[Federal Register Volume 86, Number 231 (Monday, December 6, 2021)]
[Rules and Regulations]
[Pages 68926-68931]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26239]


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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: Final rule.

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SUMMARY: The Surface Transportation Board (Board) is adopting a final 
rule establishing a new class exemption for emergency temporary 
trackage rights. The final rule also makes certain other related 
changes to the class exemptions for trackage rights and temporary 
trackage rights.

DATES: The rule is effective December 30, 2021.

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: 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 49 CFR 1180.2(d)(8) (and various 
other class exemptions under 49 CFR 1180.2(d)) cannot become effective 
until at least 30 days after a railroad files a verified notice of 
exemption for 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 the Board for waiver of the 
30-day period. In such cases, in addition to serving and publishing 
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 49 CFR 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). In this final rule, the 
Board creates a new class exemption at 49 CFR 1180.2(d)(9) for 
emergency temporary trackage rights that eliminates the 30-day notice 
period in certain circumstances. The final rule also makes certain 
other related changes to the existing class exemptions for trackage 
rights and temporary trackage rights.

Background

    On October 9, 2020, the Association of American Railroads (AAR) 
filed a petition requesting that the Board initiate a rulemaking 
proceeding to establish a new emergency temporary trackage rights class 
exemption for specific limited situations that would allow emergency 
temporary trackage rights to take effect within five days of a carrier 
filing a verified notice of exemption without requiring waiver of 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. SMART/TD-NY argued that the Board 
should decline to institute a rulemaking proceeding because AAR's 
proposed emergency temporary trackage rights exemption is unwarranted 
given the existing trackage rights exemptions and because the proposed 
exemption would threaten rail safety by allowing operation by carrier 
personnel unfamiliar with the line over which the trackage rights would 
be granted. (SMART/TD-NY Reply 3-4, Nov. 4, 2020.)
    On May 28, 2021, after considering the petition and the responsive 
comment, the Board issued a Notice of Proposed Rulemaking. Pet. for 
Rulemaking--R.R. Consolidation Procs.--Exemption for Emergency 
Temporary Trackage Rts. (NPRM), EP 282 (Sub-No. 21) (STB served May 28, 
2021). In the NPRM, the Board explained that SMART/TD-NY's arguments 
were unpersuasive because the proposed class exemption would make the 
process of obtaining temporary trackage rights in an emergency more 
efficient and predictable, and the proposed rule would not affect rail 
safety because it would not impact the existing Federal Railroad 
Administration (FRA) safety regulations, such as the regulation 
governing operations of more than one railroad over the same track, as 
in a trackage rights arrangement. NPRM, EP 282 (Sub-No. 21), slip op. 
at 4.
    As explained in the NPRM, the proposed rule differed in some 
respects from AAR's petition request. The proposed exemption would be 
available only for ``unforeseen'' track outages expected to last more 
than seven days where there is no reasonable alternative to maintain 
pre-outage levels of service. Id. at 5. The Board also proposed a 
requirement that the verified notice provide a description of the 
situation that includes, to the extent possible, the following 
information: 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 track outage was discovered; and the expected 
duration of the outage. Id.
    The proposed rule limited 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. Id. Under the 
proposed rule, 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 after the railroad's 
verified notice of exemption is filed. Id. at 6. The Board's notice 
would be published in the Federal Register concurrently with service if 
possible, or as soon thereafter as practicable. Id. Additionally, the 
Board proposed that, should the track outage be resolved and use of the 
trackage rights become unnecessary prior to the expiration of the 
exemption period, carriers be required to 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. 
Id. at 6.
    The Board proposed not requiring a caption summary for exemptions 
under 49 CFR 1180.2(d)(9) and to eliminate the existing caption summary 
requirements for exemptions under 49 CFR 1180.2(d)(7) and 49 CFR 
1180.2(d)(8). NPRM, EP 282 (Sub-No. 21), slip op. at 7. Under the 
proposed rule, the caption summary requirements would be replaced by a 
requirement that the parties provide in their verified notices the same 
information currently required in caption summaries. Id.
    The proposed rule would also clarify that the Board's regulation at 
49 CFR 1180.4(g)(4), pertaining to interchange

