[Federal Register Volume 81, Number 186 (Monday, September 26, 2016)]
[Proposed Rules]
[Pages 65987-65988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-23144]
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SURFACE TRANSPORTATION BOARD
49 CFR Parts 1201, 1242
[Docket No. EP 681]
Class I Railroad Accounting and Financial Reporting--
Transportation of Hazardous Materials
AGENCY: Surface Transportation Board.
ACTION: Advance notice of proposed rulemaking, withdrawal.
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SUMMARY: The Surface Transportation Board is withdrawing the advance
notice of proposed rulemaking and discontinuing the EP 681 rulemaking
proceeding which sought comment on whether and how it should update its
accounting and financial reporting for Class I rail carriers to better
capture the operating costs of transporting hazardous materials.
DATES: The advance notice of proposed rulemaking published on January
5, 2009 (74 FR 248) is withdrawn and the rulemaking proceeding is
discontinued on September 22, 2016.
FOR FURTHER INFORMATION CONTACT: Allison Davis at (202) 245-0378.
Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at 1-800-877-8339.
SUPPLEMENTARY INFORMATION: On January 5, 2009, in the above titled
docket, the Board issued an Advance Notice of Proposed Rulemaking
(ANPR) seeking public comment on whether and how it should update its
accounting and financial reporting for Class I rail carriers and refine
its Uniform Railroad Costing System (URCS) to better capture the
operating costs of transporting hazardous materials. For the reasons
stated below, we will discontinue this proceeding.
The Board uses URCS to determine a carrier's variable costs in a
variety of regulatory proceedings. The URCS model determines, for each
Class I railroad, what portion of each category of costs shown in that
carrier's Annual Report to the Board (STB Form R-1) represents its
system-average variable cost for that year, expressed as a unit cost.
In the ANPR, the Board noted that there may be unique operating costs
associated with the transportation of hazardous materials that URCS
does not attribute to those movements. As an example, the Board
suggested that the transportation of hazardous materials may require
carriers to pay high insurance premiums, which would be spread across
all traffic of the railroad rather than being attributed specifically
to the transportation of the hazardous materials. Additionally, the
Board noted that the Uniform System of Accounts (USOA)--the accounting
standards which Class I carriers must use to prepare the financial
statements that they submit to the Board--does not include a separate
classification for hazardous material operations that would allow for
an accounting of the assets used and costs incurred in providing such
service.
The Board therefore sought comment on ``whether and how it should
improve its informational tools to better identify and attribute the
costs of hazardous-material transportation movements,'' including any
revisions to the USOA and improvements to the analytic capabilities of
URCS. ANPR, slip op. at 2. The Board specifically sought comment on
several items, including how hazardous material operations and expenses
could be reported in a subschedule of the annual R-1 reports, a
specific definition of what should constitute a movement of hazardous
material for this purpose, whether that definition should be limited to
movements of ``Toxic Inhalation Hazards'' or not, and the best
operating statistic (such as car-miles, revenue ton-miles, or revenue
tons of hazardous materials movements) for URCS to use to allocate
specified hazardous material costs to individual movements. In response
to the ANPR, the Board received comments from multiple stakeholders, as
discussed below.\1\
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\1\ The Board received comments from: The American Chemistry
Council, the Chlorine Institute, The Fertilizer Institute, and the
Edison Electric Institute (collectively, ACC); Arkansas Electric
Cooperative Corporation (AECC); the Association of American
Railroads (AAR); BNSF Railway Company (BNSF); Canadian Pacific
Railway Company (CP); Diversified CPC International, Inc.
(Diversified CPC); Norfolk Southern Railway Company (NSR); Union
Pacific Railroad Company (UP); and the U.S. Department of
Transportation (DOT).
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DOT agrees that ``additional data should be reported to [USOA] in
order to identify and quantify these [hazardous material] costs, and
that URCS should attribute these costs to hazmat traffic alone rather
than to the entirety of a carrier's business.'' (DOT Comment 2.)
AAR, BNSF, CP, and UP generally agree with the Board's stated goals
in this proceeding. (AAR Comment 2; BNSF Comment 2, CP Comment 7, 9; UP
Comment 7.) However, they also argue that changes to URCS would not
sufficiently address the railroad industry's concerns with transporting
hazardous material. BNSF and NSR underscore the risk of liability from
a catastrophic accident (BNSF Comment 2; NSR Comment 2-3), while UP
stresses the importance of fairly apportioning risk across all
participants in the supply chain (UP Comment 2). The railroads argue
that, even if the Board were to change URCS, they should also be
allowed to present the unique costs of transporting hazardous materials
in rate proceedings involving hazardous materials. (See AAR Comment 2;
CP Comment 3-4, 9; NSR Comment 3; UP Comment 8-9.)
ACC, AECC, and Diversified CPC argue that the Board should not
limit a review of URCS by any single issue or commodity, but should
instead conduct a broader review of URCS. (ACC Comment 2; AECC Comment
2; Diversified CPC Comment 8.) ACC also argues that the proposed
rulemaking would be arbitrary and ill-advised because, while some
railroads have faced one-time costs from settlements of claims, the
railroads have reported few
[[Page 65988]]
ongoing, quantifiable costs relating solely to hazardous materials
transportation. (ACC Comment 2.)
While the Board appreciates the input it received from the
commenters in this proceeding, it has decided to close this docket.
Although the Board is not foreclosing the possibility of addressing
this issue in the future, even if it were to do so, it would be
initiated as a new proceeding. Thus, we will not move forward with this
proceeding at this time and will discontinue this docket in the
interest of administrative efficiency.
Decided: September 20, 2016.
By the Board, Chairman Elliott, Vice Chairman Miller, and
Commissioner Begeman.
Marline Simeon,
Clearance Clerk.
[FR Doc. 2016-23144 Filed 9-23-16; 8:45 am]
BILLING CODE 4915-01-P