[Federal Register Volume 63, Number 251 (Thursday, December 31, 1998)]
[Proposed Rules]
[Pages 72225-72242]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-34563]
[[Page 72225]]
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DEPARTMENT OF TRANSPORTATION
Federal Railroad Administration
49 CFR Part 244
[FRA Docket No. SIP-1, Notice No. 1]
Surface Transportation Board
49 CFR Part 1106
[STB Ex Parte No. 574]
RIN 2130-AB24
Regulations on Safety Integration Plans Governing Railroad
Consolidations, Mergers, Acquisitions of Control, and Start Up
Operations; and Procedures for Surface Transportation Board
Consideration of Safety Integration Plans in Cases Involving Railroad
Consolidations, Mergers, and Acquisitions of Control
AGENCIES: Federal Railroad Administration, Surface Transportation
Board, DOT.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Railroad Administration (FRA) and the Surface
Transportation Board (STB or Board), working in conjunction with each
other, have developed complementary proposed regulations establishing
procedures for the development and implementation of safety integration
plans (SIPs) by railroads proposing to engage in certain specified
merger, consolidation, or acquisition of control transactions with
another railroad. The scope of the transactions covered under the two
rules would be identical except that FRA would also require carriers
engaged in ``start up'' transactions to prepare SIPs.
Under FRA's proposed rule, railroads seeking to consummate a
covered transaction would be required to file a proposed SIP with FRA.
(A SIP is a written document explaining how each step in implementing a
contemplated transaction would be performed safely.) FRA would then
review the SIP and advise the Board as to whether it provides a
reasonable assurance of safety for the transaction. The rule would
further require a railroad to have an approved SIP by FRA before it
could execute operations over property subject to the transaction.
Where the Board has been involved in authorizing the transaction, FRA
would consult with the Board at all appropriate stages of
implementation.
Likewise, rail carriers seeking to carry out a transaction within
the Board's jurisdiction for which the Board has concluded such
consideration is necessary, would be required to file a SIP with FRA
and the Board when they file their application or exemption. FRA would
review the SIP and file written comments with the Board's Section of
Environmental Analysis (SEA). After reviewing the SIP, SEA's analysis,
and comments provided by interested persons during the STB's
environmental review process, the Board would then independently
evaluate the transaction and decide whether to approve it. Should the
Board approve the transaction, FRA would monitor the implementation of
the SIP, consult with the Board at all appropriate stages of
implementation, and advise the Board when the proposed integration has
been safely completed. FRA would be authorized to exercise its full
enforcement remedies should either FRA or the STB reject the proposed
SIP or a railroad fails to implement the terms of an approved SIP.
The proposed rules are designed to enable the Board and FRA to
ensure adequate and coordinated consideration of safety integration
issues in covered rail transactions while minimizing the burdens on the
participants. FRA and the STB believe that the joint rule will serve
the public interest in promoting safety in the railroad industry,
consistency in decisions, and efficiency in compliance, enabling the
agencies to employ their areas of expertise to fulfill their statutory
objectives.
DATES: Submit written comments on or before March 1, 1999. Neither FRA
nor the STB intends to hold a public hearing at this time on its
respective proposed rules. Nevertheless, anyone who desires that either
of the two agencies hold a public hearing must notify both the FRA
Docket Clerk (either by telephone (202-493-6030) or by mail) and the
STB Secretary ((202) 565-1650 or by mail), on or before February 1,
1999, specifying which of the two agencies it wants to hold a public
hearing, and explaining why a hearing should be required.
ADDRESSES: Because of the close interrelationship between FRA and the
STB on these proposed rules, copies of any comments on the proposed
rules should be served on both FRA and the STB. However, commenters
should clearly identify the rule on which they are commenting by using
the FRA Docket No. SIP-1 for comments on FRA's proposed rule, and STB
Ex Parte No. 574 for comments on STB's proposed rule.
Procedures for written comments to FRA: Submit one copy to the
Department of Transportation Central Docket Management Facility located
in room PL-401 at the Plaza level of the Nassif Building, 400 Seventh
Street, S.W., Washington, D.C., 20590. All docket material on the FRA
rule will be available for inspection at this address and on the
Internet at http://doms.dot.gov. (Docket hours at the Nassif Building
are Monday-Friday, 10 a.m. to 5 p.m., excluding Federal holidays.)
Persons desiring to be notified that their comments have been received
by FRA should submit a stamped, self-addressed postcard with their
comments. The FRA Docket Clerk will indicate on the postcard the date
on which the comments were received and will return the card to the
addressee.
Procedures for written comments to the STB: Send an original and 10
paper copies referring to STB Ex Parte No. 574 to Office of the
Secretary, Case Control Unit, Surface Transportation Board, 1925 K
Street, N.W., Washington D.C., 20423. In addition to paper copies, the
parties must also submit their pleadings to the Board on a 3.5-inch
diskette formatted for WordPerfect 7.0 (or in a format readily
convertible into WordPerfect 7.0). All pleadings submitted on diskettes
will be posted on the Board's website (www.stb.dot.gov).
FOR FURTHER INFORMATION CONTACT: Jon Kaplan, Trial Attorney, Office of
Chief Counsel, FRA, 1120 Vermont Avenue, Mailstop 10, Washington, D.C.,
20590 (telephone: (202) 493-6053); and Evelyn G. Kitay, Office of the
General Counsel, STB, 1925 K Street, N.W., Washington, D.C., 20423
(telephone: (202) 565-1563) [TDD for the hearing impaired: (202) 565-
1695.].
SUPPLEMENTARY INFORMATION:
Joint FRA/STB Introduction
FRA and STB are jointly responsible for promoting a safe rail
transportation system.
Under Federal law, primary jurisdiction, expertise and oversight
responsibility in rail safety matters are vested in the Secretary of
the Department of Transportation, and delegated to the Federal Railroad
Administrator. 49 U.S.C. 20101 et seq.; 49 CFR 1.49. FRA has authority
to issue regulations to promote safety in every area of railroad
operations and reduce railroad-related accidents and injuries. 49
U.S.C. 20101 and 20102. FRA has exercised its jurisdiction to protect
the safety of railroad operations through the issuance and enforcement
of regulations, partnering with railroad labor organizations and
management of particular railroads to identify and develop solutions to
safety problems, actively participating in STB rail proceedings, and
monitoring railroad
[[Page 72226]]
operations during the implementation of STB-approved transactions.
The Board is also responsible for promoting a safe rail
transportation system. The rail transportation policy (RTP), 49 U.S.C.
10101, which was adopted in the Staggers Rail Act of 1980, Pub. L. 96-
448, 94 Stat. 1895, and amended in the ICC Termination Act of 1995,
Pub. L. 104-88, 109 Stat. 803 (1995), establishes the basic policy
directive against which all of the statutory provisions the Board
administers must be evaluated. The RTP provides, in relevant part,
that, ``[i]n regulating the railroad industry, it is the policy of the
United States Government * * * to promote a safe and efficient rail
transportation system'' * * * [by allowing rail carriers to] ``operate
transportation facilities and equipment without detriment to the public
health and safety * * * .'' 49 U.S.C. 10101(8). The rail transportation
policy applies to all transactions subject to the Board's jurisdiction.
Thus, both FRA and STB are vested with authority to ensure safety
in the railroad industry. Each agency, however, recognizes the other
agency's expertise in regulating the industry. FRA has expertise in the
safety of all facets of railroad operations. Concurrently, the Board
has expertise in economic regulation and assessment of environmental
impacts in the railroad industry. Together, the agencies appreciate
that their unique experience and oversight of railroads complement each
other's interest in promoting a safe and viable industry.
In the Conrail Acquisition proceeding, 1 the two
agencies recognized the need to work together to ensure that the
proposed transaction would be safely implemented. Both agencies took a
proactive role in analyzing the complex transaction involving two large
railroads--Norfolk Southern Railway Company (NS) and CSX
Transportation, Inc. (CSXT)--in their acquisition of a third large
railroad, Consolidated Rail Corporation (Conrail). FRA conducted a
formal safety assessment and recommended to the STB that the railroads
be required to file SIPs explaining how they intended to safely
integrate their operations if the transaction were approved. The Board
agreed with FRA's suggestion, and directed NS and CSXT to file SIPs. NS
and CSXT subsequently filed SIPs detailing each step of the integration
process in their operating plans. Since then, both railroads have
continued to coordinate with FRA in implementing the SIPs consistent
with the agency's guidelines, and FRA has advised the Board on each
carrier's progress in executing the plans. The lessons learned from
this process are that safety plays a significant role in a regulated
transaction and must be addressed before integration commences.
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\1\ CSX Corporation and CSXT Transportation, Inc., Norfolk
Southern Corporation and Norfolk Southern Railway Company--Control
and Operating Leases/Agreements--Conrail Inc. and Consolidated Rail
Corporation, STB Finance Docket No. 33388 (Conrail Acquisition).
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Based on this experience, FRA and STB have decided to formalize
this partnership in regulating future rail consolidation transactions
among Class I, Class II, commuter, and intercity passenger railroads by
issuing a joint notice of proposed rulemaking. The proposed rules are
intended to accomplish the safety objectives of both agencies, avoid
gaps and inconsistencies in the two agencies' regulatory requirements,
and impose as little burden as possible on the participating parties.
Joint Discussion of Framework of the Proposed Rules
FRA's proposed rule. FRA proposes to require certain railroads
seeking to merge, consolidate, or acquire control of another railroad,
or ``start up'' operations as a railroad to file proposed SIPs with FRA
before consummating the regulated transaction. The transactions covered
would be as follows: (1) A Class I railroad, a railroad providing
intercity passenger service such as the National Railroad Passenger
Corporation (Amtrak), or a commuter railroad seeking to acquire, merge,
or consolidate with a Class I or Class II railroad, a railroad
providing intercity passenger service, or a commuter railroad; (2) a
Class II railroad proposing to consolidate, merge, or acquire another
Class II railroad with which it connects so as to involve the
integration of operations; (3) any merger, consolidation, or
acquisition resulting in operations that would generate revenue in
excess of the Class I railroad threshold, except those transactions
involving Class III freight only railroads; and (4) all start up
operations involving the establishment of a new line for passenger or
freight service generating revenue that would exceed the Class II
railroad threshold.
Such SIPs must systematically describe how each applicant railroad
would integrate its operations in all areas of rail safety. FRA would
then review the proposed SIPs to ensure that they provide a reasonable
assurance of safety. Should the plans be approved, FRA would monitor
the applicants' implementation of the SIPs until integration of
operations is complete. Each railroad must carry out the specific
measures addressed in an approved SIP at all times during the
integration phase. The rule proposes authorizing FRA to exercise its
enforcement remedies should a railroad conduct operations either
without an approved SIP or in violation of the same. Enforcement may
involve legal or equitable remedies, authorizing the agency to assess
civil penalties or issue emergency or compliance orders against a
recalcitrant railroad.
STB's proposed rule. The STB's proposed rule encompasses all of the
transactions covered by FRA's proposed rule, other than ``start up''
operations. The STB's proposed rule builds on FRA's proposed rule by
requiring a SIP containing information required under the FRA rule to
be filed by an applicant railroad involved in a covered transaction
with the STB as well as with FRA. The SIP would be required to be
submitted to the STB, and FRA, no later than the date the application
or exemption for authority to execute such a transaction is filed with
the STB. The Board would conduct an environmental review of the
application, and FRA would provide written comments on the adequacy of
the SIP to the Board's SEA, which is responsible for preparing the
Board's environmental documents. SEA would then include the SIP and any
additions or revisions based on continued discussions with FRA in the
draft environmental documentation. Should the Board approve the
transaction and require compliance with a SIP, FRA, as contemplated by
these rules, would work with the applicants to ensure safe integration
of the applicants' operations in accordance with the SIP, and any
revisions or modifications agreed to by FRA. The rule proposes that FRA
advise the Board on the status of implementation in accordance with an
agreement reached between STB and FRA for each proceeding. FRA also has
undertaken to advise the Board in writing when the proposed integration
of applicants' operations has been safely completed.
Below are FRA's and STB's separate and independent statements of
basis and purpose for the rules that each agency is proposing,
including a section-by-section analysis and the text of each agency's
proposed rules themselves.
FRA's Statement of Basis
Mergers and other rail transactions can result in safety problems
if not carefully planned and implemented, as evidenced by recent
mergers. The scope of rail mergers among, and acquisitions by, Class I
railroads has changed
[[Page 72227]]
dramatically in ways that present serious safety issues. As these
carriers, and the consolidations in which they are involved, become
larger and more complex, integrating operations, facilities, personnel,
safety practices, and corporate culture while maintaining safe
operations becomes more of a challenge. Two specific examples of
shortcomings experienced by railroads carrying out ``mega-mergers'' are
discussed below.
