EP 706 Supporting Statement 12-8-11final

2140-0009
October 2011

SUPPORTING STATEMENT - R-1 Modification in EP 706
Reporting Requirements for Positive Train Control Expenses and Investments

A. Justification:
1. Why the collection is necessary. The Surface Transportation Board (Board) has broad
statutory authority to provide economic regulatory oversight of railroads, addressing such matters
as rates, service, the construction, acquisition and abandonment of rail lines, carrier mergers, and
interchange of traffic among carriers (49 U.S.C. §§ 10101-11908). Information from the Annual
R-1 reports, which are required to be filed by Class I railroads under 49 U.S.C. § 11145, is used
in the following contexts: abandonments (49 U.S.C. § 10903); mergers, acquisition of control,
and consolidations (49 U.S.C. §§ 11323-24); Uniform Rail Costing System (URCS) (49 U.S.C.
§§ 11161-11164); rail revenue adequacy proceedings (49 U.S.C. § 10704(a)(2)); Rail Cost
Adjustment Factor (RCAF) (49 U.S.C. § 10708); and other rail cost studies, investigations, and
rulemakings (49 U.S.C. §§ 10701, 10704(a)(1), 10705, 10707, 11701).
The Board proposes, in Ex Parte 706, to supplement the R-1 reports by requiring
reporting railroads to provide information that would identify capital and operating expenditures
for Positive Train Control (PTC). Railroads that carry passengers and/or carry certain hazardous
materials are required to implement PTC, a safety system for railroads that will automatically
shut down the power to locomotives to prevent accidents. Railroads are currently reporting PTC
expenditures within the aggregated reporting category of capital investments and expenses.
Under the Board’s proposal, railroads would continue to be required to provide this aggregated
information on capital investments and expenses, but would also be required to list PTC
investments and expenditures as separate line items in a supplemental R-1 schedule. The
separate identification of PTC information is necessary to help the Board monitor the emergence
of PTC as a factor affecting the financial condition of the rail industry.
PTC is a system designed to prevent train-to-train collisions, over-speed derailments,
incursions into established work zone limits, and the movement of a train through a switch left in
the wrong position. The Rail Safety Improvement Act of 2008 requires Class I rail carriers to
develop and submit a plan to the Secretary of Transportation for implementing PTC by
December 31, 2015 (49 U.S.C. § 20157). The PTC plan must address operations on main lines
where intercity rail passenger transportation or commuter rail transportation is regularly
provided, and on main lines over which TIH or PIH are transported. The Rail Safety
Improvement Act places the onus on rail carriers to pay for installation and maintenance of PTC.
2. How the collection will be used. The R-1 reports show operating expenses of the
carriers, including those for right-of-way and structures, equipment, train and yard operations,

and general and administrative expenses. The reports are used by the Board, other Federal
agencies, and industry groups (including the Association of American Railroads (AAR)) to
monitor and assess railroad industry growth, financial stability, traffic, and operations.
The Board uses data from the R-1 reports to more effectively carry out its statutory
responsibilities, including acting on railroad requests for authority to engage in Board-regulated
financial transactions such as mergers, acquisitions of control, consolidations, and
abandonments; conducting proceedings to determine whether rail revenues are adequate;
developing an index known as the Arail cost adjustment factor@; and conducting other
investigations as well as rulemakings. In addition, certain information from this report is entered
into the Board=s Uniform Rail Costing System (URCS), which is a cost measurement
methodology developed by the Board pursuant to 49 U.S.C. §§ 11161-62 and used as a tool in
rail rate proceedings to calculate the variable costs associated with providing a particular service.
Under the Board’s proposal in Ex Parte 706, the supplemental schedule will not be included in
URCS. Rather, the proposed identification of PTC information in an R-1 supplemental schedule
will help the Board monitor the emergence of PTC as a factor affecting the financial condition of
the rail industry.
3. Extent of automated information collection. Generally, no improved technology has
been identified by the Board to reduce the burden of these R-1 collections. For many years,
respondent carriers have maintained the form used for these reports in a computerized format.
The railroads enter their data on the computerized version of the form and submit the required
signed hard copy to the Board. The Board has considered electronic filing, but determined that
because the data is maintained in different electronic formats by the respondent carriers,
electronic filing would not be useful to the Board. In addition, any requirement for this report to
be filed in a specific format would necessarily impose a greater cost burden on the respondents.
4. Identification of duplication. No other Federal agency collects the information in the
R-1 report, nor is this information available from any other source. Therefore, there will be no
duplication of information. In most instances, the information sought is unique to each carrier.
5. Effects on small business. No small entities will be affected by the collection of this
information. Only Class I railroads, which have operating revenues in excess of $250 million
(1991 dollars) adjusted for inflation, are subject to this reporting requirement. The Board has
adopted an indexing methodology that will ensure that regulated carriers are classified based on
real business expansion, rather than the effects of inflation.
6. Impact of less frequent collections. Annual reports are required to be filed by Class I
railroads under 49 U.S.C. § 11145. Without this annual collection, the Board could not fulfill its
statutory responsibilities.
7. Special circumstances. No special circumstances described in question 7 apply to this
collection.
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8. Compliance with 5 C.F.R. § 1320.8. The Board is simultaneously publishing notice in
the Federal Register, seeking comments regarding the proposed modification to this collection.
See Reporting Requirements for Positive Train Control Expenses and Investments, 76 Fed. Reg.
63,582-99 (Oct. 13, 2011).
9. Payments of gifts to respondents. The Board does not provide any payment or gift to
respondents.
10. Assurance of confidentiality. All information collected through this report is
available to the public.
11. Justification for collection of sensitive information. This collection contains no
information of a sensitive nature.
12. Estimation of burden hours for respondents. Based on information recently provided
by the railroad industry, we estimate a per-respondent-railroad burden of no more than 800 hours
for the entire R-1 report. After a minor adjustment to the railroads’ computer program, the
proposed modification is not expected to have an effect on this estimated per-report burden. The
estimate includes time spent reviewing instructions; searching existing data sources; gathering
and maintaining the data needed; completing and reviewing the collection of information; and
converting the data from the carrier=s individual accounting system to the Board=s Uniform
System of Accounts (USOA), which ensures that the information will be presented in a
consistent accounting format across all reporting railroads. See 49 U.S.C. §§ 11141-43, 1116164, 49 C.F.R. §§ 1200-1201. The total estimated annual burden hours for all 7 carriers is,
therefore, no more than 5,600 hours (7 respondents X 800 hours).
13. Other costs to respondents: (a) As noted, we estimate that the proposed modification
will involve only the modest burden of adjusting the computer program to segregate and report
the requested information as a separate line item. (b) We estimate that there are otherwise no
costs for operation, maintenance, or purchase of services associated with these proposed
reporting requirements.
14. Costs to Board: We estimate that the cost to the Agency of entering the R-1 data into
URCS system and posting the searchable pdf's to the website totals $3,150, which includes 42
hours at a GS-14 pay grade.
15. Changes in burden hours. The proposed modification is not expected to affect the
number of burden hours associated with this collection.
16. Plans for tabulation and publication: The agency does not tabulate the results of this
report. Rather, the individual R-1 reports are posted in their entirety on the Board's website at
www.stb.dot.gov/stb/industry/econ_reports.html (select "Annual Reports R-1 Selected
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Schedules" hyperlink).
17. Display of expiration date for OMB approval. No exception is sought. The control
number and expiration date for this collection appear on the cover sheet of the instructions.
18. Exceptions to Certification Statement. No exceptions are sought.
B. Collections of Information Employing Statistical Methods:
Not applicable
.

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