[Federal Register Volume 86, Number 107 (Monday, June 7, 2021)]
[Proposed Rules]
[Pages 30243-30249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11889]


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SURFACE TRANSPORTATION BOARD

49 CFR Part 1180

[Docket No. EP 282 (Sub-No. 21)]


Petition for Rulemaking--Railroad Consolidation Procedures--
Exemption for Emergency Temporary Trackage Rights

AGENCY: Surface Transportation Board.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Surface Transportation Board (Board) grants a petition 
filed by the Association of American Railroads (AAR) to initiate a 
rulemaking proceeding to establish a new class exemption for emergency 
temporary trackage rights. The Board also proposes certain other 
related changes to the class exemptions for trackage rights and 
temporary trackage rights.

DATES: Comments are due by July 12, 2021. Reply comments are due by 
August 11, 2021.

ADDRESSES: Comments and replies may be filed with the Board via e-
filing and will be posted to the Board's website at www.stb.gov.

FOR FURTHER INFORMATION CONTACT: Nathaniel Bawcombe at (202) 245-0376. 
Assistance for the hearing impaired is available through the Federal 
Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: On October 9, 2020, AAR filed a petition 
requesting that the Board initiate a rulemaking proceeding to establish 
a new emergency temporary trackage rights class exemption that could be 
invoked in specific situations and would allow emergency temporary 
trackage rights to take effect immediately, without need for the 30-day 
notice requirement under 49 CFR 1180.4(g)(1). On November 4, 2020, 
Samuel J. Nasca, for and on behalf of SMART-Transportation Division-New 
York State Legislative Board (SMART/TD-NY), filed a reply in opposition 
to AAR's petition.
    On February 5, 2020, after considering the petition and reply, the 
Board granted AAR's petition to initiate a rulemaking proceeding to 
establish a new emergency temporary trackage rights class exemption. 
The rule proposed here, which is set forth below, differs in some 
respects from AAR's request, as explained below. The Board also 
proposes certain other related changes to the class exemptions for 
trackage rights and temporary trackage rights, also explained below.

Background

    Pursuant to 49 U.S.C. 11323(a)(6), prior Board approval is required 
for a rail carrier to acquire trackage rights over a rail line owned or 
operated by another rail carrier. Under 49 U.S.C. 11324(d), the Board 
is required to approve trackage rights applications unless it finds 
that: (1) As a result of a transaction, there is likely to be 
substantial lessening of competition, creation of a monopoly, or 
restraint of trade in freight surface transportation in any region of 
the United States; and (2) the anticompetitive effects of the 
transaction outweigh the public interest in meeting significant 
transportation needs.
    Under 49 U.S.C. 10502, the Board is directed, to the maximum extent 
consistent with 49 U.S.C. subtitle IV part A, to exempt a person, class 
of persons, or a transaction or service from regulation whenever it 
finds that: (1) Regulation is not necessary to carry out the rail 
transportation policy (RTP) of 49 U.S.C. 10101; and (2) either the 
transaction or service is of limited scope or regulation is not needed 
to protect shippers from an abuse of market power.
    The Board may exempt not only a single transaction but also an 
entire class of transactions that meets the exemption criteria of 49 
U.S.C. 10502. A class exemption for transactions otherwise subject to 
Board licensing does not place those transactions beyond the Board's 
jurisdiction; rather, it is a means by which a carrier may obtain Board 
authorization without going through the otherwise-applicable full 
licensing process.\1\
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    \1\ Exemptions may be revoked, in whole or in part, pursuant to 
49 U.S.C. 10502(d).
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    In 2003, the Board adopted a class exemption at 49 CFR 1180.2(d)(8) 
for temporary overhead trackage rights of not more than one year in 
duration. See R.R. Consolidation Procs.--Exemption for Temp. Trackage 
Rts., EP 282 (Sub-No. 20) (STB served May 23, 2003), modified (STB 
served May 17, 2004). Under 49 CFR 1180.4(g)(1), exemptions sought 
under Sec.  1180.2(d)(8) (and various other class exemptions under 
Sec.  1180.2(d)) cannot become effective until at least 30 days after a 
railroad files a verified notice of the transaction. As a result, when 
a railroad seeks to have a temporary trackage rights exemption become 
effective in less than 30 days, the railroad must petition for waiver 
of the 30-day period. In such cases, in addition to serving and 
publishing the notice of the exemption in the Federal Register, the 
Board also issues a separate decision acting on the waiver request and 
setting the effective date of the exemption. See, e.g., Union Pac. 
R.R.--Temp. Trackage Rts. Exemption--BNSF Ry., FD 36424 et al. (STB 
served Aug. 10, 2020) (granting a waiver of the 30-day notice period 
for a trackage rights exemption under Sec.  1180.2(d)(8) and setting 
effective date); Ala. & Gulf Coast Ry.--Temp. Trackage Rts. Exemption--
Kan. City S. Ry., FD 36418 (STB served July 2, 2020) (same).
    AAR's Requested Exemption. AAR asks the Board to initiate a 
rulemaking to create a new emergency temporary trackage rights class 
exemption. Under AAR's request, the 30-day notice requirement under 49 
CFR 1180.4(g)(1) would not apply to individual exemptions sought under 
the new exemption provision; the temporary trackage rights would take 
effect immediately upon publication of a notice of the transaction by 
the Board in the Federal Register, which, according to AAR, would take 
place within 5 days of a party's filing of a verified notice of 
exemption. (Pet., App. A at Sec. Sec.  1180.2(d)(9), 1180.4(g)(5)(ii).) 
As requested by AAR, the temporary trackage rights could be requested 
for a

