81 FR 63445 - Changes to Attributable Costing
POSTAL REGULATORY COMMISSION Federal Register Volume 81, Issue 179 (September 15, 2016)
Federal Register Volume 81, Issue 179 (September 15, 2016)
| Page Range | 63445-63448 | |
| FR Document | 2016-22162 |
[Federal Register Volume 81, Number 179 (Thursday, September 15, 2016)] [Proposed Rules] [Pages 63445-63448] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-22162] ======================================================================= ----------------------------------------------------------------------- POSTAL REGULATORY COMMISSION 39 CFR Parts 3015 and 3060 [Docket No. RM2016-13] Changes to Attributable Costing AGENCY: Postal Regulatory Commission. ACTION: Proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: The Commission is issuing this proposed rulemaking which amends some existing rules concerning attributable costing. The primary purpose of this rulemaking is to make conforming changes to rules that specifically define or describe attributable costs, pursuant to Commission Order No. 3506. This notice informs the public of the docket's initiation, invites public comment, and takes other administrative steps. DATES: Comments are due on or before October 17, 2016. ADDRESSES: Submit comments electronically via the Commission's Filing Online system at http://www.prc.gov. Those who cannot submit comments electronically should contact the person identified in the FOR FURTHER INFORMATION CONTACT section by telephone for advice on filing alternatives. FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 202-789-6820. SUPPLEMENTARY INFORMATION: Table of Contents I. Introduction II. Background III. Proposed Rules IV. Comments Requested V. Ordering Paragraphs I. Introduction The Commission initiates this rulemaking to request comments on proposed changes to title 39 of the Code of Federal Regulations (CFR) as they relate to attributable costs. The primary purpose of the rulemaking is to make conforming changes to rules that specifically define or describe attributable costs, pursuant to Commission Order No. 3506.\1\ --------------------------------------------------------------------------- \1\ Docket No. RM2016-2, Order Concerning United Parcel Service, Inc.'s Proposed Changes to Postal Service Costing Methodologies (UPS Proposals One, Two, and Three), September 9, 2016 (Order No. 3506). --------------------------------------------------------------------------- II. Background In Docket No. RM2016-2, the Commission issued Order No. 3506 after consideration of a United Parcel Service, Inc. (UPS) Petition which sought to make changes to the [[Page 63446]] methodologies employed by the Postal Service to account for the costs of its products in its periodic reports.\2\ In Proposal One, UPS recommended that the Postal Service calculate and attribute inframarginal costs to individual products in addition to the currently attributed volume-variable and product-specific fixed costs.\3\ --------------------------------------------------------------------------- \2\ Docket No. RM2016-2, Petition of United Parcel Service, Inc. for the Initiation of Proceedings to Make Changes to Postal Service Costing Methodologies, October 8, 2015 (Petition). \3\ Petition, Proposal One at 1. Proposal Two dealt with reclassifying some fixed costs as fully or partially variable, and attributing those costs to products. See generally, Petition, Proposal Two at 1. UPS also filed a third proposal, which requested review of competitive products; share of institutional costs. Petition, Proposal Three at 1. In Order No. 2793, the Commission held consideration of Proposal Three in abeyance until the Commission completed its review of Proposals One and Two. Docket No. RM2016-2, Notice of Proposed Rulemaking on United Parcel Service, Inc.'s Proposed Changes to Postal Service Costing Methodologies (UPS Proposals One, Two, and Three), October 29, 2015, at 6-7 (Order No. 2793). It is the Commission's decision concerning Proposal One that initiated this proposed rulemaking. --------------------------------------------------------------------------- Section 3633(a)(2) (competitive rate regulation) requires the Commission to ensure that ``each competitive product covers its costs attributable.'' 39 U.S.C. 3633(a)(2); see also 39 CFR 3015.7(b).\4\ Section 3631(b) defines attributable cost as ``the direct and indirect postal costs attributable to [ ] product[s] through reliably identified causal relationships.'' 39 U.S.C. 3631(b). --------------------------------------------------------------------------- \4\ This Notice of Proposed Rulemaking sets forth amendments to 39 CFR part 3015, which implements 39 U.S.C. 3633. These proposed rules are conforming changes required by the Commission's action taken on the UPS Petition. See Order No. 3506 at 61-62, 123-124. (Adopting the use of incremental costs to calculate attributable cost). Uncodified section 703 of the Postal Accountability and Enhancement Act, Public Law 109-435, 120 Stat. 3198 (2006) requires that when promulgating new or revised regulations under section 3633, the Commission ``shall take into account'' Federal Trade Commission recommendations about the net economic effects of laws that apply to the United States Postal Service, and subsequent relevant events. However, the proposed rules in this instance do not trigger the requirement to consider the net economic effect because the rules are a conforming change required by law. Section 3622(c) requires that costs must be attributed when there is a reliably identified causal relationship that links costs to a class or type of mail service. See 39 U.S.C. 3622(c). In Order No. 3506, the Commission found that there were additional costs that satisfied the requirements of section 3622(c), and, therefore, must be attributed. See Order No. 3506 at 61-62. Pursuant to section 3622(c), these costs must therefore be attributed to all products, including competitive products. This change in attribution requires conforming changes in 39 CFR part 3015 that are identified in this Notice. Because the rule changes are required by law, any consideration of the ``net economic effect'' recommendations identified in uncodified section 703 would be moot. Additionally, the Commission discusses the inapplicability of uncodified section 703 to UPS Proposals One and Two in Order No. 3506. Order No. 3506 at 117-120. The Commission notes, notwithstanding uncodified section 703's applicability, that this change in attribution results in an improved, more complete, or more accurate measure of attributable costs as defined by section 3622(c), and represents an improvement in the attribution of costs as required by section 3652(e). See Order No. 3506 at 122 n.152. The conforming changes identified in this Notice facilitate improved attribution and therefore reduce potential economic distortions. --------------------------------------------------------------------------- Additionally, under section 3622 (market dominant rate and class regulation), a product's ability to cover its attributable costs is a factor to be considered when regulating rates for market dominant products and includes the same terminology, that postal costs should be attributed through reliably identified causal relationships, found in sections 3631(b). 39 U.S.C. 3622(c)(2). Therefore, title 39 introduces the concept of attributable costs and describes the role they play in the regulation of both market dominant and competitive products. For competitive products, coverage of attributable costs is a requirement in regulating competitive product rates; for market dominant products, it is only one of many factors the Commission considers when regulating market dominant rates. See 39 U.S.C. 3633(a)(2); 39 CFR 3015.7(b); 39 U.S.C. 3622(c). Historically, volume-variable costs and product-specific costs together totaled attributable costs, as the Commission found both volume-variable and product-specific costs are reliably identifiable and causally related to products pursuant to statute.\5\ All other costs are currently classified as institutional and are not attributed to specific products. Order No. 3506 at 10. Institutional costs include common fixed costs and inframarginal costs. Id. Inframarginal costs are variable costs that do not vary directly with volume. Id. (emphasis added). --------------------------------------------------------------------------- \5\ Docket No. R74-1, Chief Administrative Law Judge's Initial Decision on Postal Rate and Fee Increases Volume I, May 28, 1975, at 76. See generally at id. at 76-145; see also Summary Description of USPS Development of Costs by Segments and Components, Fiscal Year 2015, July 6, 2016, ``PREF-15'' at i; Appendix H, at H-1; Docket No. R83-1, Opinion and Recommended Decision on E-COM Rate and Classification Changes, February 24, 1984, at 186. --------------------------------------------------------------------------- While the Commission found that inframarginal costs are causally related to products, it determined inframarginal costs cannot be reliably identified, which is a necessary component of cost attribution. Order No. 3506 at 56. However, the Commission found that a portion of inframarginal costs (those inframarginal costs calculated as part of a product's incremental cost) are reliably identifiable and can be linked to products. Order No. 3506 at 61. Therefore, pursuant to Order No. 3506, attributable costs must also include those inframarginal costs calculated as part of a competitive product's incremental costs (in addition to a product's volume-variable costs and product-specific fixed costs). It is this change in the description of attributable costs that requires clarification of some attributable cost references in title 39 of the CFR. III. Proposed Rules The rules requiring conforming or clarifying changes in this notice of proposed rulemaking are Sec. Sec. 3015.7, 3060.10, and 3060.21. Proposed Sec. 3015.7(a) provides that when incremental cost data are unavailable to test for cross-subsidies by market dominant products, the Commission will use volume-variable costs and product- specific costs, as well as causally related, group-specific costs, to test for cross-subsidies. This proposed section removes the ``attributable costs'' phrase currently described as the alternative test when incremental costs are not available. The proposed rule is intended to provide a refined explanation of the alternative test for cross-subsidization by market dominant products after the Commission found in Order No. 3506 that some incremental costs (those inframarginal costs calculated as part of a competitive product's incremental costs) should be included as part of attributable costs. Order No. 3506 at 61-62, 123-124. Proposed Sec. 3015.7(b) includes the updated description of attributable costs to include those inframarginal costs calculated as part of a competitive product's incremental costs, as well as volume- variable costs and product-specific costs. Order No. 3506 at 62. The proposed rule is intended to provide a clear description of which costs should be attributed to competitive products pursuant to the Commission's findings in Order No. 3506. In addition, proposed rule Sec. 3015.7(b) signifies these three costs not only comply with the description of attributable costs found in 39 U.S.C. 3631(b), but are the costs relevant to the Commission's evaluation of the Postal Service's compliance with part 3015. Proposed Sec. Sec. 3060.10(a) and 3060.21 both make conforming changes to the description of attributable costs, in each section, to include those inframarginal costs calculated as part of a competitive product's incremental costs, along with volume-variable costs and product-specific costs pursuant to Order No. 3506. While no other rules in title 39 require revisions as a result of the [[Page 63447]] Commission's Order No. 3506, the Commission's findings concerning the use a product's incremental costs (the sum of volume-variable costs, product-specific costs, and those inframarginal costs calculated as part of a product's incremental costs) to calculate attributable costs applies to any reference of attributable costs in title 39 unless otherwise indicated by the rules. See generally Order No. 3506. IV. Comments Requested Interested persons are invited to provide written comments concerning the proposed rule. Comments are due no later than 30 days after the date of publication of this notice in the Federal Register. All comments and suggestions received will be available for review on the Commission's Web site, http://www.prc.gov. Pursuant to 39 U.S.C. 505, Kenneth E. Richardson is appointed to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in the above-captioned docket. V. Ordering Paragraphs It is ordered: 1. Docket No. RM2016-13 is established for the purpose of receiving comments on the proposed change to parts 3015 and 3060, as discussed in this order. 