[Federal Register Volume 87, Number 149 (Thursday, August 4, 2022)]
[Rules and Regulations]
[Pages 47637-47644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16598]


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SURFACE TRANSPORTATION BOARD

49 CFR Part 1249

[Docket No. EP 769]


URCS Data Reporting

AGENCY: Surface Transportation Board.

ACTION: Final rule.

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SUMMARY: The Surface Transportation Board adopts a final rule to codify 
a longstanding voluntary practice whereby Class I carriers, through the 
Association of American Railroads (AAR), have annually reported tare 
weight and loss and damage data for use in the Board's Uniform Railroad 
Costing System (URCS). Under the final rule, Class I carriers may 
choose to provide tare weight and loss and damage data through AAR or 
to file the data with the Board individually.

DATES: This rule is effective on August 13, 2022.

FOR FURTHER INFORMATION CONTACT: Pedro Ramirez at (202) 245-0333. 
Assistance for the hearing impaired is available through the Federal 
Relay Service at (800) 877-8339.

SUPPLEMENTARY INFORMATION: The Board is authorized, under 49 U.S.C. 
11161, to maintain cost accounting rules for rail carriers. In 1989, 
the Board's predecessor, the Interstate Commerce Commission, adopted 
URCS as its general purpose costing system. Adoption of the Unif. R.R. 
Costing Sys. as a Gen. Purpose Costing Sys. for All Regul. Costing 
Purposes, 5 I.C.C.2d 894 (1989). The Board uses URCS for a variety of 
regulatory functions. URCS is used in rate reasonableness proceedings 
as part of the initial market dominance determination, and at later 
stages is used in parts of the Board's determination as to whether the 
challenged rate is reasonable and, when warranted, the maximum rate 
prescription. URCS is also used, among other things, to develop 
variable costs for making cost determinations in abandonment 
proceedings, provide the railroad industry and shippers with a 
standardized costing model, cost the Board's Carload Waybill Sample to 
develop industry cost information, and provide interested parties with 
basic cost information regarding railroad industry operations.
    As a longstanding practice, AAR has collected tare weight and loss 
and damage data for use in URCS from Class I carriers and voluntarily 
provided the

[[Page 47638]]

data annually to the Board. While the Board appreciates AAR's 
longstanding voluntary practice, to ensure the continued availability 
of the data, which are essential components of URCS,\1\ the Board will 
formalize the reporting requirement and require Class I carriers to 
provide tare weight and loss and damage data on an annual basis, as 
described below. The Board has the statutory authority to obtain data 
from carriers and associations under 49 U.S.C. 11144 and 11145.
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    \1\ Tare weights are used in URCS to calculate gross ton-mile 
costs, while loss and damage data are used to calculate the total 
variable shipment costs of each rail movement. The Railroad Cost 
Program User Manual is available on the Board's website at 
www.stb.gov/reports-data/uniform-rail-costing-system/.
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Background

