Abandonment and Discontinuance of Rail Lines and Rail Transportation Under 49 U.S.C. 10903

SUMMARY: The ICC Termination Act of 1995 revised the law governing

applications by rail carriers to abandon or discontinue service over

lines of railroad and related offers of financial assistance that would

continue rail service after approval of abandonment or discontinuance

by the Surface Transportation Board (Board). The Board now revises part

1152 to implement the changes and update the pertinent regulations, and

to streamline the abandonment and discontinuance processes consistent

with the new law. While making a number of changes, both substantive

and conforming, the Board has not undertaken a comprehensive revision

or rewrite of all of the existing regulations at part 1152 in this

proceeding. The Board also is making conforming changes to the

environmental rules at part 1105.

EFFECTIVE DATE: The rules are effective January 23, 1997.

FOR FURTHER INFORMATION CONTACT: Joseph H. Dettmar, (202) 927-5660.

[TDD for the hearing impaired: (202) 927-5721.]

SUPPLEMENTARY INFORMATION: The ICC Termination Act of 1995, Public Law

104-88, 109 Stat. 803 (1995) (ICCTA), abolished the Interstate Commerce

Commission (ICC) and transferred the responsibility for regulating rail

transportation, including the proposed abandonment and discontinuance

of rail lines, to the Surface Transportation Board (Board). Section

204(b)(1) of the ICCTA provides that proceedings and applications

pending before the ICC on January 1, 1996, insofar as they involve

functions retained by the ICCTA, including abandonment proceedings and

applications, shall be decided under the law in effect prior to January

1, 1996. Abandonment applications and proceedings filed on or after

January 1, 1996, shall be decided under the law as revised in the

ICCTA. Under section 204(a), regulations, including those at 49 CFR

part 1152, issued by the ICC and effective as of January 1, 1996, shall

remain in effect ``until modified, terminated, superseded, set aside,

or revoked in accordance with law by the Board * * *.''

On March 15, 1996, we served a Notice of Proposed Rulemaking (NPR)

in this proceeding, published at 61 FR 11174 (March 19, 1996). In that

notice, we proposed to revise part 1152 to implement the changes

brought about by the ICCTA and to streamline and update the

regulations. Included in the proposed revisions were deletions of

obsolete references. We stated that, while we were not proposing major

revisions at this time to our environmental rules at 49 CFR part 1105,

or our National Trails System Act (Trails Act) rules at 49 CFR 1152.29,

we were proposing some notice and timing changes to those regulations

in this proceeding, because the changes were directly related to our

efforts to streamline and improve the abandonment process. For the same

reason, we proposed some conforming changes to our procedures for

handling abandonments exempted as a class, and petitions for individual

abandonment exemptions, to reflect statutory changes resulting from the

ICCTA.

Comments in response to the NPR were received from various

categories of entities. The Association of American Railroads (AAR)

filed on behalf of its member railroads. The Rails to Trails

Conservancy (RTC) filed as an advocate of trail use/rail banking.

Comments were filed by the National Association of Reversionary

Property Owners (NARPO), which is a nationwide organization with

members interested in reversionary and other property rights. In

addition, comments were filed by: (1) Numerous Federal, state, and

local government agencies and entities; (2) labor unions; (3) trade

associations; and (4) a large number of individual landowners and

institutions representing landowners. Basically, the commenters, while

expressing certain reservations and having questions concerning certain

sections, embrace the changes and revisions to the abandonment

regulations that we have proposed.

Before addressing the specific comments, some matters bear

repeating from the NPR. We continue to view the ICCTA as reform

legislation and thus our effort has been to reform and streamline the

existing rules and process. As we stated in the NPR, our goal has been

to revise part 1152 to meet the letter and spirit of the ICCTA and to

update the regulations to improve notice to the public and ensure ample

opportunity for full public participation early in our proceedings. We

continue to believe that this will result in a timely, expeditious

resolution of abandonment cases and allow all interested parties to

participate fully. We emphasize, however, that the purpose of this

rulemaking proceeding is to implement the changes mandated by the ICCTA

along with conforming amendments; we have not attempted to conduct a

comprehensive revision or rewrite of all of the existing regulations at

part 1152. Also, we note that the parties themselves in their comments

have not suggested a wholesale ``cleanup'' of these regulations.

We now turn to the major issues raised by the commenting

parties.1

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\1\ All comments have been carefully considered. Due to the

large number of filings, however, not every specific issue raised by

the commenters will be discussed here.

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1. Uniform schedule. In the NPR, we proposed a new time schedule

for processing abandonment applications:

Day 0--Application filed, including applicant's case in chief.

Day 10--Due date for oral hearing requests.

Day 15--Due date for Board decision on oral hearing requests.

Day 20--Due date for Notice of Application to be published in the

Federal Register.

Day 45--Due date for protests and comments, including opposition case

in chief, and for public use and trail use requests.

Day 60--Due date for applicant's reply to opposition case and for

applicant's response to trail use requests.

Day 110--Due date for service of decision on the merits.

Day 120--Due date for offers of financial assistance, except that if an

application has been granted by decision issued sooner than Day 110,

the offer of financial assistance shall be due 10 days after service of

the decision granting the application.

We also stated that we viewed the notice of intent requirement as

an important early warning of proposed abandonments and intended to

retain its use. Accordingly, an applicant would be required to file

with the Board a notice of intent to abandon a line no more than 30

days and no less than 15 days before the application is filed. In

addition, we proposed to update the list of entities due to receive the

notice, including the addition of RTC and NARPO, to provide the

earliest possible notice that a particular right-of-way might be used

as a trail.

Although several parties raised concerns about the time frames in

their comments, we find no reason to alter the proposed time frames. We

continue to believe that the schedule we had

[[Page 67877]]

proposed will allow for full public participation and timely

resolution, thus benefiting all interested parties. For instance, some

commenters urged that the notice of intent be submitted up to 120 days

before the filing of the application. While that would obviously allow

additional time for parties to gather information and formulate

strategy for offers of financial assistance (OFAs), trail use, etc., it

would also unnecessarily delay many proceedings and has no statutory

basis.\2\ Moreover, the shorter time frame we proposed is in keeping

with the spirit of the ICCTA, which (in section 10904) establishes a 4-

month deadline after an application is filed for the submission of

OFAs. Also, as stated in the NPR, the 110-day outer limit for the Board

to issue a final decision is just that--a maximum time frame. In some

instances, the Board will be able to render a final decision well

before the 110th day.

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\2\ Rather, section 10903(a)(3)(E) requires merely that a rail

carrier certify to the Board with its application that the carrier

has satisfied the notice requirements of section 10903(a)(3) (A)--

(D) within the most recent 30-day period prior to the filing date of

the application.

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NARPO and RTC both oppose our proposal to include them in the list

of entities due to receive the notice of intent. Since notice to these

organizations apparently would not further our goal of achieving the

earliest possible notice that a particular right-of-way might be used

as a trail (and neither expresses willingness or ability to take on

notification responsibilities to persons interested in, or potentially

interested in, trails), we will not include this requirement in our

final rules.

Contrary to the position of RTC and NARPO, the Transportation

Trades Department of the AFL-CIO requests that carriers provide this

advance notice to the duly certified labor organizations that represent

employees on the affected rail line. The request is reasonable and we

will include these organizations on the list of entities to receive the

notice of intent.

A number of individuals, presumably adjoining property owners or

their supporters, argue that applicants should be required to provide

actual notice to each adjoining landowner when filing for abandonment

or when a trail condition is requested. However, actual notice has not

been shown to be feasible or necessary to ensure that affected

landowners and other interested parties receive adequate notice. Our

current procedures ensure extensive notice to the public of proposed

abandonments and the possibility that the right-of-way may be used as a

trail. A notice of every abandonment proposal is published in the

Federal Register. A local newspaper notice also must be published in

every abandonment case in each county affected. Furthermore, local

public hearings on trail use proposals typically are held and there is

usually widespread local publicity. Also, landowners can contact the

Board, the railroad, or the trail group for information on particular

abandonment or trail use plans.

Moreover, it would be difficult to identify, locate and

individually identify each landowner along a line proposed for

abandonment and/or trail use. Hundreds if not thousands of landowners

could potentially be interested in a single line. More importantly, no

available source provides readily ascertainable information on the

chain of title, the names and addresses of current landowners, the

nature of their property interests, and the circumstances, if any, that

might trigger a reversion in a particular state. Thus, there simply is

no practical way to name and locate all of the landowners that might

have a reversionary interest in a railroad right-of-way, as the ICC

concluded in Rail Abandonments--Use of Rights-of-Way as Trails--

Supplemental Trails Act Procedures, Ex Parte No. 274 (Sub-No. 13) (ICC

served May 26, 1989, Feb. 21, 1990, and July 28, 1994), 1994 decision

aff'd mem. 70 F.3d 638 (D.C. Cir. 1995), cert. denied, 116 U.S. 1323

(1996).

While we will not require actual notice to landowners, we will make

other changes to facilitate and improve notice to the public. For

example, RTC recommends that the newspaper and Federal Register notices

we require should specifically alert the public of the possibility

that, following the abandonment of rail service and salvage of the

line, the line may be suitable for other public use, including interim

trail use, and advise how the public may participate in the Board

proceeding (pro or con). We agree with RTC. As RTC states, newspaper

notice and Federal Register notice containing this information will

give adequate notice to the public of the Board's abandonment

proceedings and ensure that interested parties can take such action as

they deem appropriate, if they wish to participate.

In the NPR, we also proposed to change the environmental rules by

amending 49 CFR 1105.7 and 1105.8 to require railroads to serve their

environmental and/or historic reports on the required agencies at least

20 days prior to filing their case in chief with the Board. Also, we

proposed that railroads, in order to facilitate identification of lines

proposed for abandonment, be required to identify those lines by United

States Postal Service Zip Codes. We will adopt both changes. The

earlier distribution of environmental and historic reports will

expedite the environmental review process (by giving participating

agencies additional lead time to conduct their analysis) without being

unduly burdensome on the railroads. While comments on the use of Zip

Codes were mixed, the use of Zip Codes is a means to provide notice to

the public that a line near them has been proposed to be abandoned.

Therefore, we will require use of Zip Codes in the final rules.

Finally, the Department of the Army has requested that the Military

Traffic Management Command Transportation Engineering Agency (MTMCTEA)

continue to receive a copy of abandonment notices. It states that

MTMCTEA is responsible for maintaining a rail network for national

defense purposes and that MTMCTEA must receive notice to determine if

the line designated for abandonment is an essential element in the rail

network.

We have retained MTMCTEA on the list of agencies on which notices

must be served. See Secs. 1152.20(a)(2) (requiring service of notice of

intent on MTMCTEA) and 1152.50(d)(1). We have also assured that MTMCTEA

will receive copies of petitions for exemption in new Sec. 1152.60(d).

2. Federal Register Publication. Commenters overwhelmingly

supported our proposal to publish a notice of an abandonment

application or a petition for an individual exemption in the Federal

Register 20 days after the application or petition is filed.3

Accordingly, we will adopt that proposal in our final rules. The

Federal Register notice will describe the proposal, advise the public

about the due dates for offers of financial assistance and requests for

public use and trail use conditions, and explain how to participate

(pro or con) in the Board's proceeding. Abandonment applicants and

petitioners will be required to file draft Federal Register notices

that can be used to announce the filing.

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\3\ We proposed no changes for the publication of Federal

Register notices for the procedural timing of abandonments covered

by the class exemption embraced in subpart F.

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RTC argues that, in addition, we should continue our current

practice of publishing another Federal Register notice when, and if,

the abandonment authority is granted. We disagree. Because there will

be Federal Register notice and newspaper notice at the beginning of the

process specifically advising the public as to how to

[[Page 67878]]

participate (pro or con), any interested person can become a party or

can ask to be put on the service list of a proceeding and thus receive

copies of all subsequent decisions in the case.4 Moreover, Federal

Register notice is extremely costly; we lack the financial and staff

resources to publish multiple Federal Register notices in abandonment

cases.

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\4\ We note that the timing for Federal Register notices we are

adopting for applications and petitions for exemption is similar to

what has been done under the class exemption at subpart F for many

years. Under the class exemption, as here, the only Federal Register

notice is at the beginning of the process.

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Also RTC suggests that we not use the term ``must'' in the portion

of the draft Federal Register notice informing requesters of a public

use condition or trail use condition that such requests are due within

45 days of the filing of the application, 40 days of the filing of a

petition, or 10 days after the publication of a notice of exemption.

RTC argues that the use of ``must'' will lead to claims by anti-trail

groups that no late-filed requests should ever be granted. We have not

made the suggested change. Trail use requests, like all other requests,

need to be timely filed if at all possible so our uniform schedule can

be met.5 Moreover, we will specifically retain our current policy

of accepting filings after the due date when good cause is shown.

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\5\ We see no reason why trail use requests cannot typically be

filed on time. Filing a trail use request is not onerous. Moreover,

a party can request a trail condition before there is an arrangement

for interim trail use; the condition simply provides time to

negotiate.

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Finally, the comments received regarding changes to our rules for

abandonments covered by the class exemption embraced in subpart F raise

issues that are inappropriate for resolution on the current record.

Accordingly, we will not attempt to change or modify our regulations

concerning the class exemption at this time but reserve the right to

address these issues further in a separate proceeding at a later date.

3. System Diagram Maps. The ICCTA retains the requirement that rail

carriers prepare, file, and amend, as appropriate, system diagram maps

(SDMs) that identify lines that are, or soon will be, the subject of an

abandonment application. In the NPR we proposed several changes to part

1152 regarding SDMs to eliminate unnecessary regulatory and paperwork

burdens. These changes include the following:

(1) Because of the potential burden on small carriers, we proposed

to require only Class I and Class II railroads to prepare and file

SDMs.

(2) In lieu of an annual filing of these maps, we proposed a one-

time filing of a complete and current set of maps within 60 days of the

effective date of these regulations. The carrier would decide when

changes have been extensive enough to warrant the filing of a new,

updated SDM, but the Board would retain the discretion to require an

updated SDM if that became necessary.

(3) We proposed to require only 3 (instead of 6) copies whenever an

SDM or an update is filed.

(4) We proposed to reject an abandonment application of a Class I

or Class II railroad for a line that has not been identified on a SDM

in category 1 for at least 30 days.

Many commenters expressed views on this subject. First, there was

strong opposition to our excusing Class III carriers from filing SDMs.

Commenters pointed out that Class III carriers now comprise a

substantial portion of the rail network, both in numbers of carriers

and length of track operated.6 Commenters (including several state

agencies) argued that to excuse such a large portion of the rail

network from these filing requirements would work a severe hardship

upon parties opposing abandonments. Moreover, commenters argued that,

because rail lines by statute may qualify for feeder line applications

under 49 U.S.C. 10907 if they have been identified on an SDM, our

proposal would in effect limit the use of the feeder line provisions

for lines owned by Class III carriers.

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\6\ According to the National Grain and Feed Association, as of

1994, there were 487 Class III carriers operating 25,999 miles of

track. This was approximately 21 percent of the total track operated

by Class I railroads (123,355 miles in 1994).

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Based on the comments, we have decided to continue to require Class

III carriers to file the information normally found in an SDM. Because

we recognize, however, that the extensive SDM filing requirements under

our current rules could be unnecessarily burdensome on smaller

entities, we will give Class III carriers the option of filing a map or

filing only a narrative description of its lines as provided under

Sec. 1152.11.

