[The Regulatory Plan and Unified Agenda of Federal Regulatory and Deregulatory Actions]
[Surface Transportation Board Regulatory Plan]
[From the U.S. Government Printing Office, www.gpo.gov]

Federal Register / Vol. 61, No. 231 / Friday, November 29, 1996 / The
                            Regulatory Plan

[[Page 62218]]

SURFACE TRANSPORTATION BOARD (STB)
Statement of Regulatory and Deregulatory Priorities
The Surface Transportation Board (STB or Board) has as its goal the 
exercise of regulatory oversight only when necessary to respond to 
imperfections in the marketplace. Where regulatory oversight is 
necessary, the STB seeks to ensure that such oversight is exercised 
efficiently and effectively, integrating market forces, where possible, 
into the overall regulatory model. In this regard, the STB works to 
resolve matters brought before it fairly and expeditiously. Through use 
of its regulatory exemption authority, encouragement of private-sector 
solutions to disputes, where possible, streamlining of its decisional 
process, and consistent application of legal and equitable principles, 
the STB seeks to facilitate commerce by providing an effective forum 
for dispute resolution and the approval of appropriate business 
transactions.
The STB continues to develop, through rulemakings and case disposition, 
new and better ways to analyze unique and complex problems, to reach 
fully justified decisions more quickly, and to reduce the costs 
associated with regulatory oversight. In this regard, the STB continues 
to streamline applicable regulations and the process for handling 
matters within its jurisdiction.
Descriptions of the Most Important Significant Regulatory Actions
Rate Guidelines--Noncoal Proceedings, Ex Parte No. 347 (Sub-No. 2)
The STB is proposing to adopt maximum rate reasonableness guidelines 
for captive noncoal commodities.
Expedited Procedures for Processing Rail Rate Reasonableness, Exemption 
and Revocation Procedures, STB Ex Parte No. 527
The STB is proposing to establish procedures to expedite the handling 
of challenges to the reasonableness of railroad rates and the handling 
of railroad exemption and revocation proceedings. As part of this 
proceeding, the Board is also proposing to eliminate certain provisions 
of its Rules of Practice that are no longer needed.
Abandonment and Discontinuance of Rail Lines and Rail Transportation 
Under 49 USC 10903, STB Ex Parte No. 537
The STB is proposing to revise regulations for processing applications 
and exemption requests by rail carriers seeking to abandon or 
discontinue rail service, and to make related revisions of procedures 
for implementation of environmental laws.
Combined Regulatory Plan/Unified Agenda Descriptions
Attached are separate regulatory descriptions of the STB's most 
important significant regulatory actions proposed for FY 1997 as 
identified above. The descriptions are in the format of the United 
Agenda submissions and additional elements as called for in the 
Regulatory Plan.
_______________________________________________________________________
STB

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                            FINAL RULE STAGE

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171. RATE GUIDELINES--NONCOAL PROCEEDINGS, EX PARTE NO. 347 (SUB-NO. 2)
Priority:


Other Significant


Reinventing Government:


This rulemaking is part of the Reinventing Government effort. It will 
revise text in the CFR to reduce burden or duplication, or streamline 
requirements.


Legal Authority:


 49 USC 701; 49 USC 721; 49 USC 10501; 49 USC 10701; 49 USC 10704; 49 
USC 11701; 5 USC 553


CFR Citation:


 None


Legal Deadline:


 Final, Statutory, January 1, 1997.


Abstract:


The Board proposes to establish a simplified and expedited method for 
resolving challenges to the reasonableness of rail rates in those cases 
(regardless of the commodity involved) in which a full stand-alone cost 
presentation is too costly, given the value of the case.


Statement of Need:


There is a need for procedures to assess rail rate reasonableness in 
small cases (i.e., those cases that involve smaller volume, non-
recurring traffic, and that can involve smaller shippers). There are 
standards in place for evaluating the reasonableness of rail rates for 
large volume, recurring rail traffic; however, these procedures are 
elaborate and time consuming, and cannot be economically applied to 
smaller cases. This proceeding is thus necessary to ensure that all 
captive shippers that cannot resolve rate matters through negotiation 
with carriers have reasonable access to the Board to adjudicate rate 
disputes.