[[Page 30244]]

period of no more than six months; however, the requestor could, prior 
to expiration of that period, seek a renewal for up to six additional 
months. (Id. at App. A at Sec.  1180.2(d)(9).)
    Under AAR's request, to qualify for the new exemption, a rail 
carrier would be required to provide certain information regarding the 
transaction that is required for other notices of exemption under 49 
CFR part 1180 and the trackage rights would have to be: (1) Based on 
written agreements; (2) not filed or sought in responsive applications 
in rail consolidation proceedings; (3) for overhead operations only; 
and (4) as certified by the rail carrier, sought in response to a track 
outage expected to last more than seven days and where there is no 
reasonable alternative for maintaining pre-outage service levels. (See 
id., App. A at Sec. Sec.  1180.2(d)(9), 1180.4(g)(5)(i).) Every 30 days 
during the initial exemption period, the rail carrier would be required 
to recertify to the Board that the outage continues to exist and the 
temporary trackage rights continue to be necessary to maintain service. 
(Id., App. A at Sec.  1180.2(d)(9).) AAR further requests that, as 
under the existing class exemption for temporary trackage rights, rail 
carriers availing themselves of the proposed class exemption would not 
need to file for discontinuance authority at the end of the authorized 
period, (Id., App. A at Sec.  1180.2(d)(9)), and would be subject to 
applicable statutory labor protective conditions.\2\
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    \2\ Specifically, the grant of the trackage rights would be 
subject to the employee protective conditions in Norfolk & Western 
Railway--Trackage Rights--Burlington Northern, 354 I.C.C. 605 
(1978), as modified by Mendocino Coast Railway--Lease & Operate--
California Western Railroad, 360 I.C.C. 653 (1980), and the 
discontinuance of operations would be subject to the employee 
protective conditions in Oregon Short Line Railroad--Abandonment 
Portion Goshen Branch Between Firth & Ammon, in Bingham & Bonneville 
Counties, Idaho, 360 I.C.C. 91 (1979). (Pet. 4-5.)
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    AAR argues that the current two-step approach for obtaining 
temporary trackage rights without having to wait 30 days for them to 
become effective is inefficient, and asserts that its proposed class 
exemption would benefit shippers, railroads, and the Board by providing 
a streamlined and simple approach for obtaining temporary trackage 
rights in emergency situations, ensuring the continued flow of commerce 
without any decrease in regulatory oversight. (Pet. 1-4.)
    As noted above, on November 4, 2020, SMART/TD-NY filed comments 
opposing AAR's petition. SMART/TD-NY argues that the Board should deny 
AAR's petition and decline to institute a rulemaking proceeding because 
an emergency temporary trackage rights exemption is unwarranted given 
the existing trackage rights exemptions and because the proposed 
exemption would threaten rail safety. (SMART/TD-NY Reply 3-4.) SMART/
TD-NY states that detour arrangements in the railroad industry provide 
for pilot employees from the landlord carrier to provide guidance for 
the tenant carrier's operation in emergency situations. (Id. at 4.) 
According to SMART/TD-NY, the proposed exemption would allow for the 
``immediate cessation of detour operation[s]'' or even the avoidance of 
detour operations altogether and thereby allow operation solely by 
tenant carrier personnel unfamiliar with the line over which the 
trackage rights have been granted. (Id.)

The Statutory Exemption Criteria

    As noted above, 49 U.S.C. 10502 directs the Board to exempt a 
person, class of persons, or a transaction or service from regulation 
whenever it finds that: (1) Regulation is not necessary to carry out 
the RTP; and (2) either the transaction or service is of limited scope 
or regulation is not needed to protect shippers from an abuse of market 
power.
    The Board agrees that the current process for obtaining temporary 
trackage rights in emergency situations can be inefficient, and notes 
that petitions for waiver of the 30-day notice requirement are 
routinely granted. See, e.g., Union Pac. R.R., FD 36424 et al., slip 
op. at 2 (granting a waiver of the 30-day notice period); Ala. & Gulf 
Coast Ry., FD 36418, slip op. at 2 (same). A class exemption for 
emergency temporary trackage rights, as proposed below, would meet the 
requirements of section 10502 and would advance the RTP in several 
ways. It would provide for the expeditious handling and resolution of 
proceedings, 49 U.S.C. 10101(15), and encourage the efficient 
management of railroads, 49 U.S.C. 10101(9), by making the process of 
obtaining temporary trackage rights in emergencies more efficient by 
eliminating the need for a waiver of the 30-day notice period under 49 
CFR 1180.4(g)(1) and more predictable by requiring the Board to act 
within a set number of days. It would also promote the continuation of 
a sound rail system, 49 U.S.C. 10101(4), and coordination between 
carriers, 49 U.S.C. 10101(5), by facilitating the process of line 
repair and approval of trackage rights agreements.
    The class exemption proposed in this decision is limited in scope, 
in terms of both the duration of the rights and the circumstances in 
which the exemption would apply. Indeed, the proposed exemption is a 
more limited form--in terms of both duration and circumstances--of the 
existing temporary trackage rights exemption, which the Board in 2003 
found to be of limited scope. See R.R. Consolidation Procs.--Exemption 
for Temp. Trackage Rts., 6 S.T.B. 910, 913 n.8 (2003).
    Regulation is not needed to protect shippers from an abuse of 
market power. The proposed class exemption would not reduce competition 
because the temporary trackage rights would be for overhead operations 
only, and therefore the competitive status quo would not be altered 
with respect to service to shippers on the affected lines. In addition, 
the exemption would benefit shippers by enhancing the ability of 
carriers to maintain service in emergency situations.
    SMART/TD-NY's arguments in opposition to the proceeding here are 
unpersuasive. The proposed class exemption is warranted because it 
would make the process of obtaining temporary trackage rights in an 
emergency more efficient and predictable. Moreover, based on the record 
to date, the Board does not see merit in SMART/TD-NY's claim that the 
proposed class exemption would threaten rail safety. This proposal 
would not alter or impact the existing rail safety operating 
regulations administered by the Federal Railroad Administration, which 
is the Federal agency with primary responsibility over rail safety 
matters. See, e.g., 49 CFR 240.229 (prohibiting a carrier in control of 
operations on a line from allowing an engineer of a foreign carrier to 
operate a train on that line without a pilot engineer from the 
controlling carrier unless the engineer of the foreign carrier has the 
necessary knowledge of the controlling carrier's operating rules and 
the necessary familiarity with the physical characteristics of the 
line).