A number of commenters also opposed our proposal to shorten the

period of time that a carrier must identify a line in category 1 of its

SDM before filing an application to abandon the line. Because the ICCTA

deleted the 4-month requirement under the prior law, we proposed

requiring that a carrier identify a line in category 1 at least 30 days

prior to filing an abandonment application, believing that period to be

adequate to meet the various parties' planning needs. A significant

number of parties maintained that 30 days was too short a period of

time to properly notify persons who might wish to file statements in

opposition to an abandonment or for public agencies and shippers to

prepare an OFA for the line or otherwise plan for alternative

transportation. Many commenters supported retention of the 4-month

period provided under prior law and implementing regulations.

We are persuaded by the comments that 30 days may be insufficient

time for parties to properly oppose an abandonment or to make

alternative service plans. At the same time, we continue to believe

that 4 months is too long and unduly delays the overall process.

Therefore, our final rules provide for rejection of any abandonment

application for a line that has not been identified on an SDM 7 in

category 1 for at least 60 days. The additional time should be adequate

to meet the planning needs of shippers and state and local governments

while avoiding unnecessary delay.

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\7\ For Class III carriers, the term SDM shall include the

filing of a narrative description without an actual map.

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Some commenters, including AAR, recommend that we eliminate

categories (2), (3), and (4) from the SDM. We see no need to do so. By

adopting a one-time filing requirement (unless extensive changes

occur), we have already eliminated much of the extensive work and

burdensome procedures required under our prior rules.

A number of parties have also argued that we should retain the

prior requirement concerning the annual filing of updated maps or at

least require updates on a specific, periodic basis. We believe these

requirements would result in more burdens on the carriers than benefits

to the shipping public. We emphasize that carriers must continue to

file revisions when changing the category of a line, and must file

updated SDMs as appropriate or when ordered by us.

MTMCTEA asks that it continue to receive updated copies of SDMs. We

have provided copies of SDMs and updates to MTMCTEA in the past on an

informal basis. As this procedure apparently has worked well, we will

continue to provide the information to MTMCTEA as before.

4. Summary application. Absent meaningful opposition, we will

finalize our intention to delete the ``Summary Application''

provisions. By doing so, we will have a uniform, streamlined process

for all applications.

[[Page 67879]]

5. Abandonment procedures for bankrupt railroads. As part of our

proposal to adopt a streamlined process appropriate for all

applications, we preliminarily indicated in the NPR that no need

existed to continue to have separate procedures in subpart E for

bankrupt railroads. However, we did propose to include as special

provisions for bankrupt railroads in the general abandonment procedures

the requirements that abandonment applications filed by bankrupt

railroads, and protests or other public responses to the applications,

be filed with the bankruptcy court; that Board decisions or reports on

abandonment applications by bankrupt railroads be filed with the

bankruptcy court; and that special processing schedules would be

established to meet court deadlines, so long as a reasonable period of

time is allowed to obtain public responses and build a record in an

abandonment application by a bankrupt railroad. The commenters either

support, or fail to show harm from, these proposals, and we will adopt

them as part of our final regulations.

6. Due date for filing public use requests and trail use requests.

In the NPR, we proposed changes in due dates for these filings to

further our goal of compiling a full record for disposition as early as

possible. In abandonment applications, we proposed that trail use

requests and public use requests be filed at the same time as protests

and other written comments (within 45 days after the application is

filed). An applicant would then be required to respond regarding

willingness to negotiate for trail use within 15 days (or within 60

days after the application is filed). For abandonments covered by the

class exemption at subpart F, we proposed to continue to require trail

use/rail banking requests to be filed within 10 days after Federal

Register publication of the exemption and public use requests to be

filed within 20 days after Federal Register publication. For petitions

for individual exemption, we proposed to require that trail use/rail

banking requests and public use requests be filed within 20 days after

Federal Register publication of the notice of the filing of the

petition (40 days from the filing of the petition). For both class

exemptions and petitions for exemption, we proposed to require the rail

carrier to respond to trail use/rail banking requests within 10 days

after the request is filed.

Commenters have for the most part agreed with our proposed rules,

which we will adopt. Some have sought additional or more comprehensive

changes to the regulations governing public use and trail use

conditions. We will not, however, address those requests here, because

we did not set out in this proceeding to undertake a detailed re-

examination of all aspects of our handling of public use and trail use

requests. In short, our purpose in proposing to modify these due dates

was to find a way to complete a full record as early as practicable to

expedite and streamline the abandonment process.

Finally, several commenters suggest that we should undertake a

``takings implication assessment'' whenever we issue a trail condition,

pursuant to Executive Order 12630, Governmental Actions And

Interference With Constitutionally Protected Property Rights. See 53 FR

8859 (March 18, 1988). But, as the ICC had explained, the Executive

Order applies only to executive agencies, and not to independent

agencies like the ICC.8 The Executive Order does not apply to the

Board, which was created as the successor agency to the ICC.9

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\8\ Burlington Northern Railroad Company--Aband. Exemption--In

Skagit County, WA, Docket No. AB-6 (Sub. No. 299X) (ICC served June

23, 1989).

\9\ While the Board is lodged within the Department of

Transportation, just as the Federal Energy Regulatory Commission is

lodged within the Department of Energy, the Board was created as an

independent establishment of the United States Government. See 49

U.S.C. 703(a).

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7. Notice of consummation. To arrive at more definitive standards

to be used in resolving the issue of when an abandonment has been

consummated, or fully exercised, we proposed in the NPR to require that

carriers file with the Board a notice of consummation, and to give

conclusive effect to the filing of such notice.10 We did not

propose a deadline for filing, or a penalty for failure to file. We

indicated that, if no notice of consummation of abandonment had been

filed, we would continue to look at the other facts and circumstances

to determine if consummation of the abandonment had occurred.

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\10\ Until 1984, the ICC required a railroad to send the agency

a letter confirming that it had consummated an abandonment within 1

year after the abandonment was authorized. Since then, some carriers

have continued to send in these letters. Moreover, the courts have

considered these letters in determining whether the line is still

part of the interstate rail network, and thus available for interim

trail use under 16 U.S.C. 1247(d), or public use under 49 U.S.C.

10905.

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After considering the comments, we continue to believe that a

notice of consummation requirement would help clarify the consummation

issue and prevent consummation disputes from arising in the future.

Several commenters, however, criticize our failure to include a filing

deadline in our proposal, on grounds that it would leave the railroad

free never to consummate an abandonment and thus would be unfair to

adjoining landowners with a reversionary interest in the right-of-way.

Based on the comments, we have decided to set a 1-year time limit by

which time a railroad must exercise the authority to abandon and inform

us that it has done so by sending us a consummation notice.11

Accordingly, our final rules provide that, if after 1 year from the

date of service of a decision permitting abandonment, consummation has

not been effected by the railroad's filing of a notice of

consummation--and there are no legal or regulatory barriers to

consummation (i.e., outstanding conditions, including Trails Act

conditions)--the authority to abandon will automatically expire. That

means that a new proceeding would have to be instituted if the railroad

wanted to abandon the line.12

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\11\ Several parties suggest shorter time periods ranging from

30 to 180 days. AAR supports our initial decision to have no time

period at all, noting that a railroad may have reason to delay

consummation of an abandonment for a substantial period of time. We

believe that a 1-year time period is appropriate. That time period

ensures that the consummation issue will not be left open

indefinitely. At the same time, it is long enough to give carriers

that do not want to exercise their abandonment authority immediately

time to hold open the possibility that new shippers will seek rail

service or that the right-of-way could be used for interim

recreational or conservation purposes under 16 U.S.C. 1247(d), or

public use under 49 U.S.C. 10905.

\12\ There is nothing inconsistent about this approach and our

rules that permit states to acquire lines that have not been fully

abandoned upon the mere filing of a notice. See 49 CFR 1150.22. If

the line is acquired during the first year after we authorize

abandonment, and before a notice of consummation is filed, the line

has not been fully abandoned and can be acquired under our rules.

After a year has passed, if there is no notice of consummation, the

railroad's abandonment authority lapses, and the line cannot be

abandoned (or acquired by a state or any one else) without further

authority from us.

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We reject the suggestion of some commenters that we should not

adopt a notice of consummation requirement because the issue of when

abandonment has been consummated has been settled by Fritsch v. ICC, 59

F.3d 248 (D.C. Cir. 1995), cert. denied, 116 S. Ct. 1262 (1996). In

Fritsch, the court held that a public use condition imposed under

former section 10906 (now 49 U.S.C. 10905) did not prevent consummation

of the abandonment and the vesting of reversionary interests in the

right-of-way in the circumstances of that case. The courts, however,

have expressly declined to read Fritsch as holding that abandonment is

necessarily triggered upon a showing of any single piece of

[[Page 67880]]

evidence indicative of an intent to abandon. See Conrail v. STB, 93

F.3d 793, 799 (D.C. Cir. 1996); Birt v. STB, 90 F.3d 580, 588 n.15

(D.C. Cir. 1996); Grantwood Village v. Missouri Pacific RR, 95 F.3d

654, 659 n.6 (8th Cir. 1996). Moreover, the court in Fritsch

essentially viewed the railroad's letters to the ICC declaring that it

had abandoned the line as conclusive evidence that abandonment had been

consummated, therefore depriving the ICC of jurisdiction to impose a

trail condition. See 59 F.3d at 253. Thus, our adoption of a notice of

consummation requirement here will codify that portion of the court's

ruling in Fritsch and prevent similar disputes from arising in the

future.

Finally, the Oregon and Montana Departments of Transportation

suggest that we require notices of consummation to be filed with the

appropriate state agencies (DOT, Public Service Commission) as well as

with us. We will grant that request, and require that the railroads

file notices of consummation with the State Public Service Commission

(or equivalent agency) in each state through which the line passes,

because it will help keep the states apprised of the status of lines

authorized to be abandoned and is not unduly burdensome.

8. Certificate of abandonment. Since the ICCTA does not

specifically require that ``certificates'' be issued when abandonment

applications are granted, in the NPR we proposed to dispense with the

issuance of certificates and instead simply issue ``decisions

granting'' an application. However, we proposed to continue to refer to

``Certificates of Interim Trail Use or Abandonment'' in the trail use

context in part to distinguish an application proceeding from an

exemption proceeding. We received a few comments regarding this issue

but no commenter presents strong objections to our proposal. Because

the term ``certificate'' is widely known in the trail use context, we

will continue to use it for trail use purposes alone.

9. Contents of the application. In the NPR, we initially determined

that applicants should be required to submit their entire case as part

of the application. We then indicated that applicants must include all

relevant workpapers and supporting documents with each application.

AAR, in its comments, objects to the necessity of supplying all

workpapers and supporting documents. It argues that this would be a

step backward in our effort to streamline the application process. AAR

explains that differences of opinion would arise concerning what

constitutes ``workpapers'' and that the gathering of all materials

would be an unnecessary burden on applicants and produce copious

documents with little practical use. We agree with the comments and

emphasize that we did not intend to create a more burdensome process

than exists today. We clarify that what we meant by the use of the word

``all'' was that we expect each applicant to submit sufficient (or all

that the applicant believes is necessary) workpapers and supporting

documents to present a complete or prima facie case. We will modify the

regulations accordingly, but we emphasize that the burden is on the

applicant to show that the proposed abandonment or discontinuance is in

the public interest.

a. Service data. In the NPR we proposed to streamline the

requirements for abandonment applications by excluding all branch line

(line proposed for abandonment) service data for time periods prior to

the Base Year period, with the exception of data on changes in train

service. The current regulations require data for the 2 preceding

calendar years and that portion of the current calendar year for which

data are available.13

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\13\ As we stated in the NPR, this change had been proposed by

the ICC in a notice of proposed rulemaking in Abandonment

Proceedings: Elimination of the Revenue and Cost Data for All Years

Prior to the Base Year Period, Ex Parte No. 274 (Sub-No. 26) (ICC

served Nov. 9, 1992), to reduce the reporting burden on the

carriers. Comments were received but a final rule was never issued.

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

We also proposed changes to the service and traffic data required

to be provided in three specific areas. First, we proposed that the

carload data on the line would have to show only the total carloads for

each commodity group. Second, we proposed that data pertaining to

overhead or bridge traffic would have to be included only if the

serving carrier would not retain this traffic after approval of the

abandonment. Finally, we proposed that only changes in train service in

the last 2 years (instead of the last 5 years) would need to be

discussed.

A number of commenters raised concerns about the proposed exclusion

of historic operational data in the application. Reasons for their

concern vary but include: (1) Base Year data could be intentionally

distorted; (2) historical calendar year evidence reflects trends in

rail line profitability; (3) 1 or 2 years of data are inadequate to

make a determination on the viability of a rail line; and (4) without

the data from past periods, it will be difficult to determine if

intentional downgrading has occurred.

We do not entirely agree with the commenters that urge that there

is a need for more historical data. Under our proposed rules,

applicants would have to include and discuss changes in train service

for the last 2 years. In addition, applicants would also be required to

supply, under proposed Sec. 1152.22(e)(2), a list of significant

shippers and their tonnage and/or carload data for the last 2 calendar

years and, under proposed Sec. 1152.22(c)(4), total carloads by each

commodity group on the line during the Base Year. This information

should give protestants sufficient data to address alleged downgrading

and the other concerns outlined above.

Nevertheless, in response to commenters and their concerns, we have

decided to expand our traffic data requirements somewhat. Specifically,

the data required for significant users under Sec. 1152.22(e)(2) of our

final rules will include the tonnage and carloads for each commodity

group for the last 2 calendar years, any part of the current calendar

year for which data are available, and the Base Year. In addition, we

will require that the total tonnages and carloads for each commodity

group originating and/or terminating on the line segment (not limited

to significant users) be shown for the same time periods as those for

the significant users. Consistent with these changes, we also will

expand proposed Sec. 1152.22(c)(4) to require inclusion of total tons

and carloads by each commodity group on the line. With these changes,

we believe that an application will contain sufficient service and

traffic data to allow appropriate analysis of all issues relevant to

service on the subject line.

b. Financial data. In the NPR, we proposed to exclude computations

for the revenue and cost data developed for the branch line for the

prior 2 calendar years and any portion of the current year. Revenue and

cost data would be computed only for the Base Year, Forecast Year, and

Subsidy Year.14

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\14\ These changes also had been proposed in the ICC's

rulemaking in Ex Parte No. 274 (Sub-No. 26).

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

We also proposed to delete the requirements that the impact of the

abandonment on the carrier's net railway operating income (NROI) for

the past 2 calendar years be developed and that the impact on the NROI

of other carriers operated under common control of the abandoning

railroad be submitted. In addition, we proposed to delete the

requirement that the railroad's balance sheet and income statements be

filed.

Commenters voice concern regarding the absence of financial

operating results in prior years and object to the

[[Page 67881]]

proposal to delete the requirements concerning NROI and the filing of

balance sheets and income statements. They make the same arguments

against the elimination of these data as they make regarding the

elimination of historic service data. Regarding common control, some

commenters argue that the financial effect of abandonment by one

``family'' member affects another. Also, they argue that financial

statements are needed because they show the overall financial condition

of the applicant, which can be important in the Board's weighing of the

evidence under its public convenience and necessity standard.

