Federal Register / Vol. 63, No. 99 / Friday, May 22, 1998 /Rules and Regulations 28287

1Effective January 1, 1996, the ICCTA abolished

the Interstate Commerce Commission and

established the Board within the Department of

Transportation. Section 204(a) of the ICCTA

provides that ‘‘[t]he Board shall promptly rescind

all regulations established by the [Interstate

Commerce Commission] that are based on

provisions of law repealed and not substantively

reenacted by this Act.’’

2The Lehigh Valley Railroad Company, the

Central Railroad of New Jersey, the Ann Arbor

Railroad Company, the Lehigh and Hudson Valley

Railroad Company, the Boston and Maine

Corporation, the Erie Lackawanna Railway

Company, and the Reading Railroad.

List of Subjects

49 CFR Part 365

Administrative practice and

procedures, Brokers, Buses, Freight

forwarders, Highways and roads, Motor

carriers.

49 CFR Part 372

Buses, Commercial zones, Freight

forwarders, Highway and roads, Motor

carriers.

49 CFR Part 373

Buses, Highways and roads, Motor

carriers, Reporting and recordkeeping

requirements.

49 CFR Part 374

Baggage liability, Buses, Civil rights,

Discrimination, Freight forwarders,

Handicapped, Highways and roads,

Motor carrier.

49 CFR Part 377

Credit, Freight forwarders, Highways

and roads, Motor carriers.

Issued on: May 14, 1998.

Kenneth R. Wykle,

Federal Highway Administrator.

In consideration of the foregoing, the

FHWA amends title 49, Code of Federal

Regulations, chapter III, as set forth

below:

PART 365—[AMENDED]

1. The authority citation for 49 CFR

part 365 continues to read as follows:

Authority: 5 U.S.C. 553 and 559; 16 U.S.C.

1456; 49 U.S.C. 13101, 13301, 13901–13906,

14708, 31138, and 31144; 49 CFR 1.48.

1a. The authority citation for subpart

D is removed.

PART 372—[AMENDED]

2. The authority citation for 49 CFR

part 372 continues to read as follows:

Authority: 49 U.S.C. 13504 and 13506; 49

CFR 1.48.

2a. The authority citations for

subparts A, B, and C are removed.

PART 373—[AMENDED]

3. The authority citation for part 373

continues to read as follows:

Authority: 49 U.S.C. 13301 and 14706; 49

CFR 1.48.

3a. The authority citations for

subparts A and B are removed.

PART 374—[AMENDED]

4. The authority citation for part 374

continues to read as follows:

Authority: 49 U.S.C. 13301 and 14101; 49

CFR 1.48.

4a. The authority citations for

subparts A, B, C, and D are removed.

PART 377—[AMENDED]

5. The authority citation for 49 CFR

part 377 continues to read as follows:

Authority: 49 U.S.C. 13101, 13301, 13701–

13702, 13706, 13707, and 14101; 49 CFR

1.48.

5a. The authority citations for

subparts A and B are removed.

[FR Doc. 98–13436 Filed 5–21–98; 8:45 am]

BILLING CODE 4910–22–M

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

49 CFR Parts 1152 and 1155

[STB Ex Parte No. 566]

Rail Service Continuation Subsidy

Standards

AGENCY: Surface Transportation Board,

DOT.

ACTION: Final rule.

SUMMARY: The Surface Transportation

Board (Board) is removing from the

Code of Federal Regulations rules

concerning standards for determining

subsidies for the continuation of rail

service on rail properties not transferred

to Consolidated Rail Corporation

(Conrail) under the Final System Plan

pursuant to the Regional Rail

Reorganization Act of 1973. It is also

amending the regulations concerning

offers of financial assistance to provide

rules for the purchase or subsidization

of rail lines that have been continuously

subsidized since the inception of the

Final System Plan.

EFFECTIVE DATE: June 21, 1998.

