[Federal Register Volume 67, Number 237 (Tuesday, December 10, 2002)]
[Rules and Regulations]
[Pages 75938-75964]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-30527]



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Part III





Department of Transportation





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Federal Railroad Administration



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49 CFR Part 241



U.S. Locational Requirement for Dispatching of U.S. Rail Operations; 
Final Rule

  Federal Register / Vol. 67, No. 237 / Tuesday, December 10, 2002 / 
Rules and Regulations  

[[Page 75938]]


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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

49 CFR Part 241

[FRA Docket No. FRA-2001-8728, Notice No. 3]
RIN 2130-AB38


U.S. Locational Requirement for Dispatching of U.S. Rail 
Operations

AGENCY: Federal Railroad Administration (FRA), DOT.

ACTION: Final rule.

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SUMMARY: This Final Rule will supplant an interim Final Rule (IFR) that 
has been in effect since January 10, 2002, while FRA has gathered 
comments on whether to permit extraterritorial dispatching (the act of 
dispatching of a railroad operation that occurs on trackage in the 
United States by a dispatcher located outside of the United States). 
Through January 10, 2003, the IFR generally bars extraterritorial 
dispatching with the following three exceptions: extraterritorial 
dispatching is permitted in the case of emergencies, but only for the 
duration of the emergency; extraterritorial dispatching that was 
normally occurring in December of 1999 is allowed to continue 
(``grandfathering exception''); and very limited additional 
extraterritorial dispatching from Canada or Mexico of railroad track in 
the United States immediately adjacent to the borders is authorized 
(``fringe border exception''). After considering the comments on the 
IFR, FRA has determined that while special treatment is appropriate for 
extraterritorial dispatching that was conducted pursuant to the terms 
of the IFR, such treatment is better handled through a special waiver 
process discussed below.
    Effective January 11, 2003, the Final Rule adds a new regulation 
that generally requires, in the absence of a waiver, that all 
dispatching of railroad operations that occur in the United States be 
performed in the United States, with two minor exceptions.
    First, a railroad is allowed to conduct extraterritorial 
dispatching from Mexico or Canada in emergency situations, but only for 
the duration of the emergency. A railroad relying on the exception must 
provide prompt written notification of its action to the FRA Regional 
Administrator of each FRA region in which the railroad operation 
occurs; such notification is not required before addressing the 
emergency situation.
    Second, a railroad that was normally conducting extraterritorial 
dispatching from Canada or Mexico in accordance with the terms of the 
IFR may continue to so dispatch these operations for a transitional 90-
day period to permit the railroad to file a waiver petition. This 
regulation lists of the four lines of track that meet the terms of the 
``grandfathering exception'' of the IFR; FRA is not aware of any 
additional operations that have been commenced under the ``fringe 
border exception'' of the IFR. If a waiver request is filed within the 
transitional period, the railroad may continue to conduct the 
extraterritorial dispatching until FRA acts on the waiver petition.
    As mentioned above, existing extraterritorial dispatching, as well 
as proposed new extraterritorial dispatching from Canada or Mexico of 
railroad track in the United States in the area immediately adjacent to 
the borders, will be considered under a special fringe border waiver 
process. A fringe border waiver request by a railroad will generally be 
granted if the railroad has taken adequate steps to ensure the security 
of its dispatch center, the railroad has in place specified safety 
programs for its extraterritorial dispatchers, a government safety 
agency in the country where the dispatching will occur has safety 
jurisdiction over the railroad and the dispatchers and is satisfied 
with the railroad's safety programs, and the railroad agrees to abide 
by the operating restrictions specified in the rule. FRA anticipates 
that both Canadian and Mexican railroads can easily meet these 
requirements for fringe border dispatching of operations, and that FRA 
will be able to work out satisfactory arrangements with the railroads 
and the regulatory agencies in Canada and Mexico concerning the 
monitoring of the agreed upon safety programs.
    Railroads that wish to commence additional extraterritorial 
dispatching may apply for a waiver from the domestic locational 
requirement. Such a waiver may be granted if an applicant can 
demonstrate to the satisfaction of FRA that the waiver can be made 
without compromising or diminishing rail safety.
    FRA will continue to explore areas of bilateral cooperation with 
the governments of Canada and Mexico on extraterritorial dispatching 
and other cross-border safety issues. FRA will also continue working 
with the railroads in those countries on cross-border safety issues.

DATES: This regulation is effective January 11, 2003, except for 
Sec. Sec.  241.7(a), (b), and (c); 241.9(c); 241.11(c); 241.13(c) and 
241.15, which contain information collection requirements that have not 
been approved by OMB. FRA will publish a document in the Federal 
Register announcing the effective date.

ADDRESSES: Any petition for reconsideration should reference the FRA 
docket and notice numbers (Docket No. FRA-2001-8728, Notice No. 3). You 
may submit your petition and related material by only one of the 
following methods:
    By mail to the Docket Management System, United States Department 
of Transportation, room PL-401, 400 7th Street, SW., Washington, DC 
20590-0001; or
    Electronically through the Web site for the Docket Management 
System at http://dms.dot.gov. For instructions on how to submit 
comments electronically, visit the Docket Management System Web site 
and click on the ``Help'' menu.
    The Docket Management Facility maintains the public docket for this 
rulemaking. The docket is available for inspection or copying at room 
PL-401 on the Plaza Level of the Nassif Building at the same address 
during regular business hours. You may also obtain access to this 
docket on the Internet at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: For technical issues related to 
alcohol and controlled substance matters, Lamar Allen, Alcohol and Drug 
Program Manager, FRA Office of Safety, RRS-11, 1120 Vermont Avenue, 
NW., Stop 25, Washington, DC 20590 (telephone 202-493-6313); or for 
other technical issues,Dennis Yachechak, Railroad Safety Specialist, 
Office of Safety, RRS-11, FRA 1120 Vermont Avenue, NW., Stop 25, 
Washington, DC 20590 (telephone 202-493-6260). For legal issues related 
to alcohol and controlled substance matters, Patricia Sun, Trial 
Attorney, Office of the Chief Counsel, RCC-11, FRA 1120 Vermont Avenue, 
NW., Stop 10, Washington, DC 20590 (telephone 202-493-6038); or for 
other legal issues, John Winkle, Trial Attorney, Office of the Chief 
Counsel, RCC-12, FRA 1120 Vermont Avenue, NW., Stop 10, Washington, DC 
20590 (telephone 202-493-6067).

SUPPLEMENTARY INFORMATION:

Table of Contents for Supplementary Information

I. Notice Reopening Comment Period on Alcohol and Drug Testing NPRM
II. Proceedings to Date
III. Concerns Regarding Extraterritorial Dispatching that Led FRA to 
Adopt the Interim Final Rule
    A. The Importance of Safe Dispatching and the Possibility that 
Railroads May Conduct Widespread Extraterritorial Dispatching

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    B. Regulatory Oversight and the Potential for a Regulatory Gap
    C. Security Concerns
    D. Other Safety-Related Concerns
IV. Discussions of Specific Comments and Conclusions
    A. Overview of the Comments and FRA's Conclusions
    B. Regulatory Oversight
    C. Existing Extraterritorially Dispatched Operations
    D. Drug and Alcohol Testing
    E. Hours of Service
    F. Operational Testing
    G. Service Disruptions
    H. Security Concerns
    I. International Trade Implications
    J. Economic Impact
    K. Language Differences and Units of Measure
    L. Definitions of ``Dispatch'' and ``Dispatcher,'' and Special 
Relief for Fringe Border Operations
    M. Comments from Labor Organizations
V. Section-by-Section Analysis
VI. Regulatory Impact
    A. Executive Order 12866 and DOT Regulatory Policies and 
Procedures
    B. Regulatory Flexibility Act
    C. Paperwork Reduction Act
    D. Federalism Implications
    E. Environmental Impact
    F. Unfunded Mandates Reform Act of 1995
    G. Energy Impact
VII. List of Subjects

I. Notice Reopening Comment Period on Alcohol and Drug Testing NPRM

    Elsewhere in today's Federal Register, FRA is publishing a notice 
soliciting additional comments on its NPRM to amend its alcohol and 
drug testing rule (49 CFR part 219). 66 FR 64000 (Dec. 11, 2001). 
(Hereinafter, references to a numbered part are to a part in title 49 
of the CFR.) Under the proposed amendments to part 219, employees of a 
foreign railroad whose primary reporting point is outside the United 
States who perform train or dispatching service in the United States 
covered by hours of service laws (``covered service'') would become 
subject to all of the requirements of part 219.

II. Proceedings to Date

    On December 11, 2001, (66 FR 63942), FRA published an IFR that 
prohibited any extraterritorial dispatching for a period of 365 days, 
but included exceptions for emergency situations, any United States 
track segment that was regularly extraterritorially dispatched in 
December of 1999, and fringe border operations, as those operations 
were defined in the IFR. The IFR went into effect on January 10, 2002, 
and remains in effect through January 10, 2003.
    In the IFR, FRA solicited comments on the benefits and costs of 
FRA's proposal as well as comments on whether FRA should adopt an 
alternative regulatory scheme under which extraterritorial dispatching 
of United States rail operations would be permitted and, if so, under 
what conditions. The IFR generated ten written comments, which may be 
found in the docket and which are discussed below.\1\
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    \1\ Canadian Pacific Railway Company (CP) submitted two items to 
the docket. Shortly after publication of the IFR, CP submitted a 
request to delay the effective date of the rule. CP then followed up 
the letter by submitting comments addressing the issues in the IFR. 
Thus, there were nine commenters, but FRA considered ten submissions 
in determining a course of action.
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    One of the commenters, CP, requested that FRA delay indefinitely 
the effective date of the IFR. CP requested the delay because it felt 
that it was not possible for FRA to resolve all of the issues 
surrounding the IFR and the related NPRM revising part 219 in such a 
short period of time. CP felt that it would be better to delay the 
effective date until written comments could be submitted and FRA's 
Railroad Safety Advisory Committee consultations could take place. In 
return for the delay, CP pledged to refrain from expanding any 
extraterritorial dispatching of United States rail operations.
    FRA did not grant the request, however, because CP's operations 
were not the sole impetus for the IFR. Instead, as explained below, FRA 
concerns were and still are the recent increase in mergers and 
acquisitions by and between the larger railroads that has raised the 
potential for extensive extraterritorial dispatching, the fact that 
present technology enables any railroad operating in the United States 
to move its dispatching of United States train operations to any 
location in the world, and the safety and security problems associated 
with extraterritorial dispatching of domestic rail operations. In order 
to preserve the status quo that FRA believed would be jeopardized by 
delaying the effective date of the IFR, FRA determined that the safest 
course of action would be to proceed with the IFR and then make a final 
determination based on the comments received after the IFR had become 
effective.
    In addition to requesting written comments, FRA held a public 
hearing on the IFR in Washington, DC, on February 12, 2002, at which 
four parties submitted oral comments. These parties consisted of CP, 
Canadian National Railway Company (CN), the Brotherhood of Locomotive 
Engineers (BLE), and the American Train Dispatchers Department of the 
BLE (ATDD). A transcript of this hearing is available in the public 
docket of this rulemaking. After reviewing both the written and oral 
comments, FRA has decided that the safety and security issues presented 
by extraterritorial dispatching mandate that FRA proceed with this 
Final Rule.

III. Concerns Regarding Extraterritorial Dispatching that Led FRA To 
Adopt the Interim Final Rule

A. The Importance of Safe Dispatching and the Possibility that 
Railroads May Conduct Widespread Extraterritorial Dispatching

    Proper dispatching is essential for safe railroad operations of 
both freight and passenger trains. Freight trains can be more than a 
mile in length, typically carry hazardous materials, and require a mile 
or more to stop. Freight trains sometimes carry arms, ammunition, and 
implements of war as well as spent nuclear fuel. Shipments of spent 
nuclear fuel will dramatically increase once the storage site in 
Nevada's Yucca Mountain opens in 2010. As was explained in detail in 
the preamble to the IFR, dispatchers are the railroad employees 
primarily responsible for the safe movement of trains. See 66 FR 63492. 
Dispatchers actually steer the train by remotely aligning switches. 
They determine whether the train should stop or move, and if so, at 
what speed, by operating signals and issuing train orders and other 
forms of movement authority or speed restriction. In addition, 
dispatchers protect track gangs and other roadway workers from passing 
trains by issuing authorities for working limits. Train crews on board 
locomotives carry out the dispatchers' instructions and are responsible 
for actually moving the train, but dispatchers make it possible to do 
so safely.
    Currently, dispatchers located outside of the United States control 
only very limited train movements in the United States. Their 
operations are listed in appendix A to the rule and are as follows: 1.8 
miles from Windsor, Ontario, to Detroit, Michigan (dispatched by CP); 
3.1 miles from Sarnia, Ontario, to Port Huron, Michigan (dispatched by 
CN); 43.8 miles of the Sprague Subdivision between Baudette, Minnesota, 
and International Boundary, Minnesota (dispatched by CN); and 99 miles 
between Vanceboro, Maine, and Brownville Junction, Maine (dispatched by 
the Eastern Maine Railway Company).\2\
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    \2\ The listed distances are the distances dispatched from 
Canada and not necessarily the distance that a Canadian crew 
operates a train into the United States. A Canadian crew could 
operate the train further into the United States than a listed 
distance but a U.S.-based dispatcher would control the movement 
beyond the listed distance.