1. Notice of Proposed Rulemaking

    On April 29, 2022, the Board issued a notice of proposed rulemaking 
in this docket. URCS Data Reporting (NPRM), EP 769 (STB served Apr. 29, 
2022). The proposed rule is consistent with Class I carriers' current 
and longstanding practice of providing summarized tare weight and loss 
and damage data to the Board through AAR. AAR's practice has been to 
provide the average tare weight by AAR car type code \2\ in tons and 
pounds, as well as the number of cars. Additionally, AAR has 
historically provided summarized annual loss and damage expenses \3\ 
and the number of tons originated by commodity. Class I carriers are 
required to report, quarterly and annually, the number of tons 
originated on their rail lines by commodity through the freight 
commodity statistics (FCS) report. 49 CFR 1248.2. AAR's practice has 
been to provide the Board with its own version of the FCS report that 
aggregates data from the Class I carriers. AAR has also provided the 
loss and damage per ton, which is calculated by dividing loss and 
damage expenses by the number of tons originated by commodity. The 
Board proposed that Class I carriers may continue to provide tare 
weight and loss and damage data in this format.
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    \2\ AAR car type codes include freight car types and intermodal 
equipment: A-Equipped box car, B-Unequipped box car. C-Covered 
hopper car, D-Locomotive, E-Equipped gondola, F-Flat car, G-
Unequipped gondola, H-Unequipped hopper, J-Gondola car, K-Equipped 
hopper car, L-Special type car, M-Maintenance of way, scale, 
passenger, caboose, and end-of-train information systems, P-
Conventional intermodal car, Q-Lighter weight, low-profile 
intermodal car, R-Refrigerator car, S-Stack car, T-Tank car, U-
Container, V-Vehicular flat car, Z-Trailer.
    \3\ Historically, AAR has not reported loss and damage expenses 
for Grand Trunk Corporation (including U.S. affiliates of Canadian 
National Railway Company) (CN) and Soo Line Corporation (including 
U.S. affiliates of Canadian Pacific Railway Company) (CP). The Board 
proposed to require reporting from all Class I carriers because the 
Board's collection of loss and damage expenses from CN and CP for 
inclusion in URCS would allow the Board to provide more accurate 
cost estimates.
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    The Board also proposed an alternative to allow Class I carriers to 
individually report tare weight and loss and damage data directly to 
the Board. Under this option, Class I carriers would provide the tare 
weight totals by AAR car type code in tons and pounds and the number of 
cars, and the Board would calculate the average tare weight. For loss 
and damage data, Class I carriers would provide their total annual loss 
and damage expenses, number of tons originated, and loss and damage per 
ton by commodity using the specific commodity groupings identified in 
the proposed Annual Report of Loss and Damage Data, see NPRM, EP 769, 
slip op. at 11-13, and the Board would consolidate the data to 
calculate the loss and damage per ton for all Class I carriers.
    To ensure the timely availability of data for use in URCS, the 
Board proposed to require Class I carriers, either individually or 
through AAR, to file the annual tare weight and loss and damage data 
with the Board within 60 days after the end of each calendar year. 
Additionally, to facilitate the prompt receipt of 2021 data for use in 
URCS this year, the Board proposed to require Class I carriers, either 
individually or through AAR, to file tare weight and loss and damage 
data for the year 2021 within 30 days of the effective date of the 
final rule.
    To provide additional guidance, the Board proposed sample forms, 
attached as Appendices B (for reporting through AAR) and C (for 
reporting individually) to the NPRM, that Class I carriers may use to 
file tare weight and loss and damage data. The Board explained that its 
Office of Economics (OE) would make technical changes to the format of 
these forms in the future as necessary.\4\
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    \4\ If any technical changes were made, OE would post the 
revised templates to the Board's website and so notify the Class I 
carriers.
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    The Board invited comments on the proposed rule. Comments were due 
by June 13, 2022; replies were due by June 28, 2022. The Board received 
comments from AAR and the Western Coal Traffic League (WCTL), and a 
reply from AAR.