We do not believe that the benefits of requiring a carrier to

submit all of these data justify the very real burden on the applicant

of preparing the data. Profits or losses on a line segment in prior

years typically do not provide a proper basis on which to judge the

line's current and future financial viability. The Board's primary

measures of financial condition are the operations in the Base Year and

Forecast Year, which recognize the current and future financial

viability of the line segment. Moreover, changes in traffic are in most

instances the main cause of changes in operating results from a profit

to a loss, and necessary traffic information is included in the data

applicant is required to file. For these reasons, we will not make the

requested changes to our proposal.

c. Other application changes. In the NPR, we proposed to delete the

requirements that the carrier identify in detail the sources of

alternate transportation available and describe its efforts to solicit

traffic on the line. Instead, we proposed to require only a general

description of alternative transportation sources. We also proposed

that the carrier no longer be required to describe its efforts to

solicit traffic on the branch line in every case, but that we would

permit the carrier instead to provide a description of its efforts if

it believes that the information would aid its case regarding

protestants' claims of either potential increases in traffic or

deliberate downgrading. Comments specifically addressing these points

were unpersuasive. Accordingly, we will incorporate these changes in

our final rules.

d. Summary. We will adopt in our final rules the modifications

discussed in subparts a-c above. We believe that the information

required to be provided in the application, along with information that

the parties already have, or may readily obtain, will afford all

interested parties a fair opportunity to analyze and present argument

on every issue relevant to the abandonment process that is related to

the above data. Moreover, we remind applicants that the burden of proof

in these proceedings remains on them, and that they may wish to provide

additional data with their applications where doing so would help

assure that they have met their burden regarding anticipated challenges

such as, for example, challenges claiming deliberate downgrading of the

line.

10. Offers of financial assistance. As discussed in the NPR, in

addition to the time limits explained above, new 49 U.S.C. 10904

contains other changes in the way OFAs are handled. Initially, the

Board need only find that the offeror is a financially responsible

person before the negotiating process can begin. We proposed to revise

the rules accordingly. Under new section 10904, the Board has 30 days,

rather than 60 as before, from the date requested to issue a decision

establishing the conditions and amount of compensation for the purchase

or subsidy of the line. To meet the new deadline, we proposed to

require the requesting party to submit its case in chief at the time it

makes its request and to serve the other party(ies) with a copy by

overnight mail. The other party(ies) would have 5 days from the date of

filing to file a reply. As before, we proposed that our new rules would

automatically stay the effective date of (or revoke as necessary for a

class exemption) the underlying abandonment decision. We will adopt

these changes in our final rules. The final rules also continue to

provide that, if a request to set terms and conditions is not made to

the Board, a decision making the underlying abandonment approval (or

exemption) effective would be served within 10 days of the due date for

making the request.

The statute now places a 1-year limit on operating subsidies

imposed by the Board, unless otherwise mutually agreed by the parties.

As a result, we proposed in the NPR that: (1) Subsidy agreements

imposed by the Board would end after 1 year, and (2) beyond this period

any subsidy would be strictly a contractual agreement between the

carrier and the subsidizer without the involvement of the Board.

Also regarding subsidies, we proposed that the new rules continue

to provide for interim financial status reports, as presently included

in the abandonment regulations. However, with certain exceptions, the

subsidizer's final responsibility would be limited to a maximum of 15%

over the agreed-to amount of the operating subsidy. The exceptions

would be: (1) If the subsidizer is notified of a higher amount within

the first 10 months of the agreement; and (2) the increase results from

an expense that has been preapproved by the subsidizer. We explained in

the NPR that we believed that the limitation is needed to provide a

degree of certainty to a party that seeks to subsidize operation of a

line approved for abandonment. Our final rules include all of these

provisions.

We have considered the concern of some commenters regarding the

shortening of the 120-day statutory period for submission of OFAs when

an abandonment is granted by decision issued sooner than 110 days after

the application is filed. (Our uniform schedule provides that in such

cases the OFA will be due 10 days after service of the decision

granting the application, which could be sooner than 4 months after the

application is filed.) However, given our goal of expediting the

process where possible, we have decided not to change our proposed

Uniform Schedule. We recognize that 49 U.S.C. 10904(c) sets 4 months as

the outer limit for the filing of OFAs. At the same time, we believe

that the expanded notice that will be provided at the outset of

abandonment proceedings under our new rules typically will allow

adequate time for parties to consider filing an OFA, and marshal the

funds necessary to do so, within the Uniform Time Frames, even if in

some cases this results in something less than the full 120 day period

to file an OFA. Accordingly, we do not read the statute to require that

we delay in all cases abandonment proceedings that can be decided in

less time than the full 110 days. However, in light of the time frames

in 49 U.S.C. 10904(c), parties that can show that they would be

materially prejudiced by having less than the full 4 months may

petition the Board for the full time provided by the statute for

application proceedings.15

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\15\ Parties may seek relief under 49 CFR part 1117.

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

In addition, RTC contends that we should retain the requirement

that, in addition to being made by a financially responsible person,

the offer must be ``bona fide.'' RTC requests that we include such

language in the regulations. We find no merit in RTC's request. New 49

U.S.C. 10904 clearly does not retain that aspect of the prior statute.

Accordingly, we will not add such a requirement in our regulations. Our

final rules adopt the changes proposed in the NPR.

11. Return on investment. In the NPR, we stated that we believed

several problem areas existed with the rules for establishing return on

investment. To address these issues, we proposed

[[Page 67882]]

various changes regarding the determination of the net liquidation

value (NLV) of road properties on the branch line, a component used in

calculating return on investment. These proposed changes involved the

inclusion of assets with negative net salvage values, adjustments to

right-of-way land values, and the bases used to value right-of-way

land.

Very few comments were received regarding these proposed changes.

However, AAR has raised concerns about the proposed inclusion of

negative salvage values for those assets where the cost of dismantling

exceeds the value of the materials salvaged. There are three situations

where this value has implications. These situations are: (1)

Calculation of the operating and economic loss on the line, i.e., the

merits of the application; (2) the continuation subsidy payment

calculation; and (3) selling price in OFA purchase determinations.

Regarding the merits of the application, a negative return on value

would distort the loss from operations being borne by the serving

railroad. This could, according to AAR, result in the application being

denied.

AAR also is concerned that inclusion of a negative NLV and a

negative return on properties would reduce the subsidy amount below the

operating loss being incurred by the serving carrier. Additionally, AAR

states that in OFA proceedings a negative value for the properties

could result in an artificially low value being placed on the assets

that are to be purchased. This situation, it claims, would also reverse

the burden of proof from the offeror to the railroad in proving the

value of the line's assets.

In light of the concerns of AAR as to the potential implications of

including both a negative NLV and calculating a negative return on

value, we have made appropriate changes to our proposed regulations

regarding the calculation of subsidy payments or purchase price in OFA

proceedings.

First, to amplify what we said in the NPR, no asset on the branch

line will have a negative value unless the railroad intends to remove

the structure, or it is proven by protestants, that the structure must

be dismantled to comply with a Federal law, state law, or a local

ordinance.

Moreover, in assessing the merits of the application, if a negative

value results for the composite NLV of all branch line properties, the

negative value will be inserted in the submission of the Forecast Year

revenue and cost data, Exhibit 1 to the application. However, the

return on value will be calculated at zero. This will allow the Board

to compare the loss from operations with the negative opportunity cost

of the railroad. The cost to the railroad for dismantling the

structure(s) is recognized by the Board as a one time expense whereas

the operating loss will reoccur each year, if nothing changes.

We will amend Sec. 1152.34 of the proposed regulations to include

changes in developing the NLV of road property and the return on value

requested by AAR. Under our final rules, in calculating a continuation

subsidy payment, assets with negative value will be handled in the

following manner. Any individual asset with a negative value will be

valued at zero. The balance of the assets will have their NLV

calculated in the normal manner. A continuation subsidy must recognize

the line segment as a going concern and a return should be earned by

the railroad on those assets with value. Under no circumstances will

the subsidy payment be less than the loss from operations incurred by

the railroad from providing service on the line.

With regard to OFAs to purchase a line segment, the NLV of the

line's assets will be determined in the same manner as that used in

calculating continuation subsidy payments.

Finally, AAR favors the use of the comparable sales method for

valuing real estate. We reject that approach, as the ICC did in the

past. Accordingly, the proposed rules will be adopted concerning this

issue.

12. Holding gains and losses. In the NPR, we proposed the use of

the Gross Domestic Product as a replacement for the Gross National

Product used in estimating holding gains and losses (computed for

freight cars, locomotives, and road property accounts). We suggested

this change to bring our rules in line with the current measures used

at the U.S. Department of Commerce, Bureau of Economic Analysis.

Commenters generally approve of this modification, and we will include

it in our final regulations.

13. Appendix listing of carriers and AB numbers. In the NPR, we

proposed to delete the Appendix to part 1152 that lists carriers and

their assigned AB numbers. We preliminarily concluded that the list

serves no useful purpose, noting that interested persons could instead

contact the Board's Office of the Secretary if they have a need to

ascertain a particular carrier's assigned AB number.

The lack of comments regarding this change confirms our preliminary

conclusion that the listing does not continue to serve a useful

purpose. Accordingly, it will be deleted from part 1152 as proposed.

14. Filing fees. Several commenters address the issue of filing

fees. However, we will not address those comments here as fees issues

were considered and resolved by the Board in Regulations Governing Fees

for Service, 1 S.T.B. 179 (1996).

Small Entities

In the NPR, we sought comments on our preliminary conclusion that

these regulations, if adopted, would not have effects on small entities

that should be considered in a regulatory flexibility analysis. No

comments provided information showing that there would be significant

effects on small entities. Accordingly, the Board certifies that these

rules will not have a significant economic effect on a substantial

number of small entities. They should result in streamlining,

improving, and updating the abandonment process while ensuring the

opportunity for full public participation in our proceedings.

Environmental Finding

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 1105

Environmental impact statements, Reporting and recordkeeping

requirements.

49 CFR Part 1152

Administrative practice and procedure, Conservation, Environmental

protection, National forests, National parks, National trails system,

Public lands-grants, Public lands rights-of-way, Railroads, Recreation

and recreation areas, Reporting and recordkeeping requirements.

Decided: December 9, 1996.

By the Board, Chairman Morgan, Vice Chairman Simmons, and

Commissioner Owen.

Vernon A. Williams,

Secretary.

For the reasons set forth in the preamble, title 49, chapter X,

parts 1105 and 1152 of the Code of Federal Regulations are amended as

follows:

PART 1105--PROCEDURES FOR IMPLEMENTATION OF ENVIRONMENTAL LAWS

1. The authority citation for part 1105 is revised to read as

follows:

Authority: 5 U.S.C. 553 and 559; 16 U.S.C. 470f, 1451, and 1531;

42 U.S.C. 4332 and

[[Page 67883]]

6362(b); and 49 U.S.C. 701 note (1995) (section 204 of the ICC

Termination Act of 1995), 721(a), 10502, and 10903-10905.

2. Section 1105.7 is amended as follows:

a. In paragraph (a), after the words ``must submit'' add the words

``to the Board'';

b. In paragraph (a), after the words ``notice of exemption'' add

the words ``, except as provided in paragraph (b) for abandonments and

discontinuances'';

c. Paragraph (b), introductory text is revised;

d. In paragraph (b)(11) the last sentence is removed;

e. Paragraph (c), first sentence, after the words ``to the agencies

listed'' add the words ``and within the time period specified'';

f. In paragraph (c) the third sentence is removed.

The revision to the introductory text in paragraph (b) reads as

follows:

Sec. 1105.7 Environmental reports.

* * * * *

(b) At least 20 days prior to the filing with the Board of a notice

of exemption, petition for exemption, or an application for abandonment

or discontinuance, the applicant must serve copies of the Environmental

Report on:

* * * * *

3. In Sec. 1105.8, paragraph (c) is revised to read as follows:

Sec. 1105.8 Historic Reports.

* * * * *

(c) Distribution. The applicant must send the Historic Report to

the appropriate State Historic Preservation Officer(s), preferably at

least 60 days in advance of filing the application, petition, or

notice, but not later than 20 days prior to filing with the Board.

* * * * *

Sec. 1105.12 [Amended]

4. Section 1105.12, the appendix, is amended as follows:

a. In the first paragraph of the sample newspaper notice for out-

of-service abandonment exemptions after the words ``(station name),''

add the following words: ``which traverses through United States Postal

Service ZIP Codes (ZIP Codes).''

b. In the first paragraph of the sample newspaper notice for

petitions for abandonment exemptions, after the words ``(station

name),'' add the following words: ``which traverses through United

States Postal Service ZIP Codes (ZIP Codes).''

5. Part 1152 is revised to read as follows:

PART 1152--ABANDONMENT AND DISCONTINUANCE OF RAIL LINES AND RAIL

TRANSPORTATION UNDER 49 U.S.C. 10903

Subpart A--General

Sec.

1152.1 Purpose and scope.

1152.2 Definitions.

Subpart B--System Diagram

1152.10 System diagram map.

1152.11 Description of lines to accompany the system diagram map or

information to be contained in the narrative.

1152.12 Filing and publication.

1152.13 Amendment of the system diagram map or narrative.

1152.14 Availability of data.

1152.15 Reservation of jurisdiction.

Subpart C--Procedures Governing Notice, Applications, Financial

Assistance, Acquisition for Public Use, and Trail Use

1152.20 Notice of intent to abandon or discontinue service.

1152.21 Form of notice.

1152.22 Contents of application.

1152.23 [Reserved]

1152.24 Filing and service of application.

1152.25 Participation in abandonment or discontinuance proceedings.

1152.26 Board determination under 49 U.S.C. 10903.

1152.27 Financial assistance procedures.

1152.28 Public use procedures.

1152.29 Prospective use of rights-of-way for interim trail use and

rail banking.

Subpart D--Standards for Determining Costs, Revenues, and Return on

Value

1152.30 General.

1152.31 Revenue and income attributable to branch lines.

1152.32 Calculation of avoidable costs.

1152.33 Apportionment rules for the assignment of expenses to on-

branch costs.

1152.34 Return on investment.

1152.35 [Reserved]

1152.36 Submission of revenue and cost data.

1152.37 Financial status reports.

Subpart E--[Reserved]

Subpart F--Exempt Abandonments and Discontinuances of Service and

Trackage Rights

1152.50 Exempt abandonments and discontinuances of service and

trackage rights.

Subpart G--Special Rules Applicable to Petitions for Abandonments or

Discontinuances of Service or Trackage Rights Filed Under the 49 U.S.C.

10502 Exemption Procedure

1152.60 Special rules.

Authority: 5 U.S.C. 553, 559, and 704; 11 U.S.C. 1170; 16 U.S.C.

1247(d) and 1248; and 49 U.S.C. 701 note (1995) (section 204 of the

ICC Termination Act of 1995), 721(a), 10502, 10903-10905, and 11161.

Subpart A--General

Sec. 1152.1 Purpose and scope.

(a) 49 U.S.C. 10903 et seq. governs abandonment of rail lines and

discontinuance of rail service by common carriers. Section 10903(d)

provides that no line of railroad may be abandoned and no rail service

discontinued unless the Board finds that the present or future public

convenience and necessity require or permit the abandonment or

discontinuance.

(b) Part 1152 contains regulations governing abandonment of, and

discontinuance of service over, rail lines. This part also sets forth

procedures for providing financial assistance to assure continued rail

freight service under 49 U.S.C. 10904, for acquiring rail lines for

alternate public use under 49 U.S.C. 10905, and for acquiring or using

a rail right-of-way for interim trail use and rail banking.

Sec. 1152.2 Definitions.

Unless otherwise provided in the text of the regulations, the

following definitions apply in this part:

(a) Account means an account in the Board's Uniform System of

Accounts for Railroad Companies (49 CFR part 1201).

(b) Act means the ICC Termination Act of 1995 (Pub. L. 104-88, 109

Stat. 803), as amended.

(c) Base Year means the latest 12-month period, ending no earlier

than 6 months prior to the filing of the abandonment or discontinuance

application, for which data have been collected at the branch level as

prescribed in Sec. 1152.30(b).

(d) Board means the Surface Transportation Board.