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    It is commonplace in today's railroad operations for dispatchers to 
be located at a significant distance from the trackage and operations 
they control. For example, CSX Transportation, Inc. (CSX) dispatchers 
in Jacksonville, Florida, control the operations of CSX, Amtrak, and 
commuter rail lines throughout the Southeast and Mid-Atlantic. In 
addition, nearly all of the dispatching operations for the Union 
Pacific Railroad Company (UP), which is the Nation's largest railroad, 
are conducted from one facility in Omaha, Nebraska. FRA does not 
believe there are any inherent safety risks in this type of centralized 
operation, but because current technology allows for such operations, 
FRA recognizes that this technology allows railroads operating in the 
United States that now dispatch their trains in the United States to 
instead dispatch these trains from anywhere in the world.
    In addition, FRA is also concerned about the increase in business 
combinations in the rail industry. Prior to the imposition of a 
moratorium on railroad mergers by the Surface Transportation Board 
(STB), there were several high-profile mergers involving both domestic 
and Canadian railroads. The mergers involving the Canadian railroads 
resulted in a dramatic increase in the amount of domestic track owned 
by Canadian railroads. For example, CN acquired the Grand Trunk Western 
Railroad, Inc. (GTW) (646 miles of track operated by GTW (1998 
figures)), the Illinois Central Railroad Company (2,591 miles of 
track), and the 2,500 route miles of United States Class II and III 
railroads formerly owned by the Wisconsin Central Transportation 
Company. In addition, CP acquired the Soo Line Railroad Company (3225 
miles of track operated). Now that the STB moratorium has been lifted, 
it is legally possible that more railroads will combine, resulting in 
larger multinational railroads and increasing the appeal of cross-
border operations.

B. Regulatory Oversight and the Potential for a Regulatory Gap

    Any dispatcher, wherever located, who controls rail operations 
while under the influence of alcohol or drugs, exhausted because of 
working excessive hours, or not properly trained and tested on railroad 
operating rules could issue incorrect directions or could fail to issue 
directions, thereby jeopardizing the safety of railroad employees or 
causing a train collision or derailment with resulting injuries or 
death to train crews, passengers, or both, and possible harm to 
surrounding communities and the environment; the harm could be 
widespread if the trains are carrying hazardous materials such as spent 
nuclear fuels. Domestically, there have been accidents resulting from, 
for example, a dispatcher failing to relay to a train crew that a grade 
crossing was out of service (e.g., on January 9, 2001, a dispatcher at 
a CN/Illinois Central Railroad communications facility mistakenly 
cleared a grade crossing for normal operations, resulting in a 
collision between a train and a motor vehicle at the crossing); a 
dispatcher routing a train into the path of another train (e.g., on 
June 22, 1997, a dispatcher failed to communicate correct track warrant 
information, causing two freight trains to collide head-on in Devine, 
Texas, killing four persons); and a dispatcher allowing a train to 
enter working limits when roadway workers and equipment were present 
(e.g., on January 29, 1988, an Amtrak passenger train struck 
maintenance-of-way equipment, resulting in numerous injuries and 
substantial property damage; the National Transportation Safety Board 
determined that the accident was caused by a dispatcher who was 
impaired by drugs).
    Because problems such as fatigue, drug and alcohol abuse, and lack 
of effective job training seriously compromise the safety-critical 
performance of employees who dispatch trains, the United States has 
established safety requirements that, together with FRA safety 
oversight, effectively deal with these problems for railroad 
dispatchers located in the United States. 49 U.S.C. ch. 51, 201-213; 49 
CFR 1.49. Examples of safety rules and laws governing domestic 
dispatchers include operating rules and efficiency testing (part 217), 
drug and alcohol testing (part 219), and hours of service restrictions 
(49 U.S.C. 21105, and part 228). To promote compliance, FRA may conduct 
inspections and investigations and impose sanctions for violations of 
its safety standards against both railroads and individuals, including 
dispatchers, if the individual or railroad is located in the United 
States. See, e.g., 49 U.S.C. 20107; 49 U.S.C. ch. 213; and part 209, 
appendix A (a description of FRA's safety enforcement program and 
policy). However, paragraph (c) of Sec.  219.3 currently exempts 
employees of a foreign railroad, including dispatchers, whose primary 
reporting point is located outside of the United States and who perform 
service in the United States covered by the hours of service laws from 
subparts E (identification of troubled employees), F (pre-employment 
testing), and G (random testing). As previously noted, FRA has issued 
an NPRM that would amend part 219 to require drug and alcohol testing 
of such an employee. The comment period on the part 219 NPRM has been 
extended by a notice published elsewhere in the Federal Register today.
    Besides enforcing the Federal railroad safety laws, FRA may also 
take other safety-related actions. For example, FRA may conduct 
investigations of railroad accidents in the United States, including 
those involving dispatching, and may issue reports on the agency 
findings, including its determination of probable cause. See, e.g., 49 
U.S.C. 20107, 20902; 49 CFR 225.31. In addition, FRA may conduct 
research and development as necessary for every area of railroad 
safety, including dispatching. 49 U.S.C. 20108. Moreover, FRA may issue 
rules and orders, as necessary, for every area of railroad safety, 
including dispatching. See 49 U.S.C. 20103. Such orders may include 
emergency orders to eliminate or reduce an unsafe condition or 
practice, identified through testing, inspecting, investigation, or 
research, that causes an emergency situation involving a hazard of 
death or injury to persons. See 49 U.S.C. 20104. Finally, FRA has 
recently taken a pro-active approach in its ability to influence non-
regulated aspects of dispatching operations through its Safety 
Assurance and Compliance Program (SACP),\3\ through its safety 
advisories published in the Federal Register, and through its visits to 
dispatching centers to ensure that dispatching is being safely 
conducted whether or not specific federal standards are being violated 
(see discussion under section IV B of the supplementary information 
section of the preamble, below).
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    \3\ FRA's SACP is an approach to safety that emphasizes the 
active partnership of FRA, rail labor representatives, and railroad 
management in identifying current safety problems and jointly 
developing effective solution to those problems. For more 
information see 66 FR 63946.
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    With regard to dispatchers located in foreign countries, FRA may be 
unable to rely on foreign laws and rules governing dispatchers, in 
themselves, to ensure safety in accordance with FRA requirements. There 
can be a number of complexities in the ways foreign laws and 
regulations apply to dispatching. First, although dispatching can be 
performed from any country in the world, not every country in the world 
has an entity that regulates rail

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transportation safety. Second, even if the host country has established 
a transportation regulatory entity, that entity may well lack full 
safety jurisdiction over the railroad operations in the United States 
that are being dispatched from the host country. In either situation, 
the rail operations in the United States may not fall completely under 
the jurisdiction of any rail safety regulatory body, resulting in a 
regulatory gap that could jeopardize the safety and security of 
domestic operations.
    This potential regulatory gap could significantly interfere with 
FRA's ability to ensure that extraterritorial dispatching operations 
are conducted with the same level of regulatory oversight that occurs 
in the United States and which FRA believes is vital to the safety of 
those operations. As noted in the preamble to the IFR, FRA is 
particularly concerned that current regulations and statutes applicable 
to dispatchers, which govern such areas as hours of service 
limitations, operational testing, and drug and alcohol programs, most 
notably random drug testing, are not uniform throughout foreign 
countries, and may fall below the safety standards established by the 
United States statutes and regulations. See 66 FR 63948. Therefore, 
even if a foreign country's regulations and statutes applied to and 
completely covered cross-border dispatching of United States rail 
operations, the safety of the United States rail operations may not be 
protected to the same degree as when dispatchers are subject to United 
States' statutory and regulatory requirements or their equivalents.

C. Security Concerns

    In addition to the above-described potential negative implications 
on rail safety of extraterritorial dispatching, FRA is also concerned 
about the security of domestic rail operations and how that security 
would be impacted if FRA permitted increased extraterritorial 
dispatching. As the terrorist attacks of September 11, 2001, vividly 
demonstrated, this nation and its citizens are targets of international 
terrorists, and railroad dispatch centers are logical terrorist 
targets. While those attacks have resulted in increased railroad 
security domestically, dispatching centers located in foreign countries 
would be outside the jurisdiction of domestic security and law 
enforcement agencies. Thus, if FRA permits extraterritorial 
dispatching, the United States would increase its exposure to security 
threats that exist in foreign countries and be forced to rely upon the 
security apparatus of foreign countries. As noted above, current 
technology allows dispatching of domestic rail operations from anywhere 
in the world, including countries that may not offer the same levels of 
security and security measures that are offered by domestic agencies.
    In addition, given the threat that terrorists pose to railroad 
systems, including their dispatch centers, railroad security measures 
(e.g., guards that control access to railroad facilities, proximity 
cards that allow access to dispatching locations, use of railroad 
police to detect unauthorized persons on railroad property, and 
background checks on applicants for employment as dispatchers and train 
crew members) are increasingly important to protect railroad property, 
railroad cargo, railroad employees, and railroad passengers from 
violent actions. FRA is working with domestic railroads as they review 
the adequacy of their security plans and expects that the railroads 
will voluntarily take whatever steps are needed to safeguard their 
systems from terrorists. In the event that FRA is not satisfied with 
the security measures undertaken by a domestic railroad, however, FRA 
has the authority to require, through regulations and orders, 
additional security measures that FRA determines are necessary to 
protect the security of domestic railroad operations against potential 
terrorist threats.\4\ FRA may have limited access to and ability to 
influence security arrangements at a foreign dispatch center if the 
security procedures at that center were not sufficient to protect 
domestic rail operations. Furthermore, law enforcement and security 
agencies in the United States are not authorized to protect foreign 
dispatch facilities.
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    \4\ Section 20103(a) of title 49, United States Code, gives the 
Secretary of Transportation plenary authority to address any hazards 
to life and property that may arise in the context of railroad 
operations. To date, FRA's exercise of this authority has been 
fairly limited. For example, FRA has issued rules on Passenger Train 
Emergency Preparedness (part 239) that require passenger railroads 
to conduct detailed planning for emergency situations, which are 
defined to include ``security situations'' such as bomb threats. 
(See Sec.  239.7 and 49 U.S.C. 20133(a)(4).)
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    FRA does not know, at this time, whether all foreign railroads 
employ security measures comparable to those of United States 
railroads, or whether foreign governments have enforceable security 
requirements that would effectively protect foreign dispatch 
facilities. In addition, domestic railroads that locate dispatching 
facilities in foreign countries may not necessarily employ the same 
security measures that they use in the United States. As a result, 
foreign-based facilities, whether owned by a foreign or a domestic 
railroad, could be more attractive targets than facilities located in 
the United States and be more susceptible to terrorist infiltration or 
attack.
    There is also a national defense aspect to the security of railroad 
operations. There are both railroad safety and national defense risks 
posed by extraterritorial dispatch centers having access to information 
regarding the shipment of military goods and weapons and hazardous 
materials (including nuclear materials and nuclear waste), and having 
the capability to control the movement of these items. The Military 
Traffic Management Command of the Department of Defense (DOD) and FRA 
have worked together to identify and designate a Strategic Rail 
Corridor Network (STRACNET). STRACNET consists of more than 38,000 
miles of interconnected network of rail corridors (not actual rail 
lines) in the United States that the agencies have deemed vital to 
national defense. In the event of a large-scale military mobilization, 
it is very important that this network be fully responsive to national 
defense needs and priorities.

D. Other Safety-Related Concerns

    In the preamble to the IFR, FRA also detailed other potential 
concerns with regard to extraterritorial dispatching. See 66 FR 63950-
63951. First, it is essential for safe railroad operations that 
employees involved with directing and effectuating train movements be 
able to communicate clearly with each other. The railroad personnel 
most directly involved with train movements are the dispatchers who 
transmit written and oral instructions to train crews and the train 
crews who are responsible for carrying out the dispatchers' 
instructions and for operating trains in accordance with railroad 
traffic control devices. In addition, dispatchers must also be able to 
communicate with roadway workers who may control entry onto the 
stretches of track on which they are working. If it is allowed, 
extraterritorial dispatching raises the possibility that some of these 
employees may not be able to communicate with each other because they 
speak different languages.
    FRA's primary safety concern is that one of the parties (either the 
train crew or the dispatcher) involved in an extraterritorially 
dispatched operation may not be proficient in the language that is 
being used to conduct train operations. Thus, there is the potential 
for miscommunication where one of the parties, unbeknownst to the 
other, fails to convey necessary safety-critical