2. Comments and Reply

    AAR supports the Board's proposal to codify the voluntary practice 
and states that it ``plans to continue . . . to submit the information 
on behalf of the Class I railroads.'' (AAR Comments 1, 3.) AAR, 
however, proposes one modification to the submission deadline for loss 
and damage data because the Board's proposal to require submission of 
loss and damage data within 60 days of the end of the calendar year may 
not be feasible. (Id. at 1-2.) AAR explains that it uses four inputs to 
calculate loss and damage data,\5\ not all of which are available until 
March 31. (Id. at 2.) Accordingly, AAR proposes that the Board move the 
submission deadline to May 31 to allow AAR 60 days from the date at 
which AAR receives the last input to verify, aggregate, and calculate 
the data and prepare the report. (Id. at 2-3.)
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    \5\ AAR states that these inputs include the number of tons 
originated, the loss and damage payments and operating revenues, 
average tare weight of cars, and the number of cars by AAR car type. 
(AAR Comments 2.)
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    AAR also clarifies the parameters of the data it proposes to submit 
on behalf of CN and CP. (Id. at 3.) AAR explains that, in the past, CN 
and CP have provided AAR with loss and damage data on a consolidated 
basis for their operations. (Id.) However, under the Board's proposal, 
CN and CP would need to separate out loss and damage data for their 
U.S. operations. (Id. at 4.) To ensure that only U.S. data is provided, 
AAR explains that it would provide loss and damage data for those 
movements that originated in the U.S. (with destinations in the U.S. 
and Canada) and exclude those movements that originated in Canada. 
(Id.) AAR asserts that such practice is consistent with the Carmack 
Amendment and conforms to the proposed rule's focus on tons originated. 
(Id.)
    WCTL generally supports the Board's proposal but requests that the 
Board require that the data be reported by the Class I carriers 
individually. (WCTL Comments 1.) WCTL argues that allowing AAR to 
submit data on behalf of the Class I carriers may undermine accuracy. 
For example, WCTL contends that if one carrier has lower tare weights 
for a particular car type, then ``the use of aggregate data will 
suppress that carrier's efficiencies,'' and, if one carrier experiences 
major loss and damage, the ``use of aggregate data will cause those 
costs to be socialized.'' (Id. at 2.)
    In response to WCTL, AAR argues that the Board should continue to 
permit AAR to report the data in the aggregate. (AAR Reply 2.) AAR 
contends that its longstanding practice of providing aggregated data is 
more efficient for the Board since the individual reporting option 
would require the Board to collect, calculate, and aggregate the data. 
(Id.) Furthermore, AAR asserts that the aggregated data option is 
consistent with the purpose of URCS to generate

[[Page 47639]]

system averages for the industry, rather than monitor the operating 
practices of individual railroads. (Id.)