FOR FURTHER INFORMATION CONTACT:

Beryl Gordon, (202) 565–1600. [TDD for

the hearing impaired: (202) 565–1695.]

SUPPLEMENTARY INFORMATION: In a notice

of proposed rulemaking (NPR) served

and published in the Federal Register

on August 8, 1997 (62 FR 42734), the

Board proposed to remove the

regulations at 49 CFR part 1155 that

concern subsidy standards for certain

rail lines of railroads in reorganization

not included in the Final System Plan,

described infra. The NPR noted that

these regulations are based, at least

partially, on statutes that are still in

effect. 45 U.S.C. 744 (c) and (d). Under

the ICC Termination Act of 1995, Public

Law 104–88, 109 Stat. 803 (ICCTA),1

however, the Rail Services Planning

Office (RSPO), the statutory body that

developed the regulations, has been

abolished. See repealed 49 U.S.C.

10361–64. Moreover, the Board has in

place analogous offer of financial

assistance (OFA) regulations providing

national subsidy standards. 49 CFR

1152.27. Finally, the NPR stated that the

regional subsidy regime at 45 U.S.C.

744, which applies to ‘‘rail service on

rail properties of a railroad in

reorganization,’’ may be outdated and

may apply only to a limited number of

situations. Accordingly, we instituted

this proceeding to determine whether

these regulations may be eliminated in

light of the national OFA standards,

whether portions of the part 1155

regulations could be transferred to the

national standards, or whether they

have a continuing vitality and should be

retained.

After considering the record, we will

eliminate the part 1155 rules and

modify the national OFA rules at

1152.27. Because the part 1155 rules

have only limited applicability, it is

unnecessary to maintain these detailed

regulations. However, to provide an

opportunity for rail service continuation

and to deal with abandonments of lines

that are still being subsidized, we are

modifying our national OFA regulations

at 49 CFR 1152.27 to require that the

line owner give notice of the

abandonment or discontinuance to

enable interested persons to purchase or

subsidize the line.

Background

Our NPR gave a detailed background

for the part 1155 regulations and will be

repeated only as necessary. The part

1155 rules were based on the Regional

Rail Reorganization Act of 1973, Public

Law 93–236, 87 Stat. 985, 45 U.S.C. 701

et seq. (3R Act), as amended by the

Railroad Revitalization and Regulatory

Reform Act of 1976 (4R Act), Public Law

94–210, 90 Stat. 127. In response to the

bankruptcy of the Penn Central

Transportation Company and seven

other major railroads in the Northeast

and Midwest,2 the 3R Act provided for

the development and ultimate approval

by Congress of a Final System Plan

(Plan) for the redesign of rail services in
28288 Federal Register / Vol. 63, No. 99 / Friday, May 22, 1998 /Rules and Regulations

3See Common Carrier Status of States, State

Agencies and Instrumentalities, and Political

Subdivisions 49 CFR 1120A, Finance Docket No.

28990F (ICC served July 16, 1981) at 9–10 (footnote

omitted): ‘‘A rail line which was approved for

abandonment under the Final System Plan * * *

but over which operations were continued by a

[designated operator], comes within the meaning of

abandoned or authorized for abandonment * * *.’’

4This subsidy ‘‘covers the difference between the

revenue attributable to such rail properties and the

avoidable costs of providing service on such

properties plus a reasonable return on the value of

such rail properties * * *.’’

5The subsidy payment was now defined at

section 744(d) as ‘‘the difference between the

revenue attributable to such properties and the

avoidable costs of providing service on such rail

properties, together with a reasonable management

fee as determined by [RSPO].’’ (Emphasis supplied.)

6See Application Proc.-Construct, Acq. Or Oper.

R. Lines, 365 I.C.C. 516, 523 (1982) and Exemption

of Certain Designated Operators from Section

11343, 361 I.C.C. 379 (1979), aff’d in part and

remanded in part sub nom. McGinness v. ICC, 662

F.2d 853 (D.C. Cir. 1981). See also 49 CFR 1150.16:

‘‘Although the designated operator will not be

required to seek and obtain authority from the

Board either to commence or terminate operations,

the designated operator is a common carrier by

railroad subject to all other provisions of 49 U.S.C.

