[Federal Register Volume 60, Number 41 (Thursday, March 2, 1995)]
[Proposed Rules]
[Pages 11646-11654]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-5100]



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DEPARTMENT OF ENERGY

48 CFR Parts 933 and 970


Regulation Identifier Number 1991-AB20 Acquisition Regulation; 
Department of Energy Management and Operating Contracts

AGENCY: Department of Energy.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Department of Energy (DOE) today issues a Notice of 
Proposed Rulemaking to amend the Department of Energy Acquisition 
Regulation (DEAR) to modify requirements for management and operating 
contractor purchasing systems. DEAR subpart 970.71 will be revised to 
identify certain purchasing system objectives and standards; eliminate 
the application of the ``Federal norm''; and place greater reliance on 
commercial practices.

DATES: Written comments on the proposed rulemaking must be received on 
or before May 1, 1995.

ADDRESSES: Comments on the proposed rulemaking should be addressed to 
the U.S. Department of Energy, Director, Procurement and Property 
Review and Evaluation Division (HR-525.1), Attention: James J. 
Cavanagh, 1000 Independence Avenue SW., Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT: James J. Cavanagh, Director, 
Procurement and Property Review and Evaluation Division (HR-525.1), 
U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, 
DC 20585; telephone 202-586-8257.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background.
II. Section-by-Section Analysis.
III. Public Comments.
IV. Procedural Requirements.
    A. Review Under Executive Order 12866.
    B. Review Under the National Environmental Policy Act.
    C. Review Under the Paperwork Reduction Act.
    D. Review Under the Regulatory Flexibility Act.
    E. Review Under Executive Order 12612.
    F. Review Under Executive Order 12778.
    G. Public Hearing Determination.

I. Background

    The Government-wide approach to evaluating contractor purchasing 
systems, as set forth in Federal Acquisition Regulation (FAR) Subpart 
44.301, is to ``evaluate the efficiency and effectiveness with which 
the contractor spends Government funds and complies with the Government 
policy when subcontracting.'' Most Federal contracts require purchases 
to be made in accordance with the applicable laws and the terms and 
conditions of the contract, with minimal references back to acquisition 
regulations. The policy for the extent of reviews of these purchasing 
systems is set forth at FAR 44.303.
    Unlike other contractors, however, a DOE management and operating 
contractor historically has been expected to conform its purchasing 
practices to the ``Federal norm.'' As provided at the DEAR 970.7103, 
the Federal norm is an ``evolving concept'', which attempts to balance 
commercial purchasing practices with Federal procurement principles 
embodied in law and regulation. The DEAR identifies a number of tenets 
of Federal policy and practices to which DOE's management and operating 
contractors must adhere. As a result of the Federal norm, and 
iterations of related reviews, audits, and protest decisions, 
management and operating contractor purchasing has, over the years, 
become increasingly Federal-like, replacing efficient and effective 
commercial business practices.
    In accordance with the objectives of the National Performance 
Review and the Secretary of Energy's Contract Reform Team Report, the 
Department intends to revise its expectations for management and 
operating contractor purchasing systems by eliminating the concept of 
the ``Federal norm.'' In lieu of the detailed tenets contained in DEAR 
subpart 970.71, which have resulted in the inefficient layering of non-
commercial systems and practices, the Department has identified certain 
purchasing system objectives and standards which it believes are common 
to superior purchasing activities, whether they be commercial or 
public.
    In addition, as the Department eliminates the concept of the 
``Federal norm,'' the Department intends that any disagreements with 
management and operating contractor purchasing decision(s) be a matter 
to be settled between the contractor and potential subcontractor(s). 
Such disagreements are typically handled in this manner in the 
commercial sector. The Department expects that its management and 
operating contractors shall handle any [[Page 11647]] such 
disagreements in an open, fair, and reasonable manner, and endorses the 
use of ombudsmen and alternative disputes resolution procedures for 
that purpose. Accordingly, by this action, the Department proposes to 
delete DEAR 970.7107 which provides guidelines for the consideration of 
subcontractor level protests. This is consistent with the General 
Accounting Office proposed rule published at 60 FR 5871, January 31, 
1995. It is the intention of the Department to incorporate the changes 
made by this proposed rule into existing management and operating 
contracts as soon as practicable after the effective date of a final 
rule.

II. Section-by-Section Analysis

    1. Section 933.170, Subcontract level protests, is removed.
    2. The revision to paragraph (a) of the clause, Contractor 
Purchasing System, at 970.5204-22 provides guidance for a management 
and operating contract acquisition system consistent with proposed 
revisions to section 970.7103.
    3. Section 970.7101, General, is revised by removing paragraphs (c) 
and (d).
    4. The revision to section 970.7102(a) removes the parenthetical 
which contains references which will no longer exist when sections 
970.7104 and 970.7108 are removed in their entirety. Section 
970.7102(b)(3) is revised to provide that review of individual 
purchasing actions shall be pursuant to FAR Subpart 44.2. Section 
970.7102(b)(4) is revised to provide that periodic appraisals shall be 
in accordance with established policies in section 970.7103.
    5. The revisions to section 970.7103 eliminate the concept of the 
``Federal norm,'' and establish contractor purchasing systems 
objectives, expectations, and standards.
    6. Section 970.7104, Conditions of purchasing by management and 
operating contractors, is removed. The DOE believes it is not necessary 
to retain this section since many of the requirements comply with 
provisions of statutes and are already reflected in contract clauses. 
These requirements will, therefore, continue to be applicable as 
contractual requirements. Some of the requirements, however, are not 
specifically prescribed in other parts of the DEAR. The Department will 
review such requirements prior to finalization of this proposed rule 
and may redesignate appropriate paragraphs, in the final rule, to other 
parts of the DEAR, if necessary. If such requirements are identified, 
the Department will publish a Federal Register notice, prior to issuing 
a final rule, listing the paragraphs being considered for 
redesignation.
    7. Section 970.7106, Procedures for handling mistakes relating to 
management and operating contractor purchases, is removed.
    8. Section 970.7107, Protest of management and operating contractor 
procurements, is removed.