Summary of the Legal Basis:


The STB is required by statute to protect individual captive shippers 
from unreasonably high rate levels, upon complaint. 49 U.S.C. 10701, 
10704. In cases involving large volumes of traffic, there is a well-
established method for determining the reasonableness of rail rates--
the stand-alone cost test. Because a stand-alone cost presentation is 
very complex and expensive to make, it does not offer relief for the 
captive shipper whose traffic is not sufficient for a stand-alone cost 
presentation to be cost-effective. Therefore, the Board's predecessor--
the Interstate Commerce Commission (ICC)--instituted this proceeding to 
establish a simplified methodology for such small rail rate cases. In 
the ICC Termination Act of 1996, Congress directed the Board to 
complete this proceeding by January 1, 1997. 49 U.S.C. 10701(d) (3).


Alternatives:


The ICC originally proposed to use either a ``formula replacement 
costs'' (FRC) test or a ``revenue-to-variable cost comparison'' (R/VC) 
test. The ICC later concluded that neither of these tests provided a 
satisfactory rate standard. The ICC also rejected the use of a 
computerized model offered by the Association of American Railroads 
(AAR) that was characterized as a ``simplified stand-alone cost'' (AAR-
SSAC) program. Instead, the ICC proposed to judge rate reasonableness 
in small cases using three revenue-to-variable cost benchmarks in 
combination. The three benchmarks are the R/VC test, a ``revenue 
shortfall allocation method'' (RSAM) and an ``average revenue-to-
variable cost percentage above 180%'' (R/VC is greater than 180) test. 
Each of these tests is described in the ICC decision in this proceeding 
that was served December 1, 1995.

[[Page 62219]]

Anticipated Costs and Benefits:


Costs -- The up-front costs in terms of Board staff time and resources 
as well as the time and resources of the parties to evaluate 
alternative approaches are the most significant costs of this action. 
Not undertaking this effort, however, would leave smaller captive 
shippers without recourse, and thus vulnerable to paying rates in 
excess of those that might otherwise be determined to be reasonable. 
These increased transportation costs are likely to be ultimately passed 
on to consumers. Alternatively, where increased costs cannot be borne 
by consumers, the profitability of some shippers' businesses may be 
significantly compromised.
Benefits -- The primary benefit of this proceeding is that, once it is 
resolved, all captive shippers will be able to bring rail rate 
challenges to the STB at a reasonable cost when compared to expected 
benefits. An additional benefit of providing captive shippers of small 
traffic with an effective avenue of regulatory relief at a reasonable 
cost is that it may lead to more efficient private contracting between 
these shippers and carriers.


Risks:


The risks to be addressed by this action are unreasonably high rates 
charged to captive shippers for rail transportation where the amount of 
traffic involved is not sufficient to justify a rate challenge using a 
stand-alone cost presentation. The amount potentially at issue could be 
substantial for individual shippers, but is not substantial in relation 
to the overall rate base of the rail industry.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
Notice of Propos51 FR 18811tatement                            05/22/86
First Proposal I52 FR 11295                                    04/08/87
Second Proposal 57 FR 54252                                    11/16/92
NPRM            60 FR 62256                                    12/01/95
Latest Proposal 60 FR 62256                                    12/01/95
NPRM Comment Period End                                        03/19/96
Comments Under Review                                          03/19/96
Final Action                                                   01/00/97
Small Entities Affected:


Undetermined


Government Levels Affected:


Undetermined


Agency Contact:
Ellen D. Hanson
Deputy General Counsel
Surface Transportation Board
12th & Constitution Avenue NW.
Washington, DC 20423
Phone: 202 927-7312
TDD: 202 927-5721
Fax: 202 927-5984
RIN: 2140-AA01
_______________________________________________________________________
STB
172. ABANDONMENT AND DISCONTINUANCE OF RAIL LINES AND RAIL 
TRANSPORTATION UNDER 49 USC 10903, STB EX PARTE NO. 537
Priority:


Other Significant


Reinventing Government:


This rulemaking is part of the Reinventing Government effort. It will 
revise text in the CFR to reduce burden or duplication, or streamline 
requirements.