The mergers of the Union Pacific Railroad Company (UP) and the
Southern Pacific Transportation Company (SP) (collectively referred to
as UP/SP) and Burlington Northern Railroad Company (BN) and the
Atchison, Topeka and Santa Fe Railway Company (ATSF) (collectively
referred to as the BNSF) have demonstrated that integrating railroads
into an even larger carrier present significant challenges in a great
many areas, including: harmonizing information systems; coordinating
marketing; training dispatchers; modifying operational practices and
procedures; implementing personnel policies and bargaining agreements;
integrating corporate cultures; determining appropriate staffing needs;
and providing adequate rail facilities, infrastructure and equipment.
The following is a summary of the safety problems FRA identified with
respect to these two mergers. FRA refers interested persons to the
agency's regulatory evaluation for a more detailed discussion of these
problems, a copy of which has been placed in the docket for FRA's
proposed rule.
UP/SP, for instance, experienced severe congestion and related rail
service difficulties in integrating the two railroads with their
different histories, cultures, and operating practices. The post-merger
force reductions of 1,500 or more employees, coupled with inadequate
rail facilities, infrastructure and equipment, and increased traffic
led to service delays and disruptions, and congestion of lines in
Texas, as well as increased exposure to incidents and injuries as
overworked supervisors and train crew employees tried to cope with the
dilemma. As a result, the company suffered substantial financial losses
and safety problems surfaced.
FRA believes that this spike in UP/SP accidents and incidents is
attributed to management decisions that focused on reducing or
consolidating existing labor resources and reaching operating
efficiencies and productivity goals. For example, UP/SP offered
voluntary separation awards to seasoned SP employees and authorized
former UP employees to conduct operations on territory in which they
lacked the training on operating rules or practices governing such
operations. During its post-merger safety survey, FRA identified other
deficiencies, including incompatible computer database systems,
inadequate training of train dispatchers, and a failure to conduct
alcohol and drug testing consistent with UP's program. These
deficiencies culminated in a fundamental breakdown in sound railroad
safety practices, exposing unforeseen problems.
Likewise, BNSF encountered operational and safety problems when it
implemented its merger. FRA attributes the Cajon Pass freight train
derailment in February 1996, which was shortly after the merger, to a
lack of communication between railroad officials in the field and top
management officials in the corporate headquarters about the fact that
two-way end-of-train telemetry devices (EOT) on BNSF trains operating
over the pass did not function properly. Had the EOT device on the
derailed train functioned properly, the accident may have been averted.
See National Transportation Safety Board Accident Report PB96-916305
(Feb.1, 1996); FRA's final rule on Two-Way End-of-Train Telemetry
Devices, 62 FR 278, 279, Jan. 2, 1997. The derailment of 4 locomotives
and 45 freight cars (including 4 cars containing hazardous materials)
resulted in the death of the conductor and brakeman, serious injury to
the engineer, the burning of hazardous materials carried on the train,
the evacuation of the surrounding community, and the closing of
Interstate 15 for two days. Although BNSF was one of the first of the
major railroads to equip its trains with EOT devices in response to a
similar accident in 1994, pre-merger operating practices at BN did not
ensure for correct use of the equipment. In many cases the rear-end
device could not communicate with the head-end device. This fact was
never reported to top management for correction. In other instances,
train crews failed to use or activate the EOT equipment because of a
lack of instruction or training. A properly prepared and implemented
safety plan would have promoted communication that may have remedied
these conditions.
FRA has identified other safety problems attributed to the BNSF
merger. These include incompatible electronic database systems used by
BN and ATSF, resulting in terminal offices generating inaccurate and
incomplete train consist lists, which compromised the safety of train
crews hauling the shipments; a lack of coordination between the train
dispatching systems used by BN and ATSF when the merger was
implemented, resulting in a breakdown in many functional areas
endangering employees; following the merger, instructions were issued
to identify trains by using the initials ``BNSF'' before the locomotive
number, causing a potentially dangerous situation whereby two
locomotives (one BN and the other ATSF) could be identified as the same
locomotive; and BNSF's failure to communicate operational and safety
policies and procedures on the entire system when the merger went into
effect. Rather, the railroad continued to use the individual standards
established by the separate rail entities, thereby confusing
dispatchers, train crews, and roadway workers when working on or
operating equipment in unfamiliar territory. FRA believes that BNSF's
inadequate safety planning before implementing this complex transaction
contributed to these operational difficulties.
``Mega-mergers,'' consolidations, or acquisitions of control
clearly present implementation challenges that necessitate careful
planning to ensure safety. FRA believes that other rail transactions
covered by its rule, each of which involves significant changes to
existing rail operations, also pose serious challenges to rail safety.
These challenges include establishing a uniform corporate safety
culture, harmonizing information systems, training employees
responsible for moving trains and maintaining equipment and
infrastructure, and implementing standard operating practices and
procedures governing railroad operations.
FRA has found that even small railroads experience difficulties
when they attempt to integrate operations of an acquired property. To
illustrate, the Wisconsin Central, Limited, the parent company of the
Wisconsin Central Railroad (WC), a large regional railroad, purchased
the Fox Valley and Western Railroad Company (FVW) in 1995. Before the
merger, FVW lost many of its covered service employees due to buyouts,
retirement, or other employment opportunities. Recognizing that the FVW
had a shortage of available employees, WC migrated its managers to
repair track, inspect rolling stock, and operate trains and engines on
the FVW property. As a result, WC's accident rate remained static in
1995 and 1996, declining only from 13.79 to 10.54 per 1,000,000 train
miles.
FRA attributes WC's lack of progress in reducing its accident rate
to the migration directive. Managers were preoccupied with carrying out
railroad
[[Page 72228]]
operations instead of overseeing the workforce. WC's failure to conduct
effective efficiency testing of employees or monitor closely field
personnel on operating rules governing railroad operations jeopardized
the integrity of the railroad system, and may have contributed to the
elevated accident rate. Although WC, in partnership with FRA, has made
tremendous advances regarding this issue, the agency believes that
advance planning would have identified this shortcoming, necessitating
the parent company to hire employees to meet this labor shortage and
enable the managers to execute their traditional tasks.
Based on lessons learned from the UP/SP and BNSF mergers, the
Board, with FRA assistance, has taken steps to ensure the safe
implementation of rail transactions subject to its jurisdiction. As a
result of safety and operational problems associated with the UP/SP and
BNSF mergers that could have been avoided with sufficient advance
planning, FRA carefully examined the filings of the applicants Norfolk
Southern Railway Company's (NS) and CSX Transportation, Incorporated's
(CSXT) submissions in the Conrail Acquisition proceeding before the
Board. FRA's initial findings were not encouraging. After reviewing the
applicants' safety plans, the agency determined that the railroads had
not submitted comprehensive assessments of the safety effects of the
proposed acquisition. Neither railroad presented a systematic plan
explaining the manner in which it intended to implement the
transaction. As a result, FRA requested the Board to require the
carriers to provide detailed information on how they proposed to
provide for the safe integration of their corporate cultures and
operating systems, if the Board were to approve the proposed
transaction.
The Board followed FRA's recommendation and required the applicants
to file detailed SIPs pursuant to guidelines developed by
FRA.2 The railroads' submissions were made part of the
environmental record in that proceeding and addressed in the ongoing
environmental review process in that case. The SIPs were included in
the Draft Environmental Impact Statement, to enable review and comment
by interested persons. The Board's SEA also independently reviewed the
plans.
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\2\ Conrail Acquisition, STB Decision No. 52, served Nov. 3,
1997.
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FRA and SEA (in its Final Environmental Impact Statement (Final
EIS)) concluded that applicants had satisfactorily addressed the safety
implementation concerns presented by the transaction to date. Moreover,
shortly before the Final EIS was issued, the Board entered into a
Memorandum of Understanding (MOU) with FRA, to establish an ongoing
monitoring process while the proposed Conrail Acquisition was being
implemented.3 The MOU clarifies the actions FRA and the
Board will take to ensure that the SIPs are successfully implemented.
Under the terms of the MOU, FRA will monitor, evaluate, and review NS's
and CSXT's progress. The MOU provides that FRA may request action by
the Board in exercising its oversight over the applicants to correct
identified safety deficiencies resulting from the transaction. When
requesting Board action, FRA will provide recommendations to remedy the
deficiencies. FRA will also report periodically to the Board on the
safety integration of the Conrail Acquisition, but not less than
biennially. FRA will also report significant integration issues to the
Board if and when they are identified. FRA's reporting will continue
until FRA advises the Board in writing that the proposed integration
has been safely completed.
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\3\ In the Board's decision approving the Conrail Acquisition,
the Board imposed environmental mitigation conditions requiring the
applicants to (1) comply with their SIPs (and any modifications or
updates needed to respond to evolving conditions) and (2)
participate and fully cooperate with the ongoing regulatory
activities associated with the ongoing safety integration process
described in the MOU.
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Having developed a vehicle by which to evaluate safety integration
issues in Conrail Acquisition, the Board issued an advanced notice of
proposed rulemaking (ANPRM) requesting comments on the advisability of
promulgating rules to extend this process to other rail transactions
subject to the Board's jurisdiction.4 62 FR 64193, Dec. 4,
1997.
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\4\ The Board has required the same type of showing in the
proposed merger between Canadian National Railway Company and
Illinois Central Railroad Company, which is now pending before the
Board. Canadian National Railway Company, Grand Trunk Corporation,
and Grand Trunk Western Railroad Incorporated--Control--Illinois
Central Corporation, Illinois Central Railroad Company, Chicago,
Central and Pacific Railroad Company, and Cedar River Railroad
Company, STB Finance Docket No. 33556 (STB Decision Nos. 5 and 6,
served June 23, 1998, and Aug. 14, 1998).
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Based on the comments received in response to the ANPRM and the
Board's experience with the SIP process in Conrail Acquisition, the
Board issued a decision on July 27, 1998, finding sufficient merit to
warrant further exploration of establishing regulations addressing the
safe implementation of Board-approved transactions. The Board directed
the Board staff to develop a joint notice of proposed rulemaking,
addressing the issues that have arisen in this proceeding and that are
of concern to FRA, and to submit the proposed rule for the Board's
evaluation and approval before publishing the proposal.5
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\5\ This joint approach was predicated upon assurances by DOT
that a joint process would not subject the exercise by the Board of
its rulemaking authority in this proceeding to review by the Office
of Management and Budget, in contravention of the STB's
Congressionally mandated independence.
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Following the issuance of the July 27, 1998, decision, the STB
staff met informally with FRA staff and developed this joint rulemaking
document. The proposed rules are designed to establish procedures to
enable the Board and FRA to ensure adequate and coordinated
consideration of safety integration issues in rail transactions, while
minimizing the burdens on the participants.
FRA's Section-by-Section Analysis For Its Proposed Rule
FRA proposes to add part 244 to title 49, Code of Federal
Regulations, prescribing regulations on safety integration plans
governing railroad consolidations, mergers, acquisitions of control,
and start up operations. Below is an analysis of the regulatory
propositions proposed in the rule.
Section 244.1 Scope, Application, and Purpose.
Section 244.1(a) states the types of transactions and the parties
involved in such transactions that would require the filing of a SIP.
Section 244.1(a)(1) provides that a Class I railroad, a railroad
providing intercity passenger service, or a commuter railroad seeking
to acquire, merge, or consolidate with a Class I or Class II railroad,
a railroad providing intercity passenger service, or a commuter
railroad would be subject to this part. A Class II railroad proposing
to consolidate, merge, or acquire another Class II railroad with which
it would connect so as to involve the integration of operations would
require the filing of a plan. Also, any merger, consolidation, or
acquisition, excluding a transaction involving a Class III freight only
railroad, resulting in operations that would generate revenue in excess
of the Class I railroad threshold would be governed by part 244.
Finally, all start up operations as defined by this rule would trigger
part 244.
FRA intends to regulate significant transactions that left
unregulated, may compromise railroad safety. The agency believes that
railroads generating operating revenue, measured in 1991 dollars, in
excess of $250 million per year, i.e., the Class I railroad threshold,
[[Page 72229]]
are entities transporting a large volume of freight that need to be
scrutinized when they want to join with another large-scale carrier.
Given the problems identified with recent Class I mergers, FRA proposes
regulating Class I transactions.