[[Page 75942]]

information, inadvertently conveys false or misleading information, or 
fails to properly understand safety-critical information that has been 
conveyed. The results of such a miscommunication could be disastrous. 
Such a lack of understanding would be even more problematic if railroad 
operations crossed more than one border (e.g., Canada, the United 
States, and Mexico).
    Another problem related to communication that could arise if 
extraterritorial dispatching is allowed concerns possible differences 
in railroad terminology between one country and another. The railroad 
industry in the United States is both a highly technical industry that 
uses modern terms and an industry that has existed for 170 years and 
uses terms that have existed since the beginning of the last century. 
It would be unreasonable to assume that, absent appropriate training, 
railroad employees in other countries would be familiar with terms used 
in the United States. Given the immediacy with which problems sometimes 
develop while trains are on the tracks, it would be dangerous to 
discover such a miscommunication at a time when lives and property are 
in the balance. This problem would be compounded if the dispatcher and 
the train crew were having problems communicating because of language 
differences.
    Second, given the centralized nature of most major railroads' 
dispatching facilities, FRA is concerned that a disruption of 
communications at a dispatching facility could cause system-wide 
problems for a railroad as it scrambles to transfer operations from the 
centralized location to local dispatch centers. The preamble to the IFR 
notes the two recent occasions where the CSX dispatch center in 
Jacksonville, Florida, went off line due to extreme weather conditions. 
See 66 FR 63951. As those examples demonstrated, domestic dispatch 
centers are not immune to such problems, but FRA is concerned that the 
effects of such a disruption could be exacerbated if the dispatching 
facility were located in a foreign country far away from the railroad's 
infrastructure.
    FRA is also concerned about the potential effects that a labor 
disruption involving an extraterritorial dispatch facility could have 
on domestic rail operations. Dispatchers are typically unionized 
employees subject to the Railway Labor Act (45 U.S.C. 151-188) 
(``RLA''), which prohibits strikes over contract interpretations. 
Congress has the power to legislate an end to a strike by United States 
railroad employees, and has done so in 13 rail labor contract disputes. 
Dispatchers located in a foreign country, however, are not subject to 
the RLA, and Congress may not legislate an end to a labor dispute in 
that country despite the fact that such a dispute could severely affect 
United States rail operations, and possibly jeopardize transportation 
safety.
    The implications of a strike that cannot be readily controlled by 
government authorities have the potential of being quite severe, 
especially to the extent that it affects the shifting of rail freight 
and passenger traffic to crowded highways, the delivery of perishable 
goods to market, the delivery of coal for energy to parts of the 
country in need during extreme weather conditions, and transport of 
defense materials needed to ensure national security. The railroad 
industry carries nearly 40 percent of United States intercity freight 
traffic in terms of ton-miles (over 1 trillion ton-miles a year), 
including huge quantities of hazardous materials of all types, 
including spent nuclear waste. By comparison, trucks carry about 29 
percent of the ton-miles, and pipelines and inland water transport 
account for the remainder. In addition, railroads provide commuter rail 
service in and around many of the Nation's large cities; provide the 
infrastructure Amtrak uses for its intercity passenger operations 
outside the Northeast Corridor; and provide freight service to military 
facilities across the country. Other modes would be able to replace 
only a small portion of the transportation services provided by the 
railroads in the short term in the event of a disruption of service 
affecting the national major freight railroads, and diverting hazardous 
materials from railroads to other modes of transportation, such as 
trucks and barges, would increase the exposure of both the public and 
the environment to these hazardous materials and could increase the 
possibility of accidents.\5\ Furthermore, loaded railroad tank cars 
that cannot be delivered to customers and that are stranded on rail 
lines pose ready targets for terrorists. A disruption affecting any one 
of the major railroads could, of course, have a critical impact over 
time through cascading impacts across the national rail system because 
of the extensive interchange of rail traffic among the railroads and 
the impact on other railroads of service disruptions on lines where 
they enjoy trackage or haulage rights.
---------------------------------------------------------------------------

    \5\ Railroad tank cars can typically carry up to four times the 
volume typically carried by truck cargo tanks, so diverting 
hazardous material movements to the highways would significantly 
increase the highway movements of these dangerous commodities. In 
addition, any transloading of hazardous materials from rail tank 
cars to truck cargo tanks cars poses additional risks.
---------------------------------------------------------------------------

    Finally, it is also essential for safe railroad operations in the 
United States that certain railroad communications concerning such 
operations that relate to measurements of such critical factors as 
location, distance, and speed, use a common standard of measurement. 
The two currently used standards of measurement are English units, used 
predominately in the United States, and the International System of 
Units (``SI''), which is more commonly known as the ``metric system'' 
and is used by most of the rest of the world. Because a kilometer 
(roughly 3,280.8 feet) is approximately six-tenths the length of a mile 
(5,280 feet), the potential for confusion is obvious, especially where 
a measurement of such matters as speed, location, or distance is 
concerned. If a dispatcher instructs a train and engine crew to travel 
a specified number of kilometers at a certain speed measured in 
kilometers per hour and the crew mistakenly thinks that the dispatcher 
is referring to either or both measurements in miles, the consequences 
could be at best problematic and, at worst, devastating.\6\
---------------------------------------------------------------------------

    \6\ FRA recognizes that the Hazardous Materials Regulations 
require that most measurements regarding the transportation of 
hazardous materials be given in metric units. Under 49 CFR 171.10, 
in order to ensure compatibility with international transportation 
standards, most units of measurement in the hazardous materials 
regulations are expressed using the SI. This requirement should have 
no impact on extraterritorial dispatching, however, as SI is 
currently the standard for domestic railroad operations involving 
hazardous materials.
---------------------------------------------------------------------------

    Commenters' responses to FRA's concerns leading to the issuance of 
the IFR are discussed below.

IV. Discussions of Specific Comments and Conclusions

A. Overview of the Comments and FRA's Conclusions

    In the IFR, FRA offered two options with regard to increased 
extraterritorial dispatching operations. The first option, which was 
reflected in the IFR, is to bar extraterritorial dispatching with the 
three minor exceptions explained above (emergencies, grandfather 
operations in place since December 1999, and fringe border operations 
that met the terms of the IFR). The second option is to permit 
extraterritorial dispatching so long as (1) the foreign-based 
dispatchers are subject to the same safety standards applicable to 
dispatchers located in the United States (and enforced by FRA or by the 
host country with supplementary FRA oversight), and (2) the additional 
safety concerns previously identified, such as security, language 
differences, possible

[[Page 75943]]

labor strikes and other disruptions, are adequately addressed. FRA 
noted that the second option could be implemented by a more detailed 
version of the waiver provision (section 241.7) of the IFR. In the 
preamble to the IFR, FRA solicited comments both on the benefits and 
costs of the approach advocated by the IFR as well as on the 
feasibility of adopting the alternate option and allow extraterritorial 
dispatching provided FRA's safety and security concerns are effectively 
addressed. FRA indicated that after considering the comments FRA might 
make the IFR permanent with any substantive changes FRA determines are 
appropriate.
    As noted above, nine parties submitted written comments, and four 
of those parties offered oral comments, as well. The parties submitting 
written comments were CN and CP, which, when appropriate, will be 
referred to jointly as ``the Canadian railroads,'' the Brotherhood of 
Maintenance of Employes (BMWE), the Northeast Illinois Railroad Company 
(METRA), the Brotherhood of Railroad Signalmen (BRS), the BLE, the 
Association of American Railroads (AAR), the ATDD, and the Mexican 
government.
    The Canadian railroads, either individually or collectively, 
commented on most of the issues raised in the IFR, so FRA's responses 
will focus primarily on those comments. In general, both railroads 
objected in principle to the regulation and argued that a better 
resolution to this issue would be for FRA and Transport Canada, along 
with the individual railroads, to work out problems on a case-by-case 
basis, instead of FRA implementing a ``one size fits all'' regulation 
for a safety problem that they believe does not currently exist. Both 
railroads wanted to retain sufficient flexibility to conduct their 
existing operations and, if FRA promulgates part 241, both were in 
favor of retaining both the grandfathering provision and the exception 
for ``fringe border operations,'' although in a slightly modified form. 
In addition, both expressed concern that the definitions of 
``dispatch'' and ``dispatcher'' were too broad and could be read to 
include employees who should not be included.
    The comments from the BLE, the BMWE, METRA, and the BRS were all 
fairly general in nature and supported FRA's implementation of a bar on 
additional extraterritorial dispatching. The comments from the ATDD 
were also generally supportive of the IFR but, in addition, offered 
suggestions on specific provisions of the rule that it believes should 
be slightly modified. The brief comments from the AAR focused solely on 
the definitions of ``dispatch'' and ``dispatcher'' contained in the 
IFR. The Canadian government did not submit comments on the IFR, but 
did comment on the NPRM on part 219. Some of the Canadian government's 
comments are relevant to FRA's position on the necessity of random 
testing of dispatchers and will be addressed below. Finally, the 
comments from the Mexican government supported the banning of 
extraterritorial dispatching and noted that Mexico has banned 
extraterritorial dispatching.
    Before reviewing the specific comments, FRA notes that all of the 
negative comments on the IFR related to the safety and security of 
dispatching United States rail operations from Canada, but did not 
address extraterritorial dispatching from any other country. Therefore, 
the safety and security concerns detailed in the IFR and reiterated 
above remain unchallenged with respect to any country other than 
Canada. Accordingly, unless otherwise noted, FRA's analysis of the 
comments is limited to whether the actions taken by the Canadian 
railroads and Canadian authorities adequately address FRA's concerns.
    Based on FRA's analysis of the comments, FRA has decided that the 
general bar on extraterritorial dispatching, except relief in cases of 
emergency, should continue. However, FRA has determined that it is 
appropriate to provide special relief for the four existing 
extraterritorial dispatching operations (listed in appendix A to the 
Final Rule), and for limited new extraterritorial dispatching of fringe 
border areas in the United States designed to facilitate the smooth 
handoff of dispatching between dispatchers in Canadian and Mexican 
dispatching centers and those in the United States. Such relief is best 
granted in the context of waivers rather than blanket approvals of the 
operations, and a special fringe border waiver process has been 
established to facilitate that relief. (The fringe border waiver 
process is briefly discussed below and in more detail in the section-
by-section analysis.) The Final Rule provides that existing 
extraterritorial dispatching can continue for a transitional period 90-
days to permit the railroads to file a waiver petition under the new 
special fringe border waiver provision. If a waiver request is filed 
within the transitional period, the railroad may continue to conduct 
the extraterritorial dispatching until FRA acts on the waiver petition.
    The fringe border waiver process applies to existing 
extraterritorial dispatching operations and to new extraterritorial 
dispatching of operations that do not extend more than five route miles 
into the United States from the Canadian or Mexican border. A fringe 
border waiver request by a railroad will generally be granted if (1) 
the railroad has taken adequate steps to ensure the security of its 
dispatch center, (2) the railroad has in place specified safety 
programs for its extraterritorial dispatchers, (3) a government safety 
agency in the country where the dispatching will occur has safety 
jurisdiction over the railroad and the dispatchers and is satisfied 
with the railroad's safety programs, and (4) the railroad agrees to 
abide by the operating restrictions specified in the rule. Given the 
limited length of these operations, FRA is willing to permit the 
operations to be conducted with fewer safety requirements than would be 
required for longer operations. FRA anticipates that both Canadian and 
Mexican railroads can easily meet these requirements for cross-border 
dispatching of operations, and that FRA will be able to work out 
satisfactory arrangements with the railroads and the regulatory 
agencies in Canada and Mexico concerning the monitoring of the agreed 
upon safety programs.
    Railroads that wish to commence additional extraterritorial 
dispatching may apply for a waiver under subpart C of 49 CFR part 211 
from the domestic locational requirement set forth in part 241. Such a 
waiver may be granted if an applicant can demonstrate to the 
satisfaction of FRA that relief is consistent with safety and in the 
public interest. As discussed in the section-by-section analysis, an 
applicant will be expected to discuss how it has adequately addressed 
the various safety concerns that FRA laid above in section III of the 
supplementary information section of the preamble.
    FRA believes that the approach that it is adopting is necessary to 
ensure the safety and security of United States railroad operations.

B. Regulatory Oversight

    CN was the only commenter that directly addressed regulatory 
oversight, although CP's comments included many references to the 
adequacy of the Canadian regulatory system. The main focus of the 
Canadian railroads' comments was that while the regulatory construct in 
Canada may be different from that in the United States, there are 
sufficient protections in place in Canada to ensure that any United 
States rail

[[Page 75944]]

