Rail Transportation of Grain, Rate Regulation Review, 27280-27281 [2015-11558]
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27280
Federal Register / Vol. 80, No. 92 / Wednesday, May 13, 2015 / Proposed Rules
DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
49 CFR Parts 1300 and 1313
[Docket No. EP 665 (Sub-No. 1)]
Rail Transportation of Grain, Rate
Regulation Review
AGENCY:
Surface Transportation Board,
DOT.
ACTION:
Notice of public hearing.
The Surface Transportation
Board (Board) will hold a public hearing
on June 10, 2015, at its offices in
Washington, DC, to further examine
issues related to the accessibility of rate
complaint procedures for grain
shippers.
SUMMARY:
The hearing will be held on June
10, 2015, beginning at 9:30 a.m., in the
Hearing Room at the Board’s
headquarters located at 395 E Street
SW., Washington, DC. June 11, 2015,
will be reserved should a second day of
testimony be necessary to accommodate
all parties wishing to testify. The
hearing will be open for public
observation. Any party wishing to speak
at the hearing shall file with the Board
a notice of intent to participate
(identifying the party, the proposed
speaker, the time requested, and a
summary of the key points the speaker
intends to address) no later than May
29, 2015. Notices of intent to participate
are not required to be served on the
parties of record; they will be posted to
the Board’s Web site when they are
filed. Parties shall file hearing exhibits,
if any, by June 10, 2015.
ADDRESSES: All filings may be submitted
either via the Board’s e-filing format or
in the traditional paper format. Any
person using e-filing should attach a
document and otherwise comply with
the instructions at the ‘‘E–FILING’’ link
on the Board’s Web site at
‘‘www.stb.dot.gov.’’ Any person
submitting a filing in the traditional
paper format should send an original
and 10 copies of the filing to: Surface
Transportation Board, Attn: Docket No.
EP 665 (Sub-No. 1), 395 E Street SW.,
Washington, DC 20423–0001.
Copies of written submissions will be
posted to the Board’s Web site and will
be available for viewing and selfcopying in the Board’s Public Docket
Room, Suite 131. Copies of the
submissions will also be available (for a
fee) by contacting the Board’s Chief
Records Officer at (202) 245–0238 or
395 E Street SW., Washington, DC
20423–0001.
asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
DATES:
VerDate Sep<11>2014
16:35 May 12, 2015
Jkt 235001
FOR FURTHER INFORMATION CONTACT:
Valerie Quinn at (202) 245–0382.
Assistance for the hearing impaired is
available through the Federal
Information Relay Service (FIRS) at
(800) 877–8339.
SUPPLEMENTARY INFORMATION: Where a
railroad has market dominance—i.e., a
shipper is captive to a single railroad—
its transportation rates for common
carrier service must be reasonable. 49
U.S.C. 10701(d)(1), 10702. The Board’s
general standards for judging the
reasonableness of rail freight rates are
set forth in Coal Rate Guidelines,
Nationwide, 1 I.C.C. 2d 520 (1985), aff’d
sub nom. Consolidated Rail Corp. v.
United States, 812 F.2d 1444 (3d Cir.
1987). The Board has also adopted two
simplified methods for determining the
reasonableness of challenged rail rates,
the Simplified Stand-Alone Cost (SAC)
test and the Three-Benchmark test. See
Simplified Standards for Rail Rate
Cases (Simplified Standards), EP 646
(Sub-No. 1) (STB served Sept. 5, 2007),
aff’d sub nom. CSX Transp., Inc. v. STB,
568 F.3d 236 (D.C. Cir.), vacated in part
on reh’g, 584 F.3d 1076 (D.C. Cir. 2009).
Under the Three-Benchmark method,
the reasonableness of a challenged rate
is determined by examining the
challenged rate in relation to three
benchmark figures, each of which is
expressed as a revenue-to-variable cost
(R/VC) ratio. Rate Regulation Reforms,
EP 715, slip op. at 11 (STB served July
25, 2012).1 If a challenged rate is above
a reasonable confidence interval around
the estimate of the mean for the adjusted
comparison group, it is presumed
unreasonable and, absent any ‘‘other
relevant factors,’’ the maximum lawful
rate will be prescribed at that boundary
level. See Simplified Standards, slip op.
at 21–22.
