.....................        40-13-20      Do.                                        
    Purchased services.........................        41-13-20      Do.                                        

[[Page 67899]]

                                                                                                                
    Other expenses.............................        61-13-20      Do.                                        
      Electric power systems                                                                                    
    Salaries and wages.........................        11-13-21      Do.                                        
    Materials..................................        21-13-21      Do.                                        
    Repairs by others--DR......................        39-13-21      Do.                                        
    Repairs for others--CR.....................        40-13-21      Do.                                        
    Purchased services.........................        41-13-21      Do.                                        
    Other expenses.............................        61-13-21      Do.                                        
      Highway grade crossings--running                                                                          
    Salaries and wages.........................        11-11-22      Do.                                        
    Materials..................................        21-11-22      Do.                                        
    Repairs by others--DR......................        39-11-22      Do.                                        
    Repairs for others--CR.....................        40-11-22      Do.                                        
    Purchased services.........................        41-11-22      Do.                                        
    Other expenses.............................        61-11-22      Do.                                        
      Highway grade crossings--switching                                                                        
    Salaries and wages.........................        11-12-22      Do.                                        
    Materials..................................        21-12-22      Do.                                        
    Repairs by others--DR......................        39-12-22      Do.                                        
    Repairs for others--CR.....................        40-12-22      Do.                                        
    Purchased services.........................        41-12-22      Do.                                        
    Other expenses.............................        61-12-22      Do.                                        
      Station and office buildings                                                                              
    Salaries and wages.........................        11-13-23      Do.                                        
    Materials..................................        21-13-23      Do.                                        
    Repairs by others--DR......................        39-13-23      Do.                                        
    Repairs for others--CR.....................        40-13-23      Do.                                        
    Purchased services.........................        41-13-23      Do.                                        
    Other expenses.............................        61-13-23      Do.                                        
      Station buildings--locomotives                                                                            
    Salaries and wages.........................        11-13-24      Do.                                        
    Materials..................................        21-13-24      Do.                                        
    Repairs by others--DR......................        39-13-24      Do.                                        
    Repairs for others--CR.....................        40-13-24      Do.                                        
    Purchased services.........................        41-13-24      Do.                                        
    Other expenses.............................        61-13-24      Do.                                        
      Shop buildings--freight cars                                                                              
    Salaries and wages.........................        11-13-25      Do.                                        
    Materials..................................        21-13-25      Do.                                        
    Repairs by others--DR......................        39-13-25      Do.                                        
    Repairs for others--CR.....................        40-13-25      Do.                                        
    Purchased services.........................        41-13-25      Do.                                        
    Other expenses.............................        61-13-25      Do.                                        
      Shop buildings--other equipment                                                                           
    Salaries and wages.........................        11-13-26      Do.                                        
    Materials..................................        21-13-26      Do.                                        
    Repairs by others--DR......................        39-13-26      Do.                                        
    Repairs for others--CR.....................        40-13-26      Do.                                        
    Purchased services.........................        41-13-26      Do.                                        
    Other expenses.............................        61-13-26      Do.                                        
      Locomotive servicing facilities                                                                           
    Salaries and wages.........................        11-13-27      Do.                                        
    Materials..................................        21-13-27      Do.                                        
    Repairs by others--DR......................        39-13-27      Do.                                        
    Repairs for others--CR.....................        40-13-27      Do.                                        
    Purchased services.........................        41-13-27      Do.                                        
    Other expenses.............................        61-13-27      Do.                                        
      Miscellaneous buildings and structures                                                                    
    Salaries and wages.........................        11-13-28      Do.                                        
    Materials..................................        21-13-28      Do.                                        
    Repairs by others--DR......................        39-13-28      Do.                                        
    Repairs for others--CR.....................        40-13-28      Do.                                        
    Purchased services.........................        41-13-28      Do.                                        
    Other expenses.............................        61-13-28      Do.                                        
      Coal terminals                                                                                            
    Salaries and wages.........................        11-13-29      Do.                                        
    Materials..................................        21-13-29      Do.                                        
    Repairs by others--DR......................        39-13-29      Do.                                        
    Repairs for others--CR.....................        40-13-29      Do.                                        
    Purchased services.........................        41-13-29      Do.                                        
    Other expenses.............................        61-13-29      Do.                                        
      Ore terminals                                                                                             
    Salaries and wages.........................        11-13-30      Do.                                        
    Materials..................................        21-13-30      Do.                                        

[[Page 67900]]

                                                                                                                
    Repairs by others--DR......................        39-13-30      Do.                                        
    Repairs for others--CR.....................        40-13-30      Do.                                        
    Purchased services.........................        41-13-30      Do.                                        
    Other expenses.............................        61-13-30      Do.                                        
      TOFC/COFC terminals                                                                                       
    Salaries and wages.........................        11-13-31      Do.                                        
    Materials..................................        21-13-31      Do.                                        
    Repairs by others--DR......................        39-13-31      Do.                                        
    Repairs for others--CR.....................        40-13-31      Do.                                        
    Purchased services.........................        41-13-21      Do.                                        
    Other expenses.............................        61-13-31      Do.                                        
      Other marine terminals                                                                                    
    Salaries and wages.........................        11-13-32      Do.                                        
    Materials..................................        21-13-32      Do.                                        
    Repairs by others--DR......................        39-13-32      Do.                                        
    Repairs for others--CR.....................        40-13-32      Do.                                        
    Purchased services.........................        41-13-32      Do.                                        
    Other expenses.............................        61-13-32      Do.                                        
      Motor vehicle loading and distribution                                                                    
       facilities                                                                                               
    Salaries and wages.........................        11-13-33      Do.                                        
    Materials..................................        21-13-33      Do.                                        
    Repairs by others--DR......................        39-13-33      Do.                                        
    Repairs for others--CR.....................        40-13-33      Do.                                        
    Purchased services.........................        41-13-33      Do.                                        
    Other expenses.............................        61-13-33      Do.                                        
      Facilities for other specialized service                                                                  
       operations                                                                                               
    Salaries and wages.........................        11-13-35      Do.                                        
    Materials..................................        21-13-35      Do.                                        
    Repairs by others--DR......................        39-13-35      Do.                                        
    Repairs for others--CR.....................        40-13-35      Do.                                        
    Purchased services.........................        41-13-35      Do.                                        
    Other expenses.............................        61-13-35      Do.                                        
      Roadway machines                                                                                          
    Salaries and wages.........................        11-13-36  Daily repair costs per GMA, for each type of   
                                                                  machine used on the branch line sec.          
                                                                  1152.33(a)(1).                                
    Materials..................................        21-13-36      Do.                                        
    Repairs by others--DR......................        39-13-36      Do.                                        
    Repairs for others--CR.....................        40-13-36      Do.                                        
    Purchased services.........................        41-13-36      Do.                                        
    Other expenses.............................        61-13-36      Do.                                        
      Small tools and supplies                                                                                  
    Other expenses.............................        11-13-37  Assign supplies on the daily costs per GMA, for
                                                                  each type of machine used on the branch; small
                                                                  tool assign to maintenance of way 11- 11/12-10
                                                                  through 17, and 48, sec. 1152.33(a)(2).       
    Materials..................................        21-13-37      Do.                                        
    Repairs by others--DR......................        39-13-37      Do.                                        
    Repairs for others--CR.....................        40-13-37      Do.                                        
    Purchased services.........................        41-13-37      Do.                                        
    Other expenses.............................        61-13-37      Do.                                        
      Snow removal                                                                                              
    Salaries and wages.........................        11-13-38  Actual.                                        
    Materials..................................        21-13-38      Do.                                        
    Repairs by others--DR......................        39-13-38      Do.                                        
    Repairs for others--CR.....................        40-13-38      Do.                                        
    Purchased Services.........................        41-13-38      Do.                                        
    Other expenses.............................        61-13-38      Do.                                        
Fringe benefits--running.......................        12-11-00  11-11-XX, sec. 1152.33(a)(3)(i).               
Fringe benefits--switching.....................        12-12-00  11-12-XX, sec. 1152.33(a)(3)(ii).              
Fringe benefits--other.........................        12-13-00  11-13-XX, sec. 1152.33(a)(3)(iii).             
      Casualties and insurance--running                                                                         
    Other casualties...........................        52-11-00  Actual.                                        
    Insurance..................................        53-11-00      Do.                                        
      Casualties and insurance--switching                                                                       
    Other casualties...........................        52-12-00      Do.                                        
    Insurance..................................        53-12-00      Do.                                        
Lease rentals--debit--running..................        31-11-00      Do.                                        
Lease rentals--debit--switching................        31-12-00      Do.                                        
Lease rentals--debit--other....................        31-13-00      Do.                                        
Lease rentals--credit--running.................        32-11-00      Do.                                        
Lease rentals--credit--switching...............        32-12-00      Do.                                        
Lease rentals--credit--other...................        32-13-00      Do.                                        
Joint facility rent--debit--running............        33-11-00      Do.                                        
Joint facility rent--debit--switching..........        33-12-00      Do.                                        

[[Page 67901]]

                                                                                                                
      Casualties and insurance--other                                                                           
    Other casualties...........................        52-13-00      Do.                                        
    Insurance..................................        53-13-00      Do.                                        
Joint facility--debit--other...................        33-13-00      Do.                                        
Joint facility rent--credit--running...........        34-11-00      Do.                                        
Joint facility rent--credit--switching.........        34-12-00      Do.                                        
Joint facility rent--credit--other.............        34-13-00      Do.                                        
Other rents--debit--running....................        35-11-00      Do.                                        
Other rents--debit--switching..................        35-12-00      Do.                                        
Other rents--debit--other......................        35-13-00      Do.                                        
Other rents--credit--running...................        36-11-00      Do.                                        
Other rents--credit--switching.................        36-12-00      Do.                                        
Other rents--credit--other.....................        36-13-00      Do.                                        
Depreciation--running..........................        62-11-00      Do.                                        
Depreciation--switching........................        62-12-00      Do.                                        
Depreciation--other............................        62-13-00      Do.                                        
Joint facility--debit--running.................        37-11-00      Do.                                        
Joint facility--debit--switching...............        37-12-00      Do.                                        
Joint facility--debit--other...................        37-13-00      Do.                                        
Joint facility--credit--running................        38-11-00      Do.                                        
Joint facility--credit--switching..............        38-12-00      Do.                                        
Joint facility--credit--other..................        38-13-00      Do.                                        
      Dismantling retired road property--                                                                       
       running                                                                                                  
    Salaries and wages.........................        11-11-39      Do.                                        
    Materials..................................        21-11-39      Do.                                        
    Purchased services.........................        41-11-39      Do.                                        
    Other expenses.............................        61-11-39      Do.                                        
      Dismantling retired road property--                                                                       
       switching                                                                                                
    Salaries and wages.........................        11-12-39      Do.                                        
    Materials..................................        21-12-39      Do.                                        
    Purchased services.........................        41-12-39      Do.                                        
    Other expenses.............................        61-12-39      Do.                                        
      Dismantling retired road property--other                                                                  
    Salaries and wages.........................        11-13-39      Do.                                        
    Materials..................................        21-13-39      Do.                                        
    Purchased services.........................        41-13-39      Do.                                        
    Other expenses.............................        61-13-39      Do.                                        
      Other--running                                                                                            
    Salaries and wages.........................        11-11-99      Do.                                        
    Materials..................................        21-11-99      Do.                                        
    Purchased services.........................        41-11-99      Do.                                        
    Other expenses.............................        61-11-99      Do.                                        
      Other--switching                                                                                          
    Salaries and wages.........................        11-12-99      Do.                                        
    Materials..................................        21-12-99      Do.                                        
    Purchased Services.........................        41-12-99      Do.                                        
    Other Expenses.............................        61-12-99      Do.                                        
      Other--other                                                                                              
    Salaries and wages.........................        11-13-99    Do.                                          
    Materials..................................        21-13-99    Do.                                          
    Purchased services.........................        41-13-99    Do.                                          
    Other expenses.............................        61-13-99    Do.                                          
(b) Maintenance of equipment:                                                                                   
  (1) Locomotives: Administration                                                                               
    Salaries and wages.........................        11-21-01    Do.                                          
    Materials..................................        21-21-01    Do.                                          
    Purchased services.........................        41-21-01    Do.                                          
    Other expenses.............................        61-21-01    Do.                                          
      Repairs and maintenance                                                                                   
    Salaries and wages.........................        11-21-41  Road diesel and road electric locomotive gross 
                                                                  ton miles. Yard diesel and yard electric      
                                                                  locomotive unit hours, Sec.  1152.33(b)(1).   
    Materials..................................        21-21-41    Do.                                          
    Repairs by others--DR......................        39-21-41    Do.                                          
    Repairs for others--CR.....................        40-21-41    Do.                                          
    Purchased services.........................        41-21-41    Do.                                          
    Other expenses.............................        61-21-41    Do.                                          
      Machinery repair                                                                                          
    Salaries and wages.........................        11-21-40  Actual.                                        
    Materials..................................        21-21-40    Do.                                          
    Repairs by others--DR......................        39-21-40    Do.                                          
    Repairs for others--CR.....................        40-21-40    Do.                                          
    Purchased services.........................        41-21-40    Do.                                          
    Other expenses.............................        61-21-40    Do.                                          