[[Page 68927]]

commitments,\1\ would not apply to transactions under the proposed new 
49 CFR 1180.2(d)(9) or to trackage rights transactions under 49 CFR 
1180.2(d)(7) or 49 CFR 1180.2(d)(8), an issue that has been the cause 
of some confusion among parties in the past. NPRM, EP 282 (Sub-No. 21), 
slip op. at 8.
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    \1\ 49 CFR 1180.4(g)(4) provides that 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.''
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Comments on the NPRM

    In response to the NPRM, the Board received comments from the 
National Transportation Safety Board (NTSB) on July 9, 2021, and from 
AAR, SMART/TD-NY, and the American Short Line and Regional Railroad 
Association (ASLRRA) on July 11, 2021. AAR and SMART/TD-NY filed 
replies on August 11, 2021.
    The NTSB states it is supportive of reducing the delay for track 
exemptions under existing regulations, but it ``is concerned that the 
reduced time to grant waivers could reduce the level of safety, 
especially for railroad crews and others affected by trains operating 
in detour territories that may be unfamiliar.'' (NTSB Comments 1.) The 
NTSB claims that the NPRM lacks discussion about existing FRA 
regulations that require a train engineer to be familiar with the 
territory. (Id. at 2.) According to the NTSB, a 30-day notice provides 
time for familiarization with the territory and regulations but the 
five-day period under the proposed rule may not provide such 
opportunity. (Id.) Therefore, the NTSB proposes that the verified 
notice of exemption required under the proposed rule be expanded to 
include a verification that safety hazards associated with 
unfamiliarity with the detour territory are identified and managed. 
(Id.) In addition, the NTSB proposes that verified notices be required 
to include a plan for addressing engineer familiarity with the detour 
territory on which they will be operating. (Id.)
    SMART/TD-NY argues that the proposed exemption would adversely 
affect rail safety and reduce work opportunities for rail employees. 
(SMART/TD-NY Comments 6-7; SMART/TD-NY Reply 4-5, 7, 10, Aug. 11, 
2021.) SMART/TD-NY claims that currently, in emergency situations, rail 
carriers seek an exemption under 49 CFR 1180.2(d)(8) and file a 
petition for a waiver of the 30-day period under 49 CFR 1180.4(g)(1) 
and that while they wait for the exemption to become effective, they 
operate pursuant to detour arrangements under which their operations 
are guided and directed by a pilot crewmember of the carrier that 
controls the line.\2\ (SMART/TD-NY Reply 3, Aug. 11, 2021.) In 
contrast, according to SMART/TD-NY, the proposed rule would allow a 
carrier to begin operations over the line of a foreign carrier as soon 
as the Board serves its notice of exemption. (Id. at 4.) SMART/TD-NY 
argues that although the proposed rule requires that the Board serve 
its notice within five days after a carrier has filed a verified notice 
of exemption, ``[i]t is inconceivable the Board would wait even one 
day, much less than five days.'' (Id. at 5.) Therefore, according to 
SMART/TD-NY, emergency temporary trackage rights would become effective 
almost immediately and without the transition period of detour 
operations, thereby allowing carriers to operate with personnel 
insufficiently experienced in foreign territory operations and 
eliminating work opportunities associated with detour operations.\3\ 
(SMART/TD-NY Comments 6; SMART/TD-NY Reply 4-5, 7, Aug. 11, 2021.)
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    \2\ SMART/TD-NY explains that detour operations differ from 
trackage rights operations in that trackage rights operations 
involve a carrier using only its own employees to operate over a 
line controlled by another carrier, whereas in detour operations the 
engineer of the carrier operating over a line controlled by another 