Subtitle IV.’’

7A ‘‘railroad in reorganization’’ is defined at 45

U.S.C. 702(16) as a railroad which is subject to a

bankruptcy proceeding and which has not been

determined by a court to be reorganizable or not

subject to reorganization pursuant to this chapter as

prescribed in section 717(b) of this title. A

‘bankruptcy proceeding’ includes a proceeding

pursuant to section 77 of the Bankruptcy Act and

an equity receivership or equivalent proceeding

* * *.’’

8 ‘‘Region’’ is defined at 45 U.S.C. 702(17) as ‘‘the

States of Maine, New Hampshire, Vermont,

Massachusetts, Connecticut, Rhode Island, New

York, New Jersey, Pennsylvania, Delaware,

Maryland, Virginia, West Virginia, Ohio, Indiana,

Michigan, and Illinois; the District of Columbia; and

those portions of contiguous States in which are

located rail properties owned or operated by

railroads doing business in the aforementioned

jurisdictions (as determined by [ICC] order) * * *.’’

9The Plan was submitted to Congress on July 26,

1975. It was approved when neither the House of

Representatives nor the Senate objected to it. The

Plan was formally approved in section 601(e) of the

4R Act.

10RSPO was established as ‘‘an office in the

Interstate Commerce Commission.’’ Former 49

U.S.C. 10361. In resolving the issue of whether final

orders or regulations of RSPO were to be considered

orders or regulations of the ICC, the court held that

‘‘[a]lthough Congress gave to the RSPO final

administrative responsibility for certain

determinations, we conclude that the RSPO is

sufficiently part of the ICC so that its orders are to

be considered orders of the ICC for purposes of the

Hobbs Act.’’ Southeastern Pennsylvania Transp.

Auth. v. I.C.C., 644 F.2d 238, 240, n.3 (3d Cir. 1981).

11The language of section 205 pertaining to RSPO

was eventually codified at 49 U.S.C. 10361–64.

12However, under 49 CFR 1155.3(a), a carrier

giving notice of intent to discontinue service shall

submit an ‘‘Estimate of Subsidy Payment’’ to, inter

alia, RSPO. Under 49 CFR 1155.4(c), a party

desiring an interpretation of the standards can file

a petition with RSPO. Under § 1155.9, if the parties

cannot agree on certain issues, the matter could be

arbitrated. The ICC was not directly involved in

reviewing disputes.

13The Staggers Rail Act of 1980, Public Law 96–

448, 94 Stat. 1895, further revised former 49 U.S.C.

10905. Section 402. The 6-month negotiating period

was shortened and, when a carrier and shipper

could not agree to terms, the ICC upon request

would set, and the carrier was bound by, the

purchase or subsidy price.

14 DV is involved in a pending proceeding in

which relief is sought, inter alia, under 49 CFR part

1155. RailAmerica, Inc., and the Delaware Valley

Railway Company, Petition to Set Subsidy Terms

Under 45 U.S.C. 744(c) and 49 CFR Part 1155, STB

Finance Docket No. 33285.

the region. Lines that could not be

operated profitably and were not

considered essential to the rail

transportation system would not be

included in the Plan. The 3R Act’s Plan

created Conrail as a for-profit

corporation to reorganize the bankrupt

rail services in the region.

Section 304 of the 3R Act permitted

the summary discontinuance of service

over those lines not included in the Plan

without Interstate Commerce

Commission (ICC or Commission)

approval if 60 days’ notice was given

and certain parties were notified.

Beginning 120 days after such

discontinuance, the summary

abandonment of a line was allowed if 30

days’ notice was given and the parties

were notified. The 3R Act, in effect,

authorized the discontinuance and

abandonment of the lines not included

in the Plan; ICC approval was not

needed.3 However, section 304(c)(2) of

the 3R Act (codified at 45 U.S.C.