(e) Branch means a segment of line for which an application for

abandonment or discontinuance, pursuant to 49 U.S.C. 10903, has been

filed.

(f) Carrier means a railroad company or the trustee or trustees of

a railroad company subject to regulation under 49 U.S.C., Subtitle IV,

chapter 105.

(g) Designated state agency means the instrumentality created by a

state or designated by appropriate authority to administer or

coordinate its state rail plan.

(h) Forecast Year means the 12-month period, beginning with the

first day of the month in which the application is filed with the

Board, for which future revenues and costs are estimated.

(i) Form R-1 means the railroad's annual report filed with the

Board in accordance with the requirements of 49 U.S.C. 11145.

(j) Offeror means a shipper, a state, the United States, a local or

regional transportation authority, or any

[[Page 67884]]

financially responsible person offering rail service continuation

assistance under 49 U.S.C. 10904.

(k) URCS means the Uniform Railroad Costing System.

(l) Significant user means: (1) Each of the 10 rail patrons which

originated and/or received the largest number of carloads (or each

patron if there are less than 10); and

(2) Any other rail patron which originated and/or received 50 or

more carloads, on the line proposed for abandonment or discontinuance,

during the 12-month period preceding the month in which notice is given

of the abandonment or discontinuance application.

(m) Subsidy year means any 12-month period for which a subsidy

agreement has been negotiated and is in operation.

Subpart B--System Diagram

Sec. 1152.10 System diagram map.

(a) Each carrier shall prepare a diagram of its rail system on a

map, designating all lines in its system by the categories established

in paragraph (b) of this section. A Class III carrier shall either

prepare the aforementioned map of its rail system or file only a

narrative description of its lines that provides all of the information

required in this subpart.

(b) All lines in each carrier's rail system shall be separated into

the following categories:

(1) All lines or portions of lines which the carrier anticipates

will be the subject of an abandonment or discontinuance application to

be filed within the 3-year period following the date upon which the

diagram or narrative, or any amended diagram or narrative, is filed

with the Board;

(2) All lines or portions of lines which are potentially subject to

abandonment, defined as those which the carrier has under study and

believes may be the subject of a future abandonment application because

of either anticipated operating losses or excessive rehabilitation

costs, as compared to potential revenues;

(3) All lines or portions of lines for which an abandonment or

discontinuance application is pending before the Board on the date upon

which the diagram or narrative, or any amended diagram or narrative, is

filed with the Board;

(4) All lines or portions of lines which are being operated under

the rail service continuation provisions of 49 U.S.C. 10904 (and former

49 U.S.C. 10905) on the date upon which the diagram or narrative, or

any amended diagram or narrative, is filed with the Board; and

(5) All other lines or portions of lines which the carrier owns and

operates, directly or indirectly.

(c) The system diagram map shall be color-coded to show the 5

categories of lines as follows:

(1) Red shall designate those lines described in

Sec. 1152.10(b)(1);

(2) Green shall designate those lines described in

Sec. 1152.10(b)(2);

(3) Yellow shall designate those lines described in

Sec. 1152.10(b)(3);

(4) Brown shall designate those lines described in

Sec. 1152.10(b)(4); and

(5) Black or dark blue shall designate those lines described in

Sec. 1152.10(b)(5).

(d) The system diagram map shall also identify, and shall be drawn

to a scale sufficient to depict clearly, the location of:

(1) All state boundary lines;

(2) Boundaries of every county in which is situated a rail line

owned or operated by the carrier which is listed in categories 1 thru 4

(Sec. 1152.10(b)(1) thru (4));

(3) Every Standard Metropolitan Statistical Area (SMSA) any portion

of which is located within 5 air miles of a rail line owned or operated

by the carrier; and

(4) Every city outside an SMSA which has a population of 5,000 or

more persons (according to the latest published United States census

reports) and which has any portion located within 5 air miles of a rail

line owned or operated by the carrier. A series of interrelated maps

may be used where the system serves a very large or congested area. An

explanation of the interrelationship must be furnished.

Sec. 1152.11 Description of lines to accompany the system diagram map

or information to be contained in the narrative.

Each carrier required to file a system diagram map or narrative

shall list and describe, separately by category and within each

category by state, all lines or portions of lines identified on its

system diagram map or to be included in its narrative as falling within

categories 1 thru 3 (Sec. 1152.10(b)(1) thru (3)) as follows:

(a) Carrier's designation for each line (for example, the

Zanesville Secondary Track);

(b) State or states in which each line is located;

(c) County or counties in which each line is located;

(d) Mileposts delineating each line or portion of line; and

(e) Agency or terminal stations located on each line or portion of

line with milepost designations.

Sec. 1152.12 Filing and publication.

(a) Each carrier required to file a system diagram map or a

narrative shall file with the Board three copies of a complete and up-

dated color-coded system diagram map or narrative (identified by its

``AB number'') and the accompanying line descriptions in conformance

with the filing and publication requirements of this section. If a

revised map or narrative is filed, the line descriptions for the lines

which were revised must be filed.

(b) The color-coded system diagram map or narrative, any

amendments, and accompanying line descriptions shall be served upon the

Governor, the public service commission (or equivalent agency) and the

designated state agency of each state within which the carrier operates

or owns a line of railroad.

(c) The carrier shall: (1) Publish in a newspaper of general

circulation in each county containing category 1 through 3 lines or

lines being revised, a notice containing:

(i) A black-and-white copy of the system diagram map (or a portion

of the map clearly depicting its lines in that county); and

(ii) A description of each line (in the case of Class III carriers

only the line description is required);

(2) Post a copy of the newspaper notice:

(i) In each agency station or terminal on each line in categories 1

through 3 and on each line which has been revised; or

(ii) If there is no agency station on the line, at any station

through which business for the line is received or forwarded;

(3) Furnish, at reasonable cost, upon request of any interested

person, a copy of its system diagram map (either color-coded or black-

and-white) or narrative; and

(4) Notify interested persons of this availability through its

publication in the appropriate county newspaper.

(d) Each carrier required to file a system diagram map or narrative

shall file with the Board an affidavit of service and publication

stating the date each was accomplished. A copy of each newspaper notice

published shall be attached to the affidavit. The effective date of the

filing of the initial system diagram map or narrative and each amended

system diagram map or narrative as required in paragraph (a) of this

section shall be deemed to be the date upon which the Board receives

the affidavit required in this paragraph.

(e) The Board shall require republication of the notice if it is

found to be inadequate.

[[Page 67885]]

Sec. 1152.13 Amendment of the system diagram map or narrative.

(a) Each carrier shall be responsible for maintaining the

continuing accuracy of its system diagram map and the accompanying line

descriptions or narrative. Amendments may be filed at any time and will

be subject to all carrier filing and publication requirements of

Sec. 1152.12.

(b) By March 24, 1997, each carrier shall file with the Board a

revised and updated color-coded system diagram map and line

descriptions or narrative which shall be subject to the filing and

publication requirements of Sec. 1152.12. Thereafter, each carrier

shall file amendments as line designations change and update its map or

narrative, as appropriate. Also, each carrier shall file an updated or

amended map or narrative upon order of the Board. Each new rail carrier

shall comply with the requirements of this subsection within 60 days

after it becomes a carrier.

(c) The Board will reject an abandonment or discontinuance

application filed by a rail carrier if any part of the application

includes a line that has not been identified and described, by

amendment or otherwise, on the carrier's system diagram map or

narrative, as appropriate, as a line in category 1 (Sec. 1152.10(b)(1))

for at least 60 days.

Sec. 1152.14 Availability of data.

Each carrier shall provide to the designated state agency, upon

request, information concerning the net liquidation value (as defined

in Sec. 1152.34(c)) of any line placed in category 1

(Sec. 1152.10(b)(1)) on its system diagram map or narrative together

with a description of such a line and any appurtenant facilities and of

their condition.

Sec. 1152.15 Reservation of jurisdiction.

49 U.S.C. 10903(c)(1) authorizes the Board, at its discretion, to

provide for designation of lines as ``potentially subject to

abandonment'' under standards which vary by region of the United

States, by railroad, or by group of railroads. The Board expressly

reserves the right to adopt such varying standards in the future.

Subpart C--Procedures Governing Notice, Applications, Financial

Assistance, Acquisition for Public Use, and Trail Use

Sec. 1152.20 Notice of intent to abandon or discontinue service.

(a) Filing and publication requirements. An applicant shall give

Notice of Intent to file an abandonment or discontinuance application

by complying with the following procedures:

(1) Filing. Applicant must serve its Notice of Intent on the Board,

by certified letter, in the format prescribed in Sec. 1152.21. The

Notice shall be filed in accordance with the time requirements of

paragraph (b) of this section.

(2) Service. Applicant must serve, by first-class mail (unless

otherwise specified), its Notice of Intent upon:

(i) Significant users of the line;

(ii) The Governor (by certified mail) of each state directly

affected by the abandonment or discontinuance;

(iii) The Public Service Commission (or equivalent agency) in these

states;

(iv) The designated state agency in these states;

(v) The State Cooperative Extension Service in these states;

(vi) The U.S. Department of Transportation (Federal Railroad

Administration);

(vii) Department of Defense (Military Traffic Management Command,

Transportation Engineering Agency, Railroads for National Defense

Program);

(viii) The U.S. Department of Interior (Recreation Resources

Assistance Division, National Park Service);

(ix) The U.S. Railroad Retirement Board;

(x) The National Railroad Passenger Corporation (``Amtrak'') (if

Amtrak operates over the involved line);

(xi) The headquarters of the Railroad Labor Executives'

Association;

(xii) The U.S. Department of Agriculture, Chief of the Forest

Service; and

(xiii) The headquarters of all duly certified labor organizations

that represent employees on the affected rail line. For purposes of

this subsection ``directly affected states'' are those in which any

part of a line sought to be abandoned is located.

(3) Posting. Applicant must post a copy of its Notice of Intent at

each agency station and terminal on the line to be abandoned. (If there

are no agency stations on the line, the Notice of Intent should be

posted at any agency station through which business for the involved

line is received or forwarded.)

(4) Newspaper publication. Applicant must publish its Notice of

Intent at least once during each of 3 consecutive weeks in a newspaper

of general circulation in each county in which any part of the involved

line is located.

(b) Time limits. (1) The Notice of Intent must be served at least

15 days, but not more than 30 days, prior to the filing of the

abandonment application;

(2) The Notice must be posted and fully published within the 30-day

period prior to the filing of the application; and

(3) The Notice must be filed with the Board either concurrently

with service or when the Notice is first published (whichever occurs

first).

(c) Environmental and Historic Reports. Applicant must also submit

the Environmental and Historic Reports described at Secs. 1105.7 and

1105.8 at least 20 days prior to filing an application.

Sec. 1152.21 Form of notice.

The Notice of Intent to abandon or to discontinue service shall be

in the following form:

STB No. AB ________(Sub-No. ________)

Notice of Intent to Abandon or to Discontinue Service

(Name of Applicant) gives notice that on or about (insert date

application will be filed with the Board) it intends to file with

the Surface Transportation Board, Washington, D.C. 20423, an

application for permission for the abandonment of (the

discontinuance of service on), a line of railroad known as

____________ extending from railroad milepost near (station name) to

(the end of line or rail milepost) near (station name), which

traverses through United States Postal Service ZIP Codes (ZIP

Codes), a distance of ____________ miles, in [County(ies),

State(s)]. The line includes the stations of (list all stations on

the line in order of milepost number, indicating milepost location).

The reason(s) for the proposed abandonment (or discontinuance)

is (are) ____________ (explain briefly and clearly why the proposed

action is being undertaken by the applicant). Based on information

in our possession, the line (does) (does not) contain federally

granted rights-of-way. Any documentation in the railroad's

possession will be made available promptly to those requesting it.

This line of railroad has appeared on the system diagram map or

included in the narrative in category 1 since (insert date).

The interest of railroad employees will be protected by (specify

the appropriate conditions).

The application will include the applicant's entire case for

abandonment (or discontinuance) (case in chief). Any interested

person, after the application is filed on (insert date), may file

with the Surface Transportation Board written comments concerning

the proposed abandonment (or discontinuance) or protests to it.

These filings are due 45 days from the date of filing of the

application. All interested persons should be aware that following

any abandonment of rail service and salvage of the line, the line

may be suitable for other public use, including interim trail use.

Any request for a public use condition under 49 U.S.C. 10905

(Sec. 1152.28 of the Board's rules) and any request for a trail use

condition under 16 U.S.C. 1247(d) (Sec. 1152.29 of the Board's

rules) must also be filed within 45 days from the date of filing of

the application. Persons who may oppose the abandonment or

discontinuance but who

[[Page 67886]]

do not wish to participate fully in the process by appearing at any

oral hearings or by submitting verified statements of witnesses,

containing detailed evidence, should file comments. Persons

interested only in seeking public use or trail use conditions should

also file comments. Persons opposing the proposed abandonment or

discontinuance that do wish to participate actively and fully in the

process should file a protest.

Protests must contain that party's entire case in opposition

(case in chief) including the following:

(1) Protestant's name, address and business.

(2) A statement describing protestant's interest in the

proceeding including:

(i) A description of protestant's use of the line;

(ii) If protestant does not use the line, information concerning

the group or public interest it represents; and

(iii) If protestant's interest is limited to the retention of

service over a portion of the line, a description of the portion of

the line subject to protestant's interest (with milepost

designations if available) and evidence showing that the applicant

can operate the portion of the line profitably, including an

appropriate return on its investment for those operations.

(3) Specific reasons why protestant opposes the application

including information regarding protestant's reliance on the

involved service [this information must be supported by affidavits

of persons with personal knowledge of the fact(s)].

(4) Any rebuttal of material submitted by applicant.

In addition, a commenting party or protestant may provide a

statement of position and evidence regarding:

(i) Intent to offer financial assistance pursuant to 49 U.S.C.

10904;

(ii) Environmental impact;

(iii) Impact on rural and community development;

(iv) Recommended provisions for protection of the interests of

employees;

(v) Suitability of the properties for other public purposes

pursuant to 49 U.S.C. 10905; and

(vi) Prospective use of the right-of-way for interim trail use

and rail banking under 16 U.S.C. 1247(d) and Sec. 1152.29.

A protest may demonstrate that: (1) the protestant filed a feeder

line application under 49 U.S.C. 10907; (2) the feeder line

application involves any portion of the rail line involved in the

abandonment or discontinuance application; (3) the feeder line

application was filed prior to the date the abandonment or

discontinuance application was filed; and (4) the feeder line

application is pending before the Board.

Written comments and protests will be considered by the Board in

determining what disposition to make of the application. The

commenting party or protestant may participate in the proceeding as

its interests may appear.

If an oral hearing is desired, the requester must make a request

for an oral hearing and provide reasons why an oral hearing is

necessary. Oral hearing requests must be filed with the Board no

later than 10 days after the application is filed.

Those parties filing protests to the proposed abandonment (or

discontinuance) should be prepared to participate actively either in

an oral hearing or through the submission of their entire opposition

case in the form of verified statements and arguments at the time

they file a protest. Parties seeking information concerning the

filing of protests should refer to Sec. 1152.25.

Written comments and protests, including all requests for public

use and trail use conditions, should indicate the proceeding

designation STB No. AB ________ (Sub-No. ________) and must be filed

with the Secretary, Surface Transportation Board, Washington, DC

20423, no later than (insert the date 45 days after the date

applicant intends to file its application). Interested persons may

file a written comment or protest with the Board to become a party

to this abandonment (or discontinuance) proceeding. A copy of each

written comment or protest shall be served upon the representative

of the applicant (insert name, address, and phone number). The

original and 10 copies of all comments or protests shall be filed

with the Board with a certificate of service. Except as otherwise

set forth in part 1152, each document filed with the Board must be

served on all parties to the abandonment proceeding. 49 CFR

1104.12(a).