[[Page 67902]]

                                                                                                                
      Equipment damaged                                                                                         
    Salaries and wages.........................        11-21-48    Do.                                          
    Materials..................................        21-21-48    Do.                                          
    Repairs by others--DR......................        39-21-48    Do.                                          
    Repairs for others--CR.....................        40-21-48    Do.                                          
    Purchased services.........................        41-21-48    Do.                                          
    Other expenses.............................        61-21-48    Do.                                          
      Equipment damaged                                                                                         
Fringe benefits................................        12-21-00  11-21-XX, sec. 1152.33(b)(3)(i).               
      Other casualties and insurance                                                                            
    Other casualties...........................        52-21-00  Actual.                                        
    Insurance..................................        53-21-00    Do.                                          
Lease rentals--debit...........................        31-21-00    Do.                                          
Lease rentals--credit..........................        32-21-00    Do.                                          
Joint facility rent--debit.....................        33-21-00    Do.                                          
Joint facility rent--credit....................        34-21-00    Do.                                          
Other rents--debit.............................        35-21-00    Do.                                          
Other rents--credit............................        36-21-00    Do.                                          
Joint facility--debit..........................        37-21-00    Do.                                          
Joint facility--credit.........................        38-21-00    Do.                                          
Depreciation...................................        62-21-00  All locomotives, locomotive unit hours, sec.   
                                                                  1152.33(b)(2).                                
      Dismantling retired property                                                                              
    Salaries and wages.........................        11-21-39  Actual.                                        
    Materials..................................        21-21-39    Do.                                          
    Purchased services.........................        41-21-39    Do.                                          
    Other expenses.............................        61-21-39    Do.                                          
      Other                                                                                                     
    Salaries and wages.........................        11-21-99    Do.                                          
    Materials..................................        21-21-99    Do.                                          
    Purchased services.........................        41-21-99    Do.                                          
    Other expenses.............................        61-21-99    Do.                                          
  (2) Freight cars: Administration:                                                                             
    Salaries and wages.........................        11-22-01    Do.                                          
    Materials..................................        21-22-01    Do.                                          
    Purchased services.........................        41-22-01    Do.                                          
    Other expenses.............................        61-22-01    Do.                                          
      Machinery repair                                                                                          
    Salaries and wages.........................        11-22-40    Do.                                          
    Materials..................................        21-22-40    Do.                                          
    Repairs by others--DR......................        39-22-40    Do.                                          
    Repairs for others--CR.....................        40-22-40    Do.                                          
    Purchased services.........................        41-22-40    Do.                                          
    Other expenses.............................        61-22-40    Do.                                          
      Equipment damage                                                                                          
    Salaries and wages.........................        11-22-48    Do.                                          
    Materials..................................        21-22-48    Do.                                          
    Repairs by others--DR......................        39-22-48    Do.                                          
    Repairs for others--CR.....................        40-22-48    Do.                                          
    Purchased services.........................        41-22-48    Do.                                          
    Other expenses.............................        61-22-48    Do.                                          
Fringe benefits................................        12-22-00  11-22-XX, sec. 1152.33-(b)(3)(iii).            
      Other casualties and insurance                                                                            
    Other casualties...........................        52-22-00  Actual.                                        
    Insurance..................................        53-22-00    Do.                                          
Joint facility rent--DR........................        33-22-00    Do.                                          
Joint facility rent--CR........................        34-22-00    Do.                                          
Joint facility--DR.............................        37-22-00    Do.                                          
Joint facility--CR.............................        38-22-00    Do.                                          
      Dismantling retired property                                                                              
    Salaries and wages.........................        11-22-39    Do.                                          
    Materials..................................        21-22-39    Do.                                          
    Purchased services.........................        41-22-39    Do.                                          
    Other expenses.............................        61-22-39    Do.                                          
      Other                                                                                                     
    Salaries and wages.........................        11-22-99    Do.                                          
    Materials..................................        21-22-99    Do.                                          
    Purchased services.........................        41-22-99    Do.                                          
    Other expenses.............................        61-22-99    Do.                                          
Freight car costs per day and per mile:                                                                         
      Repair and maintenance                                                                                    
    Salaries and wages.........................        11-22-42  These accounts are used to develop the cost per
                                                                  car day and per car mile for each type of car,
                                                                  sec. 1152.32(g).                              
    Materials..................................        21-22-42    Do.                                          
    Repairs by others--DR......................        39-22-42    Do.                                          

[[Page 67903]]

                                                                                                                
    Repairs for others--CR.....................        40-22-42    Do.                                          
    Purchased services.........................        41-22-42    Do.                                          
    Other expenses.............................        61-22-42    Do.                                          
Lease rentals--DR..............................        31-22-00  ...............................................
Lease rentals--CR..............................        32-22-00  ...............................................
Depreciation...................................        62-22-00  ...............................................
Other rents--DR................................        35-22-00  ...............................................
Other rents--CR................................        36-22-00  ...............................................
  (3) Other equipment: Administration                                                                           
    Salaries and wages.........................        11-23-01  Actual.                                        
    Materials..................................        21-23-01    Do.                                          
    Purchased services.........................        41-23-01    Do.                                          
    Other expenses.............................        61-23-01    Do.                                          
Repair and maintenance: Trucks, trailers and                                                                    
 containers--revenue service                                                                                    
    Salaries and wages.........................        11-23-43    Do.                                          
    Materials..................................        21-23-43    Do.                                          
    Repairs by others--DR......................        39-23-43    Do.                                          
    Repairs for others--CR.....................        40-23-43    Do.                                          
    Purchased services.........................        41-23-43    Do.                                          
    Other expenses.............................        61-23-43    Do.                                          
      Floating equipment--revenue service                                                                       
    Salaries and wages.........................        11-23-44    Do.                                          
    Materials..................................        21-23-44    Do.                                          
    Repairs by others--DR......................        39-23-44    Do.                                          
    Repairs for others--CR.....................        40-23-44    Do.                                          
    Purchased services.........................        41-23-44    Do.                                          
    Other expenses.............................        61-23-44    Do.                                          
      Computer and data processing                                                                              
    Salaries and wages.........................        11-23-46    Do.                                          
    Materials..................................        21-23-46      Do.                                        
    Repairs by others--DR......................        39-23-46      Do.                                        
    Repairs for others--CR.....................        40-23-46      Do.                                        
    Purchased services.........................        41-23-46      Do.                                        
    Other expenses.............................        61-23-46      Do.                                        
      Machinery                                                                                                 
    Salaries and wages.........................        11-23-40      Do.                                        
    Materials..................................        21-23-40      Do.                                        
    Repairs by others--DR......................        39-23-40      Do.                                        
    Repairs for others--CR.....................        40-23-40      Do.                                        
    Purchased services.........................        41-23-40      Do.                                        
    Other expenses.............................        61-23-40      Do.                                        
      Work and other non revenue equipment                                                                      
    Salaries and wages.........................        11-23-47      Do.                                        
    Materials..................................        21-23-47      Do.                                        
    Repairs by others--DR......................        39-23-47      Do.                                        
    Repairs for others--CR.....................        40-23-47      Do.                                        
    Purchased services.........................        41-23-47      Do.                                        
    Other expenses.............................        61-23-47      Do.                                        
      Equipment damaged                                                                                         
    Salaries and wages.........................        11-23-48      Do.                                        
    Materials..................................        21-23-48      Do.                                        
    Repairs by others--DR......................        39-23-48      Do.                                        
    Repairs for others--CR.....................        40-23-38      Do.                                        
    Purchased services.........................        41-23-48      Do.                                        
    Other expenses.............................        61-23-48      Do.                                        
      Equipment damaged                                                                                         
Fringe benefits................................        12-23-00  11-23-XX, sec. 1152.33(b)(3)(ii).              
      Other casualties and insurance                                                                            
    Other casualties...........................        52-23-00  Actual.                                        
      Insurance................................        53-23-00      Do.                                        
    Lease rentals--DR..........................        31-23-00      Do.                                        
    Lease rentals--CR..........................        32-23-00      Do.                                        
    Joint facility rent--DR....................        33-23-00      Do.                                        
    Joint facility rent--CR....................        34-23-00      Do.                                        
    Other rents--DR............................        35-23-00      Do.                                        
    Other rents--CR............................        36-23-00      Do.                                        
    Depreciation...............................        62-23-00      Do.                                        
    Joint facility--DR.........................        37-23-00      Do.                                        
    Joint facility--CR.........................        38-23-00      Do.                                        
      Dismantling retired property                                                                              
    Salaries and wages.........................        11-23-39      Do.                                        
    Materials..................................        21-23-39      Do.                                        
    Purchased services.........................        41-23-39      Do.                                        

[[Page 67904]]

                                                                                                                
    Other expenses.............................        61-23-39      Do.                                        
      Other                                                                                                     
    Salaries and wages.........................        11-23-99      Do.                                        
    Materials..................................        21-23-99      Do.                                        
    Purchased services.........................        41-23-99      Do.                                        
    Other expenses.............................        61-23-99      Do.                                        
(c) Transportation:                                                                                             
  (1) Train operations: Administration:                                                                         
    Salaries and wages.........................        11-31-01      Do.                                        
    Materials..................................        21-31-01      Do.                                        
    Purchased services.........................        41-31-01      Do.                                        
    Other expenses.............................        61-31-01      Do.                                        
      Engine crews                                                                                              
    Salaries and wages.........................        11-31-56      Do.                                        
    Materials..................................        21-31-56  Train hours, sec. 1152.33(c)(1)(i).            
    Purchased services.........................        41-31-56  Actual.                                        
    Other expenses.............................        61-31-56      Do.                                        
      Train crews                                                                                               
    Salaries and wages.........................        11-31-57      Do.                                        
    Materials..................................        21-31-57  Train hours, sec. 1152.33(c)(1)(i).            
    Purchased services.........................        41-31-57  Actual.                                        
    Other expenses.............................        61-31-57      Do.                                        
      Dispatching trains                                                                                        
    Salaries and wages.........................        11-31-58      Do.                                        
    Materials..................................        21-31-58      Do.                                        
    Purchased services.........................        41-31-58      Do.                                        
    Other expenses.............................        61-31-58      Do.                                        
      Operating signals and interlockers                                                                        
    Salaries and wages.........................        11-31-59      Do.                                        
    Materials..................................        21-31-59      Do.                                        
    Purchased services.........................        41-31-59      Do.                                        
    Other expenses.............................        61-31-59      Do.                                        
      Operating drawbridges                                                                                     
    Salaries and wages.........................        11-31-60      Do.                                        
    Materials..................................        21-31-60      Do.                                        
    Purchased services.........................        41-31-60      Do.                                        
    Other expenses.............................        61-31-60      Do.                                        
      Highway crossing protection                                                                               
    Salaries and wages.........................        11-31-61      Do.                                        
    Materials..................................        21-31-61      Do.                                        
    Purchased services.........................        41-31-61      Do.                                        
    Other expenses.............................        61-31-61      Do.                                        
      Train and inspection and lubrication                                                                      
    Salaries and wages.........................        11-31-62  Train hours, Sec. 1152.33(c)(1)(i).            
    Materials..................................        21-31-62      Do.                                        
    Purchased services.........................        41-31-62  Actual.                                        
    Other expenses.............................        61-31-62      Do.                                        
      Locomotive fuel                                                                                           
    Salaries and wages.........................        11-31-67  Diesel locomotive unit hours, Sec.             
                                                                  1152.33(c)(1)(ii).                            
    Materials..................................        21-31-67      Do.                                        
    Purchased services.........................        41-31-67      Do.                                        
    Other expenses.............................        61-31-67      Do.                                        
      Electric power purchased or produced for                                                                  
       motive power                                                                                             
    Salaries and wages.........................        11-31-68  Electric locomotive unit hours, sec.           
                                                                  1152.33(c)(1)(iii).                           
    Materials..................................        21-31-68      Do.                                        
    Purchased services.........................        41-31-68      Do.                                        
    Other expenses.............................        61-31-68      Do.                                        
      Servicing locomotives                                                                                     
    Salaries and wages.........................        11-31-69  Locomotive unit miles, sec. 1152.33(c)(1)(iv). 
    Materials..................................        21-31-69      Do.                                        
    Purchased services.........................        41-31-69      Do.                                        
    Other expenses.............................        61-31-69      Do.                                        
Freight lost or damaged--solely related........        51-31-00  Actual.                                        
      Clearing wrecks                                                                                           
    Salaries and wages.........................        11-31-63      Do.                                        
    Materials..................................        21-31-63      Do.                                        
    Purchased services.........................        41-31-63      Do.                                        
    Other expenses.............................        61-31-63      Do.                                        
Fringe benefits................................        12-31-00      11-31-XX, sec. 1152.33 (c)(4)(i).          
      Other casualties and insurance                                                                            
    Other casualties...........................        52-31-00  Actual.                                        
    Insurance..................................        53-31-00      Do.                                        
    Joint facility--DR.........................        37-31-00      Do.                                        
    Joint facility--CR.........................        38-31-00      Do.                                        