Correspondingly, FRA believes that passenger railroads, whether
they are intercity or commuter operations, that participate in a
regulated transaction are sophisticated operations requiring Federal
Government oversight. Class II railroads seeking to execute a
transaction in which they would directly interchange traffic and all
transactions, excluding Class III freight only railroads, in which the
consummation of operations would produce revenue in excess of the Class
I revenue threshold, irrespective of geographic limitations, would also
be regulated. Class II railroads have operating revenues, measured in
1991 dollars, between $20 million and $250 million per year and include
such carriers as WC, Florida East Coast Railway, and Montana Rail Link,
Inc. FRA posits that these entities seeking to directly interchange
freight with each other present a complex transaction involving the
transfer or sharing of employees or equipment. Similarly, large-scale
transactions generating revenue in excess of $250 million per year
would create a railroad of complex magnitude. Again, the rule proposes
requiring plans from these applicants, setting out the manner and
methods in integrating such transactions.
The proposed rule would also govern start up railroads. ``Start
ups'' involve the establishment of a new rail line for intercity or
commuter passenger service or freight service generating revenue that
would exceed the Class II railroad threshold. See proposed Section
244.9 for the definition of ``start up operation.'' Commencing railroad
operations present the development and deployment of an infrastructure
system never before tried or tested. The use of rail equipment, track,
and signals, and the employment of operating rules governing the
movement of trains and designation of roadway work demands familiarity
with the new system and advance planning of operations scheduled to be
conducted. A SIP captures the need to forecast the step-by-step
implementation of a new line from construction to completion.
At this time, FRA does not intend to regulate the merger of Class
II railroads that do not directly interchange traffic or transactions
involving terminal railroads; rail line sales; or trackage rights
requests. The proposed rule further does not cover Class III freight
only railroads, i.e., those railroads that generate revenue, measured
in 1991 dollars, of less than $20 million per year. The agency believes
that these railroads engage in transactions that are not so complex or
hazardous as to warrant regulation. Nevertheless, FRA solicits comments
from interested parties as to whether the final rule should cover these
transactions, including transactions involving Class III railroads over
which passenger service would be provided, and whether the railroads
involved should prepare ``full blown'' SIPs or meet lesser safety
informational requirements. The comments should articulate a detailed
rationale for regulating these transactions and the types of
information that should be required together with evidence of any
consequences in leaving these transactions unregulated.
Paragraph (b) of this section explains the basis for the rule. SIPs
are designed to achieve a reasonable level of safety while regulated
transactions are being implemented. The source of the rule is premised
on the complexity of large transactions and the need to plan ahead
before carrying out such activities. FRA is confident that plans
setting out how railroads will merge, consolidate, acquire another
railroad, or start up business will promote efficiency, economy, and
safety in the railroad industry.
Section 244.1(c) advises applicants that part 244 applies only to
FRA's disposition of a regulated transaction. It does not apply to the
Board's process in reviewing transactions subject to its jurisdiction.
See 49 CFR part 1106 for regulations governing transactions regulated
by STB. The rule proposes that transactions within the Board's purview
would require a SIP process involving both FRA and STB before a
railroad may consummate a proposed transaction and conduct operations
over the affected property.
Section 244.3 Preemptive Effect.
Section 244.3 informs the public as to FRA's views regarding the
preemptive effect of the proposed rule. Section 20106 of title 49,
United States Code, provides that all regulations prescribed by the
Secretary relating to railroad safety preempt any State law,
regulation, or order covering the same subject matter, except a
provision necessary to eliminate or reduce an essentially local safety
hazard that is not incompatible with a Federal law, regulation, or
order, and that does not unreasonably burden interstate commerce. With
the exception of a provision directed at an essentially local safety
hazard, 49 U.S.C. 20106 preempts any State regulatory agency rule
covering the same subject matter as these regulations proposed.
Section 244.5 Penalties.
Section 244.5 identifies the penalties that FRA may assess upon any
person, including a railroad, or employees of a carrier, that violates
any requirements of this part. The penalty provision, which parallels
penalty provisions contained in other FRA-issued regulations, is
authorized by 49 U.S.C. 21301, 21304, and 21311. In essence, any person
who violates any requirement of this part or causes the violation of
any such requirement is subject to a civil penalty of at least $500 and
not more than $11,000 per violation. FRA may assess civil penalties
against individuals only for willful violations, and it may assess a
penalty of up to $22,000 per violation where a grossly negligent
violation or a pattern of repeated violations creates an imminent
hazard of death or injury to persons, or causes death or injury. Each
day a violation continues constitutes a separate offense. A person may
be also subject to criminal penalties for knowingly and willfully
falsifying entries or reports required by these regulations.
Paragraph (b) of Sec. 244.5 provides that FRA may invoke any of its
other enforcement remedies available under the safety laws if a
railroad fails to comply with this part. In particular, the agency
advises the regulated community that it is authorized to issue an
emergency or compliance order or seek the issuance of an injunction
prohibiting certain conduct should a railroad violate Sec. 244.21 of
this part. See, e.g., 49 CFR part 209, Appendix A. For example, should
FRA reject a proposed SIP and an applicant commence railroad operations
on property subject to the plan anyway, the agency may order the
railroad to cease operations until it receives approval of the plan.
FRA believes that the inclusion of penalty provisions for failure
to comply with the regulations is important to ensure that applicants
obtain agency approval of a proposed SIP before implementing a
regulated transaction and execute all measures provided in an approved
plan. The final rule will include a schedule of civil penalties in
Appendix A to 49 CFR part 244, to be used in connection with this part.
Because such penalty schedules are statements of policy, notice and
comment are not required before their issuance. See 5 U.S.C.
553(b)(3)(A). Nevertheless, commenters are invited to recommend the
appropriate penalties
[[Page 72230]]
corresponding to the relative seriousness of each type of violation.
Section 244.7 Waivers.
Proposed Sec. 244.7 sets forth the procedures for seeking a waiver
of compliance with the requirements of FRA's rule. A request for such a
waiver may be filed by any party subject to part 244. FRA will conduct
its own independent investigations to determine if an exception to the
general criteria can be made without compromising or diminishing rail
safety.
In filing a petition for a waiver, FRA respectfully refers an
interested party to the requirements enunciated at 49 CFR part 211 for
the procedures that must be followed. FRA recognizes that certain
transactions may arise that the agency did not intend to regulate. FRA
would thus entertain such a petition, provided that the petitioner can
show that the transaction at issue involves an incidental impact on
rail operations that would not pose a risk to rail safety. The burden
rests with the entity requesting the waiver to meet this criterion.
FRA may grant the petition should it determine that it is in the
public interest and is consistent with rail safety. FRA also reserves
the right to institute any conditions on the petition as it believes
are necessary to promote rail safety. The agency advises the regulated
community that it enjoys plenary authority to approve or reject any
petition for a waiver of this rule and its decision is ``agency
discretion by law.'' 5 U.S.C. 701(a)(2); see also Heckler v. Chaney,
470 U.S. 821 (1985).
Section 244.9 Definitions.
This section contains an extensive set of definitions introducing
the regulations. FRA promulgates these definitions to clarify the
meaning of important terms as they are used in the text of the proposed
rule. The proposed definitions are carefully worded to minimize any
possible misinterpretation of the rule. Several terms introduce new
concepts not published in any other FRA regulations. These definitions
require further discussion as set forth below.
The term ``amalgamation of operations'' is intended to cover the
migration, combination, or unification of one set of railroad
operations with another set of railroad operations. For example, if a
purchasing railroad intends to change personnel responsible for
conducting field operations, or replace, rehabilitate, refurbish, or
renovate existing track, bridges, radio, or signal and train control
systems, then it is amalgamating operations as defined. Similarly, an
applicant deploying, relocating, or transferring roadway equipment or
rolling stock from one railroad property to another is conducting
activities within the purview of this definition. In other words,
amalgamation is triggered when a railroad allocates human or capital
resources that impact operations from one entity to another.
The definitions of ``applicant'' and ``Class I or Class II
railroad'' are self-explanatory. ``Applicant'' covers a Class I or
Class II railroad, a railroad providing intercity passenger service, or
a commuter railroad that seeks to consummate a regulated transaction.
``Class I or Class II railroad'' is defined by regulations issued by
the Board, which are found at 49 CFR 1201; General Instructions 1-1.
Generally, STB classifies a Class I railroad as having an annual
carrier operating revenue of $250 million or more, and a Class II
railroad as having an annual carrier operating revenue between $20
million and $250 million. (A Class III railroad has an annual carrier
operating revenue of less than $20 million.) In accordance with the
Board's regulations, the annual carrier operating revenue is measured
in 1991 dollars.
The term ``best practices'' means the safest and most efficient
rules or instructions governing rail operations that are issued by a
railroad. FRA does not intend to substitute its judgment for that of a
railroad in determining safety and efficiency. Rather, the agency will
defer to an applicant's understanding and application of its operating
rules and practices that promote these interests.
The definition of ``corporate culture'' is new. As proposed, the
term means the attitudes, commitments, directives, and practices of
railroad management with respect to safe railroad operations. FRA
intends corporate culture to encompass a railroad management's
attitudes, directives, planning and resource allocations on the subject
of safety. Corporate culture thus represents a company's attitude
toward safety as identified in its operating rules and practices, and
its policies in eliminating individual deficiencies and planning for a
harmonious integration of railroad operations. FRA solicits comments
whether persons agree with this definition.
``Control,'' ``consolidation,'' ``merger,'' and ``start up'' are
terms describing the types of transactions governed by this part. The
definition of ``control'' is borrowed from the statutory definition at
49 U.S.C. 10102. FRA intends to regulate a proposed transaction in
which one or more railroads seek to acquire or exercise control of
property. One example is NS's and CSXT's acquisition of Consolidated
Rail Corporation (Conrail) in 1998, which involved the dividing up of
an existing Class I railroad by two separate Class I railroads. NS and
CSXT will now own and operate over property that was once possessed by
an independent carrier. Such a transaction fits within the meaning of
``control.''
As defined in this part, ``merger'' means an equity purchase of a
Class I or Class II railroad, a railroad providing intercity passenger
service, or a commuter railroad by another Class I or Class II
railroad, a railroad providing intercity passenger service, or a
commuter railroad. The transaction must involve the purchase of assets
and shareholder equity, and assumption of liabilities held by the
railroad acquired. Similarly, ``consolidation'' exists when a railroad
takes over another railroad's assets and/or liabilities with the
resulting entity having the combined capital, powers, and subsidiaries
and affiliates, if applicable, of all of its individual constituents.
Put another way, a merger occurs when a corporation, known as the
surviving corporation, buys another corporation, with the result that
the former company's existence continues whereas the latter company's
existence ceases. This principle is best expressed in the following
equation: A Corporation + B Corporation = A Corporation. In contrast, a
consolidation occurs when two or more constituent corporations cease to
exist and a new consolidated corporation emerges. This principle is
best expressed in the following equation: A Corporation + B Corporation
= C Corporation. In either transaction, the surviving or consolidated
corporation takes over the assets of the former constituent corporation
and assumes its liabilities.
A ``start up operation'' exists when an entity initiates railroad
operations on a rail line or lines involving intercity or commuter
passenger service or freight service in excess of the Class II railroad
threshold, i.e., revenue in excess of $20 million per year.
The definition of ``railroad'' is based on 49 U.S.C. 20102 (1) and
(2), and encompasses any person providing railroad transportation
directly or indirectly, including a commuter rail authority that
provides railroad transportation by contracting out the operation of
the railroad to another person, as well as any form of nonhighway
ground transportation that runs on rails or electromagnetic guideways,
but excludes urban rapid transit not connected to the general system.
[[Page 72231]]
The term ``Safety Integration Plan'' means a comprehensive written
plan submitted to and approved by FRA in compliance with this part that
details the measures for ensuring safe railroad operations during
implementation of a proposed transaction and assures compliance with
the safety laws. FRA intends a SIP to be a formal written document that
systematically describes how each element set out in Sec. 244.13 will
be integrated safely into the operations of the applicant railroad. The
SIP must comprehensively consider and analyze all significant sources
of increased safety risk, and discuss the sound procedures to be
adopted for implementing the transaction.
Finally, FRA borrows the definitions of ``environmental
documentation'' and ``Section of Environmental Analysis'' from the
definitions enumerated in the Surface Transportation Board's portion of
the joint rule. The meaning and application of these definitions may be
found at 49 CFR part 1106, which is the Board's counterpart of this
rule.
Section 244.11 Contents of a Safety Integration Plan
Proposed Sec. 244.11 sets out the structure of the SIP an applicant
must file. The litany identifies elements that must be addressed in
each subject matter area provided in Sec. 244.13. In general, the
regulatory proposition requires a railroad to prepare a roadmap or play
book explaining the practices and procedures, financial commitment, and
time frame for integrating or commencing field operations subject to
the transaction.