2. Interested persons may submit comments no later than 30 days from the date of the publication of this notice in the Federal Register. 3. Pursuant to 39 U.S.C. 505, Kenneth E. Richardson is appointed to serve as the Public Representative in this proceeding. 4. The Secretary shall arrange for publication of this order in the Federal Register. By the Commission. Stacy L. Ruble, Secretary. List of Subjects 39 CFR Part 3015 Administrative practice and procedure, Postal Service. 39 CFR Part 3060 Administrative practice and procedure, Reporting and recordkeeping requirements. For the reasons discussed in the preamble, the Commission proposes to amend chapter III of title 39 of the Code of Federal Regulations as follows: PART 3015--REGULATION OF RATES FOR COMPETITIVE PRODUCTS 0 1. The authority citation of part 3015 continues to read as follows: Authority: 39 U.S.C. 503; 3633. 0 2. Amend Sec. 3015.7 by revising paragraph (a) and (b) to read as follows: Sec. 3015.7 Standards for compliance. * * * * * (a) Incremental costs will be used to test for cross-subsidies by market dominant products of competitive products. To the extent that incremental cost data are unavailable, the Commission will use the sum of competitive products' volume-variable costs and product-specific costs supplemented to include causally related, group-specific costs to test for cross-subsidies. (b) Each competitive product must recover its attributable costs as defined in 39 U.S.C. 3631(b). Pursuant to 39 U.S.C. 3631(b), the Commission will use a competitive product's incremental costs, which is the sum of volume-variable costs, product-specific costs, and those inframarginal costs calculated as part of a competitive product's incremental costs, to calculate attributable costs. * * * * * PART 3060--ACCOUNTING PRACTICES AND TAX RULES FOR THE THEORETICAL COMPETITIVE PRODUCTS ENTERPRISE 0 3. The authority citation of part 3060 continues to read as follows: Authority: 39 U.S.C. 503; 2011, 3633, 3634. 0 4. Amend Sec. 3060.10 by revising paragraph (b)(1) to read as follows: Sec. 3060.10 Costing. * * * * * (b) * * * (1) Attributable costs, including volume-variable costs, product- specific costs, and those inframarginal costs calculated as part of a competitive product's incremental costs; and (2) * * * 0 5. Amend Sec. 3060.21 by revising Table 1--Competitive Products Income Statement--PRC Form CP-01 to read as follows: Sec. 3060.21 Income report. * * * * * Table 1--Competitive Products Income Statement--PRC Form CP-01 [$ in 000s] ---------------------------------------------------------------------------------------------------------------- Percent change Percent change FY 20xx FY 20xx-1 from SPLY from SPLY ---------------------------------------------------------------------------------------------------------------- Revenue:........................................ $x,xxx $x,xxx xxx xx.x (1) Mail and Services Revenues.............. xxx xxx xx xx.x (2) Investment Income....................... x,xx x,xxx xxx xx.x (3) Total Competitive Products Revenue...... .............. .............. .............. .............. Expenses:....................................... x,xxx .............. .............. .............. (4) Volume-Variable Costs................... x,xxx x,xxx xxx xx.x (5) Product Specific Costs.................. x,xxx x,xxx xxx xx.x (6) Incremental Inframarginal Costs......... x,xxx x,xxx xxx xx.x (7) Total Competitive Products Attributable x,xxx x,xxx xxx xx.x Costs...................................... (8) Net Income Before Institutional Cost x,xxx x,xxx xxx .............. Contribution............................... (9) Required Institutional Cost Contribution x,xxx x,xxx $xxx x.x.x (10) Net Income (Loss) Before Tax........... x,xxx x,xxx $xxx xx.x (11) Assumed Federal Income Tax............. x,xxx x,xxx $xxx xx.x (12) Net Income (Loss) After Tax............ x,xxx x,xxx $xxx xx.x ---------------------------------------------------------------------------------------------------------------- Line (1): Total revenues from Competitive Products volumes and Ancillary Services. Line (2): Income provided from investment of surplus Competitive Products revenues. Line (3): Sum total of revenues from Competitive Products volumes, services, and investments. Line (4): Total Competitive Products volume-variable costs as shown in the Cost and Revenue Analysis (CRA) report. [[Page 63448]] Line (5): Total Competitive Products product-specific costs as shown in the CRA report. Line (6): Inframarginal costs calculated as part of total Competitive Products incremental costs. Line (7): Sum total of Competitive Products costs (sum of lines 4, 5, and 6). Line (8): Difference between Competitive Products total revenues and attributable costs (line 3 less line 6). Line (9): Minimum amount of Institutional cost contribution required under 39 CFR 3015.7 of this chapter. Line (10): Line 8 less line 9. Line (11): Total assumed Federal income tax as calculated under 39 CFR 3060.40. Line (12): Line 10 less line 11. ---------------------------------------------------------------------------------------------------------------- [FR Doc. 2016-22162 Filed 9-14-16; 8:45 am] BILLING CODE 7710-FW-P
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request, the Office will remove driver’s request in writing to the email address records. The Office will not include any
license numbers, social security or mailing address listed in § 201.1(c). notation of this action in its records.