[[Page 67905]]

                                                                                                                
      Other                                                                                                     
    Salaries and wages.........................        11-31-99      Do.                                        
    Materials..................................        21-31-99      Do.                                        
    Purchased services.........................        41-31-99      Do.                                        
    Other expenses.............................        61-31-99      Do.                                        
  (2) Yard operations: Administration:                                                                          
    Salaries and wages.........................        11-32-01      Do.                                        
    Materials..................................        21-32-01      Do.                                        
    Purchased services.........................        41-32-01      Do.                                        
    Other expenses.............................        61-32-01      Do.                                        
      Switch crews                                                                                              
    Salaries and wages.........................        11-32-64      Do.                                        
    Materials..................................        21-32-64  Locomotive unit hours, sec. 1152.33(c)(2)(i)   
    Purchased services.........................        41-32-64  Actual.                                        
    Other expenses.............................        61-32-64      Do.                                        
      Controlling operations                                                                                    
    Salaries and wages.........................        11-32-65      Do.                                        
    Materials..................................        21-32-65      Do.                                        
    Purchased services.........................        41-32-65      Do.                                        
    Other expenses.............................        61-32-65      Do.                                        
      Yard and terminal clerical                                                                                
    Salaries and wages.........................        11-32-66      Do.                                        
    Materials..................................        21-32-66      Do.                                        
    Purchased services.........................        41-32-66      Do.                                        
    Other expenses.............................        61-32-66      Do.                                        
      Operating switches, signals, retarders                                                                    
       and humps                                                                                                
    Salaries and wages.........................        11-32-59      Do.                                        
    Materials..................................        21-32-59      Do.                                        
    Purchased services.........................        41-32-59      Do.                                        
    Other expenses.............................        61-32-59      Do.                                        
      Locomotive fuel                                                                                           
    Salaries and wages.........................        11-32-67  Dieselloco motive unit hours, sec.             
                                                                  1152.33(c)(2)(ii)                             
    Materials..................................        21-32-67      Do.                                        
    Purchased services.........................        41-32-67      Do.                                        
    Other expenses.............................        61-32-67      Do.                                        
      Electric power purchased or produced for                                                                  
       motive power                                                                                             
    Salaries and wages.........................        11-32-68  Electric locomotive unit hours, sec.           
                                                                  1152.33(c)(2)(iii).                           
    Materials..................................        21-32-68      Do.                                        
    Purchased services.........................        41-32-68      Do.                                        
    Other expenses.............................        61-32-68      Do.                                        
      Servicing locomotives                                                                                     
    Salaries and wages.........................        11-32-69  Locomotive unit hours, sec. 1152.33(c)(2)(i).  
    Materials..................................        21-32-69      Do.                                        
    Purchased services.........................        41-32-69      Do.                                        
    Other expenses.............................        61-32-69      Do.                                        
Freight lost or damaged--solely related........        51-32-00  Actual.                                        
      Clearing wrecks                                                                                           
    Salaries and wages.........................        11-32-63      Do.                                        
    Materials..................................        21-32-63      Do.                                        
    Purchased services.........................        41-32-63      Do.                                        
    Other expenses.............................        61-32-63      Do.                                        
    Fringe benefits............................        12-32-00  11-32-XX, sec. 1152.33(c)(4)(ii).              
      Other casualties and insurance                                                                            
    Other casualties...........................        52-32-00  Actual.                                        
    Insurance..................................        53-32-00      Do.                                        
    Joint facility--DR.........................        37-32-00      Do.                                        
    Joint facility--CR.........................        38-32-00      Do.                                        
      Other                                                                                                     
    Salaries and wages.........................        11-32-99      Do.                                        
    Materials..................................        21-32-99      Do.                                        
    Purchased services.........................        41-32-99      Do.                                        
    Other expenses.............................        61-32-99      Do.                                        
  (3) Train and yard operations common:                                                                         
      Cleaning car interiors                                                                                    
    Salaries and wages.........................        11-33-70      Do.                                        
    Materials..................................        21-33-70      Do.                                        
    Purchased services.........................        41-33-70      Do.                                        
      Adjusting and transferring loads                                                                          
    Salaries and wages.........................        11-33-71      Do.                                        
    Materials..................................        21-33-71      Do.                                        
    Purchased services.........................        41-33-71      Do.                                        
      Carloading devices and grain doors                                                                        
    Salaries and wages.........................        11-33-72      Do.                                        
    Materials..................................        21-33-72      Do.                                        

[[Page 67906]]

                                                                                                                
    Purchased services.........................        41-33-72      Do.                                        
Freight lost or damaged--all other.............        51-33-00      Do.                                        
Fringe benefits................................        12-33-00  11-33-XX, sec. 1152.33(c)(4)(iii).             
  (4) Specialized service operations:                                                                           
   Administration:                                                                                              
    Salaries and wages.........................        11-34-01  Actual.                                        
    Materials..................................        21-34-01      Do.                                        
    Purchased services.........................        41-34-01      Do.                                        
    Other expenses.............................        61-34-01      Do.                                        
      Pick-up and delivery, marine line haul,                                                                   
       and rail substitute service                                                                              
    Salaries and wages.........................        11-34-73      Do.                                        
    Materials..................................        21-34-73      Do.                                        
    Purchased services.........................        41-34-73      Do.                                        
    Other expenses.............................        61-34-73      Do.                                        
      Loading and unloading and local marine                                                                    
    Salaries and wages.........................        11-34-74      Do.                                        
    Materials..................................        21-34-74      Do.                                        
    Purchased services.........................        41-34-74      Do.                                        
    Other expenses.............................        61-34-74      Do.                                        
      Protective services                                                                                       
    Salaries and wages.........................        11-34-75      Do.                                        
    Materials..................................        21-34-75      Do.                                        
    Purchased services.........................        41-34-75      Do.                                        
    Other expenses.............................        61-34-75      Do.                                        
Freight lost or damaged--Solely related........        51-34-00      Do.                                        
Fringe benefits................................        12-34-00  11-34-XX, sec. 1152.33(c)(4)(iv).              
      Casualties and insurance                                                                                  
    Other casualties...........................        52-34-00  Actual.                                        
    Insurance..................................        53-34-00      Do.                                        
    Joint facility--DR.........................        37-34-00      Do.                                        
    Joint facility--CR.........................        38-34-00      Do.                                        
      Other                                                                                                     
    Salaries and wages.........................        11-34-99      Do.                                        
    Materials..................................        21-34-99      Do.                                        
    Purchased services.........................        41-34-99      Do.                                        
    Other expenses.............................        61-34-99      Do.                                        
  (5) Administrative support operations:                                                                        
   Administration :                                                                                             
    Salaries and wages.........................        11-35-01      Do.                                        
    Materials..................................        21-35-01      Do.                                        
    Purchased services.........................        41-35-01      Do.                                        
    Other expenses.............................        61-35-01      Do.                                        
      Employees performing clerical and                                                                         
       accounting functions                                                                                     
    Salaries and wages.........................        11-35-76      Do.                                        
    Materials..................................        21-35-76      Do.                                        
    Purchased services.........................        41-35-76      Do.                                        
    Other expenses.............................        61-35-76      Do.                                        
      Communication systems operation                                                                           
    Salaries and wages.........................        11-35-77      Do.                                        
    Materials..................................        21-35-77      Do.                                        
    Purchased services.........................        41-35-77      Do.                                        
    Other expenses.............................        61-35-77      Do.                                        
      Loss and damage claims processing                                                                         
    Salaries and wages.........................        11-35-78  Number of claims, sec. 1152.33(c)(3)(i).       
    Materials..................................        21-35-78      Do.                                        
    Purchased services.........................        41-35-78      Do.                                        
    Other expenses.............................        61-35-78      Do.                                        
Fringe benefits................................        12-35-00  11-35-XX. sec. 1152.33(c)(4)(v).               
Joint facility--DR.............................        37-35-00  Actual.                                        
Joint facility--CR.............................        38-35-00      Do.                                        
    Casualties and insurance...................                                                                 
    Other casualties...........................        52-35-00      Do.                                        
    Insurance..................................        53-35-00      Do.                                        
      Other                                                                                                     
    Salaries and wages.........................        11-35-99      Do.                                        
    Materials..................................        21-35-99      Do.                                        
    Purchased services.........................        41-35-99      Do.                                        
    Other expenses.............................        61-35-99      Do.                                        
(d) General Administrative Officers--general                                                                    
 administration:                                                                                                
    Salaries and wages.........................        11-61-01      Do.                                        
    Materials..................................        21-61-01      Do.                                        
    Purchased services.........................        41-61-01      Do.                                        
    Other expenses.............................        61-61-01      Do.                                        
      Accounting, auditing and finance                                                                          
    Salaries and wages.........................        11-61-86      Do.                                        

[[Page 67907]]

                                                                                                                
    Materials..................................        21-61-86      Do.                                        
    Purchased services.........................        41-61-86      Do.                                        
    Other expenses.............................        61-61-86      Do.                                        
      Management services and data processing                                                                   
    Salaries and wages.........................        11-61-87      Do.                                        
    Materials..................................        21-61-87      Do.                                        
    Purchased services.........................        41-61-87      Do.                                        
    Other expenses.............................        61-61-87      Do.                                        
      Marketing:                                                                                                
    Salaries and wages.........................        11-61-88      Do.                                        
    Materials..................................        21-61-88      Do.                                        
    Purchased services.........................        41-61-88      Do.                                        
    Other expenses.............................        61-61-88      Do.                                        
      Sales                                                                                                     
    Salaries and wages.........................        11-61-89      Do.                                        
    Materials..................................        21-61-89      Do.                                        
    Purchased services.........................        41-61-89      Do.                                        
    Other expenses.............................        61-61-89      Do.                                        
      Industrial development                                                                                    
    Salaries and wages.........................        11-61-90      Do.                                        
    Materials..................................        21-61-90      Do.                                        
    Purchased services.........................        41-61-90      Do.                                        
    Other expenses.............................        61-61-90      Do.                                        
      Personnel and labor relations                                                                             
    Salaries and wages.........................        11-61-91      Do.                                        
    Materials..................................        21-61-91      Do.                                        
    Purchased services.........................        41-61-91      Do.                                        
    Other expenses.............................        61-61-91      Do.                                        
      Legal and secretarial                                                                                     
    Salaries and wages.........................        11-61-92      Do.                                        
    Materials..................................        21-61-92      Do.                                        
    Purchased services.........................        41-61-92      Do.                                        
    Other expenses.............................        61-61-92      Do.                                        
      Public relations and advertising                                                                          
    Salaries and wages.........................        11-61-93      Do.                                        
    Materials..................................        21-61-93      Do.                                        
    Purchased services.........................        41-61-93      Do.                                        
    Other expenses.............................        61-61-93      Do.                                        
      Research and development                                                                                  
    Salaries and wages.........................        11-61-94      Do.                                        
    Materials..................................        21-61-94      Do.                                        
    Purchased services.........................        41-61-94      Do.                                        
    Other expenses.............................        61-61-94      Do.                                        
Fringe benefits................................        12-61-00  11-61-XX, sec. 1152.33(d)(1).                  
      Casualties and insurance                                                                                  
    Other casualties...........................        52-61-00  Actual                                         
    Insurance..................................        53-61-00      Do.                                        
Writedown of uncollectible accounts............        63-61-00      Do.                                        
Other taxes except on corporate income or              65-61-00      Do.                                        
 payroll.                                                                                                       
Joint facility--DR.............................        37-61-00      Do.                                        
Joint facility--CR.............................        38-61-00      Do.                                        
      Other                                                                                                     
    Salaries and wages.........................        11-61-99      Do.                                        
    Materials..................................        21-61-99      Do.                                        
    Purchased services.........................        41-61-99      Do.                                        
    Other expenses.............................        61-61-99      Do.                                        
----------------------------------------------------------------------------------------------------------------