By a decision served in this
proceeding on December 12, 2013, the
Board invited public comment on how
to ensure that the Board’s rate complaint
procedures are accessible to grain
shippers and provide effective
protection against unreasonable freight
rail transportation rates. The Board
sought input from interested parties on
grain shippers’ ability to effectively seek
relief for unreasonable rates, including
proposals for modifying existing
procedures, or new alternative rate relief
1 Under Simplified-SAC, the Board determines
whether a captive shipper is being forced to crosssubsidize other parts of the railroad’s rail network
by comparing the costs and revenues of the actual
operations and services provided under the
assumption that all existing infrastructure along the
predominant route used to haul the complainant’s
traffic is needed to serve the traffic on that route.
Rate Regulation Reforms, EP 715, slip op. at n.2
(STB served Mar. 13, 2015).
PO 00000
Frm 00012
Fmt 4702
Sfmt 4702
methodologies, should they be
necessary.
The public comment period was
intended to allow parties to consider
and propose ways that the Board could
make the rate reasonableness process
more accessible to grain shippers. In the
comments, parties have raised a number
of proposals and identified a number of
issues that merit further discussion.
Accordingly, the Board will hold a
public hearing beginning at 9:30 a.m.,
on June 10, 2015, at its offices in
Washington, DC, to further examine
issues related to the accessibility of rate
complaint procedures for grain shippers
and provide interested persons the
opportunity to comment on the
modifications to the existing procedures
and the alternative rate relief
methodologies proposed during the
public comment period. In addition to
their own proposals and responses, the
parties should be prepared to discuss
the following issues:
Jurisdictional Threshold. In the
comments, it was suggested that the
Board’s Uniform Railroad Costing
System (URCS) prevents grain shippers
from accessing potential rate relief
because URCS over-estimates the cost of
shipping grain. Although parties are
currently prohibited from making
movement-specific adjustments to
URCS, parties are invited to discuss
whether the Board should revisit this
prohibition in determining the
quantitative market dominance
threshold in rate cases for grain
shipments.
Definition of Grain. In the comments,
some shippers argued in favor of an
expansive definition of ‘‘grain’’ that
includes both grain and grain products.
Because certain grain products, such as
ethanol, require different treatment in
terms of railroad operations, interested
parties should be prepared to discuss
whether an expansive definition of
‘‘grain’’ is appropriate in this
proceeding.
Modifications and Alternatives to the
Three-Benchmark Approach in Grain
Rates Cases. Several commenters argue
that the Three-Benchmark test puts too
many limitations on the types of
shipments that a shipper can include in
its comparison group upon which the
Board relies to determine if the
railroad’s rate is unreasonable.2
Accordingly, parties should be prepared
to discuss the idea of allowing the use
of non-defendant traffic and/or traffic
with R/VC ratios below 180% in
comparison groups for grain shipments.
2 See Alliance for Rail Competition Opening, V.S.
Fauth 22–24.
E:\FR\FM\13MYP1.SGM
13MYP1
Federal Register / Vol. 80, No. 92 / Wednesday, May 13, 2015 / Proposed Rules
In the comments, various parties have
also proposed new methodologies that
could be used specifically for rate cases
involving grain shipments. These
approaches include adopting a ‘‘TwoBenchmark’’ approach for grain
shipments hauled by revenue adequate
carriers 3 and replacing the existing
Three-Benchmark approach with an ‘‘Ag
Commodity Maximum Rate
Methodology,’’ which includes a
‘‘Revenue Adequacy Adjustment
Factor.’’ 4 To the extent that any parties
feel that these approaches have merit or
are flawed, they should be prepared to
discuss.
Revenue Adequacy. Interested parties
are invited to address whether the Board
should consider the revenues and costs
of Canadian carriers’ full-system
operations, to include the parent
company and subsidiaries, when
determining revenue adequacy in rate
reasonableness challenges of grain
shipments.
Aggregation of Claims. Interested
parties are asked to address whether the
Board should allow multiple
agricultural farmers and other
agricultural shippers to aggregate their
distinct rate claims against the same
carrier into a single proceeding.