Paragraph (a) of Sec. 244.11 is bifurcated based on the type of
transaction proposed. A railroad proposing to start up operations must
address the physical and operational characteristics of the new line or
lines and the best practices to be adopted. For instance, an applicant
intending to construct a new line must provide information about the
terrain over which operations will commence and the establishment of
divisions and districts governing rail operations. In contrast, an
applicant seeking to merge, consolidate, or acquire control of another
railroad will be required to explain the different characteristics
between itself and the other railroads subject to the transaction. In
either case, the applicant must address the best practices of the
resulting transaction, meaning the safest and most efficient rules
employed in the railroad industry.
Next, the regulation requires a specific description of the manner
and method of operations proposed in a step-by-step chronology. Again,
an applicant must anticipate how it will safely implement the proposed
transaction for each subject matter area defined. The plan must also
describe the human and capital resources appropriated to carry out the
proposed transaction, the measures to comply with the safety laws, and
a proposed timetable, from start to finish, to implement the
transaction. FRA believes that the contents serve as a foundation for
implementing the plan. The contents must be descriptive, coherent, and
logical to lend credibility to the plan. FRA posits that a well
organized proposal setting out a plan of execution of detailed action
items will serve the agency's and railroad's interest in safely
integrating operations.
Section 244.13 Subjects To Be Addressed in a Safety Integration Plan
Involving an Amalgamation of Operations or Start Up Operations
This section contains the substantive information that must be
discussed in a SIP when a railroad seeks to amalgamate operations in a
regulated transaction. As explained above, a transaction in which a
railroad intends to transfer employees or rolling equipment from one
entity to another, or make changes in existing infrastructure,
precipitates an amalgamation under this part. FRA believes that these
operational changes are complex in nature and require thoughtful
analysis before they are carried out. A comprehensive assessment of
certain subject matter areas serves to direct applicants to focus on
instituting a safe transition of railroad operations. Again, the
premises are that advance planning, systematic thinking, and a written
plan promote safe implementations.
The subject matter areas are divided into two categories--physical
safety and cultural environment. The physical safety rubric contains
seven functional areas, which are track, bridges, and structures;
dispatching centers; operating practices; car and equipment maintenance
and inspection; signals and train control; hazardous materials; and
highway-rail grade crossings. FRA has identified these areas as
critical disciplines that are impacted by a regulated transaction when
operations are amalgamated. To protect the integrity of rail
operations, FRA proposes that these elements be addressed in a plan.
Paragraph 244.13(a) requires each applicant to explain the basis
for its safety culture. Specifically, the rule proposes requiring a
railroad to identify and describe differences in corporate cultures for
each safety-related area; describe how these cultures lead to different
practices governing rail operations; and explain how the proposed
integration of corporate cultures will result in a system of ``best
practices'' when the proposed transaction is implemented.
Historically, each railroad has possessed distinctive ways of
conducting its business that its employees identify as its way of
managing affairs, and that they are usually inclined to consider the
correct or best way of executing tasks. Mergers, consolidations,
acquisitions, and start up operations are complicated transactions,
requiring management and labor to embrace a culture that powerfully
emphasizes safety and good communications among management, employees,
and the employees' union representatives. It is imperative that the
applicant describe how it intends to produce the desired corporate
culture that underscores safe railroad operations.
FRA believes safety culture is an instrumental element in achieving
rail safety. For purposes of the proposed rule, the term ``corporate
culture'' means management's attitudes, directives, planning, and
resource allocations on the subject of safety. These elements
ultimately provide the vision and direction for all levels of railroad
employees and influence their training, health, morale, and safety
practices and habits. The safety culture of U.S. railroad companies,
especially the major Class I railroads, is established by the
railroad's chief executive officer and permeates throughout the entire
rank-and-file of employees. Management's attitudes, directives,
planning, and resource allocations all reflect the mission and vision
of a company, and influence the training, morale, and safety practices
of carrier employees. Successful integration requires a railroad to
evaluate its underlying priorities, practices, and philosophies during
the transition phase. For example, FRA views UP's and BNSF's immediate
post-merger reduction in employment to reach financial efficiencies
created a loss of talent and institutional knowledge for the two
railroads. This shortcoming led to a lack of familiarity with railroad
operations, employee misunderstandings, and communication gaps,
increasing the railroads' exposure to accidents, incidents, and
fatalities. FRA anticipates that a SIP addressing an applicant's
attitudes and practices toward safety will enhance the harmonious
integration of a unified system of operations.
Against this background, a railroad is required to discuss the
different cultures
[[Page 72232]]
within the various disciplines and explain how it will adopt the ``best
practices'' when the proposed transaction is implemented. Besides
reviewing the safest practices to be instituted, FRA is interested in
learning the methodology employed in developing the final work product.
An applicant is thus encouraged to trace the steps taken to reach the
ultimate measures to be adopted.
Most important, an applicant must designate safety as its highest
priority. Although productivity and efficiency drive the transaction,
there must be commitment to rail safety at all levels of a corporate
organization. Evidence has shown that when productivity eclipses
safety, congestion and service difficulties arise, leading to
operational hazards and increases in derailments and collisions. FRA
believes that a systematic analysis of a railroad's safety culture will
center the applicant's attention on safety, eliminating the ``root
cause'' of accidents and incidents. Communications patterns about
safety matters are especially important. When safety information is not
communicated clearly and promptly both up and down the corporate
hierarchy, safety problems ensue. That said, FRA invites the regulated
community to comment on whether the agency should regulate ``corporate
culture'' at all, and an applicant's ability to apply this element to
its business practices and the manner necessary to comply with this
requirement.
Section 244.13(b) requires each applicant to discuss its training
and educational programs to ensure that its employees and supervisors
responsible for field operations are proficient and qualified. The
specific employees include train and engine service employees,
dispatchers and operators, roadway workers, signal employees,
mechanical officials, and hazardous materials personnel. These
employees are on the ``front lines'' of the industry and need to be
familiar with all aspects of their occupations. A plan should include
details identifying the scope and depth of the type of training
operating personnel will receive. Training should also discuss the
resources allocated to conduct and complete training, and a proposed
schedule for accomplishing this task.
Proposed paragraph 244.13(c) provides the operating practices
information that must be contained in a SIP. There are five elements
that are within the discipline--operating rules, accidents/incidents,
hours of service laws, and the alcohol and drug and locomotive engineer
qualification and certification programs. Each requirement is self-
explanatory as enumerated in the regulatory text and must be addressed
in a plan.
FRA is convinced that railroad safety is best ensured by the strict
adherence to operating rules established by a railroad. Given that many
railroads either issued their own independent operating rules or
adopted operating rules published by the Northeast Operating Rules
Advisory Committee or General Code of Operating Rules, operations are
being governed by different sets of rules. To ensure that operations
are properly executed, an applicant must specify the operating rules,
timetables, and timetable special instructions that will govern these
activities.
A railroad must also identify the reporting procedures for any
reportable accident under 49 CFR part 225, and its policy on harassment
and intimidation, including a copy of its internal control plan as
required by 49 CFR 225.33. The applicant must address measures it will
take to comply with the Railroad Accidents/Incidents regulations found
at 49 CFR part 225, administer the monthly reporting requirements as
mandated by law, and inform employees about procedures available for
those who perceive intimidation and harassment under part 225.
The rule would further require a railroad to identify its post-
accident toxicological testing, reasonable cause testing, and random
alcohol and drug testing programs as required under 49 CFR part 219 and
how it intends to integrate operations subject to the transaction with
the existing programs. An applicant would also be required to set out
the qualification and certification program of locomotive engineers to
be employed and the manner in which it will integrate the new divisions
with the program. Finally, the plan must discuss an applicant's
proposed measures to comply with the hours of service laws and hours of
service recordkeeping regulations and FRA's interpretations of the
same. The plan must also address efforts taken to minimize fatigue of
covered service employees, i.e., employees who perform train and
engine, dispatching, or signal system service. FRA believes that
employee fatigue has caused or contributed to accidents and incidents
precipitated by human error. Employees who are well rested and
refreshed are less likely to commit errors affecting rail operations.
Thus, initiatives taken to minimize fatigue enhance safety in the
field, necessitating its inclusion in a SIP.
Section 244.13(d) would require a railroad to identify the
qualification standards for employees who inspect, maintain, or repair
rolling stock and designate the facilities that will repair the rolling
equipment. A plan must provide adequate assurances that mechanical
officials who are responsible for performing required inspections and
tests of the equipment are proficient in mechanical practices to
safeguard the use of freight or passenger cars and locomotives on a
railroad. The plan must further disclose the inspection facilities to
be employed for repairing rolling stock. This provision will ensure
that an applicant plans which roundhouses will be retained to maintain
equipment in compliance with the safety laws while efficiently using an
existing engine or car fleet. Paragraph (e) of Sec. 244.13 states that
a railroad must identify the signal and train control systems employed,
and maintenance, capital improvement, and research and development
projects planned for signal and train control operations. FRA is
interested is reviewing a SIP proposing to migrate or integrate an
acquired property or line segment system with an existing signal
system. Where an incompatibility between signal and train control
systems is found, safety may be jeopardized. The plan should discuss a
railroad's proposal to reconcile or harmonize dissimilar signal
practices and standards to avoid any possible misunderstandings or
miscommunications that may impact safety. Likewise, Sec. 244.13(f)
requires a railroad to identify the maintenance and inspection programs
for track and bridges. The plan should provide assurances that the
structures are safe or will be repaired, rehabilitated, or replaced, if
necessary, to ensure the integrity of the property.
Section 244.13(g) proposes requiring an applicant to address
hazardous materials in a SIP. There are two parts to this requirement.
First, an applicant must set out a hazardous materials inspection
program covering field inspection practices, communication standards
(i.e., shipping descriptions, certification, marking, labeling,
placarding, and emergency response information), and emergency response
procedures. Second, the railroad must explain its development and
delivery of an automated system for records of hazardous materials
shipments. FRA asserts that a SIP must include this information to
enable the agency to assess the safety of the railroad's hazardous
materials transportation system. A plan quantifying inspections of
hazardous materials shipments, shipping papers, and emergency response
measures provides a baseline
[[Page 72233]]
to evaluate the integrity of the program. Concurrently, information
about the computer software system retaining hazardous materials data
is vital to determine the reliability and accuracy of the data entered
and retained. FRA expects railroads embracing the latest technology to
install automated systems offering ``fail-safe'' features to prevent
the entry of ``freight all kinds'' for hazardous materials shipments or
incorrect waybills generated from electronic data interchange or
Standard Transportation Commodity Codes (STCC) information received
from a shipper. The program deployed must make information on hazardous
materials shipments immediately available for inspection and
photocopying by FRA officials during normal business hours. Above all,
an applicant must ensure that the automated system provides timely
availability of hazardous materials shipping papers to train crews,
clerical personnel, and agency officials.
Paragraph 244.13(h) sets out four criteria on dispatching
operations that a plan must address. They are the dispatching system to
be adopted, the migration of the existing system to the adopted one, if
applicable, the qualifications for determining duties performed by
dispatchers or operators, and the volume of work assigned to
dispatchers or operators. Undoubtedly, train dispatching is an integral
element in moving trains, engines, and rolling equipment in a safe and
efficient manner. To accomplish this task, a railroad must discuss
which dispatching system or systems will direct traffic on the property
subject to the transaction. The plan should address how a dispatching
system will be integrated in a deliberate manner to prevent service
disruptions and the measures to be taken to combat excess service.
Excess service fatigues dispatchers and operators, and railroads are
encouraged to develop initiatives reducing workload capacities to
further reduce the risk of dispatcher error.
Highway-rail grade crossing safety is another element that a SIP
must address. The plan must provide a program discussing grade crossing
signal system safety, emergency response measures, public education
initiatives, and proposals to improve grade crossings and grade
crossing system warning devices. Statistics show that the vast majority
of fatalities and injuries during railroad operations occur at grade
crossings due to collisions or trespass incidents. It has been FRA's
experience that a railroad consummating a transaction will increase
traffic on certain designated lines. Before increasing traffic density
in a territory, the carrier needs to consider its impact on safety at
grade crossings. Accordingly, an applicant should discuss its
commitment to improve existing grade crossing signal systems and
warning devices and educate the public about grade crossing safety in
its plan. FRA believes that a prevention program will elevate rail
safety by reducing accidents and injuries occurring at crossings.
Section 244.13(j) covers personnel staffing. A SIP must provide
data on the number of employees, both current and proposed, for certain
occupations associated with railroad operations. The eight specific
tasks are enumerated in the regulation. FRA believes that immediate
staff reductions in these areas may be detrimental to safety.
Institutional knowledge is essential to ensure a smooth transition in
operations. Unilateral dismissals will adversely impact certain crafts
by placing more responsibility on less trained or experienced
personnel. This feature, coupled with an increased workload, may place
undue pressure on these employees to execute tasks. Consequently, there
is a greater likelihood of human error, thereby compromising safety in
the field. Therefore, a railroad needs to plan the number of employees
necessary to carry out the assignments. The proposed rule in no way
establishes a guideline or yardstick for staffing purposes. Rather, the
rule requires an applicant to contemplate staffing levels and their
impact on discharging operations. A plan should simply provide a nexus
between staffing needs and adequate rail safety.