    (e) Deadheading, taxi, and hotel costs. The costs assigned under 
this subsection shall be the actual costs incurred as a result of 
providing service to the branch line for deadheading, taxi, and hotel 
costs. The amounts included under this subsection shall not be included 
under other subsections of these regulations.
    (f) Overhead movement costs. The costs assigned under this 
subsection shall be the actual costs incurred in moving over any other 
rail line solely to reach and provide service to the branch. The 
amounts shown under this subsection shall not be included under other 
subsections of these regulations.
    (g) Freight car costs. For Class I railroads, the on-segment costs 
for time-mileage freight cars shall be calculated on the basis of the 
carrier's average cost per day and per mile. Those freight cars that 
are rented on a straight mileage basis are to be costed on the 
carrier's average cost per mile for each type of car rented on this 
basis. No costs are to be included in the calculation for private line 
(shipper owned) or other cars for which the railroad does not make 
payments. The cost per day and per mile shall be calculated separately 
for each type of car specified in Ex Parte No. 334, Car Service 
Compensation--Basic Per Diem Charges, 362 I.C.C. 884 (1980). The 
freight car costs shall be separated between ``return on value-freight 
cars'' and ``freight car costs other than return on freight cars''. The 
costs assigned to a line under this subsection

[[Page 67908]]

are to be derived from the accounts listed below.

------------------------------------------------------------------------
      Operating expense group--Repair and maintenance        Account No.
------------------------------------------------------------------------
Salaries and wages........................................      11-22-42
Materials.................................................      21-22-42
Repairs by others--DR.....................................      39-22-42
Repairs for others--CR....................................      40-22-42
Purchased services........................................      41-22-42
Other expenses............................................      61-22-42
Lease rentals--DR.........................................      31-22-00
Lease rentals--CR.........................................      32-22-00
Depreciation                                                            
  Other rents--DR.........................................      35-22-00
  Other rents--CR.........................................      36-22-00
------------------------------------------------------------------------

    The system total of the repair and maintenance accounts, all 
accounts designated XX-XX-42, and depreciation shall be divided into 
time-related costs and mileage-related costs on the basis of 50 percent 
time and 50 percent mileage for repairs, and 60 percent time and 40 
percent mileage for depreciation. Freight car costs shall not include 
depreciation as determined in Account No. 62-22-00. Freight car 
depreciation shall be calculated in the manner set forth in paragraph 
(g)(3)(i) of this section. The system total receipts and payments for 
the hire of time-mileage cars, and the basic data used in the 
development of the car-day and car-mile factors, shall be taken from 
the carrier's latest Form R-1 and company records. The specific steps 
to complete the calculation are as follows:
    (1) The total system car days by car type shall be calculated by:
    (i) Averaging the carrier's freight car ownership at the beginning 
and end of the year (Form R-1, schedule 710, columns (b) and (k);
    (ii) Multiplying the average by the standard active number of car 
days (346) as developed in ICC Docket No. 31358;
    (iii) Subtracting car days on foreign lines (source: Company 
records); and
    (iv) Adding the foreign car days on home line (source: Company 
records). This procedure shall be followed for each car type specified 
in Ex Parte No. 334, supra.
    (2) The total railroad car miles shall be calculated by adding the 
loaded car miles for the railroad owned and leased cars (R-1, Schedule 
755) to empty car miles for the railroad owned or leased cars (R-1, 
Schedule 755). The total car miles, loaded and empty, shall be 
calculated for each car type specified in Ex Parte No. 334, supra.
    (3) The cost per car day shall be calculated for each type of time-
mileage car by adding 50 percent of total freight car repair costs for 
each type (Form R-1, schedule 415, column (b)), and 60 percent of the 
depreciation shall be developed as follows:
    (i) The current value for each type of car shall be calculated by 
first arriving at the current cost per car using the most recent 
purchase of this type by the railroad indexed to the midpoint of the 
year or a price quote from the manufacturer. This unit price shall be 
applied to the average number of this type of car owned by the carrier 
during the year. The current value developed for each car type is then 
multiplied by the composite depreciation rate for that type of car as 
shown in the latest annual report filed with the Board or company 
records.
    (ii) Add 100 percent of the return on investment. Return on 
investment shall be determined by multiplying the current value of each 
type of car, developed in paragraph (g)(3)(i) of this section, by 1 
minus the ratio of accumulated depreciation to the total original cost 
investment. This will determine the net current value for each type of 
car. The net current value for each type of car shall then be 
multiplied by the nominal rate of return calculated in Sec. 1152.34(d) 
to obtain nominal return on investment for each type of car. The total 
return on investment shall then be calculated by deducting the 
projected holding gain (loss) for the forecast and/or subsidy year from 
the nominal return on investment for each type of car. In any instance 
where the holding gain is not specifically determined for freight cars, 
the Gross Domestic Product deflator calculated by the U.S. Department 
of Commerce shall be used. The total return on investment for each type 
of car shall then be divided by total car-days for each car-type 
developed in paragraph (g)(1) of this section.
    (iii) To the amounts for repairs and depreciation, add the time 
portion of the railroad's payment for hire of time-mileage freight cars 
(Form R-1, schedule 414, column (g)), and subtract the time portion of 
the railroad's receipts for hire of time mileage freight cars (Form R-
1, schedule 414, column (d)). The total of these costs is divided by 
the total car days for each type developed in paragraph (g)(1) of this 
section.
    (4) The cost per mile shall be calculated for each type of time-
mileage car as follows. First, add:
    (i) 50 percent of the total freight train car repair cost for each 
car type (Form R-1, schedule 415, column (b));
    (ii) 40 percent of the total depreciation costs for each car type 
developed in paragraph (g)(3)(i) of this section; and
    (iii) The mileage portion of the carrier's payments for the hire of 
time-mileage freight cars (Form R-1, schedule 414, column (f)).

Second, subtract the mileage portion of the carrier's receipts for hire 
of time-mileage freight cars (Form R-1, schedule 414, column (c)). 
Finally, divide the result by the total car-miles for each car-type 
developed in paragraph (g)(2) of this section.
    (5) The costs per car day and per car mile developed in paragraphs 
(g) (3) and (4) of this section shall be applied to the total car days 
and total car miles for each car type accumulated on the line segment 
for all traffic originated and/or terminated on the segment plus those 
freight cars that bridge the line segment which are attributed to time-
mileage freight train cars. The on-segment costs for freight cars 
rented on a straight mileage basis shall be the railroad's total 
payments for mileage cars (Form R-1, schedule 414, column (e)) for each 
car type divided by the total miles on which the charges were based.
    (6) For Class II and III railroads, the on-segment costs for time-
mileage and straight mileage freight cars shall be calculated in the 
same manner prescribed for Class I railroads, using the latest data 
available.
    (h) Return on investment--locomotive (line). The return on 
investment shall be calculated for each type of classification of 
locomotive that is actually used to provide service to the line 
segment. The return for the locomotive(s) used shall be calculated in 
accordance with the following procedure:
    (1) The current replacement cost for each type of locomotive used 
to serve the line segment shall be based on the most recent purchase of 
that particular type and size locomotive by the carrier, indexed to the 
midpoint of the forecast and/or subsidy year, or on an amount quoted by 
the manufacturer. The amount must be substantiated. This unit cost 
shall be multiplied by 1 minus the ratio of total accumulated 
depreciation to original total cost of that type of equipment owned by 
applicant-carrier, as shown by company records.
    (2) The current nominal cost of capital shall be used in the 
calculation of return on investment for locomotives and shall be 
calculated as provided in Sec. 1152.34(d).
    (3) The return on investment for each category or type of 
locomotive shall be the nominal return less the holding gain (loss). 
The nominal return is calculated by multiplying the replacement cost 
determined in paragraph (h)(1) of this section by the nominal rate of 
return determined in paragraph (h)(2) of this section. The holding gain 
(loss) shall be the gain (loss) projected to occur during the forecast 
and/or subsidy year. In any instance where the holding gain is not 
specifically determined for locomotives,

[[Page 67909]]

the Gross Domestic Product deflator calculated by the U.S. Department 
of Commerce shall be used.
    (4) The return on investment for each type of locomotive shall be 
assigned to the line segment on a ratio of the locomotive unit hours on 
the segment to average locomotive unit hours per unit for each type of 
locomotive in the system. This ratio will be developed as follows:
    (i) The carrier shall keep and maintain records of the number of 
hours that each type of locomotive incurred in serving the segment 
during the subsidy period.
    (ii) The railroad shall develop the system average locomotive unit 
hours per unit for each of the following types of locomotives; yard 
diesel; yard-other; road diesel; and road-other.
    (iii) The ratio applied to the return on investment is calculated 
by dividing the hours that each type or class of locomotive is used to 
serve the segment, as developed in paragraph (h)(4)(i) of this section, 
by the system average locomotive unit hours per unit for the applicable 
type developed in paragraph (h)(4)(ii) of this section.
    (5) The cost assigned to the segment for each type of locomotive 
shall be calculated by multiplying the annual return on investment 
developed in paragraph (h)(3) of this section by the ratio(s) developed 
in paragraph (h)(4) of this section.
    (i) Revenue taxes. The amount of revenue taxes shall be computed 
based on the amounts directly paid in those states that subject the 
railroad to a revenue tax.
    (j) Property taxes (Line). (1) The assigned costs under this 
subsection shall be the net systemwide property tax savings resulting 
from the abandonment, calculated as set out below, if the applicant-
carrier intends subsequently to sell or otherwise dispose of the 
abandoned properties. If the applicant-carrier expresses an intent to 
dispose of the properties, it will be presumed that the properties will 
ultimately be sold or otherwise disposed of after abandonment. 
Protestants may rebut this presumption by showing that it would be 
financially beneficial to retain ownership of the property for 
investment purposes.
    (2) In states where a true ad valorem tax is levied on real 
property (such as track, land, buildings, and other facilities), 
applicant must affirm that the ad valorem method applies and must 
substantiate the amount of property taxes levied against the property 
on the line segment.
    (3) In states where the ad valorem method is not employed, 
applicant must describe the applicable property tax methodology if it 
is claiming the local property tax as an avoidable cost of operations. 
Additionally, it must substantiate with evidence and computations the 
actual statewide tax savings attributable to the abandonment.
    (4) Any property tax properly substantiated under paragraphs (f)(2) 
or (3) of this section shall be presumed to represent systemwide 
savings to the carrier. Protestants may rebut this presumption by 
presenting evidence:
    (i) That property taxes in those states where the carrier operates 
that are not involved in the abandonment will increase significantly 
because of reassessments attributable to the abandonment; or
    (ii) That a significantly higher property tax will be levied 
against a retained portion of the abandoned property. If applicant does 
not refute protestant's evidence, it may claim avoidable property taxes 
only if, and to the extent, it proves systemwide property tax savings.
    (5) In states where real property taxes are assessed and levied 
against the owner of the property but the tax on rolling stock is 
assessed to the railroad operating the service on the basis of a 
formula of a statewide valuation of property, the tax on rolling stock 
attributable to each line segment shall be determined as follows:
    (i) Using ratio of the cost of equipment (as used in the formula) 
to the total of all property costs (as used in formula);
    (ii) Apply that ratio to the total state assessment to determine 
the portion of the assessment attributable to rolling stock;
    (iii) Allocate the rolling stock assessment thus determined to each 
line segment on the basis of car and locomotive unit miles on the 
segment to total car and locomotive unit miles in the state; and
    (iv) Apply the appropriate tax rate or rates to the allocated 
assessment thus determined.
    (k) Administrative costs. The costs assigned under this account 
shall be the actual costs directly attributable to the administration 
of the subsidy program or at the option of the carrier, one percent of 
the total annual revenues attributed to the branch shall be allowable 
to cover all costs of administering the subsidy program. Either method 
may be used, but not both.
    (l) Casualty reserve account. The costs assigned under this account 
shall be any payments mutually agreed to by the person offering the 
subsidy and the railroad for the purpose of holding the subsidizer 
harmless from any liability under those accounts that are used to 
record any costs incurred by the railroad as a result of an accident.
    (m) Rehabilitation. (1) For abandonment purposes the applicant 
carrier shall project the amounts necessary to permit efficient 
operations over the line segment. The carrier shall indicate the level 
of FRA class safety standard to be attained with the amount of 
expenditure. See 49 CFR part 213. Applicant, in making its projection 
of rehabilitation costs, shall give consideration to:
    (i) The cost to attain the lowest operationally feasible track 
level;
    (ii) The cost to attain the rehabilitation level resulting in the 
lowest operating and rehabilitation expenditures; or
    (iii) The cost to attain the rehabilitation level resulting in the 
lowest loss, or highest profit, from operations.
    (2) For subsidy purposes rehabilitation costs shall not be included 
unless:
    (i) The track fails to meet minimum Federal Railroad Administrative 
class 1 safety standards (49 CFR part 213), in which case the railroad 
will furnish, with the abandonment application, a detailed estimate of 
the costs to rehabilitate the track to the minimum level; or
    (ii) The potential subsidizer requests a level of service which 
requires expenditures for rehabilitation.
    (n) Off-branch costs. The off-branch costs developed in this 
section shall be separated between ``off-branch costs other than return 
on freight cars'' and ``return on value-freight cars''. The off-branch 
costs shall be developed in the following manner:
    (1) Terminal costs, line-haul costs, interchange costs, and 
modified terminal costs shall be considered as the off-branch avoidable 
costs of providing service over the remainder of the railroad's system. 
These costs shall be computed by applying the variable unit costs to 
the service units attributed to the branch line's traffic for the time 
periods specified in Sec. 1152.22(d) of this part.
    (2) The procedure for determining the off-branch costs shall be 
based upon the URCS cost formula. This formula shall be applied to the 
latest Annual Report Form R-1 filed by the railroad, with two 
exceptions. First, the amount used in the formula for freight car 
depreciation shall be calculated using the procedure discussed in 
paragraph (g)(3)(iii) of this section applied to the average total car 
fleet of the railroad. Second, the return on investment in freight cars 
shall be computed using the procedure set forth