744(c)(2)(A)) stated that an

abandonment or discontinuance could

not be carried out if a shipper, or public

authority, or any responsible person

offered a rail service continuation

subsidy.4 The 4R Act amended the 3R

Act by adding a new section 45 U.S.C.

744(d) which specified that a

‘‘designated operator’’ would be the rail

carrier conducting operations when a

subsidizer guaranteed payment.5

Although not needing ICC authority to

operate or abandon, the designated

operators were common carriers.6

The use of the subsidy is limited to

rail service and rail properties of a

railroad in reorganization 7 in the

region 8 that are not included in the

Plan. 45 U.S.C. 744(a). Moreover, the

subsidy must be made within 2 years of

the effective date of the Plan 9 or within

‘‘2 years after the date on which the

final rail service continuation payment

is received, whichever is later * * *.’’

45 U.S.C. 744(c)(1).

The 3R Act, as amended by the 4R

Act, also created RSPO 10 which was

authorized to issue standards for

defining the subsidy-related terms

‘‘revenue attributable to rail properties,’’

‘‘avoidable costs of providing service,’’

‘‘a reasonable return on the value,’’ and

‘‘reasonable management fee’’ found in

section 304. Section 205(d)(6).11

Subsequently, the ICC issued

regulations that are now codified at 49

CFR 1155. The regulations define the

terms noted above (revenue attributable,

avoidable costs, return on value,

reasonable management fee) for

determining the subsidy payment for

the continuation of train service over

lines not included in the Plan. The

regulations are largely self-executing

with little role provided for the ICC.12

The 4R Act also instituted the

national OFA procedures. It allowed an

abandonment to be postponed for up to

6 months if a financially responsible

person offered to purchase or subsidize

the line. Section 802. (This provision

was originally codified at 49 U.S.C.

1a(6)(a) and subsequently recodified

without substantive change at former 49

U.S.C. 10905.) In essence, the regional

subsidy provision of 45 U.S.C. 744 was

expanded to apply to all carriers. In

November 1976, the ICC promulgated

regulations that were predicated on the

part 1155 regulations, although, due to

factual and statutory differences, there

were certain variations. The OFA rules

are now found at 49 CFR 1152.27.13

The ICCTA was the latest legislative

action applicable to these regulations.

There was no change to 45 U.S.C.

744(c). The changes to section 744(d) do

not affect part 1155. The RSPO

statutes—49 U.S.C. 10361–64—were

repealed. Former 49 U.S.C. 10905 was

modified and is now found at 49 U.S.C.

10904, but the changes there do not

affect our analysis.

In our NPR, we stated that we were

reexamining part 1155 because of the

changes made by the ICCTA, the

availability of our national subsidy

standards, and the likelihood that few

situations fall within the regional

subsidy framework. Comments were

filed by the Association of American

Railroads (AAR) and the Delaware

Valley Railway Company, Inc. (DV).

Comments of the Parties

The AAR, in its brief comment,

supports the removal of part 1155,

arguing that rules ‘‘are of marginal, if

any, utility * * *.’’

DV is a Class III short line railroad.14

It has operated over a rail line owned by

a subsidiary of the Reading Company,

the corporate successor of the bankrupt

Reading Railroad Company. DV

expresses its belief that the regional

standards ‘‘substantially duplicate the

National OFA standards,’’ and supports

removal of the part 1155 regional

regulations because of the availability of

the national OFA standards. It claims

that, to keep separate regulations

applicable to only a few lines and
Federal Register / Vol. 63, No. 99 / Friday, May 22, 1998 /Rules and Regulations 28289

15 DV claims it involves ‘‘one of the few instances,

if not the last instance, of rail service provided over

railroad property owned by the successor to a

bankrupt railroad not transferred to Conrail or

another rail carrier under the [Plan].’’ [Footnote

omitted.]

