[Federal Register Volume 78, Number 142 (Wednesday, July 24, 2013)]
[Rules and Regulations]
[Pages 44459-44460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-17783]


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DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Part 1141

[Docket No. EP 715]


Rate Regulation Reforms

AGENCY: Surface Transportation Board.

ACTION: Final rules.

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SUMMARY: The Surface Transportation Board (Board) changes some of its 
existing regulations and procedures concerning rate complaint 
proceedings. The Board previously created two simplified procedures to 
reduce the time, complexity, and expense of rate cases. The Board now 
modifies its rules to remove the limitation on relief for one 
simplified approach, and to raise the relief available under the other 
simplified approach. The Board also makes technical changes to the full 
and simplified rate procedures; changes the interest rate that 
railroads must pay on reparations if they are found to have charged 
unreasonable rates; and announces future proceedings on options for 
addressing cross-over traffic and on proposals to address the concerns 
of small agricultural shippers. The purpose of these actions is to 
ensure that the Board's simplified and expedited processes for 
resolving rate disputes are more accessible.

DATES: These rules are effective on August 17, 2013.

ADDRESSES: Information or questions regarding these final rules should 
reference Docket No. EP 715 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: Lucille Marvin, The Board's Office of 
Public Assistance, Governmental Affairs, and Compliance at (202) 245-
0238. Assistance for the hearing impaired is available through the 
Federal Information Relay Service (FIRS) at (800) 877-8339.

SUPPLEMENTARY INFORMATION: The Board modifies some of its existing 
regulations and procedures regarding rate complaint proceedings and 
announces two future proceedings. The Board's actions are

[[Page 44460]]

discussed in five parts. Part I addresses refinements to the 
Simplified-SAC test, removing the limit on relief and requiring a more 
precise calculation of RPI. Part II addresses an increase to the limit 
on relief for a case brought under the Three-Benchmark test to $4 
million. Part III discusses the decision not to curtail the use of 
cross-over traffic in the Full-SAC test at this time, instead 
announcing a future proceeding to address this issue in more detail, 
and modifies the revenue allocation methodology for cross-over traffic. 
Part IV sets out the change in the interest rate carriers must pay 
shippers when the rate charged has been found unlawfully high (from the 
current T-bill rate to the U.S. Prime Rate, as published in the Wall 
Street Journal). Part V describes the concern that, even with changes 
to the limitations on relief for simplified rate cases, shippers of 
agricultural commodities may still not have a viable means of 
challenging rail rates, and announces the Board's intent to institute a 
separate proceeding to explore this concern more closely.
    Additional information is contained in the Board's decision served 
on July 18, 2013. To obtain a copy of this decision, visit the Board's 
Web site at http://www.stb.dot.gov. Copies of the decision may also be 
purchased by contacting the Board's Office of Public Assistance, 
Governmental Affairs, and Compliance at (202) 245-0238.
    The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, generally 
requires a description and analysis of new rules that would have a 
significant economic impact on a substantial number of small entities. 
In drafting a rule, an agency is required to: (1) Assess the effect 
that its regulation will have on small entities; (2) analyze effective 
alternatives that may minimize a regulation's impact; and (3) make the 
analysis available for public comment. 5 U.S.C. 601-604. The impact 
must be a direct impact on small entities ``whose conduct is 
circumscribed or mandated'' by the rule. White Eagle Coop. Ass'n v. 
Conner, 553 F.3d 467, 480 (7th Cir. 2009). An agency has no obligation 
to conduct a small entity impact analysis of effects on entities that 
it does not regulate. United Dist. Cos. v. FERC, 88 F.3d 1105, 1170 
(D.C. Cir. 1996). Under Sec.  605(b), an agency is not required to 
perform an initial or final regulatory flexibility analysis if it 
certifies that the proposed or final rules will not have a 
``significant impact on a substantial number of small entities.''
    The rule changes adopted here will not have a significant economic 
impact upon a substantial number of small entities, within the meaning 
of the Regulatory Flexibility Act.\1\ The changes impose no additional 
reporting or recordkeeping requirements on small railroads. Nor do 
these changes circumscribe or mandate any conduct by small railroads 
that is not already required by statute: The establishment of 
reasonable transportation rates. Small railroads have always been 
subject to rate reasonableness complaints and their associated 
litigation costs. And they have been subject to simplified rate 
procedures since 1996. Finally, as the Board has previously concluded, 
the majority of railroads involved in these rate proceedings are not 
small entities within the meaning of the Regulatory Flexibility Act.\2\ 
In the 32 years since the passage of the Staggers Act--when Congress 
limited the Board's rate reasonableness jurisdiction to where a carrier 
has market dominance over the transportation at issue--virtually all 
rate challenges have involved Class I carriers. Therefore, the Board 
certifies under 5 U.S.C. 605(b) that these rules will not have a 
significant economic impact on a substantial number of small entities 
within the meaning of the Regulatory Flexibility Act.
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    \1\ The Small Business Administration's (SBA) Office of Size 
Standards develops the numerical definition of a small business. See 
13 CFR 121.201. The SBA has established a size standard for rail 
transportation, stating that a line-haul railroad is considered 
small if its number of employees is 1,500 or less, and that a short 
line railroad is considered small if its number of employees is 500 
or less. Id. (industry subsector 482).
    \2\ See Simplified Standards for Rail Rate Cases, EP 646 (Sub-
No. 1), slip op. at 33-34 (STB served Sept. 5, 2007), aff'd sub nom. 
CSX Transp., Inc. v. STB, 568 F.3d 236 (D.C. Cir.), vacated in part 
on reh'g, 584 F.3d 1076 (D.C. Cir. 2009).
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    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 1141