[[Page 67910]]

in paragraph (g)(3)(ii) of this section. In addition, the application 
of URCS shall include the use of the nominal cost of capital for all 
return on investment determinations.
    (3) The Class I Procedure: A Class I railroad shall calculate its 
off-branch costs using the Class I procedure as set forth below in this 
paragraph.
    (i) The unit costs developed by applying URCS in the manner 
specified in paragraph (n)(2) of this section shall be applied to the 
service characteristics of each movement of traffic that is attributed 
to the branch line. This application shall result in the total off-
branch cost associated with this traffic for normal terminal handlings, 
line-haul mileage, and interchange events.
    (ii) The modified terminal cost per carload shall be calculated 
separately for each type of freight car and applied to each car that is 
attributed to the branch line. The modified terminal cost shall consist 
of clerical costs, two days of freight car cost, and an inter-intra 
train switching cost (locomotive engine minute cost only). The clerical 
cost and inter-intra train switching cost shall be calculated from unit 
costs developed within the individual URCS application.
    (A) The unit costs for the clerical cost per carload calculation 
are located in URCS Worktable E1, Part 1: Line 106, columns 1, 2, and 
3; line 107, column 1; line 108, column 1; line 109, column 1; and line 
110, column 1.
    (B) The inter-intra train switching cost shall be calculated by 
multiplying the total switch engine minute cost from URCS Worktable E1, 
Part 1, line 111, columns 1, 2, and 3 by the total minutes specified in 
the next sentence. The total minutes specified in this sentence shall 
equal the sum of:
    (1) The minutes per switch event from Worktable E2, Part 1, line 
118, column 29; and
    (2) The product of the minutes per switch event from Worktable E2, 
Part 1, line 118, column 29 and the ratio of loaded to total car miles 
for the particular type of freight car being costed.
    (C) The freight car cost shall be the car ownership costs per car 
day for 2 days developed in accordance with the procedures set forth in 
paragraph (g)(3) of this section for the type of freight car being 
costed.
    (iii) For a Class I railroad, the total costs calculated using the 
procedures set forth in paragraphs (n)(3)(i) and (n)(3)(ii) of this 
section shall constitute the off-branch costs attributable to the 
branch line's traffic.
    (4) A Class II or Class III railroad shall calculate its off-branch 
costs using any one of three different procedures. The Class I 
Procedure: A Class II or Class III railroad may calculate its off-
branch costs using the Class I procedure set forth in paragraph (n)(3) 
of this section, if the necessary data are available from the 
railroad's own records. If the data necessary to complete the Class I 
procedure set forth in paragraph (n)(3) of this section are not 
available from the railroad's own records, the Class II or Class III 
railroad shall calculate its off-branch costs using either one of the 
following procedures based on the latest regional URCS data and the 
railroad's own records. The Class II/III Simplified Costing Procedure: 
A Class II or Class III railroad may calculate its off-branch costs 
using the Class I procedure set forth in paragraph (n)(3) of this 
section, with regional URCS data of the Class I railroads used in lieu 
of individual URCS data of the Class II or Class III railroad. Costs 
developed through the use of the Class II/III simplified costing 
procedure shall enjoy a rebuttable presumption of correctness. The 
Class II/III Standard Costing Procedure: A Class II or Class III 
railroad may calculate its off-branch costs using the Class II/III 
standard costing procedure set forth in paragraphs (n)(4)(i) through 
(n)(4)(xiv) of this section. Costs developed through the use of the 
Class II/III standard costing procedure shall be given preference over 
costs developed through the use of the Class II/III simplified costing 
procedure. The Class II/III standard costing procedure is set forth in 
paragraphs (n)(4)(i) through (n)(4)(xiv) of this section.
    (i) The Class II or Class III railroad shall first determine which 
URCS regional application will be used based on its geographical 
location. The railroad's total estimated system variable expenses are 
calculated by multiplying its total operating expenses by the ratio of 
variable expenses to total expenses; this ratio is located in Worktable 
D8, Part 6, line 615, column 1 of the URCS printout for the appropriate 
region. If a railroad has passenger and freight service, the freight 
portion of the total estimated system variable expenses shall be 
calculated by multiplying the total estimated system variable expenses, 
calculated as above, by the ratio of freight related operating expenses 
to total railway operating expenses.
    (ii) The total number of revenue carload terminal handlings, as 
determined from the railroad's records, shall be calculated as the sum 
of:
    (A) Originated and terminated (local) revenue carloads multiplied 
by 2; plus
    (B) Interchanged and either originated or terminated (interline) 
revenue carloads.
    (iii) The total number of revenue carload interchange handlings, as 
determined from the railroad's records, shall be calculated as the sum 
of:
    (A) Bridge (interchange to interchange) revenue carloads multiplied 
by 2; plus
    (B) Revenue carloads that are interchanged and either originated or 
terminated (interline).
    (iv) The system average shipment weight per car, as determined from 
the railroad's records, shall be calculated by dividing:
    (A) Ton-miles-revenue freight by
    (B) Loaded freight car miles.
    (v) The system average loaded car miles per car, as determined from 
the railroad's records, shall be calculated by dividing:
    (A) Revenue ton-miles by
    (B) Revenue tons.
    (vi) The railroad shall complete a URCS Phase III ``Movement 
Costing Program'' based on the application of URCS data for the 
appropriate region. The following data shall be inputs to the Phase III 
program application.
    (A) The carrier code, either ``REG 4'' or ``REG 7'', shall 
correspond to the appropriate region.
    (B) The type of shipment shall be designated as ``OD'' in order for 
the movement to be costed as an interline movement.
    (C) The distance shall be the system average loaded car miles per 
car as developed in paragraph (n)(4)(v) of this section.
    (D) The type of freight car shall be identified as a Box, General 
Service Equipped, which has an input user code of ``3''. If all of the 
traffic on the branch line is transported in a single type of car, and 
it is not a Box, General Service Equipped, the code for that type of 
car may be substituted.
    (E) The number of freight cars shall be ``1''.
    (F) The car ownership factor shall be designated as ``R'' for 
railroad owned cars unless all of the branch line traffic is moved in 
privately owned cars, in which case the code ``P'' for privately owned 
cars would be the input.
    (G) The program requires a loss and damage input. The code ``48'', 
representing the average of all commodities, shall be used.
    (H) The input for shipment weight shall be the system average 
shipment weight per car developed in paragraph (n)(4)(iv) of this 
section.
    (I) The input for type of movement shall be ``1'', representing an 
individual car movement.
    (vii) The ratios employed to separate the total estimated system 
variable expenses, as determined in paragraph

[[Page 67911]]

(n)(4)(i) of this section, among terminal, interchange, and line-haul 
operations shall be based on the procedures outlined in this paragraph 
(n)(4)(vii). This separation shall reflect the variable costs resulting 
from the application of the URCS Phase III program based on the input 
factors specified in paragraph (n)(4)(vi) of this section. The ratios 
shall be calculated in the following manner:
    (A) The terminal expenses calculated by the application of the 
Phase III program shall consist of the following:
    (1) ``Carload and Clerical Costs'' shall be calculated as the sum 
of lines 256, 258, 260, 262, 264, 266, and 268.
    (2) Switching expenses based on ``Total SEM-Industry'' shall be 
calculated by multiplying:
    (i) The sum of lines 315, 317, and 319, by
    (ii) Line 311.
    (3) Car mile yard cost ``CM(Y)-Industry'' shall be calculated by 
multiplying:
    (i) The sum of lines 426, 428, and 430, by
    (ii) Line 422.
    (4) Car day yard cost ``CD(Y)-Industry'' and ``CD(Y)-L&UL'' shall 
be calculated by multiplying:
    (i) The sum of lines 452, 454, and 456, by
    (ii) The sum of lines 446 and 450.
    (5) The expenses for accessorial services for railroad owned cars 
shall be calculated as the sum of:
    (i) The product of line 422 and the sum of lines 464, 466, and 468; 
plus
    (ii) The product of the sum of lines 446 and 450 and the sum of 
lines 476, 478, and 480.
    (B) The interchange expenses calculated by the application of the 
Phase III program shall consist of the following:
    (1) Switching expenses based on ``Total SEM-Interchange'' shall be 
calculated by multiplying
    (i) The sum of lines 315, 317, and 319, by
    (ii) Line 312.
    (2) Car mile cost in interchange ``CM(Y)-Interchange'' shall be 
calculated by multiplying:
    (i) The sum of lines 426, 428, and 430, by
    (ii) Line 423.
    (3) Car day cost in interchange ``CD(Y)-Interchange (L&E)'' shall 
be calculated by multiplying:
    (i) The sum of lines 452, 454, and 456, by
    (ii) Line 447.
    (4) The expenses for accessorial services for railroad owned cars 
shall be calculated as the sum of:
    (i) The product of line 423 and the sum of lines 464, 466, and 468; 
plus.
    (ii) The product of line 447 and the sum of lines 476, 478, and 
480.
    (C) The line-haul expenses resulting from the application of the 
Phase III program shall be calculated by subtracting the sum of:
    (1) The terminal expenses as determined in paragraph (n)(4)(vii)(A) 
of this section, and
    (2) The interchange expenses as determined in paragraph 
(n)(4)(vii)(B) of this section, from
    (3) The total variable cost excluding loss and damage as calculated 
in the Phase III program at line 696.
    (D) The ratio for terminal expenses shall be calculated by dividing 
the terminal expenses as determined in paragraph (n)(4)(vii)(A) of this 
section by the total variable cost excluding loss and damage as 
calculated in the Phase III program at line 696.
    (E) The ratio for interchange expenses shall be calculated by 
dividing the interchange expenses as determined in paragraph 
(n)(4)(vii)(B) of this section by the total variable cost excluding 
loss and damage as calculated in the Phase III program at line 696.
    (F) The ratio for line-haul expenses shall be calculated by 
dividing the line-haul expenses as determined in paragraph 
(n)(4)(vii)(C) of this section by the total variable cost excluding 
loss and damage as calculated in the Phase III program at line 696.
    (viii) The railroad's total estimated system variable expenses 
shall be separated as follows:
    (A) The total terminal variable expenses shall be calculated by 
multiplying the total estimated system variable expenses as determined 
in paragraph (n)(4)(i) of this section by the ratio for terminal 
expenses as determined in paragraph (n)(4)(vii)(D) of this section.
    (B) The total interchange variable expenses shall be calculated by 
multiplying the total estimated system variable expenses as determined 
in paragraph (n)(4)(i) of this section by the ratio for interchange 
expenses as determined in paragraph (n)(4)(vii)(E) of this section.
    (C) The total line-haul variable expenses shall be calculated by 
multiplying the total estimated system variable expenses as determined 
in paragraph (n)(4)(i) of this section by the ratio for line-haul 
expenses as determined in paragraph (n)(4)(vii)(F) of this section.
    (ix) The railroad's unit costs shall be determined for terminal, 
interchange, and line-haul operations as follows:
    (A) The terminal cost per carload shall be calculated by dividing 
the total terminal variable expenses as determined in paragraph 
(n)(4)(viii)(A) of this section by the total number of revenue carload 
terminal handlings as determined in paragraph (n)(4)(ii) of this 
section.
    (B) The interchange cost per carload shall be calculated by 
dividing the total interchange variable expenses as determined in 
paragraph (n)(4)(viii)(B) of this section by the total number of 
revenue carload interchange handlings as determined in paragraph 
(n)(4)(iii) of this section.
    (C) The line-haul cost per car mile shall be calculated by dividing 
the total line-haul variable expenses as determined in paragraph 
(n)(4)(viii)(C) of this section by the total system freight car miles, 
loaded and empty, as determined from the railroad's records.
    (x) The modified terminal cost per carload is a composite of costs 
developed in the Phase III program and costs determined in accordance 
with paragraph (g) of this section and this paragraph. The modified 
terminal cost per carload shall be calculated for each type of car as 
follows:
    (A) The station clerical cost per carload shall be developed in the 
following manner:
    (1) The station clerical expense ratio shall be calculated by 
dividing the total clerical cost (the sum of lines 256, 258, 260, 262, 
264, 266, and 268) by the terminal expenses as determined in paragraph 
(n)(4)(vii)(A) of this section.
    (2) The station clerical cost per carload shall be calculated by 
multiplying the terminal cost per carload as determined in paragraph 
(n)(4)(ix)(A) of this section by the station clerical expense ratio.
    (B) The interchange switching cost per carload shall be developed 
in the following manner:
    (1) The total interchange switching expense shall be calculated by 
multiplying the sum of lines 315, 317, and 319 by line 312.
    (2) The interchange switching ratio shall be calculated by dividing 
the total interchange switching expense by the interchange expenses as 
determined in paragraph (n)(4)(vii)(B) of this section.
    (3) The interchange switching cost per carload shall be calculated 
by multiplying the interchange cost per carload as determined in 
paragraph (n)(4)(ix)(B) of this section by the interchange switching 
ratio.
    (C) The freight car cost element shall be the freight car cost per 
car day for 2 days as developed for each car type in paragraph (g)(3) 
of this section.
    (D) The modified terminal cost per carload shall be the total of 
the costs developed in paragraphs (n)(4)(x)(A),