carrier is guided by an experienced crewmember of the carrier that 
controls the line. (SMART Reply 3, Aug. 11, 2021.)
    \3\ SMART/TD-NY further argues that the proposed rule should not 
be enacted because it would be an ``extension of [Board] regulation, 
over and above, what has been traditional railroad self-regulation 
for emergency temporary trackage operations'' through detour 
arrangements. (SMART/TD-NY Comments 5.)
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    SMART/TD-NY also argues that the proposed exemption is unwarranted 
because the existing exemption and waiver process is sufficient to 
address emergency situations and is not unduly inefficient. (SMART/TD-
NY Comments 4-5; SMART/TD-NY Reply 6-7, Aug. 11, 2021.) SMART/TD-NY 
claims that the current process is not inefficient because verified 
notices of exemption and petitions for waiver are short documents that 
are easy to prepare, that the notice is ``self-executing'' and does not 
need to be approved by the Board, and that the petitions for waiver are 
routinely granted. (SMART/TD-NY Reply 6, Aug. 11, 2021.) SMART/TD-NY 
also asserts that there have previously been no claims that the current 
process is inefficient. (Id. at 7.) According to SMART/TD-NY, these 
facts demonstrate that the ``claimed serious inefficiency'' of the 
current process is a ``hoax.'' (Id. at 6.)
    SMART/TD-NY opposes the Board's proposal not to require a caption 
summary in verified notices of exemption filed under 49 CFR 
1180.2(d)(9) and to eliminate the caption summary requirement for 
notices filed under 49 CFR 1180.2(d)(7) and (d)(8). (SMART/TD-NY Reply 
11-12, Aug. 11, 2021.) SMART/TD-NY claims that removing the caption 
summary requirement is inconsistent with the requirement that notice of 
the emergency temporary trackage rights be published in the Federal 
Register. (Id. at 12.)
    AAR supports the proposed rule but asks the Board to clarify 
several issues. AAR argues that the regulatory text should include 
examples of the types of events that would constitute an unforeseen 
track outage under proposed 49 CFR 1180.2(d)(9) and that the Board 
should clarify that pursuing an exemption under proposed 49 CFR 
1180.2(d)(9) would not preclude a subsequent exemption under 49 CFR 
1180.2(d)(8) if the circumstances of the unforeseen event require more 
than six months to restore the outage.\4\ (AAR Comments 5-6.)
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    \4\ SMART/TD-NY argues that AAR's proposal to allow carriers to 
utilize the temporary trackage rights exemption under 49 CFR 
1180.2(d)(8) after obtaining emergency temporary trackage rights 
under 49 CFR 1180.2(d)(9) demonstrates that the existing temporary 
trackage rights exemption is sufficient. (SMART/TD-NY Reply 11, Aug. 
11, 2021.)
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    Responding to the arguments made by SMART/TD-NY, AAR also argues 
that the proposed exemption--which would remove regulatory requirements 
in limited circumstances--is warranted because the existing exemption 
and waiver process is inefficient. (AAR Reply 2-4.) AAR claims that the 
exemption would make the process of obtaining a trackage rights 
exemption in an emergency more efficient, that it advances the rail 
transportation policy (RTP) of 49 U.S.C. 10101 in several ways, and 
that, by removing regulation in certain emergency situations, it 
furthers the statutory directive in 49 U.S.C. 10502 that the Board 
exempt rail carriers from regulation ``to the maximum extent'' 
consistent with the law. (Id. at 3-4.)
    In addition, AAR argues that, contrary to the claims made by SMART/
TD-NY and the NTSB, the proposed exemption would not adversely impact 
rail safety. (AAR Comments 10-12; AAR Reply 4-6.) AAR claims that the 
exemption would not impact the application of FRA safety regulations, 
including those that require an engineer to be properly