The line sought to be abandoned (or discontinued) will be

available for subsidy or sale for continued rail use, if the Board

decides to permit the abandonment (or discontinuance), in accordance

with applicable laws and regulations (49 U.S.C. 10904 and 49 CFR

1152.27). No subsidy arrangement approved under 49 U.S.C. 10904

shall remain in effect for more than 1 year unless otherwise

mutually agreed by the parties (49 U.S.C. 10904(f)(4)(B)). Applicant

will promptly provide upon request to each interested party an

estimate of the subsidy and minimum purchase price required to keep

the line in operation. The carrier's representative to whom

inquiries may be made concerning sale or subsidy terms is (insert

name and business address).

Persons seeking further information concerning abandonment

procedures may contact the Surface Transportation Board or refer to

the full abandonment or discontinuance regulations at 49 CFR part

1152. Questions concerning environmental issues may be directed to

the Board's Section of Environmental Analysis.

A copy of the application will be available for public

inspection on or after (insert date abandonment application is to be

filed with Board) at each agency station or terminal on the line

proposed to be abandoned or discontinued [if there is no agency

station on the line, the application shall be deposited at any

agency station through which business for the line is received or

forwarded (insert name, address, location, and business hours)]. The

carrier shall furnish a copy of the application to any interested

person proposing to file a protest or comment, upon request.

An environmental assessment (EA) (or environmental impact

statement (EIS), if necessary) prepared by the Section of

Environmental Analysis will be served upon all parties of record and

upon any agencies or other persons who commented during its

preparation. Any other persons who would like to obtain a copy of

the EA (or EIS) may contact the Section of Environmental Analysis.

EAs in these abandonment proceedings normally will be made available

within 33 days of the filing of the application. The deadline for

submission of comments on the EA will generally be within 30 days of

its service. The comments received will be addressed in the Board's

decision. A supplemental EA or EIS may be issued where appropriate.

Sec. 1152.22 Contents of application.

Applications for the abandonment of railroad lines or the

discontinuance of rail service shall contain the following information,

including workpapers and supporting documents, and each paragraph (a)

through (j) of this section shall be attested to by a person having

personal knowledge of the matters contained therein:

(a) General. (1) Exact name of applicant.

(2) Whether applicant is a common carrier by railroad subject to 49

U.S.C. Subtitle IV, chapter 105.

(3) Relief sought (abandonment of line or discontinuance of

service).

(4) Detailed map of the subject line on a sheet not larger than

8 x 10\1/2\ inches, drawn to scale, and with the scale shown thereon.

The map must show, in clear relief, the exact location of the rail line

to be abandoned or over which service is to be discontinued and its

relation to other rail lines in the area, highways, water routes, and

population centers.

(5) Reference to inclusion of the rail line to be abandoned or over

which service is to be discontinued on the carrier's system diagram map

or narrative, in compliance with Secs. 1152.10 through 1152.13, and the

date upon which such line was first listed on the system diagram map or

included in the narrative in category 1 in accordance with

Sec. 1152.10(b)(1). A copy of the line description which accompanies

the system diagram map shall also be submitted.

(6) Detailed statement of reasons for filing application.

(7) Name, title, and address of representative of applicant to whom

correspondence should be sent.

(8) List of all United States Postal Service ZIP Codes that the

line proposed for abandonment traverses.

(b) Condition of properties. The present physical condition of the

line including any operating restrictions and estimate of deferred

maintenance and rehabilitation costs (e.g., number of ties that need

replacing, miles of rail that need replacing and/or new ballast, bridge

repairs or replacement needed,

[[Page 67887]]

and estimated labor expenses necessary to upgrade the line to minimum

Federal Railroad Administration class 1 safety standards). The bases

for the estimates shall be stated with particularity, and workpapers

shall be filed with the application.

(c) Service provided. Description of the service performed on the

line during the Base Year (as defined by Sec. 1152.2(c)), including the

actual:

(1) Number of trains operated and their frequency.

(2) Miles of track operated (include main line and all railroad-

owned sidings).

(3) Average number of locomotive units operated.

(4) Total tonnage and carloads by each commodity group on the line.

(5) Overhead or bridge traffic by carload commodity group that will

not be retained by the carrier.

(6) Average crew size.

(7) Level of maintenance.

(8) Any important changes in train service undertaken in the 2

calendar years immediately preceding the filing of the application.

(9) Reasons for decline in traffic, if any, in the best judgment of

applicant.

(d) Revenue and cost data. (1) Computation of the revenues

attributable and avoidable costs for the line to be abandoned for the

Base Year (as defined by Sec. 1152.2(c) and to the extent such branch

level data are available), in accordance with the methodology

prescribed in Secs. 1152.31 through 1152.33, as applicable, and

submitted in the form called for in Sec. 1152.36, as Exhibit 1.

(2) The carrier shall compute an estimate of the future revenues

attributable, avoidable costs and reasonable return on the value for

the line to be abandoned, for the Forecast Year (as defined in

Sec. 1152.2(h)) in the form called for in Exhibit 1. The carrier shall

fully support and document all dollar amounts shown in the Forecast

Year column including an explanation of the rationale and key

assumptions used to determine the Forecast Year amounts.

(3) The carrier shall also compute an ``Estimated Subsidy Payment''

for the Base Year in the form called for in Exhibit 1 and an alternate

payment to reflect:

(i) Increases or decreases in attributable revenues and avoidable

costs projected for the subsidy year; and

(ii) An estimate, in reasonable detail, of the cash income tax

reductions, Federal and state, to be realized in the subsidy year. The

bases for the adjustment, e.g., rate increase, changes in traffic

level, necessary maintenance to comply with minimum Federal Railroad

Administration class 1 safety standards, shall be stated with

particularity.

(e) Rural and community impact. (1) The name and population

(identify source and date of figures) of each community in which a

station on the line is located.

(2) Identification of significant users, as defined in

Sec. 1152.2(l), by name, address, principal commodity, and by tonnage

and carloads for each of the 2 calendar years immediately preceding the

filing of the abandonment or discontinuance application, for that part

of the current year for which information is available, and for the

Base Year. In addition, the total tonnage and carloads for each

commodity group originating and/or terminating on the line segment

shall also be shown for the same time periods as those of the

significant users.

(3) General description of the alternate sources of transportation

service (rail, motor, water, air) available, and the highway network in

the proximate area.

(4) Statement of whether the properties proposed to be abandoned

are appropriate for use for other public purposes, including roads or

highways, other forms of mass transportation, conservation, energy

production or transmission, or recreation. If the applicant is aware of

any restriction on the title to the property, including any

reversionary interest, which would affect the transfer of title or the

use of property for other than rail purposes, this shall be disclosed.

(f) Environmental impact. The applicant shall submit information

regarding the environmental impact of the proposed abandonment or

discontinuance in compliance with Secs. 1105.7 and 1105.8. If certain

information required by the environmental regulations duplicates

information required elsewhere in the application, the environmental

information requirements may be met by a specific reference to the

location of the information elsewhere in the application.

(g) Passenger service. If passenger service is provided on the

line, the applicant shall state whether appropriate steps have been

taken for discontinuance pursuant to the Rail Passenger Service Act.

(45 U.S.C. 501 et seq.)

(h) Additional information. The applicant shall submit such

additional information to support its application as the Board may

require.

(i) Draft Federal Register Notice. The applicant shall submit a

draft notice of its application to be published by the Board. In

addition to the regular number of copies that must be filed with the

Board, the applicant must submit a copy of the draft notice as data

contained on a computer diskette compatible with the Board's current

word processing capabilities. The Board will publish the notice in the

Federal Register within 20 days of the application's filing with the

Board. The draft notice shall be in the form set forth below:

STB No. AB-________ (Sub-No. ________)

Notice of Application to Abandon or to Discontinue Service

On (insert date application was filed with the Board) (name of

applicant) filed with the Surface Transportation Board, Washington,

D.C. 20423, an application for permission for the abandonment of

(the discontinuance of service on) a line of railroad known as

____________ extending from railroad milepost near (station name) to

(the end of line or rail milepost) near (station name), a distance

of ____________ miles, in [County(ies), State(s)]. The line includes

the stations of (list all stations on the line in order of milepost

number, indicating milepost location) and traverses through

____________ (ZIP Codes) United States Postal Service ZIP Codes.

The line (does) (does not) contain federally granted rights-of-

way. Any documentation in the railroad's possession will be made

available promptly to those requesting it. The applicant's entire

case for abandonment (or discontinuance) (case in chief) was filed

with the application.

This line of railroad has appeared on the applicant's system

diagram map or has been included in its narrative in category 1

since (insert date).

The interest of railroad employees will be protected by (specify

the appropriate conditions).

Any interested person may file with the Surface Transportation

Board written comments concerning the proposed abandonment (or

discontinuance) or protests (including the protestant's entire

opposition case), within 45 days after the application is filed. All

interested persons should be aware that following any abandonment of

rail service and salvage of the line, the line may be suitable for

other public use, including interim trail use. Any request for a

public use condition under 49 U.S.C. 10905 (Sec. 1152.28 of the

Board's rules) and any request for a trail use condition under 16

U.S.C. 1247(d) (Sec. 1152.29 of the Board's rules) must be filed

within 45 days after the application is filed. Persons who may

oppose the abandonment or discontinuance but who do not wish to

participate fully in the process by appearing at any oral hearings

or by submitting verified statements of witnesses, containing

detailed evidence should file comments. Persons interested only in

seeking public use or trail use conditions should also file

comments. Persons opposing the proposed abandonment or

discontinuance that do wish to participate actively and fully in the

process should file a protest.

In addition, a commenting party or protestant may provide:

[[Page 67888]]

(i) An offer of financial assistance, pursuant to 49 U.S.C.

10904 (due 120 days after the application is filed or 10 days after

the application is granted by the Board, whichever occurs sooner);

(ii) Recommended provisions for protection of the interests of

employees;

(iii) A request for a public use condition under 49 U.S.C.

10905; and

(iv) A statement pertaining to prospective use of the right-of-

way for interim trail use and rail banking under 16 U.S.C. 1247(d)

and Sec. 1152.29.

Parties seeking information concerning the filing of protests

should refer to Sec. 1152.25.

Written comments and protests, including all requests for public

use and trail use conditions, must indicate the proceeding

designation STB No. AB-____ (Sub-No. ____) and should be filed with

the Secretary, Surface Transportation Board (Board), Washington, DC

20423, no later than (insert the date 45 days after the date

applicant intends to file its application). Interested persons may

file a written comment or protest with the Board to become a party

to this abandonment (or discontinuance) proceeding. A copy of each

written comment or protest shall be served upon the representative

of the applicant (insert name, address, and phone number). The

original and 10 copies of all comments or protests shall be filed

with the Board with a certificate of service. Except as otherwise

set forth in part 1152, every document filed with the Board must be

served on all parties to the abandonment proceeding. 49 CFR

1104.12(a).

The line sought to be abandoned (or discontinued) will be

available for subsidy or sale for continued rail use, if the Board

decides to permit the abandonment (or discontinuance), in accordance

with applicable laws and regulations (49 U.S.C. 10904 and 49 CFR

1152.27). No subsidy arrangement approved under 49 U.S.C. 10904

shall remain in effect for more than 1 year unless otherwise

mutually agreed by the parties (49 U.S.C. 10904(f)(4)(B)). Applicant

will promptly provide upon request to each interested party an

estimate of the subsidy and minimum purchase price required to keep

the line in operation. The carrier's representative to whom

inquiries may be made concerning sale or subsidy terms is (insert

name and business address).

Persons seeking further information concerning abandonment

procedures may contact the Surface Transportation Board or refer to

the full abandonment or discontinuance regulations at 49 CFR part

1152. Questions concerning environmental issues may be directed to

the Board's Section of Environmental Analysis.

An environmental assessment (EA) (or environmental impact

statement (EIS), if necessary) prepared by the Section of

Environmental Analysis will be served upon all parties of record and

upon any agencies or other persons who commented during its

preparation. Any other persons who would like to obtain a copy of

the EA (or EIS) may contact the Section of Environmental Analysis.

EAs in these abandonment proceedings normally will be made available

within 33 days of the filing of the application. The deadline for

submission of comments on the EA will generally be within 30 days of

its service. The comments received will be addressed in the Board's

decision. A supplemental EA or EIS may be issued where appropriate.

(j) Verification. The original application shall be executed and

verified in the form set forth below by an officer of the carrier

having knowledge of the facts and matters relied upon.

Verification

State of ____________ ss.

County of ____________

____________ (Name of affiant) makes oath and says that (s)he

is the ____________ (title of affiant) of the ____________ (name of

applicant) applicant herein; that (s)he has been authorized by the

applicant (or as appropriate, a court) to verify and file with the

Surface Transportation Board the foregoing application in STB AB-

____ (Sub-No. ____); that (s)he has carefully examined all of the

statements in the application as well as the exhibits attached

thereto and made a part thereof; that (s)he has knowledge of the

facts and matters relied upon in the application; and that all

representations set forth therein are true and correct to the best

of his(her) knowledge, information, and belief.

(Signature)

Subscribed and sworn to before me ____________ in and for the

State and County above named, this ____ day of ____, 19__.

My commission expires

Sec. 1152.23 [Reserved]

Sec. 1152.24 Filing and service of application.

(a) An original and 10 copies of applications, typewritten or

printed on paper approximately 8\1/2\ inches by 11 inches with 1\1/2\

inch left margin, shall be filed with the Secretary of the Surface

Transportation Board, Washington, DC 20423. The original shall bear the

date and signature and shall be complete in itself; the signature may

be stamped or typed and the notarial seal may be omitted on the copies.

A check or money order payable to the Surface Transportation Board must

also be submitted to cover the applicable filing fee. If the applicant

carrier is in bankruptcy, the application shall also be filed on the

bankruptcy court.

(b) The applicant shall tender with its application an affidavit

attesting to its compliance with the notice requirement of

Sec. 1152.20. The affidavit shall include the dates of service,

posting, and publication of the notice.

(c) When the application is filed with the Board, the applicant

shall serve, by first class mail, a copy on the Governor, the Public

Service Commission (or equivalent agency), and the designated state

agency of each state in which any part of the line of railroad sought

to be abandoned or discontinued is situated. A copy of the application

will be available for public inspection, on or after the date the

abandonment application is filed with the Board, at each agency station

or terminal on the line proposed to be abandoned or discontinued (if

there is no agency station on the line, the application shall be

deposited at any agency station through which business for the line is

received or forwarded). A certificate of service shall be promptly

filed with the Board.

(d) The applicant shall promptly furnish by first class mail a copy

of the application to any interested person proposing to file a written

comment or protest upon request. A certificate of service shall

promptly be filed with the Board.

(e)(1) The Board shall reject any abandonment or discontinuance

application which does not substantially conform to the regulations in

this subpart C regarding notice, form, and content, or which applies to

a line which has not properly been published on the carrier's system

diagram map (or included in a narrative in the case of a Class III

carrier), in conformance with the regulations of subpart B of this

part.

(2) Upon the filing of an abandonment or discontinuance

application, the Board will review the application and determine

whether it conforms with all applicable regulations. If the application

is substantially incomplete or its filing otherwise defective, the

Board shall reject the application for stated reasons by order (which

order will be administratively final) within 20 days from the date of

filing of the application. If the Board does not reject the

application, notice of the filing of the application shall be published

in the Federal Register by the Board within 20 days of the filing of

the application.

