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 Surface Transportation Board [Docket No. EP 682 (Sub-No. 13)]
 The Board is publishing, and providing the public an opportunity to comment on, the 2021 weighted average state tax rates for each Class I railroad, as calculated by the Association of American Railroads (AAR), for use in the Revenue Shortfall Allocation Method (RSAM). The RSAM figure is one of three benchmarks that together are used to determine the reasonableness of a challenged rate under the Board's 
                    *Simplified Standards for Rail Rate Cases,*
                     EP 646 (Sub-No. 1), slip op. at 10 (STB served Sept. 5, 2007),[1]
                    
                     as further revised in 
                    *Simplified Standards for Rail Rate Cases—Taxes in Revenue Shortfall Allocation Method*
                     (
                    *Simplified Standards—Taxes in RSAM*), EP 646 (Sub-No. 2) (STB served Nov. 21, 2008). RSAM is intended to measure the 
                    ( print page 33867)
                    average markup that the railroad would need to collect from all of its “potentially captive traffic” (traffic with a revenue-to-variable-cost ratio above 180%) to earn adequate revenues as measured by the Board under 49 U.S.C. 10704(a)(2) (
                    *i.e.,*
                     earn a return on investment equal to the railroad industry cost of capital). 
                    *Simplified Standards—Taxes in RSAM,*
                     EP 646 (Sub-No. 2), slip op. at 1. In 
                    *Simplified Standards—Taxes in RSAM,*
                     EP 646 (Sub-No. 2), slip op. at 3, 5, the Board modified its RSAM formula to account for taxes, as the prior formula mistakenly compared pre-tax and after-tax revenues. In that decision, the Board stated that it would institute a separate proceeding in which Class I railroads would be required to submit the annual tax information necessary for the Board's annual RSAM calculation. 
                    *Id.*
                     at 5-6. Pursuant to 49 CFR 1135.2, AAR is required to annually calculate and submit to the Board the weighted average state tax rate for each Class I railroad for the previous year. On May 26, 2022, AAR filed its calculation of the weighted average state tax rates for 2021, listed below for each Class I railroad: Weighted Average State Tax Rates
Railroad
2021
                             (percent)
2020
                             (percent)
% ChangeBNSF Railway Company
5.068
5.119
−0.051CSX Transportation, Inc.
5.010
5.101
−0.091Grand Trunk Corporation
7.904
8.124
−0.220The Kansas City Southern Railway Company
5.164
5.139
0.025Norfolk Southern Combined Railroad Subsidiaries
5.671
5.713
−0.042Soo Line Corporation
7.827
8.122
−0.295Union Pacific Railroad Company
5.451
5.598
−0.147
 Pursuant to 49 CFR 1135.2(b), notice of AAR's submission will be published in the 
                    **Federal Register**
                    . Any party wishing to comment on AAR's calculation of the 2021 weighted average state tax rates should file a comment by July 5, 2022. 
                    *See*49 CFR 1135.2(c). If any comments opposing AAR's calculations are filed, AAR's reply will be due by July 25, 2022. 
                    *Id.*
                     If any comments are filed, the Board will review AAR's submission, together with the comments, and serve a decision within 60 days of the close of the record that either accepts, rejects, or modifies AAR's railroad-specific tax information. 
                    *Id.*
                     If no comments are filed by July 5, 2022, AAR's submitted weighted average state tax rates will be automatically adopted by the Board, effective July 6, 2022. 
                    *Id.* *It is ordered:* 1. Comments on AAR's calculation of the 2021 weighted average state tax rates for the Class I railroads are due by July 5, 2022. If any comments opposing AAR's calculations are filed, AAR's reply is due by July 25, 2022. 2. If no comments are filed, AAR's calculation of the 2021 weighted average state tax rates for each Class I railroad will be automatically adopted by the Board, effective July 6, 2022. Decided: May 31, 2022. By the Board, Scott M. Zimmerman, Acting Director, Office of Proceedings. Kenyatta Clay, Clearance Clerk.


# Footnotes

1.
    
                         
                        *Aff'd sub nom. CSX Transp., Inc.*
                         v. 
                        *STB,*
                         568 F.3d 236 (D.C. Cir. 2009), 
                        *vacated in part on reh'g,*
                         584 F.3d 1076 (D.C. Cir. 2009). Back to Citation


[FR Doc. 2022-11970 Filed 6-2-22; 8:45 am] BILLING CODE 4915-01-P