III. Public Comments

    DOE invites interested persons to participate by submitting data, 
views, or arguments with respect to the DEAR amendments set forth in 
this rule. Three copies of written comments should be submitted to the 
address indicated in the ``ADDRESSES'' section of this rule. All 
comments received will be available for public inspection during normal 
work hours. All written comments received by the date indicated in the 
``DATES'' section of this notice will be carefully assessed and fully 
considered prior to the effective date of these amendments as a final 
rule. Any information considered to be confidential must be so 
identified and submitted in writing, one copy only. DOE reserves the 
right to determine the confidential status of the information and to 
treat it according to its determination in accordance with 10 CFR 
1004.11.

IV. Procedural Requirements

A. Review Under Executive Order 12866

    This regulatory action has been determined not to be a 
``significant regulatory action'' under Executive Order 12866, 
``Regulatory Planning and Review,'' (58 FR 51735, October 4, 1993).
    Accordingly, this action was not subject to review under the 
Executive Order by the Office of Information and Regulatory Affairs.

B. Review Under the National Environmental Policy Act

    Pursuant to the Council on Environmental Quality Regulations (40 
CFR 1500-1508), the Department has established guidelines for its 
compliance with the provisions of the National Environmental Policy Act 
(NEPA) of 1969 (42 U.S.C. 4321 et seq.). Pursuant to appendix A of 
subpart D of 10 CFR part 1021, National Environmental Policy Act 
Implementing Procedures (Categorical Exclusion A6), the Department of 
Energy has determined that this proposed rule is categorically excluded 
from the need to prepare an environmental impact statement or 
environmental assessment.

C. Review Under the Paperwork Reduction Act

    To the extent that new information collection or recordkeeping 
requirements are imposed by this rulemaking, they are provided for 
under Office of Management and Budget paperwork clearance package No. 
1910-0300. No new information collection is proposed by this rule.

D. Review Under the Regulatory Flexibility Act

    This proposed rule was reviewed under the Regulatory Flexibility 
Act of 1980, Pub. L. 96-354, which requires preparation of a regulatory 
flexibility analysis for any rule which is likely to have significant 
economic impact on a substantial number of small entities. This 
proposed rule will have no impact on interest rates, tax policies or 
liabilities, the cost of goods or services, or other direct economic 
factors. It will also not have any indirect economic consequences, such 
as changed construction rates. DOE certifies that this rule will not 
have a significant economic impact on a substantial number of small 
entities and, therefore, no regulatory flexibility analysis has been 
prepared.

E. Review Under Executive Order 12612

    Executive Order 12612 entitled ``Federalism,'' 52 FR 41685 (October 
30, 1987), requires that regulations, rules, legislation, and any other 
policy actions be reviewed for any substantial direct effects on 
States, on the relationship between the Federal Government and the 
States, or in the distribution of power and responsibilities among 
various levels of Government. If there are sufficient substantial 
direct effects, then the Executive Order requires preparation of a 
federalism assessment to be used in all decisions involved in 
promulgating and implementing a policy action. The Department of Energy 
has determined that this proposed rule will not have a substantial 
direct effect on the institutional interests or traditional functions 
of States.

F. Review Under Executive Order 12778

    Section 2 of Executive Order 12778 instructs each agency to adhere 
to certain requirements in promulgating new regulations and reviewing 
existing regulations. These requirements, set forth in sections 2(a) 
and (b)(2), include eliminating drafting errors and needless ambiguity, 
drafting the regulations to minimize litigation, providing clear and 
certain legal standards for affected legal conduct, and promoting 
simplification and burden reduction. Agencies are also instructed to 
make every reasonable [[Page 11648]] effort to ensure that the 
regulation: specifies clearly any preemptive effect, effect on existing 
Federal law or regulation, and retroactive effect; describes any 
administrative proceedings to be available prior to judicial review and 
any provisions for the exhaustion of such administrative proceedings; 
and defines key terms. DOE certifies that this rule meets the 
requirements of sections 2(a) and 2(b) of Executive Order 12778.

G. Public Hearing Determination

    DOE has concluded that this proposed rule does not involve any 
significant issues of law or fact. Therefore, consistent with 5 U.S.C. 
553, DOE has not scheduled a public hearing.

List of Subjects in 48 CFR Parts 933 and 970

    Government procurement.

    Issued in Washington, D.C. on February 24, 1995.
Richard H. Hopf,
Deputy Assistant Secretary for Procurement and Assistance Management.

    For the reasons set forth in the preamble, chapter 9 of title 48 of 
the Code of Federal Regulations is proposed to be amended as set forth 
below.

PART 933--PROTESTS, DISPUTES, AND APPEALS

    1. The authority citation for part 933 continues to read as 
follows:

    Authority: 42 U.S.C. 7254; 40 U.S.C. 486(c)


933.170  [Removed]

    2. Section 933.170 is removed.

PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS

    3. The authority citation for part 970 continues to read as 
follows:

    Authority: Sec. 161 of the Atomic Energy Act of 1954 (42 U.S.C. 
2201), sec. 644 of the Department of Energy Organization Act, Pub. 
L. 95-91 (42 U.S.C. 7254), sec. 201 of the Federal Civilian Employee 
and Contractor Travel Expenses Act of 1985 (41 U.S.C. 420) and sec. 
1534 of the Department of Defense Authorization Act, 1986, Pub. L. 
99-145 (42 U.S.C. 7256a), as amended.

    4. At 970.5204-22, revise paragraph (a) of the clause to read as 
follows:


970.5204-22  Contractor purchasing system.