(3) If the application is rejected, a revised application may be

submitted, and the Board will determine whether the resubmitted

application conforms with all prescribed regulations. A properly

revised application submitted within 60 days of the order rejecting the

incomplete or improper application need not be subjected to new notice

and publication under Sec. 1152.20, unless the defect causing the

rejection was in the notice and/or publication. A revised application

submitted after such 60-day period must be newly published and noticed.

(4) The resubmission of an abandonment or discontinuance

application shall be considered a de novo filing for the purposes of

computation of the time period for filing an offer of financial

assistance under 49

[[Page 67889]]

U.S.C. 10904, and for other time periods prescribed in the regulations

contained in this part (49 CFR part 1152), provided, that a resubmitted

application is deemed complete and proper.

(5) An applicant may seek waiver of specific regulations listed in

subpart C of this part by filing a petition for waiver with the Board.

A decision by the Director of the Office of Proceedings granting or

denying a waiver petition will be issued within 30 days of the date the

petition is filed. Appeals from the Director's decision will be decided

by the entire Board. If waiver is not obtained prior to the filing of

the application, the application may be subject to rejection under

paragraphs (e) (1) and (2) of this section.

(f) As provided in Sec. 1152.29(e)(2), rail carriers authorized to

abandon a line under 49 U.S.C. 10903 must file with the Board a notice

that abandonment has been consummated.

Sec. 1152.25 Participation in abandonment or discontinuance

proceedings.

(a) Public participation. (1) Protests and comments. Interested

persons may become parties to an abandonment or discontinuance

proceeding by filing written comments or protests with the Board. Any

request for a public use condition under 49 U.S.C. 10905 (Sec. 1152.28

of the Board's rules) and any request for a trail use condition under

16 U.S.C. 1247(d) (Sec. 1152.29 of the Board's rules) must be included

in these filings. Persons who may oppose the abandonment or

discontinuance, but who do not wish to participate fully in the process

by appearing at any oral hearings or by submitting verified statements

of witnesses containing detailed evidence, should file comments.

Persons interested only in seeking public use or trail use conditions

should also file comments. Persons opposing the proposed abandonment or

discontinuance that do wish to participate actively and fully in the

process should file a protest. Protests shall include all evidence and

argument in support of protestant's position (protestant's case in

chief). Protests must contain the following information:

(i) Protestant's name, address and business.

(ii) A statement describing protestant's interest in the proceeding

including:

(A) A description of protestant's use of the line;

(B) If protestant does not use the line, information concerning the

group or public interest it represents; and

(C) If protestant's interest is limited to the retention of service

over a portion of the line, a description of the portion of the line

subject to protestant's interest (with milepost designations if

available) and evidence showing that the applicant can operate the

portion of the line profitably, including an appropriate return on its

investment for those operations.

(iii) Specific reasons why protestant opposes the application

including information regarding protestant's reliance on the involved

service (this information must be supported by affidavits of persons

with personal knowledge of the fact(s)).

(iv) Any rebuttal of material submitted by applicant.

(v) Any request for a public use condition under 49 U.S.C. 10905

(Sec. 1152.28 of the Board's rules) and any request for a trail use

condition under 16 U.S.C. 1247(d) (Sec. 1152.29 of the Board's rules).

(2) Additional information. In addition to the information required

in paragraph (a) (1) of this section, a commenting party or protestant

may provide a statement of position and a summary of evidence

regarding:

(i) Intent to offer financial assistance under 49 U.S.C. 10904;

(ii) Environmental impact;

(iii) Impact on rural and community development;

(iv) Recommended provisions for protection of the interests of

employees;

(v) A request for a public use condition under 49 U.S.C. 10905; and

(vi) Prospective use of the right-of-way for interim trail use and

rail banking under 16 U.S.C. 1247(d) and 49 CFR 1152.29.

(3) Feeder line application for all or part of the line subject to

the abandonment application. In addition to the information required in

paragraphs (a)(1) and (2) of this section, a commenting party or

protestant must provide information that:

(i) The protestant filed a feeder line application under 49 U.S.C.

10907 (or former 49 U.S.C. 10910);

(ii) The feeder line application involves any portion of the rail

line involved in the abandonment or discontinuance application;

(iii) The feeder line application was filed prior to the date the

abandonment or discontinuance application was filed; and

(iv) The feeder line application is pending before the Board.

(b) Employee or employee representative participation. Employees or

their representatives may file protests or comments to an application.

However, because the Board will impose employee protective conditions

under 49 U.S.C. 10903(b)(2) if an application is granted, employees and

their representatives need not file comments or protests seeking this

protection.

(c) Filing and service of written comments, protests, along with

evidence and argument, and replies. (1) Written comments and protests,

as well as public use and trail use requests, shall be filed with the

Board (the Secretary, Surface Transportation Board, Washington, DC

20423) within 45 days of the filing with the Board of an abandonment or

discontinuance application.

(2) An original and 10 copies of each written comment or protest

shall be filed with the Board.

(3) A copy of each written comment or protest shall be served on

applicant or its representative at the time of filing with the Board.

If the applicant carrier is in bankruptcy, each comment or protest

shall also be filed on the Bankruptcy Court. Each filing shall contain

a certificate of service.

(4) Replies or rebuttal to written comments and protests shall be

filed and served by applicants no later than 60 days after the filing

of the application. An original and 10 copies of such replies shall be

filed with the Board.

(d) Time limits. (1) Pleadings, requests or other papers or

documents (including any comments or protests and any appeal from a

Board decision) required or permitted to be filed under this part must

be received for filing at the Board's Offices at Washington, DC within

the time limits, if any, for such filing. The date of receipt at the

Board and not the date of deposit in the mail is determinative,

provided, however, that if such document is mailed by certified,

registered, or express mail, postmarked at least 3 days prior to the

due date, it will be accepted as timely filed.

(2) In computing any time period prescribed or allowed by this

part, the day of the act, event, or default after which the designated

period of time begins to run is not to be included.

(3) Any filing under this part which falls due on a Saturday,

Sunday, or a legal holiday in the District of Columbia, may be filed at

the Board by the end of the next day which is neither a Saturday,

Sunday, nor a holiday, except as indicated in paragraph (d)(4) of this

section. A half holiday shall not be considered as a holiday.

(4) Offers of financial assistance made pursuant to Sec. 1152.27(c)

must be filed on or before their statutory or regulatory due date as

computed in paragraph (d)(2) of this section, regardless of whether

that date is a Saturday, Sunday,

[[Page 67890]]

or a legal holiday in the District of Columbia.

(5) The Board will reject any pleading filed after its due date

unless good cause is shown why the pleading is filed late.

(6) Oral Hearings: (i) If the Board decides to hold an oral

hearing, the oral hearing shall be for the primary purpose of cross

examination of witnesses filing verified statements in the proceeding.

Any direct testimony, other than applicant's rebuttal evidence, shall

be received at the discretion of the hearing officer.

(ii) In addition to that contained in the application, the

submission of written evidence prior to the commencement of the hearing

shall be established by the Board.

(iii) Post hearing legal briefs shall be due 10 days after the

close of the oral hearing, or at an earlier date if established at the

hearing by the hearing officer.

(e) Appellate procedures. (1) Scope of rule. Except as specifically

indicated below, these appellate procedures are to be followed in

abandonment and discontinuance proceedings in lieu of the general

procedures at 49 CFR 1115. Appeals of initial decisions of the Director

of the Office of Proceedings determining:

(i) Whether offers of financial assistance satisfy the standard of

49 U.S.C. 10904(d) for purposes of instituting negotiations or, in

exemption proceedings, for purposes of partial revocation and

instituting negotiations;

(ii) Whether partially to revoke or to reopen abandonment

exemptions authorized, respectively, under 49 U.S.C. 10502 and 49 CFR

part 1152 subpart F for the purpose of imposing public use conditions

under the criteria in 49 CFR 1152.28 and/or conditions limiting salvage

of the rail properties for environmental and historic preservation

purposes; and

(iii) The applicability and administration of the Trails Act [16

U.S.C. 1247(d)] in abandonment proceedings under 49 U.S.C. 10903 (and

abandonment exemption proceedings), issued pursuant to delegations of

authority at 49 CFR 1011.8(c) (4) and (5), will be acted on by the

entire Board as set forth at 49 CFR 1011.2(a)(7). An original and 10

copies of all appeals, and replies to appeals, under this section must

be filed with the Board.

(2) Appeals criteria. Appeals to the Board's decision in

abandonment or discontinuance proceedings will not be entertained.

Those decisions are administratively final upon the date they are

served.

(i) Parties seeking further administrative action may file a

petition to reopen the proceeding under paragraph (e)(4) of this

section. If an abandonment or discontinuance is granted and a party

wishes the Board to have the opportunity to consider a petition to

reopen before the abandonment or discontinuance authorization becomes

effective, it must file its petition within 15 days after the

administratively final decision is served together with a request for a

stay of effectiveness under paragraph (e)(7) of this section. If such a

petition to reopen and stay request is received within that 15-day

period, any replies to the petition to reopen must be filed no later

than 25 days after the date the decision is served, and any reply to

the stay request must reach the Board no later than 5 days after the

stay request is filed.

(ii) The Board will grant a petition to reopen only upon a showing

that the action would be affected materially because of new evidence,

changed circumstances, or material error.

(3) Form. A petition to reopen and any reply shall not exceed 30

pages in length, including the index of subject matter, argument, and

appendices or other attachments.

(4) Petitions to reopen administratively final actions. A person

may file a petition to reopen any administratively final action of the

Board. A petition to reopen shall state in detail the respects in which

the proceeding involves material error, new evidence, or substantially

changed circumstances. An original and 10 copies of such petitions must

be filed with the Board.

(5) Judicial review: (i) Parties may seek judicial review of a

Board action in an abandonment or discontinuance proceeding on the day

the action of the Board becomes final.

(ii) If a petition seeking reopening is filed under this section,

before or after a petition seeking judicial review is filed with the

courts, the Board will act upon the petition after advising the court

of its pendency unless action might interfere with the court's

jurisdiction.

(6) Petitions to vacate. In the event of procedural defects (such

as the loss of a properly filed protest, the failure of the applicant

to afford the public the requisite notice of its proposed abandonment,

etc.), the Board will entertain petitions to vacate the abandonment or

discontinuance authorization. An original and 10 copies of these

petitions to vacate must be filed with the Board.

(7) Petitions to stay. (i) The filing of a petition to reopen shall

not stay the effect of a prior action. An original and 10 copies of any

petitions to stay must be filed with the Board.

(ii) A petition to reopen an administratively final action may be

accompanied by a petition for a stay of the effectiveness of the

abandonment or discontinuance. As provided in paragraph (e)(2) of this

section, a petition to reopen must be accompanied by a stay request if

the party wishes the Board to have the opportunity to consider the

petition to reopen before the abandonment or discontinuance

authorization becomes final.

(iii) A party may petition for a stay of the effectiveness of

abandonment or discontinuance authorization pending a request for

judicial review. The reasons for the desired relief shall be stated in

the petition, and the petition shall be filed not less than 15 days

prior to the effective date of the abandonment authorization. No reply

need be filed. If a party elects to file a reply, the reply must reach

the Board no later than 5 days after the petition is filed.

Sec. 1152.26 Board determination under 49 U.S.C. 10903.

(a) The following schedule shall govern the process for Board

consideration and decisions in abandonment and discontinuance

application proceedings from the time the application is filed until

the time of the Board's decision on the merits:

Day 0--Application filed, including applicant's case in chief.

Day 10--Due date for oral hearing requests.

Day 15--Due date for Board decision on oral hearing requests.

Day 20--Due date for Notice of Application to be published in the

Federal Register.

Day 45--Due date for protests and comments, including opposition case

in chief, and for public use and trail use requests.

Day 60--Due date for applicant's reply to opposition case and for

applicant's response to trail use requests.

Day 110--Due date for service of decision on the merits.

Day 120--Due date for offers of financial assistance, except that if an

application has been granted by decision issued sooner than Day 110,

the offer of financial assistance shall be due 10 days after service of

the decision granting the application.

(b) If an application for abandonment or discontinuance is filed by

a bankrupt railroad, the Board shall base its decision (Report to the

Bankruptcy Court) on the application and any responses to the

application that are filed. In each such instance, the Board shall

establish a reasonable period of

[[Page 67891]]

time for filing responses to the application so that public input can

be included in the Board's decision (Report) and so that the Board will

be able to meet a deadline imposed or requested by the Bankruptcy

Court.

Sec. 1152.27 Financial assistance procedures.

(a) Provision of information. An applicant must provide promptly

upon request to a party considering an offer of financial assistance to

continue existing rail service, and concurrently to the Board, the

following:

(1)(i) In an application or petition for exemption proceeding, an

estimate of the annual subsidy and minimum purchase price required to

keep the line or a portion of the line in operation;

(ii) In a class exemption proceeding, either an estimate of the

annual subsidy or the minimum purchase price, depending upon the type

of financial assistance indicated in the potential offeror's formal

expression of intent submitted under paragraph (c)(2)(i) of this

section;

(2) Its most recent reports on the physical condition of the

involved line; and

(3) Traffic, revenue, and other data necessary to determine the

amount of annual financial assistance that would be required to

continue rail transportation over that part of the railroad line. In an

exemption proceeding, the data to be provided must at a minimum include

the carrier's estimate of the net liquidation value of the line, with

supporting data reflecting available real estate appraisals,

assessments of the quality and quantity of track materials in a line,

and removal cost estimates (including the cost of transporting removed

materials to point of sale or point of storage for relay use), and, if

an offer of subsidy is contemplated, an estimate of the cost of

rehabilitating the line to Federal Railroad Administration class 1

Safety Standards (49 CFR part 213).

(b) Federal Register notice. (1) Abandonment and discontinuance

applications. The Federal Register publication, which gives notice of

the filing of the application 20 days after the application is filed,

will serve as notice to persons intending to offer financial assistance

to assure continued rail service under 49 U.S.C. 10904 and these

regulations as they relate to abandonment and discontinuance

applications. Offers of financial assistance will be due 120 days after

the application is filed or 10 days after a decision granting the

application is served, whichever occurs sooner.

(2) Exemption proceedings. (i) If a petition for individual

exemption from the prior approval requirements of 49 U.S.C. 10903 is

filed with the Board for abandonment or discontinuance of a line of

railroad, the Board will publish notice of the petition in the Federal

Register within 20 days of the filing of the petition. The Federal

Register publication will serve as notice to persons with a potential

interest in providing financial assistance to assure continued rail

service on the line under 49 U.S.C. 10904 and these regulations as they

relate to exempt abandonments and discontinuances. Offers of financial

assistance will be due 120 days after the filing of the petition for

exemption or 10 days after service of a Board decision granting the

exemption, whichever occurs sooner.

(ii) If a notice of exemption is filed under the class exemption,

the Board will publish notice of the exemption in the Federal Register

within 20 days of filing. The Federal Register publication will serve

as notice to persons with a potential interest in providing financial

assistance to assure continued rail service on the line under 49 U.S.C.

10904 and these regulations as they relate to exempt abandonments and

discontinuances. Offers of financial assistance will be due no later

than 30 days after the date of the Federal Register publication giving

notice of the exemption.

(c) Submission of financial assistance offer. (1) Abandonment and

discontinuance applications and petitions for exemption. (i) Service

and filing. An offeror must serve its offer of assistance on the

carrier owning and operating the line and all parties to the

abandonment or discontinuance application or exemption proceeding. The

offer must be filed concurrently with the Secretary, Surface

Transportation Board, Washington, DC 20423.

(A) An offer may be filed and served at any time after the filing

of the abandonment or discontinuance application or petition for

exemption. Once a decision is served granting an application or

petition for exemption, however, the Board must be notified that an

offer has previously been submitted.