operations dispatched from Canada would be done so safely.
    In particular, CN stated that Transport Canada and Human Resources 
Development Canada combine to regulate any dispatchers located in 
Canada regardless of the territory they dispatch, even territory 
located in the United States. In addition, during the public hearing, 
CN's representative stated that Transport Canada's regulations would 
cover contractors located in Canada who were conducting dispatching 
operations for a Canadian railroad. The commenters noted that Transport 
Canada's Safety Management Systems regulations require the railroads to 
develop a comprehensive plan covering all aspects of rail safety, and 
that the Canadian Labour Code, together with the collective bargaining 
agreements of the railroads, effectively control the number of hours 
that dispatchers may work. Finally, CN claims it would allow FRA access 
to CN dispatching facilities located in Canada in order to conduct site 
inspections and safety assessments.
    There are contrasts between the regulatory systems of the United 
States and Canada. Domestically, Congress and FRA have concentrated on 
promulgating nationwide safety standards that apply uniformly to all 
railroads. Congress has established the maximum number of hours that a 
dispatcher may work, has directed FRA to establish comprehensive drug 
and alcohol testing for safety-sensitive railroad employees such as 
dispatchers, including random drug testing, and has given FRA authority 
to regulate all areas of railroad safety. FRA has established minimum 
safety standards, and the railroads are required to conduct their own 
inspections to ensure that these safety standards are being met. FRA 
leads a cadre of approximately 550 Federal and State safety inspectors 
and specialists whose role is to monitor the railroad industry and its 
own inspection forces for compliance with rail safety laws and to work 
with the railroad industry on resolving safety problems that are not 
subject to those laws.
    FRA's safety oversight has proven effective in identifying and 
resolving safety problems that are not directly addressed through FRA's 
regulations. For example, in 1997 FRA conducted extensive audits of the 
UP's Harriman Dispatch Center which controls operations on 
approximately 95 percent of UP's territory. These audits revealed 
ineffective and unsafe practices by supervisors and dispatchers. FRA 
made specific recommendations that UP accepted, such as creating 
additional dispatch positions, realigning dispatchers' territories to 
better balance the workload, hiring new dispatchers, tripling the 
number of dispatching supervisors, making improvements to the 
dispatching software, and forming a working group consisting of 
representatives from FRA, rail labor, and UP management to continually 
monitor and address dispatching issues that may arise. This is one just 
one example of the United States' more proactive approach to regulatory 
oversight, which is intended to ensure that railroad safety does not 
fall below an acceptable level.
    The Canadian regulatory system, on the other hand, tends to rely 
more heavily on acceptance of railway-submitted rules. Under this 
approach, railways conduct consultations with government (and often 
labor organizations) and submit standards and procedures for approval. 
In some cases the rules apply to individual railways, and in other 
cases the rules apply in common to the major railways.
    Under Transport Canada's Railway Safety Management Systems 
regulation, railroads are required to identify the following: (1) Their 
company railroad safety rules and orders, and the procedures they will 
use in demonstrating compliance with them; (2) systems for accident and 
incident reporting, investigation, analysis, and corrective action; (3) 
systems for ensuring that employees have appropriate skills and 
training and adequate supervision to ensure that they comply with all 
safety requirements; and (4) procedures for periodic internal safety 
audits. Railroads are also required to do the following: (1) Maintain 
accident and incident investigation reports and corrective actions they 
take for the purpose of assessing its safety records; (2) report yearly 
to the Minister on their safety management system; and (3) keep readily 
available all documents mentioned in their safety management system to 
enable a railway safety inspector to monitor compliance with Transport 
Canada's safety management system regulation. Transport Canada then 
monitors the railroads' compliance with their safety programs. The 
Safety Management System approach is a new element in the Canadian 
regulatory structure, and initial audits are only now underway.
    As will be detailed below in the preamble sections on drug and 
alcohol testing and hours of service, the safety programs that the 
Canadian railroads have developed and the Canadian standards and the 
government oversight in these areas are significantly different from 
FRA standards. While FRA requires domestic railroads to conduct 
efficiency testing of their dispatchers to ensure that they understand 
the necessary operating rules, and issues civil penalties against those 
railroads for failing to conduct such testing, Transport Canada has no 
such requirement (apart from the recently adopted Safety Management 
System process). While Canadian carriers have voluntarily conducted 
such efficiency testing, they are not assessed monetary fines should 
they fail to follow their programs. On the other hand, administrative 
officials from the inspector level to the Minister enjoy broad powers 
to order changes in operations and address unsafe conditions. Based on 
available information, it appears that the Canadian Transportation 
Safety Board has broad accident reporting requirements; however, the 
means for enforcing those requirements are not immediately evident.
    Given the differences in Canadian railway culture, methods of 
governance, safety standards (including regulations and rules), safety 
data systems, and mechanisms for enforcement, it is extremely difficult 
to evaluate the relative equivalence of the two regulatory approaches 
in terms of overall safety results, let alone at the level of safety of 
dispatching. Without question, cooperation and understanding between 
Transport Canada and FRA is maturing at a more rapid pace due to 
enhanced communication and joint endeavors; and much remains to be 
learned through appropriate consultation. Cooperation with respect to 
security presents a new a special challenge, given divisions of 
responsibility within both governments and evolving policies in both 
countries. Accordingly, it is appropriate that FRA continue 
consultations with Transport Canada and develop the necessary factual 
predicates and institutional arrangements before giving consideration 
to permitting more extensive dispatching of U.S. operations. 
Appropriate institutional arrangements might include express mutual 
undertakings (which do not currently exist) for each government to look 
out for the safety of operations in territory outside its jurisdiction 
that are dispatched from anywhere within its jurisdiction.
    Mexico also recognized that extraterritorial dispatching poses a 
safety risk to rail operations and has addressed the issue by 
requiring, in Article 26 of Title III of the Regulatory Law of Railroad 
Service (Ley Reglamentaria del Servicio Ferroviario), that railroads 
depend on dispatching facilities that must be established within

[[Page 75945]]

Mexico. In addition, Article 96 of Title III of the Railroad Service 
Regulations (Reglamento del Servicio Ferroviario) reiterates that a 
railroad's system of train control must guarantee the safe and fluid 
operation of services and must adhere to what is established by Mexican 
law. In comments submitted by the Directorate of Technical Operations 
Regulations of Railroad Transportation, the Mexican government 
indicated that it believes FRA is acting in the best interests of rail 
safety by barring extraterritorial dispatching. The comments 
specifically noted the differences in regulations between countries and 
the problems that could arise when personnel in foreign countries 
dispatching Mexican operations are not subject to Mexican law as 
justifications for a bar on extraterritorial dispatching of Mexican 
operations.

C. Existing Extraterritorially Dispatched Operations

    In the preamble to the IFR, FRA noted that there are several 
existing extraterritorially dispatched operations, and then gave the 
specifics of those operations. CP commented on both the safety records 
of their existing operations as well as the details of those operations 
offered by FRA in the preamble while CN's comments only offered 
additional information on the specifics of their cross-border 
operations. CP's comments noted that they have safely dispatched seven 
cross-border operations for some time. Along with their comments, the 
Canadian railroads submitted updated lists of their current cross-
border operations and requested clarification on whether those 
operations would be grandfathered under the applicable provisions of 
the Final Rule. CN acknowledged the three segments listed in the IFR 
and added a fourth. CP asserted that it dispatched seven cross-border 
operations and listed those operations in an appendix to its comments.
    After reviewing those submissions and further researching the track 
segments, FRA has concluded that only the four segments listed in 
appendix A to the Final Rule are actually dispatched and the other 
segments are either controlled by another method of operation or no 
longer in service. Operations on six on the track segments are 
currently controlled by Rule 105 of the Canadian Rail Operating Rules, 
which mandates that trains operate at ``reduced speed.'' Reduced speed 
is defined as a speed no faster than that necessary to stop within one-
half the range of vision. No actual permission is required to operate 
on the track but, any train that does run on those segments must 
operate in accordance with Rule 105. The final track segment was in 
operation during December 1999 but has since been abandoned.\7\
---------------------------------------------------------------------------

    \7\ One of the segments listed in CN's submission is still in 
existence but is now dispatched by CP. That segment is the 1.8 mile 
stretch of track between Windsor, Ontario, and Detroit, Michigan.
---------------------------------------------------------------------------

    In commenting on the IFR, CP also pointed out that neither the 
Federal Motor Carrier Safety Administration nor the Federal Aviation 
Administration (FAA) has a locational requirement for dispatchers of 
trucks and airliners that come into the United States from another 
country. FRA does not find the absence of such regulations instructive 
in resolving the question of whether any form of extraterritorial 
dispatching of railroad operations is consistent with railroad safety 
and the security of the United States. Nevertheless, it should be 
recognized that truck dispatchers have virtually no safety role, while 
railroad train dispatchers are the primary protectors of safe railroad 
operations. As previously discussed train dispatchers actually steer 
the train by remotely aligning switches; they determine whether the 
train should move or stop by operating signals and issuing train orders 
and other forms of movement authority; and they protect roadway workers 
from passing trains. Air traffic controllers, as contrasted to truck 
dispatchers, do perform a safety role although not as comprehensive as 
train dispatchers. FRA recognizes that the FAA permits limited cross-
border dispatching of airlines into the fringe border areas of the 
United States to facilitate the safe hand-off of air operations to 
domestic air traffic controllers. The final rule provides for waivers 
of such fringe border rail operations. Other aircraft operations over/
on U.S. soil are handled by U.S. air traffic controllers at U.S.-based 
control centers. There are of course differences between airline and 
railroad operations, and each mode of operation presents different 
safety concerns requiring different regulatory approaches.
    As noted above, FRA has decided not to include a grandfathering 
exception for existing lines in the Final Rule. Given the possibility 
that railroads could increase extraterritorial dispatching, FRA issued 
the IFR in order to preserve the status quo until all the issues 
surrounding extraterritorial dispatching could be fully examined. After 
reviewing the comments and further examining the issues, FRA has 
determined that the safety and security risks inherent in 
extraterritorial dispatching are too serious to allow an operation to 
continue merely because it was in existence at a certain point in time. 
FRA acknowledges the comments from CP attesting to the fact that its 
cross-border operations have been safely conducted for many years, but 
FRA does not believe that reason alone can justify allowing these 
operations, especially since the nature of the operations (such as 
traffic levels in general, and volumes of hazardous materials being 
handled) can greatly increase in the future, thereby increasing the 
safety risk to the areas surrounding that track.\8\ The North American 
Free Trade Agreement (NAFTA) has increased trade among the United 
States, Mexico, and Canada. This in turn has increased the amount of 
transborder rail traffic in the United States. Incoming train crossing 
data are collected monthly at border ports by the United States Customs 
Service. In 1997, there were 7,479 train crossings into the United 
States from Mexico and 30,337 from Canada. This translates into an 
average of 104 trains crossing into the United States daily. As 
transborder traffic continues to increase on existing rail lines, it is 
likely that train speeds, which currently do not exceed 55 miles per 
hour at the borders, and train lengths will increase along with the 
actual number of trains crossing into the United States. This will 
increase the exposure of trains and other rail vehicles to railroad 
accidents at or near the borders with Mexico and Canada.\9\ As it faces 
this new operating environment with greater risk, the railroad industry 
must take precautions

[[Page 75946]]

to avoid an increase in the number of accidents and incidents caused by 
human error.
---------------------------------------------------------------------------

    \8\ Each of the four existing extraterritorial dispatched lines 
carries hazardous materials, with the volume on two of the lines 
being substantial; unsafe dispatching of any of the four operations 
would jeopardize safety. The loaded hazardous materials carloads 
carried on the four lines in 2001 were as follows: the CN line from 
Sarina, Ontario, to Port Huron, Michigan--41,819 carloads; the CN 
Sprague Subdivision line between Baudette, Minnesota, and 
International Boundary, Minnesota--25,598 carloads; the CP line from 
Windsor, Ontario, to Detroit, Michigan--2,831 carloads; and the 
Eastern Maine Railway Company's line between Vanceboro, Maine, and 
Brownville Junction, Maine--464 carloads.
    \9\ Between 1998 and 2001, the value of rail traffic moving 
between the United States and Canada has grown from $49.65 billion 
(U.S. dollars) to $60.17 billion, which is a 21.2 percent increase 
over the period or an annual rate of 4.9 percent. (Since the traffic 
mix has not changed significantly during this period, ``value'' can 
be considered a good proxy for physical units such as tons or 
carloads.) Traffic attributable to eastern gateways (Customs ports 
in United States border states of Michigan and eastward) has grown 
slightly more rapidly: $39.69 billion (U.S. dollars) to $49.07 
billion, or 23.6 percent overall, or 5.4 percent per year. It is 
commonly expected that trade between the United States and Canada 
will continue to increase in the future. These data are based on 
USDOT, Bureau of Transportation Statistics, Transborder Surface 
Freight Data public files.
---------------------------------------------------------------------------

    FRA has a responsibility to ensure that existing extraterritorial 
dispatching operations will be conducted in accordance with minimum 
safety programs for the dispatchers in the areas of efficiency testing, 
hours of service, and alcohol and drug abuse that are actively 
monitored by a government regulatory agency, that communication by the 
foreign-based dispatchers with train crews and maintenance of way 
workers in this country are understood and that there is no 
misunderstanding with regard to references to units of measurements 
such as location, distance, and speed, and that the dispatching 
operations will be conducted in a dispatch center that has adequate 
security measures in place. The fringe border waiver provision of the 
Final Rule is the most effective way for FRA to address these matters. 
The section-by-section analysis provides a detailed discussion of the 
fringe border waiver process.
    FRA anticipates that the Canadian railroads can easily meet the 
requirements for approval of fringe border dispatching. FRA is delaying 
the effective date of the rule with respect to these four existing 
operations for 90 days to enable the railroads to file a waiver request 
under the special fringe border waiver process. If a waiver request is 
filed by April 11, 2003, such operations can continue until the waiver 
request is acted upon by FRA.

