[Federal Register Volume 62, Number 113 (Thursday, June 12, 1997)]
[Proposed Rules]
[Pages 32068-32070]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15266]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Part 1157

[STB Ex Parte No. 563]


Commuter Rail Service Continuation Subsidies and Discontinuance 
Notices

AGENCY: Surface Transportation Board.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Surface Transportation Board (Board) is proposing to 
remove from the Code of Federal Regulations regulations concerning 
subsidies for the continuation of commuter rail service and notices of 
the discontinuance of commuter rail service.

DATES: Comments are due on July 14, 1997.

FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 565-1600. [TDD for 
the hearing impaired: (202) 565-1695.]

SUPPLEMENTARY INFORMATION: Effective January 1, 1996, the ICC 
Termination Act of 1995, Pub. L. No. 104-88, 109 Stat. 803 (ICCTA), 
abolished the Interstate Commerce Commission (ICC) and established the 
Board. Section 204(a) of the ICCTA provides that ``[t]he Board shall 
promptly rescind all regulations established by the [ICC] that are 
based on provisions of law repealed and not substantively reenacted by 
this Act.''
    It appears that some of the regulations at 49 CFR part 1157 are 
based on repealed statutes. On the other hand, statutes outside the 
ICCTA refer to and hence may require the retention in substance of part 
1157. We are instituting this proceeding to determine whether these 
regulations may be eliminated, or whether they have continuing validity 
and must be retained.
    Part 1157 deals with the determination of commuter rail 
continuation subsidies for the Consolidated Rail Corporation (Conrail) 
(subpart A) and notices of the discontinuance of commuter rail service 
by Amtrak Commuter Services Corporation (Amtrak Commuter) (subpart B). 
The subpart A regulations are based in part on former 49 U.S.C. 10362, 
which, together with former section 10361, pertained to the Rail 
Services Planning Office (RSPO) of the former ICC.1 Both 
section 10361 and section 10362 were repealed by the ICCTA.2 
Moreover, the ICCTA removed the requirement in 45 U.S.C. 744(e) that 
RSPO issue regulations for rail passenger subsidies for Conrail. See 
section 327(3) of the ICCTA. Finally, under 49 U.S.C. 10501(c)(2) of 
the ICCTA, with certain exceptions not relevant here,3 ``the 
Board does not have jurisdiction under this part over mass 
transportation provided by a local governmental authority.'' 
4 As described infra, however, the subpart A regulations are 
referred to in an Amtrak Commuter statute that is still in effect. 
Accordingly, we seek comment on whether subpart A can be eliminated.
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    \1\  These and other statutes will be discussed in greater 
detail, infra.
    \2\  Besides former 49 U.S.C. 10362, the regulations in part 
1157, subpart A give for their statutory authority 49 U.S.C. 10321 
and 5 U.S.C. 559. Section 10321, dealing with the ICC's general 
authority, has been carried over to 49 U.S.C. 721, while 5 U.S.C. 
559 remains part of the Administrative Procedure Act.
    \3\  The exceptions, listed in section 10501(c)(3)(A), make 
safety, employee representation for collective bargaining, and other 
employee-related matters subject to applicable federal laws. Also, 
under section 10501(c)(3)(B), the Board has jurisdiction over 
transportation by local transportation authorities relating to use 
of terminal facilities (section 11102) and switch connections and 
tracks (section 11103).
    \4\  Under former 49 U.S.C. 10504(b)(2), the ICC did not have 
jurisdiction over mass transportation provided by a local 
governmental authority if the fares, or the authority to apply to 
the Commission for changes in those fares, were subject to the 
approval of the Governor of the state in which the transportation 
was provided. The ICCTA broadened this exemption, and the Board 
currently does not have jurisdiction whether or not the Governor can 
approve a fare. ``This provision * * * changes the statement of 
agency jurisdiction to reflect curtailment of regulatory 
jurisdiction in areas such as passenger transportation. * * * 
(A)lthough regulation of passenger transportation is generally 
eliminated, public transportation authorities * * * may invoke the 
terminal area and reciprocal switching access remedies of section 
11102 and 11103.'' See H. R. Conf. Rep. No. 422, 104th Cong., 1st 
Sess. 167 (1995). See also, Commuter Rail Division of the Regional 
Transportation Authority of Northeast Illinois, D/B/A Metra--
Exemption-- Tariff Filing Requirements, Docket No. 41506 (STB, 
served Mar. 29, 1996).
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    The regulations in part 1157, subpart B are based on 49 U.S.C. 
24505(e)(2).5 As noted, while the ICCTA removed references 
in 45 U.S.C. 744(e) to regulations issued by RSPO, section 24505(e)(2) 
still refers to RSPO prescribing regulations for Amtrak Commuter 
discontinuance notices. As indicated, however, under section 
10501(c)(2) the Board does not have jurisdiction over local 
governmental authorities providing mass transportation. Additionally, 
neither the Board (nor the ICC before it) has jurisdiction to regulate 
any of Amtrak's service. We also seek comment on whether the subpart B 
regulations can be eliminated.
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    \5\  The statutory authority given for the regulations in part 
1157, subpart B is ``49 U.S.C. 504(d)(2)'' while the text of the 
regulations cites ``45 U.S.C. 504(d)(2).'' Neither of these 
references is currently correct. Section 1137 of the Northeast Rail 
Service Act of 1981, discussed infra, contains a section 504(d)(2) 
which was originally codified at 45 U.S.C. 584(d)(2). Section 584 
was repealed by Pub. L. No. 103-272, section 7(b), July 5, 1994, 108 
Stat. 745, and recodified at 49 U.S.C. 24505(e)(2) as part of a 
general restructuring of the United States Code ``(t)o restate the 
laws related to transportation in one comprehensive title * * *.'' 
H.R. Rep. No. 180, 103d Cong., 2d Sess. 3 (1994), reprinted in 1994 
U.S.C.C.A.N. 818, 820.
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Background