[[Page 67912]]

(n)(4)(x)(B), and (n)(4)(x)(C) of this section.
    (xi) The terminal costs shall be calculated by multiplying the 
terminal cost per carload as determined in paragraph (n)(4)(ix)(A) of 
this section by the number of carloads that both:
    (A) Originated or terminated on the branch, and
    (B) Are local to the railroad serving the branch.
    (xii) The interchange costs shall be calculated by multiplying the 
interchange cost per carload as determined in paragraph (n)(4)(ix)(B) 
of this section by the number of carloads that both:
    (A) Originated or terminated on the branch; and
    (B) Are received in or forwarded through interchange with other 
railroads.
    (xiii) The line-haul costs shall be calculated by multiplying the 
line-haul cost per car mile as determined in paragraph (n)(4)(ix)(C) of 
this section by the total loaded and empty car miles generated on the 
railroad's system off the branch by cars that originated or terminated 
on the branch.
    (xiv) The modified terminal costs shall be calculated by 
multiplying the modified terminal cost per carload as determined in 
paragraph (n)(4)(x)(D) of this section by the number of carloads that 
originated or terminated on the branch.
    (o) Locomotive depreciation. The depreciation cost for locomotives 
used on the line shall be calculated using the following procedure:
    (1) The current replacement cost for each type of locomotive used 
to serve the line will be based on the most recent purchase of that 
particular type and size locomotive by the carrier indexed to the 
midpoint of the year or on an amount quoted by the manufacturer.
    (2) The depreciation rate that will be applied to the replacement 
cost shall be the carrier's component rate for each type of locomotive 
as reported in the latest Annual Report Form R-1 submitted to the Board 
or from the company records. Carriers using depreciation rates based on 
company records must explain why composite rates are inappropriate; 
provide a detailed explanation of the methodology used to compute the 
alternate depreciation rate; and demonstrate that these rates have been 
used consistently.
    (3) The annual depreciation cost for each type of locomotive shall 
be calculated by multiplying the replacement cost(s) developed in 
paragraph (o)(1) of this section by the rate from paragraph (o)(2) of 
this section.
    (4) The depreciation expense for each type of locomotive shall be 
assigned to the line on the ratio of the hours incurred serving the 
line to the average system locomotive unit hours in service by each of 
the following categories of locomotives: yard-diesel; yard-other; road-
diesel; and road-other. The ratio for each type of locomotive used to 
serve the line shall be the same as that developed in paragraph (h)(4) 
of this section.
    (5) The depreciation shall be calculated by multiplying the annual 
depreciation expense for each type of locomotive developed in paragraph 
(o)(3) of this section by the ratio(s) developed in paragraph (o)(4) of 
this section.
    (p) Opportunity costs. Applicant-carrier may, at its discretion, 
present evidence of its opportunity costs, if the assets engaged in the 
line proposed to be abandoned could be used more profitably in some 
other capacity.
    Opportunity costs may be calculated in accordance with the 
methodology established in Sec. 1152.34 of this part, or by using any 
other reasonable, fully explained method. Opportunity costs are not 
included as costs on Exhibit 1 described at Sec. 1152.36. These costs 
should be submitted as a separate exhibit to the application.
    (q) Labor costs. (1) The salaries, wages and fringe benefits of 
personnel exclusively assigned to the line segment shall be deemed 
attributable costs of the segment. The salaries, wages, and fringe 
benefits of personnel not exclusively assigned to the line segment 
shall be deemed attributable costs of the segment to the extent they 
are shown to be apportionable to the segment to be abandoned.
    (2) These costs shall be deemed attributable notwithstanding any 
obligation of applicant to provide employee protection for employees 
after the abandonment.


Sec. 1152.33  Apportionment rules for the assignment of expenses to on-
branch costs.

    The accounts specified under Sec. 1152.32 (a), (b), (c), and (d) as 
having an assignment basis other than ``Actual'' shall be apportioned 
according to the rules contained in this section.
    (a) Maintenance of way and structures--(1) Roadway machines. All 
accounts designated XX-13-36 shall be assigned to the branch on the 
basis of the average repair costs, for each type of machine, included 
in the daily rental fees charged by the operating railroad or as 
published by the General Manager's Association of Chicago (GMA), based 
on the actual number of days each type of machine is used on the 
branch.
    (2) Small tools and supplies. All accounts designated XX-13-37 
shall be assigned to the branch as follows:
    (i) The costs of supplies, consumed in the operation of roadway 
machines, shall be assigned to the branch on the basis of the average 
costs of supplies per day, included in the daily rental fees charged by 
the operating railroad or as published by the GMA, multiplied by the 
actual number of days that the machine is used on the branch;
    (ii) The costs of small tools shall be assigned to the branch on 
the basis of the ratio that the branch amounts in Accounts 11-11-10 
through 11-11-17 and 11-11-48, plus 11-12-10 through 11-12-17 and 11-
12-48, bear to the railroad's system total for the same accounts.
    (3) Fringe benefits. Fringe benefits shall be assigned to the 
branch separated between running, switching and other, on the ratio 
that the total branch salary and wages bear to the total system 
salaries and wages for each activity as follows:
    (i) Fringe benefits--Running, Account 12-11-00, total of all 11-11-
XX accounts branch to system;
    (ii) Fringe benefits--Switching, Account 12-12-00, total of all 11-
12-XX accounts branch to system; and
    (iii) Fringe benefits--Other, Account 12-13-00, total of all 11-13-
XX accounts branch to system.
    (b) Maintenance of equipment--(1) Locomotive repairs and 
maintenance. All accounts designated XX-21-41 shall be separated 
between yard and road with a further separation between diesel and 
other (electric). The costs for these accounts for yard locomotives 
shall be assigned to the branch separately for diesel and electric 
locomotives on the basis of the ratio of branch diesel and electric 
yard locomotive unit-hours to the total system diesel and electric yard 
locomotive unit-hours. The costs for these accounts for road 
locomotives shall be assigned to the branch separately for diesel and 
electric locomotives on the basis of the ratio of branch diesel and 
electric locomotive gross ton-miles in road service to the total system 
diesel and electric locomotive gross ton-miles in road service. The 
costs assigned under these accounts for specialized equipment devoted 
exclusively to branch line service shall be theactual costs for the 
specific equipment used.
    (2) Locomotive depreciation. Locomotive depreciation shall be 
calculated and assigned in accordance with the procedures set forth in 
Sec. 1152.32(o).

[[Page 67913]]