[[Page 68928]]

certified for joint operations and require that train crews be familiar 
with the territory over which they operate. (AAR Comments 10-11; AAR 
Reply 5-6.) AAR states that these requirements would not be waived or 
otherwise affected if carriers were to obtain emergency temporary 
trackage rights under the proposed exemption. (AAR Comments 11; AAR 
Reply 6.)
    ASLRRA supports the proposed rule and agrees with the Board's 
findings that the proposed exemption is consistent with the 
requirements of 49 U.S.C. 10502 and promotes the RTP by making the 
process of obtaining trackage rights in emergency situations more 
efficient and predictable. (ASLRRA Comments 2.)

Final Rule

    After considering the comments and replies received in response to 
the NPRM, the Board is adopting the rule proposed in the NPRM as a 
final rule. Under 49 U.S.C. 10502, the Board is required, 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 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. As explained in the NPRM and further 
below, the new emergency temporary trackage rights exemption would make 
the process of obtaining trackage rights to restore service in an 
emergency more efficient and predictable, thereby promoting the RTP by 
providing for the expeditious handling and resolution of proceedings, 
49 U.S.C. 10101(15); encouraging the efficient management of railroads, 
49 U.S.C. 10101(9); and promoting the continuation of a sound rail 
system, 49 U.S.C. 10101(4), and coordination between carriers, 49 
U.S.C. 10101(5). (NPRM, EP 282 (Sub-No. 21), slip op. at 4.) In 
addition, as explained in the NPRM, the new class exemption is limited 
in scope, both in terms of the duration of the rights and the 
circumstances in which the exemption would apply, and regulation is not 
needed to protect shippers from an abuse of market power because the 
temporary trackage rights would be for overhead operations only and 
would benefit shippers by enhancing the ability of carriers to maintain 
service in emergency situations. (Id.)
    As noted above, AAR requests that the regulatory text in the final 
rule include examples of the types of events that would constitute an 
unforeseen track outage. The Board finds that the regulatory language 
proposed in the NPRM is sufficiently clear without a list of examples 
and therefore declines to make the change requested by AAR. However, 
the Board clarifies here that several of the examples suggested by AAR 
in its comments--natural disasters, severe weather events, flooding, 
accidents, and washouts--are among the types of events contemplated by 
the final rule. The Board notes, however, that a term like 
``incident,'' which was also suggested by AAR, (AAR Comments 5), is too 
broad to include as an example of an event that would constitute an 
``unforeseen'' track outage since an incident is simply an event or 
occurrence and not necessarily something unforeseen. Similarly, 
``bridge or tunnel damage,'' another example suggested by AAR as an 
``unforeseen'' track outage, is too broad, as it could encompass damage 
that results from normal wear and tear and therefore is not unforeseen. 
To the extent that an outage resulting from bridge and tunnel damage 
would qualify for the new exemption, it would have to be caused by an 
unforeseen event such as a natural disaster, a severe weather event, 
etc.
    AAR also asks that the Board clarify that if a carrier were to 
obtain an exemption under 49 CFR 1180.2(d)(9), it would not be 
precluded from later seeking an exemption under 49 CFR 1180.2(d)(8) in 
the event that resolving the track outage takes longer than the maximum 
six months allowed under the proposed 49 CFR 1180.2(d)(9). The Board 
agrees that in situations where a carrier has obtained an emergency 
temporary trackage rights exemption under 49 CFR 1180.2(d)(9) and the 
track outage cannot be resolved in six months, the carrier should have 
the option of seeking a temporary trackage rights exemption under 49 