Final Rule

    The Board will adopt the regulations as proposed in the NPRM with 
one modification and one clarification proposed by AAR, which are both 
reasonable and unopposed. First, the Board will modify the submission 
deadline for loss and damage data, from 60 days after the end of the 
calendar year to no later than May 31 of each year, to allow AAR 
sufficient time to collect the inputs, and verify and calculate the 
data. The Board will likewise modify the deadline for submission of 
tare weight data, from 60 days after the end of the calendar year to no 
later than May 31 of each year, so that both data sets are due 
simultaneously. Second, the Board clarifies that AAR's proposed 
methodology to ensure that the loss and damage data provided for CN and 
CP comprise only their U.S. operations (by including movements that 
originate in the U.S. and excluding movements that originate in Canada) 
is reasonable. With each annual submission of loss and damage data, AAR 
(or CN and CP, if the data is submitted by the carriers) will be 
required to explain the methodology by which Canadian operations are 
excluded so that the Board will be aware of any changes in that 
methodology.\6\
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    \6\ If, in the future, a U.S. railroad's operations extend into 
Mexico, then the Board expects that AAR (or the individual carrier, 
if the data is submitted by the carriers) would exclude those 
Mexican operations in the same manner as the exclusion of CN and 
CP's Canadian operations.
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    The final rule will retain the option for AAR to report the data 
for the Class I carriers in the aggregate. WCTL has provided the Board 
with no basis to conclude that the manner of the submission of the data 
(aggregated or individualized) would affect the accuracy of the 
collection. Moreover, the purpose of URCS is to provide system-average 
costing information for each railroad. Accordingly, the Board would 
have to undertake the additional burden of aggregating the data if they 
were submitted individually for each carrier. As discussed above, AAR's 
longstanding practice of collecting tare weight and loss and damage 
data from Class I carriers and providing aggregated data to the Board 
has worked successfully for decades and reduced administrative burdens 
for the Board. WCTL has not presented a compelling reason to change the 
Board's proposal and longstanding practice.
    In the NPRM, the Board proposed to require Class I carriers, either 
individually or through AAR, to file tare weight and loss and damage 
data for the year 2021 within 30 days of the effective date of the 
final rule. To ensure the timely availability of data for use in URCS 
this year, the Board finds good cause to waive the 30-day effective 
period for the final rule so that the final rule will be effective 15 
days after issuance. See 5 U.S.C. 553(d) (stating that an agency may 
waive the 30-day effective period for a final rule ``for good cause 
found and published with the rule''). AAR will have 45 days after 
issuance of the final rule to submit tare weight and loss and damage 
data to the Board for the year 2021. Since AAR has the inputs for the 
data collection by March 31 of each year, this deadline should not be 
burdensome.
    The final rule, reflecting the modification to the proposed rule 
discussed above, is set forth below.
    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. Section 601-604. In its final rule, the agency must either 
include a final regulatory flexibility analysis, section 604(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 final rule will not have a significant impact on a substantial 
number of small entities within the meaning of the RFA \7\ because it 
is limited to Class I carriers. Accordingly, the Board certifies under 
5 U.S.C. 605(b) that this rule would not have a significant economic 
impact on a substantial number of small entities as defined by the RFA. 
A copy of this decision will be served upon the Chief Counsel for 
Advocacy, Office of Advocacy, U.S. Small Business Administration, 
Washington, DC 20416.
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    \7\ For purposes of the RFA analysis, the Board defines a small 
entity as only including those rail carriers classified as Class III 
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 
($42,370,575 when adjusted for inflation using 2021 data). Class II 
carriers have annual operating revenues of less than $900 million in 
2019 dollars ($943,898,958 when adjusted for inflation using 2021 
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 Ann. Operating Revenues of R.Rs., EP 748 (STB 
served June 29, 2022).
    In the NPRM, footnote 5 on page 4 incorrectly indicated that the 
revenue thresholds for Class II and Class III carriers had been 
adjusted for inflation to the base year of 1991. On April 5, 2021, 
the Board issued a Final Rule in Montana Rail Link, Inc.--Petition 
for Rulemaking--Classification of Carriers, Docket No. EP 763, in 
which the revenue classification level for Class I railroads was 
raised from $250 million (1991 dollars) to $900 million (2019 
dollars) effective for the reporting year beginning January 1, 2020. 
The Class II threshold was converted and rounded from $20 million 
(1991 dollars) to $40.4 million (2019 dollars). The corresponding 
footnote in this decision has been corrected to reflect the new base 
year of 2019.
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    Paperwork Reduction Act. In the NPRM, the Board sought comments 
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), 
and Appendix D, about the impact of the new collection for URCS Data 
Reporting (OMB Control No. 2140-XXXX), concerning (1) whether the 
proposed collection of information, as described in Appendix D of 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.
    The Board estimated in the NPRM that the proposed new requirements 
would include a total annual hourly burden of 28 hours and a one-time, 
start-up hourly burden of 63 hours. There were no proposed non-hourly 
burdens associated with this collection. No comments were received 
pertaining to the collection of this information under the PRA.
    The new collection will be submitted to OMB for review as required 
under the PRA, 44 U.S.C. 3507(d), and 5 CFR 1320.11.

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    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 a non-major rule, as defined by 5 U.S.C. 
804(2).
    Because the data required by the final rule is necessary to timely 
process the Board's URCS calculations, the Board finds good cause to 
make this rule effective on less than the 30 days' notice required 
under 5 U.S.C. 553(d).

List of Subjects in 49 CFR Part 1249

    Railroads, Reporting and recordkeeping requirements.

    It is ordered:
    1. The Board adopts the final rule as set forth in this decision 
and the Appendices.
    2. Notice of the final rule will be published in the Federal 
Register.
    3. The final rule is effective on August 13, 2022.
    4. Class I carriers, either individually or through AAR, shall file 
tare weight and loss and damage data for the year 2021 by September 12, 
2022.
    5. A copy of this decision will be served upon the Chief Counsel 
for Advocacy, Office of Advocacy, U.S. Small Business Administration.
    6. This decision is effective on its service date.