The Proposed Class Exemption

    For the reasons discussed above, and as set forth below, the Board 
proposes to establish a new class exemption for emergency temporary 
trackage rights. As explained further below, the Board's proposed rule 
differs in various respects from AAR's request and includes certain 
related changes to the existing class exemptions for trackage rights 
and temporary trackage rights.
    Circumstances in which the proposed rule would apply. AAR's 
requested new class exemption would apply where there is a track outage 
that is expected to last more than seven days and there is no 
reasonable alternative to maintain pre-outage levels of service. (Pet., 
App.

[[Page 30245]]

A at Sec.  1180.2(d)(9).) The Board finds that further clarification is 
needed to ensure that use of the class exemption would be restricted so 
that it applies only to emergency situations and not to situations 
where routine temporary trackage rights authority was not sought in a 
timely manner. Specifically, the Board proposes to require that the new 
exemption be available only for ``unforeseen'' track outages expected 
to last more than seven days and there is no reasonable alternative to 
maintain pre-outage levels of service. Examples of emergency situations 
that result in such unforeseen track outages include, but are not 
limited to, natural disasters and accidents or derailments. This 
clarification appears consistent with AAR's intent. (Pet. 1-3, 9 
(describing the need for the exemption in cases of ``unpredictable'' or 
``unexpected'' events such as accidents or natural disasters).) The 
Board also proposes a requirement that, when railroads certify that 
trackage rights are needed for an unforeseen track outage, the verified 
notice should provide a description of the situation that includes, to 
the extent possible, the following information:
    1. The nature of the event that caused the unforeseen outage;
    2. The location of the outage;
    3. The date that the emergency situation occurred;
    4. The date the track outage was discovered; and
    5. The expected duration of the outage.
    Duration of the exemption. AAR requests that the temporary trackage 
rights would be approved for an initial period of no longer than six 
months, with the option to request a renewal for an additional six 
months. The Board's proposal limits the emergency temporary trackage 
rights to an initial period not to exceed three months, with the option 
to request a renewal for an additional three months. A review of recent 
cases in which the Board waived the 30-day notice requirement for 
temporary trackage rights in emergency situations suggests that 
trackage rights would rarely be needed for a period longer than three 
months.\3\
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    \3\ See, e.g., Union Pac. R.R., FD 36424, slip op. at 2 
(granting waiver of 30-day notice period for trackage rights 
agreement with a term of a little over one month); Ala. & Gulf Coast 
Ry, FD 36418, slip op. at 1 n.3 (granting waiver of 30-day notice 
period for trackage rights agreement with a term of just less than 
two months); Norfolk Southern Railway Company Petition for Waiver 3, 
Norfolk S. Ry.--Temp. Trackage Rts. Exemption--Kan. City S. Ry., FD 
36359 (railroad anticipates that need for trackage rights operations 
would last for several weeks or months); Kan. City S. Ry.--Temp. 
Trackage Rts. Exemption--Norfolk S. Ry., FD 36314 et al., slip op. 
at 1-2 (STB served June 13, 2019) (providing notice of exemption for 
trackage rights agreement with a term of less than three months); 
Terminal Railway Alabama State Docks Verified Notice of Exemption at 
2, Apr. 27, 2018, Terminal Ry. Ala. State Docks--Temp. Trackage Rts. 
Exemption--Norfolk S. Ry., FD 36190 (seeking exemption for trackage 
rights agreement with a term of six months but stating that trackage 
rights likely only needed for approximately one month).
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    Certification every 30 days. AAR's request would require a rail 
carrier to certify every 30 days that the track outage continues to 
exist and that the temporary trackage rights continue to be necessary 
to maintain service. However, the Board's proposal would not require 
such certifications. Rather, the Board would only require that the 
carrier file a notice stating that the outage has been resolved and 
that trackage rights are no longer needed, as well as the date on which 
use of the trackage rights ceased, should the track outage be resolved 
and use of the trackage rights become unnecessary prior to the 
expiration of the exemption period. Any such notice should be filed 
within 5 business days of the date on which use of the trackage rights 
ceased. The Board finds that the reduction of the exemption period from 
six months to three months, combined with the requirement for parties 