(B) An offer, or notification of a previously filed offer, must be

filed and served no later than 10 days after service of the Board

decision granting the application or petition for exemption. This

filing and service is subject to the requirements of 49 CFR 1152.25

(d)(1), (d)(2), and (d)(4).

(C) If, after a bona fide request, applicant or petitioner has

failed to provide a potential offeror promptly with the information

required under paragraph (a) of this section and if that information is

not contained in the application or petition, the Board will entertain

petitions to toll the 10-day period for submitting offers of financial

assistance under paragraph (c)(1) of this section. Petitions must be

filed with the Board within 5 days after service of the decision

granting the application or petition for exemption. Petitions should

include copies of the prior written request for information or an

accurate outline of the specific information that was orally requested.

Replies to these petitions must be filed within 10 days after service

of the decision granting the application or petition for exemption.

These petitions and replies must be filed on or before their actual due

date under 49 CFR 1152.25(d)(4). The Board will issue a decision on

petitions within 15 days after service of the decision granting the

application or petition for exemption.

(ii) Contents of offer. The offeror shall set forth its offer in

detail. The offer must:

(A) Identify the line, or the portion of the line, in question;

(B) Demonstrate that the offeror is financially responsible; that

is, that it has or within a reasonable time will have the financial

resources to fulfill proposed contractual obligations; governmental

entities will be presumed to be financially responsible; and

(C) Explain the disparity between the offeror's purchase price or

subsidy if it is less than the carrier's estimate under paragraph

(a)(1) of this section, and explain how the offer of subsidy or

purchase is calculated.

(2) Class exemption proceedings. (i) Expression of intent to file

offer. Persons with a potential interest in providing financial

assistance must, no later than 10 days after the Federal Register

publication described in paragraph (b)(2)(ii) of this section, submit

to the carrier and the Board a formal expression of their intent to

file an offer of financial assistance, indicating the type of financial

assistance they wish to provide (i.e., subsidy or purchase). Such

submissions are subject to the filing requirements of

Sec. 1152.25(d)(1) through (d)(3). Submission of a formal expression of

intent under this subsection will automatically stay the effective date

of the notice of exemption under the class exemption for 40 days

(normally, this will be 10 days beyond the date stated in the Federal

Register publication).

(ii) Service and filing. An offeror must serve its offer of

assistance on the carrier that instituted the exempt filing as well

[[Page 67892]]

as all other parties to the proceeding. The offer must be filed

concurrently with the Secretary, Surface Transportation Board,

Washington, DC 20423.

(A) An offer may be filed and served at any time after the filing

of the notice of exemption. Once a notice of exemption is published in

the Federal Register, however, the Board must be notified that an offer

has previously been submitted.

(B) An offer, or notification of a previously filed offer, must be

filed and served no later than 30 days after the Federal Register

publication described in paragraph (b)(2)(ii) of this section. This

filing and service is subject to the requirements of 49 CFR 1152.25

(d)(1), (d)(2), and (d)(4).

(C) If, after a bona fide request, applicant has failed to provide

a potential offeror promptly with the information required under

paragraph (a) of this section and if that information is not contained

in the notice of exemption, the Board will entertain petitions to toll

the 30-day period for submitting offers of financial assistance under

paragraph (c)(2) of this section. Petitions must be filed with the

Board within 25 days after publication in the Federal Register

(described in paragraph (b)(2)(ii) of this section). Petitions should

include copies of the prior written request for information or an

accurate outline of the specific information that was orally requested.

Replies to these petitions must be filed within 30 days after the

publication. These petitions and replies must be filed on or before

their actual due date under 49 CFR 1152.25(d)(4). The Board will issue

a decision on petitions to toll the offer period within 35 days after

publication.

(D) Upon receipt of a formal expression of intent to file an offer

under paragraph (c)(2)(i) of this section, the rail carrier applicant

may advise the Board and the potential offeror that additional time is

needed to develop the information required under paragraph (a) of this

section. Applicant shall expressly indicate the amount of time it

considers necessary (not to exceed 60 days) to develop and submit the

required information to the potential offeror. For the duration of the

time period so indicated by the applicant, the 30-day period for

submitting offers of financial assistance under paragraph (c)(2) of

this section shall be tolled without formal Board action.

(iii) Contents of offer. The offeror shall set forth its offer in

detail. The offer must meet the requirements of paragraph (c)(1)(ii) of

this section.

(d) Access to documents. Upon receipt by the carrier of a written

comment under Sec. 1152.25 or a formal expression of intent under

paragraph (c)(2)(i) of this section indicating an intent to offer

financial assistance, or upon receipt by the carrier of an offer of

financial assistance, whichever occurs earlier, the carrier must make

available to that party or offeror the records, accounts, appraisals,

working papers, and other documents used in preparing Exhibit 1

(Sec. 1152.36) or, if an exemption proceeding, those documents that

would have been used in preparing Exhibit 1 had an abandonment or

discontinuance application been filed, or other records, reports, and

data in the possession of the carrier seeking the exemption that

provide comparable data. These documents shall be made available during

regular business hours at a time and place mutually agreeable to the

parties.

(e) Review of offers. (1) Abandonment and discontinuance

applications. The Board will review each offer submitted to determine

if a financially responsible person has offered assistance. If that

criterion is met, the Board will issue a decision postponing the

effective date of the authorization for abandonment or discontinuance.

This decision will be issued within 15 days of the service of the

decision granting the application (or within 5 days after the offer is

filed if the time for filing has been tolled under paragraph

(c)(1)(i)(C) of this section, or within 5 days after expiration of the

120 day (4 month) period described in 49 U.S.C. 10904, if that occurs

first). Under the delegation of authority at Sec. 1011.8, the Director

of the Office of Proceedings will make the initial determination

whether offers of financial assistance satisfy the standards of 49

U.S.C. 10904(d) for purposes of instituting negotiations. Appeals of

initial decisions determining whether offers of financial assistance

satisfy the standards of 49 U.S.C. 10904(d) for purposes of instituting

negotiations will be acted upon by the entire Board pursuant to 49 CFR

1011.2(a)(7).

(2) Exemption proceedings. The Board will review each offer

submitted to determine if a financially responsible person has offered

assistance. If that criterion is met, the Board will postpone the

effective date either of the decision granting a petition for

individual exemption or the notice of exemption under the class

exemption and partially revoke the exemption or (in the case of a class

exemption) the notice of exemption to the extent it applies to 49

U.S.C. 10904. The decision to postpone and partially revoke will be

issued within 15 days of the service date of a decision granting a

petition for exemption, or within 35 days of the Federal Register

publication described in paragraph (b)(2)(ii) of this section (or

within 5 days after the offer is filed if the time for filing has been

tolled under paragraph (c)(1)(i)(C) or (c)(2)(ii) (C) or (D) of this

section). Under the delegation of authority at Sec. 1011.8, the

Director of the Office of Proceedings will make the initial

determination whether offers of financial assistance satisfy the

standards of 49 U.S.C. 10904(d) for purposes of partial revocation and

institution of negotiations. Appeals of initial decisions determining

whether offers of financial assistance satisfy the standards of 49

U.S.C. 10904(d) for purposes of partial revocation and institution of

negotiations will be acted upon by the entire Board pursuant to 49 CFR

1011.2(a)(7).

(f) Agreement on financial assistance. (1) If the carrier and a

person offering financial assistance enter into a subsidy agreement

designed to provide for continued rail service, the Board will postpone

the effective date of the abandonment or discontinuance. If a decision

granting a petition for individual exemption, or a notice of exemption,

has been issued, the Board will postpone the effective date of the

decision or notice of exemption. The postponement will be for as long

as the subsidy agreement is in effect.

(2) If the carrier and a person offering to purchase a line enter

into a purchase agreement which will result in continued rail service,

the Board will approve the transaction and dismiss the application for

abandonment or discontinuance, or the petition for exemption or notice

of exemption. Board approval is not required under 49 U.S.C. 10901,

10902, or 11323 for the parties to consummate the transaction or for

the purchaser to institute service and operate as a railroad subject to

49 U.S.C. 10501(a).

(g) Failure to reach agreement on financial assistance. (1) If the

carrier and a 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 compensation. This

request must be filed with the Board within 30 days after the offer is

made and served concurrently by overnight mail on all parties to the

proceeding. The request must be accompanied by the appropriate fee,

codified at 49 CFR 1002.2(f)(26). Replies will be due 5 days later.

(2) If no agreement is reached within 30 days after the offer of

purchase or subsidy is made, and no request is made

[[Page 67893]]

to the Board to set the conditions and amount of compensation under

paragraph (g)(1) of this section, the Board will serve a decision

vacating the prior decision, which postponed the effective date of the

decision granting the application, the decision granting the exemption,

or the notice of exemption and, which, if applicable, partially revoked

either the decision granting the exemption or (in the case of a class

exemption) the notice of exemption. The Board will issue the decision

to vacate within 10 days of the due date for requesting the Board to

set the conditions and amount of compensation, and the Board will make

the decision to vacate effective on its date of service.

(h) Request to establish conditions and compensation for financial

assistance. (1) If the Board is requested to establish conditions and

compensation for financial assistance under paragraph (g)(1) of this

section, the Board will issue a decision within 30 days after the

request is due.

(2) If the applicant receives multiple offers of financial

assistance, requests to establish conditions and compensation will not

be permitted before the applicant selects the offeror with whom it

wishes to transact business. (See paragraph (l)(1) of this section.)

(3) A party requesting the Board to establish conditions and

compensation for financial assistance must, within the time period set

forth in paragraph (h)(4) of this section, provide its case in chief,

including reasons why its estimates are correct and the other

negotiating party's estimates are incorrect, points of agreement and

points of disagreement between the negotiating parties, and evidence

substantiating these allegations. The offeror has the burden of proof

as to all issues in dispute.

(4) The offeror must submit all evidence and information supporting

the terms it seeks within 30 days after the offer is made. The

carrier's reply to this evidence and support for the terms it seeks are

due within 35 days after the offer is made. No rebuttal evidence will

be permitted and evidence and information submitted after these dates

will be rejected.

(5) If requested, the Board will determine the amount and terms of

subsidy based on the avoidable cost of providing continued rail

transportation, plus a reasonable return on the value of the line.

Under 49 U.S.C. 10904(f)(4)(B), no subsidy arrangement approved under

section 10904 shall remain in effect for more than one year unless

mutually agreed by the parties.

(6) If requested, the Board will determine the price and other

terms of sale. The Board will not set a price below the fair market

value of the line (including, unless otherwise agreed upon by the

parties, all facilities on the line or portion necessary to provide

effective transportation services). Fair market value equals

constitutional minimum value which is the greater of the net

liquidation value of the line or the going concern value of the line.

The constitutional minimum value is computed without regard to labor

protection costs.

(7) Within 10 days of the service date of the Board's decision, the

offeror must accept or reject the Board's terms and conditions with a

written notification to the Board and all parties to the proceeding. If

the offeror accepts the terms and conditions set by the Board, the

Board's decision is binding on both parties. If the offeror withdraws

its offer or does not accept the terms and conditions set by the Board

with a timely written notification, the Board will serve, within 20

days after the service date of the Board decision setting the terms and

conditions, a decision vacating the prior decision, which postponed the

effective date of either the decision granting the application or

exemption or the notice of exemption, and which, if applicable,

partially revoked the exemption or (in the case of a class exemption)

the notice of exemption (unless other offers are being considered under

paragraph (l) of this section). The decision to vacate will be

effective on its date of service.

(i) Substitution of purchasers and disposition after sale. (1)

Prior to the consummation of a purchase under this section, an offeror

may substitute its corporate affiliate as the purchaser under an

agreement, provided the Board has determined either:

(i) The original offeror has guaranteed the financial

responsibility of its affiliate; or

(ii) The affiliate has demonstrated financial responsibility in its

own right.

(2) Except as provided in paragraph (i)(3) of this section, a

purchaser under this section may not:

(i) Transfer the line or discontinue service over the line prior to

the end of the second year after consummation of the original sale

under these provisions; or

(ii) Transfer the line, except to the carrier from whom the line

was purchased, prior to the end of the fifth year after consummation.

(3) Paragraph (i)(2) of this section does not preclude a purchaser

under this section from transferring the line to a corporate affiliate

following the consummation of the original sale. Prior Board approval

of the affiliate's acquisition and operation, however, is required

under 49 U.S.C. 10901, 10902, or 11323. A corporate affiliate acquiring

a line under this section is prohibited from discontinuing service over

the line or transferring the line to a party that is not a corporate

affiliate during the time periods prescribed in paragraph (i)(2) of

this section.

(j) Discontinuance of subsidy. A subsidizer may discontinue a

subsidy under this section by giving 60 days notice of the

discontinuance to the applicant and all other parties to the

proceeding. Unless another financially responsible party enters into a

subsidy agreement as beneficial to the carrier as the discontinued

subsidy agreement in a situation where the 1-year time limit of 49

U.S.C. 10904(f)(4)(B) has not yet run, the carrier may by filing a

request with the Board and serving the request on all parties to the

abandonment or exemption proceeding obtain a decision vacating the

decision postponing the effective date of either the decision granting

the application, or petition for individual exemption, or the notice of

exemption. The Board will issue a decision to vacate within 10 days

after the filing and service of the request. This decision to vacate

will be effective on its service date.

(k) Default on agreement. If any party defaults on its obligations

under a financial assistance agreement, any other party to the

agreement may promptly inform the Board of that default. Upon

notification, the Board will take appropriate action.

(l) Multiple offers of financial assistance. (1) If an applicant

receives more than one offer to purchase or subsidize the line from

offerors found to be financially responsible, the applicant must select

the offeror from those with whom it wishes to transact business. In

abandonment and discontinuance application and petition for exemption

proceedings within 25 days after service of the decision granting the

application or petition for exemption, and in class exemption

proceedings within 45 days after the Federal Register publication

described in paragraph (b)(2)(ii) of this section, the railroad must:

(i) File a written notification of its selection with the Board;

and

(ii) Serve a copy of the notification on all parties to the

proceeding.

(2)(i) Abandonment and discontinuance applications and petitions

for exemption. If the applicant has received multiple offers of

financial assistance from persons found to be financially responsible

and has selected the offeror with whom it wishes to transact business,

the negotiating parties shall complete the sale or subsidy

[[Page 67894]]

agreement or request the Board to establish the conditions and amount

of compensation within 40 days after the service date of the decision

granting the application or petition for exemption. A request to the

Board to set terms and conditions must be served concurrently on all

parties to the proceeding. If no agreement on subsidy or sale is

reached within the 40-day period and the Board has not been requested

to establish the conditions and amount of compensation, any other

financially responsible offeror may request the Board to establish the

conditions and amount of compensation. This request must be filed at

the Board within 50 days of the service date of the decision granting

the application or petition for exemption and served concurrently on

all parties to the proceeding. If no other request is filed, the Board

will issue a decision authorizing abandonment or discontinuance within

60 days of the service date of the decision granting the application or

petition for exemption. This decision will be effective on the date of

service.

(ii) Class exemption proceedings. If the carrier seeking the

exemption has received multiple offers of financial assistance from

persons found to be financially responsible and has selected the

offeror with whom it wishes to transact business, the negotiating

parties shall complete the sale or subsidy agreement or request the

Board to establish the conditions and amount of compensation within 60

days after the Federal Register publication described in paragraph

(b)(2)(ii) of this section. A request to the Board to set terms and

conditions must be served concurrently on all parties to the

proceeding. If no agreement on subsidy or sale is reached within the

60-day period and the Board has not been requested to establish the

conditions and amount of compensation, any other financially

responsible offeror may request the Board to establish the conditions

and amount of compensation. This request must be filed at the Board

within 70 days of the Federal Register publication described in

paragraph (b)(2)(ii) of this section and served concurrently on all

parties to the proceeding. If no other request is filed, the Board will

issue a decision vacating the decision postponing the effective date of

the notice of exemption within 80 days of the Federal Register

publication described in paragraph (b)(2)(ii) of this section. The

decision to vacate will be effective on the date of service.