16These concerns are moot, because we are

finding that the abandonment and discontinuance

of lines still being subsidized will fall under the

special national OFA standards at 49 CFR

1152.27(n). Formerly subsidized lines that are being

abandoned or discontinued will come under the

regular OFA rules at section 1152.27.

17We note that the regulations assign continuing

responsibilities to the abolished office (issuing

interpretations, receiving estimates of subsidy

payments).

18Under 45 U.S.C. 744(d)(1), the defunct RSPO is

to determine the terms a subsidizer is to pay a

designated operator. Section 744(d)(1) states that

the terms ‘‘revenue attributable,’’ ‘‘avoidable costs,’’

and ‘‘reasonable management fee’’ are to be

determined by ‘‘the Office,’’ defined at 45 U.S.C.

702(12) as RSPO.

Moreover, under 45 U.S.C. 744(d)(2), the term

‘‘reasonable return on value’’ is to be developed

according to the standards of 205(d)(6) of the 3R

Act, which, as noted, was codified at the now

repealed RSPO statute, 49 U.S.C. 10362.

19The court noted (Id. at 1323, n.2) the following

consummation dates: Erie Lackawanna, Inc.

(November 30, 1982); Reading Co. (December 31,

1980); Penn Central Transportation Co. (October 24,

1978); Lehigh Valley Railroad Co. (September 1,

1982); and the Central of New Jersey (September 14,

1979). We note that despite this ruling, section

797h(b) has not been removed.

20Notice shall be to the Board, governor and

transportation agencies and the government of each

political subdivision of each state in which such

rail properties are located and to each shipper who

has used the rail service during the previous 12

months.

another standard for all other lines,

would cause ‘‘unnecessary, wasteful,

potentially inconsistent, and duplicative

regulation.’’ It seeks to amend the

national OFA standards to handle the

few situations that would still fall under

the regional standards.

In response to the question of whether

there are any ‘‘railroads in

reorganization,’’ DV claims that the

Reading Company, while ‘‘concededly

not a railroad in reorganization under

that [3R Act] statute, is a successor to a

railroad in reorganization and should be

subject to the provisions of 49 CFR part

1155 on that basis.’’ 15 It argues that

Congress did not intend that carriers

could avoid regulatory oversight by

reorganizing themselves, and that the

Board should focus on the rail property

and rail service at issue and not the

status of the owning entity.16

Discussion and Conclusions

Because of the changes in the ICCTA

and the fact that there appear to be few

lines being operated under the regional

subsidy regime, we will remove the

more than 30 pages of regulations at part

1155. While technically there may no

longer be any 3R Act railroads in

reorganization, there appear to be a few

lines that have been continuously

subsidized under 49 U.S.C. 744, and

these lines require special procedures.

Therefore, we are issuing regulations at

49 CFR 1152.27(n) that would provide

for summary abandonment and

discontinuance on notice by the carrier

owning the line, and that would allow

for the opportunity to subsidize and

purchase lines under the national OFA

rules.

As noted, supra, these lines were

effectively approved for abandonment

and discontinuance under section 744,

and, for those lines that have been

continually subsidized, we do not

believe that the approval to abandon or

discontinue has been removed.

Accordingly, Board authorization is not

needed for cessation of service. Lines of

railroad in the Northeast that were not

included in the Plan and are no longer

being subsidized under section 744 but

continue to be operated are common

carrier lines subject to the regular

abandonment and national OFA regime

of the Interstate Commerce Act.

The commenters generally support

the removal of part 1155 (with DV also

seeking a concomitant modification of

the national OFA rules). Moreover, the

record indicates that the regulations

appear to be unnecessary. They were

determined and issued by an office

(RSPO) that has been abolished by the

ICCTA.17 Under former 49 U.S.C.