Paragraph 244.13(k) requires an applicant to set out its capital
investment program. The program must describe the railroad's intended
investments in the company's infrastructure, including its track and
structures, signals and train control systems, and locomotives, freight
cars, and other forms of rolling stock. The plan must also address
changes to existing investment forecasts and explain those differences.
Capital investment requires advance planning, which is the root of
this proposed rule. Transition in operations necessitates improvement
in existing infrastructure to increase capacity, volume, and
efficiency, and enhance safety. The rule would require an applicant to
identify a blueprint for allocating resources serving these objectives.
FRA anticipates that a SIP directing a railroad to appropriate capital
for infrastructure needs would improve performance while eliminating
systemic deficiencies that impair a transportation network.
Proposed section 244.13(l) provides that an applicant must describe
the relationship of freight and passenger service on railroad lines
subject to a regulated transaction. For instance, if an intercity
passenger or a commuter railroad operates on property that is within
the terms and conditions of a proposed merger, consolidation, or
acquisition, the railroad must address the manner in which it will
coordinate passenger and rail service to maintain a safe co-existence
between the two services. A SIP should explain the level of
communication between a freight railroad and a passenger railroad about
the operating rules and practices that will govern these operations
should the transaction be approved. FRA encourages applicants to
discuss their emergency response programs, joint safety exercises, and
efforts to coordinate automated systems programs in their plans. The
SIP, in short, must identify the potential safety impact on the
services and the measures directed to minimize any consequences.
Proposed paragraph 244.13(m) identifies the final element that must
be discussed in a plan. That element--information systems
compatibility--is essential for integrating an applied technology
system and providing continuity in an information database network that
ensures safe operations and protects customer service. An applicant
must address the steps it intends to execute to provide data on train
consists, freight car and locomotive movements and movement history,
dispatching operations, accident/incident reporting and recordkeeping
requirements, and emergency cessation of operations. The information
system must provide a single interface of data with a railroad's
customers, transmitting and receiving information without interruption.
Such planning requires the coordination and consensus of the parties in
a regulated transaction, enabling interested persons and FRA officials
to track the movement of shipments and equipment and download
information to determine compliance with the safety laws. Thoughtful
and careful planning will ensure a smooth and safe transition of
operations in the technology area.
Section 244.15 Subjects To Be Addressed in a Safety Integration Plan
Not Involving an Amalgamation of Operations or Start Up Operations.
The rule proposes requiring a railroad engaging in a transaction
that does not involve an amalgamation of operations or start up
operations to file a more
[[Page 72234]]
limited SIP. Those subject matter areas are training (Sec. 244.13(b)),
personnel staffing (Sec. 244.13(j)), and capital investment
(Sec. 244.13(k)).
FRA submits that these transactions do not involve a change in rail
operations because there is little, if any, migration of personnel or
equipment. FRA's principal interest in reviewing and approving SIPs is
to secure commitments from a railroad when infrastructure changes are
expected, which impact operations and correspondingly, safety. The
transactions described under this proposed section are akin to ``paper
transactions'' rather than ``operational transactions,'' meaning that
aside from revisions to corporate letterhead, any changes in operations
are minimal. In an abundance of caution, however, FRA believes that a
plan addressing training, employment, and capital investment would be
instructive for an applicant to be sensitive to topics that impact rail
safety in general. FRA welcomes comments from interested persons as to
whether railroads engaging in these transactions should be required to
file a more limited SIP, or a SIP at all.
Section 244.17 Procedures.
Proposed Sec. 244.17 sets out the procedures applicants must follow
in filing a SIP with FRA. Paragraph 244.17(a) explains that a railroad
must file a SIP with FRA and, for those transactions within the Board's
jurisdiction, file the same with STB no later than the date it submits
its application or exemption to the Board. FRA, however, intends to
make itself available to work with an applicant before it files its
proposed SIP on the elements that must be addressed in the plan. To
illustrate, the agency extended its assistance to the Canadian National
Railway Company (CN) before it filed its application to purchase the
Illinois Central Railroad Company (IC). The agency met and conferred
with CN corporate officials about its SIP and delineated specific
subject matter areas that the plan had to discuss to satisfy FRA's
concerns. As a result, CN was better positioned to file an acceptable
SIP with the agency and the Board within the STB's statutory time
frame. FRA will review the proposed SIP and provide comments, if any.
The rule provides that the applicant must file additional information
supporting its plan should FRA require the same. FRA expects that the
applicant and agency will engage in an iterative process to resolve any
questions about the foundation and implementation of the plan.
Paragraph 244.17(d) proposes requiring FRA to issue its findings of
fact and conclusions on the proposed SIP to the STB for those
transactions requiring Board approval. (FRA's standard of review of a
proposed SIP is discussed below.) FRA (and STB in its proposed rule)
propose requiring FRA to submit its report to the Board's SEA at a date
sufficiently in advance of the Board's issuance of the draft
environmental documentation in the case to permit incorporation in the
draft environmental record. The schedule will enable STB to issue its
draft environmental documentation, which will incorporate FRA's
comments. If the rail carriers have not produced a SIP that is fully
acceptable to FRA, FRA's filing to the Board will note the progress
that has been made and the areas that the carriers still need to
address. FRA intends to continue working with the applicants after the
SEA files its draft environmental documentation, but before the Board
disposes of the applications. This process was followed in the Conrail
Acquisition case and the proposed merger of CN and IC. FRA believes
that a flexible response is necessary to enable an applicant to
complete an acceptable comprehensive plan.
Section 244.17(e) requires an applicant to coordinate with FRA in
carrying out the transaction in accordance with the SIP, assuming FRA
and, if applicable, STB approve the proposed plan. In other words, the
rule proposes FRA to continue exercising oversight of a railroad after
its proposed SIP is approved to ensure that it correctly implements the
plan. FRA believes that safety is a continuum that begins with the
filing of a proposed SIP and continues until the transaction is
implemented consistent with the plan. Therefore, FRA would monitor a
railroad's performance in carrying out the plan until integration is
complete. In furtherance of its role, FRA envisions consulting with the
Board at all appropriate stages of the SIP implementation, and advising
the Board on the status of the implementation process consistent with a
MOU executed between FRA and STB. FRA's communication with the Board
would continue until integration is complete. The interplay between FRA
and the Board is set out in paragraph 244.17(f). These reports will
enable the STB to exercise its oversight of transactions that it
approves.
Section 244.19 Disposition.
Section 244.19 addresses FRA's review and approval process of a
proposed SIP. Paragraph 244.19(a) enumerates the agency's standard of
review. The plan must be thorough, complete, and clear, and detail a
logical and workable transition from conditions existing before the
proposed transaction to conditions intended to exist after the
transaction is consummated. Put another way, the plan must explain in a
comprehensive manner how the railroad intends to go from start to
finish in carrying out the proposed transaction. FRA underscores the
importance of addressing each of the subject matter elements within the
framework of the SIP's contents as provided in Sec. 244.11.
FRA then would evaluate the SIP to ensure that it provides a
reasonable assurance of safety at every step of the proposed
transaction. The plan must be sufficient to comply with the safety laws
and otherwise provide for safe railroad operations, and rational to
satisfy expectations of integration of operations. FRA emphasizes that
it has no intention of operating the railroad or questioning management
decisions implementing the SIP. Instead, the agency sees it role as
conducting a rational basis review of the SIP, meaning that the plan
must be reasonable. Should the SIP prove satisfactory, FRA would issue
its notice of approval. Approval is conditioned on the applicant's
successful execution of all of the subject matter elements in the plan,
including all later developments subject to FRA approval that could not
be completed before the agency's approval of the plan.
Finally, the rule proposes authorizing a railroad to amend its SIP
with FRA's approval or for FRA to require a railroad to amend its
approved plan should circumstances dictate. Plan approval is contingent
upon fulfillment of the elements enunciated in the plan and execution
of operations that were unforeseen when the proposed SIP was filed. For
example, NS and CSXT in the Conrail Acquisition, and CN and IC in their
intended merger continue to update their respective plans when they
identify resources, commitments, or schedules that were not anticipated
when they filed their proposed SIPs. FRA perceives a SIP and its
implementation as an evolutionary process requiring fine-tuning when
conditions warrant. Should the agency identify a shortcoming of an
approved SIP during implementation, it reserves the right to require
the railroad to amend its plan consistent with rail safety.
[[Page 72235]]
Section 244.21 Compliance and Enforcement.
Paragraph 244.21 explains FRA's role in enforcing the rule and
ensuring compliance with the regulations. Each railroad seeking to
carry out a regulated transaction must have an approved SIP before it
may change its operations on the property subject to the transaction.
FRA further notes that where the Board has been involved in authorizing
the transaction, FRA would consult with the Board at all appropriate
stages of SIP implementation. Additionally, each railroad must
successfully execute each measure within its approved SIP. FRA reserves
the right to exercise any of its enforcement remedies available under
the safety laws should a railroad not comply with either one of these
requirements. These legal and equitable remedies, which are more fully
discussed in Sec. 244.5 above, include civil or criminal prosecution of
any violation identified. FRA expects to exercise its enforcement
remedies in a judicious fashion.
Regulatory Impact of FRA's Proposed Rule
Executive Order 12866 and DOT Regulatory Policies and Procedures
FRA's proposed rule has been evaluated in accordance with existing
policies and procedures and is considered to be nonsignificant under
Executive Order 12866 and significant under DOT policies and procedures
(44 FR 11034, Feb. 26, 1979). The agency's proposal is deemed
significant under DOT's policies and procedures because this rulemaking
action embodies joint rules issued by independent regulatory agencies.
FRA has prepared and placed in the docket a regulatory evaluation of
the proposed rule. This evaluation estimates the costs and consequences
of the proposed rule as well as its anticipated economic and safety
benefits. It may be inspected and photocopied during normal business
hours by visiting the FRA Docket Clerk at the Office of Chief Counsel,
FRA, Seventh Floor, 1120 Vermont Avenue, N.W., in Washington, D.C.
Photocopies may also be obtained by submitting a written request by
mail to the FRA Docket Clerk at the Office of Chief Counsel, Federal
Railroad Administration, 1120 Vermont Avenue, N.W., Mail Stop 10,
Washington, D.C., 20590.
FRA prepared an analysis of this proposal which may be found, in
its entirety in the docket for this rulemaking. Principally, for a
Class I railroad, FRA estimates that a SIP will cost between $300,000
to $800,000 to prepare, but will prevent between $1,500,000 to
$12,000,000 in accident costs. For a Class II railroad, FRA estimates
that a plan will cost between $50,000 to $200,000 to prepare, but will
prevent between $60,000 to $1,200,000 in accident costs. The rule will
not apply to small entities, i.e., Class III freight railroads. In
addition, a railroad may avoid substantial service difficulties by
carrying through the safety planning process. This could save the
railroad hundreds of millions or billions of dollars. In the first
three quarters of 1998, UP reported losses of over $900,000,000 due to
service difficulties. The societal costs of these delays is probably
much greater as the figures only quantify costs incurred by UP.
FRA derived its estimates of accident reduction benefits from UP's
merger with SP, which created several unsafe conditions and encountered
several serious accidents, at least one of which was likely due to
inadequate safety planning. UP's service difficulties were reported in
its 10-Q filed with the Securities and Exchange Commission for the
third quarter of 1998. FRA's estimates of SIP costs are based on the
reported costs of NS and CSXT, which prepared respective SIPs in their
acquisition of Conrail.
Regulatory Flexibility Act
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601 et seq.,
requires an assessment of the impact of proposed rules on ``small
entities.'' The proposed rule relates to mergers, consolidations, and
acquisitions involving, in general, Class I or Class II railroads, and
would not apply to Class III freight railroads as currently drafted.
Given FRA's recently published interim policy establishing ``small
entities'' as being railroads that meet the line haulage revenue
requirements of a Class III railroad, FRA certifies that this
proceeding will not have a significant economic impact on a substantial
number of small businesses. See Interim Statement of Policy Concerning
Small Entities Subject to the Railroad Safety Laws (Policy Statement),
62 Fed. Reg. 43024, Aug. 11, 1997.
FRA adds that in its Policy Statement, it interprets commuter
railroads as ``small governmental jurisdictions'' as defined under the
RFA. ``Small governmental jurisdictions'' apply to communities ``with a
population of less than 50,000'' under RFA. 5 U.S.C. 601(5). FRA
submits that to the extent the proposed rule affects Class III commuter
railroads, they serve communities exceeding 50,000 persons.