    (3) Fringe Benefits. Fringe benefits for locomotives and other 
equipment shall be assigned to the branch on the ratio that the total 
branch salary and wages bear to the system total salaries and wages for 
each type of equipment as follows:
    (i) Locomotives--Account 12-21-00, total of all 11-21-XX accounts 
branch to system.
    (ii) Other Equipment--Account 12-23-00, total of all 11-23-XX 
accounts branch to system.
    (iii) Fringe benefits for freight cars shall be calculated by first 
estimating the total in Account 11-22-42, Freight car repairs--salaries 
and wages, that is included in the total on branch costs for freight 
cars as determined from the car-day and car-mile cost calculations in 
Sec. 1152.32(g) of these regulations. To this amount is added the 
branch totals in the balance of all 11-22-XX accounts. The ratio of 
this total branch account to the system total for all 11-22-XX accounts 
is applied to Account 12-22-00, Fringe Benefits--Freight Cars.
    (c) Transportation--(1) Train operations--(i) Engine Crews-
Materials. Account 21-31-56; Train Crews-Materials, Account 21-31-57; 
Train Inspection and Lubrication-Salaries and Wages, Account 11-31-62; 
and Train Inspection and Lubrication-Materials, Account 21-31-62. If 
the branch is served by a local/way or through train, the costs in 
these accounts shall be assigned to the branch on the weighted ratio of 
the loaded freight train cars on the branch to the total system loaded 
freight train cars, and the loaded and empty car-miles on the branch to 
the total system loaded and empty car-miles. This shall be calculated 
as follows:
    (A) To determine the car-mile portion of these accounts:
    (1) Multiply the total amounts in these accounts (from the R-1 
Annual Report, Schedule 410) by 69 percent, which is the ratio of 
train-mile and running expenses;
    (2) Divide the amount in paragraph (c)(1)(i)(A)(1) of this section 
by the total system loaded and empty car-miles; and
    (3) Multiply the car-mile unit cost factor from paragraph 
(c)(1)(i)(A)(2) of this section by the on-branch car-miles (loaded and 
empty).
    (B) To determine the carload portion of these accounts:
    (1) Multiply the total amounts in these accounts by 31 percent, 
which is the ratio of terminal expenses;
    (2) Divide the amount in paragraph (c)(1)(i)(B)(1) of this section 
by the total system carloads; and
    (3) Multiply the carload unit cost factor from paragraph 
(c)(1)(i)(B)(2) of this section by the on-branch carloads.
    (C) To determine the total costs assignable to the branch for these 
accounts, add the amounts developed in paragraphs (c)(1)(i)(A)(3) and 
(c)(1)(i)(B)(3) of this section.
    (ii) All accounts designated xx-31-67 shall be assigned to the 
branch in accordance with the following procedure. The dollar amounts 
used in the determination of locomotive fuel costs shall be based on 
data contained in the most recent publication issued by the General 
Managers Association (GMA) relating to the rental of locomotives. The 
total number of locomotive unit hours incurred by the locomotive(s) 
shall then be categorized according to the applicable GMA horsepower 
classification group. The fuel cost is derived from the Repairs and 
Supplies Expenses element of the locomotive rental rates published by 
the GMA. The fuel cost per locomotive unit hour shall be determined for 
each GMA horsepower classification group by multiplying the latest GMA 
fuel cost percentage by the Repairs and Supplies Expense per hour 
included in each group. The fuel cost update ratio is determined by 
using the indices for fuel from the Association of American Railroad's 
(AAR's) Railroad Cost Recovery Index (RCR). The indices shall be taken 
from the district to which the railroad is assigned by the Board. The 
index for the current period is divided by the index of the period 
representative of the GMA publication to develop the fuel update ratio. 
The fuel cost per locomotive unit hour developed for each GMA 
horsepower group shall be multiplied by the fuel update ratio to 
determine the fuel cost per locomotive hour for each horsepower group. 
The updated fuel cost per locomotive unit hour for each applicable GMA 
group shall be multiplied by the number of locomotive unit hours 
incurred in serving the branch by locomotives of that GMA horsepower 
classification group. The total cost developed under this procedure for 
each horsepower classification shall be the locomotive fuel cost 
assignable to the branch line.
    (iii) Electric power purchased or produced for motive power--All 
accounts designated XX-31-68 shall be assigned to the branch on the 
ratio of road electric locomotive unit hours on the branch to the total 
system road electric locomotive unit hours.
    (iv) Servicing locomotives--All accounts designated XX-31-69 shall 
be assigned to the branch on the ratio of road locomotive unit miles on 
the branch to the total system road locomotive unit miles.
    (2) Yard operations--(i) Switch Crews--Materials, Account 21-32-64, 
and Servicing Locomotives, all accounts designated XX-32-69. The costs 
for these accounts shall be assigned to the branch on the ratio of yard 
locomotive unit hours on the branch to the system total yard locomotive 
unit hours.
    (ii) Locomotive fuel--All accounts designated XX-32-67 shall be 
assigned to the branch on the ratio of yard diesel locomotive unit 
hours on the branch to the total system yard diesel locomotive unit 
hours.
    (iii) Electric power purchased or produced for motive power--All 
accounts designated XX-32-68 shall be assigned to the branch on the 
ratio of yard electric locomotive unit hours on the branch to the total 
system yard electric locomotive unit hours.
    (3) Administrative support operations--(i) Loss and damage claims 
processing--All accounts designated XX-35-78 shall be assigned to the 
branch on the ratio of the number of claims processed for loss or 
damage occurring on the branch to the total number of claims processed 
by the railroad.
    (ii) [Reserved]
    (4) Transportation fringe benefits. Fringe benefits shall be 
assigned to the branch separated between train operations, yard 
operations, train and yard operations common, specialized service 
operations, and administrative support operations. The costs for each 
activity shall be assigned to the branch on the ratio that the total 
branch salary and wages bear to the total system salary and wages for 
each activity shown below.
    (i) Train Operations, Account 12-31-00, total of all 11-31-XX 
accounts branch to system.
    (ii) Yard Operations, Account 12-32-00, total of all 11-32-XX 
accounts branch to system.
    (iii) Train and Yard Operations Common, Account 12-33-00, total of 
all 11-33-XX accounts branch to system.
    (iv) Specialized Service Operations, Account 12-34-00, total of all 
11-34-XX accounts branch to system.
    (v) Administrative Support, Account 12-35-00, total of all 11-35-XX 
accounts branch to system.
    (d) General administrative. (1) Fringe Benefits, Account 12-61-00, 
shall be assigned to the branch on the ratio that the total branch 
salary and wages in all 11-61-XX accounts bear to the system total 
salary and wages in all 11-61-XX accounts.
    (2) [Reserved]

[[Page 67914]]

Sec. 1152.34  Return on investment.

    Return on investment for road property shall be computed according 
to the procedures set forth in this section.
    (a) [Reserved]
    (b) [Reserved]
    (c) Return on investment--road properties. Return on investment--
road properties shall be computed according to the following 
procedures:
    (1) The investment base to which the nominal return element shall 
apply shall be the sum of:
    (i) The allowable working capital computed at 15 days on-branch 
cash avoidable costs (on branch avoidable costs less depreciation).
    (ii) The amount of current income tax benefits resulting from 
abandonment of the line which would have been applicable to the period 
of the subsidy agreement. (Conversely, if the railroad would incur an 
income tax liability from abandonment, the liability should be deducted 
from the investment base.) This information is to be furnished by the 
railroad and subject to audit by the person offering the subsidy.
    (iii) The net liquidation value for the highest and best use for 
non-rail purposes of the rail properties on the line to be subsidized 
which are used and required for performance of the services requested 
by the persons offering the subsidy. This value shall be determined by 
computing the current appraised market value of such properties for 
other than rail transportation purposes, less all costs of dismantling 
and disposition of improvements necessary to make the remaining 
properties available for their highest and best use and complying with 
applicable zoning, land use, and environmental regulations. If 
rehabilitation has been performed along the line during a subsidy year 
and rehabilitation expenses have been paid by the subsidizer under 49 
CFR 1152.32(m)(2), the investment base shall exclude the increment to 
the net liquidation value of the line caused by the rehabilitation 
project. For these purposes:
    (A) In calculating the net liquidation values for the Forecast 
Year, no asset on the line shall be excluded from the determination of 
net liquidation value because it contributes negatively to that value, 
i.e., the removal costs exceed the market value after removal. All such 
assets shall be included in the net liquidation value determination if 
the carrier is required by law to remove them or if the carrier intends 
to remove them, even if it is not required to do so. The parties shall 
fully support and explain the exclusion for net liquidation purposes of 
all assets having a negative salvage value.
    (1) In calculating the net liquidation value of railroad properties 
for the purpose of determining the operating subsidy under an offer of 
financial assistance, any asset with a negative salvage value shall be 
included at a value of zero (0).
    (2) Determination of the net liquidation value of rail properties 
for the purpose of purchasing the rail properties under an offer of 
financial assistance shall include any asset with a negative salvage 
value at a value of zero (0).
    (B) All adjustments to the appraised fair market value of right-of-
way land, including a downward adjustment to reflect an imputed real 
estate commission or selling expense, shall be fully supported and 
explained.
    (C) Parties shall fully support and explain their use of unadjusted 
across-the-fence (ATF) values as a surrogate for the value of railroad 
right-of-way land, given that the physical and economic characteristics 
(grading and elevation) usually are different from those of surrounding 
parcels. All adjustments to ATF values to arrive at the right-of-way 
values shall also be supported and explained.
    (2) [Reserved]
    (d) Reasonable return. A rail carrier shall furnish to the Board, 
and to any financially responsible person considering making an offer 
of a rail service continuation payment, a substantiated statement 
showing its current nominal cost of capital. The railroad's nominal 
cost of capital shall be the current before tax cost of capital, 
weighted to the capital structure, and adjusted for the effects of the 
combined statutory Federal and state income tax rates. This rate of 
return expressed as a percent, shall be calculated as follows:
    (1) The railroad shall determine its permanent capital structure 
ratio for debt and equity capital such that the two numbers total 100 
percent. This capital structure will be the actual capital structure of 
the railroad. If this calculation is not possible or also not 
representative because the railroad is part of a conglomerate, the 
debt-equity ratio from the Board's latest Determination of Adequate 
Railroad Revenues will be used. However, if the debt-equity ratio for 
the railroad industry is used then the industry average equity and debt 
rate from the Board's latest revenue adequacy finding must also be used 
in paragraphs (d)(2) and (d)(3) of this section.
    (2) The current nominal cost of debt shall be determined by taking 
the average of all debt instruments (including bonds, equipment trust 
certificates, financial lease arrangements, et cetera) issued by the 
carrier in the most recent 12-month period. The debt cost calculated by 
this procedure is a before-tax rate and is not adjusted for inflation 
or income taxes.
    (3) The current nominal after tax cost of equity shall be an amount 
equal to that which a prudent investor would expect to earn through 
investment in the market place. The current after tax nominal cost of 
equity is divided by 1 minus the combined statutory Federal and state 
income tax rates. This will develop the nominal cost of equity on a 
before tax basis.
    (4) The current nominal before-tax cost of debt is multiplied by 
the current percentage of debt to total capital to obtain a weighted 
before-tax nominal cost of current debt.
    (5) The current nominal before-tax cost of equity is multiplied by 
the current percentage of equity to total capital to obtain a weighted 
nominal before-tax cost of current equity.
    (6) The results of paragraphs (d)(4) and (d)(5) of this section are 
added together to determine the current nominal cost of capital.
    (e) Holding gain (loss)-road properties. The railroad shall 
determine the holding gain (loss) that is projected to occur during the 
forecast and/or subsidy year. In any instance where the holding gain is 
not specifically determined for road properties, the Gross Domestic 
Product deflator calculated by the U.S. Department of Commerce shall be 
used.


Sec. 1152.35   [Reserved]


Sec. 1152.36   Submission of revenue and cost data.

    The following information shall be submitted by applicant as 
Exhibit 1 to an abandonment or discontinuance application 
(Sec. 1152.22(d)) and shall be developed in accordance with the 
methodology established in Secs. 1152.31 through 1152.35, as 
applicable. Such information, form and methodology shall also be used 
by an offeror of financial assistance to formulate a Proposed Subsidy 
Payment (Sec. 1152.27).

[[Page 67915]]



----------------------------------------------------------------------------------------------------------------
                                                                      Forecast year       Projected subsidy year
                                          Base year operations          operations              operations      
----------------------------------------------------------------------------------------------------------------
Revenues attributable for:                                                                                      
    1. Freight originated and/or                                                                                
     terminated on branch                                                                                       
    2. Bridge traffic                                                                                           
    3. All other revenue and income                                                                             
    4. Total revenues attributable                                                                              
     (lines 1 through 3)                                                                                        
Avoidable costs for:                                                                                            
    5. On-branch costs (lines 5a                                                                                
     through 5k)                                                                                                
        a. Maintenance of way and                                                                               
         structures                                                                                             
        b. Maintenance of equipment                                                                             
        c. Transportation                                                                                       
        d. General administrative                                                                               
        e. Deadheading, taxi, and                                                                               
         hotel                                                                                                  
        f. Overhead movement                                                                                    
        g. Freight car costs (other                                                                             
         than return on freight cars)                                                                           
        h. Return on value-locomotives                                                                          
        i. Return on value-freight                                                                              
         cars                                                                                                   
        j. Revenue taxes                                                                                        
        k. Property taxes                                                                                       
    6. Off-branch costs                                                                                         
        a. Off-branch costs (other                                                                              
         than return on freight cars)                                                                           
        b. Return on value-freight                                                                              
         cars                                                                                                   
    7. Total avoidable costs (line 5                                                                            
     plus line 6)                                                                                               
Subsidization costs for:                                                                                        
    8. Rehabilitation \1\                                                                                       
    9. Administration costs (subsidy                                                                            
     year only) \2\                                                                                             
    10. Casualty reserve account \2\                                                                            
    11. Total subsidization costs                                                                               
     (lines 8 through 10)                                                                                       
Return on value:                                                                                                
    12. Valuation of property (lines                                                                            
     12a through 12c)                                                                                           
        a. Working capital............  XXXX...................                                                 
        b. Income tax consequences....  XXXX...................                                                 
        c. Net liquidation value......  XXXX...................                                                 
    13. Nominal rate of return........  XXXX...................                                                 
    14. Nominal return on value (line   XXXX...................                                                 
     12 times line 13) \3\.                                                                                     
    15. Holding gain (loss)...........  XXXX...................                                                 
    16. Total return on value (line 14  XXXX...................                                                 
     minus 15) \3\.                                                                                             
    17. Avoidable loss from operations                                                                          
     (line 4 minus line 7)                                                                                      
    18. Estimated forecast year loss                                                                            
     from operations (line 4 minus                                                                              
     lines 7 and 16)                                                                                            
    19. Estimated subsidy (line 4                                                                               
     minus lines 7, 11 and 16)                                                                                  
----------------------------------------------------------------------------------------------------------------
\1\ This projection shall be computed in accordance with Sec.  1152.32(m).                                      
\2\ Omit in applications pursuant to Secs.  1152.22 and 1152.23.                                                
\3\ If the amount in line 12c is a negative for the ``Forecast Year operations'' insert ``0'' in this line.     