D. Drug and Alcohol Testing

    One of FRA's main concerns with regard to extraterritorial 
dispatching is the potential lack of an effective drug and alcohol 
testing program in other countries. In the Omnibus Transportation 
Employee Testing Act of 1991, Pub. L. 102-143 (the Act), Congress 
recognized the importance of drug and alcohol testing in protecting the 
safety of domestic transportation systems. As stated in the fifth 
Congressional finding in that Act, Congress believed that ``the most 
effective deterrent to abuse of alcohol and use of illegal drugs is 
increased testing, including random testing.'' Given that the misuse of 
alcohol and drugs has proven to be a critical factor in transportation 
accidents, testing is integral to ensuring that domestic transportation 
systems, including railroads, operate in the safest possible manner. In 
response to Congress' directives in the Act, FRA expanded the testing 
requirements in its existing part 219 regulations. See 49 U.S.C. 20140.
    As was stated in the preamble to the IFR, under FRA's mandatory 
alcohol and drug testing program, dispatchers working in the United 
States are now subject to general restrictions on the possession and 
use of alcohol and drugs, employer policies covering voluntary referral 
and co-worker reporting of drug and alcohol abuse problems, and random, 
reasonable suspicion, return-to-duty, follow-up, and post-accident drug 
and alcohol testing, as well as pre-employment testing for drugs. Post-
accident testing is required for a dispatcher who is directly and 
contemporaneously involved in the circumstances of any train accident 
meeting FRA thresholds. See Sec.  219.203. A dispatcher found to have 
violated FRA's drug and alcohol rules at Sec. Sec.  219.101 or 219.102 
is required to be removed from covered service and is required to 
complete a rehabilitation program. See Sec.  219.104. A dispatcher who 
refuses to submit a required sample must be removed from covered 
service for nine months and must complete a rehabilitation program. See 
Sec. Sec.  219.104, 219.107, and 219.213. All dispatchers working in 
the United States who are controlling United States railroad operations 
are covered by part 219, and FRA believes, with the two exceptions 
previously noted, that any extraterritorial dispatcher controlling 
domestic operations must be covered by the same or fully equivalent 
requirements.\10\ To allow any other dispatchers who are not subject to 
the comprehensive and stringent testing requirements that DOT and FRA 
believe are necessary for rail safety to control domestic operations 
would be contrary to FRA's safety efforts.
---------------------------------------------------------------------------

    \10\ As previously noted, an employee of a foreign railroad 
whose primary reporting point is located outside of the United 
States and who performs dispatching service in the United States is 
exempt from certain part 219 requirements. See Sec.  219.3(c). FRA 
has published an NPRM that would revise part 219 to require drug and 
alcohol testing of such employees. Elsewhere in today's edition of 
the Federal Register, FRA is publishing a notice extending the 
comment period on the NPRM.
---------------------------------------------------------------------------

    The Canadian Government, in its comments on part 219 NPRM, and CN 
and CP in their comments in both the part 219 and part 241 rulemakings 
argued that the Canadian regulatory system, together with the 
railroads' voluntary drug and alcohol programs provide a functional 
equivalent to part 219. They cite to the following as five elements of 
the Canadian rail safety program: (1) The Canadian railroads' operating 
Rule G (Canadian Rule G), which prohibits the use of intoxicants or 
narcotics by employees subject to duty, or their possession or use 
while on duty; (2) the Canadian railroads' voluntary implementation of 
comprehensive drug and alcohol programs that provide for pre-employment 
and pre-placement (or pre-assignment) drug testing to risk-sensitive 
positions, reasonable cause testing, and return-to-service testing; (3) 
the Railway Safety Management System Regulations, which require 
Canadian railroads to implement and maintain safety programs; (4) the 
Canadian Railway Safety Act, which mandates regular medical examination 
every three to five years, depending upon the age of the employee, for 
all persons occupying safety-critical positions (including dispatchers 
and train crews), and which requires physicians and optometrists to 
notify the employing railroad's Chief Medical Officer if the employee 
has a medical condition that could be a threat to safe railroad 
operations; (5) Transport Canada's role in monitoring compliance with 
Canadian Rule G and auditing railroad safety programs; and (6) criminal 
prosecutions--under the Canadian Criminal Code it is an offense to 
operate railway equipment while impaired by alcohol or a drug, or to 
have a blood alcohol concentration level greater than .08 percent.\11\
---------------------------------------------------------------------------

    \11\ Under the Canadian criminal code police officers (including 
railway police officers) are entitled to test for presence of 
alcohol through approved breathalyser machines on reasonable cause. 
Penalties for violation of the criminal code include the possibility 
of fines and imprisonment. CN reported that over the past five years 
there have been four CN employees charged with this offense, one of 
which was a member of a train crew; the others were engineering or 
mechanical employees operating on or off-track equipment. CP 
reported that , between January 1998 and February 2002, five of its 
employees were charged with this offense; seven others were 
investigated but no charges were filed after an arrest, or the 
individuals were cleared of the charge.
---------------------------------------------------------------------------

    CN indicated that despite the drug and alcohol measures that have 
been adopted in Canada, it believed that random drug testing is also 
needed. CN urged FRA to continue to press Transport Canada to adopt a 
random drug testing requirement. However, both CN and CP expressed 
concern that, under current Canadian human rights legislation, 
employees could challenge implementation of part 219's random drug 
testing requirement to Canadian railroad employees (such as Canadian 
train crews operating in the United States), and such challenges would 
lead to significant costs and potential disruption to their rail 
operations.
    FRA commends the Canadian railroads and Canadian Government for 
their efforts to stem drug and alcohol abuse by Canadian railroad 
employees. However, FRA believes that the measures that have been 
implemented to date in Canada are neither

[[Page 75947]]

comparable to the requirements of part 219, nor adequate to safeguard 
United States railroad operations were Canadian dispatching of these 
operations to become widespread. FRA also notes that since July 1, 
1997, Canadian trucking companies with drivers assigned to operate 
commercial motor vehicles in the United States have had to comply with 
United States Department of Transportation substance-testing 
requirements similar to part 219, and that compliance with part 219 (in 
the case of Canadian train crews that operate in the United States) may 
not be as troublesome as CN and CP anticipate.
    Transport Canada has approved Canadian Rule G, which was developed 
by the Canadian railroad industry, but Transport Canada has not 
reviewed and approved individual railroad plans implementing Canadian 
Rule G.\12\ Like other aspects of the Canadian regulatory scheme, 
Canadian Rule G relies very much on self-regulation and implementation 
with broad oversight by the Canadian government. Such an approach is in 
stark contrast to part 219, which mandates very specific requirements 
that the testing plans of domestic railroads must include.
---------------------------------------------------------------------------

    \12\ The Canadian Rule G provides that:
    (a) The use of intoxicants or narcotics by employees subject to 
duty, or their possession or use while on duty, is prohibited.
    (b) The use of mood altering agents by employees subject to 
duty, or their possession or use while on duty, is prohibited except 
as prescribed by a doctor.
    (c) The use of drugs, medication or mood altering agents, 
including those prescribed by a doctor, which, in any way, will 
adversely affect their ability to work safely, by employees subject 
to duty, or on duty is prohibited.
    (d) Employees must know and understand the possible effects of 
drugs, medication or mood altering agents, including those 
prescribed by a doctor, which, in any way, will adversely affect 
their ability to work safely.
---------------------------------------------------------------------------

    Canadian Rule G has several significant differences compared to 
part 219. First, it fails to provide for alcohol and drug testing of 
railroad employees to detect and deter violations. Prior experience 
with a Rule G approach in the United States has revealed that such a 
rule alone, without the random and other tests required by part 219, is 
not effective in detecting and deterring drug and alcohol abuse among 
safety sensitive railroad employees. Second, Canadian Rule G does not 
directly prohibit the off-duty use of drugs and abuse of alcohol by 
dispatchers, in contrast to FRA's regulations, which prohibit any off-
duty use of drugs, and which prohibit use of alcohol within four hours 
of reporting for covered service or after receiving notice to report 
for covered service since such usage may ultimately affect an 
individual's performance on the job. See Sec. Sec.  219.101(a)(3) and 
219.102.
    Prior to the adoption of part 219 in 1985, railroads in the United 
States had attempted to deter alcohol and drug use by their employees 
by their Rule G, which prohibited operating employees from possessing 
and using alcohol and drugs while on duty, and from consuming alcoholic 
beverages while subject to being called for duty. The customary 
sanction for violation of Rule G was dismissal. Unfortunately, accident 
reports revealed that the United States railroads' Rule G efforts were 
not effective in curbing alcohol and drug abuse by railroad employees. 
47 FR 30726 (1983). Railroads were able to detect only a relatively 
small number of Rule G violations owing, primarily, to their practice 
of relying on observations by supervisors and co-workers to enforce the 
rule. FRA found that there was a ``conspiracy of silence'' among 
railroad employees concerning alcohol and drug use. 49 FR 24281 (1984). 
Despite Rule G, industry participants confirmed that alcohol and drug 
use occurred on the United States railroads with unacceptable 
frequency. Available information from all sources ``suggest[ed] that 
the problem includ[ed] `pockets' of drinking and drug use involving 
multiple crew members (before and during work), sporadic cases of 
individuals reporting to work impaired, and repeated drinking and drug 
use by individual employees who were chemically or psychologically 
dependent on those substances.'' Id. at 24253-24254. FRA identified 
multiple accidents, fatalities, injuries and property damage that 
resulted from the errors of alcohol- and drug-impaired railroad 
employees. Id. at 24254. Some of these accidents involved the release 
of hazardous material and, in one case, the release required the 
evacuation of an entire Louisiana community. Id. at 24254, 24259. These 
findings led FRA to promulgate the initial version of part 219 in 1985. 
The regulations do not restrict a railroad's authority to impose more 
stringent requirements. 50 FR 31538 (1985).
    A review of the Canadian Rule G violations reported by CP indicates 
that the Canadian Rule G has resulted in the identification of an 
extremely low number of operating crew violators. CP reported that in 
the period 1995-2001, when there were between 3,900 to 4,700 operating 
crew employees per year, there was a total of only 26 Canadian Rule G 
operating crew violators for the period. It is likely that the true 
level of drug and alcohol abuse among Canadian operating crew employees 
was much higher. For example, a 1987 survey commissioned by a Canadian 
Task Force on the Control of Drug and Alcohol Abuse in the Railway 
Industry revealed that 20 percent of 1,000 randomly-selected Canadian 
railway workers admitted that they had come to work feeling the effects 
of alcohol, and 2.5 percent admitted that they had used illegal drugs 
during their shift. In addition, CN's drug screening of its employees 
has shown a significant level of drug abuse among its employees.\13\ 
Furthermore, alcohol and drug testing of safety sensitive railroad 
employees in the United States found a significantly higher level of 
substance abuse prior to the introduction of random testing.
---------------------------------------------------------------------------

    \13\ CN's submission to a Canadian Standing Committee on 
Transportation noted that CN had utilized pre-employment drug 
screening of job applicants since 1986, and these tests yielded a 
positive rate of 12 percent; similar testing of CN employees 
transferring to safety-sensitive positions (``pre-placement 
testing''), such as dispatcher positions, also yielded a positive 
rate of 12 percent. In the Matter of an Arbitration Between Canadian 
National Railway Company and National Automobile, Aerospace, 
Transportation and General Workers Union of Canada (Union) and 
Canadian Council of Railway Operating Unions (Intervener), Re: the 
Company's Drug and Alcohol Policy, decision of Arbitrator Michel G. 
Picher at 56 (July 18, 2000). CN drug screening results from of all 
sources (pre-placement, reasonable cause, medical examinations, 
promotions and transfer, reinstatement, and EAP follow-ups) in 1995, 
showed a 6.4 percent positive test rate in the Eastern Canada, and a 
10 percent positive rate in Western Canada. Id. At 59-60.
---------------------------------------------------------------------------

    FRA's own data, compiled from domestic railroad reports, shows a 
significantly higher level of substance abuse among safety-sensitive 
railroad employees in the United States prior to the introduction of 
random testing. For example, in 1988, the industry positive rates for 
reasonable cause testing were 4.7 percent for drugs and 4.5 percent for 
alcohol. After the introduction of random testing in 1989, these rates 
declined respectively to 2.02 percent and 1.32 percent. While the 
positive rates for reasonable cause testing have continued to fall, a 
comparison of the data for post-accident testing reveals an even 
stronger impact on positive testing rates. In 1988 the positive rate 
for drugs after qualifying accident events was 5.6 percent. After the 
commencement of random testing in 1990, this rate fell to 1.1 percent 
positive. There was a corresponding reduction in post-accident 
positives from 41 in 1988 to 17 in 1990.
    The Canadian Government and CN and CP also rely heavily on the 
medical assessment that is required for dispatchers under the new 
Medical Rules for Safety Critical Employees as providing a functional 
equivalent to random testing. Under these rules, an assessment must be 
performed every

[[Page 75948]]

three to five years, depending on the age of the employee, and include 
a medical examination. CP notes that the required intervals between 
assessments result in approximately 25 percent of Canadian employees 
being examined annually, and it argues that this is approximately the 
same number of United States rail employees that receive random drug 
testing per year under part 219.\14\
---------------------------------------------------------------------------

    \14\ CP is not entirely correct in making this assertion. 
Section 219.602 currently sets a minimum random drug testing rate of 
25 percent, but this does not mean that 25 percent of covered 
employees must be tested each year. The requirement is for each 
railroad to conduct a sufficient number of random drug tests to 
equal at least 25 percent of it is covered employees. For example, a 
railroad with 1,000 covered employees must conduct at least 250 
random drug tests during the year, but this should not result in 250 
employees being tested, since in a truly random program, some 
employees will be tested more than once while others will not tested 
at all. In addition, 25 percent is the minimum random drug testing 
rate required; railroads remain free to conduct random testing at a 
higher annual rate.
---------------------------------------------------------------------------