Accordingly, FRA certifies that the proposal will not affect ``small
governmental jurisdictions,'' obviating the need to prepare an RFA
analysis.
Nevertheless, in light of the potential for a change in the
definition when FRA issues its final Policy Statement or in
transactions covered by this proposed rule, FRA invites comments in
this proceeding from any interested party on FRA's definition of
``small entity.''
Paperwork Reduction Act
FRA submits that the proposed rule does not contain information
collection requirements under the Paperwork Reduction Act of 1995, 44
U.S.C. 3501 et seq., and its implementing regulations, 5 CFR part 1320,
(collectively, PRA). Specifically, the agency has determined that the
rule does not involve a ``collection of information'' as defined by the
Office of Management and Budget under 49 CFR 1320.3(c) because the
information collection requirements will not impact ten or more persons
within any 12-month period. (For purposes of this rule, the definition
of ``person'' under the PRA is consistent with the definition as
enumerated in the regulatory text. See 49 CFR 1320.3(k).) Therefore,
the rule does not require FRA to conduct or sponsor a collection of
information within the meaning and application of the PRA, obviating
the need to prepare a paperwork package in this instance. See 49 CFR
1320.5(a). FRA invites public comment on the agency's estimate that the
information collection requirement will impact ten or less persons
within a 12-month period.
Environmental Impact
FRA has evaluated this proposed rule in accordance with its
procedures for ensuring full consideration of the potential
environmental impacts of FRA actions, as required by the National
Environmental Policy Act (42 U.S.C. 4321 et seq.), other environmental
statutes, Executive Orders, and related directives. This regulation
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 does not have sufficient federalism implications
to warrant the preparation of a Federalism Assessment.
STB's Statement of Basis
As pointed out in the joint FRA/STB introduction, the Board is
responsible
[[Page 72236]]
for promoting a safe rail transportation system. By advance notice of
proposed rulemaking (ANPRM) published in the Federal Register on
December 4, 1997, at 62 FR 64193, the Board requested comments on the
extent to which railroads should be required to provide information
pertaining to the manner in which they intend to provide for the safe
implementation of authority granted by the Board. The Board explained
that, over the years, it and its predecessor agency, the Interstate
Commerce Commission (ICC), have considered the issue of safety along
with other relevant issues in individual cases. As particularly
pertinent here, in the Conrail Acquisition case,6 the Board
for the first time required applicants to provide detailed information
on how they proposed to provide for the safe integration of their
corporate cultures and operating systems, if the Board were to approve
the proposed transaction. (The Board has required the same type of
showing in the proposed merger between CN and IC, which is now pending
before the Board.) The Board did so at the suggestion of FRA and rail
labor interests, after FRA advised the Board, based on its experience
following the STB's approval of the UP/SP merger in August 1996, that
it believed that certain of the safety problems that arose in the
implementation of that merger might have been avoided with sufficient
advance planning.
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\6\ Conrail Acquisition, STB Finance Docket No. 33388 (STB
Decision No. 52, served Nov. 3, 1997).
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Specifically, the Board required applicants in Conrail Acquisition
to file detailed Safety Implementation Plans (SIPs) developed within
guidelines set by FRA. The railroads' submissions were made part of the
environmental record in that proceeding and dealt with in the ongoing
environmental review process in that case. The SIPs were included in
the Draft Environmental Impact Statement (Draft EIS) to allow review
and comment by FRA, other parties, and the public. The Board's
environmental staff (SEA) also independently reviewed the plans.
FRA and SEA (in its Final Environmental Impact Statement (Final
EIS)) concluded that applicants had satisfactorily addressed the safety
implementation concerns presented by the transaction to date. Moreover,
shortly before the Final EIS was issued, the Board entered into a MOU
with FRA, with DOT's concurrence, to establish an ongoing monitoring
process during implementation of the proposed Conrail Acquisition. The
MOU clarified the actions that FRA and the Board would take to ensure
the successful implementation of the SIPs. Under the terms of the MOU,
FRA will monitor, evaluate, and review the applicants' progress. The
MOU provides that FRA may request action by the Board, in the exercise
of the STB's oversight authority over the applicants, to correct
identified safety deficiencies resulting from the transaction. When
requesting Board action, FRA will provide recommendations for
correcting the deficiency. FRA will report periodically to the Board
regarding safety integration of the Conrail Acquisition, but not less
than biannually. FRA will also report significant integration issues to
the Board if and when they are identified. FRA's reporting will
continue until FRA advises the Board in writing that the proposed
integration has been safely completed.
The Board's ANPRM in this proceeding explained that, having
developed a vehicle by which to evaluate safety integration issues in
Conrail Acquisition, it was appropriate to consider the advisability of
promulgating rules to extend this process to other rail transactions
subject to the Board's jurisdiction. Accordingly, the Board sought
public comment from FRA and any other interested persons on how the
Board should proceed to assure the safe implementation of rail
transactions subject to its jurisdiction (i.e., whether the STB should
proceed broadly by general rule or exclusively on a case-by-case basis,
and whether procedures other than those adopted in Conrail Acquisition
might be preferable in Board-approved transactions outside the merger
area).7
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\7\ The administrative process permits the Board to proceed
either on a case-by-case basis or by rule, and to address some kinds
of transactions by rule and some by reliance on the development of
precedent.
---------------------------------------------------------------------------
As discussed in more detail in the Board's decision served July 27,
1998, announcing that the STB would institute a rulemaking, the
commenters that responded to our ANPRM varied widely in their
recommendations. DOT urged the Board to undertake a joint rulemaking
proceeding and announced that FRA on its own is developing procedures
that would be required for Board transactions. Other commenters
including the National Industrial Transportation League (NITL) stressed
the need for coordination with FRA. The railroad participants argued
that special procedures were not necessary and that we should proceed
only on a case-by-case basis. On the other hand, the labor participants
argued that the STB should adopt special procedures and that we do so
for all transactions, including ones involving small or start-up
railroads.
The parties representing shipper interests took positions in
between those of the railroad and labor participants. For example, NITL
urged that there be formal rules for major control and construction
transactions, but that for minor control transactions we require only
that safety be considered, with less advance documentation required.
The Chemical Manufacturers Association would require advance
documentation only for future rail mergers and acquisitions. The City
of Reno proposed that preparation of a SIP as in Conrail Acquisition be
required for all railroad mergers. Additionally, it suggested that the
STB require a FRA certification process for certain
transactions.8
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\8\ The California Public Utilities Commission made a similar
request.
---------------------------------------------------------------------------
Based on the comments in response to the ANPRM and the Board's
experience with the SIP process in Conrail Acquisition, the Board
issued its decision served July 27, 1998, finding sufficient merit to
warrant further exploration of establishing regulations addressing the
safe implementation of Board approved transactions. The Board directed
STB staff to develop a joint notice of proposed rulemaking addressing
the issues that have arisen in this proceeding and that are of concern
to FRA, and to submit the proposed notice for its evaluation and
approval prior to going forward with publication.9
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\9\ This joint approach was predicated upon assurances by the
Department of Transportation that a joint process would not subject
the exercise by the Board of its rulemaking authority in this
proceeding to review by the Office of Management and Budget, in
contravention of this agency's Congressionally mandated
independence.
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Following the issuance of the Board's July 27, 1998 decision, Board
staff has met informally with FRA staff regarding the development of an
appropriate proposal that would accomplish the objectives of both
agencies, avoid gaps and inconsistencies in the two agencies'
regulatory requirements, and impose as little burden as possible on the
participating parties.
STB's Section-By-Section Analysis of Its Proposed Rule
Section 1106.1 Purpose.
The rules are designed to assure adequate and coordinated
consideration of safety integration issues by the Board and FRA in the
implementation of certain transactions subject to the Board's
jurisdiction.
[[Page 72237]]
Section 1106.2 Definitions.
This section sets forth definitions used in this part; these
definitions are self explanatory.
Section 1106.3 Actions for which Safety Integration Plan is Required.
This section explains which transactions require a railroad to file
a Safety Integration Plan with the Board. These transactions include a
Class I railroad, a railroad providing intercity passenger service, or
a railroad providing commuter service in a metropolitan or suburban
area proposing to consolidate with, merge with, or acquire control of
another Class I or Class II railroad, a railroad providing intercity
passenger service, or a railroad providing commuter service in a
metropolitan or suburban area; a Class II railroad proposing to
consolidate with, merge with, or acquire control of another Class II
railroad, with which it connects so as to involve the integration of
operations; or any railroad merging with, consolidating with, or
acquiring control of another railroad or railroads, except a
transaction involving a Class III freight only railroad, that would
result in operations generating revenue in excess of the Class I
railroad threshold. The regulation also requires a Class I or Class II
railroad requesting authority to acquire railroad property under 49
U.S.C. 10901 or 10902 that involves intercity passenger or commuter
operations to file a SIP. Generally, these regulated transactions
coincide with the transactions covered by FRA, except for start up
operations, which will promote consistency and efficiency in the
interplay between FRA and STB. In cases where the filing of a SIP is
required only by FRA's rules, the Board does not contemplate delaying
the processing of the Board proceeding to require compliance with FRA's
separate rules. Where the filing of a SIP is required by the Board's
rules, the Board will enforce the requirement with appropriate
sanctions, including suspending the processing of the application, or
in extreme cases, dismissal.
The proposed rule does not cover Class III freight railroads, i.e.,
those railroads that generate revenue, measured in 1991 dollars, of
less than $20 million per year. The Board had originally intended to
cover transactions involving Class III carriers where a Class I or
Class II carrier was involved, or the Class III carrier was acquiring a
line on which commuter or intercity passenger service is being
provided. However, based on FRA's representations that in its
experience such transactions do not create sufficient safety problems
to warrant imposing the burden of requiring preparation of a SIP, the
Board has initially decided to limit the scope of its proposal to
exclude those transactions as has FRA. The Board, like FRA,
specifically solicits comments, however, from interested parties as to
whether the final rule should cover these transactions. The comments
should articulate a detailed rationale for regulating these
transactions, the safety information that should be required, and
evidence of any consequences in leaving these transactions unregulated.
Section 1106.4 The Safety Integration Plan Process.
Proposed Sec. 1106.4 sets out the procedures for an applicant to
file a SIP, and the procedures by which the Board will consider a SIP
in connection with its approval or authorization of transactions for
which the Board has concluded such consideration is required. A
railroad seeking to carry out a covered transaction must file a SIP
prepared in accordance with FRA's regulations with the STB's SEA and
FRA no later than the date the application or exemption is filed with
the Board. The SIP will become part of the environmental documentation
in the Board proceeding and will be considered in the environmental
review process consistent with the Board's environmental rules at 49
CFR part 1105. Generally, covered transactions will be subject to
environmental review because the nature of the transaction involves
operational changes that exceed the regulatory thresholds established
under 49 CFR 1105.7(e)(4) or (5). See 49 CFR 1105.6(b)(4)(i). In the
event that a SIP should be required in a transaction that would not be
subject to environmental review, the Board intends to develop
appropriate case-specific SIP procedures. The Board specifically
requests comments on whether such transactions should be covered by
these rules, and if so, what procedures would be appropriate.
After FRA reviews the SIP, FRA will issue its findings and
conclusions on the adequacy of the plan to SEA at a date that is
sufficiently in advance of the Board's issuance of its Draft
Environmental Assessment or Draft EIS. As discussed earlier, FRA will
provide its analysis of the SIP within the time frame indicated,
whenever possible. Nevertheless, recognizing that the SIP is an ongoing
and fluid process, as in the Conrail Acquisition, FRA may comment on
the plan, and an applicant's status of progress in completing a SIP,
without endorsing the plan in full. The Board agrees with FRA that a
flexible response is necessary to enable an applicant to complete a
comprehensive plan.
Additionally, this approach will enable the Board to incorporate
FRA's comments in its draft environmental documentation, which, in
turn, will encourage the public to review and comment on the proposed
transaction. SEA will then independently review the SIP and respond to
comments received pursuant to the plan in its final environmental
documentation. Finally, the Board will consider the entire
environmental record, including information concerning the SIP, in
deciding whether to approve or reject the proposed transaction. Should
the Board approve the transaction, adopt the SIP, and require that the
applicant comply with the same, the railroad must coordinate with FRA
in carrying out the plan, including any amendments to the same, if
necessary. See FRA's section-by-section analysis discussing amendments
at Sec. 244.19 for a more complete discussion.
As explained in FRA's section-by-section analysis of
Sec. 244.17(f), FRA is proposing to advise the Board about FRA's
findings on the ongoing implementation process during any oversight
period established by the Board, in accordance with an agreement that
FRA and the Board will enter into and execute. Should FRA identify
shortcomings or deficiencies during integration, STB reserves
jurisdiction to reopen the proceedings and impose terms and conditions
on the transaction to ensure the transaction is safely implemented. FRA
also has undertaken to advise the Board when, in its view, the proposed
integration of applicants' operations has been safely completed.
