[Federal Register Volume 81, Number 229 (Tuesday, November 29, 2016)]
[Rules and Regulations]
[Pages 85901-85904]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28610]


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SURFACE TRANSPORTATION BOARD

49 CFR Part 1109

[Docket No. EP 734]


Dispute Resolution Procedures Under the Fixing America's Surface 
Transportation Act of 2015

AGENCY: Surface Transportation Board.

ACTION: Final rules.

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SUMMARY: The Surface Transportation Board (Board) adopts final rules to 
implement passenger rail-related dispute resolution provisions under 
the Fixing America's Surface Transportation Act of 2015 (FAST Act).

DATES: These rules are effective on December 29, 2016.

ADDRESSES: Information or questions regarding these final rules should 
reference Docket No. EP 734 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: Scott M. Zimmerman, (202) 245-0386. 
Assistance for the hearing impaired is available through Federal 
Information Relay Service (FIRS) at (800) 877-8339.

SUPPLEMENTARY INFORMATION: Title XI of the FAST Act,\1\ entitled 
``Passenger Rail Reform and Investment Act of 2015,'' adds to the 
Board's existing passenger rail adjudicatory responsibilities related 
to the National Railroad Passenger Corporation (Amtrak). Among other 
things, Title XI includes new provisions involving cost recovery by 
Amtrak for Amtrak's operation of ``state-supported routes'' and for the 
costs allocated to states (including state entities) using the 
Northeast Corridor rail facilities for their commuter rail operations. 
As relevant here, Title XI gives the Board jurisdiction to resolve cost 
allocation and access disputes between Amtrak, the states, and 
potential non-Amtrak operators of intercity passenger rail service.\2\ 
The FAST Act directs the Board to establish procedures for the 
resolution of certain of these disputes, ``which may include the 
provision of professional mediation services.'' 49 U.S.C. 24712(c)(2) 
and 24905(c)(4).
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    \1\ Fixing America's Surface Transportation Act of 2015, Public 
Law 114-94 (signed Dec. 4, 2015).
    \2\ Currently, Amtrak is the only operator of regularly 
scheduled, common carrier intercity passenger rail service in the 
United States. Certain statutory provisions contemplate the 
possibility, in the future, of other such intercity passenger rail 
operators. See, e.g., 49 U.S.C. 24711 and 49 U.S.C. 24308(f).
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    On July 28, 2016, the Board issued a notice of proposed rulemaking 
(NPR) (81 FR 51147), seeking comment on proposed rules pursuant to the 
FAST Act. In the NPR, the Board noted that because it does not have in 
place a general set of procedural rules to govern the presentation and 
conduct of proceedings involving passenger rail matters under 49 U.S.C. 
24101-24910,\3\ which would include contested matters arising under 
Title XI of the FAST Act, parties seeking to bring contested matters 
before the Board should be guided by the Board's existing Rules of 
Practice (49 CFR parts 1100-1129), as applicable. However, the 
potential to offer ``professional mediation services'' is unique to the 
authority granted under the FAST Act, and the Board's existing Rules of 
Practice contain no applicable

[[Page 85902]]

provisions. Therefore, the Board proposed new regulations to address 
requests from one or more parties for informal assistance in securing 
outside professional mediation services pursuant to the FAST Act.
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    \3\ See 49 CFR 1100.1 (limiting the scope of the Rules of 
Practice to matters under title 49, subtitle IV of the United States 
Code, 49 U.S.C. 10101 et seq.).
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    Specifically, the NPR provided that, under a new 49 CFR 1109.5, 
parties to a dispute involving the State-Sponsored Route Committee or 
the Northeast Corridor Commission would be permitted to request the 
Board's assistance in securing outside professional mediation services 
by submitting a letter to the Board's Office of Public Assistance, 
Governmental Affairs, and Compliance (OPAGAC). OPAGAC would then 
contact the requesting party or parties in response to such requests 
within 14 days of receipt of the request to assist in arranging for 
professional mediation services.
    After careful consideration of the comments received, the Board is 
promulgating a set of procedural rules that adopt and clarify the 
provisions of the NPR regarding professional mediation services with 
respect to certain passenger rail matters under Title XI of the FAST 
Act.

