[Federal Register Volume 78, Number 136 (Tuesday, July 16, 2013)]
[Proposed Rules]
[Pages 42484-42485]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-17022]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Chapter X

[Docket No. EP 719]


Small Entity Size Standards Under the Regulatory Flexibility Act

AGENCY: Surface Transportation Board (Board or STB), DOT.

ACTION: Notice of proposed size standards for purposes of the 
Regulatory Flexibility Act (RFA) and request for public comment.

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SUMMARY: The Board is proposing to define ``small business'' for the 
purpose of RFA analyses as including only those rail carriers with 
revenues that would bring them within the definition of a Class III 
rail carrier.

DATES: Comments are due by August 15, 2013.

FOR FURTHER INFORMATION CONTACT: Amy Ziehm at (202) 245-0391. 
Assistance for the hearing impaired is available through the Federal 
Information Relay Service (FIRS) at (800) 877-8339.

SUPPLEMENTARY INFORMATION: The RFA requires agencies to consider the 
impact of their regulatory proposals on small entities. The RFA defines 
``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' \1\ 5 U.S.C. 601(6). Generally, a small business is a 
business concern that is independently owned and operated, and is not 
dominant in its field of operation. 5 U.S.C. 601(3); 15 U.S.C. 632. The 
Small Business Administration (SBA) has developed size standards to 
carry out the purposes of the Small Business Act. An agency may 
establish other definitions for ``small business'' that are appropriate 
to the agency's activities after consultation with the SBA's Office of 
Advocacy and opportunity for public comment. 5 U.S.C. 601(3).
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    \1\ The RFA defines ``small organization'' as meaning ``any not-
for-profit enterprise which is independently owned and operated and 
is not dominant in its field . . . ,'' and ``small governmental 
jurisdiction'' as meaning ``governments of cities, counties, towns, 
townships, villages, school districts, or special districts, with a 
population of less than fifty thousand. . . .'' 5 U.S.C. 601(4) & 
(5).
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    Pursuant to its statutory authority, the SBA promulgated 
regulations that clarify the term ``small business'' by industry, using 
number of employees or annual income as criteria. Under these 
regulations, line-haul railroads with 1,500 or fewer employees and 
short line railroads with 500 or fewer employees constitute small 
entities. 13 CFR 121.201 (industry subsector 482). The Board proposes 
to establish a size standard for purposes of RFA analysis for rail 
carriers subject to our jurisdiction based on annual operating revenues 
rather than number of employees.
    The Board was created by the ICC Termination Act of 1995, Public 
Law 104-88, 109 Stat. 803 (1995), on January 1, 1996, to assume some 
functions of the Interstate Commerce Commission (ICC), which was 
terminated by that same Act.

[[Page 42485]]

The majority of the functions that the Board assumed are related to the 
regulation of freight railroads. The ICC had previously developed a 
classification system for freight railroads based on annual operating 
revenue, pursuant to which railroads were classified as Class I, II, or 
III. This classification system was used by the ICC as early as 1911, 
and the Board continues to use it in the administration of its duties. 
Currently, the Board's regulations define Class I rail carriers as 
having operating revenues of $250 million or more, Class II rail 
carriers as having less than $250 million but in excess of $20 million, 
and Class III rail carriers as having $20 million or less, after 
applying the railroad revenue deflator formula. The Board calculates 
the revenue deflator factor annually and publishes the railroad revenue 
thresholds on its Web site.
    This classification system is used pervasively by the Board and the 
railroad industry to identify rail entities by size. The Board's 
governing statute, its precedent, and its regulations often impose 
different requirements depending on the class of carrier involved. In 
2003, the Federal Railroad Administration acknowledged the soundness of 
this system when it adopted, after consultation with the SBA's Office 
of Advocacy and opportunity for public comment, a definition of small 
entity for RFA purposes as including only those rail carriers with 
revenues that would bring them within the Class III definition. 68 FR 
24,891 (2003); see also 62 FR 43,024 (1997). The SBA's Office of 
Advocacy has been consulted with respect to the Board's decision to use 
this system for the purpose of RFA analyses. The Board proposes to 
define ``small business'' as including only those rail carriers with 
revenues that would bring them within the Class III definition. The 
Board believes that this definition is more realistic and useful than 
the general definitions previously established by the SBA, and it is 
consistent with the practices of the Federal Railroad Administration.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.
    It is ordered:
    1. Comments are due by August 15, 2013.
    2. A copy of this decision will be served upon the Chief Counsel 
for Advocacy, Office of Advocacy, U.S. Small Business Administration.
    3. Notice of this decision will be published in the Federal 
Register.
    4. This decision is effective on its service date.

    Decided: July 11, 2013.

    By the Board, Chairman Elliott, Vice Chairman Begeman, and 
Commissioner Mulvey.
Jeffrey Herzig,
Clearance Clerk.
[FR Doc. 2013-17022 Filed 7-15-13; 8:45 am]
BILLING CODE 4915-01-P