    (a) The contractor shall develop, implement, and maintain formal 
policies, practices and procedures to be used in the award of 
subcontracts consistent with DEAR 970.71. The contractor's purchasing 
system and methods shall be fully documented, consistently applied, and 
acceptable to DOE in accordance with DEAR 970.7102. The contractor's 
purchasing performance will be evaluated against agreed-upon criteria 
in accordance with the performance criteria and measures clause(s) set 
forth elsewhere in this contract. DOE reserves the right at any time to 
require that the contractor submit for approval any or all purchases 
under this contract. The Contractor shall not purchase any item or 
service the purchase of which is expressly prohibited by the written 
direction of DOE and shall use such special and directed sources as may 
be expressly required by the DOE contracting officer.
* * * * *


970.7101  [Amended]

    5. Section 970.7101 is amended by removing paragraphs (c) and (d).


970.7102  [Amended]

    6. Section 970.7102 is amended at: paragraph (a) to remove the 
parenthetical at the end of the paragraph; paragraph (b)(3) by removing 
the words ``to assure that management and operating contractors 
implement DOE policies and requirements as defined in this subpart, in 
accordance with the contractor's accepted system and methods'' and 
adding in its place the words ``pursuant to FAR 44.2''; and paragraph 
(b)(4) by removing ``Subpart 944.3 and 970.7108'' and adding in its 
place ``970.7103.''


970.7103  [Revised]

    7. Section 970.7103 is revised to read as follows: 970.7103 
Contractor purchasing system.
    The following shall apply to the purchasing systems of management 
and operating contractors:
    (a) The objective of a management and operating contractor's 
purchasing system is to deliver to its customers on a timely basis 
those best value products and services necessary to accomplish the 
purposes of the Government's contract. To achieve this objective, 
contractors are expected to use their experience, expertise and 
initiative consistent with this subpart.
    (b) The purchasing systems and methods used by management and 
operating contractors shall be well-defined, consistently applied, and 
shall follow purchasing practices appropriate for the requirement and 
dollar value of the purchase. It is anticipated that purchasing 
practices and procedures will vary among contractors and according to 
the type and kinds of purchases to be made.
    (c) Contractor purchases are not Federal procurements, and are not 
directly subject to the Federal Acquisition Regulation. Nonetheless, 
certain Federal laws, Executive Orders, and regulations may affect 
contractor purchasing, as required by statute, regulation, or contract 
terms and conditions.
    (d) Contractor purchasing systems shall identify and apply the best 
in commercial purchasing practices and procedures (although nothing 
precludes the adoption of Federal procurement practices and procedures) 
to achieve system objectives. Where specific requirements do not 
otherwise apply, the contractor purchasing system shall provide for 
appropriate measures to ensure:
    (1) Acquisition of quality products and services at fair and 
reasonable prices;
    (2) Use of capable and reliable subcontractors who either:
    (i) Have track records of successful past performance, or
    (ii) Can demonstrate a current superior ability to perform;
    (3) Minimization of acquisition lead-time and administrative costs 
of purchasing;
    (4) Use of effective competitive techniques;
    (5) Reduction of performance risks associated with subcontractors, 
and facilitation of quality relationships which can include techniques 
such as partnering agreements, ombudsmen, and alternative disputes 
procedures.
    (6) Use of self-assessment and benchmarking techniques to support 
continuous improvement in purchasing;
    (7) Maintenance of the highest professional and ethical standards; 
and
    (8) Maintenance of file documentation appropriate to the value of 
the purchase and which is adequate to establish the propriety of the 
transaction and the price paid.


970.7104 through 970.7104-47, 970.7106, 970.7107  [Removed]

    8. Sections 970.7104 through 970.7104-47 970.7106, and 970.7107 are 
removed.

[FR Doc. 95-5173 Filed 3-1-95; 8:45 am]
BILLING CODE 6450-01-P
[[Page 11649]]

DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

49 CFR Part 234

[FRA Docket No. RSGC-6; Notice No. 1]
RIN 2130-AA92


Selection and Installation of Grade Crossing Warning Systems; 
Notice of Proposed Rulemaking

AGENCY: Federal Railroad Administration (FRA), Department of 
Transportation (DOT).

ACTION: Notice of Proposed Rulemaking (NPRM).

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SUMMARY: FRA proposes to prohibit railroads from unilaterally selecting 
and installing highway-rail grade crossing warning systems at public 
highway-rail crossings. FRA further proposes to require that railroads 
furnish state highway authorities with information necessary for state 
grade crossing project planning and prioritization purposes.

DATES: (1) Written comments must be received no later than May 16, 
1995. Comments received after that date will be considered to the 
extent possible without incurring additional expense or delay.
    (2) A public hearing will be held at 9:30 a.m. on May 9, 1995. Any 
person who wishes to speak at the hearing should notify the FRA Docket 
Clerk at least five working days before to the hearing, by telephone or 
by mail.

ADDRESSES: (1) Written comments should be submitted to the Docket 
Clerk, Office of Chief Counsel, FRA, 400 Seventh Street, SW., 
Washington, DC 20590. Persons desiring to be notified that their 
written comments have been received by FRA should submit a stamped, 
self-addressed postcard with their comments. The Docket Clerk will 
indicate on the postcard the date on which the comments were received 
and will return the card to the addressee. Written comments will be 
available for examination, both before and after the closing date for 
comments, during regular business hours in Room 8201 of the Nassif 
Building at the above address.
    (2) A public hearing will be held in room 2230 of the Nassif 
Building, 400 Seventh Street, SW., Washington, DC Persons desiring to 
speak at the hearing should notify the Docket Clerk by telephone (202-
366-0628) or by writing to the Docket Clerk at the address above.

FOR FURTHER INFORMATION CONTACT: Bruce F. George, Chief, Highway-Rail 
Crossing and Trespasser Programs Division, Office of Safety, FRA, 400 
Seventh Street, SW., Washington, DC 20590 (telephone 202-366-0533), or 
Mark Tessler, Trial Attorney, Office of Chief Counsel, FRA, 400 Seventh 
Street, SW., Washington, DC 20590 (telephone 202-366-0628).