numbers, banking information, credit Such a request must name the author ■ 4. In § 201.3, add paragraph (c)(19) to
card information, and other extraneous and/or claimant, provide the registration read as follows:
PII that was erroneously included on a number(s) associated for the record in § 201.3 Fees for registration, recordation,
registration application from the public question, and give a description of the and related services, special services, and
record. There is no fee for this service. extraneous PII that is to be removed. services performed by the Licensing
To make a request, the author, claimant, Once the request is received, the Office Division.
or the authorized representative of the will remove the extraneous information * * * * *
author or claimant, must submit the from both its online and offline public (c) * * *
Fees
Registration, recordation and related services ($)
* * * * * * *
(19) Removal of PII from Registration Records:
(i) Initial request, per registration record ...................................................................................................................................... 130
(ii) Reconsideration of denied requests, flat fee .......................................................................................................................... 60
* * * * * * *
* * * * * Washington, DC 20559–6000. The DATES: Comments are due on or before
request shall explain why the individual October 17, 2016.
PART 204—PRIVACY ACT: POLICIES believes the record to be incomplete, ADDRESSES: Submit comments
AND PROCEDURES inaccurate, irrelevant, or untimely. electronically via the Commission’s
■ 5. The authority citation for part 204 (b) With respect to requests for the Filing Online system at http://
continues to read as follows: correction or amendment of records that www.prc.gov. Those who cannot submit
are governed by this section, the Office comments electronically should contact
Authority: 17 U.S.C. 702; 5 U.S.C. 552(a). will respond within 10 working days the person identified in the FOR FURTHER
■ 6. Revise § 204.7 to read as follows: indicating to the requester that the INFORMATION CONTACT section by
requested correction or amendment has telephone for advice on filing
§ 204.7 Request for correction or been made or that it has been refused.
amendment of records.
alternatives.
If the requested correction or
(a) Any individual may request the FOR FURTHER INFORMATION CONTACT:
amendment is refused, the Office’s
correction or amendment of a record David A. Trissell, General Counsel, at
response will indicate the reason for the
pertaining to her or him. Requests for 202–789–6820.
refusal and the procedure available to
the removal of requested personally the individual to appeal the refusal. SUPPLEMENTARY INFORMATION:
identifiable information related to a Table of Contents
Dated: September 8, 2016.
copyright registration are governed by
Sarang V. Damle, I. Introduction
§ 201.2(e) of this chapter. Requests for
the removal of extraneous personally General Counsel and Associate Register of II. Background
Copyrights. III. Proposed Rules
identifiable information, such as IV. Comments Requested
[FR Doc. 2016–22011 Filed 9–14–16; 8:45 am]
driver’s license numbers, social security V. Ordering Paragraphs
numbers, banking information, and BILLING CODE 1410–30–P
credit card information from registration I. Introduction
records are governed by § 201.2(f) of this The Commission initiates this
chapter. With respect to the correction POSTAL REGULATORY COMMISSION rulemaking to request comments on
or amendment of all other information proposed changes to title 39 of the Code
contained in a copyright registration, 39 CFR Parts 3015 and 3060
of Federal Regulations (CFR) as they
the set of procedures and related fees [Docket No. RM2016–13] relate to attributable costs. The primary
are governed by 17 U.S.C. 408(d) and purpose of the rulemaking is to make
§ 201.5 of this chapter. With respect to Changes to Attributable Costing conforming changes to rules that
requests to amend any other record that AGENCY: Postal Regulatory Commission. specifically define or describe
an individual believes is incomplete, ACTION: Proposed rulemaking. attributable costs, pursuant to
inaccurate, irrelevant or untimely, the Commission Order No. 3506.1
request shall be in writing and delivered SUMMARY: The Commission is issuing
II. Background
either by mail addressed to the U.S. this proposed rulemaking which
Copyright Office, Supervisory Copyright amends some existing rules concerning In Docket No. RM2016–2, the
Information Specialist, Copyright attributable costing. The primary Commission issued Order No. 3506 after
rmajette on DSK2TPTVN1PROD with PROPOSALS
Information Section, Attn: Privacy Act purpose of this rulemaking is to make consideration of a United Parcel
Request, P.O. Box 70400, Washington, conforming changes to rules that Service, Inc. (UPS) Petition which
DC 20024–0400, or in person Monday specifically define or describe sought to make changes to the
through Friday between the hours of attributable costs, pursuant to
1 Docket No. RM2016–2, Order Concerning
8:30 a.m. and 5 p.m., eastern time, Commission Order No. 3506. This
United Parcel Service, Inc.’s Proposed Changes to
except legal holidays, at Room LM–401, notice informs the public of the docket’s Postal Service Costing Methodologies (UPS
Library of Congress, U.S. Copyright initiation, invites public comment, and Proposals One, Two, and Three), September 9, 2016
Office, 101 Independence Avenue SE., takes other administrative steps. (Order No. 3506).