Section 1106.5 Waiver.
The Board can waive or modify the requirements of this part where a
carrier shows that relief is warranted or appropriate.
Section 1106.6 Reservation of Jurisdiction
The Board reserves the right to require the filing of a SIP in
transactions other than those provided in this part, or to adopt
modified SIP requirements in individual cases, if it concludes doing so
is necessary to properly consider an application or other request for
authority.
Regulatory Flexibility Act
The Board preliminarily certifies that its proposal to require
safety integration plans under certain circumstances, if adopted, would
not have a significant effect on a substantial number of small
entities. The Board, however, seeks
[[Page 72238]]
comments on whether there would be effects on small entities that
should be considered.
Environmental Impact
This action will not significantly affect either the quality of the
human environment or the conservation of energy resources.
Federal Railroad Administration 49 CFR Chapter II
List of Subjects in 49 CFR PART 244
Administrative penalties, practice and procedure, Railroad safety,
Railroads, Safety Integration Plans.
In consideration of the foregoing, FRA propose to amend chapter II
of title 49, Code of Federal Regulations, to read as follows:
1. Part 244 is added to read as follows:
PART 244--REGULATIONS ON SAFETY INTEGRATION PLANS GOVERNING
RAILROAD CONSOLIDATIONS, MERGERS, ACQUISITIONS OF CONTROL, AND
START UP OPERATIONS
Subpart A--General
Sec.
244.1 Scope, application, and purpose.
244.3 Preemptive effect.
244.5 Penalties.
244.7 Waivers.
244.9 Definitions.
Subpart B--Safety Integration Plans
244.11 Contents of a Safety Integration Plan.
244.13 Subjects to be addressed in a Safety Integration Plan
involving an amalgamation of operations or start up operations.
244.15 Subjects to be addressed in a Safety Integration Plan not
involving an amalgamation of operations or start up operations.
244.17 Procedures.
244.19 Disposition.
244.21 Compliance and enforcement.
Appendix A to Part 244--Schedule of Civil Penalties (Reserved)
Authority: 49 U.S.C. 20103, 20107, 21301; 5 U.S.C. 553 and 559;
Sec. 31001(s)(1), Pub. L. No. 104-134, 110 Stat. 1321-373 (28 U.S.C.
2461 note); and 49 CFR 1.49.
Subpart A--General
Sec. 244.1 Scope, application, and purpose.
(a) This part prescribes requirements for filing a Safety
Integration Plan with FRA whenever:
(1) A Class I railroad, a railroad providing intercity passenger
service, or a railroad providing commuter service in a metropolitan or
suburban area proposes to consolidate with, merge with, or acquire
control of another Class I or Class II railroad, a railroad providing
intercity passenger service, or a railroad providing commuter service
in a metropolitan or suburban area;
(2) A railroad proposes to start up operations as a railroad as
defined under Sec. 244.9 of this part;
(3) A Class II railroad proposes to consolidate with, merge with,
or acquire control of another Class II railroad with which it would
connect so as to involve the integration of operations; or
(4) Any railroad merger, consolidation, or acquisition of control
would result in operations that generate revenue in excess of the Class
I railroad threshold, except for a transaction involving a Class III
freight only railroad.
(b) The purpose of this part is to achieve a reasonable level of
railroad safety during the implementation of transactions described in
paragraph (a) of this section. This part does not preclude a railroad
from filing more inclusive information not inconsistent with this part.
(c) The requirements prescribed under this part apply only to FRA's
disposition of a regulated transaction filed by an applicant. Certain
of the transactions covered by this part require separate filing with
and approval by the Surface Transportation Board. See 49 CFR part 1106.
Sec. 244.3 Preemptive effect.
Under 49 U.S.C. 20106, issuance of these regulations preempts any
State law, regulation, or order covering the same subject matter,
except an additional or more stringent law, regulation, or order that
is necessary to eliminate or reduce an essentially local safety hazard;
is not incompatible with a law, regulation, or order of the United
States Government; and does not unreasonably burden interstate
commerce.
Sec. 244.5 Penalties.
(a) Any person who violates any requirement of this part or causes
the violation of any such requirement is subject to a civil penalty of
at least $500, but not more than $11,000 per day, except that:
Penalties may be assessed against individuals only for willful
violations, and, where a grossly negligent violation or a pattern of
repeated violations has created an imminent hazard of death or injury
to persons, or has caused death or injury, a penalty not to exceed
$22,000 per violation may be assessed. Each day a violation continues
shall constitute a separate offense. Appendix A to this part contains a
schedule of civil penalty amounts used in connection with this part.
(b) As specified in Sec. 244.21 of this part, FRA may also exercise
any of its other enforcement remedies if a railroad fails to comply
with Sec. 244.21.
(c) Any person who knowingly and willfully makes a false entry in a
record or report required by this part shall be subject to criminal
penalties under 49 U.S.C. 21311.
Sec. 244.7 Waivers.
(a) A person subject to a requirement of this part may petition the
Administrator for a waiver of compliance with any requirement of this
part. The filing of such a petition does not affect that person's
responsibility for compliance with that requirement pending action on
such a petition.
(b) Each petition for a waiver under this section must be filed in
the manner and contain the information required by part 211 of this
chapter.
(c) If the Administrator finds that a waiver of compliance is in
the public interest and is consistent with railroad safety, the
Administrator may grant the waiver subject to any conditions the
Administrator deems necessary.
Sec. 244.9 Definitions.
As used in this part--
Administrator means the Administrator of the Federal Railroad
Administration or the Administrator's delegate.
Amalgamation of operations means the migration, combination, or
unification of one set of railroad operations with that of another set
of railroad operations, including, but not limited to, the allocation
of resources affecting railroad operations (e.g., changes in personnel,
track, bridges, or communication or signal systems; or use or
deployment of maintenance-of-way equipment, locomotives, or freight or
passenger cars).
Applicant means a Class I or Class II railroad, a railroad
providing intercity passenger service or a railroad providing commuter
service in a metropolitan or suburban area engaging in a transaction
subject to this part.
Best practices means the safest and most efficient rules or
instructions governing railroad operations that are reasonable and
practicable in accordance with railroad industry standards.
Class I or Class II railroad has the meaning assigned by
regulations of the Surface Transportation Board (49 CFR Part 1201;
General Instructions 1-1), as those regulations may be revised by the
Board (including modifications in class
[[Page 72239]]
thresholds based revenue deflator adjustments) from time to time.
Consolidation means the creation of a new Class I or Class II
railroad by combining existing railroads, or a railroad providing
intercity passenger service or a railroad providing commuter service in
a metropolitan or suburban area by taking over the assets or assuming
the liabilities, or both, of another Class I or Class II railroad, a
railroad providing intercity passenger service or a railroad providing
commuter service in a metropolitan or suburban area, such that the
resulting unified entity has the combined capital, powers, and
subsidiaries and affiliates, if applicable, of all of its constituents.
Control means actual control, legal control, or the power to
exercise control through common directors, officers, stockholders, a
voting trust, or a holding or investment company, or any other means.
See 49 U.S.C. 10102.
Corporate culture means the attitudes, commitments, directives, and
practices of railroad management with respect to safe railroad
operations.
Environmental documentation means either an Environmental Impact
Statement or Environmental Assessment prepared in accordance with the
Surface Transportation Board's environmental rules at 49 CFR part 1105.
Merger means the acquisition of one Class I or Class II railroad, a
railroad providing intercity passenger service, or a railroad providing
commuter service in a metropolitan or suburban area by another Class I
or Class II railroad, a railroad providing intercity passenger service,
or a railroad providing commuter service in a metropolitan or suburban
area, such that the acquiring railroad acquires the stock, assets,
liabilities, powers, subsidiaries and affiliates of the railroad
acquired.
Person means an entity of any type covered under 1 U.S.C. 1,
including but not limited to the following: a railroad; a manager,
supervisor, official, or other employee or agent of a railroad; any
owner, manufacturer, lessor, or lessee of railroad equipment, track, or
facilities; any independent contractor providing goods or services to a
railroad; and any employee of such owner, manufacturer, lessor, lessee,
or independent contractor.
Railroad means any form of non-highway ground transportation that
runs on rails or electromagnetic guideways, including:
(1) Commuter or other short-haul rail passenger service in a
metropolitan or suburban area; and
(2) High speed ground transportation systems that connect
metropolitan areas, without regard to whether those systems use new
technologies not associated with traditional railroads. The term does
not include rapid transit operations in an urban area that are not
connected to the general railroad system of transportation.
Safety Integration Plan means a comprehensive written plan
submitted to and approved by FRA in compliance with this part that
demonstrates in required detail how an applicant will provide for safe
railroad operations during and after any proposed transaction covered
by this part, and otherwise assure compliance with the Federal railroad
safety laws.
Section of Environmental Analysis or ``SEA'' means the Section that
prepares the Surface Transportation Board's environmental documents and
analyses.
Start up operation means to initiate railroad operations on a rail
line or lines in which the commencement of operations would either
involve intercity or commuter passenger service or produce revenue in
excess of the Class II railroad threshold.
Transaction means a consolidation, merger, acquisition of control,
or start up operation subject to the requirements of this part.
Subpart B--Safety Integration Plans
Sec. 244.11 Contents of a Safety Integration Plan.
Each Safety Integration Plan shall contain the following
information for each subject matter identified in Sec. 244.13 or
Sec. 244.15 of this part:
(a) A detailed description of:
(1) For transactions involving a start up operation, the physical
and operational characteristics of the start up operation and the best
practices to be adopted; or
(2) For all other transactions, how the applicant differs from each
railroad it proposes to acquire or with which the applicant proposes to
consolidate or merge, and the best practices of these railroads.
(b) A detailed description of the proposed manner and method of
operations of the resulting railroad or start up operation;
(c) The proposed specific measures, expressed step-by-step, for
each relevant subject matter that the applicant believes will result in
safe implementation of the proposed transaction consistent with the
requirements of this part;
(d) The allocation of resources, expressed as human and capital
resources within designated operating budgets, directed to complete
operations subject to the transaction;
(e) The measures to be taken to comply with the Federal railroad
safety laws, where applicable; and
(f) The timetable, stated in specific terms from commencement to
completion, for implementing paragraphs (c), (d) and (e) of this
section.
Sec. 244.13 Subjects to be addressed in a Safety Integration Plan
involving an amalgamation of operations or start up operations.
Each Safety Integration Plan involving an amalgamation of
operations or start up operations shall address the following subjects
for railroad operations conducted on property subject to the
transaction:
(a) Corporate culture. Each applicant shall:
(1) Identify and describe differences in corporate cultures for
each safety-related area;
(2) Describe how these cultures lead to different practices
governing rail operations; and
(3) Explain how the proposed integration of corporate cultures will
result in a system of ``best practices'' when the proposed transaction
is implemented.
(b) Training. Each applicant shall identify classroom and field
courses, lectures, tests, and other educational or instructional forums
designed to ensure the proficiency and qualification of the following
employees:
(1) Employees who perform train and engine service;
(2) Employees who inspect and maintain track and bridges;
(3) Employees who inspect, maintain and repair any type of on-track
equipment, including locomotives, passenger cars, and freight cars of
all types;
(4) Dispatchers or operators;
(5) Employees who inspect and maintain signal and train control
devices and systems;
(6) Hazardous materials personnel;
(7) Employees who maintain or upgrade communication systems
affecting rail operations; and
(8) Supervisors of employees enumerated in paragraphs (b)(1)
through (7) of this section.
(c) Operating practices--(1) Operating rules. Each applicant shall
identify the operating rules, timetables, and timetable special
instructions to govern railroad operations, including yard or terminal
operations.
(2) Accidents/incidents. Each applicant shall identify the
reporting procedures for any accident/incident subject to 49 CFR 225
and the policy on harassment and intimidation required
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by part 225, including a copy of the applicant's internal control plan
under 49 CFR 225.33.
(3) Alcohol and drug. Each applicant shall identify the post-
accident toxicological testing, reasonable cause testing, and random
alcohol and drug testing programs as required under 49 CFR 219.
(4) Qualification and certification of locomotive engineers. Each
applicant shall identify the program for qualifying and certifying
locomotive engineers under 49 CFR 240.
(5) Hours of service laws. Each applicant shall identify the
procedures for complying with the Federal hours of service laws and
related measures to minimize fatigue of employees covered by 49 U.S.C.
chapter 211.
(d) Motive power and equipment. Each applicant shall identify the
qualification standards for employees who inspect, maintain, or repair
railroad freight or passenger cars and locomotives, and designation of
facilities that will repair such equipment.