FAST Act Provisions

    The State-Supported Route Committee. Section 11204 of the FAST Act 
adds a new section to the United States Code: 49 U.S.C. 24712, ``State 
supported routes operated by Amtrak.'' State-supported routes are 
intercity rail passenger routes for which operating and capital costs 
are established and allocated among the states and Amtrak under section 
209 of the Passenger Rail Investment and Improvement Act of 2008 
(PRIIA).\4\ Under these agreements, Amtrak currently receives funding 
from states and state-related entities to operate routes under 750 
miles in length. New section 24712 establishes a State-Supported Route 
Committee comprised of Amtrak, the U.S. Department of Transportation/
Federal Railroad Administration, and states that subsidize state-
supported routes, to implement the cost-allocation methodology 
previously developed under section 209 of PRIIA through negotiation 
between Amtrak and the affected states and approved by the Board. See 
Amtrak's Pet. for Determination of PRIIA Sec. 209 Cost Methodology, FD 
35571 (STB served Mar. 15, 2012). The Committee may also amend that 
cost-allocation methodology. Section 24712(c)(1) gives the Board 
jurisdiction to ``conduct dispute resolution'' pertaining to (1) the 
Committee's rules and procedures, (2) the invoices to be produced by 
Amtrak or reports to be produced by Amtrak or the states as described 
in section 24712(b), and (3) the implementation of or compliance with 
the cost allocation methodology. Section 24712(c)(2) requires the Board 
to establish procedures for resolving such disputes, which procedures 
``may include provision of professional mediation services.''
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    \4\ Public Law 110-432, Section 209; 49 U.S.C. 24101 note.
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    The Northeast Corridor Commission. Section 11305 of the FAST Act, 
which amends 49 U.S.C. 24905, involves the powers and obligations of 
the Northeast Corridor Commission (NEC Commission), created by Congress 
in 2008 as part of PRIIA.\5\ The NEC Commission is responsible for 
developing and implementing a standardized policy for determining and 
allocating costs, revenues, and compensation between Amtrak and the 
providers of commuter rail passenger transportation on the Northeast 
Corridor. The FAST Act amends 49 U.S.C. 24905 with respect to the 
Board's role in resolving disputes between Amtrak and the states in 
determining compensation for use of the Northeast Corridor in light of 
the policy approved by the NEC Commission. Under the new subsection, 49 
U.S.C. 24905(c)(4), the FAST Act permits the NEC Commission, Amtrak, or 
public authorities providing commuter rail passenger transportation on 
the Northeast Corridor to request that the Board conduct dispute 
resolution if a dispute arises over implementation of, or compliance 
with, the NEC Commission's cost allocation policy. The new subsection 
requires the Board to establish procedures for resolving such disputes 
and provides that those procedures ``may include the provision of 
professional mediation services.''
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    \5\ The NEC Commission was originally established as the 
Northeast Corridor Infrastructure and Operations Advisory 
Commission. See 49 U.S.C. 24905. It is composed of voting 
representatives from Amtrak, the U.S. Department of Transportation, 
and the states comprising the Northeast Corridor (including the 
District of Columbia).
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Comments

    The Board sought comments on the proposed regulations by August 31, 
2016, and replies by September 30, 2016. The Board received comments 
from six parties: California Department of Transportation (Caltrans), 
Los Angeles-San Diego-San Luis Obispo Rail Corridor Agency (LOSSAN 
Agency), Amtrak, U.S. Department of Transportation (DOT), San Joaquin 
Joint Powers Authority (SJJPA), and Capitol Corridor Joint Powers 
Authority (CCJPA). Amtrak filed a reply.
    Caltrans, LOSSAN Agency, SJJPA, and CCJPA (California Entities) all 
assert that the NPR did not meet the intent and requirement of the FAST 
Act. They state that the proposed mediation regulation is non-binding 
and that in order to efficiently resolve disputes, parties should have 
recourse to a binding mechanism for resolving such disputes. The 
California Entities suggest that the Board adopt binding arbitration, 
either before the Board or a third-party arbitrator, as the dispute 
resolution procedures required under section 24712. They further 
propose that arbitration be mandatory and that the Board compel 
arbitration upon request from a State or Amtrak. Lastly, the California 
Entities suggest that the Board clarify the proposed mediation 
regulation to address whether the Board will: (1) Maintain a list of 
mediators; (2) intervene if parties cannot agree to a mediator; (3) 
establish terms for payment of mediation services; and (4) require 
parties to participate in mediation.
    In its initial comments, Amtrak supports the proposed rule and 
suggest two clarifications. First, Amtrak asserts that the proposed 49 
CFR 1109.5 is ambiguous as to whether the Board's existing mediation 
rules apply to formally contested matters involving the State-Supported 
Route Committee (section 209 of PRIIA) or the Northeast Corridor 
Commission (section 212 of PRIIA). Amtrak suggests adding language 
which explicitly states, ``mediation procedures under [49 CFR] 1109.1, 
1109.2, and 1109.3 are applicable'' to disputes arising under sections 
209 or 212 of PRIIA. Second, Amtrak proposes that the Board clarify and 
expand the procedures following the filing of a request with OPAGAC for 
securing professional mediation assistance.
    In its reply comments, Amtrak responded to the California Entities' 
requests for the Board to adopt binding arbitration. Amtrak states that 
arbitration is a voluntary alternate dispute mechanism and that nothing 
in the FAST Act suggests that the Board should impose arbitration on 
unwilling parties. Amtrak also argues that the FAST Act does not 
authorize the Board to delegate its decision-making power to a third-
party arbitrator. Lastly, Amtrak argues that binding arbitration is not 
the best tool for resolving recurring issues in which uniformity among 
multiple parties is needed.