Other Ideas. Additionally, in further
considering the matter of grain rates,
parties are invited to discuss whether
there are ways in which the Board could
create greater transparency for grain
shippers regarding how railroads set
rates. To that end, parties at the hearing
are asked to address the disclosure
requirements for agricultural tariff rates
under 49 CFR 1300.5 5 and whether this
requirement should be modified to
allow for increased transparency. Parties
are also asked to address the
requirement that rail carriers file
agricultural contract summaries under
49 CFR part 1313 6 and whether this
3 See
id. at 25.
National Grain and Feed Association
Opening 27–35.
5 Under § 1300.5(a), a rail carrier must publish,
make available, and retain for public inspection its
currently effective rates, schedules of rates, charges,
and other service terms, and any scheduled changes
to the same with respect to transportation of
agricultural products (including grain, as defined in
7 U.S.C. 75 and products thereof). The information
published must include an accurate description of
the services offered to the public; the specific
applicable rates (or the basis for calculating the
rates), charges, and service terms; and be arranged
in a way that allows for the determination of the
exact rate, charges, and service terms applicable to
any given shipment. 49 CFR 1300.5(b).
Additionally, the rail carrier must highlight any
increases, reductions, and other changes so that the
nature and effective dates of those changes are
readily identifiable. Id.
6 Section 1313 requires that rail carriers subject to
the Board’s jurisdiction promptly file a summary of
each contract for the transportation of agricultural
asabaliauskas on DSK5VPTVN1PROD with PROPOSALS
4 See
VerDate Sep<11>2014
16:35 May 12, 2015
Jkt 235001
requirement should be modified to
allow for increased transparency.
Board Releases and Live Video
Streaming Available via the Internet
Decisions and notices of the Board,
including this notice, are available on
the Board’s Web site at
‘‘www.stb.dot.gov.’’ This hearing will be
available on the Board’s Web site by live
video streaming. To access the hearing,
click on the ‘‘Live Video’’ link under
‘‘Information Center’’ at the left side of
the home page beginning at 9:30 a.m. on
June 10, 2015.
This action will not significantly
affect either the quality of the human
environment or the conservation of
energy resources.
It is ordered:
1. A public hearing will be held on
June 10, 2015, at 9:30 a.m., in the
Board’s Hearing Room, at 395 E Street
SW., Washington, DC, as described
above.
2. Any party wishing to speak at the
hearing shall file with the Board a
notice of intent to participate
(identifying the party, the proposed
speaker, the time requested, and a
summary of the key points the speaker
intends to address) no later than May
29, 2015. The notices of intent to
participate need not be served on the
parties of record. Parties appearing at
the hearing shall file hearing exhibits, if
any, by June 10, 2015.
3. This decision is effective on its
service date.
Decided: May 8, 2015.
By the Board, Joseph H. Dettmar, Acting
Director, Office of Proceedings.
Raina S. Contee,
Clearance Clerk.
[FR Doc. 2015–11558 Filed 5–12–15; 8:45 am]
BILLING CODE 4915–01–P
products (including grain as defined in 7 U.S.C. 75)
and allows complaints to be filed regarding such
contracts. 49 CFR 1313.1 and 1313.2. The level of
information that must be provided in the summary
varies depending on whether contract is for grain
and whether the shipment is to a port. At a
minimum the summary must include: The carrier
name; the specific commodity; the shipper’s
identity; the rail car data; the rates; and the charges.
PO 00000
Frm 00013
Fmt 4702
Sfmt 4702
27281
DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
49 CFR Chapter X
[Docket No. EP 722; Docket No. EP 664
(Sub-No. 2)]
Railroad Revenue Adequacy; Petition
of the Western Coal Traffic League To
Institute a Rulemaking Proceeding To
Abolish the Use of the Multi-Stage
Discounted Cash Flow Model in
Determining the Railroad Industry’s
Cost of Equity Capital
AGENCY:
Surface Transportation Board,
DOT.
ACTION:
Notice of public hearing.
The Surface Transportation
Board (Board) will hold a public hearing
on July 22–23, 2015, at its headquarters
in Washington, DC, to further examine
issues raised in Docket No. EP 722
related to railroad revenue adequacy,
and issues raised in Docket No. EP 664
(Sub-No. 2) on how the Board calculates
the railroad industry’s cost of equity
capital. These proceedings are not
consolidated but are being addressed in
the same decision for administrative
convenience.