(3) If the Board has established the conditions and amount of

compensation, and the original offer is withdrawn under paragraph

(h)(7) of this section, any other offeror found to be financially

responsible may accept the Board's decision within 20 days after the

service date of the Board's decision setting terms and conditions. If

the decision is accepted by another such offeror, the Board will

require the applicant to accept the terms incorporated in the Board's

decision.

(m) Additional time for filing. Notwithstanding the deadlines

previously set forth in part 1152 for filing an offer of financial

assistance, parties that can show that they would be materially

prejudiced by having less than the full 4 months for filing an offer of

financial assistance provided in 49 U.S.C. 10904(c) for application

proceedings may seek relief under 49 CFR part 1117.

Sec. 1152.28 Public use procedures.

(a)(1) If the Board finds that the present or future public

convenience and necessity require or permit abandonment or

discontinuance, the Board will determine if the involved rail

properties are appropriate for use for other public purposes.

(2) A request for a public use condition under 49 U.S.C. 10905 must

be in writing and set forth:

(i) The condition sought;

(ii) The public importance of the condition;

(iii) The period of time for which the condition would be effective

(up to the statutory maximum of 180 days); and

(iv) Justification for the imposition of the time period. A copy of

the request shall be mailed to the applicant.

(3) For applications filed under part 1152, subpart C, a request

for a public use condition must be filed not more than 45 days after

the application is filed. A decision on the public use request will be

issued by the Board or the Director of the Office of Proceedings prior

to the effective date of the abandonment. For abandonment exemptions

under part 1152, subpart F or exemptions granted on the basis of an

individual petition for exemption filed under 49 U.S.C. 10502, a

request for a public use condition must be filed not more than 20 days

from the date of publication of the notice of exemption in the Federal

Register in the case of class exemptions under subpart F of this part,

or not more than 20 days from the date of publication of notice of the

filing of the petition for individual exemption in the Federal

Register.

(b) If the Board finds that the rail properties are appropriate for

use for other public purposes, the railroad may dispose of the rail

properties only under the conditions described in the Board's decision.

The conditions imposed by the Board may include a prohibition against

the disposal of the rail assets for a period of not more than 180 days

from the effective date of the decision authorizing the abandonment or

discontinuance, unless the properties have first been offered, on

reasonable terms, for sale for public purposes. This period will run

concurrently with any other postponements. Jurisdiction to impose such

conditions expires after 180 days from the effective date of the

decision authorizing the abandonment or discontinuance.

Sec. 1152.29 Prospective use of rights-of-way for interim trail use

and rail banking.

(a) If any state, political subdivision, or qualified private

organization is interested in acquiring or using a right-of-way of a

rail line proposed to be abandoned for interim trail use and rail

banking pursuant to 16 U.S.C. 1247(d), it must file a comment or

otherwise include a request in its filing (in a regulated abandonment

proceeding) or a petition (in an exemption proceeding) indicating that

it would like to do so. The comment/request or petition must include:

(1) A map depicting, and an accurate description of, the right-of-

way, or portion thereof (including mileposts), proposed to be acquired

or used;

(2) A statement indicating the user's willingness to assume full

responsibility: for managing the right-of-way; for any legal liability

arising out of the use of the right-of-way (unless the user is immune

from liability, in which case it need only indemnify the railroad

against any potential liability); and for the payment of all taxes

assessed against the right-of-way; and

(3) An acknowledgment that interim trail use is subject to the

user's continuing to meet its responsibilities described in paragraph

(a)(2) of this section, and subject to possible future reconstruction

and reactivation of the right-of-way for rail service. The statement

must be in the following form:

Statement of Willingness To Assume Financial Responsibility

In order to establish interim trail use and rail banking under

16 U.S.C. 1247(d) and 49 CFR 1152.29, __________ (Interim Trail

User) is willing to assume full responsibility for management of,

for any legal liability arising out of the transfer or use of

(unless the user is immune from liability, in which case it need

only indemnify the railroad against any potential liability), and

for the payment of any and all taxes that may be levied or assessed

against the right-of-way owned by __________ (Railroad) and operated

by __________ (Railroad). The property, known as __________ (Name of

Branch Line), extends from railroad milepost __________ near

__________ (Station Name), to railroad

[[Page 67895]]

milepost __________, near __________ (Station name), a distance of

__________ miles in [County(ies), (State(s)]. The right-of-way is

part of a line of railroad proposed for abandonment in Docket No.

STB AB-______ (Sub-No. ______).

A map of the property depicting the right-of-way is attached.

______ (Interim Trail User) acknowledges that use of the right-

of-way is subject to the user's continuing to meet its

responsibilities described above and subject to possible future

reconstruction and reactivation of the right-of-way for rail

service. A copy of this statement is being served on the railroad(s)

on the same date it is being served on the Board.

(b)(1) In abandonment application proceedings under 49 U.S.C.

10903, interim trail use statements are due within the 45-day protest

and comment period following the date the abandonment application is

filed. See Sec. 1152.25(c). The applicant carrier's response notifying

the Board whether and with whom it intends to negotiate a trail use

agreement is due within 15 days after the close of the protest and

comment period (i.e., 60 days after the abandonment application is

filed).

(i) In every proceeding where a Trails Act request is made, the

Board will determine whether the Trails Act is applicable.

(ii) If the Trails Act is not applicable because of failure to

comply with Sec. 1152.29(a), or is applicable but the carrier either

does not intend to negotiate an agreement, or does not timely notify

the Board of its intention to negotiate, a decision on the merits will

be issued and no Certificate of Interim Trail Use or Abandonment will

be issued. If the carrier is willing to negotiate an agreement, and the

public convenience and necessity permit abandonment, the Board will

issue a CITU.

(2) In exemption proceedings, a petition containing an interim

trail use statement is due within 10 days after the date the notice of

exemption is published in the Federal Register in the case of a class

exemption and within 20 days after publication in the Federal Register

of the notice of filing of a petition for exemption in the case of a

petition for exemption. When an interim trail use comment(s) or

petition(s) is filed in an exemption proceeding, the railroad's reply

to the Board (indicating whether and with whom it intends to negotiate

an agreement) is due within 10 days after the date a petition

requesting interim trail use is filed.

(3) Late-filed trail use statements must be supported by a

statement showing good cause for late filing.

(c) Regular and NERSA abandonment proceedings. (1) If continued

rail service does not occur pursuant to 49 U.S.C. 10904 and

Sec. 1152.27, and a railroad agrees to negotiate an interim trail use/

rail banking agreement, then the Board will issue a CITU to the

railroad and to the interim trail user for that portion of the right-

of-way to be covered by the agreement. The CITU will: Permit the

railroad to discontinue service, cancel any applicable tariffs, and

salvage track and material consistent with interim trail use and rail

banking, as long as it is consistent with any other Board order, 30

days after the date it is issued (10 days after issuance in NERSA

proceedings); and permit the railroad to fully abandon the line if no

trail use agreement is reached 180 days after it is issued, subject to

appropriate conditions, including labor protection and environmental

matters.

(2) The CITU will indicate that any interim trail use is subject to

future restoration of rail service, and subject to the user continuing

to meet the financial obligations for the right-of-way. The CITU will

also provide that, if the user intends to terminate trail use, it must

send the Board a copy of the CITU and request that it be vacated on a

specified date. The Board will reopen the abandonment proceeding,

vacate the CITU, and issue a decision permitting immediate abandonment

for the involved portion of the right-of-way. Copies of the decision

will be sent to:

(i) The abandonment applicant;

(ii) The owner of the right-of-way; and

(iii) The current trail user.

(3) If an application to construct and operate a rail line over the

right-of-way is authorized under 49 U.S.C. 10901 and 49 CFR part 1150,

or exempted under 49 U.S.C. 10502, then the CITU will be vacated

accordingly.

(d) Exempt abandonment proceedings. (1) If continued rail service

does not occur under 49 U.S.C. 10904 and Sec. 1152.27 and a railroad

agrees to negotiate an interim trail use/rail banking agreement, then

the Board will issue a Notice of Interim Trail Use or Abandonment

(NITU) to the railroad and to the interim trail user for the portion of

the right-of-way to be covered by the agreement. The NITU will: permit

the railroad to discontinue service, cancel any applicable tariffs, and

salvage track and materials, consistent with interim trail use and rail

banking, as long as it is consistent with any other Board order, 30

days after the date it is issued; and permit the railroad to fully

abandon the line if no agreement is reached 180 days after it is

issued, subject to appropriate conditions, including labor protection

and environmental matters.

(2) The NITU will indicate that interim trail use is subject to

future restoration of rail service, and subject to the user continuing

to meet the financial obligations for the right-of-way. The NITU will

also provide that, if the user intends to terminate trail use, it must

send the Board a copy of the NITU and request that it be vacated on a

specific date. The Board will reopen the exemption proceeding, vacate

the NITU, and issue a decision reinstating the exemption for that

portion of the right-of-way. Copies of the decision will be sent to:

(i) The abandonment exemption applicant;

(ii) The owner of the right-of-way; and

(iii) The current trail user.

(3) If an application to construct and operate a rail line over the

right-of-way is authorized under 49 U.S.C. 10901 and 49 CFR part 1150,

or exempted under 49 U.S.C. 10502, then the NITU will be vacated

accordingly.

(e)(1) Where late-filed trail use statements are accepted, the

Director (or designee) will telephone the railroad to determine whether

abandonment has been consummated and, if not, whether the railroad is

willing to negotiate an interim trail use agreement. The railroad shall

confirm, in writing, its response, within 5 days. If abandonment has

been consummated, the trail use request will be dismissed. If

abandonment has not been consummated but the railroad refuses to

negotiate, then trail use will be denied. If abandonment has not been

consummated and the railroad is willing to negotiate, the abandonment

proceeding will be reopened, the abandonment decision granting an

application, petition for exemption or notice of exemption will be

vacated, and an appropriate CITU or NITU will be issued. The effective

date of the CITU or NITU will be the same date as the vacated decision

or notice.

(2) A railroad that receives authority from the Board to abandon a

line (in a regulated abandonment proceeding under 49 U.S.C. 10903, or

by individual or class exemption issued under 49 U.S.C. 10502) shall

file a notice of consummation with the Board to signify that it has

exercised the authority granted and fully abandoned the line (e.g.,

discontinued operations, salvaged the track, canceled tariffs, and

intends that the property be removed from the interstate rail network).

The notice shall provide the name of the STB proceeding and its docket

number, a brief description of the line, and a statement that the

railroad has consummated, or fully exercised, the abandonment authority

on a certain date. The notice shall be filed within 1 year of the

[[Page 67896]]

service date of the decision permitting the abandonment (assuming that

the railroad intends to consummate the abandonment). Notices will be

deemed conclusive on the point of consummation if there are no legal or

regulatory barriers to consummation (such as outstanding conditions,

including Trails Act conditions). If, after 1 year from the date of

service of a decision permitting abandonment, consummation has not been

effected by the railroad's filing of a notice of consummation, and

there are no legal or regulatory barriers to consummation, the

authority to abandon will automatically expire. In that event, a new

proceeding would have to be instituted if the railroad wants to abandon

the line. Copies of the railroad's notice of consummation shall be

filed with the Secretary of the Board. In addition, the notice of

consummation shall be sent to the State Public Service Commission (or

equivalent agency) of every state through which the line passes.

(f)(1) When a trail user intends to terminate trail use and another

person intends to become a trail user by assuming financial

responsibility for the right-of-way, then the existing and future trail

users shall file, jointly:

(i) A copy of the extant CITU or NITU; and

(ii) A Statement of Willingness to Assume Financial Responsibility

by the new trail user.

(2) The parties shall indicate the date on which responsibility for

the right-of-way is to transfer to the new trail user. The Board will

reopen the abandonment or exemption proceeding, vacate the existing

NITU or CITU; and issue an appropriate replacement NITU or CITU to the

new trail user.

(g) In proceedings where a timely trail use statement is filed, but

due to either the railroad's indication of its unwillingness to

negotiate interim trail use agreement, or its failure to timely notify

the Board of its willingness to negotiate, a decision authorizing

abandonment or an exemption notice or decision is issued instead of a

CITU or NITU, and subsequently the railroad and trail use proponent

nevertheless determine to negotiate an interim trail use agreement

under the Trails Act, then the railroad and trail use proponent must

file a joint pleading requesting that an appropriate CITU or NITU be

issued. If the abandonment has not been consummated, the Board will

reopen the proceeding, vacate the outstanding decision or notice (or

portion thereof), and issue an appropriate CITU or NITU that will

permit the parties to negotiate for a period agreed to by the parties

in their joint filing, but not to exceed 180 days, at the end of which,

the CITU or NITU will convert into a decision or notice permitting

abandonment.

Subpart D--Standards for Determining Costs, Revenues, and Return on

Value

Sec. 1152.30 General.

(a) Contents of subpart. (1) 49 U.S.C. 10904 directs the Board to

determine the extent to which the avoidable costs of providing rail

service plus a reasonable return on the value of the line exceed the

revenues attributable to the line. This subpart contains the

methodology for such determinations and the standards necessary for

application of those terms in the context of a particular proceeding.

Such data will be used in reaching the Board's findings on the merits

of an abandonment or discontinuance proceeding and in making the

necessary financial assistance determinations.

(2) This subpart also sets forth a method by which the carrier may

establish its Forecast Year estimates and Estimated Subsidy Payment to

be included in its application (Sec. 1152.22(d) of this part).

Furthermore, an offeror of financial assistance may use this method to

formulate a subsidy offer and/or Proposed Subsidy Payment under 49

U.S.C. 10904 and Sec. 1152.27 of subpart C of this part.

(b) Data collection. The owning or operating carrier shall

establish a system to collect at branch level the data necessary to

compute the base year data and the final subsidy payment. The

collection and compilation of such data shall be in accordance with the

Branch Line Accounting System (49 CFR part 1201).

(c) Final payment of financial assistance. (1) When a financial

assistance agreement is concluded, the final payment will be adjusted

to reflect the actual revenues derived, avoidable costs incurred, and

value of the properties used in the subsidy year.

(2) Where an adjustment results in an increase in the Estimated

Subsidy Payment upon which the financial assistance agreement is based,

the amount of such increase is limited to 15 percent of the estimated

payment. However, if the railroad notifies the subsidizer that the

estimate will be exceeded by more than 15 percent in one of the

Financial Status Reports (Sec. 1152.37) issued during the first 10

months of the subsidy year or the increase results from an expense

preapproved by the subsidizer, the adjusted amount shall be included in

the final payment.

Sec. 1152.31 Revenue and income attributable to branch lines.

The revenue attributable to the rail properties is the total of the

revenues assigned to the branch in accordance with this section, plus

any subsidy payments that would cease upon discontinuance of service on

the branch, for the subsidy year. The revenues assigned shall be

derived from the following accounts:

(a) Account 101--Freight. The revenue assigned under this account

shall be the actual revenues, including transit revenues, accruing to

the railroad, derived from waybills and other source documents, for all

traffic that:

(1) Originates and terminates on the branch;

(2) Originates or terminates on the branch and is handled off the

branch on the system but not on another carrier; and

(3) Originates or terminates on

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