[[Page 85903]]

The Final Rules

    After considering the comments received, the Board is adopting 
final rules, as set forth in the Appendix, for the mediation of 
passenger rail disputes involving the State-Sponsored Route Committee 
or the Northeast Corridor Commission. Formal disputes under 49 U.S.C. 
24712 and 24905 would be conducted using the Board's existing Rules of 
Practice as a guide. Parties interested in professional mediation 
services could seek the Board's informal assistance in securing such 
services by submitting a letter to OPAGAC. Such informal assistance may 
be sought even if no party has filed a formal complaint with the Board.
    The Board does not agree with the California Entities that section 
11204 of the FAST Act authorizes or requires the Board to resolve PRIIA 
section 209 disputes through binding arbitration. (Neither does any 
such authorization or requirement appear in FAST Act section 11305, 
with regard to PRIIA section 212.) While the FAST Act specifically 
mentions professional mediation services, it does not state or 
otherwise suggest the use of arbitration as a potential dispute 
resolution procedure. Further, as Amtrak points out, parties have to 
agree on arbitration as the method to resolve their disputes. 
Therefore, provisions for binding arbitration will not be included as 
part of the regulations adopted here.
    CCJPA argues that the plain language of the FAST Act contemplates a 
more significant role for the Board than providing informal assistance 
in securing outside professional mediation services--specifically, that 
the statute contemplates ``dispute resolution'' by the Board itself. 
(CCJPA Comments 2.) To the extent that CCJPA is arguing that the Board 
should be involved in ``dispute resolution'' by issuing decisions on 
disputes arising under the FAST Act, as noted above, parties may bring 
contested matters under section 11204 or section 11305 of the FAST Act 
before the Board, guided by the Board's existing Rules of Practice. 
See, e.g., Pet. of the Nat'l R.R. Passenger Corp. for Relief Pursuant 
to 49 U.S.C. 24905, FD 36048 (STB served Oct. 3, 2016). Alternatively, 
if CCJPA believes that the Board should engage in dispute resolution by 
conducting mediation itself and not simply relying on outside 
professional mediators, as discussed further below, the new rules 
provide that in cases where a formal complaint is brought under 
sections 209 or 212 of PRIIA, the Board's existing rules under part 
1109 for mediation in Board proceedings would apply.
    The California Entities have asked that the Board clarify the 
proposed rule to address questions about choosing professional 
mediators, payment of mediation services, and whether participation in 
mediation would be mandatory. (Caltrans Comments 1; CCJPA Comments 3; 
SJJPA Comments 2; LOSSAN Agency Comments 2.) Similarly, Amtrak proposes 
expanding 49 CFR 1109.5 to include specifics such as timing and means 
of service of the requesting letter on all affected parties, whether 
parties must consent, the purpose for which OPAGAC will contact the 
requesting party, and whether and how OPAGAC will contact other 
affected parties. However, as these rules are intended to provide 
guidance for informal requests, in which parties and OPAGAC retain 
maximal flexibility in arranging for professional mediation, the Board 
believes that these issues should not be codified in regulations but 
left in the first instance to discussions between OPAGAC and the 
requesting party or parties, following receipt of a request. 
Accordingly, the Board will not adopt commenters' suggestions to 
address such specifics.
    Amtrak also asks that the rules clarify whether the Board's 
existing mediation rules apply to contested matters under section 209 
or 212 of PRIIA. The Board's proposed rule contemplated that the 
existing, applicable mediation procedures under 49 CFR part 1109 \6\ 
would be available in formal complaint cases brought under sections 209 
or 212 of PRIIA. See Sec.  1109.5(a) and (b) (noting that requests for 
assistance in securing professional mediation services are ``[i]n 
addition to the mediation procedures under this Part 1109 that are 
available following the filing of a complaint . . .'') (emphasis 
added). We reiterate here that, in cases where a formal complaint is 
brought under sections 209 or 212 of PRIIA, the preexisting mediation 
rules under part 1109 shall apply.
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    \6\ Rather than identifying each individual subsection, this 
language encompasses the existing procedures available to parties 
after the filing of a complaint in Sec. Sec.  1109.1, 1109.2, and 
1109.3. The mediation rules for rate cases under the stand-alone 
cost methodology (49 CFR 1109.4) are inapplicable here.
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    In asking for this last clarification, Amtrak states that there may 
be ambiguity with respect to whether the current provisions of part 
1109 apply in a contested matter under PRIIA because part 1109 deals 
with mediation after the filing of a complaint. It is the Board's 
intention that an informal request for assistance in securing 
professional mediation services be available not only in instances 
where there has not been a formal complaint filed, but also during the 
pendency of a formal complaint case--as long as a motion is filed in 
that formal proceeding requesting that it be held in abeyance in light 
of the request for informal assistance. Thus, we have modified the 
rules proposed in the NPR to include this clarification. See Sec.  
1109.5(a) and (b).