10362(b)(7), RSPO was to ‘‘maintain,

and from time to time revise and

republish * * * standards for

determining the revenue attributable to

the rail properties, the avoidable costs of

providing transportation, a reasonable

return on value, and a reasonable

management fee * * *.’’ As noted, this

section, as well as RSPO, has been

abolished. There are, however, parallel

sections in force—45 U.S.C. 744(c) and

(d)—that pertain to subsidies for the

continuation of rail freight service. Even

here, however, support for the subsidy

regulations is uncertain, because section

744(d)(1) and (d)(2) refer to laws

repealed by the ICCTA.18

Even if the ICCTA does not mandate

the removal of the regulations, there

appears to be little need for the subsidy

rules, because of the availability of the

national standards and because the

circumstances and conditions that the

regional standards were to address have

largely expired. Under 45 U.S.C.

744(a)(1) and (c)(1), the regional subsidy

program applies to a ‘‘rail service on rail

properties of a railroad in

reorganization’’ and is not available

‘‘after 2 years from the effective date of

the [Plan] or more than two years after

the last rail service continuation

payment is received, whichever is later

* * *.’’ There may not be any railroads

in reorganization as defined by the

statute. In Consolidated Rail Corp. v.

Reading Co., 654 F. Supp. 1318, 1323

(Sp. Ct. RRRA 1987) (Reading), a case

arose that involved whether personal

injury claims could be brought against

Conrail and National Railroad Passenger

Corporation pursuant to section 709(b)

of the 3R Act (45 U.S.C. 797h(b)). That

section provided for assumption by

Conrail of personal injury claims against

‘‘a railroad in reorganization.’’ The court

looked at the definition of railroad in

reorganization (45 U.S.C. 702(16)),

supra, and stated that certain

predecessor railroads of Conrail were

not railroads in reorganization because

they were no longer ‘‘subject to a

bankruptcy proceeding.’’ These carriers

had undergone reorganization, final

consummation orders had been entered,

and the carriers had been discharged in

bankruptcy.19 The court found that

‘‘[w]here, as is the case here, the

definition of a statutory term is clear

and unequivocal it is controlling.’’ Id.

(citations omitted.)

As a consequence of Reading, there

will, at a minimum, be no new lines that

can be added to the regional subsidy

regime. This does not, however, end our

inquiry. There appears to be at least one

line that has been subsidized since the

enactment of the regional subsidy

program. Such lines have already been

approved for abandonment and

discontinuance. Moreover, it can be

argued that these lines still fall within

the ambit of section 744. Under these

circumstances, we believe that the best

approach will be to eliminate part 1155,

but modify the OFA regulations for

situations involving lines that are still

being subsidized under the regional

standards.

The notice periods will follow the

basic regime of section 744. Summary

discontinuance of service without Board

approval may be effected if 60 days’

notice is given by the owner of the line

and certain parties are notified.20

Beginning 120 days thereafter, the

summary abandonment of a line is

allowed if 30 days’ notice is given and

the parties are notified.

We are requiring the owner of the

line, and not the designated operator, to

provide the notice that triggers the OFA

process. We are retaining the provision

by which a designated operator may

terminate service in accordance with the

terms of its agreement and is only

required to give notice of termination of

service to the shippers on the line. 49

CFR 1150.11. No time period is

specified for the notice. We hope that
28290 Federal Register / Vol. 63, No. 99 / Friday, May 22, 1998 /Rules and Regulations

21Under the statute, the standards for subsidizing

lines are the same for both the national OFA (49

U.S.C. 10904(f)(1)(C)) and regional subsidy (45

U.S.C. 744(c)(2)): the difference between the

revenue attributable to the line and the avoidable

costs of providing service plus a reasonable return

on the value of the line. The regional standards also

provide that designated operators are to receive a

reasonable management fee discussed infra. Unlike

section 744, however, the national OFA statute

provides that the standard for purchasing a line is

its fair market value. This standard will be used in

processing offers under section 1152.27(n).