    Throughout the preamble to the IFR, FRA emphasized the importance 
of random drug and alcohol testing in detecting and deterring substance 
abuse by railroad employees. The deterrent effect of random testing, 
which was implemented by FRA in 1988-1989, most certainly influenced 
the dramatic reduction in post-accident positives between the 41 that 
were recorded in 1988 to the 17 that were recorded in 1990. FRA does 
not believe that the periodic medical assessments Canadian railroad 
employees must undergo are the functional equivalent of random testing. 
The medical model relies primarily on medical examinations that are 
scheduled in advance. The employees know well beforehand that they will 
be undergoing an exam, giving them the opportunity to refrain from any 
activity that may reveal a substance abuse problem. Experience in 
similar programs in the United States (e.g., in the aviation and motor 
carrier industries) indicates that routine medical examinations will 
seldom be successful in identifying alcohol or drug use problems except 
perhaps in the most advanced stages of chemical dependancy when an 
employee's remaining work life is often limited and major damage has 
been done to vital organs. Even if an employee is forthcoming in 
offering that he or she is misusing drugs in his or her personal life, 
this would apparently not be a disqualifying condition absent medical 
diagnosis of a specific substance abuse disorder; however, one does not 
have to be chemically dependant to constitute a threat to public 
safety. Much of the alcohol and drug use that threatens transportation 
safety has a voluntaristic component, and random testing is appropriate 
as a deterrent. Further, Transport Canada is in the early stages of 
implementing this program and has not yet had the opportunity to 
determine program outcomes. For these reasons, it would not be 
appropriate for FRA to rely upon this program as a full substitute for 
key DOT program elements, including a prohibition on non-medical use of 
controlled substance and random testing.
    In CP's written comments, it argued that the lack of random testing 
is the only component of a testing program that would create part 241 
compliance problems for the Canadian railroads. These comments were 
filed before the issuance of the Canadian Human Rights Commission 
Policy on Alcohol and Drug Testing (CHR Policy) in June of this year. 
The CHR Policy indicates that pre-employment drug testing is not 
acceptable, throwing into doubt CN and CP's voluntary pre-employment 
drug testing programs; pre-employment drug testing for safety-sensitive 
positions (such as dispatchers) is required by part 219. See Sec.  
219.501. The CHR Policy does note that Canadian trucking and bus 
companies wishing to do business in the United States are required to 
develop drug and alcohol testing programs that comply with U.S. 
regulations (which include pre-employment drug testing), and that not 
being banned from driving in the United States may be bona fide 
occupational requirement.
    Aside from the fact that FRA believes that random testing is the 
most important aspect of any testing program and that pre-employment 
testing is important, FRA is also concerned about two other significant 
differences between part 219 and the Canadian railroads' testing 
programs.
    First, the criteria for post-accident testing are much more 
subjective under the Canadian programs than under part 219. In the 
United States, post-accident testing is required for a dispatcher who 
is directly and contemporaneously involved in the circumstances of any 
qualifying train accident. See Sec.  219.203. Under the Canadian 
programs, however, a dispatcher is not automatically tested when he or 
she is involved in an accident. Instead, the railroad must have 
independent evidence of impairment before a dispatcher involved in an 
accident may be tested. Thus, a dispatcher under the influence of drugs 
or alcohol may contribute to an accident and yet must not be tested if 
he or she does not exhibit some physical manifestation of impairment. 
That dispatcher may continue to work without undergoing additional 
scrutiny that may reveal a dependency problem that could continue to 
negatively impact his or her job performance. CN did indicate in its 
written comments that it plans to revise its policy this year to add 
mandatory post-accident testing using criteria identical to that in 
part 219. The CHR Commission Policy Statement endorses the right of 
Canadian companies to impose such testing for safety-sensitive 
employees.
    Second, a Canadian rail employee may currently decline to be tested 
and not suffer adverse consequences unless the employer has an 
independent basis for concluding that the employee is impaired by drugs 
or alcohol. Under part 219, however, a dispatcher in the United States 
who refuses a test is immediately suspended for a period of nine months 
and must follow specified procedures, including return-to-duty and 
follow-up testing, before being allowed to return to dispatching 
service. Obviously, the effectiveness of a testing program is severely 
compromised if an employee is permitted to simply decline to be tested.

E. Hours of Service

    Like alcohol or drug impairment, fatigue can cause dispatchers to 
make mistakes that lead to catastrophic railroad accidents. Both 
Canadian railroads acknowledged that Transport Canada does not regulate 
the total hours that dispatchers are allowed to work, but they pointed 
out that hours of service are covered generally by the Canada Labour 
Code, and more specifically by collective bargaining agreements between 
the railroads and their employees. The Labour Code mandates either a 
48-hour weekly limit or an 80-hour biweekly limit, although the Code 
does not mandate a maximum daily limit. With the Code as guidance, both 
railroads have negotiated similar agreements with their respective 
labor organizations that limit the number of hours a dispatcher may 
work per day to 12. Through collective bargaining agreements, 
dispatchers on both CN and CP may work no more than 48 hours in one 
week. In addition, on CP, any time worked in excess of 40 hours in one 
week must be offset by reducing the total hours worked in the next 
week. Finally, although not included in the comments from either 
railroad, FRA has learned that Transport Canada is reexamining Canada's 
hours of service regulations and may introduce comprehensive revisions 
sometime in the next year.
    Despite the apparent flexibility of the hours of service 
arrangements for Canadian dispatchers, FRA is concerned by the lack of 
a daily limit for

[[Page 75949]]

dispatcher's working hours. In contrast, 49 U.S.C. 21105 mandates 
strict daily limits on the hours that a dispatcher may work in the 
United States. Dispatchers in the United States may not work more than 
nine hours during a 24-hour period in a location where two or more 
shifts are employed, or 12 hours during a 24-hour period where only one 
shift is employed. As a practical matter, most domestic railroads, 
including the Class I and commuter railroads, operate 24-hour 
dispatching facilities where at least two shifts are employed. The only 
railroads that might employ a one-shift dispatching operation would be 
very small short line railroads, although most of those railroads use 
two shifts, as well. In addition, the fact that many of the limits on 
hours of service for Canadian dispatchers are dictated by collective 
bargaining agreements is troublesome to FRA as these agreements are 
fluid and may change. Although FRA is aware that the duration of daily 
assignments may be less significant in the onset of fatigue than 
cumulative effects and biological rhythms, this material difference 
between U.S. and Canadian practice warrants further review before 
consideration of expanded cross-border dispatching.

F. Operational Testing

    Human performance is critically important to railroad safety. Every 
year, human factors cause about a third of all train accidents and a 
large portion of railroad employee injuries in the United States. Under 
part 217, FRA requires railroads operating in the United States to have 
operating rules, to periodically instruct dispatchers on those rules, 
to periodically conduct operational tests (or ``efficiency tests,'' as 
they are widely known), and inspections on dispatchers to determine the 
extent of their compliance with the rules, and to keep records of the 
individual tests and inspections for review by FRA. As with most other 
regulations, FRA may fine railroads for failure to comply with part 
217.
    Similar to Transport Canada's regulatory approach to hours of 
service, Transport Canada does not regulate efficiency testing for 
dispatchers and, in their comments, the Canadian railroads acknowledged 
as much. Both railroads, however, use extensive voluntary testing 
programs and then report the results of the testing to Transport 
Canada. According to CP's comments, its program provides for the 
testing of more of the Canadian Rail Operating Rules than is common in 
the United States. For Canadian-based employees, including dispatchers, 
CN uses an extensive efficiency testing program called Performance 
Monitoring and Rule Compliance, which is virtually identical to the 
United States testing requirements that CN uses for United States-based 
dispatching offices. Once the Canadian railroads have reported test 
results to Transport Canada, Transport Canada then has the authority to 
audit all railroad activities and, according to CP, has conducted 
several in-depth audits of CP, the most recent of which occurred in 
December 2001. CP's comments also noted that the number of accident 
precursors, or ``near misses,'' on CP attributable to CP dispatchers is 
very small and has been declining.
    Obviously, FRA's proactive approach to ensuring rail safety is very 
different from Transport Canada's method of encouraging voluntary self-
evaluation by the Canadian railroads. Based on FRA's review of the 
comments, the Canadian railroads' testing program may very well be 
adequate if continually and evenly applied, but, unlike in the United 
States, there are no assurances that Transport Canada will provide the 
regulatory oversight to ensure continued compliance. FRA does not 
believe it is prudent to rely upon the voluntary efforts of foreign 
railroads to protect domestic rail safety. As previously noted, FRA 
will continue to discuss its safety concerns with Transport Canada in 
an attempt to reach an arrangement that is satisfactory to both 
countries.

G. Service Disruptions

    As FRA noted above, domestic dispatchers are usually unionized 
employees subject to the provisions of the Railway Labor Act, which 
prohibits strikes over contract interpretations. Congress has the power 
to legislate an end to a strike by United States railroad employees, 
but not to strikes by foreign-based railroad employees who do not enter 
the United States. Both Canadian railroads felt that the Canada Labour 
Code will protect against service disruptions arising from labor 
disputes in Canada.
    Canadian dispatchers are subject to the provisions of the Canada 
Labour Code. In the event of a strike, if the Canadian Industrial 
Relations Board determines that a strike or lockout could pose an 
immediate and serious threat to the safety or health of the public, it 
may order the continuation of services to prevent the danger. 
Furthermore, if a strike or lockout occurs while Parliament is not in 
session, and the Governor in Council determines the strike or lockout 
would adversely affect national interests, the Council may issue an 
order deferring the strike or lockout during the period between 
Parliaments. In addition, CN's comments noted that CN has contingency 
plans for any labor disruption, including those involving dispatchers. 
In the event of a disruption, CN is prepared to use supervisory 
personnel as dispatchers or, in the event of another type of 
disruption, to move dispatching operations to an alternate location.
    While FRA acknowledges that the Canadian Labour Code grants 
sufficient power to the Canadian government to end labor disruptions in 
Canada, there is no guarantee that the Code would cover dispatchers 
controlling track in the United States, even if they were dispatching 
for a Canadian railroad. The Code clearly gives governing bodies in 
Canada the authority to take action to protect safety in Canada, but it 
is not clear that the law covers the safety of United States rail 
operations or that the Canadian government would take steps to stop 
labor disputes that disrupt only United States operations. Even if 
Canadian law authorized the Canadian government to stop labor disputes 
that disrupt only United States operations, the Canadian government 
would only exercise that authority as a volunteer, not as a body 
charged with serving the people of the United States. Neither of the 
Canadian railroads addressed this critical issue in their comments. As 
a result, FRA remains concerned that a labor disruption involving 
extraterritorial dispatchers who control United States territory could 
cause severe domestic service problems and, as previously discussed, 
possibly jeopardize transportation safety.

H. Security Concerns

    The security of transportation infrastructure has taken on greater 
significance in the wake of the terrorist attacks of September 11, 
2001. As FRA noted in the preamble to the IFR and again in the above 
discussion, the security of domestic rail operations involves the 
following two aspects: (1) The security of, and access to, the actual 
dispatching facilities; and (2) the safety and national security 
implications involved with allowing foreign dispatch centers to have 
access to information on movements of military goods and extremely 
hazardous materials and control over the movement of these items, 
particularly on the STRACNET.
    Both Canadian railroads indicate that they employ security measures 
that are similar to those employed by domestic railroads. For example, 
access to dispatching facilities is controlled by multiple levels of 
security, including card readers and monitored security cameras. Both 
Canadian railroads are

[[Page 75950]]

members of the North American Association of Railroad Chiefs of Police, 
and both work closely with the Royal Canadian Mounted Police and other 
North American law enforcement organizations to ensure an effective 
exchange of information related to security issues. In addition, 
following the attacks of September 11, both Canadian railroads, along 
with the domestic railroads, have participated in AAR security working 
groups and have begun implementing the recommendations made by those 
groups. CP also noted that they have a fully equipped back-up 
dispatching facility that can be utilized in the event of an emergency. 
Neither CN nor CP directly addressed the security issues surrounding 
the foreign dispatch centers having access to information regarding the 
shipment of military goods and hazardous materials, including 
radioactive substances, in the United States and having the ability to 
control the movement of these items.
    FRA recognizes the efforts undertaken by the Canadian railroads to 
secure their dispatch centers. However, in light of the increased 
awareness of the need for heightened transportation security following 
the attacks of September 11, FRA is concerned about allowing foreign 
dispatch centers to have access to information on movements of military 
goods and hazardous materials, and to have control over the movements 
of these items, particularly on the STRACNET.
    Furthermore, many of the commodities that railroads transport in 
large quantities across the United States are extremely dangerous and, 
if accidentally or intentionally released in urban or environmentally 
sensitive areas, could cause catastrophic damage. FRA is particularly 
concerned that these commodities could prove to be tempting targets for 
terrorist attacks. Moreover, the projected large rail movements of 
spent nuclear waste will provide even more dangerous targets for 
terrorists. Finally, given the rapidly changing world-wide terrorism 
problem confronting the United States, it is of the utmost importance 
that the domestic railroad network be fully responsive to national 
defense needs and priorities, including the need to quickly and 
secretly move military items.