SUPPLEMENTARY INFORMATION: This NPRM clarifies the respective 
responsibilities of railroads and state and local governments regarding 
the selection and installation of highway-rail grade crossing warning 
systems. This proposal is issued to eliminate confusion and uncertainty 
as to the role of railroads in the selection and installation process. 
FRA expects the proposed rules to ``substantially subsume'' the subject 
matter of railroads' selection and installation of highway rail grade 
crossing warning systems and as such will preempt state laws covering 
the same subject matter.

Background

    Highway-rail grade crossings present inherent risks to users, 
including motorists, pedestrians, railroad passengers and railroad 
employees. Of the more than 168,000 public highway-rail grade crossings 
in the nation, only 28,100 are fully equipped with automatic lights, 
gates and bells; fewer than 1,000 of the 108,000 private crossings are 
so equipped. The vast majority of public crossings (and private 
crossings) are equipped with only passive warning devices such as 
crossbucks. Engineering improvements at individual crossings, education 
of the public, and enforcement of highway traffic laws have reduced 
accidents and casualties at highway-rail crossings. Since 1978, 
accidents and fatalities have decreased dramatically despite increased 
highway usage, stable rail traffic levels, and increased train speeds. 
However, the present loss of life, injuries and property damage are 
still unacceptable. Highway-rail collisions are the number one cause of 
death in the entire railroad industry, far surpassing employee or 
passenger fatalities. Additionally, the proportion of severe accidents 
(i.e., those likely to result in fatalities) is rising. Nearly 4,900 
collisions occurred between highway users and on-track railroad 
equipment in 1993. More than 600 people were killed and over 1,800 were 
seriously injured in these collisions.
    In 1973 Congress first established the Rail-Highway Crossing 
Program (section 130 program) to improve highway-rail crossing safety. 
Continuous federal funding since then has made more than $3 billion 
available in improvement funds, representing more than 90% of project 
costs under this program. Because highway-rail grade crossing safety is 
primarily achieved through highway traffic control, DOT'S Federal 
Highway Administration (FHWA) has oversight responsibility for the 
program. See 49 CFR 1.48.

State Safety Prioritization Process

    FHWA regulations provide uniform federal standards for all highway 
traffic control systems, including those at highway-rail crossings. The 
federal government, rather than dictating the specific type of warning 
system to be installed at each of the nation's 168,000 public grade 
crossings, has established the outline of the required planning and 
selection process. FHWA has adopted regulations governing the process 
by which states are to establish priorities for implementing highway 
safety improvement projects, including projects for elimination of 
hazards of highway-rail grade crossings.
    FHWA's regulations detail the uniform planning process involved in 
selecting the crossings to be improved (23 CFR Part 924.) The planning 
component of a state's highway safety improvement program is required 
to incorporate a process for collecting and maintaining a record of 
accident, traffic, and highway data including characteristics of both 
highway and rail traffic. The planning component must also contain a 
process for analyzing data to identify hazardous highway locations 
based on accident experience or accident potential as well as 
containing a process for conducting engineering studies of hazardous 
locations. Of vital importance in ensuring that limited funds are spent 
in a manner that will achieve the greatest safety return, a state's 
safety improvement program is required to have a process for 
establishing priorities for implementing highway safety improvement 
projects. That process must consider the potential reduction in the 
number and/or severity of accidents; the cost of the projects and 
resources available; the relative hazard of public highway-rail 
crossings based on a hazard index formula; on-site inspections of 
crossings; potential danger to large numbers of people at crossings 
used on a regular basis by passenger trains, buses, pedestrians, 
bicyclists or by trains and motor vehicles carrying hazardous 
materials; and other criteria as appropriate in each state. 23 CFR 
924.9.
    As a review of the planning and prioritization components shows, 
the process outlined above could only be carried out by an entity 
capable of gathering and analyzing all the needed data. A railroad has 
only data available [[Page 11650]] to it which is railroad specific: 
rail traffic volume, authorized speed, number of tracks, type of train 
control system, and projected changes in these areas. Even accident 
data available to a railroad are of uncertain benefit since they are 
limited to the experiences of that one railroad rather than compared 
and collated with similar data from other railroads in the state or 
even other railroads whose tracks are crossed by the same highway.
    The federal government has recognized that individual entities such 
as railroads do not have the requisite analytical tools and information 
gathering ability to make the appropriate decisions regarding the most 
appropriate focusing of limited safety improvement funds. State 
agencies have the necessary analytical tools and information. It is 
therefore appropriate that they have the responsibility for the actual 
selection of specific crossings and the determination of the type of 
warning devices to be installed.
    The Secretary, through FHWA, has also issued standards governing 
the form and placement of all grade crossing warning systems 
irrespective of whether federal funds are used in their installation. 
23 CFR 646.214. FHWA's Manual on Uniform Traffic Control Devices 
(MUTCD), incorporated by reference into the Code of Federal Regulations 
(23 CFR 655.601), establishes ``traffic control device standards for 
all streets and highways open to public travel regardless of type or 
class or the governmental agency having jurisdiction.'' MUTCD 1A-2. The 
MUTCD establishes uniform standards relating to design and placement of 
traffic control signs, pavement markings and automatic warning devices. 
These standards apply nationwide--even when the improvements have not 
been paid for with federal funds.