CFR 1180.2(d)(8). To preclude the use of exemptions under 49 CFR 
1180.2(d)(8) in such situations would leave carriers without the 
ability to obtain a potentially necessary trackage rights exemption 
despite a continuing track outage.
    The NTSB and SMART/TD-NY suggest that the emergency temporary 
trackage rights exemption could adversely affect rail safety. The NTSB 
and SMART/TD-NY argue that the reduction in time for carriers to obtain 
emergency trackage rights authority might result in carriers beginning 
operations before their engineers have had time to familiarize 
themselves with territory over which they will be operating.\5\ 
However, while the new exemption will generally speed up the process 
for authorizing trackage rights in an emergency, the Board notes that 
the timing difference will be fairly minor, particularly given the 
current practice regarding waiver petitions. Currently, when a carrier 
files a verified notice of exemption under 49 CFR 1180.2(d)(8) combined 
with a petition to waive the 30-day notice period under 49 CFR 
1180.4(g)(1), the Board typically serves a notice and a decision 
waiving the 30-day notice period within a few business days of the 
carrier's filing of its verified notice.\6\ Under the new 49 CFR 
1180.2(d)(9) process where exemptions will become effective upon the 
Board's service of a notice, service of such a notice will be required 
within five days of the verified notice's filing date, but the Board 
anticipates that service will occur within one or two business days in 
most cases.\7\ Accordingly, in practice, the time frames under each 
approach are not drastically different.
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    \5\ (See NTSB Comments 2 (``A 30-day notice provides time for 
familiarization with the territory and regulations; a [five]-day 
period may not provide such opportunity . . . .''); SMART/TD-NY 
Reply 4-5, Aug. 11, 2021 (expressing support for NTSB's concern that 
reducing the time between filing of a verified notice and the 
effective date of the exemption to five days would adversely affect 
safety).)
    \6\ See, e.g., Union Pac. R.R., FD 36424 et al. (granting waiver 
of 30-day notice period within two business days after carrier filed 
verified notice of exemption); Ala. & Gulf Coast Ry., FD 36418 
(granting waiver of 30-day notice period one day after carrier filed 
verified notice of exemption); Norfolk S. Ry.--Temp. Trackage Rts. 
Exemption--Kan. City S. Ry., FD 36359 (STB served Oct. 11, 2019) 
(granting waiver of 30-day notice period within two business days 
after carrier filed verified notice of exemption); Kan. City S. 
Ry.--Temp. Trackage Rts. Exemption--Norfolk S. Ry., FD 36314 et al. 
(STB served June 13, 2019) (granting waiver of 30-day notice period 
within four business days after carrier filed verified notice of 
exemption).
    \7\ SMART/TD-NY claims it is ``inconceivable'' that the Board 
will not serve notices on the same day it receives verified notices 
under 49 CFR 1180.2(d)(9). (SMART/TD-NY Reply 5, Aug. 11, 2021.) 
However, this argument ignores the time it takes for Board staff to 
review the notice for compliance with applicable regulatory 
requirements, draft and review a notice for service, and complete 
the administrative processes involved with service and publication. 
Regardless, as discussed elsewhere in this decision, the Board does 
not consider the time between filing and service of a notice of 
exemption a cause for concern.
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    Furthermore, regardless of how quickly trackage rights exemptions 
become effective, FRA safety regulations governing joint operations 
determine whether a carrier can operate on another carrier's line using 
only its own engineer or whether detour operations involving a pilot 
engineer are required. See 49 CFR 240.229. The NTSB suggests that the 
Board should add a requirement that parties include a verification that 
safety hazards associated with