22The one significant difference is that we are

incorporating into new section 1152.27(n)(2) the

reasonable management fee standard for designated

operators (41⁄2 %) from section 1155.7(o).

23As noted, the owner of the lines gives the

notice that triggers the OFA process for

discontinuances. The designated operator follows

the notice requirements of 49 CFR 1150.11.

24We cannot postpone the effective date of the

discontinuance because, under our rules,

designated operators need only comply with the

notice requirements of 49 CFR 1150.11, and, in

instances of discontinuance, the line owner is not

obligated to operate the line.

the designated operator and line owner

will coordinate the giving of notice so

that there will be no break in service.

We recognize, however, that under our

present ‘‘designated operator’’ rules, it is

possible that the operator could

terminate service before the notice

period has expired. This eventuality is

a natural outcome of such subsidy

regimes where service is tied

specifically to an agreement.

Nevertheless, given the specified time

periods and the ability of the Board to

set terms and conditions under the

national standards, we expect that any

breaks in service would be of short

duration.

The New OFA Rules

We are modifying 49 CFR 1152.27 by

adding a new paragraph (n).

Abandonment or discontinuance notice

must be given, affording interested

persons an opportunity to purchase or

subsidize the line under our national

OFA standards.21 The applicable time

limits will run from the date of the

notice as the Board does not approve the

cessation of service for these lines.

We will generally apply the national

OFA standards applicable to class

exemptions found at 49 CFR 1152.27 to

these summary abandonments and

discontinuances.22 For example, a party

may discontinue 23 or abandon service

on a line of railroad formerly in

reorganization that was not included in

the Plan on 60 days’ notice and,

beginning 120 days after

discontinuance, on 30 days’ notice,

respectively. Notice of summary

abandonment or discontinuance will be

published by the Board in the Federal

Register within 20 days of filing. 49 CFR

1152.27(b)(2)(ii). Expressions of intent

to file an offer must be filed no later

than 10 days after the Federal Register

publication. Paragraph (c)(2)(i) of

section 1152.27. An offer must be filed

within 30 days of the Federal Register

publication. Paragraphs (b)(2)(ii) and

(c)(2)(ii)(B) of section 1152.27.

The Board will review offers to

determine if a financially responsible

person has offered assistance. If this

criterion is met, the Board will postpone

the effective date of the summary

abandonment (but not the

discontinuance) 24 within 35 days of the

Federal Register publication. Paragraph

(e)(2) of § 1152.27. If the carrier and

financially responsible person fail to

agree on the amount or terms of subsidy

or purchase, either party may request

the Board to establish the conditions

and amount of the compensation. This

request must be filed within 30 days

after the offer of purchase or subsidy is

made, and the Board will issue a

decision within 30 days after the request

is due. Paragraphs (g)(1) and (h)(1) of

§ 1152.27.

Lines of the former railroads in

reorganization under the 3R Act are

under Board jurisdiction insofar as the

institution of new rail service is

involved. See Delaware and Hudson Ry.

Co.—Modified Cert. Of PC&N, 363 I.C.C.

808 (1981) (holding that where a line

had formally been operated under

subsidy and was later abandoned, the

carrier was required to file an

application under former 49 U.S.C.

10901 to operate the line). Thus, in

those instances, any future

abandonment or discontinuance would

be subject to the abandonment and OFA

procedures of 49 U.S.C. 10903–04.

The Board concludes that the removal

of the rule and the addition of the new

rule will not have a significant effect on

a substantial number of small entities. It

appears that the eliminated, as well as

the new, rule does not apply to many

situations. In those situations where the

rule changes are applicable, they are

consistent with the new statutory

framework. Moreover, there should not

be any significant change from current

practice under the new rules.

This action will not significantly

affect either the quality of the human

environment or the conservation of

energy resources.

List of Subjects

49 CFR Part 1152

Administrative practice and

procedure, Conservation, Environmental

protection, National forests, National

parks, National trails system, Public

land-grants, Public lands-rights-of-way,

Railroads, Recreation and recreation

areas, Reporting and recordkeeping

requirements.

