[Federal Register Volume 81, Number 186 (Monday, September 26, 2016)]
[Proposed Rules]
[Pages 65987-65988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-23144]


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SURFACE TRANSPORTATION BOARD

49 CFR Parts 1201, 1242

[Docket No. EP 681]


Class I Railroad Accounting and Financial Reporting--
Transportation of Hazardous Materials

AGENCY: Surface Transportation Board.

ACTION: Advance notice of proposed rulemaking, withdrawal.

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SUMMARY: The Surface Transportation Board is withdrawing the advance 
notice of proposed rulemaking and discontinuing the EP 681 rulemaking 
proceeding which sought comment on whether and how it should update its 
accounting and financial reporting for Class I rail carriers to better 
capture the operating costs of transporting hazardous materials.

DATES: The advance notice of proposed rulemaking published on January 
5, 2009 (74 FR 248) is withdrawn and the rulemaking proceeding is 
discontinued on September 22, 2016.

FOR FURTHER INFORMATION CONTACT: Allison Davis at (202) 245-0378. 
Assistance for the hearing impaired is available through the Federal 
Information Relay Service (FIRS) at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: On January 5, 2009, in the above titled 
docket, the Board issued an Advance Notice of Proposed Rulemaking 
(ANPR) seeking public comment on whether and how it should update its 
accounting and financial reporting for Class I rail carriers and refine 
its Uniform Railroad Costing System (URCS) to better capture the 
operating costs of transporting hazardous materials. For the reasons 
stated below, we will discontinue this proceeding.
    The Board uses URCS to determine a carrier's variable costs in a 
variety of regulatory proceedings. The URCS model determines, for each 
Class I railroad, what portion of each category of costs shown in that 
carrier's Annual Report to the Board (STB Form R-1) represents its 
system-average variable cost for that year, expressed as a unit cost. 
In the ANPR, the Board noted that there may be unique operating costs 
associated with the transportation of hazardous materials that URCS 
does not attribute to those movements. As an example, the Board 
suggested that the transportation of hazardous materials may require 
carriers to pay high insurance premiums, which would be spread across 
all traffic of the railroad rather than being attributed specifically 
to the transportation of the hazardous materials. Additionally, the 
Board noted that the Uniform System of Accounts (USOA)--the accounting 
standards which Class I carriers must use to prepare the financial 
statements that they submit to the Board--does not include a separate 
classification for hazardous material operations that would allow for 
an accounting of the assets used and costs incurred in providing such 
service.
    The Board therefore sought comment on ``whether and how it should 
improve its informational tools to better identify and attribute the 
costs of hazardous-material transportation movements,'' including any 
revisions to the USOA and improvements to the analytic capabilities of 
URCS. ANPR, slip op. at 2. The Board specifically sought comment on 
several items, including how hazardous material operations and expenses 
could be reported in a subschedule of the annual R-1 reports, a 
specific definition of what should constitute a movement of hazardous 
material for this purpose, whether that definition should be limited to 
movements of ``Toxic Inhalation Hazards'' or not, and the best 
operating statistic (such as car-miles, revenue ton-miles, or revenue 
tons of hazardous materials movements) for URCS to use to allocate 
specified hazardous material costs to individual movements. In response 
to the ANPR, the Board received comments from multiple stakeholders, as 
discussed below.\1\
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    \1\ The Board received comments from: The American Chemistry 
Council, the Chlorine Institute, The Fertilizer Institute, and the 
Edison Electric Institute (collectively, ACC); Arkansas Electric 
Cooperative Corporation (AECC); the Association of American 
Railroads (AAR); BNSF Railway Company (BNSF); Canadian Pacific 
Railway Company (CP); Diversified CPC International, Inc. 
(Diversified CPC); Norfolk Southern Railway Company (NSR); Union 
Pacific Railroad Company (UP); and the U.S. Department of 
Transportation (DOT).
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    DOT agrees that ``additional data should be reported to [USOA] in 
order to identify and quantify these [hazardous material] costs, and 
that URCS should attribute these costs to hazmat traffic alone rather 
than to the entirety of a carrier's business.'' (DOT Comment 2.)
    AAR, BNSF, CP, and UP generally agree with the Board's stated goals 
in this proceeding. (AAR Comment 2; BNSF Comment 2, CP Comment 7, 9; UP 
Comment 7.) However, they also argue that changes to URCS would not 
sufficiently address the railroad industry's concerns with transporting 
hazardous material. BNSF and NSR underscore the risk of liability from 
a catastrophic accident (BNSF Comment 2; NSR Comment 2-3), while UP 
stresses the importance of fairly apportioning risk across all 
participants in the supply chain (UP Comment 2). The railroads argue 
that, even if the Board were to change URCS, they should also be 
allowed to present the unique costs of transporting hazardous materials 
in rate proceedings involving hazardous materials. (See AAR Comment 2; 
CP Comment 3-4, 9; NSR Comment 3; UP Comment 8-9.)
    ACC, AECC, and Diversified CPC argue that the Board should not 
limit a review of URCS by any single issue or commodity, but should 
instead conduct a broader review of URCS. (ACC Comment 2; AECC Comment 
2; Diversified CPC Comment 8.) ACC also argues that the proposed 
rulemaking would be arbitrary and ill-advised because, while some 
railroads have faced one-time costs from settlements of claims, the 
railroads have reported few

[[Page 65988]]

ongoing, quantifiable costs relating solely to hazardous materials 
transportation. (ACC Comment 2.)
    While the Board appreciates the input it received from the 
commenters in this proceeding, it has decided to close this docket. 
Although the Board is not foreclosing the possibility of addressing 
this issue in the future, even if it were to do so, it would be 
initiated as a new proceeding. Thus, we will not move forward with this 
proceeding at this time and will discontinue this docket in the 
interest of administrative efficiency.

    Decided: September 20, 2016.

    By the Board, Chairman Elliott, Vice Chairman Miller, and 
Commissioner Begeman.
Marline Simeon,
Clearance Clerk.
[FR Doc. 2016-23144 Filed 9-23-16; 8:45 am]
 BILLING CODE 4915-01-P