DOT Safety Initiatives

    This proposed rule is but one component of a continuing DOT 
campaign to improve grade crossing safety. DOT's Grade Crossing Action 
Plan includes several initiatives that will aid in improving safety at 
grade crossings. This plan details six major Departmental initiatives 
encompassing 55 separate actions addressing highway-rail grade crossing 
safety and trespass prevention. These initiatives include: enhanced 
enforcement of traffic laws at crossings; enhanced rail corridor 
crossing reviews and improvements; expanded public education and 
Operation Lifesaver activities; increased safety at private crossings; 
improved data and research efforts; and prevention of rail trespassing.
    A cornerstone of this grade crossing safety campaign is the closure 
and consolidation of little used and redundant crossings. It is 
generally acknowledged that there are too many highway-rail grade 
crossings in this country--there are not sufficient resources from any 
source or sources to provide full warning systems or grade separations 
at all of the nation's crossings. Too many crossings are equipped only 
with crossbuck warning signs. Elimination of poorly designed, less 
travelled, and redundant crossings will clearly enhance the safety of 
the travelling public. FRA has thus been advocating consolidation and 
closure for a number of years. FRA's role of advocate reflects the fact 
that state and local governments have the authority to close and 
consolidate crossings just as they have the authority to create 
crossings in connection with public road construction.
    This rulemaking is one in a series of rules addressing the 
responsibilities of the various parties in this critical rail safety 
area. On September 27, 1994, FRA issued maintenance, inspection, and 
testing rules (59 FR 50086, September 30, 1994). Those rules for the 
first time impose specific responsibilities on railroads to maintain, 
inspect and test active highway-rail grade crossing warning systems. 
Additionally, FRA imposed on railroads the responsibility to take 
specified actions when grade crossing warning systems malfunction. The 
rules impose costs on railroads in addition to the more than $130 
million they spend on crossing maintenance every year. The allocation 
of responsibility to railroads regarding grade crossing maintenance, 
inspection, and testing and response to malfunctions reflects reality--
railroads are the appropriate party to perform these activities. They 
have the technical expertise and forces to perform the work. Safety is 
enhanced by such allocation of responsibility.
    Similarly, responsibilities have been allocated between railroads 
and state and local agencies by the Congress in the Swift Rail 
Development Act of 1994 (Pub. L. 103-440). Section 302 of that act 
directs the Secretary of Transportation to issue regulations requiring 
that a locomotive horn be sounded while each train is approaching and 
entering each public grade crossing unless certain supplementary safety 
measures are provided by the ``appropriate traffic control authority or 
law enforcement authority responsible for safety at the highway-rail 
grade crossing.'' Congress has implicitly recognized that railroads 
have responsibility in areas over which they have control, such as 
sounding of horns, while state and local traffic control authorities 
have responsibility pertaining to those areas within their expertise 
and under their control, namely, highway traffic control.