(e) Signal and train control. Each applicant shall identify the
signal and train control systems governing railroad operations and
maintenance, capital improvement, and research and development projects
for signal and train control operations.
(f) Track Safety Standards and bridge structures. Each applicant
shall identify the maintenance and inspection programs for track and
bridges.
(g) Hazardous Materials. Each applicant shall:
(1) Identify an inspection program covering the following areas:
(i) Field inspection practices;
(ii) Hazardous materials communication standards; and
(iii) Emergency response procedures.
(2) Develop and deploy computer software operating systems at
designated locations providing immediate retrieval of shipping papers
accompanying shipments of hazardous materials for inspection and
photocopying by representatives of FRA during normal business hours, if
applicable.
(h) Dispatching operations. Each applicant shall identify:
(1) The railroad dispatching system to be adopted;
(2) The migration of the existing dispatching systems to the
adopted system, if applicable;
(3) The criteria used to determine duties performed by operators or
dispatchers employed to execute operations; and
(4) The work load imposed on dispatchers or operators to carry out
duties assigned.
(i) Highway-rail grade crossing systems. Each applicant shall
identify a program, including its development and implementation,
covering the following:
(1) Highway-rail grade crossing signal system safety, in general;
(2) Emergency response actions;
(3) Public education forums on highway-rail grade crossing safety;
and
(4) Proposals to improve highway-rail grade crossing safety and
highway-rail grade crossing system warning devices.
(j) Personnel staffing. Each applicant shall identify the number of
employees by job category, currently and proposed, to perform each of
the following types of function:
(1) Train and engine service;
(2) Yard and terminal service;
(3) Dispatching operations;
(4) Roadway maintenance;
(5) Freight car and locomotive maintenance;
(6) Maintenance of signal and train control systems, devices, and
appliances;
(7) Hazardous materials operations; and
(8) Managers responsible for oversight of safety programs.
(k) Capital investment. Each applicant shall identify the capital
investment program, clearly displaying at least planned investments in
track and structures, signals and train control, and locomotives and
equipment. The program shall describe any differences from the program
currently in place on each of the railroads involved in the
transaction.
(l) Relationship between freight and passenger service. Each
applicant shall identify measures addressing passenger and freight
operations on lines subject to the transaction.
(m) Information systems compatibility. Each applicant shall
identify measures providing for a seamless interchange of information
relating to the following subject matters:
(1) Train consists;
(2) Movements and movement history of locomotives and railroad
freight cars;
(3) Dispatching operations;
(4) Accident/incident reporting and recordkeeping requirements; and
(5) Emergency termination of operations.
Sec. 244.15 Subjects to be addressed in a Safety Integration Plan not
involving an amalgamation of operations or start up operations.
Each Safety Integration Plan required by this part that does not
propose an amalgamation of operations or start up operations shall
address paragraphs (b), (j), and (k) of Sec. 244.13 of this part for
railroad operations conducted on property subject to the transaction.
Sec. 244.17 Procedures.
(a) Each applicant shall file one original of a proposed Safety
Integration Plan with the Associate Administrator for Safety, FRA, 1120
Vermont Avenue, N.W., Mailstop 5, Washington, DC, 20590. If applicable,
the applicant shall file the plan with FRA and the Surface
Transportation Board for proposed transactions within its jurisdiction
no later than the date it files its application or exemption with the
Surface Transportation Board.
(b) The applicant shall submit such additional information
necessary to support its proposed Safety Integration Plan as FRA may
require.
(c) The applicant shall coordinate with FRA to resolve FRA's
comments on the proposed Safety Integration Plan until such plan is
approved.
(d) For a transaction requiring Surface Transportation Board
approval, FRA will file its findings and conclusions on the proposed
Safety Integration Plan with the Board's Section of Environmental
Analysis at a date sufficiently in advance of the Board's issuance of
its draft environmental documentation in the case to permit
incorporation in the draft environmental document.
(e) Assuming FRA approves the proposed Safety Integration Plan and,
if applicable, the Surface Transportation Board approves the proposed
transaction, each applicant involved in the transaction shall
coordinate with FRA in implementing the approved Safety Integration
Plan.
(f) During implementation of an approved Safety Integration Plan,
FRA will inform the Surface Transportation Board about implementation
of the plan at times and in a manner designed to aid the Board's
exercise of its continuing jurisdiction over the approved transaction
in accordance with an agreement that FRA and the Board will enter into
and execute. Pursuant to such agreement, FRA will consult with the
Board at all appropriate stages of implementation, and will advise the
Board when the integration of operations subject to the transaction is
complete.
Sec. 244.19 Disposition.
(a) Standard of review.
(1) Each applicant shall:
(i) Write a thorough, complete, and clear Safety Integration Plan;
and
(ii) Describe in detail a logical and workable transition from
conditions existing before the proposed transaction to conditions
intended to exist after consummation of the transaction.
(2) FRA shall review an applicant's Safety Integration Plan to
determine
[[Page 72241]]
whether it provides a reasonable assurance of safety at every step of
the proposed transaction.
(b) Approval of the Safety Integration Plan. A Safety Integration
Plan that is satisfactory to the FRA Administrator shall receive a
notice of approval. The approval shall be conditioned on an applicant's
execution of all of the elements contained in the plan, including all
later developments subject to FRA approval that could not be completed
before approval of it.
(c) Amendment--(1) By the applicant. The applicant may amend its
Safety Integration Plan, as needed, from time to time. Any amendment is
subject to the approval of the FRA Administrator.
(2) By FRA. The FRA Administrator may require an applicant to amend
its approved Safety Integration Plan from time to time should
circumstances warrant.
Sec. 244.21 Compliance and Enforcement.
(a) A railroad shall have an FRA approved Safety Integration Plan
before changing its operations to implement a proposed transaction
subject to this part.
(b) FRA may exercise any or all of its enforcement remedies
authorized by the Federal railroad safety laws if a railroad fails to
comply with paragraph (a) of this section or to execute any measure
contained in an FRA approved Safety Integration Plan.
(c) Where the Surface Transportation Board has authorized a
transaction, FRA will consult with the Board at all appropriate stages
of implementation of the Safety Integration Plan.
Issued in Washington, D.C. on December 18, 1998.
Jolene M. Molitoris,
Federal Railroad Administrator.
Surface Transportation Board 49 CFR Chapter X
List of Subjects in 49 CFR Part 1106
Railroad Safety, Railroads, Safety Integration Plans.
For the reasons set forth in the preamble, a new title 49, subtitle
IV, part 1106 of the Code of Federal Regulations is proposed to be
added as follows:
PART 1106--SAFETY INTEGRATION PLAN PROCEDURES
Sec.
1106.1 Purpose.
1106.2 Definitions.
1106.3 Actions for which Safety Integration Plan is required.
1106.4 The Safety Integration Plan process.
1106.5 Waiver.
1106.6 Reservation of Jurisdiction.
Authority: 5 U.S.C. 553; 5 U.S.C. 559; 49 U.S.C. 721; 49 U.S.C.
10101; 49 U.S.C. 10901-10902; 49 U.S.C. 11323-11325; 42 U.S.C. 4332.
Sec. 1106.1 Purpose.
This part is designed to assure adequate and coordinated
consideration of safety integration issues, by both the Board and the
Federal Railroad Administration, the agency within the Department of
Transportation responsible for the enforcement of railroad safety, in
the implementation of rail transactions subject to the Board's
jurisdiction. It establishes the procedure by which the Board will
consider safety integration plans in connection with its approval or
authorization of transactions for which the Board has concluded such
consideration is required.
Sec. 1106.2 Definitions.
The following definitions apply to this part:
Act means the ICC Termination Act of 1995, Pub. L. No. 104-88, 109
Stat. 803 (1995).
Applicant means any Class I or Class II railroad, a railroad
providing intercity passenger service, or a railroad providing commuter
service in a metropolitan or suburban area engaging in a transaction
subject to this part.
Board means the Surface Transportation Board.
Class I or Class II railroad has the meaning assigned by
regulations of the Surface Transportation Board (49 CFR Part 1201;
General Instructions 1-1), as those regulations may be revised by the
Board (including modifications in class thresholds based revenue
deflator adjustments) from time to time.
Environmental documentation means either an Environmental Impact
Statement or an Environmental Assessment prepared in accordance with
the Board's environmental rules at 49 CFR part 1105.
Federal Railroad Administration (or FRA) means the agency within
the Department of Transportation responsible for railroad safety.
Safety Integration Plan or ``SIP'' means a comprehensive written
plan, prepared in accordance with FRA guidelines or regulations,
explaining the process by which Applicants intend to integrate the
operation of the properties involved in a manner that would maintain
safety at every step of the integration process, in the event the Board
approves the transaction that requires a SIP.
Section of Environmental Analysis or ``SEA'' means the Section that
prepares the Board's environmental documents and analyses.
Transaction means an application by a Class I railroad, a railroad
providing intercity passenger service, or a railroad providing commuter
service in a metropolitan or suburban area that proposes to consolidate
with, merge with, or acquire control under 49 U.S.C. 11323(a)(1) of
another Class I or Class II railroad, a railroad providing intercity
passenger service, or a railroad providing commuter service in a
metropolitan or suburban area; a Class II railroad proposing to
consolidate with, merge with, or acquire control under 49 U.S.C.
11323(a)(1) of another Class II railroad with which it would connect so
as to involve the integration of operations; or any consolidation,
merger, or acquisition of control under 49 U.S.C. 11323(a)(1) that
would result in operations generating revenue in excess of the Class I
railroad threshold, except for a transaction involving a Class III
freight only railroad. ``Transaction'' also includes a request for
authority by a Class I or Class II railroad to acquire railroad
property under 49 U.S.C. 10901 or 10902 that involves intercity
passenger or commuter railroad operations, and a proceeding other than
those specified above if the Board concludes that a SIP requirement is
necessary to its proper consideration of the application or other
request for authority.
Sec. 1106.3 Actions for which Safety Integration Plan is required.
A Safety Integration Plan shall be filed by any applicant
requesting authority to undertake a transaction as defined under
Sec. 1106.2 of this part.
Sec. 1106.4 The Safety Integration Plan process.
(a) Each applicant in a transaction subject to this part shall file
a SIP in accordance with the informational requirements prescribed at
49 CFR part 244, or other FRA guidelines or requirements regarding the
contents of a SIP, with SEA and FRA no later than the date the
application or exemption is filed with the Board.
(b) The SIP shall be made part of the environmental record in the
Board proceeding and dealt with in the ongoing environmental review
process under 49 CFR part 1105. The procedures governing the process
shall be as follows:
(1) In accordance with 49 CFR 244.17, FRA will provide its findings
and conclusions on the adequacy of the SIP (i.e., assess whether the
SIP establishes a process that provides a reasonable assurance of
safety in executing the proposed transaction) to SEA at a date
sufficiently in advance of the Board's
[[Page 72242]]
issuance of its draft environmental documentation in the case to permit
incorporation in the draft environmental document.
(2) The draft environmental documentation shall incorporate the
SIP, any revisions or modifications to it based on further
consultations with FRA, and FRA's written comments regarding the SIP.
The public may review and comment on the draft environmental
documentation within the time limits prescribed by SEA.
(3) SEA will independently review each SIP. In its final
environmental documentation, SEA will address written comments on the
SIP received during the time established for submitting comments on the
draft environmental documentation. The Board then will consider the
full environmental record, including the information concerning the
SIP, in arriving at its decision in the case.
(4) If the Board approves the transaction, adopts the SIP, and
requires compliance with the SIP, each applicant involved in the
transaction shall coordinate with FRA in implementing the approved
Safety Integration Plan, including any amendments thereto. FRA has
provided in its rules at 49 CFR part 244 for providing information to
the Board during implementation of an approved transaction that will
assist the Board in exercising its continuing jurisdiction over the
transaction. FRA also has undertaken to advise the Board when, in its
view, the integration of applicants' operations has been safely
completed.
(c) If a SIP is required in transactions that would not be subject
to environmental review under the Board's environmental rules at 49 CFR
part 1105, the Board will develop appropriate case specific SIP
procedures based on the facts and circumstances of the case.
Sec. 1106.5 Waiver.
The SIP requirements established by this part can be waived or
modified by the Board where a rail carrier shows that relief is
warranted or appropriate.
Sec. 1106.6 Reservation of jurisdiction.
The Board reserves the right to require a SIP in cases other than
those enumerated in this part, or to adopt modified SIP requirements in
individual cases, if it concludes doing so is necessary in its proper
consideration of the application or other request for authority.
Decided: December 18, 1998.
By the Board, Chairman Morgan and Vice Chairman Owen
Vernon A. Williams,
Secretary.
[FR Doc. 98-34563 Filed 12-30-98; 8:45 am]
BILLING CODE 4910-06-P