to inform the Board if use of trackage rights has ceased prior to when 
the exemption period would have otherwise expired renders the 30-day 
certifications affirming the continued need for the trackage rights 
unnecessary.
    Effective date of the exemption. AAR requests that exemptions under 
the new provision become effective immediately upon publication of the 
Board's notice in the Federal Register, which would be required within 
five days after a verified notice of exemption is filed. However, due 
to requirements of the Federal Register publication process that are 
outside the Board's control, publication within five days may not be 
possible in certain situations. For that reason, the Board proposes 
that the exemption would become effective not upon publication in the 
Federal Register but rather upon service of the Board's notice, which 
would occur within five days of filing of the railroad's verified 
notice of exemption.\4\ The Board's notice would be published in the 
Federal Register concurrently with service if possible, or as soon 
thereafter as practicable.
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    \4\ Under Sec.  1180.4(g), stay petitions for notices filed 
under Sec.  1180.2(d) must be filed at least 7 days before the 
exemption becomes effective. The Board proposes to specify that, for 
notices filed under Sec.  1180.2(d)(9), stay petitions be filed as 
soon as possible before the exemption becomes effective. Under 49 
U.S.C. 10502(d), petitions to revoke the exemption can be filed at 
any time.
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    Caption summary. Under AAR's request, parties seeking an exemption 
under the new Sec.  1180.2(d)(9) would include in its verified notice a 
caption summary suitable for publication in the Federal Register 
containing certain information regarding the proposed transaction.\5\ 
This requirement mirrors the requirement of a caption summary for 
exemptions sought under Sec.  1180.2(d)(7) and (d)(8). Originally, the 
purpose of this requirement was to facilitate Federal Register 
publication by providing the Board with a document that could be 
published as the Board's notice.\6\ However, in practice, caption 
summaries have not routinely been used for that purpose. Accordingly, 
the Board proposes not to require a caption summary for exemptions 
under Sec.  1180.2(d)(9) and to eliminate the existing caption summary 
requirements for exemptions under Sec.  1180.2(d)(7) and Sec.  
1180.2(d)(8). Pursuant to the Board's proposal, the caption summary 
requirements would be replaced by a requirement that the parties 
provide in their notices the same information currently required in 
caption summaries.
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    \5\ AAR requests to include the caption summary and other 
requirements under new Sec.  1180.4(g)(5). Many of the requirements 
in new proposed Sec.  1180.4(g)(5) are duplicative of requirements 
already contained in Sec.  1180.4(g)(1), which is applicable to all 
exemptions under Sec.  1180.2(d), including the new proposed Sec.  
1180.2(d)(9). Rather than proposing a new Sec.  1180.4(g)(5), as 
suggested by AAR, the Board proposes to incorporate the requirements 
of this Sec.  into the existing Sec.  1180.4(g)(1) to the extent 
they are not already contained therein.
    \6\ The caption summary regulations originally indicated that 
caption summaries themselves would be published in the Federal 
Register. R.R. Consolidation Procs.--Exemption for Temp. Trackage 
Rts., EP 282 (Sub-No. 20), slip op. at 9 (STB served May 23, 2003); 
R.R. Consolidation Procs.--Trackage Rts. Exemption, 1 I.C.C. 270, 
283 (1985). See also 49 CFR 1180.4(g)(2)(i) and (ii) (requiring 
caption summaries to be ``suitable for publication in the Federal 
Register'').
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    Certification regarding interchange commitments. Under Sec.  
1180.4(g)(4), parties seeking Board approval for transactions under 49 
CFR part 1180 must certify ``whether or not a proposed acquisition or 
operation of a rail line involves a provision or agreement that may 
limit future interchange with a third-party connecting carrier, whether 
by outright prohibition, per-car penalty, adjustment in the purchase 
price or rental, positive economic inducement, or other means.'' On its 
face, this provision could be read to require such a certification in 
connection with the emergency temporary trackage rights exemption 
proposed here.\7\
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    \7\ AAR's request does not address the issue of certification of 
interchange commitments.
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    The Board adopted the interchange commitment certification 
requirement in Information Required in Notices &

[[Page 30246]]