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methodologies employed by the Postal Section 3631(b) defines attributable cost attributable costs must also include
Service to account for the costs of its as ‘‘the direct and indirect postal costs those inframarginal costs calculated as
products in its periodic reports.2 In attributable to [ ] product[s] through part of a competitive product’s
Proposal One, UPS recommended that reliably identified causal relationships.’’ incremental costs (in addition to a
the Postal Service calculate and 39 U.S.C. 3631(b). product’s volume-variable costs and
attribute inframarginal costs to Additionally, under section 3622 product-specific fixed costs). It is this
individual products in addition to the (market dominant rate and class change in the description of attributable
currently attributed volume-variable regulation), a product’s ability to cover costs that requires clarification of some
and product-specific fixed costs.3 its attributable costs is a factor to be attributable cost references in title 39 of
Section 3633(a)(2) (competitive rate considered when regulating rates for the CFR.
regulation) requires the Commission to market dominant products and includes
III. Proposed Rules
ensure that ‘‘each competitive product the same terminology, that postal costs
covers its costs attributable.’’ 39 U.S.C. should be attributed through reliably The rules requiring conforming or
3633(a)(2); see also 39 CFR 3015.7(b).4 identified causal relationships, found in clarifying changes in this notice of
sections 3631(b). 39 U.S.C. 3622(c)(2). proposed rulemaking are §§ 3015.7,
2 Docket No. RM2016–2, Petition of United Parcel
Therefore, title 39 introduces the 3060.10, and 3060.21.
Service, Inc. for the Initiation of Proceedings to concept of attributable costs and Proposed § 3015.7(a) provides that
Make Changes to Postal Service Costing when incremental cost data are
Methodologies, October 8, 2015 (Petition). describes the role they play in the
3 Petition, Proposal One at 1. Proposal Two dealt regulation of both market dominant and unavailable to test for cross-subsidies by
with reclassifying some fixed costs as fully or competitive products. For competitive market dominant products, the
partially variable, and attributing those costs to products, coverage of attributable costs Commission will use volume-variable
products. See generally, Petition, Proposal Two at
is a requirement in regulating costs and product-specific costs, as well
1. UPS also filed a third proposal, which requested as causally related, group-specific costs,
review of competitive products; share of competitive product rates; for market
institutional costs. Petition, Proposal Three at 1. In dominant products, it is only one of to test for cross-subsidies. This
Order No. 2793, the Commission held consideration many factors the Commission considers proposed section removes the
of Proposal Three in abeyance until the
when regulating market dominant rates. ‘‘attributable costs’’ phrase currently
Commission completed its review of Proposals One described as the alternative test when
and Two. Docket No. RM2016–2, Notice of See 39 U.S.C. 3633(a)(2); 39 CFR
Proposed Rulemaking on United Parcel Service, 3015.7(b); 39 U.S.C. 3622(c). incremental costs are not available. The
Inc.’s Proposed Changes to Postal Service Costing Historically, volume-variable costs proposed rule is intended to provide a
Methodologies (UPS Proposals One, Two, and and product-specific costs together refined explanation of the alternative
Three), October 29, 2015, at 6–7 (Order No. 2793). test for cross-subsidization by market
It is the Commission’s decision concerning Proposal totaled attributable costs, as the
One that initiated this proposed rulemaking. Commission found both volume- dominant products after the
4 This Notice of Proposed Rulemaking sets forth variable and product-specific costs are Commission found in Order No. 3506
amendments to 39 CFR part 3015, which reliably identifiable and causally related that some incremental costs (those
implements 39 U.S.C. 3633. These proposed rules
to products pursuant to statute.5 All inframarginal costs calculated as part of
are conforming changes required by the a competitive product’s incremental
Commission’s action taken on the UPS Petition. See other costs are currently classified as
Order No. 3506 at 61–62, 123–124. (Adopting the institutional and are not attributed to costs) should be included as part of
use of incremental costs to calculate attributable specific products. Order No. 3506 at 10. attributable costs. Order No. 3506 at 61–
cost). Uncodified section 703 of the Postal
Institutional costs include common 62, 123–124.
Accountability and Enhancement Act, Public Law Proposed § 3015.7(b) includes the
109–435, 120 Stat. 3198 (2006) requires that when fixed costs and inframarginal costs. Id.
updated description of attributable costs
promulgating new or revised regulations under Inframarginal costs are variable costs
section 3633, the Commission ‘‘shall take into to include those inframarginal costs
that do not vary directly with volume.
account’’ Federal Trade Commission calculated as part of a competitive
recommendations about the net economic effects of
Id. (emphasis added).