DATES: The hearing will be held on July
22–23, 2015, beginning at 9:30 a.m., in
the Hearing Room at the Board’s
headquarters located at 395 E Street
SW., Washington, DC. The hearing will
be open for public observation. Any
party wishing to speak at the hearing
shall file with the Board by July 8, 2015,
a notice of intent to participate
(identifying the party, the proposed
speaker, and the time requested, and
summarizing the key points that the
speaker intends to address). The notices
of intent to participate are not required
to be served on the parties of record;
they will be posted to the Board’s Web
site when they are filed. Parties shall
file hearing exhibits, if any, by July 22,
2015.
ADDRESSES: All filings may be submitted
either via the Board’s e-filing format or
in the traditional paper format. Any
person using e-filing should attach a
document and otherwise comply with
the instructions at the ‘‘E–FILING’’ link
on the Board’s Web site at
‘‘www.stb.dot.gov.’’ Any person
submitting a filing in the traditional
paper format should send an original
and 10 copies of the filing to: Surface
Transportation Board, Attn: Docket No.
[EP 722 or EP 664 (Sub-No. 2), as the
case may be], 395 E Street SW.,
Washington, DC 20423–0001.
Copies of written submissions will be
posted to the Board’s Web site and will
SUMMARY:
E:\FR\FM\13MYP1.SGM
13MYP1
Agencies
[Federal Register Volume 80, Number 92 (Wednesday, May 13, 2015)]
[Proposed Rules]
[Pages 27280-27281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-11558]
[[Page 27280]]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
49 CFR Parts 1300 and 1313
[Docket No. EP 665 (Sub-No. 1)]
Rail Transportation of Grain, Rate Regulation Review
AGENCY: Surface Transportation Board, DOT.
ACTION: Notice of public hearing.
-----------------------------------------------------------------------
SUMMARY: The Surface Transportation Board (Board) will hold a public
hearing on June 10, 2015, at its offices in Washington, DC, to further
examine issues related to the accessibility of rate complaint
procedures for grain shippers.
DATES: The hearing will be held on June 10, 2015, beginning at 9:30
a.m., in the Hearing Room at the Board's headquarters located at 395 E
Street SW., Washington, DC. June 11, 2015, will be reserved should a
second day of testimony be necessary to accommodate all parties wishing
to testify. The hearing will be open for public observation. Any party
wishing to speak at the hearing shall file with the Board a notice of
intent to participate (identifying the party, the proposed speaker, the
time requested, and a summary of the key points the speaker intends to
address) no later than May 29, 2015. Notices of intent to participate
are not required to be served on the parties of record; they will be
posted to the Board's Web site when they are filed. Parties shall file
hearing exhibits, if any, by June 10, 2015.
ADDRESSES: All filings may be submitted either via the Board's e-filing
format or in the traditional paper format. Any person using e-filing
should attach a document and otherwise comply with the instructions at
the ``E-FILING'' link on the Board's Web site at ``www.stb.dot.gov.''
Any person submitting a filing in the traditional paper format should
send an original and 10 copies of the filing to: Surface Transportation
Board, Attn: Docket No. EP 665 (Sub-No. 1), 395 E Street SW.,
Washington, DC 20423-0001.
Copies of written submissions will be posted to the Board's Web
site and will be available for viewing and self-copying in the Board's
Public Docket Room, Suite 131. Copies of the submissions will also be
available (for a fee) by contacting the Board's Chief Records Officer
at (202) 245-0238 or 395 E Street SW., Washington, DC 20423-0001.
FOR FURTHER INFORMATION CONTACT: Valerie Quinn at (202) 245-0382.
Assistance for the hearing impaired is available through the Federal
Information Relay Service (FIRS) at (800) 877-8339.
