Public Participation in Class Exemption Proceedings, 13563-13565 [06-2472]

Agencies

• Surface Transportation Board
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 71, Number 51 (Thursday, March 16, 2006)]
[Proposed Rules]
[Pages 13563-13565]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-2472]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Parts 1150 and 1180

[STB Ex Parte No. 659]


Public Participation in Class Exemption Proceedings

AGENCY: Surface Transportation Board.

ACTION: Notice of Proposed Rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Surface Transportation Board, having assessed its 
procedures for transactions qualifying for the 7- and 21-day class 
exemptions proposes to modify the timeframes in its rules to provide 
greater public notice in advance of an exempt transaction. The proposed 
changes are intended to ensure that the public is given notice of a 
proposed transaction before the exemption becomes effective; and that 
the Board may process such notices of exemption, and related petitions 
for stay, if any, in an orderly and timely fashion.

DATES: Comments are due on May 15, 2006. Replies are due on June 14, 
2006.

ADDRESSES: Comments may be submitted either via the Board's e-filing 
format or in the traditional paper format. Any person using e-filing 
should comply with the instructions found on the Board's ``https://
www.stb.dot.gov'' Web site, at the ``E-FILING'' link. Any person 
submitting a filing in the traditional paper format should send an 
original and 10 paper copies of the filing (referring to STB Ex Parte 
No. 659) to: Surface Transportation Board, 1925 K Street, NW., 
Washington, DC 20423-0001. Comments must be filed in accordance with 
the Board's requirements at 49 CFR part 1104.
    Copies of written comments will be available from the Board's 
contractor, ASAP Document Solutions (mailing address: Suite 103, 9332 
Annapolis Rd., Lanham, MD 20706; e-mail address: asapdc@verizon.net; 
telephone number: 202-306-4004). The comments will also be available 
for viewing and self-copying in the Board's Public Docket Room, Room 
755, and will be posted to the Board's Web site at https://
www.stb.dot.gov.

FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 565-1609. 
[Assistance for the hearing impaired is available through the Federal 
Information Relay Service (FIRS) at 1-800-877-8339.]

SUPPLEMENTARY INFORMATION: The purpose of this notice of proposed 
rulemaking (NPRM) is to obtain comments on a proposal to provide the 
public with additional notice that certain of the Board's class 
exemptions have been invoked before those exemptions become effective. 
These class exemptions are proposed to be modified only as described 
herein. The scope, purpose and effect of these rules otherwise remains 
the same. Thus, the Board does not propose to make any changes to 
situations in which a class exemption can be used, or the information 
that entities seeking to use a class exemption must provide. This 
proceeding is based on the Board's exemption authority at 49 U.S.C. 
10502. The rules that are the subject of this proposal (those found at 
49 CFR part 1150 subpart D (Exempt Transactions Under 49 U.S.C. 10901), 
49 CFR part 1150 subpart E (Exempt Transactions Under 49 U.S.C. 10902 
for Class III Rail Carriers), and 49 CFR part 1180 subpart A (General 
Acquisition Procedures)) were established in the following agency 
proceedings: Class Exemption for the Acquisition and Operation of Rail 
Lines Under 49 U.S.C. 10901, Ex Parte No. 392; Class Exemption for the 
Acquisition or Operation of Rail Lines by Class III Rail Carriers Under 
49 U.S.C. 10902, STB Ex Parte No. 529; and Railroad Consolidation 
Procedures, STB Ex Parte No. 282. For administrative convenience, a 
single new docket number is being used to permit consolidated 
consideration of the proposed procedural changes in one proceeding.

Overview

    Under 49 U.S.C. 10502(a), the Board may exempt individual 
transactions or classes of transactions from the application 
requirements of the statute when it finds that full regulatory scrutiny 
is not required and the transaction or service will be limited in scope 
or greater regulatory scrutiny is not needed to protect shippers from 
an abuse of market power. If the Board grants an exemption, it may 
later revoke the exemption authority if it finds that action to be 
necessary to carry out the rail transportation policy of 49 U.S.C. 
10101 (49 U.S.C. 10502(d)), or the notice may be deemed void ab initio 
if it contains false or misleading information.
    There are some situations in which Board authorization is granted 
so