    To assist parties in commenting on whether part 1157 should be 
retained, we will briefly describe the rather complex statutory setting 
for the regulations.
    The Rail Passenger Service Act of 1970, Pub. L. No. 91-518, 84 
Stat. 1327 (1970) (Amtrak Act), created the National Railroad Passenger 
Corporation, known as Amtrak, a for-profit corporation. See 49 U.S.C. 
24301 et seq.6 Railroads that entered into contracts with 
Amtrak were relieved of their duties to provide intercity rail 
passenger service.
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    \6\  The Amtrak Act was originally codified at 45 U.S.C. 501-
566.
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    The Regional Rail Reorganization Act of 1973, Pub. L. No. 93-236, 
87 Stat. 985, 45 U.S.C. 701 et seq. (3R Act) created Conrail as a for-
profit corporation to reorganize the bankrupt rail services in the 
Northeast and Midwest. Conrail was required by the 3R Act to continue 
providing rail service if states or local transportation authorities 
made payments to subsidize unprofitable operations. Section 304. The 3R 
Act also created RSPO, which was authorized to issue standards for 
defining accounting terms used in section 304. Section 
205(d).7
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    \7\  Under the eventual statutory codification, RSPO was 
established as ``an office in the Interstate Commerce Commission.'' 
Former 49 U.S.C. 10361. In resolving the issue of whether final 
orders or regulations of RSPO were to be considered orders or 
regulations of the ICC, the court held that ``(a)lthough Congress 
gave to the RSPO final administrative responsibility for certain 
determinations, we conclude that the RSPO is sufficiently part of 
the ICC so that its orders are to be considered orders of the ICC 
for purposes of the Hobbs Act.'' Southeastern Pennsylvania Transp. 
Auth. v. I.C.C., 644 F.2d 238, 240, n.3 (3rd Cir. 1981).
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    Subsequently, Congress enacted the Railroad Revitalization and 
Regulatory Reform Act of 1976 (4R Act), which amended portions of the 
3R Act and also added new sections. The 4R Act established, inter alia, 
a program of Federal financial assistance for the continuation of 
certain rail commuter passenger services in the Midwest and

[[Page 32069]]

