AAR: STB rulemakings need cost-benefit analyses

Written by William C. Vantuono, Editor-in-Chief
image description

AAR President and CEO Ian Jefferies.

The Association of American Railroads (AAR) on March 14 petitioned the Surface Transportation Board (STB) to incorporate cost-benefit analysis into rulemaking proceedings. AAR urged that, “in the spirit of good government, such analysis should include the most current and reliable data possible, and that the Board should consider the cumulative impact of regulations when proposing and adopting new rules.”

In the 86-page petition, submitted by AAR Counsel Cynthia E. Richman of Gibson, Dunn & Crutcher LLP, AAR is requesting that the STB “initiate a rulemaking proceeding and adopt three new procedural requirements for future rulemakings”:

  • A requirement that the Board “consider the economic costs and benefits of new rules when it proposes and adopts them.”
  • A requirement that the Board “consider the cumulative impact of regulations.”
  • A requirement that the Board base its decisions on “up-to-date and reliable data.”

“Meaningful cost-benefit analysis (sometimes called ‘economic analysis,’ ‘regulatory-impact analysis,’ or ‘benefit-cost analysis’) facilitates sound agency decision-making through an evaluation of whether additional rules will achieve positive outcomes, and at what cost,” AAR said. “Cost-benefit analysis is a widely accepted feature of modern administrative law and is an indispensable part of reasoned policymaking.”

“While these practices are required by law at executive agencies, current administrative law does not require independent agencies like the STB to do these basic analyses—a reality the AAR petition acknowledges,” AAR said. “However, the AAR argues that the STB—recently equipped with two new members, who, along with Chairman Begeman, seek agency reforms—would have access to better information and could have substantially greater confidence in critical rulemaking decisions if cost-benefit analyses were performed. This approach would help guarantee that rulemakings comply with the law and will withstand judicial scrutiny.

“By incorporating cost-benefit analysis moving forward, the Board would put itself in good company with other independent agencies that also have the power to substantially impact national commerce, such as the Federal Communications Commission. Codifying the proposed requirements would also align the Board with a method favored by U.S. presidents of both political parties, as well as most regulatory experts from across the ideological spectrum.

“There should be no principled objection to a process that is already widely used in rulemaking, and the AAR notes in its filing that implementation is highly feasible, as stakeholders and outside experts already disclose significant public information, and parties participating in a proceeding are more than capable of submitting to the Board up-to-date and reliable information to make decisions that reflect economic conditions in the real world.

“Ultimately, AAR believes that adopting the petition would simply ensure that rulemakers charged with the critical mission of ensuring a viable and competitive freight rail transportation system understand the costs and benefits of various proposed courses of action.”

“Cost-benefit analysis would be a critical tool in fostering sound regulation and supports the Board’s efforts toward achieving its goals, including its mission to facilitate a fluid and reliable rail network,” said AAR President and CEO Ian Jefferies. “By adopting the process improvements sought in our petition, we believe the STB would be better positioned to meet its statutory mandate and bring its practices more in line with the spirit of past Executive Orders, which the Board has largely acknowledged to date.”

Categories: Class I, Freight, News, Regulatory Tags: , ,