[Federal Register Volume 75, Number 38 (Friday, February 26, 2010)]
[Rules and Regulations]
[Pages 8817-8818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-3969]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Part 1135

[STB Ex Parte No. 682]


Annual Submission of Tax Information for Use in the Revenue 
Shortfall Allocation Method

ACTION: Final rule.

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SUMMARY: The Surface Transportation Board (Board) is amending 49 CFR 
part 1135 to add a rule that requires the Association of American 
Railroads (AAR) to annually update each Class I railroad's weighted 
average State tax rate for use in the Revenue Shortfall Allocation 
Method (RSAM). RSAM is one of three benchmarks that together are used 
to determine the reasonableness of a challenged rate under the Board's 
Simplified Standards for Rail Rate Cases, STB Docket No. 646 (Sub-No. 
1) (STB served Sept. 5, 2007) (Simplified Standards).\1\ The new rule 
requires that the AAR submit this information by May 30 of each year.
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    \1\ Aff'd sub nom. CSX Transp., Inc. v. STB, 568 F.3d 236 (DC 
Cir. 2009), and vacated in part on other grounds on reh'g, CSX 
Transp., Inc. v. STB, 584 F.3d 1076 (DC Cir. 2009).

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[[Page 8818]]


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DATES: Effective Date: This rule is effective on February 26, 2010.

ADDRESSES: Information or questions regarding this final rule should 
reference STB Ex Parte No. 682 and be in writing addressed to: Chief, 
Section of Administration, Office of Proceedings, Surface 
Transportation Board, 395 E Street, SW., Washington, DC 20423-0001.

FOR FURTHER INFORMATION CONTACT: Valerie O. Quinn at (202) 245-0382. 
Assistance for the hearing impaired is available through the Federal 
Information Relay Service (FIRS) at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: The Board is revising its regulations to 
include a new rule, 49 CFR 1135.2, that requires the AAR to annually 
calculate the weighted average State tax rate for each Class I railroad 
and submit that information to the Board by May 30 of each year. On May 
11, 2009, the Board completed its revision of the methodology it uses 
to calculate RSAM, one of the three benchmarks used in the rate 
standard applied to the smallest rate disputes under Simplified 
Standards. See Simplified Standards for Rail Rate Cases--Taxes in 
Revenue Shortfall Allocation Method, STB Ex Parte No. 646 (Sub-No. 2) 
(STB served May 11, 2009) (RSAM Taxes). Specifically, that revision 
addressed the methodology used to calculate railroad-specific tax rates 
to be reflected in RSAM. The calculation of the railroad-specific 
weighted average State tax rates requires, as one component, the State 
tax rates applicable to each Class I railroad, which can vary by State 
and railroad depending on a number of factors. The Board noted in RSAM 
Taxes that, because of this variance, the Board would need updated tax 
information on an annual basis. Therefore, on September 21, 2009, the 
Board served a decision that, among other things, instituted this 
rulemaking, set a procedural schedule for comments, and proposed that 
the AAR annually update each Class I railroad's weighted average State 
tax information on or before the due date for the Class I railroads to 
file their Annual Report R-1, Schedule 250, which is April 30 of each 
year.\2\ See Annual Submission of Tax Information for Use in the 
Revenue Shortfall Allocation Method, STB Ex Parte No. 682 (STB served 
Sept. 21, 2009) (September Decision).
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    \2\ The Annual Report R-1 is a report filed annually with the 
Board by March 31 by every Class I railroad pursuant to 49 U.S.C. 
11145. This report contains a yearly accounting of the affairs of 
the railroad. Though Schedule 250 is one of several schedules 
required as part of the Annual Report R-1, it is a separate document 
used by the Board in revenue adequacy determinations, and it has a 
later submission deadline than does the rest of the Annual Report R-
1 due to the time required to prepare it.
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    Pursuant to the procedural schedule forth in the September 
Decision, the AAR filed its comments on the proposed rulemaking on 
October 21, 2009. The AAR concurs with the Board's proposal to require 
the AAR to calculate and file the weighted average State tax rate for 
each Class I railroad on a specific date and also concurs with the 
proposed procedural schedule for reviewing the submitted information. 
The AAR requests, however, that the Board change the due date for 
submission of the State tax information from April 30 to May 30 of each 
year. The AAR states that the Annual Report R-1, due March 31 of each 
year, includes the mileage necessary to weight the State tax rates.\3\ 
If there is a delay in filing the Annual Report Form R-1, which the AAR 
reports has occurred in the past, then the AAR states that it would not 
have enough time prior to April 30 to verify the mileage data and 
calculate the railroad-specific weighted average State tax rates. 
Therefore, the AAR requests that we extend the due date for submitting 
the railroad-specific weighted average State tax rates to May 30 of 
each year.
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    \3\ The mileage information is included in Schedule 702.
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    The Board received no reply comments to the AAR's submission. The 
Board finds the AAR's request to extend the due date for the 
calculations of the railroad-specific weighted average State tax rates 
reasonable. We will modify the final rule to reflect a due date of May 
30 of each year.
    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 1135

    Administrative practice and procedure, Railroads, and Reporting and 
recordkeeping requirements.

    Authority: 5 U.S.C. 553 and 49 U.S.C. 721 and 10708.

    By the Board, Chairman Elliott, Vice Chairman Mulvey, and 
Commissioner Nottingham.
Jeffrey Herzig,
Clearance Clerk.


0
For the reasons set forth in the preamble, the Surface Transportation 
Board amends part 1135 of title 49, chapter X, of the Code of Federal 
Regulations as follows:

PART 1135--REPORTING REQUIREMENTS FOR RATE PROCEEDINGS

0
1. The authority citation for part 1135 is revised to read as follows:

    Authority: 5 U.S.C. 553, and 49 U.S.C. 721, 10701, 10704, 10708, 
and 11145.


0
2. Section 1135.2 is added to read as follows:


Sec.  1135.2  Revenue Shortfall Allocation Method: Annual State tax 
information.

    (a) To enable the Board to calculate the revenue shortfall 
allocation method (RSAM), which is one of the three benchmarks that are 
used to determine the reasonableness of a challenged rate under one 
standard of the Board's Simplified Standards for Rail Rate Cases, STB 
Docket No. 646 (Sub-No. 1) (STB served Sept. 5, 2007), the Association 
of American Railroads (AAR) shall file with the Board, on or before May 
30, the weighted average State tax rates applicable to each Class I 
railroad for the previous year. The AAR shall submit workpapers 
detailing its calculations.
    (b) The Board will serve and publish a notice of the filing in the 
Federal Register within 10 days of the AAR's filing.
    (c) Any interested party may file comments on the AAR's filing 
within 30 days of the notice described in paragraph (b) of this 
section. If no comments are received within 30 days, the Board will 
automatically adopt the AAR's weighted average State tax rates on the 
31st day. If comments opposing the AAR's calculations are received, the 
AAR's response will be due within 20 days of the comments. The Board 
will review the submission and comments and serve a decision within 60 
days from the date of the close of the record that either accepts, 
rejects, or modifies the AAR's railroad-specific tax information.

[FR Doc. 2010-3969 Filed 2-25-10; 8:45 am]
BILLING CODE 4915-01-P