81 FR 65987 - Class I Railroad Accounting and Financial Reporting-Transportation of Hazardous Materials

SURFACE TRANSPORTATION BOARD

Federal Register Volume 81, Issue 186 (September 26, 2016)

Page Range		65987-65988
FR Document		2016-23144

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.

Federal Register, Volume 81 Issue 186 (Monday, September 26, 2016)

[Federal Register Volume 81, Number 186 (Monday, September 26, 2016)]
[Proposed Rules]
[Pages 65987-65988]
From the Federal Register Online  [www.thefederalregister.org]
[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5, 2009 (74 FR 248) is withdrawn and the rulemaking proceeding is 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

Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Proposed Rules 65987

(10) A subscriber units must be DATES: The advance notice of proposed subschedule of the annual R–1 reports,
compatible with C4FM and CQPSK rulemaking published on January 5, a specific definition of what should
Modulation in conformance with the 2009 (74 FR 248) is withdrawn and the constitute a movement of hazardous
following standard: TIA TSB– rulemaking proceeding is discontinued material for this purpose, whether that
102.CABA, released December 11, 2013. on September 22, 2016. definition should be limited to
(11) A fixed conventional repeater FOR FURTHER INFORMATION CONTACT: movements of ‘‘Toxic Inhalation
must be able to repeat the correct/ Allison Davis at (202) 245–0378. Hazards’’ or not, and the best operating
matching network access code (NAC) for Assistance for the hearing impaired is statistic (such as car-miles, revenue ton-
all subscriber call types (clear and available through the Federal miles, or revenue tons of hazardous
encrypted) using the same output NAC Information Relay Service (FIRS) at 1– materials movements) for URCS to use
in conformance with the following 800–877–8339. to allocate specified hazardous material
standard: TIA TSB–102.CABA, released SUPPLEMENTARY INFORMATION: On
costs to individual movements. In
December 11, 2013. January 5, 2009, in the above titled response to the ANPR, the Board
(12) A fixed conventional repeater docket, the Board issued an Advance received comments from multiple
must be able to repeat the correct/ Notice of Proposed Rulemaking (ANPR) stakeholders, as discussed below.1
matching network access code (NAC) for DOT agrees that ‘‘additional data
seeking public comment on whether
all subscriber call types (clear and should be reported to [USOA] in order
and how it should update its accounting
encrypted) using a different output NAC to identify and quantify these
and financial reporting for Class I rail
in conformance with the following [hazardous material] costs, and that
carriers and refine its Uniform Railroad URCS should attribute these costs to
standard: TIA TSB–102.CABA, released Costing System (URCS) to better capture
December 11, 2013. hazmat traffic alone rather than to the
the operating costs of transporting entirety of a carrier’s business.’’ (DOT
(13) A fixed conventional repeater hazardous materials. For the reasons
must be able to reject (no repeat) all Comment 2.)
stated below, we will discontinue this AAR, BNSF, CP, and UP generally
input transmissions with incorrect proceeding.
network access code (NAC) in agree with the Board’s stated goals in
The Board uses URCS to determine a this proceeding. (AAR Comment 2;
conformance with the following carrier’s variable costs in a variety of
standard; TIA TSB–102.CABA, released BNSF Comment 2, CP Comment 7, 9; UP
regulatory proceedings. The URCS Comment 7.) However, they also argue
December 11, 2013. model determines, for each Class I
(14) A fixed conventional repeater that changes to URCS would not
railroad, what portion of each category sufficiently address the railroad
must be able to support the correct of costs shown in that carrier’s Annual
status symbol indicating when an input industry’s concerns with transporting
Report to the Board (STB Form R–1) hazardous material. BNSF and NSR
channel is busy in conformance with represents its system-average variable underscore the risk of liability from a
the following standard: TIA TSB– cost for that year, expressed as a unit catastrophic accident (BNSF Comment
102.CABA, released December 11, 2013. cost. In the ANPR, the Board noted that 2; NSR Comment 2–3), while UP
(15) A fixed conventional repeater there may be unique operating costs stresses the importance of fairly
must be able to support the correct associated with the transportation of apportioning risk across all participants
implementation of special reserved hazardous materials that URCS does not in the supply chain (UP Comment 2).
network access code (NAC) values $293, attribute to those movements. As an The railroads argue that, even if the
$F7E, and $F7F in conformance with example, the Board suggested that the Board were to change URCS, they
the following standard: TIA TSB– transportation of hazardous materials should also be allowed to present the
102.CABA, released December 11, 2013. may require carriers to pay high unique costs of transporting hazardous
[FR Doc. 2016–22978 Filed 9–23–16; 8:45 am] insurance premiums, which would be materials in rate proceedings involving
BILLING CODE 6712–01–P spread across all traffic of the railroad hazardous materials. (See AAR
rather than being attributed specifically Comment 2; CP Comment 3–4, 9; NSR
to the transportation of the hazardous Comment 3; UP Comment 8–9.)
SURFACE TRANSPORTATION BOARD materials. Additionally, the Board noted ACC, AECC, and Diversified CPC
that the Uniform System of Accounts argue that the Board should not limit a
49 CFR Parts 1201, 1242 (USOA)—the accounting standards review of URCS by any single issue or
which Class I carriers must use to commodity, but should instead conduct
[Docket No. EP 681] prepare the financial statements that a broader review of URCS. (ACC
Class I Railroad Accounting and they submit to the Board—does not Comment 2; AECC Comment 2;
Financial Reporting—Transportation of include a separate classification for Diversified CPC Comment 8.) ACC also
Hazardous Materials hazardous material operations that argues that the proposed rulemaking
would allow for an accounting of the would be arbitrary and ill-advised
AGENCY: Surface Transportation Board. assets used and costs incurred in because, while some railroads have
ACTION:Advance notice of proposed providing such service. faced one-time costs from settlements of
rulemaking, withdrawal. The Board therefore sought comment claims, the railroads have reported few
on ‘‘whether and how it should improve
SUMMARY: The Surface Transportation its informational tools to better identify 1 The Board received comments from: The

Board is withdrawing the advance and attribute the costs of hazardous- American Chemistry Council, the Chlorine
mstockstill on DSK3G9T082PROD with PROPOSALS

notice of proposed rulemaking and material transportation movements,’’ Institute, The Fertilizer Institute, and the Edison
Electric Institute (collectively, ACC); Arkansas
discontinuing the EP 681 rulemaking including any revisions to the USOA Electric Cooperative Corporation (AECC); the
proceeding which sought comment on and improvements to the analytic Association of American Railroads (AAR); BNSF
whether and how it should update its capabilities of URCS. ANPR, slip op. at Railway Company (BNSF); Canadian Pacific
accounting and financial reporting for 2. The Board specifically sought Railway Company (CP); Diversified CPC
International, Inc. (Diversified CPC); Norfolk
Class I rail carriers to better capture the comment on several items, including Southern Railway Company (NSR); Union Pacific
operating costs of transporting how hazardous material operations and Railroad Company (UP); and the U.S. Department
hazardous materials. expenses could be reported in a of Transportation (DOT).

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Document Created: 2018-02-09 13:22:31
Document Modified: 2018-02-09 13:22:31

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		Advance notice of proposed rulemaking, withdrawal.
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.
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.
FR Citation		81 FR 65987
CFR Citation		49 CFR 1201 49 CFR 1242