Paperwork Reduction Act

    In the NPR, the Board sought comments under the Paperwork Reduction 
Act (PRA), 44 U.S.C. 3501-3549, and Office of Management and Budget 
(OMB) regulations at 5 CFR 1320.8(d)(3). No comments addressing PRA 
issues were received. Due to a technical omission in the NPR under the 
PRA, the Board will continue to seek OMB approval for this collection 
in a separate notice. Any comments received by the Board from that 
notice will be forwarded to OMB for its review and will be posted under 
this docket.

Regulatory Flexibility Act Certification

    The Regulatory Flexibility Act of 1980 (RFA), 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. In 
its notice of proposed rulemaking, the agency must either include an 
initial regulatory flexibility analysis, section 603(a), or certify 
that the proposed rule would not have a ``significant impact on a 
substantial number of small entities.'' section 605(b). The impact must 
be a direct impact on small entities ``whose conduct is circumscribed 
or mandated'' by the proposed rule. White Eagle Coop. v. Conner, 553 
F.3d 467, 480 (7th Cir. 2009).
    In the NPR, the Board certified under 5 U.S.C. 605(b) that the 
proposed rules would not have a significant economic impact on a 
substantial number of small entities within the meaning of the RFA.\7\

[[Page 85904]]

The Board explained that the proposed regulations would specify 
procedures related to dispute resolution of certain passenger rail 
transportation matters by the Board and do not mandate or circumscribe 
the conduct of small entities. The Board further noted that if a party 
wishing to utilize the proposed procedures files a complaint, petition, 
application, or request for dispute resolution, that entity will not 
encounter any additional burden and that, rather, the procedures are 
being updated and clarified by the regulations. The NPR was served upon 
the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business 
Administration.
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    \7\ Effective June 30, 2016, for the purpose of RFA analysis for 
rail carriers subject to our jurisdiction, the Board defines a 
``small business'' as a rail carrier classified as a Class III rail 
carrier under 49 CFR 1201.1-1. See Small Entity Size Standards Under 
the Regulatory Flexibility Act, EP 719 (STB served June 30, 2016) 
(with Commissioner Begeman dissenting). Class III carriers have 
annual operating revenues of $20 million or less in 1991 dollars, or 
$36,633,119 or less when adjusted for inflation using 2015 data. 
Class II rail carriers have annual operating revenues of up to $250 
million in 1991 dollars or up to $457,913,997 when adjusted for 
inflation using 2015 data. The Board calculates the revenue deflator 
factor annually and publishes the railroad revenue thresholds on its 
Web site. 49 CFR 1201.1-1.
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    The final rules adopted here make slight modifications to the 
proposed rule, but the same basis for the Board's certification of the 
proposed rule applies to the final rules adopted here. The modification 
adopted in the final rule refines the proposed rule by clarifying the 
circumstances under which the informal process for seeking Board 
assistance in pursuing professional mediation services will be 
available. Therefore, the Board certifies under 5 U.S.C. 605(b) that 
this rule will not have a significant economic impact on a substantial 
number of small entities as defined by the RFA. A copy of this decision 
will be served upon the Chief Counsel for Advocacy, Office of Advocacy, 
U.S. Small Business Administration, Washington, DC 20416.