[[Page 13564]]

routinely that the Board has put in place a ``class exemption'' 
allowing parties to use abbreviated, summary procedures for obtaining 
that authority, subject to after-the-fact Board review if objections 
are received. The Board's class exemptions provide an expedited process 
for railroads to obtain Board authority in routine and uncontroversial 
cases and some assurance that transactions qualifying for the class 
exemption can be consummated on a date that can be predicted in 
advance.
    Pursuant to 49 U.S.C. 10502, the Board and its predecessor, the 
Interstate Commerce Commission (ICC), have exempted certain classes of 
transactions from the prior approval requirements of 49 U.S.C. 10901, 
10902, and 11323. By this process, class exemptions have been created 
for the following types of transactions that are the subject of this 
NPRM (collectively, the Ten Exempt Transaction Types): (1) Rail line 
acquisitions and similar transactions involving the creation of a Class 
III carrier (49 CFR part 1150 subpart D); \1\ (2) rail line 
acquisitions and similar transactions involving a Class III carrier (49 
CFR part 1150 subpart E) \2\ (3) acquisitions of a line authorized for 
abandonment that do not entail major market extensions (49 CFR 
1180.2(d)(1)); \3\ (4) acquisitions or continuances in control of a 
nonconnecting carrier or multiple nonconnecting carriers (49 CFR 
1180.2(d)(2)); (5) corporate family transactions (49 CFR 1180.2(d)(3)); 
(6) renewals of a lease or operating agreement previously authorized 
(49 CFR 1180.2(d)(4)); (7) joint projects involving a rail line 
relocation (49 CFR 1180.2(d)(5)); (8) reincorporations in a different 
state (49 CFR 1180.2(d)(6)); (9) acquisitions or renewals of trackage 
rights (49 CFR 1180.2(d)(7)); \4\ and (10) acquisitions of temporary 
trackage rights (49 CFR 1180.2(d)(8)).\5\ The class exemptions under 49 
CFR part 1150 subparts D and E also extend to transactions involving 
the creation of Class I and II carriers, but the procedures at 49 CFR 
1150.35 and 1150.45 differ from those applicable to transactions 
involving Class III carriers, and will be discussed later.\6\
---------------------------------------------------------------------------

    \1\ Class Exemption--Acq. & Oper. of R. Lines Under 49 U.S.C. 
10901, 1 I.C.C.2d 810 (1985), aff'd, Illinois Commerce Comm'n v. 
ICC, 817 F.2d 145 (DC Cir. 1987).
    \2\ Class Exem. for Acq. or Oper. Under 49 U.S.C. 10902, 1 
S.T.B. 95 (1996) (Class Exemption--10902) (reconsideration denied, 
STB served November 29, 1996).
    \3\ The class exemptions for transactions under 49 CFR 
1180.2(d)(1)-(6) were adopted in Railroad Consolidation Procedures, 
363 I.C.C. 200 (1980), and modest modifications have been adopted 
thereafter. See, e.g, Rail Consol. Proc.--Con. in Cont. of 
Nonconnecting Carrier, 2 I.C.C.2d 677 (1986).
    \4\ Railroad Consolidation Procedures, 1 I.C.C.2d 270 (1985).
    \5\ Railroad Consolidation Procedures, STB Ex Parte No. 282 
(Sub-No. 20) (STB served May 23, 2003, modified, STB served May 17, 
2004).
    \6\ These regulations were created pursuant to Class Exemption--
Acq. & Oper. of R. Lines Under 49 U.S.C. 10901, 4 I.C.C.2d 309 
(1988); and Class Exemption--10902.
---------------------------------------------------------------------------

    For each of the Ten Exempt Transaction Types, the Board's 
regulations currently provide that the exemption will become 
effective--and that the transaction may be consummated--7 calendar days 
after a notice invoking the class exemption is filed at the Board. See 
49 CFR 1150.32(b), 1150.42(b), and 1180.4(g). Notice of the exemption 
is published in the Federal Register within 30 days of the filing 
except for acquisitions of trackage rights or temporary trackage 
rights, in which case notice is published within 20 days. See 49 CFR 
1150.32(b), 1150.42(b), 1180.4(g)(1)(ii), 1180.4(g)(2)(ii), 
1180.4(g)(2)(iv). Consequently, Federal Register notice of a 
transaction is published after the exemption has become effective and 
often after the transaction has been consummated.
    The regulations at 49 CFR part 1150 governing the creation of Class 
I and II carriers presently require that the Board be notified of the 
applicant's intent to file a notice of exemption at least 14 days 
before the notice of exemption is filed. See 49 CFR 1150.35(a), 
1150.45(a). These exemptions become effective 21 days after the notice 
of exemption is filed. Publication in the Federal Register takes place 
within 30 days after the notice is filed.  See 49 CFR 1150.35(e), 
1150.45(e). Once again, formal public notice of the transaction might 
not occur until after the transaction has been consummated.
    To ensure that the public is given notice of proposed transactions 
presented under one or more of the class exemptions before the 
exemptions become effective, and that the Board may process such 
notices of exemption, and related petitions for stay, if any, in an 
orderly and timely fashion, the Board proposes to modify these class 
exemption procedures.