I. International Trade Implications

    CP was the only commenter that raised free trade as an issue. CP 
indicated that part 241 might violate Articles 906 to 911 of Part 3 of 
NAFTA. These provisions concern Technical Barriers to Trade, and while 
CP did not make any express statements to that effect, the comments 
seemed to imply that part 241 could potentially run afoul of NAFTA. In 
addition, CP noted that, under the NAFTA, the Land Transportation 
Standards Subcommittee (LTSS) has authority to address regulatory 
issues related to cross-border rail operations. CP directed FRA's 
attention to the latest report from the LTSS, which noted current 
arrangements do not impede the flow of passenger or freight traffic in 
North America. CP argued that if FRA believes extraterritorial 
dispatching to be a legitimate safety threat, the LTSS should first 
examine the issue before FRA takes any other action. CP also proposed 
as an alternative to part 241 the formal adoption of a ``border zone'' 
that would provide a limited distance on both sides of the Canada-
United States border where all railway safety regulations of the other 
country would be recognized as equivalent.
    FRA does not believe that part 241 is contrary to NAFTA, which 
prohibits Parties to NAFTA from creating unnecessary obstacles to trade 
between each other. NAFTA requires the Parties to strive to establish 
compatible standards-related measures so as to facilitate trade in a 
good or service, and to treat technical standards adopted by the other 
Parties as equivalent to its own where these standards adequately 
fulfill the importing Party's legitimate objectives. Under Article 904 
of NAFTA, however, each Party retains the right to adopt and enforce 
any safety measure it considers appropriate to address legitimate 
safety objectives, including prohibiting the provision of service by a 
service provider of another Party that fails to comply with the safety 
measure. Furthermore, under Article 2102, each Party has the right to 
take any actions that it considers necessary for the protection of its 
essential security interests.
    Under Article 2101, a NAFTA Party has the right to bar access to 
information which it determines to be contrary to its security. A NAFTA 
Party also has the right to take other actions it considers necessary 
for the protection of its essential security interests relating to the 
traffic in arms, ammunition, and implements of war and to such traffic 
and transactions in other goods, materials, services, and technology 
undertaken directly or indirectly for the purpose of supplying a 
military or other security establishment. As such, part 241 serves to 
control access to information the disclosure of which would be contrary 
to national security. Allowing extraterritorial dispatching would also 
increase the possibility that train movement of spent nuclear waste and 
portions of the STRACNET would be controlled by foreign-based 
dispatchers. Some of the rail lines that make up the STRACNET include 
lines that aid in routing shipments to and from military bases. Part 
241 is clearly permissible under NAFTA.
    Finally, FRA notes that Mexico has indicated that extraterritorial 
dispatching of rail operations in the United States poses a safety risk 
that justifies the promulgation of a bar to such dispatching. Mexico 
itself has in place a law requiring that all dispatching of Mexican 
rail operations occur in Mexico.
    In this rulemaking document, FRA has articulated legitimate safety 
concerns, including security concerns, that would result from 
extraterritorial dispatching, and that support the issuance of the 
Final Rule. FRA disagrees with the suggestion that it should have 
submitted its safety concerns to the LTSS rather than proceeding to 
resolve these concerns in the manner that it has. The rail working 
group of the LTSS was set up under NAFTA to evaluate the then existing 
safety regulations of the three countries to determine if they 
represented impediments to cross-border rail operations. After a 
thorough review, the group determined that there were no significant 
impediments. Once that objective had been met, the group was re-formed 
as the Rail Safety and Economics group of the Transportation 
Consultative Group (TCG), a sister group of the LTSS that continues to 
meet to discuss issues of mutual interest. The TCG, like the LTSS, has 
no power to mandate any changes to a country's regulations--it is an 
advisory body only.
    NAFTA recognized that the signatories might decide, in the future, 
to institute changes to their respective regulatory regimes; therefore, 
the treaty mandates that a country wishing to impose or remove a 
regulation consult with its partners and offer an opportunity for 
comment. The United States has met its burden in that regard, through 
discussions with its NAFTA partners during TCG meetings and other bi-
lateral meetings with Transport Canada and Mexican officials, and 
through the formal notice and comment process followed in the issuance 
of this Final Rule, where both Mexico and Canada, as well as all other 
interested parties were specifically given the opportunity to comment 
on the issue of whether FRA should limit extraterritorial dispatching.
    The Final Rule that is being adopted attempts to balance United 
States' safety standards with the safety standards of its NAFTA 
partners and their railroads

[[Page 75951]]

in order to facilitate cross-border railroad operations. FRA has 
approved a fringe border waiver process that would permit existing 
extraterritorial dispatching to continue and that would permit new 
extraterritorial dispatching from Canada and Mexico in the areas in the 
United States immediately surrounding the Canadian and Mexican borders, 
without these dispatchers having to fully comply with all of FRA's 
safety standards for domestic dispatchers. FRA has also provided for a 
transitional period for existing extraterritorial dispatching to 
continue while the railroads qualify the operations under the fringe 
border waiver provision. FRA does not believe that the Canadian 
commenters have sufficiently made the case that any broader relief is 
appropriate, or that FRA needed to take any additional steps in 
promulgating this Final Rule. FRA has pledged its willingness to 
continue discussing extraterritorial dispatching with its NAFTA 
partners and their railroads, as well as all other cross-border safety 
issues; these discussions, together with the safety experience gained 
under the rule with respect to extraterritorial dispatching, well may 
lead to future changes to the Final Rule.

J. Economic Impact

    CN was the only commenter that questioned the economic analysis and 
disagreed that the railroads will experience a savings over the next 20 
years as a result of part 241 because of the number of unknown factors 
associated with the ultimate Final Rule. CN argues that until the rule 
becomes final, costs associated with eliminating the grandfathering and 
fringe border operations cannot be measured. Even if these provisions 
are maintained, CN suggests that the costs do not accurately portray 
the costs of adding FRA programs or of losing flexibility that would 
follow from the rule. CN also disagrees that the rule will prevent 
injuries or fatalities and challenges FRA to support that assertion.
    FRA has examined the economic impact of the Final Rule and the 
results of this analysis are set forth in section VI (Regulatory 
Impact) of the supplementary information below.

K. Language Differences and Units of Measure

    Based on the comments submitted by CN and CP, FRA is satisfied that 
these two railroads have taken steps that address FRA's concerns 
regarding language differences and designation of units of measurement 
with respect to dispatching of United States railroad operations from 
Canada. Eastern Maine Railway Company did not file comments, and FRA is 
not aware of how it is handling language and unit of measurement 
issues.
    Both CN and CP use English units and not metric units for all units 
of measurement, including distance, speed, and locations. In addition, 
both railroads assured FRA that any dispatching of United States track 
from Canada would be conducted in the English language. According to CN 
and CP, the only territory where dispatching is conducted in French is 
in the Quebec province, and both CN and CP use only bilingual 
dispatchers and train crews in Quebec. Finally, with only a few minor 
differences, both Canadian railroads use the same terminology as that 
used by domestic railroads. FRA notes, however, that while the comments 
from CN and CP may alleviate FRA's concerns with regard to these 
railroads, they do not address the potential implications of other 
railroads dispatching from Canada or of railroad dispatching operations 
in a country other than Canada.

L. Definitions of ``Dispatch'' and ``Dispatcher,'' and Special Relief 
for Fringe Border Operations

    Both Canadian railroads as well as the AAR raised concerns over the 
possible interpretation of the definitions of ``dispatch'' and 
``dispatcher'' in Sec.  241.5. In addition, CN and CP also argued that 
the ``fringe border operations'' exception in Sec. Sec.  241.9, 241.11, 
and 241.13, while intended by FRA to promote flexibility in allowing 
minor cross-border operations in the future, actually had just the 
opposite effect as the language was too narrow to permit many 
operations that might fall under the exception.\15\
---------------------------------------------------------------------------

    \15\ In the IFR, FRA had suggested possible parameters for a 
fringe border exception. In their comments, both CN and CP suggested 
modifications that would have expanded the scope of the exception. 
Both railroads recognized that FRA was trying to promote flexibility 
but argued that the exactness of the language in the rule had just 
the opposite effect. CP pointed out that, many times, the only 
purpose of a cross-border operation is to set off, pick up, or 
interchange cars, but the language of the rule could be read 
narrowly in order to prohibit that. CN questioned both the ``bridge 
traffic'' and ``hand-off'' operations and offered suggestions to 
change those operational parameters to make them more practicable. 
Specifically, CN noted that existing Canadian-based dispatching 
operations have not presented problems in the past and are of 
minimal risk, but under the exception as written, very few 
additional operations would be permissible and suggested that a more 
reasonable approach would be to allow hand-offs to proceed to a crew 
change point or a change in traffic control method (not including 
yard limits) with an overall limit of 15 miles.
---------------------------------------------------------------------------

    After reviewing the comments, FRA agrees that some of the changes 
to the definitions of ``dispatch'' and ``dispatcher'' suggested by the 
commenters would improve the rule. As the comments concern specific 
language in the rule, FRA will fully address them and explain the 
rationale for the changes in the section-by-section analysis to follow.
    CN and CP supported the concept of a fringe border exception but 
have asked for greater relief than FRA has determined is appropriate to 
adequately protect railroad safety. As noted above, the Final Rule does 
not contain a fringe border operations exception per se, but rather 
contains a special fringe border waiver process that will permit 
railroads flexibility in dispatching cross-border operations from 
Canada or Mexico. See the discussion of the fringe border waiver 
process in the section-by-section analysis to follow.

M. Comments From Labor Organizations

    As noted above, three labor organizations--the BLE, BMWE and ATDD--
submitted comments on part 241. The comments from the BLE and the BMWE 
were general in nature and supported the position taken by FRA in 
proposing to bar any additional extraterritorial dispatching, although 
the BMWE did offer one specific comment with regard to the 
grandfathered operations. Both the BLE and BMWE also supported the 
comments from the ATDD, which also supported FRA's position but 
included suggestions to change specific provisions in the rule. After 
reviewing the ATDD's comments, FRA has decided not to make any of the 
changes suggested by the ATDD.
    The ATDD suggested four changes to the IFR. First, with regard to 
the operations that are grandfathered, the ATDD wanted FRA to require 
extraterritorial dispatchers controlling those operations to 
demonstrate, at least semi-annually, familiarity with the operations 
they are dispatching. Second, the ATDD suggested that the 
grandfathering exception apply only to current operations and should 
terminate when ownership of the United States track changes or when 
operations over that track change. Similarly, the BMWE suggested that 
any grandfathered track segment that is abandoned and then restarted 
should lose the exception. Third, the ATDD wanted to eliminate waivers 
for part 241. Finally, the ATDD argued that a railroad's ability to 
move dispatching operations to another country should be limited to 
situations where the railroad can prove that such operations could not 
be transferred to another location in the United States. In addition, 
railroads should have plans in place to provide a domestic alternative 
to a foreign location.

[[Page 75952]]

    As noted above, FRA is not including the grandfathering exception 
in the Final Rule. Therefore, the ATDD's comments on the grandfathered 
operations are no longer relevant. With regard to waivers, FRA believes 
that waivers are necessary in order to maintain flexibility. If a 
railroad can address all of the concerns that militate in favor of part 
241, FRA will definitely consider a waiver. Likewise, in an emergency 
situation, railroads should be allowed a maximum amount of flexibility 
in order to safely conduct their operations. By limiting the duration 
of the permissible extraterritorial dispatching to the duration of the 
emergency, FRA is effectively balancing the railroads' need for 
flexibility with the need to maintain domestic rail safety.

V. Section-by-Section Analysis

    This section-by-section analysis will explain the provisions of the 
Final Rule and the changes made from the IFR. Of course, a number of 
the issues and provisions involving this rule have been discussed and 
addressed in detail in the preceding discussions. Accordingly, the 
preceding discussions should be considered in conjunction with those 
below and will be referred to as appropriate. Also, as the majority of 
the rule text introduced in the IFR remains unchanged in this Final 
Rule and there were no comments on the other portions of the section-
by-section analysis, much of the section-by-section analysis included 
in the IFR is repeated here.

Section 241.1 Purpose and Scope

    Paragraph (a) states that the purpose of the rule is to prevent 
railroad accidents and incidents, and consequent injuries, deaths, and 
property damage, that would result from improper dispatching of 
railroad operations in the United States by persons located outside of 
the United States. As noted earlier in the preamble, dispatchers are 
responsible for establishing a train's route and ensuring that the 
train has a clear track in front of it. As such, it is essential that 
dispatching be conducted as safely as possible in order to avoid 
incidents such as collisions and derailments that endanger train crews, 
other railroad employees, and the general public.
    Paragraph (b) states that the rule prohibits extraterritorial 
dispatching of railroad operations, conducting railroad operations that 
are extraterritorially dispatched, and allowing track to be used for 
such operations, subject to certain stated exceptions. Because FRA 
believes that extraterritorial dispatching presents serious safety 
problems and because proper dispatching is such an integral part of 
safe railroad operations, FRA is generally prohibiting any 
extraterritorial dispatching of United States rail operations, except 
in cases of emergencies. However, FRA has determined that it is 
appropriate to provide special relief for the four existing 
extraterritorial dispatching operations (listed in appendix A to the 
rule), and for limited new extraterritorial dispatching of fringe 
border areas in the United States designed to facilitate the smooth 
handoff of dispatching between dispatchers in Canadian and Mexico and 
those in the United States. Such relief is best granted in the context 
of waivers rather than blanket approvals of the operations; the special 
waiver process is discussed below. Of course, railroads subject to this 
part may adopt and enforce additional or more stringent requirements 
provided they are not inconsistent with this part.

Section 241.3 Application and Responsibility for Compliance

    This section employs what is essentially standardized regulatory 
language that FRA uses in most of its rules. Paragraphs (a) and (b) 
mean that railroads whose entire operations are conducted on track 
within an installation that is outside of the general railroad system 
of transportation in the United States (in this paragraph, ``general 
system'') are not covered by this part. See 49 CFR part 209, appendix A 
for a discussion of ``general railroad system of transportation.'' 
Tourist, scenic or excursion operations that occur on tracks that are 
not part of the general railroad system would, therefore, not be 
subject to this part. The word ``installation'' is intended to convey 
the meaning of physical (and not just operational) separateness from 
the general system. A railroad that operates only within a distinct 
enclave that is connected to the general system only for the purposes 
of receiving or offering its own shipments is within an installation. 
Examples of such installations are chemical and manufacturing plants, 
most tourist railroads, mining railroads, and military bases. However, 
a rail operation conducted over the general system in a block of time 
during which the general system railroad is not operating is not within 
an installation and, accordingly, not outside of the general system 
merely because of the operational separation.
    Paragraph (c) clarifies FRA's position that the requirements 
contained in this Final Rule are applicable not only to any 
``railroad'' subject to this part but also to any ``person,'' as 
defined in Sec.  241.5, that performs any function required by this 
Final Rule. Although various sections of the Final Rule address the 
duties of a railroad, FRA intends that any person who performs any 
action on behalf of a railroad or any person who performs any action 
covered by the Final Rule is required to perform that action in the 
same manner as required of a railroad or be subject to FRA enforcement 
action. For example, contractors that perform duties covered by these 
regulations would be required to perform those duties in the same 
manner as required of a railroad.