Legal Authority:


 5 USC 553; 5 USC 559; 11 USC 704; 16 USC 470f; 16 USC 1247(d); 16 USC 
1248; 16 USC 1451; 16 USC 701; 49 USC 721; 49 USC 10502; 49 USC 10903; 
49 USC 10904; 49 USC 10905; 49 USC 11161


CFR Citation:


 49 CFR 1105; 49 CFR 1152


Legal Deadline:


None


Abstract:


The Board is proposing to revise regulations for processing 
applications and exemption requests by rail carriers seeking to abandon 
or discontinue rail service, and to make related revisions to 
procedures for implementation of environmental law.


Statement of Need:


The action proposed (adoption of new rules to govern the process for 
the STB's management of its railroad abandonment regulatory 
responsibilities) is needed to streamline and update the procedures so 
that they are consistent with the letter and spirit of the ICC 
Termination Act of 1995. A simpler, more expedited, and more user-
friendly process for railroads and their constituents would promote the 
efficient handling of proposed abandonments, whether they are subject 
to the application process or qualify for exemption from regulatory 
approval, either as a member of a class of transactions or on an 
individual basis. A process is needed that produces all relevant and 
necessary information without burdening any party with production of 
unneeded data.


Summary of the Legal Basis:


The action is not directly required by statute, but the action is 
needed to establish procedures that are consistent with the new statute 
that became effective on January 1, 1996.


Alternatives:


Action is necessary to establish procedures that are consistent with 
the new statute. The approach proposed in the notice of proposed 
rulemaking was to seek public comment, not only on changes that are 
directly necessary because of specific new provisions of the law 
(establishment of new statutory deadlines and removal of others, as 
examples), but also on changes that constitute a broader reform of the 
procedures, with the primary goal of streamlining the process. The 
principal alternative considered was a narrower action that would have 
addressed only those areas where specific changes in the law required 
specific conforming changes in the procedures. That would have produced 
a proposal that was closer to the status quo.


Anticipated Costs and Benefits:


Costs -- The action anticipates that fewer resources would be required 
on a regular and routine basis for participants in rail abandonment 
proceedings. The focus is on relieving railroads of filing burdens 
associated with routine and ongoing requirements designed to effect 
broad notice of anticipated rail carrier actions relating to 
abandonment or discontinuance of rail service. The aim is that fewer 
materials would be produced on a routine basis but that those materials 
that are necessary would be available as early in the process as 
possible.
Benefits -- The principal benefit would be that all participants in 
rail abandonment proceedings, whether they are for or against cessation 
of service, would be less burdened by participating in abandonment 
proceedings before the STB and would have greater flexibility to decide 
what useful data ought to be presented. The result should be a more 
focused record with fewer extraneous materials. Participants would bear 
some increased burdens upfront as compared to the current procedure due 
to the fact that

[[Page 62220]]

filings would need to be made earlier in a proceeding, both to provide 
early notice to other participants and to produce a complete record as 
early as possible for the sake of expedited decisionmaking.


Risks:


The action would reduce the risk of protracted record development and 
decisionmaking by establishing processes and deadlines for early record 
production, without extraneous materials. The risks associated with the 
action relate to the possibility that ambitious scheduling of due dates 
for filing requirements could disadvantage an entity that is not 
equipped for expedition, and to the possibility that some useful 
information will not be elicited early enough (in some cases), or at 
all (in other cases). Experience, however, has shown that the action 
would reduce more risks than it produces. The objective is a process 
that is (a) sufficiently streamlined to facilitate consideration of 
most abandonment proposals and (b) flexible enough to adapt to the 
minority of proceedings where more or different information is needed.


Timetable:
_______________________________________________________________________
Action                                 DFR Cite

_______________________________________________________________________
NPRM            61 FR 11174                                    03/19/96
NPRM Comment Period End                                        05/06/96
Comments Under Review                                          05/07/96
Final Action                                                   12/00/96
Small Entities Affected:


None


Government Levels Affected:


None


Agency Contact:
Joseph H. Dettmar
Deputy Director
Office of Proceedings
Surface Transportation Board
12th and Constitution Avenue NW.
Washington, DC 20423
Phone: 202 927-5660
TDD: 202 927-5721
Fax: 202 927-5984
RIN: 2140-AA17
BILLING CODE 4915-00-F