Proposed Procedures for the Ten Exempt Transaction Types

    As set forth in the proposed regulations below, the Board would 
modify the procedures for the Ten Exempt Transaction Types as follows: 
(1) Notice of the proposed transaction would be published in the 
Federal Register within 16 days of filing; (2) stay petitions would be 
due at least 7 days prior to the effective date of the exemption; and 
(3) the exemption, if not stayed, would take effect 30 days after the 
notice is filed.
    In arranging for Federal Register publication within 16 days of the 
filing, the Board would review the notice, determine if it is complete 
and qualifies for use of the exemption, prepare and/or edit a caption 
summary for publication, and forward the notice, in appropriate format, 
to the Office of the Federal Register. Requiring stay petitions to be 
filed no later than 7 days before the effective date of the exemption 
would permit more orderly handling of requests for stay.
    The Board also proposes that an exemption filed under these 
procedures would take effect 30 days after the notice has been filed. 
In so doing, the Board would adhere to the well-established process of 
setting forth a date certain by which an exempt transaction should be 
able to be consummated. With such a process in place, an entity seeking 
to invoke a class exemption would be able to structure its transaction 
knowing the earliest available consummation date.
    As previously noted, these modifications are purely procedural. 
Nothing else about these class exemptions would be changed. The types 
of transactions qualifying for the class exemption would not change, 
nor would the regulations setting forth the information to accompany a 
notice of exemption. Petitions to revoke an exemption could still be 
filed at any time.

Procedures for Transactions That Would Create a Class I or Class II 
Carrier

    The Board proposes similar changes to the notice requirements at 49 
CFR part 1150 subparts D and E for transactions involving the creation 
of a Class I or Class II carrier. As set forth in the proposed 
regulations, the Board would modify the procedures at 49 CFR 1150.35 
and 1150.45 as follows: (1) Notice of a covered transaction would be 
published in the Federal Register within 16 days of filing; (2) 
petitions for stay would be due no later than 14 days prior to the 
effective date of the exemption; \7\ and (3) the exemption would take 
effect 45 days after filing. The 14-day advance notice of intent to 
file requirements currently in place would not change.
---------------------------------------------------------------------------

    \7\ As is the case now, replies to stay petitions filed under 
sections 1150.35 and 1150.45 would be due 7 days after the stay 
petition has been filed.

---------------------------------------------------------------------------

[[Page 13565]]

    In keeping with the procedural changes proposed for the Ten Exempt 
Transaction Types discussed above, these modifications would provide 
greater public notice in advance of a transaction. As now, a notice 
filer would have a reliable process and could predict with reasonable 
certainty when it should be able to consummate a transaction covered by 
sections 1150.35 and 1150.45. As with the proposed procedures for the 
Ten Exempt Transaction Types, the proposed changes to 49 CFR 1150.35 
and 1150.45 are purely procedural.
    Only those class exemptions specifically referenced herein are 
affected by the NPRM, i.e., 49 CFR part 1150 subpart D; 49 CFR part 
1150 subpart E; 49 CFR 1180.2(d)(1); 49 CFR 1180.2(d)(2); 49 CFR 
1180.2(d)(3); 49 CFR 1180.2(d)(4); 49 CFR 1180.2(d)(5); 49 CFR 
1180.2(d)(6); 49 CFR 1180.2(d)(7); and 49 CFR 1180.2(d)(8). Other class 
exemptions--for example, those for exempt construction of connecting 
track (49 CFR 1150.36) and for exempt abandonments and discontinuances 
of service and trackage rights (49 CFR 1152.50)--are not affected by 
this NPRM because they already provide for significantly longer notice 
periods.

Comments

    The Board invites comments on the proposed regulations. Written 
comments (an original and 10 copies) are due on May 15, 2006. Replies 
are due on June 14, 2006. All comments must comply with the Board's 
requirements at 49 CFR part 1104.

Regulatory Flexibility Analysis

    The Board certifies that the proposed rules, if adopted, would not 
have a significant economic impact on a substantial number of small 
entities. The proposed regulations, while modestly increasing the 
lengths of the notice requirement for the applicant, would continue to 
benefit individuals and entities potentially affected by transactions 
covered by the regulations by providing exemptions from statutory 
approval requirements for entire classes of transactions. These 
exemptions may still be invoked merely by filing a notice with the 
Board, so long as the requirements are met and the required processes 
are followed. That notice will cause the exemption to become effective 
as to the transaction identified in the notice in a period of time 
specified by rule.
    This action will not significantly affect either the quality of the 
human environment or the conservation of energy resources.