While the Commission found that product’s incremental costs, as well as
laws that apply to the United States Postal Service,
and subsequent relevant events. inframarginal costs are causally related volume-variable costs and product-
However, the proposed rules in this instance do to products, it determined inframarginal specific costs. Order No. 3506 at 62. The
not trigger the requirement to consider the net costs cannot be reliably identified, proposed rule is intended to provide a
economic effect because the rules are a conforming
which is a necessary component of cost clear description of which costs should
change required by law. Section 3622(c) requires be attributed to competitive products
that costs must be attributed when there is a attribution. Order No. 3506 at 56.
reliably identified causal relationship that links However, the Commission found that a pursuant to the Commission’s findings
costs to a class or type of mail service. See 39 U.S.C. portion of inframarginal costs (those in Order No. 3506. In addition,
3622(c). In Order No. 3506, the Commission found
inframarginal costs calculated as part of proposed rule § 3015.7(b) signifies these
that there were additional costs that satisfied the three costs not only comply with the
requirements of section 3622(c), and, therefore, a product’s incremental cost) are
must be attributed. See Order No. 3506 at 61–62. reliably identifiable and can be linked to description of attributable costs found
Pursuant to section 3622(c), these costs must products. Order No. 3506 at 61. in 39 U.S.C. 3631(b), but are the costs
therefore be attributed to all products, including
Therefore, pursuant to Order No. 3506, relevant to the Commission’s evaluation
competitive products. This change in attribution of the Postal Service’s compliance with
requires conforming changes in 39 CFR part 3015
that are identified in this Notice. Because the rule required by section 3652(e). See Order No. 3506 at part 3015.
changes are required by law, any consideration of 122 n.152. The conforming changes identified in Proposed §§ 3060.10(a) and 3060.21
the ‘‘net economic effect’’ recommendations this Notice facilitate improved attribution and both make conforming changes to the
identified in uncodified section 703 would be moot. therefore reduce potential economic distortions. description of attributable costs, in each
rmajette on DSK2TPTVN1PROD with PROPOSALS
Additionally, the Commission discusses the 5 Docket No. R74–1, Chief Administrative Law
inapplicability of uncodified section 703 to UPS
section, to include those inframarginal
Judge’s Initial Decision on Postal Rate and Fee
Proposals One and Two in Order No. 3506. Order Increases Volume I, May 28, 1975, at 76. See costs calculated as part of a competitive
No. 3506 at 117–120. generally at id. at 76–145; see also Summary product’s incremental costs, along with
The Commission notes, notwithstanding Description of USPS Development of Costs by volume-variable costs and product-
uncodified section 703’s applicability, that this Segments and Components, Fiscal Year 2015, July specific costs pursuant to Order No.
change in attribution results in an improved, more 6, 2016, ‘‘PREF–15’’ at i; Appendix H, at H–1;
complete, or more accurate measure of attributable Docket No. R83–1, Opinion and Recommended 3506.
costs as defined by section 3622(c), and represents Decision on E–COM Rate and Classification While no other rules in title 39
an improvement in the attribution of costs as Changes, February 24, 1984, at 186. require revisions as a result of the
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Commission’s Order No. 3506, the 4. The Secretary shall arrange for related, group-specific costs to test for
Commission’s findings concerning the publication of this order in the Federal cross-subsidies.
use a product’s incremental costs (the Register. (b) Each competitive product must
sum of volume-variable costs, product- By the Commission. recover its attributable costs as defined
specific costs, and those inframarginal Stacy L. Ruble, in 39 U.S.C. 3631(b). Pursuant to 39
costs calculated as part of a product’s U.S.C. 3631(b), the Commission will use
Secretary.
incremental costs) to calculate a competitive product’s incremental
attributable costs applies to any List of Subjects costs, which is the sum of volume-
reference of attributable costs in title 39 variable costs, product-specific costs,
unless otherwise indicated by the rules. 39 CFR Part 3015
and those inframarginal costs calculated
See generally Order No. 3506. Administrative practice and as part of a competitive product’s
IV. Comments Requested procedure, Postal Service. incremental costs, to calculate
39 CFR Part 3060 attributable costs.
Interested persons are invited to
provide written comments concerning * * * * *
Administrative practice and
the proposed rule. Comments are due no procedure, Reporting and recordkeeping PART 3060—ACCOUNTING
later than 30 days after the date of requirements. PRACTICES AND TAX RULES FOR
publication of this notice in the Federal
For the reasons discussed in the THE THEORETICAL COMPETITIVE
Register. All comments and suggestions
preamble, the Commission proposes to PRODUCTS ENTERPRISE
received will be available for review on
the Commission’s Web site, http:// amend chapter III of title 39 of the Code
■ 3. The authority citation of part 3060
www.prc.gov. of Federal Regulations as follows:
continues to read as follows:
Pursuant to 39 U.S.C. 505, Kenneth E.
