E9-2056. Simplified Standards for Rail Rate Cases-Taxes in Revenue Shortfall Allocation Method

AGENCY:

Surface Transportation Board.

ACTION:

Notice of decision.

SUMMARY:

By a decision served on January 30, 2009, the Board directed the Association of American Railroads (AAR), and permitted other parties, to file supplemental evidence so that the Board has a full record on which to base its methodology to calculate a railroad-specific average state tax rate for use in the Revenue Shortfall Allocation Method (RSAM).

DATES:

AAR is directed to file supplemental evidence by February 19, 2009. Any interested person may reply by March 11, 2009. AAR's rebuttal is due March 25, 2009.

FOR FURTHER INFORMATION CONTACT:

Timothy J. Strafford, [phone]. [Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1-800-877-8339.]

SUPPLEMENTARY INFORMATION:

The Board recently found that the failure to include state and federal taxes in RSAM calculations was material error. The Board concluded that the use of the statutory federal tax rate, combined with a railroad-specific weighted average state tax rate, best approximated the marginal taxes that the carrier would pay on the incremental revenue hypothesized by RSAM.

The decision served on January 30, 2009, directed AAR to submit the evidence and calculations necessary to establish carrier-specific average state tax rates for each Class I railroad, including state corporate income tax rates and the number of miles operated by each carrier in each state it operates in for each of the years 2002-2007, by February 19, 2009. Any interested person may reply by March 11, 2009. AAR's rebuttal is due March 25, 2009. Once there is resolution to any disputes over how to calculate the carrier-specific state tax rates, the Board will publish the new RSAM figures.

Additional information is contained in the Board's decision. A copy of the Board's decision is available for inspection or copying at the Board's Public Docket Room, Room 131, 395 E Street, SW., Washington, DC 20423-0001, and is posted on the Board's Web site, http://www.stb.dot.gov.

This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

Decided: January 23, 2008.

By the Board, Chairman Nottingham, Vice Chairman Mulvey, and Commissioner Buttrey.

Jeffrey Herzig,

Clearance Clerk.