The NPRM

    This NPRM would also define responsibilities in the grade crossing 
area. It defines the responsibility of railroads to provide information 
and assistance in those areas in which their expertise is paramount--
railroad operations. Railroads would be required to provide appropriate 
state agencies information related to their operations and to 
participate with state or local diagnostic teams to help the state or 
local governmental body determine which crossings' warning systems 
should be upgraded and to what extent.
    This allocation of responsibility to railroads is based on the 
recognition that state and local governmental bodies are the entities 
with the expertise and information to look at the entire picture (of 
which railroad traffic and plans are but one component): whether 
crossings should be consolidated or closed; funding availability; 
funding constraints; local desires; area residential, commercial and 
industrial development plans; and highway traffic engineering demands 
and constraints. Consistent with that expertise and information base, 
state and local governmental bodies are the appropriate bodies to 
determine which, how, and when highway rail grade crossing warning 
systems should be upgraded. Because of the very high cost to install an 
automatic traffic control warning system at a grade crossing--more than 
$100,000 at a double track crossing--it is imperative that the limited 
safety funds, from whatever sources, available for crossing 
improvements be spent in a rational, uniform, and coordinated manner. 
The present system whereby states, pursuant to FHWA regulations, 
investigate, plan, and prioritize crossing improvements provides the 
needed uniformity and coordination to ensure that the crossings most in 
need of safety improvements are those that receive them. Grade crossing 
safety is best enhanced by such a program that provides for a 
systematic upgrading of traffic control devices at crossings that are 
truly needed pursuant to a prioritized schedule established by state 
authorities under uniform federal criteria. Such a program allows state 
highway officials the ability to respond to the concerns of the public 
in making grade crossing improvement decisions, [[Page 11651]] and 
allows available resources to be allocated to the grade crossing 
improvement projects yielding the highest safety returns. Simply 
stated, this will save more lives than if an equal amount of money were 
spent on upgrading crossings that statistically are not as dangerous.
    In other, less frequent situations, a state agency, local 
governmental body, or state or local legislative body may, outside of 
the Federal-aid program, fund the upgrading of a warning system at a 
specific crossing or order a railroad to install or upgrade a warning 
system at its own expense. These proposed rules are not meant to 
prevent those governmental authorities from being involved in such 
activities. Although the selection decision in these situations may not 
be based on the selection and installation criteria established by FHWA 
and adopted by the state department of transportation or highway 
department, presumably the governmental body's selection decision is 
based on sound public policy and overall safety considerations derived 
from information available to the state.
    Some state laws, generally predating the advent of the Federal 
Rail-Highway Crossing Program, impose a tort law duty upon railroads to 
maintain safe crossings. In some cases this duty has been interpreted 
to include a duty to select and install warning systems at hazardous 
crossings. While this system may have been appropriate in the past, 
when there was no systematic and uniform improvement program in 
existence, today the result is one of misallocation of scarce 
resources. This ad hoc system of grade crossing improvements, driven by 
tort law and individual jury awards, runs counter to the goal of a 
uniform national program based on planning and prioritization. Those 
ofttimes arbitrary local requirements can result in the installation of 
grade crossing warning systems, not where research and data indicates 
they will do the most good, but where a judge or jury determined, after 
the fact, that such a system should have been installed.
    Jury verdicts based on common law standards are necessarily ad hoc, 
case-by-case judgements that are retrospective in nature. The duties 
now imposed upon railroads ad hoc in this manner are inconsistent with 
the command of Congress that ``[l]aws, regulations, and orders related 
to railroad safety shall be nationally uniform to the extent 
practicable.'' (49 U.S.C. 20106) These verdicts do not provide an 
appropriate mechanism for determining whether the crossing is needed in 
the first place, and if needed, what warning devices are appropriate. 
Neither do these verdicts provide an appropriate method for determining 
the order in which crossings would be equipped or upgraded to yield the 
greatest safety benefits. Moreover, these judgments divert resources 
from saving lives through investments in grade crossing warning devices 
to compensating those killed or injured in accidents or their 
survivors. This is sound public policy only when the railroad has 
breached a duty to them that it is appropriate for the railroad to 
have.
    In this proposed rule, FRA is defining in a nationally uniform 
manner the safety duties railroads have in connection with the 
selection and installation of warning devices at grade crossings. Tort 
judgments in general certainly exert a salutary deterrent influence on 
behaviors that rational actors can avoid, but here that deterrent is 
distorted and diminished by the combination of (i) the lack of adequate 
funds, public or private, to improve all grade crossings to the desired 
level of safety, (ii) the focus of tort cases on whether a railroad has 
satisfied its common law duties at the grade crossing in question 
without regard to its behavior concerning grade crossings in general, 
and (iii) large judgments for accidents at grade crossings of low 
relative hazard. As things now stand, a railroad that is responsibly 
investing its available funds for the improvement of grade crossings in 
the order and in the manner specified by the transportation authorities 
in the states it serves may be subjected to large tort judgments 
resulting from the relatively random occurrence of accidents at grade 
crossings of low hazard relative to those improved. The proposed 
regulations are meant to ensure that the present system is not 
compromised by state requirements that railroads select and install 
grade crossing improvements outside of the coordinated and prioritized 
federal/state system already established.
    The Supreme Court, in a recent decision, CSX Transportation, Inc. 
v. Easterwood, (113 S. Ct. 1732, (1993)) held that legal duties imposed 
on railroads by a State's common law of negligence fall within the 
scope of the preemption provision of 49 U.S.C. 20106, (formerly 
Sec. 205 of the Federal Railroad Safety Act (45 U.S.C. Sec. 434)). 
However, the Court held that preemption of such state laws will lie 
only if the federal regulations substantially subsume the subject 
matter of the relevant state law.
    FRA expects the proposed rules will ``substantially subsume'' the 
subject matter of railroads' selection and installation of highway rail 
grade crossing warning systems and as such will preempt state laws 
covering the same subject matter, regardless of whether Federal funding 
of improvements is involved at a particular crossing.
    In Easterwood, the Court held that ``for projects in which federal 
funds participate in the installation of warning devices, the Secretary 
has determined the devices to be installed and the means by which 
railroads are to participate in their selection. The Secretary's 
regulations therefore cover the subject matter of state law which, like 
the tort law on which respondent relies, seeks to impose an independent 
duty on a railroad to identify and/or repair dangerous crossings.'' 123 
L. Ed. 2d at 401.
    The Department believes that the distinction in safety duties drawn 
in Easterwood depending upon whether or not improvements to a 
particular grade crossing were federally funded results in poor public 
policy that is likely to misallocate scarce funds for grade crossing 
improvements because railroads are given a powerful financial incentive 
either (i) to invest funds in improving crossings on some basis other 
than the relative hazard rankings established by state highway 
authorities or (ii), especially in the case of small railroads, to 
diminish investment in grade crossing improvements because they cannot 
tell where an adverse verdict may strike next and their net financial 
results may be better served by using the funds to pay judgments they 
are unable to avoid. Railroad and highway safety alike are best served 
by focusing the economic and legal incentives of everyone involved in 
the process to invest grade crossing improvement funds where the most 
lives will be saved and the most injuries prevented. The proposed rule 
is intended to achieve that result.
    If, as the Department has recommended in its Highway-Rail Grade 
Crossing Action Plan, state transportation authorities also begin 
evaluating the hazards of grade crossings on entire rail corridors, the 
proposed rule would accommodate improvements focused in that manner. 
That is simply another way for state transportation authorities to 
systematically evaluate the relative safety of highway rail grade 
crossings and to decide which improvements will yield the best safety 
results.
    Moreover, highway rail grade crossing warning systems are devices 
to control motor vehicle traffic on highways. Government bodies 
responsible for [[Page 11652]] highways and motor vehicle safety are 
the appropriate decision makers to decide which devices should be 
installed on public highways and the order in which intersections 
should be improved.
    Railroads should be responsible for providing information to help 
state highway authorities make those decisions and for helping to 
implement those decisions after they are made. In fulfilling the 
requirements of FHWA's Highway Safety Improvement Program (49 CFR Part 
924), state agencies have a need for railroad information that might 
have an impact on the type of improvement appropriate to a particular 
crossing or that might affect the relative priority to be given in 
upgrading one crossing versus another. Such data include present and 
projected rail traffic (both hazardous and non-hazardous materials), 
track configuration, signalling, and authorized train speed as well as 
other conditions affecting the crossing. Railroads have historically 
provided assistance to state agencies planning for grade crossing 
improvements. The proposal would codify railroads' present practice of 
providing information and assistance needed by those state agencies.
    The proposal will not affect railroads' present obligations to 
maintain grade crossing warning systems. Indeed, as noted above, FRA's 
recently issued amendments to Grade Crossing Signal System Safety 
regulations codify specific maintenance, inspection, and testing 
requirements for grade crossing warning systems.
    While this proposed rule prevents a railroad from unilaterally 
selecting and installing warning systems, it does not prevent a state 
agency from ordering a railroad to pay for all or part of grade 
crossing warning system on a non-Federal aid project. While FRA is 
philosophically opposed to the concept of a railroad being forced to 
pay for an upgrade to what is essentially a highway traffic control 
device for which it receives no net benefit (see 23 CFR 210(b)), FRA is 
not prepared at this time to issue regulations preempting the many 
state laws in this area.

Section-by-Section Analysis

Sec. 234.301 Railroad cooperation.