Richardson is appointed to serve as an PART 3015—REGULATION OF RATES Authority: 39 U.S.C. 503; 2011, 3633, 3634.
officer of the Commission (Public FOR COMPETITIVE PRODUCTS
■ 4. Amend § 3060.10 by revising
Representative) to represent the paragraph (b)(1) to read as follows:
interests of the general public in the ■ 1. The authority citation of part 3015
above-captioned docket. continues to read as follows: § 3060.10 Costing.
Authority: 39 U.S.C. 503; 3633. * * * * *
V. Ordering Paragraphs
■ 2. Amend § 3015.7 by revising (b) * * *
It is ordered:
1. Docket No. RM2016–13 is paragraph (a) and (b) to read as follows: (1) Attributable costs, including
established for the purpose of receiving volume-variable costs, product-specific
§ 3015.7 Standards for compliance. costs, and those inframarginal costs
comments on the proposed change to
parts 3015 and 3060, as discussed in * * * * * calculated as part of a competitive
this order. (a) Incremental costs will be used to product’s incremental costs; and
2. Interested persons may submit test for cross-subsidies by market (2) * * *
comments no later than 30 days from dominant products of competitive ■ 5. Amend § 3060.21 by revising Table
the date of the publication of this notice products. To the extent that incremental 1—Competitive Products Income
in the Federal Register. cost data are unavailable, the Statement—PRC Form CP–01 to read as
3. Pursuant to 39 U.S.C. 505, Kenneth Commission will use the sum of follows:
E. Richardson is appointed to serve as competitive products’ volume-variable
the Public Representative in this costs and product-specific costs § 3060.21 Income report.
proceeding. supplemented to include causally * * * * *
TABLE 1—COMPETITIVE PRODUCTS INCOME STATEMENT—PRC FORM CP–01
[$ in 000s]
Percent Percent
change change
FY 20xx FY 20xx–1 from from
SPLY SPLY
Revenue: .......................................................................................................... $x,xxx $x,xxx xxx xx.x
(1) Mail and Services Revenues .............................................................. xxx xxx xx xx.x
(2) Investment Income .............................................................................. x,xx x,xxx xxx xx.x
(3) Total Competitive Products Revenue ................................................. ........................ ........................ ........................ ........................
Expenses: ........................................................................................................ x,xxx ........................ ........................ ........................
(4) Volume-Variable Costs ....................................................................... x,xxx x,xxx xxx xx.x
(5) Product Specific Costs ........................................................................ x,xxx x,xxx xxx xx.x
(6) Incremental Inframarginal Costs ......................................................... x,xxx x,xxx xxx xx.x
(7) Total Competitive Products Attributable Costs ................................... x,xxx x,xxx xxx xx.x
(8) Net Income Before Institutional Cost Contribution ............................. x,xxx x,xxx xxx ........................
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(9) Required Institutional Cost Contribution ............................................. x,xxx x,xxx $xxx x.x.x
(10) Net Income (Loss) Before Tax .......................................................... x,xxx x,xxx $xxx xx.x
(11) Assumed Federal Income Tax .......................................................... x,xxx x,xxx $xxx xx.x
(12) Net Income (Loss) After Tax ............................................................. x,xxx x,xxx $xxx xx.x
Line (1): Total revenues from Competitive Products volumes and Ancillary Services.
Line (2): Income provided from investment of surplus Competitive Products revenues.
Line (3): Sum total of revenues from Competitive Products volumes, services, and investments.
Line (4): Total Competitive Products volume-variable costs as shown in the Cost and Revenue Analysis (CRA) report.
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![63448 Federal Register / Vol. 81, No. 179 / Thursday, September 15, 2016 / Proposed Rules
TABLE 1—COMPETITIVE PRODUCTS INCOME STATEMENT—PRC FORM CP–01—Continued
[$ in 000s]
Percent Percent
change change
FY 20xx FY 20xx–1 from from
SPLY SPLY
Line (5): Total Competitive Products product-specific costs as shown in the CRA report.
Line (6): Inframarginal costs calculated as part of total Competitive Products incremental costs.
Line (7): Sum total of Competitive Products costs (sum of lines 4, 5, and 6).
Line (8): Difference between Competitive Products total revenues and attributable costs (line 3 less line 6).
Line (9): Minimum amount of Institutional cost contribution required under 39 CFR 3015.7 of this chapter.
Line (10): Line 8 less line 9.
Line (11): Total assumed Federal income tax as calculated under 39 CFR 3060.40.
Line (12): Line 10 less line 11.
[FR Doc. 2016–22162 Filed 9–14–16; 8:45 am] lead (Pb), 2008 ozone, and 2010 sulfur III. What is EPA’s analysis of New York’s
BILLING CODE 7710–FW–P dioxide (SO2) national ambient air NSR rule revisions?
quality standards (NAAQS). IV. How has the State addressed elements of
the Section 110(a)(1) and (2)
DATES: Comments must be received on ‘‘infrastructure’’ provisions?