Petitions Containing Interchange Commitments, EP 714 (STB served Sept. 
5, 2013). In the notice of proposed rulemaking (NPRM) in that 
proceeding, the Board did not specifically address the applicability of 
the interchange certification to trackage rights transactions, though 
it did cite one previous trackage rights exemption proceeding. Info. 
Required in Notices & Pets. Containing Interchange Commitments, EP 714, 
slip op. at 4-5, nn.17, 18, 20 (STB served Nov. 1, 2012) (citing 
Jackson & Lansing R.R.--Trackage Rts. Exemption--Norfolk S. Ry., FD 
35418 et al. (STB served Sept. 27, 2011)).\8\
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    \8\ The Jackson & Lansing decision, which embraced three 
separate proceedings, addressed issues related to an interchange 
commitment disclosed as part of a lease transaction, not the 
trackage rights transaction. Further, that decision in several 
instances referred to interchange commitments being part of lease 
and sale transactions. Jackson & Lansing, FD 35418 et al., slip op. 
at 6, 7 n.23, 8.
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    Nor did the final rule in Docket No. EP 714 specifically address 
the applicability of the interchange commitment certification to 
railroads obtaining trackage rights. The NPRM refers only to the 
interchange commitment certification requirement applying to a 
``purchaser'' or ``lessee'' railroad. Info. Required in Notices & Pets. 
Containing Interchange Commitments, EP 714, slip op. at 4-6 (STB served 
Nov 1, 2012). Further, the Board has generally interpreted this 
requirement as not applying to trackage rights agreements under Sec.  
1180.2(d)(7) \9\ or Sec.  1180.2(d)(8).\10\
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    \9\ See, e.g., Grand Trunk W. R.R.--Trackage Rts. Exemption--
Norfolk S. Ry., FD 36267 (STB served May 16, 2019); Ind. Rail Road--
Trackage Rts. Exemption--CSX Transp., Inc., FD 36068 (STB served 
Oct. 14, 2016); Ind. Rail Road--Amended Trackage Rts. Exemption--CSX 
Transp., Inc., FD 35283 (Sub-No. 1) (STB served Apr. 28, 2017).
    \10\ See, e.g., Ala. & Gulf Coast Ry.--Temp. Trackage Rts. 
Exemption--Kan. Cty. S. Ry., FD 36418; Union Pac. R.R.--Temp. 
Trackage Rts. Exemption--Kan. Cty. S. Ry., FD 36135 (STB served July 
26, 2017); Allegheny Valley R.R.--Temp. Trackage Rts. Exemption--
Norfolk S. Ry., FD 36015 (STB served May 6, 2016).
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    Therefore, the Board proposes to clarify that Sec.  1180.4(g)(4) 
would not apply to transactions under the proposed new Sec.  
1180.2(d)(9). In addition, the Board proposes to clarify that Sec.  
1180.4(g)(4) also does not apply to trackage rights transactions under 
Sec.  1180.2(d)(7) or Sec.  1180.2(d)(8), an issue that has been the 
cause of some confusion among parties in the past.
    Regulatory Flexibility Act. 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. Sections 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). Because the goal of the RFA is to reduce the cost to 
small entities of complying with federal regulations, the RFA requires 
an agency to perform a regulatory flexibility analysis of small entity 
impacts only when a rule directly regulates those entities. In other 
words, 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).
    The Board's proposed changes to its regulations here are intended 
to make the process of obtaining Board approval of temporary trackage 
agreements in emergency situations more efficient and predictable and 
do not mandate the conduct of small entities. For the purpose of RFA 
analysis for rail carriers subject to the Board's jurisdiction, the 
Board defines a ``small business'' as only including those rail 
carriers classified as Class III rail carriers under 49 CFR 1201.1-1. 
See Small Entity Size Standards Under the Regul. Flexibility Act, EP 
719 (STB served June 30, 2016) (with Board Member Begeman 
dissenting).\11\ Currently, if small entities wish to receive temporary 
trackage rights in emergency situations, they must file for a notice of 
exemption in addition to filing a petition for waiver. The proposed 
rule, if promulgated, provides a more expedited procedural mechanism 
for carriers to quickly obtain approval for trackage rights in 
emergency situations without having to obtain a waiver of the 30-day 
notice period under Sec.  1180.4(g)(1). The regulations require the 
carrier utilizing the trackage rights to file a notice if the carrier 
ceases to use the trackage rights prior to when the exemption period 
would have otherwise expired. However, because such notices would 
consist of a brief statement that use of the trackage rights has ceased 
and the date on which use of the trackage rights ceased, the Board does 
not believe that the burden associated with these notices would 
outweigh the reduction in burden associated with eliminating the 
requirement to file a petition for waiver of the 30-day notice period 
under Sec.  1180.4(g)(1). The Board, therefore, expects the impact of 
the proposed rule would slightly reduce the paperwork burden for small 
entities. Accordingly, the economic impact of the proposed rule, if 
any, would be minimal as the burdens associated with obtaining approval 
of temporary trackage rights agreements in emergencies would be 
slightly reduced and the rule would likely provide some economic 
benefit by expediting, in some cases, the process of approving trackage 
rights agreements necessary to restore service at pre-outage levels. 
Therefore, the Board certifies under 5 U.S.C. 605(b) that these 
proposed rules, if promulgated, would not have a significant economic 
impact on a substantial number of small entities within the meaning of 
the RFA. This decision will be served upon the Chief Counsel for 
Advocacy, Offices of Advocacy, U.S. Small Business Administration, 
Washington, DC 20416.
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    \11\ Class III carriers have annual operating revenues of $20 
million or less in 1991 dollars or $40,384,263 or less when adjusted 
for inflation using 2019 data. Class II rail carriers have annual 
operating revenues of less than $250 million or $504,803,294 when 
adjusted for inflation using 2019 data. The Board calculates the 
revenue deflator factor annually and publishes the railroad revenue 
thresholds on its website. 49 CFR 1201.1-1; Indexing the Annual 
Operating Revenues of R.Rs., EP 748 (STB served June 10, 2020).
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    Paperwork Reduction Act. Pursuant to the Paperwork Reduction Act 
(PRA), 44 U.S.C. 3501-3521, Office of Management and Budget (OMB) 
regulations at 5 CFR 1320.8(d)(3), and in the Appendix, the Board seeks 
comments about the impact of the revisions in the proposed rule to the 
currently approved collection of Statutory Licensing Authority (OMB 
Control Number: 2140-0023), concerning: (1) Whether the collection of 
information, as modified or added in the proposed rule, and further 
described below, is necessary for the proper performance of the 
functions of the Board, including whether the collection has practical 
utility; (2) the accuracy of the Board's burden estimates; (3) ways to 
enhance the quality, utility, and clarity of the information collected; 
and (4) ways to minimize the burden of the collection of information on 
the respondents, including the use of automated collection techniques 
or other forms of information technology, when appropriate.
    The Board estimates that the proposed requirements would save a 
total hourly burden of 54 hours per year as compared to the current 
procedures for obtaining emergency temporary trackage rights involving 
the filing of verified notice of exemption and a petition for