    Paragraph (a) of this section requires that railroads cooperate 
with the appropriate state agency in furnishing information to enable 
the state to develop plans and project priorities for the elimination 
of hazards of highway-rail grade crossings. Railroad plans to increase 
traffic on a line or to upgrade track or signalling to enable increases 
in train speed, are important factors which states must take into 
consideration in determining their prioritization and plans. Similarly, 
state planners need information regarding railroad plans or projections 
regarding decreasing traffic volume. Railroads have generally provided 
such information on a voluntary and routine basis. This provision 
codifies the responsibility of a railroad to provide current and 
projected information which is uniquely available to the railroad. 
Without railroad information a state is unable to make the appropriate 
decisions to determine which crossings should be upgraded and with 
which type of warning systems. Many railroads already provide 
information such as current train counts, speeds, type and number of 
tracks and type of installed warning system to FRA or the state for 
inclusion in the DOT/Association of American Railroads National 
Highway-Rail Grade Crossing Inventory (Inventory) on file with FRA. 
Duplicate submissions to a state are not necessary under this rule 
inasmuch as Inventory data is routinely available to States.
    Presently, information submissions by States and railroads to the 
Inventory are made on a voluntary basis. Comments are specifically 
invited regarding the advisability of making Inventory information 
submission mandatory.
    This section also provides that a railroad need not submit 
proprietary data of a confidential nature to a state unless that 
information will be protected from disclosure. Such provision will 
ensure that railroads will not be penalized commercially by such 
regulatory compliance.
    Paragraph (b) of this section requires that railroads provide 
appropriate engineering and other technical assistance to the state 
agency in designing and installing the warning system determined by the 
state to be appropriate to the particular crossing. In many instances a 
railroad is the only party with the requisite technical expertise to 
assist the state in developing the engineering design for the crossing. 
This section recognizes that fact and therefore establishes a duty to 
assist in this area.

Sec. 234.303  Selection and installation of warning systems at public 
crossings.

    Paragraph (a) of this section prohibits a railroad from 
unilaterally selecting or determining the type of grade crossing 
warning system to be installed at a public highway-rail grade crossing. 
Such a decision is more appropriately made by the state or local 
government. In some situations today, a railroad voluntarily 
contributes to the cost of installing a crossing warning system. In 
some cases, a railroad has voluntarily contributed all or part of a 
locality's required local share in order to enable a particular 
crossing to be improved with federal funds. The proposed rule is not 
meant to alter this practice of voluntary railroad involvement. 
Similarly, this rule is not meant to affect those situations in which a 
railroad improves a crossing at its own expense in order to secure the 
closure of another crossing. These railroad practices, unlike funding 
of projects outside of the state planning process, are supportive and 
consistent with the prioritization and planning process. Therefore, 
nothing in the proposal prevents a railroad from voluntarily 
contributing to the installation costs of warning devices installed 
pursuant to the state planning process.
    Paragraph (b) addresses installation of the warning system after 
the specific grade crossing and type of warning system has been 
selected. This paragraph provides that a railroad shall only install or 
upgrade a grade crossing warning system at a public highway-rail grade 
crossing pursuant to an order by, or agreement with, a state agency or 
other public body having authority to issue such order or enter into 
such agreements. The proposal provides that whenever such state agency 
or other public body determines that a particular grade crossing 
warning system should be installed at a particular highway-rail grade 
crossing, the railroad shall comply with any legally sufficient order, 
or in the case of federally funded grade crossing projects, enter into 
and perform an agreement for the installation or upgrade of that grade 
crossing warning system with the state agency or other public body 
having jurisdiction. The rule does not require a railroad to provide 
the non-federal share of costs involved in federally-funded grade 
crossing improvement projects.
    This section recognizes that since the warning system is, in many 
instances, tied into the railroad's track circuits and the railroad 
will maintain the system, the railroad is generally the most 
appropriate party to physically install the system. Under the present 
Federal-aid system, railroads are reimbursed for procurement and 
installation costs of the warning system. This paragraph recognizes the 
benefits of this process and only prohibits railroads from unilaterally 
installing grade crossing warning systems without state or local 
approval.
    This section is not meant to prohibit a railroad's voluntarily 
contribution to the costs of installation of a highway-rail grade 
crossing warning system. [[Page 11653]] Railroads have voluntarily 
contributed all or a portion of the non-Federal matching share required 
under Federal law for construction of grade crossing warning systems. 
FRA does not intend to prevent or discourage such contributions.
    While FRA believes that railroads have many powerful incentives to 
continue their longstanding policy of voluntarily providing matching 
funds for federally funded grade crossing projects, comment is sought 
concerning whether this proposal will affect the level of railroad 
participation in such projects.
    Paragraph (c) addresses railroad projects in which warning system 
improvements are only incidental to the railroad project. Some railroad 
projects, such as new track, upgraded track, or the installation of 
signal systems, may involve upgrading warning system circuits or the 
replacement of obsolete equipment with newer, more technologically 
advanced equipment. This rule is not intended to prohibit railroad's 
present practice of incidental upgrades.

Regulatory Impact

E.O. 12866 and DOT Regulatory Policies and Procedures

    This proposed rule has been evaluated in accordance with existing 
policies and procedures, and is considered to be significant under DOT 
policies and procedures (44 FR 11034, February 26, 1979). This 
regulatory document was subject to review under E.O. 12866. FRA has 
prepared and placed in the rulemaking docket a regulatory evaluation 
addressing the economic impact of this rule. A copy of the regulatory 
evaluation may be inspected and copied in Room 8201, 400 Seventh 
Street, S.W., Washington, D.C., 20590.
    In its regulatory analysis FRA posited that the costs and benefits 
of this proposed rule are not measurable at present, but that the 
benefits will equal or exceed the costs, because the function of the 
rule is to virtually eliminate grade crossing selections and 
installations which do not require an analysis which considers costs 
and benefits.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) 
requires a review of rules to assess their impact on small entities. In 
reviewing the economic impact of the proposed rule, FRA has concluded 
that it will have a minimal economic impact on small entities. There is 
no direct or indirect economic impact on small units of government, 
businesses, or other organizations. Therefore, it is certified that 
this rule will not have a significant economic impact on a substantial 
number of small entities under the provisions of the Regulatory 
Flexibility Act.