List of Subjects in 49 CFR Parts 1150 and 1180

    Administrative practice and procedure, Railroads.

    Authority: 49 U.S.C. 10502 and 5 U.S.C. 553.

    Decided: March 9, 2006.

    By the Board, Chairman Buttrey and Vice Chairman Mulvey.
Vernon A. Williams,
Secretary.
    For the reasons set forth in the preamble, the Surface 
Transportation Board proposes to amend parts 1150 and 1180 of title 49, 
chapter X, of the Code of Federal Regulations as follows:

PART 1150--CERTIFICATE TO CONSTRUCT, ACQUIRE, OR OPERATE RAILROAD 
LINES

    1. The authority citation for part 1150 continues to read as 
follows:

    Authority: 49 U.S.C. 721(a), 10502, 10901, and 10902.

    2. Amend Sec.  1150.32 as follows:
    A. In paragraph (b), remove the words ``30 days'' and add, in their 
place the words ``16 days''.
    B. In paragraph (b), remove the words ``7 days'' and add, in their 
place, the words ``30 days''.
    C. In paragraph (c), add a new sentence to the end of the paragraph 
as follows:


Sec.  1150.32  Procedures and relevant dates--transactions that involve 
creation of Class III carriers.

* * * * *
    (c) * * * Stay petitions must be filed at least 7 days before the 
exemption becomes effective.
* * * * *
    3. Amend Sec.  1150.35 as follows:
    A. In paragraph (e), remove the words ``21 days'' and add, in their 
place, the words ``45 days''.
    B. In paragraph (e), remove the words ``30 days'' and add, in their 
place, the words ``16 days''.
    C. In paragraph (f), revise the third sentence to read as follows:


Sec.  1150.35  Procedures and relevant dates--transactions that involve 
creation of Class I or Class II carriers.

* * * * *
    (f) * * * Stay petitions must be filed at least 14 days before the 
exemption becomes effective. * * *
* * * * *
    4. Amend Sec.  1150.42 as follows:
    A. In paragraph (b), remove the words ``30 days'' and add, in their 
place, the words ``16 days''.
    B. In paragraph (b), remove the words ``7 days'' and add, in their 
place, the words ``30 days''.
    C. In paragraph (c), add a new sentence to the end of the paragraph 
as follows:


Sec.  1150.42  Procedures and relevant dates for small line 
acquisitions.

* * * * *
    (c) * * * Stay petitions must be filed at least 7 days before the 
exemption becomes effective.
* * * * *
    5. Amend Sec.  1150.45 as follows:
    A. In paragraph (e), remove the words ``21 days'' and add, in their 
place, the words ``45 days''.
    B. In paragraph (e), remove the words ``30 days'' and add, in their 
place, the words ``16 days''.
    C. In paragraph (f), revise the third sentence to read as follows:


Sec.  1150.45  Procedures and relevant dates--transactions under 
section 10902 that involve creation of Class I or Class II rail 
carriers.

* * * * *
    (f) * * * Stay petitions must be filed at least 14 days before the 
exemption becomes effective. * * *
* * * * *

PART 1180--RAILROAD ACQUISITION, CONTROL, MERGER, CONSOLIDATION 
PROJECT, TRACKAGE RIGHTS, AND LEASE PROCEDURES

    6. The authority citation for part 1180 continues to read as 
follows:

    Authority: 5 U.S.C. 553 and 559; 11 U.S.C. 1172; 49 U.S.C. 721, 
10502, 11323-11325.

    7. Amend Sec.  1180.4 as follows:
    A. In paragraph (g)(1) introductory text, remove the words ``one 
week'' and add, in their place, the words ``30 days''.
    B. In paragraph (g)(1)(ii), remove the words ``30 days'' and add, 
in their place, the words ``16 days''.
    C. Redesignate paragraph (g)(1)(iii) as paragraph (g)(1)(iv) and 
add a new paragraph (g)(1)(iii).
    D. Remove paragraph (g)(2)(ii).
    E. Redesignate paragraph (g)(2)(iii) as paragraph (g)(2)(ii).
    F. Remove paragraph (g)(2)(iv).


Sec.  1180.4  Procedures.

* * * * *
    (g) * * *
    (1) * * *
    (iii) The filing of a petition to revoke under 49 U.S.C. 10502(d) 
does not stay the effectiveness of an exemption. Stay petitions must be 
filed at least 7 days before the exemption becomes effective.
* * * * *
[FR Doc. 06-2472 Filed 3-15-06; 8:45 am]
BILLING CODE 4915-01-P