List of Subjects in 49 CFR Part 1109

    Administrative practice and procedure, Maritime carriers, Motor 
carriers, Railroads.
    It is ordered:
    1. The Board adopts the final rules as set forth in this decision. 
Notice of the adopted rules will be published in the Federal Register.
    2. A copy of this decision will be served upon the Chief Counsel 
for Advocacy, Office of Advocacy, U.S. Small Business Administration, 
Washington, DC 20416.
    3. This decision is effective December 29, 2016.

    Decided: November 22, 2016.

    By the Board, Chairman Elliott, Vice Chairman Miller, and 
Commissioner Begeman.
Kenyatta Clay,
Clearance Clerk.

    For the reasons set forth in the preamble, the Surface 
Transportation Board amends part 1109 of title 49, chapter X, of the 
Code of Federal Regulations as follows:

PART 1109--USE OF MEDIATION IN BOARD PROCEEDINGS

0
1. Revise the authority citation for part 1109 to read as follows:

    Authority: 5 U.S.C. 571 et seq. and 49 U.S.C. 1321(a), 24712(c), 
and 24905(c).


0
2. Add Sec.  1109.5 to read as follows:


Sec.  1109.5  Resolution of certain disputes involving the State 
Sponsored Route Committee and the Northeast Corridor Commission.

    (a) In addition to the mediation procedures under this part that 
are available following the filing of a complaint in a proceeding 
before the Board, Amtrak or a State member of the State Supported Route 
Committee established under 49 U.S.C. 24712 may request that the Board 
informally assist in securing outside professional mediation services 
in order to resolve disputes arising from: Implementation of, or 
compliance with, the cost allocation methodology for State-Supported 
Routes developed under section 209 of the Passenger Rail Investment and 
Improvement Act of 2008 or amended under 49 U.S.C. 24712(a)(6); 
invoices or reports provided under 49 U.S.C. 24712(b); or rules and 
procedures implemented by the State Supported Route Committee under 49 
U.S.C. 24712(a)(4). With respect to a particular dispute, such a 
request for informal assistance in securing outside professional 
mediation services may be submitted to the Board:
    (1) In the absence of a complaint proceeding before the Board; or
    (2) If, while a formal complaint is pending before the Board, a 
motion is filed in that formal proceeding requesting that it be held in 
abeyance in light of the request for informal assistance.
    (b) In addition to the mediation procedures under this part that 
are available following the filing of a complaint in a proceeding 
before the Board, the Northeast Corridor Commission established under 
49 U.S.C. 24905, Amtrak, or public authorities providing commuter rail 
passenger transportation on the Northeast Corridor may request that the 
Board informally assist in securing outside professional mediation 
services in order to resolve disputes involving implementation of, or 
compliance with, the policy developed under 49 U.S.C. 24905(c)(1). With 
respect to a particular dispute, such a request for informal assistance 
in securing outside professional mediation services may be submitted to 
the Board:
    (1) In the absence of a complaint proceeding before the Board; or
    (2) If, while a formal complaint is pending before the Board, a 
motion is filed in that formal proceeding requesting that it be held in 
abeyance in light of the request for informal assistance.
    (c) A request for informal Board assistance in securing outside 
professional mediation services under paragraph (a) or (b) of this 
section shall be submitted by letter duly authorized to be submitted to 
the Board by the requesting party. The request letter shall be 
addressed to the Director of the Board's Office of Public Assistance, 
Governmental Affairs, and Compliance, and shall include a concise 
description of the issues for which outside professional mediation 
services are sought. The Office of Public Assistance, Governmental 
Affairs, and Compliance shall contact the requesting party in response 
to such request within 14 days of receipt of the request.

[FR Doc. 2016-28610 Filed 11-28-16; 8:45 am]
 BILLING CODE 4915-01-P