[[Page 30247]]

waiver of the 30-day notice period. The new emergency temporary 
trackage rights notice would incorporate additional language, resulting 
in approximately 5% more burden hours to prepare than the average 
notice of exemption, and it is estimated that two notices regarding the 
cessation of trackage rights would be filed annually. There are no 
changes to the estimated non-hourly burdens associated with this 
collection. The Board welcomes comment on the estimates of actual time 
and costs of the collection of the proposed emergency trackage rights 
notices of exemptions, as detailed below in the Appendix. Other 
information pertinent to this collection is also included in the 
Appendix. The proposed rule will be submitted to OMB for review as 
required under 44 U.S.C. 3507(d) and 5 CFR 1320.11. Comments received 
by the Board regarding these information collections will also be 
forwarded to OMB for its review when the final rule is published.

List of Subjects in 49 CFR Part 1180

    Administrative practice and procedure, Railroads, Reporting and 
recordkeeping requirements.

    It is ordered:
    1. Comments are due by July 12, 2021. Reply comments are due by 
August 11, 2021.
    2. Notice of this decision will be published in the Federal 
Register.
    3. A copy of this decision will be served upon the Chief Counsel 
for Advocacy, Office of Advocacy, U.S. Small Business Administration.
    4. This decision is effective on its service date.

    Decided: May 28, 2021.

    By the Board, Board Members Begeman, Fuchs, Oberman, Primus, and 
Schultz.
Jeffrey Herzig,
Clearance Clerk.

    For the reasons set forth in the preamble, the Surface 
Transportation Board proposes to amend part 1180 of title 49, chapter 
X, of the Code of Federal Regulations as follows:

PART 1180--RAILROAD ACQUISITION, CONTROL, MERGER, CONSOLIDATION 
PROJECT, TRACKAGE RIGHTS, AND LEASE PROCEDURES

0
1. The authority citation for part 1180 continues to read as follows:

    Authority:  5 U.S.C. 553 and 559; 11 U.S.C. 1172; 49 U.S.C. 
1321, 10502, 11323-11325.

0
2. Amend Sec.  1180.2 as follows:
0
a. Revise the first sentence of paragraph (d) introductory text;
0
b. In paragraph (d)(8)(iv), remove the words ``49 CFR 
1180.4(g)(2)(iii)'' and add in their place the words ``49 CFR 
1180.4(g)(1)(ii)'', and remove the words ``these rules'' and add in 
their place the words ``this paragraph (d)(8)'';
0
c. Add paragraph (d)(9).


Sec.  1180.2  Types of transactions.

* * * * *
    (d) A transaction is exempt if it is within one of the nine 
categories described in paragraphs (d)(1) through (9). * * *
* * * * *
    (9)(i) Acquisition of emergency temporary trackage rights by a rail 
carrier over lines owned or operated by any other rail carrier or 
carriers that are:
    (A) Based on written agreements,
    (B) Not filed or sought in responsive applications in rail 
consolidation proceedings,
    (C) For overhead operations only,
    (D) Scheduled to expire on a specific date not to exceed three 
months from the effective date of the exemption, and
    (E) Sought in response to an unforeseen track outage and expected 
to last more than seven days where there is no reasonable alternative 
to maintain pre-outage levels of service.
    (ii) If during the exemption period, the outage is resolved and use 
of the temporary emergency trackage rights ceases to be necessary to 
maintain service at pre-outage levels, the rail carrier must file a 
notice stating that the outage has been resolved and that use of the 
trackage rights has ceased and identifying the date on which use of the 
trackage rights ceased. Such a notice should be filed within 5 business 
days of the date on which use of the trackage rights ceased. The 
emergency temporary trackage rights authority expires upon the official 
filing date of the notice. If the operations contemplated by the 
exemption will not be concluded within the initial exemption period, 
the rail carrier may, prior to expiration of the period, file a request 
for a renewal of the temporary rights for an additional period of up to 
3 months, including the reason(s) therefor. Rail carriers acquiring 
temporary trackage rights need not seek authority from the Board to 
discontinue the trackage rights as of the expiration date specified 
under Sec.  1180.4(g)(1)(ii). All transactions under this paragraph 
(d)(9) will be subject to applicable statutory labor protective 
conditions.
0
3. Amend Sec.  1180.4 as follows:
0
a. Revise paragraph (g)(1);
0
b. Remove paragraph (g)(2);
0
c. Redesignate paragraphs (g)(3) and (4) as paragraphs (g)(2) and (3);
0
d. Revise newly redesignated (g)(2); and
0
e. Amend newly redesignated (g)(3) by
0
i. Removing the paragraph heading ``Transactions imposing interchange 
commitments'';
0
ii. Revising the first sentence of paragraph (g)(3)(i).
    The revisions read as follows:


Sec.  1180.4   Procedures.

