[Federal Register Volume 85, Number 98 (Wednesday, May 20, 2020)]
[Proposed Rules]
[Pages 30680-30681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10764]


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SURFACE TRANSPORTATION BOARD

49 CFR Part 1201

[Docket No. EP 763]


Montana Rail Link, Inc.--Petition for Rulemaking--Classification 
of Carriers

    On February 14, 2020, Montana Rail Link, Inc. (MRL), filed a 
petition for rulemaking to amend the Board's rail carrier 
classification regulation set forth at 49 CFR part 1201, General 
Instructions section 1-1(a), which describes the revenue thresholds for 
the classes of carriers for the purposes of accounting and 
reporting.\1\ Currently, Class I carriers have annual operating 
revenues of $489,935,956 or more, Class II carriers have annual 
operating revenues of less than $489,935,956 and more than $39,194,876, 
and Class III carriers have annual operating revenues of $39,194,876 or 
less, all when adjusted for inflation. 49 CFR pt. 1201, General 
Instructions section 1-1(a) (setting thresholds unadjusted for 
inflation); Indexing the Annual Operating Revenues of R.R.s., EP 748 
(STB served June 14, 2019) (calculating revenue deflator factor and 
publishing thresholds adjusted for inflation based on 2018 data).\2\
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    \1\ The revenue thresholds for each class of carrier are 
adjusted annually for inflation and published on the Board's 
website.
    \2\ ``The railroad revenue deflator formula is based on the 
Railroad Freight Price Index developed by the Bureau of Labor 
Statistics. The formula is as follows: Current Year's Revenues x 
(1991 Average Index/Current Year's Average Index).'' 49 CFR pt. 
1201, Note A.
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    MRL requests that the Board increase the above revenue threshold 
for Class I carriers to $900 million. (Pet. 1.) In support of its 
request, MRL contends that it continues to be a regional railroad 
operationally and economically but may exceed the Class I revenue 
threshold within two years. (Id.) Citing principles drawn from the 
Interstate Commerce Commission's 1992 rulemaking in which the revenue 
thresholds were last

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raised,\3\ MRL asks that the Board address ``whether a regional carrier 
such as MRL should be treated as a Class I carrier, taking into account 
(1) the financial and operational differences between MRL and existing 
Class I carriers, and (2) the cost-benefit analysis of imposing Class I 
requirements on MRL.'' (Id. at 12.) From an operational standpoint, MRL 
states that it is clearly differentiated from a typical Class I carrier 
because of its heavy dependence on a single Class I railroad and 
because approximately 95% of its mainline track is located in Montana. 
(Id. at 5-6.) From a financial standpoint, MRL also notes, among other 
things, that the average operating revenue for Class I railroads in 
2018 was more than 27 times MRL's total revenue for that year and that 
the operating revenue for the smallest Class I railroad was about 3.5 
times the total revenue of MRL. (Id. at 8). Because of its operational 
and financial characteristics, MRL contends that there would be no 
offsetting benefit from imposing the cost of Class I reporting 
requirements on MRL. (Id. at 12.) MRL submitted eight letters of 
support with its petition.\4\ No replies to MRL's petition were 
received.
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    \3\ Pet. at 1-2 (citing Mont. Rail Link, Inc. & Wis. Cent. Ltd., 
Joint Pet. for Rulemaking with Respect to 49 CFR part 1201, 8 
I.C.C.2d 625 (1992)).
    \4\ Letters of support were included from the Montana 
Contractors' Association, Montana Agricultural Business Association, 
Montana Grain Elevator Association, Montana Petroleum Association, 
Inc., Montana Taxpayers Association, Montana Chamber of Commerce, 
Treasure State Resources Association, and Montana Wood Products 
Association.
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    The Board will open a rulemaking proceeding to consider MRL's 
petition and consider issues related to the Class I carrier revenue 
threshold determination. The Board invites comment about whether it 
should amend 49 CFR part 1201, General Instructions section 1-1(a), to 
increase the revenue threshold for Class I carriers, and, if so, 
whether $900 million or another amount would be appropriate.
    Any interested stakeholders may file comments regarding potentially 
amending 49 CFR part 1201, General Instructions section 1-1(a), to 
increase the revenue threshold for Class I carriers by June 15, 2020. 
If any comments are filed, replies will be due by July 6, 2020.

List of Subjects in 49 CFR Part 1201

    Railroad, Uniform System of Accounts.

    It is ordered:
    1. MRL's petition to initiate a rulemaking proceeding is granted, 
as discussed above.
    2. Comments are due by June 15, 2020; replies are due by July 6, 
2020.
    3. This decision will be published in the Federal Register.
    4. This decision is effective on the date of service.

    Decided: May 13, 2020.

    By the Board, Board Members Begeman, Fuchs, and Oberman.
Tammy Lowery,
Clearance Clerk.
[FR Doc. 2020-10764 Filed 5-19-20; 8:45 am]
 BILLING CODE 4915-01-P