[[Page 68929]]

unfamiliarity with the detour territory are identified and managed and 
that verified notices include a plan for addressing engineer 
familiarity with the detour territory upon which they will be 
operating. (NTSB Comments 2.) But the FRA, rather than the Board, 
exercises primary authority over matters of rail safety,\8\ and because 
the new emergency temporary trackage rights exemption does not waive or 
nullify the application of FRA safety regulations governing these 
topics, additional Board regulations imposing essentially the same 
requirements would be unnecessarily duplicative.
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    \8\ See, e.g., Ass'n of Am. R.R.--Pet. for Declaratory Ord., FD 
36369, slip op. at 16 (STB served Dec. 30, 2020).
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    The Board also finds unpersuasive SMART/TD-NY's argument that the 
proposed rule should be rejected because emergency situations can be 
dealt with efficiently enough using the current process of filing 
notices of exemption under 49 CFR 1180.2(d)(8) combined with a petition 
to waive the 30-day notice period under 49 CFR 1180.4(g)(1). Although 
waiver petitions are generally not lengthy and are routinely granted, 
it is nonetheless more efficient to eliminate the burden associated 
with these petitions and the accompanying administrative processes. 
Moreover, although the new emergency temporary trackage rights 
exemption will not dramatically speed up the process for authorizing 
trackage rights in an emergency, any time saved in an emergency 
situation where service needs to be quickly restored is valuable.\9\ In 
short, the Board does not agree with the assertion that creating a more 
efficient and predictable process, and in turn providing benefits to 
shippers, carriers, and the public, is unwarranted because trackage 
rights operations can be authorized under the less efficient and 
predictable existing regulations.\10\
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    \9\ As explained in the NPRM, the emergency temporary trackage 
rights exemption will also make the process more predictable for 
carriers. Under the current process, the Board typically issues a 
waiver decision within a few business days, but there is no 
regulatory deadline requiring the Board to do so, and carriers 
therefore cannot predict when a waiver decision will be issued. 
Under the new emergency temporary trackage rights exemption, 
carriers will know that the Board must issue a notice within five 
days and will be able to plan accordingly.
    \10\ SMART/TD-NY also argues that because detour arrangements 
are voluntary and not regulated by the Board, the new exemption 
would constitute an extension of rail regulation because it would be 
used in lieu of detour operations. (SMART/TD-NY Comments 5.) The new 
exemption does not represent an extension of rail regulation. 
Rather, it reduces the regulatory burden on parties by providing a 
more streamlined alternative for carriers to obtain an exemption 
from the regulatory process for approval of temporary trackage 
rights, and, for the reasons explained above, it should have little 
to no effect on whether parties choose to use detour operations.
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    SMART/TD-NY's opposition to the elimination of caption summaries 
appears to be based on a misunderstanding of the role of caption 
summaries. SMART/TD-NY's arguments suggest that it believes if parties 
are not required to submit caption summaries for trackage rights 
transactions that the Board will no longer publish notices of exemption 
for these transactions in the Federal Register, (SMART/TD-NY Reply 12, 
Aug. 11, 2021), but that is not the case. It is true that the purpose 
of the caption summary requirement was to facilitate Federal Register 
publication by providing the Board with a document that could be 
published as the Board's notice.\11\ However, as explained in the NPRM, 
caption summaries have not routinely been used for that purpose. NPRM, 
EP 282 (Sub-No. 21), slip op. at 7. Rather than relying on parties for 
caption summaries, the Board prepares its own notices for publication 
in the Federal Register to ensure that they are accurate and contain 
all relevant information. The requirement for parties to draft and 
submit caption summaries has become unnecessary.\12\ The Board will 
continue to draft and publish notices in the Federal Register for 
trackage rights exemptions after the final rule becomes effective.
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    \11\ 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).
    \12\ As noted in the NPRM, the caption summary requirements will 
be replaced by a requirement that the parties provide in their 
verified notices the same information currently required in caption 
summaries. NPRM, EP 282 (Sub-No. 21), slip op. at 7.
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    For the foregoing reasons, the Board will adopt as a final rule the 
amendments to 49 CFR part 1180 as proposed in the NPRM, without 
modification.\13\ The text of the final rule is set forth below.
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    \13\ The final rule's adoption without modification of the 
proposed amendments to 49 CFR part 1180 includes those that affect 
existing class exemptions. As discussed above, the NPRM proposed 
requiring parties to provide certain information in the body of 
their verified notices rather than in a separate caption summary and 
proposed clarifying that 49 CFR 1180.4(g)(4)'s requirement to 
provide certifications regarding interchange commitments does not 
apply to trackage rights transactions.
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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. 601-604. In its final 
rule, the agency must either include a final regulatory flexibility 
analysis, 604(a), or certify that the proposed rule would not have a 
``significant impact on a substantial number of small entities,'' 
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 impacts on small 
entities 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).
    In the NPRM, the Board certified that the proposed rule would not 
have a significant economic impact on a substantial number of small 
entities within the meaning of the RFA.\14\ The Board explained that 
the proposed change is intended to make the process of obtaining Board 
approval of temporary trackage agreements in emergency situations more 
efficient and predictable and does not mandate the conduct of small 
entities. 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 NPRM 
explained that the proposed rule would provide 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 49 CFR 1180.4(g)(1). The 
regulations would require the carrier utilizing the trackage

[[Page 68930]]