* * * * *
    (g) Notice of exemption. (1) To qualify for an exemption under 
Sec.  1180.2(d), a railroad must file a verified notice of the 
transaction with the Board. Except for verified notices filed under 
Sec.  1180.2(d)(9), all verified notices under Sec.  1180.2(d) must be 
filed at least 30 days before the transaction is consummated, 
indicating the proposed consummation date. Verified notices filed under 
Sec.  1180.2(d)(9) will become effective upon service of notice of the 
transaction by the Board. Before a verified notice is filed, the 
railroad shall obtain a docket number from the Board's Section of 
Administration, Office of Proceedings.
    (i) All notices filed under Sec.  1180.2(d) shall contain the 
information required in Sec.  1180.6(a)(1)(i)-(iii), (a)(5)-(6), and 
(a)(7)(ii), and indicate the level of labor protection to be imposed.
    (ii) Notices filed under Sec. Sec.  1180.2(d)(7), 1180.2(d)(8), or 
1180.2(d)(9) shall also contain the following information:
    (A) The name of the tenant railroad;
    (B) The name of the landlord railroad;
    (C) A description of the trackage rights, including a description 
of the track. For notices under Sec.  1180.2(d)(8) and (9), the notice 
must state that the trackage rights are overhead rights. For notices 
under Sec.  1180.2(d)(7), the notice must state whether the trackage 
rights are local or overhead;
    (D) The date the trackage rights transaction is proposed to be 
consummated;
    (E) The date temporary trackage rights will expire, if applicable; 
and
    (F) For notices under Sec.  1180.2(d)(9), a description of the 
situation resulting in the outage in sufficient detail to allow the 
Board to determine an emergency exits, including, to the extent 
possible, the nature of the event that caused the unforeseen outage, 
the location of the outage, the date that the emergency situation 
occurred, the date the outage was discovered, and the expected duration 
of the outage.
    (iii) Except for notices filed under Sec.  1180.2(d)(9), the Board 
shall publish a notice of exemption in the Federal Register within 16 
days of the filing of the notice. For notices filed under Sec.  
1180.2(d)(9), the Board shall serve a

[[Page 30248]]

notice of exemption on parties of record within 5 days after the 
verified notice of exemption is filed and shall publish that notice in 
the Federal Register. The publication of notices under Sec.  1180.2(d) 
will indicate the labor protection required.
    (iv) If the notice contains false or misleading information that is 
brought to the Board's attention, the Board shall summarily revoke the 
exemption for that carrier and require divestiture.
    (v) The filing of a petition to revoke under 49 U.S.C. 10502(d) 
does not stay the effectiveness of an exemption. Except for notices 
filed under Sec.  1180.2(d)(9), stay petitions must be filed at least 7 
days before the exemption becomes effective. For notices filed under 
Sec.  1180.2(d)(9), stay petitions should be filed as soon as possible 
before the exemption becomes effective.
    (vi) Other exemptions that may be relevant to a proposal under this 
provision are codified at 49 CFR part 1150, subpart D, which governs 
transactions under 49 U.S.C. 10901.
* * * * *
    (3)(i) Except for notices filed under Sec.  1180.2(d)(7), (8), or 
(9), the filing party must certify whether a proposed acquisition or 
operation of a rail line involves a provision or agreement that may 
limit future interchange with a third-party connecting carrier, whether 
by outright prohibition, per-car penalty, adjustment in the purchase 
price or rental, positive economic inducement, or other means 
(``interchange commitment''). * * *

    Note:  The following will not appear in the Code of Federal 
Regulations.

Appendix

Information Collected Under the Paperwork Reduction Act

    As part of its continuing effort to reduce paperwork burdens, 
and as required by the Paperwork Reduction Act of 1995 (PRA), 44 
U.S.C. 3501-3521, the Surface Transportation Board (Board) gives 
notice that it is requesting from the Office of Management and 
Budget (OMB) approval for the revision and extension of the 
currently approved information collection, Statutory Licensing 
Authority (OMB Control Number: 2140-0023), as described below. The 
requested revision to the existing, approved collection by this 
notice of proposed rulemaking (NPRM) is expected to (1) provide 
parties with an emergency temporary trackage rights exemption (to 
replace the need for submitting both a notice of exemption and a 
separate petition for waiver) and (2) in the event that the use of 
the temporary emergency trackage rights ceases to be necessary 
during the exemption period, require a short notice stating such.