ENVIRONMENTAL PROTECTION or before October 17, 2016. V. What action is EPA proposing to take?
AGENCY ADDRESSES: Submit your comments, VI. Incorporation by Reference
identified by Docket ID number EPA– VII. Statutory and Executive Order Reviews.
40 CFR Part 52
R02–OAR–2016–0478, at http:// I. What is being addressed in this
[EPA–R02–OAR–2016–0478; FRL–9952–49– www.regulations.gov. Follow the online document?
Region 2] instructions for submitting comments.
Once submitted, comments cannot be On October 12, 2011, the New York
Approval and Promulgation of State Department of Environmental
edited or removed from Regulations.gov.
Implementation Plans; New York Conservation (NYSDEC) submitted to
The EPA may publish any comment
Prevention of Significant Deterioration EPA Region 2 a new set of revisions to
received to its public docket. Do not
of Air Quality and Nonattainment New the New York State Implementation
submit electronically any information
Source Review; Infrastructure State Plan (SIP). This submittal consists of
you consider to be Confidential
Implementation Plan Requirements revisions to Title 6 of the New York
Business Information (CBI) or other
AGENCY: Environmental Protection information whose disclosure is Code of Rules and Regulations (6
Agency. restricted by statute. Multimedia NYCRR) Part 231, New Source Review
submissions (audio, video, etc.) must be for New and Modified Facilities; 6
ACTION: Proposed rule.
accompanied by a written comment. NYCRR Part 200, General Provisions;
SUMMARY: The Environmental Protection The written comment is considered the and 6 NYCRR Part 201, Permits and
Agency (EPA) is proposing to approve official comment and should include Certificates. New York undertook this
revisions to the New York State discussion of all points you wish to rulemaking to comply with EPA’s May
Implementation Plan (SIP) amending make. The EPA will generally not 16, 2008 NSR final rule for the
existing nonattainment New Source consider comments or comment regulation of particulate matter with an
Review (NNSR) and attainment New contents located outside of the primary aerodynamic diameter less than or equal
Source Review (Prevention of submission (i.e., on the web, cloud, or to 2.5 micrometers (PM2.5). Also, the
Significant Deterioration of Air Quality, other file sharing system). For revisions implement EPA’s October 20,
PSD) program requirements. additional submission methods, the full 2010 final rule that establishes the PM2.5
Specifically, the SIP revision includes EPA public comment policy, increments, significant impact levels,
new requirements pertaining to the information about CBI or multimedia and significant monitoring
regulation of particulate matter with an submissions, and general guidance on concentrations. This proposed
aerodynamic diameter less than or equal making effective comments, please visit rulemaking implements PM2.5
to 2.5 micrometer (PM2.5) and the http://www2.epa.gov/dockets/ provisions that were not previously
regulation of Greenhouse Gases (GHGs) commenting-epa-dockets. included in the November 17, 2010 EPA
under New York’s Part 231, ‘‘New SIP approval of Part 231. This SIP
FOR FURTHER INFORMATION CONTACT:
Source Review for New and Modified revision also incorporates provisions
Frank Jon, Air Programs Branch, that conform to EPA’s June 3, 2010 final
Facilities;’’ Part 201, ‘‘Permits and
Environmental Protection Agency, 290 rule for Greenhouse Gases (GHGs) under
Registrations;’’ and amendments to Part
Broadway, 25th Floor, New York, New its PSD and Title V programs,
200, ‘‘General Provisions,’’ of Title 6 of
York 10007–1866, (212) 637–4085; establishing major source applicability
the Official Compilation of Codes, Rules
email address: jon.frank@epa.gov. threshold levels for GHG emissions and
and Regulations of the State of New
rmajette on DSK2TPTVN1PROD with PROPOSALS
York (6 NYCRR) which will make the SUPPLEMENTARY INFORMATION: other conforming changes such as the
SIP consistent with existing federal Throughout this document, references establishment of global warming
requirements. The EPA is also to ‘‘EPA,’’ ‘‘we,’’ ‘‘us,’’ or ‘‘our,’’ are potential values for calculating CO2
proposing to approve certain elements intended to mean the Environmental equivalents under New York’s PSD and
of New York SIP revisions submitted to Protection Agency. The supplementary Title V programs.
demonstrate that the State meets the information is arranged as follows: The EPA is also proposing to approve
requirements of section 110(a)(1) and (2) I. What is being addressed in this document? certain elements of New York SIP
of the Clean Air Act (CAA) for the 2008 II. What is the background for this action? revisions as meeting CAA section 110(a)
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Document Created: 2018-02-09 13:18:28
Document Modified: 2018-02-09 13:18:28
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Proposed rulemaking. | |
| Dates | Comments are due on or before October 17, 2016. | |
| Contact | David A. Trissell, General Counsel, at 202-789-6820. | |
| FR Citation | 81 FR 63445 | |
| CFR Citation | 39
CFR
3015 39 CFR 3060 | |
| CFR Associated | Administrative Practice and Procedure; Postal Service and Reporting and Recordkeeping Requirements |
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