SUPPLEMENTARY INFORMATION: Where a railroad has market dominance--i.e.,
a shipper is captive to a single railroad--its transportation rates for
common carrier service must be reasonable. 49 U.S.C. 10701(d)(1),
10702. The Board's general standards for judging the reasonableness of
rail freight rates are set forth in Coal Rate Guidelines, Nationwide, 1
I.C.C. 2d 520 (1985), aff'd sub nom. Consolidated Rail Corp. v. United
States, 812 F.2d 1444 (3d Cir. 1987). The Board has also adopted two
simplified methods for determining the reasonableness of challenged
rail rates, the Simplified Stand-Alone Cost (SAC) test and the Three-
Benchmark test. See Simplified Standards for Rail Rate Cases
(Simplified Standards), EP 646 (Sub-No. 1) (STB served Sept. 5, 2007),
aff'd sub nom. CSX Transp., Inc. v. STB, 568 F.3d 236 (D.C. Cir.),
vacated in part on reh'g, 584 F.3d 1076 (D.C. Cir. 2009). Under the
Three-Benchmark method, the reasonableness of a challenged rate is
determined by examining the challenged rate in relation to three
benchmark figures, each of which is expressed as a revenue-to-variable
cost (R/VC) ratio. Rate Regulation Reforms, EP 715, slip op. at 11 (STB
served July 25, 2012).\1\ If a challenged rate is above a reasonable
confidence interval around the estimate of the mean for the adjusted
comparison group, it is presumed unreasonable and, absent any ``other
relevant factors,'' the maximum lawful rate will be prescribed at that
boundary level. See Simplified Standards, slip op. at 21-22.
---------------------------------------------------------------------------
\1\ Under Simplified-SAC, the Board determines whether a captive
shipper is being forced to cross-subsidize other parts of the
railroad's rail network by comparing the costs and revenues of the
actual operations and services provided under the assumption that
all existing infrastructure along the predominant route used to haul
the complainant's traffic is needed to serve the traffic on that
route. Rate Regulation Reforms, EP 715, slip op. at n.2 (STB served
Mar. 13, 2015).
---------------------------------------------------------------------------
By a decision served in this proceeding on December 12, 2013, the
Board invited public comment on how to ensure that the Board's rate
complaint procedures are accessible to grain shippers and provide
effective protection against unreasonable freight rail transportation
rates. The Board sought input from interested parties on grain
shippers' ability to effectively seek relief for unreasonable rates,
including proposals for modifying existing procedures, or new
alternative rate relief methodologies, should they be necessary.
The public comment period was intended to allow parties to consider
and propose ways that the Board could make the rate reasonableness
process more accessible to grain shippers. In the comments, parties
have raised a number of proposals and identified a number of issues
that merit further discussion. Accordingly, the Board will hold a
public hearing beginning at 9:30 a.m., on June 10, 2015, at its offices
in Washington, DC, to further examine issues related to the
accessibility of rate complaint procedures for grain shippers and
provide interested persons the opportunity to comment on the
modifications to the existing procedures and the alternative rate
relief methodologies proposed during the public comment period. In
addition to their own proposals and responses, the parties should be
prepared to discuss the following issues:
Jurisdictional Threshold. In the comments, it was suggested that
the Board's Uniform Railroad Costing System (URCS) prevents grain
shippers from accessing potential rate relief because URCS over-
estimates the cost of shipping grain. Although parties are currently
prohibited from making movement-specific adjustments to URCS, parties
are invited to discuss whether the Board should revisit this
prohibition in determining the quantitative market dominance threshold
in rate cases for grain shipments.
Definition of Grain. In the comments, some shippers argued in favor
of an expansive definition of ``grain'' that includes both grain and
grain products. Because certain grain products, such as ethanol,
require different treatment in terms of railroad operations, interested
parties should be prepared to discuss whether an expansive definition
of ``grain'' is appropriate in this proceeding.
Modifications and Alternatives to the Three-Benchmark Approach in
Grain Rates Cases. Several commenters argue that the Three-Benchmark
test puts too many limitations on the types of shipments that a shipper
can include in its comparison group upon which the Board relies to
determine if the railroad's rate is unreasonable.\2\ Accordingly,
parties should be prepared to discuss the idea of allowing the use of
non-defendant traffic and/or traffic with R/VC ratios below 180% in
comparison groups for grain shipments.
---------------------------------------------------------------------------
\2\ See Alliance for Rail Competition Opening, V.S. Fauth 22-24.