Northeast regions. Section 304(e) of the 4R Act (now codified at 45 
U.S.C. 744(e)) amended the 3R Act by explicitly adding a section 
pertaining to rail passenger service. Under this provision, Conrail was 
to continue providing rail passenger service if a state or local 
transportation authority offered a subsidy to pay for the unprofitable 
service.
    Of significance to this proceeding, section 309 of the 4R Act 
amended section 205(d) of the 3R Act (49 U.S.C. 10362) to require RSPO 
to develop standards for the computation of subsidies for the 
continuation of these commuter services.8 RSPO issued the 
regulations on August 3, 1976, 41 FR 32546.9 These standards 
were originally codified at 49 CFR part 1127 and are now found at 49 
CFR part 1157, subpart A (subsidy standards).
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    \8\  The RSPO subsidy regulations are also referenced in 45 
U.S.C. 744(e).
    \9\  RSPO originally published a notice of proposed rulemaking 
(NPR) on February 20, 1976, in Standards for the Computation of 
Commuter Rail Passenger Service Subsidies, Ex Parte No. 293 (Sub-No. 
8). On May 16, 1976, it published a further NPR (41 FR 20104), and 
on June 30, 1976, it published a second NPR (41 FR 26936).
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    Next, Congress enacted the Northeast Rail Service Act of 1981, Pub. 
L. 97-35, 95 Stat. 643 (NERSA).10 In the context of part 
1157, NERSA made three important changes.
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    \10\  ``NERSA * * * was designed essentially to extricate 
Conrail from its fiscally draining commitment to commuter services 
so that it could concentrate on freight services, while ensuring the 
orderly transfer of commuter services to new, viable providers.'' 
Conrail v. Metropolitan Transit Authority, 1996 U.S. Dist. Lexis 
3519, at *4 (S.D.N.Y. 1996).
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    First, under section 1136 of NERSA, codified at 45 U.S.C. 744a, 
Conrail was relieved on January 1, 1983, of any legal obligation to 
provide commuter service. Despite this change, however, 45 U.S.C. 744 
was retained. Section 744(e), as noted, required Conrail to provide 
rail passenger service if a subsidy is paid under regulations issued by 
RSPO.
    Second, section 1137 of NERSA amended the Amtrak Act and chartered 
Amtrak Commuter. Section 1137 was originally codified at 45 U.S.C. 581-
91 and is now codified at 49 U.S.C. 24501-06. Under section 
24505(a)(1), Amtrak Commuter is required to provide the commuter rail 
passenger service that Conrail was obligated to provide under the 3R 
and 4R Acts. Moreover, under section 24505(a)(2), Amtrak Commuter may 
provide passenger service if a commuter authority pays the avoidable 
costs plus a reasonable return on value less the revenues from the 
transportation. RSPO was to issue the regulations for such 
payments.11
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    \11\  Section 24505(b)(1) provides that ``(a) commuter authority 
making an offer under subsection (a)(2) of this section shall * * * 
(B) make the offer according to regulations the Rail Services 
Planning Office prescribes under section 10362(b) (5)(A) and (6) of 
this title.''
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    Finally, also under section 1137 and now codified at 49 U.S.C. 
24505(e), Amtrak Commuter may discontinue rail passenger service on 60 
days' notice if a commuter authority does not offer a subsidy or a 
subsidy payment is not paid when due. Under section 24505(e)(2) RSPO 
was directed to prescribe regulations for ``the necessary contents of 
the notice required under this subsection.''
    In response to NERSA, RSPO issued an NPR in Ex Parte No. 293 (Sub-
No. 8), that was published in the Federal Register on September 9, 1982 
(47 FR 39700). RSPO proposed to divide the regulations at 49 CFR part 
1127 (which then contained the subsidy standards) into two sections: 
subpart A would contain the existing subsidy standards while subpart B 
would comprise the new discontinuance notice procedures.
    While RSPO proposed new regulations under subpart B for 
discontinuance notices, it did not propose any changes to the subsidy 
standards. Instead, the NPR implicitly proposed to adopt the subsidy 
standards for use in Amtrak Commuter cases: ``After January 1, 1983, 
[Amtrak Commuter] is required to take over the commuter operations 
currently provided by Conrail if a commuter authority offers a subsidy 
payment which complies with RSPO's Standards * * * .'' (Emphasis 
supplied; citation omitted.) Final rules were adopted in a notice 
published in the Federal Register on January 5, 1983 (48 FR 413).
    The ICCTA was the final legislative action applicable to these 
regulations. As noted, under 49 U.S.C. 10501(c)(2), ``the Board does 
not have jurisdiction under this part over mass transportation provided 
by a local governmental authority.'' (Emphasis supplied.) Moreover, 
under the ICCTA, sections 10361 and 10362 concerning RSPO were 
repealed.
    As indicated, although Conrail, under 45 U.S.C. 744a, is no longer 
obligated to provide commuter passenger service, 45 U.S.C. 744(e) has 
not been repealed. The ICCTA did, however, eliminate from section 
744(e) references to subsidy standards set by RSPO. For example, before 
the ICCTA, section 744(e)(4)(C) concerned a public body that ``offers a 
rail service continuation payment, pursuant to subsection (c)(2)(A) of 
this section and regulations issued by (RSPO) pursuant to section 
205(d)(5) of this Act . * * *'' (Emphasis supplied.) The ICCTA removed 
the language pertaining to regulations issued by RSPO, and now the 
statute simply describes a public body that ``offers a rail service 
continuation payment, pursuant to subsection (c)(2)(A) of this section 
. * * *''
    On the other hand, the ICCTA did not delete references in the 
Amtrak Commuter statute to RSPO regulations. Section 24505(b)(2) still 
states that RSPO ``may revise and update the [subsidy] regulations'', 
and section 24505(e)(2) still requires RSPO to prescribe the notice of 
discontinuance regulations.