Sec. 1152.37   Financial status reports.

    Within 30 days after the end of each quarter of the subsidy year, 
each carrier which is party to the financial assistance agreement shall 
submit to the subsidizer a Financial Status Report for each line 
operated under subsidy. Such Financial Status Report shall be in the 
form prescribed below. Significant deviations from the negotiated 
estimates must be explained. All data shall be developed in accordance 
with the methodology set forth in Secs. 1152.31 through 1152.35. In the 
quarterly reports, the actual data for the year to date and a 
projection to the end of the subsidy year shall be shown for each item.

----------------------------------------------------------------------------------------------------------------
                                                       Actual                            Projected              
----------------------------------------------------------------------------------------------------------------
Revenues for:                                                                                                   
    1. Freight originated and/or                                                                                
     terminated on branch                                                                                       
    2. Bridge traffic                                                                                           
    3. All other revenue and income                                                                             
    4. Total revenues (lines 1 through 3)                                                                       
Avoidable costs for:                                                                                            
    5. On-branch costs (lines 5a through                                                                        
     5j)                                                                                                        
        a. Maintenance of way and                                                                               
         structures                                                                                             
        b. Maintenance of equipment                                                                             
        c. Transportation                                                                                       
        d. General administrative                                                                               
        e. Deadheading, taxi, and hotel                                                                         
        f. Overhead movement                                                                                    
        g. Freight car costs                                                                                    
        h. Return on investment--                                                                               
         locomotives                                                                                            
        i. Revenue taxes                                                                                        
        j. Property taxes                                                                                       

[[Page 67916]]

                                                                                                                
    6. Off-branch costs                                                                                         
    7. Total avoidable costs (line 5 plus                                                                       
     line 6)                                                                                                    
Subsidization costs for:                                                                                        
    8. Rehabilitation                                                                                           
    9. Administrative costs                                                                                     
    10. Casualty                                                                                                
    11. Total subsidization costs (lines                                                                        
     8 through 10)                                                                                              
Return on value:                                                                                                
    12. Valuation of property (lines 12a                                                                        
     through 12c)                                                                                               
        a. Working capital                                                                                      
        b. Income tax consequences                                                                              
        c. Net liquidation value                                                                                
    13. Rate of return                                                                                          
    14. Total return on value (line 12                                                                          
     times line 13)                                                                                             
Subsidy payment:                                                                                                
    15. Subsidy payment (line 4 minus                                                                           
     lines 7, 11, and 14)                                                                                       
----------------------------------------------------------------------------------------------------------------

Subpart E--[Reserved]

Subpart F--Exempt Abandonments and Discontinuances of Service and 
Trackage Rights


Sec. 1152.50  Exempt abandonments and discontinuances of service and 
trackage rights.

    (a)(1) A proposed abandonment or discontinuance of service or 
trackage rights over a railroad line is exempt from the provisions of 
49 U.S.C. 10903 if the criteria in this section are satisfied.
    (2) Whenever the Board determines a proposed abandonment to be 
exempt from the requirements of 49 U.S.C. 10903, whether under this 
section or on the basis of the merits of an individual petition, the 
provisions of Secs. 1152.27, 1152.28, and 1152.29 as they relate to 
exemption proceedings shall be applicable.
    (b) An abandonment or discontinuance of service or trackage rights 
is exempt if the carrier certifies that no local traffic has moved over 
the line for at least 2 years and any overhead traffic on the line can 
be rerouted over other lines and that no formal complaint filed by a 
user of rail service on the line (or a state or local government entity 
acting on behalf of such user) regarding cessation of service over the 
line either is pending with the Board or any U.S. District Court or has 
been decided in favor of the complainant within the 2-year period. The 
complaint must allege (if pending), or prove (if decided) that the 
carrier has imposed an illegal embargo or other unlawful impediment to 
service.
    (c) The Board has found:
    (1) That its prior review and approval of these abandonments and 
discontinuances is not necessary to carry out the rail transportation 
policy of 49 U.S.C. 10101; and
    (2) That these transactions are of limited scope and continued 
regulation is unnecessary to protect shippers from abuse of market 
power. 49 U.S.C. 10502. A notice must be filed to use this class 
exemption. The procedures are set out in Sec. 1152.50(d). This class 
exemption does not relieve a carrier of its statutory obligation to 
protect the interests of employees. 49 U.S.C. 10502(g) and 10903(b)(2). 
This also does not preclude a carrier from seeking an exemption of a 
specific abandonment or discontinuance that does not fall within this 
class.
    (d) Notice of exemption. (1) At least 10 days prior to filing a 
notice of exemption with the Board, the railroad seeking the exemption 
must notify in writing:
    (i) The Public Service Commission (or equivalent agency) in the 
state(s) where the line will be abandoned or the service or trackage 
rights discontinued;
    (ii) Department of Defense (Military Traffic Management Command, 
Transportation Engineering Agency, Railroads for National Defense 
Program);
    (iii) The National Park Service, Recreation Resources Assistance 
Division; and
    (iv) The U.S. Department of Agriculture, Chief of the Forest 
Service.
    The notice shall name the railroad, describe the line involved, 
including United States Postal Service ZIP Codes, indicate that the 
exemption procedure is being used, and include the approximate date 
that the notice of exemption will be filed with the Board. The notice 
shall include the following statement ``Based on information in our 
possession, the line (does) (does not) contain federally granted 
rights-of-way. Any documentation in the railroad's possession will be 
made available promptly to those requesting it.''
    (2) The railroad must file a verified notice using its appropriate 
abandonment docket number and subnumber (followed by the letter ``X'') 
with the Board at least 50 days before the abandonment or 
discontinuance is to be consummated. The notice shall include the 
proposed consummation date, the certification required in 
Sec. 1152.50(b), the information required in Secs. 1152.22(a) (1) 
through (4), (7) and (8), and (e)(5), the level of labor protection, 
and a certificate that the notice requirements of Secs. 1152.50(d)(1) 
and 1105.11 have been complied with.
    (3) The Board, through the Director of the Office of Proceedings, 
shall publish a notice in the Federal Register within 20 days after the 
filing of the notice of exemption. The notice shall include a statement 
to alert the public that following any abandonment of rail service and 
salvage of the line, the line may be suitable for other public use, 
including interim trail use. Petitions to stay the effective date of 
the notice on other than environmental or historic preservation grounds 
must be filed within 10 days of the publication. Petitions to stay the 
effective date of the notice on environmental or historic preservation 
grounds may be filed at any time but must be filed sufficiently in 
advance of the effective date in order to allow the Board to consider 
and act on the petition before the notice becomes effective. Petitions 
for reconsideration, comments regarding environmental, energy and 
historic preservation matters, and requests for public use conditions 
under 49 U.S.C. 10905 and 49 CFR 1152.28(a)(2) must be filed within 20 
days after publication. Requests for a trail use condition under 16 
U.S.C. 1247(d) and 49 CFR 1152.29 must be filed within 10 days after 
publication. The exemption will be effective 30 days after publication, 
unless stayed. If the notice of exemption contains false or misleading 
information, the use of the exemption is

[[Page 67917]]

void ab initio and the Board shall summarily reject the exemption 
notice.
    (4) In out-of-service rail line exemption proceedings under 49 CFR 
1152.50, the Board, on its own motion, will stay the effective date of 
individual notices of exemption when an informed decision on pending 
environmental and historic preservation issues cannot be made prior to 
the date that the exemption authority would otherwise become effective.
    (5) A notice or decision to all parties will be issued if use of 
the exemption is made subject to environmental, energy, historic 
preservation, public use and/or interim trail use and rail banking 
conditions.
    (6) To address whether the standard labor protective conditions set 
forth in Oregon Short Line R. Co.--Abandonment--Goshen, 360 I.C.C. 91 
(1979), adequately protect affected employees, a petition for partial 
revocation of the exemption under 49 U.S.C. 10502(d) must be filed.
    (e) Consummation notice. As provided in Sec. 1152.29(e)(2), rail 
carriers that receive authority to abandon a line under Sec. 1152.50 
must file with the Board a notice that abandonment has been 
consummated.

Subpart G--Special Rules Applicable to Petitions for Abandonments 
or Discontinuances of Service or Trackage Rights Filed Under the 49 
U.S.C. 10502 Exemption Procedure


Sec. 1152.60  Special rules.

    (a) This section contains special rules applicable to any 
proceeding instituted under the 49 U.S.C. 10502 exemption procedure for 
either the abandonment of a rail line or the discontinuance of service 
or trackage rights over a rail line. General rules applicable to any 
proceeding filed under the 49 U.S.C. 10502 exemption procedure may be 
found at 49 CFR part 1121, but the rules in part 1152 control in case 
of any conflict with the general exemption rules. In the case of 
petitions for exemption for abandonment, notice of the filing of the 
petition will be published in the Federal Register 20 days after the 
petition is filed. There will be no further Federal Register 
publication later if and when a petition is granted.
    (b) Any petition filed under the 49 U.S.C. 10502 exemption 
procedure for either the abandonment of a rail line or the 
discontinuance of service or trackage rights over a rail line must be 
accompanied by a map that meets the requirements of Sec. 1152.22(a)(4) 
of this part.
    (c) A petitioner for an abandonment exemption shall submit, with 
its petition, a draft Federal Register notice of its petition according 
to the form prescribed below:

    Draft Federal Register Notice. The petitioner shall submit a 
draft notice of its petition to be published by the Board within 20 
days of the petition's filing with the Board. The petitioner must 
submit a copy of the draft notice as data contained on a computer 
diskette compatible with the Board's current word processing 
capabilities. The draft notice shall be in the form set forth below:

STB No. AB-______ (Sub-No.______)

Notice of Petition for Exemption to Abandon or to Discontinue Service

    On (insert date petition was filed with the Board) (name of 
petitioner) filed with the Surface Transportation Board, Washington, 
D.C. 20423, a petition for exemption for the abandonment of (the 
discontinuance of service on) a line of railroad known as______, 
extending from railroad milepost near (station name) to (the end of 
line or rail milepost) near (station name), which traverses through 
______ (ZIP Codes) United States Postal Service ZIP Codes, a 
distance of ______ miles, in [County(ies), State(s)]. The line for 
which the abandonment (or discontinuance) exemption request was 
filed includes the stations of (list all stations on the line in 
order of milepost number, indicating milepost location).
    The line (does) (does not) contain federally granted rights-of-
way. Any documentation in the railroad's possession will be made 
available promptly to those requesting it.
    The interest of railroad employees will be protected by (specify 
the appropriate conditions).
    Any offer of financial assistance will be due no later than 10 
days after service of a decision granting the petition for 
exemption.
    All interested persons should be aware that following 
abandonment of rail service and salvage of the line, the line may be 
suitable for other public use, including interim trail use.
    Any request for a public use condition and any request for trail 
use/rail banking will be due no later than 20 days after notice of 
the filing of the petition for exemption is published in the Federal 
Register.
    Persons seeking further information concerning abandonment 
procedures may contact the Surface Transportation Board or refer to 
the full abandonment or discontinuance regulations at 49 CFR part 
1152. Questions concerning environmental issues may be directed to 
the Board's Section of Environmental Analysis.
    An environmental assessment (EA) (or environmental impact 
statement (EIS), if necessary) prepared by the Section of 
Environmental Analysis will be served upon all parties of record and 
upon any agencies or other persons who commented during its 
preparation. Any other persons who would like to obtain a copy of 
the EA (or EIS) may contact the Section of Environmental Analysis. 
EAs in these abandonment proceedings normally will be made available 
within 60 days of the filing of the petition. The deadline for 
submission of comments on the EA will generally be within 30 days of 
its service.
    (d) A petitioner for an abandonment exemption must serve a copy 
of the petition on the persons receiving notices of exemption under 
Sec. 1152.50(d). The petition must include the following statement: 
``Based on information in our possession, the line (does) (does not) 
contain federally granted right-of-way. Any documentation in 
petitioner's possession will be made available promptly to those 
requesting it.''
    (e) As Provided in Sec. 1152.29(e)(2), rail carriers that 
receive authority to abandon a line by individual exemption under 49 
U.S.C. 10502 must file with the Board a notice that abandonment has 
been consummated.

[FR Doc. 96-32229 Filed 12-23-96; 8:45 am]
BILLING CODE 4915-00-P