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 stated in the NPRM that it did 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 49 CFR 
1180.4(g)(1). Accordingly, the Board concluded that the impact of the 
proposed rule should slightly reduce the paperwork burden for small 
entities. The Board also found that 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 certified under 5 U.S.C. 605(b) 
that the proposed rule would not have a significant economic impact on 
a substantial number of small entities within the meaning of the RFA.
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    \14\ 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). Class III carriers have 
annual operating revenues of $40.4 million or less in 2019 dollars. 
Class II rail carriers have annual operating revenues of less than 
$900 million in 2019 dollars. 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 July 12, 2021). As 
the Railroad Price Index remained the same from 2019 to 2020, there 
was no adjustment to the thresholds for 2020. Indexing the Annual 
Operating Revenues of R.Rs., EP 748, slip op. at 2 n.2.
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    The Board is adopting as a final rule the amendments to 49 CFR part 
1180 as proposed in the NPRM, without modification. Therefore, the 
Board certifies under 5 U.S.C. 605(b) that the final rule will not have 
a significant economic impact on a substantial number of small entities 
within the meaning of the RFA.\15\ 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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    \15\ As noted above, the final rule adopts the proposals to 
require parties to file certain information in the body of their 
verified notices rather than in a separate caption summary and to 
clarify that 49 CFR 1180.4(g)(4) does not apply to trackage rights 
transactions. Requiring parties to provide certain information in 
verified notices rather than in caption summaries and clarifying 
that certifications regarding interchange commitments are not 
required for trackage rights transactions will not increase the 
economic impact on parties. Therefore, these requirements do not 
alter the conclusion that the final rule will not have a significant 
economic impact on a substantial number of small entities within the 
meaning of the RFA.
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Paperwork Reduction Act

    In this proceeding, the Board is modifying an existing collection 
of information that is currently approved by the Office of Management 
and Budget (OMB) through November 30, 2023, under the collection of 
Statutory Licensing Authority (OMB Control Number: 2140-0023). In the 
NPRM, the Board sought comments pursuant to the Paperwork Reduction Act 
(PRA), 44 U.S.C. 3501-3521, and OMB regulations, 5 CFR 1320.8(d)(3), 
regarding: (1) Whether the collection of information, as modified in 
the proposed rule and further described in the Appendix to the NPRM, 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. No comments 
were received pertaining to the collection of this information under 
the PRA.
    This modification to an existing collection will be submitted to 
OMB for review as required under the PRA, 44 U.S.C. 3507(d), and 5 CFR 
1320.11.

Congressional Review Act

    Pursuant to the Congressional Review Act, 5 U.S.C. 801-808, the 
Office of Information and Regulatory Affairs has designated this rule 
as non-major, as defined by 5 U.S.C. 804(2).

List of Subjects in 49 CFR Part 1180

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

    It is ordered:
    1. The Board adopts the final rule set forth in this decision.
    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 December 30, 2021.

    Decided: November 28, 2021.

    By the Board, Board Members Begeman, Fuchs, Oberman, Primus, and 
Schultz.
Raina White,
Clearance Clerk.

Code of Federal Regulations

    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):
0
i. Remove ``(i)'', ``(ii)'', ``(iii)'', and ``(iv)'' and add in their 
place ``{i{time} '', ``{ii{time} '', ``{iii{time} '', and 
``{iv{time} '', respectively;
0
ii. 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
0
iii. Remove the words ``these rules'' and add in their place the words 
``this paragraph (d)(8)''; and
0
c. Add paragraph (d)(9).
    The revision and addition read as follows:


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) of this section. 
* * *
* * * * *
    (9) Acquisition of emergency temporary trackage rights by a rail 
carrier over lines owned or operated by any other rail carrier or 
carriers that are: {i{time}  Based on written agreements, {ii{time}  
not filed or sought in responsive applications in rail consolidation 
proceedings, {iii{time}  for overhead operations only, {iv{time}  
scheduled to expire on a specific date not to exceed three months from 
the effective date of the exemption, and {v{time}  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. 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

[[Page 68931]]

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); 
and
0
d. Amend newly redesignated paragraph (g)(3) by removing the subject 
heading and revising the first sentence of paragraph (g)(3)(i).
    The revisions read as follows:


Sec.  1180.4   Procedures.

* * * * *
    (g) * * *
    (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) through (iii), (a)(5) and 
(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 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. Sec.  1180.2(d)(7), 
1180.2(d)(8), or 1180.2(d)(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''). * * *
* * * * *
[FR Doc. 2021-26239 Filed 12-3-21; 8:45 am]
BILLING CODE 4915-01-P