Paperwork Reduction Act

    The proposed rule contains information collection requirements. FRA 
is submitting these information collection requirements to the Office 
of Management and Budget for approval under the Paperwork Reduction Act 
of 1980 (44 U.S.C. 3501 et seq.). The proposed section that contains 
information collection requirements is Sec. 234.301. Persons desiring 
to comment on this topic should submit their views in writing to FRA 
(Ms. Gloria Swanson, RRS-21, Federal Railroad Administration, 400 
Seventh Street, S.W., Washington, D.C. 20590) and to the Office of 
Management and Budget (Desk Officer, Regulatory Policy Branch (OMB No. 
2130-AA92), Office and Management and Budget, New Executive Office 
Building, 726 Jackson Place, N.W., Washington, D.C. 20530. Copies of 
any such comments should also be submitted to the Docket Clerk, Office 
of Chief Counsel, FRA, 400 Seventh Street, S.W., Washington, D.C. 
20590.

Environmental Impact

    FRA has evaluated these proposed regulations in accordance with its 
procedure for ensuring full consideration of the potential 
environmental impacts of FRA actions, as required by the National 
Environmental Policy Act and related directives. This notice meets the 
criteria that establish this as a non-major action for environmental 
purposes.

Federalism Implications

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 12612, and it has been determined 
that the proposed rule has sufficient federalism implications to 
warrant the preparation of a Federalism Assessment. A copy of the 
Federalism Assessment has been placed in the public docket and is 
available for inspection.

List of Subjects in 49 CFR Part 234

    Railroad safety, Highway-rail grade crossings.

The Proposed Rule

    In consideration of the foregoing, FRA proposes to amend Part 234, 
Title 49, Code of Federal Regulations as follows:

PART 234--[AMENDED]

    1. The authority citation for Part 234 continues to read as 
follows:

    Authority: 49 U.S.C. 20103, 20106, 20107, 20111, 20112, 20134, 
21301, 21304, and 21311 (formerly Secs. 202, 208, and 209 of the 
Federal Railroad Safety Act of 1970, as amended (45 U.S.C. 431, 434, 
437, and 438, as amended)); 49 U.S.C. 20901 and 20102 (formerly the 
Accident Reports Act (45 U.S.C. 38 and 42); and 49 CFR 1.49 (f), 
(g), and (m).

    2. Add a new ``Subpart E--Selection and Installation of Grade 
Crossing Warning Systems,'' to read as follows:

Subpart E--Selection and Installation of Grade Crossing Warning 
Systems

 Sec.
234.301  Railroad cooperation.
234.303  Selection and installation of grade crossing warning 
systems.


Sec. 234.301  Railroad Cooperation.

    (a) Railroads shall cooperate with the appropriate state agency in 
furnishing information to enable the state agency to develop plans and 
project priorities for the elimination of hazards of highway-rail grade 
crossings including, but not limited to grade crossing elimination, 
reconstruction of existing grade separations, and grade crossing 
improvements. At the request of the appropriate state agency, a 
railroad shall provide information not already provided to the FRA or 
the state for inclusion in the DOT/Association of American Railroads 
National Highway-Rail Grade Crossing Inventory regarding railroad 
operations involving specific highway-rail grade crossings, including, 
but not limited to: present and projected rail freight traffic 
(including transportation of hazardous materials); present and 
projected passenger traffic; present and projected track configuration 
and signalling; present and projected maximum authorized train speed; 
and other conditions which may affect the planning for, and 
prioritization of, crossing improvements. Nothing herein requires that 
a railroad provide to a state proprietary data of a confidential nature 
unless such information shall be protected from disclosure.
    (b) Railroads shall provide appropriate engineering and other 
technical assistance to the state agency in designing and installing 
the warning system determined by the state to be appropriate to the 
particular crossing.


Sec. 234.303  Selection and installation of grade crossing warning 
systems.

    (a) A railroad shall not unilaterally select or determine the type 
of grade crossing warning system to be installed at a public highway-
rail grade crossing. [[Page 11654]] 
    (b) Subject to paragraph (c), a railroad shall only install or 
upgrade a grade crossing warning system at a public highway-rail grade 
crossing pursuant to an order by, or agreement with, a state agency or 
other public body having authority to issue such order or enter into 
such agreements. Whenever such state agency or other public body 
determines that a particular grade crossing warning system should be 
installed at a particular highway-rail grade crossing, the railroad 
shall comply with any legally sufficient order, or in the case of 
federally funded grade crossing projects, enter into and perform an 
agreement for the installation or upgrade of that grade crossing 
warning system with the state agency or other public body having 
jurisdiction. Nothing herein shall require a railroad to provide the 
non-federal share of costs involved in federally-funded grade crossing 
improvement projects.
    (c) A railroad is permitted to upgrade, at its own expense, 
components of a public highway-rail grade crossing warning system when 
such upgrade is incidental to a railroad improvement project relating 
to track, structures or train control systems.
    3. Amend Appendix A by inserting in numerical order new entries to 
read as follows:

          Appendix A to Part 234.--Schedule of Civil Penalties          
------------------------------------------------------------------------
                                                                Willful 
                      Section                       Violation  violation
------------------------------------------------------------------------
                                                                        
                  *        *        *        *        *                 
234.301 Railroad cooperation......................     $5,000     $7,500
Sec. 234.303 Selection and installation of grade                        
 crossing warning systems.........................      5,000      7,500
                                                                        
                                                                        
                  *        *        *        *        *                 
------------------------------------------------------------------------

    Issued in Washington, D.C. on February 24, 1995.
Jolene M. Molitoris,
Administrator.
[FR Doc. 95-5100 Filed 3-1-95; 8:45 am]
BILLING CODE 4910-06-P