49 CFR Part 1155

Railroads, Uniform System of

Accounts.

Decided: May 13, 1998.

By the Board, Chairman Morgan and Vice

Chairman Owen.

Vernon A. Williams,

Secretary.

For the reasons set forth in the

preamble and under the authority of 49

U.S.C. 721(a), title 49, chapter X of the

Code of Federal Regulations is amended

as set forth below:

PART 1152—ABANDONMENT AND

DISCONTINUANCE OF RAIL LINES

AND RAIL TRANSPORTATION UNDER

49 U.S.C. 10903

1. The authority citation for part 1152

is revised to read as follows:

Authority: 11 U.S.C. 1170; 16 U.S.C.

1247(d) and 1248; 45 U.S.C. 744; and 49

U.S.C. 701 note (1995) (section 204 of the ICC

Termination Act of 1995), 721(a), 10502,

10903–10905, and 11161.

2. In § 1152.27, paragraph (n) is added

to read as follows:

§ 1152.27 Financial assistance

procedures.

* * * * *

(n) Special provisions for summary

discontinuance and abandonment of

lines not part of the Final System Plan.

(1) Board authorization is not needed for

the cessation of service on a line of

railroad formerly in reorganization that

was not included in the Final System

Plan (Plan) under the Regional Rail

Reorganization Act of 1973, 45 U.S.C.

701 et seq., as amended by the Railroad

Revitalization and Regulatory Reform

Act of 1976, if the line has been

continuously subsidized since the

inception of the Plan. To provide an

opportunity for rail service continuation

through offers of financial assistance,

however, the owner of the line must

give not less than 60 days’ notice of a

discontinuance, and beginning 120 days

after discontinuance, not less than 30

days’ notice of abandonment.

Designated operators need only comply

with the notice requirements of

§ 1150.11 of this title. In instances of

discontinuance by a designated

operator, the line owner is not obligated

to operate the line. Notice is to be sent

by the line owner to the Board, the

governor and transportation agencies

and the government of each political

subdivision of each state in which such

rail properties are located and to each

shipper who has used the rail service
Federal Register / Vol. 63, No. 99 / Friday, May 22, 1998 /Rules and Regulations 28291

during the previous 12 months. The

Board will generally apply the OFA

procedures in this section (49 CFR

1152.27) for class exemptions to

summary abandonment and

discontinuance notices (except that the

Board will not postpone the effective

date of a summary discontinuance). For

example, notice of summary

abandonment or discontinuance will be

published by the Board in the Federal

Register within 20 days of filing.

Paragraph (b)(2)(ii) of this section.

Expressions of intent to file an offer

must be filed no later than 10 days after

the Federal Register publication.

Paragraph (c)(2)(i) of this section. An

offer must be filed within 30 days of the

Federal Register publication.

Paragraphs (b)(2)(ii) and (c)(2)(ii)(B) of

this section. The Board will review

offers to determine if a financially

responsible person has offered

assistance. If this criterion is met, the

Board will postpone the effective date of

the summary abandonment (but not the

discontinuance) within 35 days of the

Federal Register publication. Paragraph

(e)(2) of this section. If the carrier and

financially responsible person fail to

agree on the amount or terms of subsidy

or purchase, either party may request

the Board to establish the conditions

and amount of the compensation. This

request must be filed within 30 days

after the offer of purchase or subsidy is

made, and the Board will issue a

decision within 30 days after the request

is due. Paragraphs (g)(1) and (h)(1) of

this section.

(2) Where a designated operator is

being used, it shall be paid a reasonable

management fee. If the parties cannot

agree on this fee, it shall be four and

one-half percent of the total annual

revenues attributable to the branch.

PART 1155—[REMOVED]

3. Part 1155 is removed.

[FR Doc. 98–13592 Filed 5–21–98; 8:45 am]

BILLING CODE 4915–00–P