Part 1157 Regulations

    The regulations in part 1157, subpart A, pertaining to the 
determination of commuter rail service subsidies, are detailed and 
long. The subsidy standards prescribe various responsibilities for 
RSPO. Under Sec. 1157.3(d)(4), upon request of either party, RSPO will 
mediate disputes about the subsidy agreement, the subsidy standards, 
and certain plans. Under Sec. 1157.4, parties desiring an 
interpretation of the standards can file a written petition; RSPO will 
issue an interpretation unless it determines that the subsidy standards 
need to be amended, in which case it will institute a rulemaking 
proceeding. Under Sec. 1157.7(d), in an impasse over joint special 
studies, either party may submit the dispute to RSPO for resolution. 
Finally, under Sec. 1157.3(f), the subsidized carrier is to submit 
financial status reports to RSPO.
    The regulations at 49 CFR part 1157, subpart B, implement the 
statutory requirement of section 24505(e) that the contents of an 
Amtrak Commuter discontinuance notice be prescribed. The regulations 
repeat the statutory criteria that Amtrak Commuter can discontinue 
service on 60 days' notice if it is not offered a subsidy or a subsidy 
is not paid when due. The regulations prescribe the form and content of 
the notice and method of posting. They also require that the notice be 
served on the subsidizer, governor, designated state agency, RSPO, and 
Amtrak.

Discussion and Conclusions

    The changes made by the ICCTA require us to reexamine part 1157. We 
note that these regulations were issued by an office (RSPO) that has 
been abolished. They provide, moreover, for continuing responsibilities 
by that office, particularly in subpart A (mediation, issuing 
interpretations). Thus, at a minimum, the regulations

[[Page 32070]]

must be modified to remove the references to, and continuing duties of, 
RSPO. In subpart B, RSPO's only function was to receive a copy of the 
notice, and this responsibility can be easily eliminated.
    The Federal Circuit has recently held:

    ``When a statute has been repealed, the regulations based on 
that statute automatically lose their vitality. Regulations do not 
maintain an independent life, defeating the statutory change.'' 
Aerolineas Argentinas v. U.S., 77 F.3d 1564, 1575 (Fed. Cir. 1996).

The broader issue, however, is whether the remaining regulations have a 
validity independent of the existence of RSPO and the jurisdiction of 
the Board. While the ICCTA deleted the RSPO references at 45 U.S.C. 
744(e) pertaining to Conrail, 49 U.S.C. 24505(b) still incorporates 
RSPO subsidy regulations in the requirements for an offer to provide 
subsidy to Amtrak Commuter. We also note that under 49 U.S.C. 
10501(c)(2) the Board does not have jurisdiction over mass 
transportation provided by a local government authority. On its face, 
this restriction appears to eliminate our authority to modify, or 
resolve disputes under, the subsidy and notice 
regulations.12 Nonetheless, it can be argued that there is 
still a need for the regulations, which, because of their utility, are 
``frozen in time'' (at least until further statutory changes are made). 
We seek comment on these issues.
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    \12\ Under section 10501(c)(1)(A) (i) and (ii), the term ``local 
governmental authority'' has two meanings. First, it takes the 
definition of 49 U.S.C. 5302(a)(6): State political subdivision, an 
authority of a state or political subdivision, an Indian tribe, or a 
public corporation, commission or board established under state law. 
It also ``includes a person or entity that contracts with the local 
governmental authority . * * *'' Section 10501(c)(1)(A)(ii). Under 
section 10501(c)(1)(B), ``Mass transportation'' means the rail 
services described in section 5302(a)(7): transportation providing 
regular and continuing general or specific public transportation.
    By comparison, section 24501(a)(2) states that Amtrak Commuter 
``provides by contract commuter rail passenger transportation for a 
commuter authority. * * *'' The terms ``commuter authority'' and 
``commuter rail passenger transportation'' are similar to ``local 
governmental authority'' and ``mass transportation''. Under 49 
U.S.C. 24102(4), commuter authority is defined as ``a State, local, 
or regional entity established to provide, or make a contract 
providing for, commuter rail passenger transportation.'' Under 
section 24102(5), commuter rail passenger transportation is ``short-
haul rail passenger transportation in metropolitan and suburban 
areas usually having reduced fare, multiple-ride, and commuter 
tickets and morning and evening peak period operations.'' Thus, 
under either definition, the Board appears to have no jurisdiction 
over such activities.
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    The Board preliminarily concludes that the removal of the rule, if 
adopted, would not have a significant effect on a substantial number of 
small entities. The rule removal will lessen the filing requirements of 
rail passenger carriers. Any harm to passengers that are considered 
small entities would be minimal and, in any event, are required by law. 
The Board, however, seeks comments on whether there would be effects on 
small entities that should be considered.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.

List of Subjects in 49 CFR Part 1157

    Railroads, Reporting and recordkeeping requirements, Uniform System 
of Accounts.

    Decided: June 2, 1997.

    By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.

PART 1157--[REMOVED]

    For the reasons set forth in the preamble and under the authority 
of 49 U.S.C. 721(a), title 49, chapter X of the Code of Federal 
Regulations is proposed to be amended by removing part 1157.

[FR Doc. 97-15266 Filed 6-11-97; 8:45 am]
BILLING CODE 4915-00-P