    Decided: July 28, 2022.

    By the Board, Board Members Fuchs, Hedlund, Oberman, Primus, and 
Schultz.
Aretha Laws-Byrum,
Clearance Clerk.

    For the reasons set forth in the preamble, the Surface 
Transportation Board amends title 49, chapter X, subchapter C, of the 
Code of Federal Regulations by adding part 1249, consisting of 
Sec. Sec.  1249.1 and 1249.2, to read as follows:

PART 1249--REPORTS OF TARE WEIGHT AND LOSS AND DAMAGE DATA

    Authority:  49 U.S.C. 1321, 11144, 11145.


Sec.  1249.1   Annual Report of Tare Weight Data.

    Class I carriers, either individually or through AAR, shall 
annually file tare weight data, as detailed in the Annual Report of 
Tare Weight Data, with the Surface Transportation Board's Office of 
Economics no later than May 31 of each year. Forms and instructions are 
available at www.stb.gov and may also be obtained by contacting the 
Office of Economics.


Sec.  1249.2   Annual Report of Loss and Damage Data.

    Class I carriers, either individually or through AAR, shall 
annually file loss and damage data, as detailed in the Annual Report of 
Loss and Damage Data, with the Surface Transportation Board's Office of 
Economics no later than May 31 of each year. Forms and instructions are 
available at www.stb.gov and may also be obtained by contacting the 
Office of Economics.

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

Appendix A--Sample Forms for AAR Reporting

Annual Report of Loss and Damage Data Instructions

    This report is applicable to all Class I railroads.
    1. Update current reporting year.
    2. For each standard transportation commodity code (STCC) 
identified, report total annual loss and damage expenses, the number 
of tons originated, and the loss and damage per ton.
    3. Report the number of tons originated for each commodity for 
all railroads.
    4. The loss and damage per ton is calculated by dividing loss 
and damage expenses by the number of tons originated by commodity. 
Round to the thousandths place.
    5. For Commodity 49 Hazmat, only report data in the loss and 
damage column.
    6. Explain the methodology by which non-U.S. operations, if any, 
are excluded.
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Annual Report of Tare Weight Data Instructions

    1. For each four-digit AAR Car Type Code, report the average 
tare weight for all Class I railroads by tons and pounds, and the 
number of cars.
    2. Report detailed data for freight car types and intermodal 
equipment codes: A, B, C, D, E, F, G, H, J, K, L, M, P, Q, R, S, T, 
U, V, and Z.
[GRAPHIC] [TIFF OMITTED] TR04AU22.017

Appendix B--Sample Forms for Individual Reporting

Annual Report of Loss and Damage Data Instructions

    This report is applicable to all Class I railroads.
    1. Update current reporting year.
    2. For each standard transportation commodity code (STCC) 
identified, report total annual loss and damage expenses, the number 
of tons originated, and the loss and damage per ton.
    3. Report the number of tons originated for each commodity for 
all railroads.
    4. The loss and damage per ton is calculated by dividing loss 
and damage expenses by the number of tons originated by commodity. 
Round to the thousandths place.
    5. For Commodity 49 Hazmat, only report data in the loss and 
damage column.
    6. Explain the methodology by which non-U.S. operations, if any, 
are excluded.

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Annual Report of Tare Weight Data Instructions

    1. For each four-digit AAR Car Type Code, report the total tare 
weight in tons and pounds, and the number of cars.
    2. Report detailed data for freight car types and intermodal 
equipment codes: A, B, C, D, E, F, G, H, J, K, L, M, P, Q, R, S, T, 
U, V, and Z.
[GRAPHIC] [TIFF OMITTED] TR04AU22.019

[FR Doc. 2022-16598 Filed 8-3-22; 8:45 am]
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