---------------------------------------------------------------------------
[[Page 27281]]
In the comments, various parties have also proposed new
methodologies that could be used specifically for rate cases involving
grain shipments. These approaches include adopting a ``Two-Benchmark''
approach for grain shipments hauled by revenue adequate carriers \3\
and replacing the existing Three-Benchmark approach with an ``Ag
Commodity Maximum Rate Methodology,'' which includes a ``Revenue
Adequacy Adjustment Factor.'' \4\ To the extent that any parties feel
that these approaches have merit or are flawed, they should be prepared
to discuss.
---------------------------------------------------------------------------
\3\ See id. at 25.
\4\ See National Grain and Feed Association Opening 27-35.
---------------------------------------------------------------------------
Revenue Adequacy. Interested parties are invited to address whether
the Board should consider the revenues and costs of Canadian carriers'
full-system operations, to include the parent company and subsidiaries,
when determining revenue adequacy in rate reasonableness challenges of
grain shipments.
Aggregation of Claims. Interested parties are asked to address
whether the Board should allow multiple agricultural farmers and other
agricultural shippers to aggregate their distinct rate claims against
the same carrier into a single proceeding.
Other Ideas. Additionally, in further considering the matter of
grain rates, parties are invited to discuss whether there are ways in
which the Board could create greater transparency for grain shippers
regarding how railroads set rates. To that end, parties at the hearing
are asked to address the disclosure requirements for agricultural
tariff rates under 49 CFR 1300.5 \5\ and whether this requirement
should be modified to allow for increased transparency. Parties are
also asked to address the requirement that rail carriers file
agricultural contract summaries under 49 CFR part 1313 \6\ and whether
this requirement should be modified to allow for increased
transparency.
---------------------------------------------------------------------------
\5\ Under Sec. 1300.5(a), a rail carrier must publish, make
available, and retain for public inspection its currently effective
rates, schedules of rates, charges, and other service terms, and any
scheduled changes to the same with respect to transportation of
agricultural products (including grain, as defined in 7 U.S.C. 75
and products thereof). The information published must include an
accurate description of the services offered to the public; the
specific applicable rates (or the basis for calculating the rates),
charges, and service terms; and be arranged in a way that allows for
the determination of the exact rate, charges, and service terms
applicable to any given shipment. 49 CFR 1300.5(b). Additionally,
the rail carrier must highlight any increases, reductions, and other
changes so that the nature and effective dates of those changes are
readily identifiable. Id.
\6\ Section 1313 requires that rail carriers subject to the
Board's jurisdiction promptly file a summary of each contract for
the transportation of agricultural products (including grain as
defined in 7 U.S.C. 75) and allows complaints to be filed regarding
such contracts. 49 CFR 1313.1 and 1313.2. The level of information
that must be provided in the summary varies depending on whether
contract is for grain and whether the shipment is to a port. At a
minimum the summary must include: The carrier name; the specific
commodity; the shipper's identity; the rail car data; the rates; and
the charges.
---------------------------------------------------------------------------
Board Releases and Live Video Streaming Available via the Internet
Decisions and notices of the Board, including this notice, are
available on the Board's Web site at ``www.stb.dot.gov.'' This hearing
will be available on the Board's Web site by live video streaming. To
access the hearing, click on the ``Live Video'' link under
``Information Center'' at the left side of the home page beginning at
9:30 a.m. on June 10, 2015.
This action will not significantly affect either the quality of the
human environment or the conservation of energy resources.
It is ordered:
1. A public hearing will be held on June 10, 2015, at 9:30 a.m., in
the Board's Hearing Room, at 395 E Street SW., Washington, DC, as
described above.
2. Any party wishing to speak at the hearing shall file with the
Board a notice of intent to participate (identifying the party, the
proposed speaker, the time requested, and a summary of the key points
the speaker intends to address) no later than May 29, 2015. The notices
of intent to participate need not be served on the parties of record.
Parties appearing at the hearing shall file hearing exhibits, if any,
by June 10, 2015.
3. This decision is effective on its service date.
Decided: May 8, 2015.
By the Board, Joseph H. Dettmar, Acting Director, Office of
Proceedings.
Raina S. Contee,
Clearance Clerk.
[FR Doc. 2015-11558 Filed 5-12-15; 8:45 am]
BILLING CODE 4915-01-P