Surface Transportation Board – Federal Register Recent Federal Regulation Documents

The Surface Transportation Board (Board) invites public comments on a proposed procedural schedule for this proceeding. On February 25, 2021, CSX Corporation (CSXC), CSX Transportation Inc. (CSXT), 747 Merger Sub 2, Inc. (747 Merger Sub 2), Pan Am Systems, Inc. (Systems), Pan Am Railways, Inc. (PAR), Boston and Maine Corporation (Boston & Maine), Maine Central Railroad Company (Maine Central), Northern Railroad (Northern), Portland Terminal Company (Portland Terminal), Springfield Terminal Railway Company (Springfield Terminal), Stony Brook Railroad Company (Stony Brook), and Vermont & Massachusetts Railroad Company (V&M) (collectively, Applicants) submitted a filing with the Board. The applicants are seeking approval for: (1) CSXC, CSXT, and 747 Merger Sub 2 to control the seven railroads controlled by Systems and PAR, and (2) CSXT to merge six of the seven railroads into CSXT. In Decision No. 1, served and published on March 25, 2021, the Board accepted the February 25 submission as a prefiling notification, thus allowing Applicants to supplement their submission with the requisite information for a ``significant'' transaction in accordance with the Board's regulations, between April 25 and June 25, 2021 (i.e., two to four months after the prefiling notice was submitted).

Canadian Pacific Railway Limited (Canadian Pacific), Canadian Pacific Railway Company (CPRC), and their U.S. rail carrier subsidiaries, Soo Line Railroad Company (Soo Line), Central Maine & Quebec Railway US Inc., Dakota, Minnesota & Eastern Railroad Corporation, and Delaware & Hudson Railway Company, Inc. (collectively, CP) and Kansas City Southern and its U.S. rail carrier subsidiaries, The Kansas City Southern Railway Company (KCSR), Gateway Eastern Railway Company, and The Texas Mexican Railway Company (collectively, KCS) (CP and KCS collectively, Applicants) have notified the Surface Transportation Board (Board) of their intent to file an application seeking authority for the acquisition of control by Canadian Pacific, through its indirect, wholly owned subsidiary Cygnus Merger Sub 2 Corporation (Cygnus Merger Sub 2 Corp.), of Kansas City Southern, and through it, of KCSR and its railroad affiliates, and for the resulting common control by Canadian Pacific of its U.S. railroad subsidiaries, and KCSR and its railroad affiliates. Applicants have indicated that 2019 will be the base year for their impact analysis and that they anticipate filing their application on or shortly after June 28, 2021.

Notice is hereby given of a meeting of the Rail Energy Transportation Advisory Committee (RETAC), pursuant to the Federal Advisory Committee Act.

The Surface Transportation Board (STB or Board) is adopting a final rule amending the thresholds for classifying rail carriers.

The Chairman of the Surface Transportation Board is publishing the Regulatory Flexibility Agenda for fall 2020.

The Surface Transportation Board (Board) \1\ has reviewed the submission filed February 25, 2021, by CSX Corporation (CSXC), CSX Transportation Inc. (CSXT),\2\ 747 Merger Sub 2, Inc. (747 Merger Sub 2), Pan Am Systems, Inc. (Systems), Pan Am Railways, Inc. (PAR), Boston and Maine Corporation (Boston & Maine), Maine Central Railroad Company (Maine Central), Northern Railroad (Northern), Portland Terminal Company (Portland Terminal), Springfield Terminal Railway Company (Springfield Terminal), Stony Brook Railroad Company (Stony Brook), and Vermont & Massachusetts Railroad Company (V&M) (collectively, Applicants). The submission is styled as an application for a ``minor'' transaction seeking Board approval for: (1) CSXC, CSXT, and 747 Merger Sub 2 to control the seven railroads controlled by Systems and PAR,\3\ and (2) CSXT to merge six of the seven railroads into CSXT. This proposal is referred to as the ``Proposed Transaction.''

The Board approves the second quarter 2021 Rail Cost Adjustment Factor (RCAF) and cost index filed by the Association of American Railroads. The second quarter 2021 RCAF (Unadjusted) is 1.059. The second quarter 2021 RCAF (Adjusted) is 0.441. The second quarter 2021 RCAF-5 is 0.417.

The Board is instituting a proceeding to determine the railroad industry's cost of capital for 2020. The decision solicits comments on the following issues: The railroads' 2020 current cost of debt capital; the railroads' 2020 current cost of preferred equity capital (if any); the railroads' 2020 cost of common equity capital; and the 2020 capital structure mix of the railroad industry on a market value basis.

The Board hereby gives notice of vacancies on RSTAC for two small railroad representatives. The Board seeks suggestions for candidates to fill these vacancies.