    Administrative practice and procedure.

    Decided: July 18, 2013.

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


0
For the reasons set forth in the preamble, the Surface Transportation 
Board revises part 1141 of title 49, chapter X, of the Code of Federal 
Regulations to read as follows:

PART 1141--PROCEDURES TO CALCULATE INTEREST RATES

    Authority:  49 U.S.C. 721.


Sec.  1141.1  Procedures to calculate interest rates.

    (a) For purposes of complying with a Board decision in an 
investigation or complaint proceeding, interest rates to be computed 
shall be the most recent U.S. Prime Rate as published by The Wall 
Street Journal. The rate levels will be determined as follows:
    (1) For investigation proceedings, the interest rate shall be the 
U.S. Prime Rate as published by The Wall Street Journal in effect on 
the date the statement is filed accounting for all amounts received 
under the new rates.
    (2) For complaint proceedings, the interest rate shall be the U.S. 
Prime Rate as published by The Wall Street Journal in effect on the day 
when the unlawful charge is paid. The interest rate in complaint 
proceedings shall be updated whenever The Wall Street Journal publishes 
a change to its reported U.S. Prime Rate. Updating will continue until 
the required reparation payments are made.
    (b) For investigation proceedings, the reparations period shall 
begin on the date the investigation is started. For complaint 
proceedings, the reparations period shall begin on the date the 
unlawful charge is paid.
    (c) For both investigation and complaint proceedings, the annual 
percentage rate shall be the same as the annual nominal (or stated) 
rate. Thus, the nominal rate must be factored exponentially to the 
power representing the portion of the year covered by the interest 
rate. A simple multiplication of the nominal rate by the portion of the 
year covered by the interest rate would not be appropriate because it 
would result in an effective rate in excess of the nominal rate. Under 
this ``exponential'' approach, the total cumulative reparations payment 
(including interest) is calculated by multiplying the interest factor 
for each period by the principal amount for that period plus any 
accumulated interest from previous periods. The ``interest factor'' for 
each period is 1.0 plus the interest rate for that period to the power 
representing the portion of the year covered by the interest rate.

[FR Doc. 2013-17783 Filed 7-23-13; 8:45 am]
BILLING CODE 4915-01-P