Description of Collection

    Title: Statutory Licensing Authority.
    OMB Control Number: 2140-0023.
    STB Form Number: None.
    Type of Review: Revision of a currently approved collection.
    Respondents: Rail carriers and non-carriers seeking statutory 
licensing or consolidation authority or an exemption from filing an 
application for such authority (including, in some circumstances, a 
certification regarding whether the transaction at issue imposes 
interchange commitments).
    Number of Respondents: 80.
    Total Burden Hours (annually including all respondents): 4,203 
(sum of estimated hours per response x number of responses for each 
type of filing, including the increase and decrease in burdens under 
the NPRM). The tables below show the burden impact of the NPRM, 
including the (a) current estimates for the existing collection, (b) 
reduction in estimates due to the NPRM, and (c) increase in 
estimates due to the NPRM.
    As provided in Table 1--Estimated Average Number of Responses 
below, the Board maintains its existing, approved collection of 
three applications, 12 petitions for exemption, 103 notices of 
exemption, and four certifications regarding interchange commitments 
annually based on an actual three-year average (FY 2018-2020) of 
filings. Table 1 also shows the expected decrease and increase in 
filings under the NPRM. Similarly, Table 2--Estimated Number of 
Hours per Response shows both the existing estimated burden hours 
for each existing response and provides the estimated burdens for 
the increase and decrease of responses under the NPRM. When 
multiplied by the number of hours for each type of filing, as 
provided in Table 2, the estimated annual burden hours for 122 
responses are 4,203 hours (sum of estimated hours per response x 
number of responses for each type of filing), as shown in Table 3--
Total Estimated Annual Burden Hours.
    Frequency: On occasion.

             Table 1--Estimated Average Number of Responses
------------------------------------------------------------------------
                                                         Average number
                    Type of filing                       of filings per
                                                              year
------------------------------------------------------------------------
Existing filings:
    Applications......................................                 3
    Petitions.........................................                12
    Notices...........................................               103
    Interchange commitments certifications............                 4
Reductions in filings--Proposed:
    Notices (previously used).........................               (2)
    Petitions for waiver (no longer necessary)........               (2)
Additions in filings--Proposed:
    New Notices (emergency trackage rights exemptions)                 2
    New notices regarding cessation of trackage rights                 2
                                                       -----------------
        Total estimated filings.......................               122
------------------------------------------------------------------------


             Table 2--Estimated Number of Hours per Response
------------------------------------------------------------------------
                                                         Number of hours
                    Type of filing                        per response
------------------------------------------------------------------------
Existing filings:
    Applications......................................               524
    Petitions.........................................                58
    Notices...........................................                19
    Interchange commitments certifications............                 8
Reductions in filings--Proposed:
    Notices (previously used).........................              (19)
    Petitions for waiver (no longer necessary)........              (29)

[[Page 30249]]

 
Additions in filings--Proposed:
    New Notices (emergency trackage rights exemptions)                20
    New notices regarding cessation of trackage rights                 1
------------------------------------------------------------------------


                                  Table 3--Total Estimated Annual Burden Hours
----------------------------------------------------------------------------------------------------------------
                                                                Hours per     Annual number of    Total annual
                      Type of filing                            response           filings        burden hours
----------------------------------------------------------------------------------------------------------------
Existing filing:
    Applications..........................................               524                 3             1,572
    Petitions.............................................                58                12               696
    Notices...............................................                19               103             1,957
    Interchange commitments...............................                 8                 4                32
                                                           -----------------------------------------------------
        Total Existing Annual Burden Hours................  ................  ................             4,257
Reductions in filings--Proposed:
    Notices (previously used).............................              (19)                 2              (38)
    Petitions for waiver (no longer necessary)............              (29)                 2              (58)
Additions in filings--Proposed:
    New Notices (emergency trackage rights exemptions)....                20                 2                40
    New notices regarding cessation of trackage rights....                 1                 2                 2
                                                           -----------------------------------------------------
        Total new annual burden hours.....................  ................  ................             4,203
----------------------------------------------------------------------------------------------------------------

    Total ``Non-hour Burden'' Cost: Because Board collections are 
submitted electronically to the Board, there is no cost for filing 
with the Board. However, for some filings, respondents may be 
required to send consultation letters to various other governmental 
agencies. Copies of these letters are part of an environmental and 
historic report that must be filed with this collection (unless 
waived by the Board). Because some of these other agencies may 
require hard copy letters, there may be some limited mailing costs, 
which staff estimates in total to be approximately $1,750.
    Needs and Uses: As mandated by Congress, persons seeking to 
construct, acquire, or operate a line of railroad and railroads 
seeking to abandon or to discontinue operations over a line of 
railroad or, in the case of two or more railroads, to consolidate 
their interests through merger or a common-control arrangement are 
required to file an application for prior approval and authority 
with the Board. See 49 U.S.C. 10901-03, 11323-26. Under 49 U.S.C. 
10502, persons may seek an exemption from many of the application 
requirements of Sec. Sec.  10901-03 and Sec. Sec.  11323-26 by 
filing with the Board a petition for exemption or notice of 
exemption in lieu of an application. The collection by the Board of 
these applications, petitions, and notices (including collection of 
disclosures of rail interchange commitments under 49 CFR 1121.3(d), 
1150.33(h), 1150.43(h), and 1180.4(g)(4)) enables the Board to meet 
its statutory duty to regulate the referenced rail transactions. In 
cases in which the requests for authority involve agreements with 
interchange commitments that may limit the future interchange of 
traffic with third parties, certain information must be disclosed to 
the Board about those commitments. 49 CFR 1121.3(d), 1150.33(h), 
1150.43(h), 1180.4(g)(4). The collection of this information 
facilitates the case-specific review of interchange commitments and 
enables the Board's monitoring of their usage generally.

[FR Doc. 2021-11889 Filed 6-4-21; 8:45 am]
BILLING CODE 4915-01-P