Section 241.5 Definitions

    This section contains a set of definitions intended to clarify the 
meaning of important terms as they are used in the text of the rule. 
Several of the definitions involve fundamental concepts that require 
further discussion.
    Dispatch. Based on the comments received from the Canadian 
railroads and the AAR, FRA is modifying the definitions of both 
``dispatch'' and ``dispatcher'' in order to avoid confusion about the 
job categories that could potentially be covered by the definition. FRA 
intended the definition of ``dispatch'' to be function-specific, not 
job-specific, but recognizes that the definitions, as written in the 
IFR and if not read in conjunction with the preamble, could be 
misinterpreted to include employees, such as yardmasters, performing 
tasks that FRA did not intend to be included. The commenters agreed 
with the preamble language but were troubled by the fact that the 
language was not included in the rule text.
    In the IFR, FRA stated that ``dispatch'' means to control the 
movement of a train or other on-track equipment by the issuance of a 
written or verbal authority. In addition, the definition of 
``dispatcher'' could include, among other specifically mentioned job 
categories, yardmasters. The Canadian railroads were understandably 
concerned that a yardmaster performing a duty other than dispatching 
could fall under the definition merely by virtue of his or her job 
title. Likewise, the AAR was concerned that a track foreman giving 
permission to a train to enter working limits would be considered 
``controlling the movement of a train'' by issuance of a track 
authority to the train and, thus, could fall under the definition. The 
AAR suggested that the problem could be corrected by eliminating the 
enumeration of the types of employees who may at times perform 
dispatching functions and asked that FRA clarify that a track foreman 
giving authority to a train to

[[Page 75953]]

proceed is not considered dispatching. CP suggested that the definition 
of ``dispatch,'' along with the definition of ``dispatcher,'' be 
revised to more closely parallel the definition used in the hours of 
service regulations found at part 228.
    FRA agrees that the definitions could lead to confusion and has 
decided to modify both. Therefore, FRA is more explicitly limiting the 
functions that would fall under the definition of ``dispatch'' to only 
those duties that would be performed by a ``dispatching service 
employee'' as that term is defined by the hours of service laws at 49 
U.S.C. 21101(2), were these functions to be performed in the United 
States. To that effect, FRA has removed the portion of the definition 
providing that ``'dispatch'' means to use a telegraph, telephone, 
radio, * * *'' and ``* * * hand delivery,'' but has retained the 
provisions for ``electrical or mechanical device'' as an example of how 
someone who is dispatching can control train movement. FRA retained 
this portion of the definition to clarify that the definition is 
intended to more closely track both the statutory definition of 
``dispatching service employee'' as well as previous agency 
interpretations on hours or service. Unlike in the IFR where the first 
sentence of the definition is an abstract statement of the scope of 
``dispatch,'' this sentence now sets the limits of what constitutes 
dispatching and the remainder of the definition is merely clarification 
language providing examples of the types of activities FRA intends to 
cover and to not cover under the definition.
    Under 49 U.S.C. 21101(2), a ``dispatching service employee'' is 
defined as ``an operator, train dispatcher, or other train employee who 
by the use of an electrical or mechanical device dispatches, reports, 
transmits, receives, or delivers orders related to or affecting train 
movements.'' This statutory provision has been interpreted by FRA in a 
statement of agency policy and interpretation codified at part 228, 
appendix A. Consistent with that interpretation, both the statutory 
definition and part 241's definition of ``dispatch'' are functional, 
meaning that an individual's job title is irrelevant in determining 
whether he or she is dispatching. In addition, whether the individual 
is employed by a railroad is irrelevant. However, unlike the statutory 
definition of ``dispatch,'' the regulatory definition makes clear that 
the location of the individual performing the dispatching is irrelevant 
to the determination of the function the individual is performing. 
Thus, an individual located in a foreign country who, because of his or 
her job duties, would be covered by the statutory definition if he or 
she were located in the United States would be dispatching within the 
meaning of Sec.  241.5. Finally, as FRA stated in the preamble to the 
IFR and wants to make perfectly clear in this Final Rule, FRA does not 
intend that yardmasters as a job category fall within the scope of the 
definition. Instead, yardmasters are only covered by this part when 
they are performing dispatching functions.
    Subsection (i) of the definition gives specific examples of the 
types of functions that one who dispatches would perform in order to be 
considered dispatching. In particular, FRA intends that anyone 
controlling the ``movement of a train,'' which is defined in another 
paragraph of this section as a movement of on-track equipment requiring 
a power brake test under parts 232 or 238, would be considered 
dispatching and, therefore, would fall within the scope of the rule. 
Another type of movement that FRA intends to include is the movement of 
certain other on-track equipment, such as specialized maintenance-of-
way equipment, that is not subject to the power brake regulations. FRA 
still intends to exclude movements of on-track equipment used in the 
process of sorting and grouping rail cars inside a railroad yard in 
order to assemble or disassemble a train.
    Subsection (i) also explicitly notes two methods of controlling 
movements that fall within the scope of the definition. The first 
method that FRA considers dispatching under part 241 is controlling 
movements by the issuance of a written or verbal authority or 
permission that affects a railroad operation, such as through movement 
authorities and speed restrictions, and includes the following:

    Track Warrants, Track Bulletins, Track and Time Authority, 
Direct Traffic Control Authorities, and any other methods of 
conveying authority for trains and engines to operate on a main 
track, controlled siding, or other track controlled by a 
[dispatcher].

Operating Practices Safety Advisory (OPSA-96-03), reissued as OP-97-
34, p. 7.

    ``Railroad operation'' is defined in another paragraph of this 
section as the movement of a train or other on-track equipment (except 
as specified earlier) or ``the activity that is the subject of an 
authority issued to a roadway worker for working limits.''
    The second method that falls within the scope of the definition of 
``dispatch'' is to control a movement ``by establishing a route through 
the use of a signal or train control system but not merely by aligning 
or realigning a switch.'' This provision makes clear that the act of 
aligning or realigning a switch alone is not sufficient to constitute 
dispatching. In order to constitute dispatching within Sec.  241.5, 
aligning or realigning a switch must be accompanied by the act of 
setting a signal authorizing movement over a track segment. This 
exclusion is consistent with FRA's interpretation in Operating 
Practices Technical Bulletin (OP-96-04) and Operating Practices Safety 
Advisory (OPSA-96-03), reissued as OP-97-34 (hereinafter, ``OP-97-
34'').
    Subsection (ii) of the definition of ``dispatch'' clarifies that 
those railroad employees who issue an authority for either a roadway 
worker or stationary on-track equipment, or both, to occupy a certain 
stretch of track while performing repairs, inspections, etc., will also 
be covered by this rule. FRA included this section to distinguish this 
activity from that of authorizing movement of trains or other on-track 
equipment onto track.
    Subsection (iii) of the definition of ``dispatch'' states another 
function of a dispatcher, which is to issue an authority for working 
limits to a roadway worker. As defined in another paragraph of this 
section,

[w]orking limits means a segment of track with definite boundaries 
established in accordance with part 214 of this chapter upon which 
trains and engines may move only as authorized by the roadway worker 
having control over that defined segment of track. Working limits 
may be established through ``exclusive track occupancy,'' 
``inaccessible track,'' ``foul time'' or ``train coordination'' as 
defined in part 214 of this chapter.

    Finally, paragraph (2) of the definition of ``dispatch'' has been 
rewritten to further clarify that the term excludes several types of 
activities that might mistakenly be considered to fall within the scope 
of the definition. Paragraph (2) limits the exclusions, however, to 
personnel in the field. Subsection (i) specifically excludes from the 
scope of the definition the carrying out of a written or verbal 
authority or permission or an authority for working limits. As further 
clarification, subsection (i) notes two examples of activities that 
would fall under the exclusion, provided they were carried out by field 
personnel: Initiating an interlocking timing device and, in response to 
the AAR's comments, authorizing a train to enter working limits. 
Subsection (ii) specifically excludes from the scope of the definition 
the operation by field personnel of a function of a signal system 
intended to be used by those

[[Page 75954]]

field personnel, such as initiating an interlocking timing device.
    Dispatcher. As noted above, in order to make explicitly clear that 
an individual's job title does not determine whether the functions he 
or she performs will be considered ``dispatching'' FRA has revised the 
definition of ``dispatcher'' to remove all job categories and instead 
has made the definition entirely function-specific. Therefore, any 
individual, regardless of job title, performing any of the functions 
encompassed by the definition of ``dispatch'' will be considered a 
``dispatcher'' and will fall within the ambit of part 241.
    Emergency. The definition of ``emergency'' remains unchanged from 
the IFR. An ``emergency'' under this part must be unexpected and 
unforeseeable and must interfere with a railroad's ability to dispatch 
a United States railroad operation domestically to the extent that if 
the operation is not dispatched extraterritorially there would be a 
substantial disruption in rail traffic or a significant safety risk. 
Planned shortages of domestic dispatchers relating to vacation 
scheduling or the railroad's failure to maintain an adequate list of 
extraboard employees and foreseeable train delays due to substandard 
maintenance and repair of rail equipment are not emergencies.
    Typical examples of emergencies are the following: The sudden 
illness of a domestic dispatcher about to begin working the next duty 
shift when there is no other domestic employee nearby who could be 
called to substitute; the delay of a train operating on mainline track 
in reaching its station when the delay is due to the derailment of 
another train and the domestic dispatching office was scheduled to 
close until the next day after the domestic dispatcher completed his or 
her tour of duty; and unforeseeable system failures resulting in 
significant train delays when the available pool of domestic relief 
dispatchers is insufficient to safely handle the increased traffic 
density. In addition, other situations may constitute part 241 
emergencies, depending on all the facts involved. The determination of 
whether a situation is an emergency must always be made on a case-by-
case basis.
    Finally, if extraterritorial dispatching service needed to abate an 
emergency is concluded before the end of a duty tour, the emergency 
provision does not provide license to continue the extraterritorial 
dispatching if an emergency no longer exists.
    Extraterritorial dispatcher. The definition of ``extraterritorial 
dispatcher'' remains unchanged from the IFR. An ``extraterritorial 
dispatcher'' is an individual who, while performing the function of a 
dispatcher from a country other than the United States, dispatches a 
railroad operation that takes place in the United States.
    Extraterritorial dispatching. The term has been slightly reworded 
to mean the act of dispatching a railroad operation that occurs on 
trackage in the United States by a dispatcher located outside the 
United States.
    Fringe border dispatching. This is a new definition that relates to 
the new fringe border waiver provision. ``Fringe border dispatching'' 
is defined to mean the act of extraterritorial dispatching a railroad 
operations that occurs on trackage in the United States immediately 
adjacent to the border by a dispatcher who is a railroad employee 
located in Canada or Mexico.
    Movement of a train. This term remains unchanged from the IFR. FRA 
intends it to have the same meaning as does the term ``train'' in 49 
CFR 220.5.
    Occupancy of a track by a roadway worker or stationary on-track 
equipment or both. This term remains unchanged from the IFR and refers 
to the physical presence of a roadway worker or stationary on-track 
equipment on a track for the purpose of making a repair, an inspection, 
or another activity not associated with the movement of a train or 
other on-track equipment. It is intended to cover situations where a 
stretch of track is being occupied for a certain period of time by 
roadway workers, with or without on-track equipment, for purposes not 
related to the movement of a train.
    Roadway worker. This term remains unchanged from the IFR and is 
intended to have the meaning it has in 49 CFR 214.7 and 220.5.

Section 241.7 Waivers

    This section sets forth the procedures for seeking waivers of 
compliance with the prohibitions and requirements of this rule. As 
noted above in section IV(M) of the supplementary information, above, 
the ATDD suggested that FRA not allow waivers of compliance with part 
241 because the safety implications surrounding part 241 are too 
important, and because the waiver section has too many loopholes. FRA 
disagrees with both of those assertions and believes that the waiver 
provision must remain in order to allow flexibility. If a railroad 
proves to FRA's satisfaction that it can safely and securely conduct an 
extraterritorially dispatched operation, FRA may grant a waiver of the 
requirements of part 241.
    The section has been expanded to provide special relief for the 
limited railroad operation in the United States that are currently 
being extraterritorially dispatched, and to facilitate further 
extraterritorial dispatching of fringe border operations. Paragraph (a) 
provides the general rules governing waiver requests. This paragraph is 
consistent with the general waiver provisions contained in other 
Federal regulations issued by FRA. Requests for waivers may be filed by 
any interested party. Except as provided by paragraph (b), the filing 
of a waiver petition does not affect that person's responsibility for 
compliance with the rule while the petition is being considered. In 
reviewing waiver requests, FRA conducts investigations to determine if 
a deviation from the general prohibitions and requirements can be made 
without compromising or diminishing rail safety. FRA recognizes that 
circumstances may arise when conduct of extraterritorial dispatching 
that does not fall within one of the exceptions to the prohibition 
contained in this rule is appropriate and in the public interest. 
However, FRA will normally expect an applicant to demonstrate that the 
dispatchers are subject to the same or comparable safety standards as 
those applicable to dispatchers located in the United States, that 
those standards will be enforced by FRA or by the host country with 
supplementary FRA oversight, and that the additional safety concerns 
previously identified, such as security, language and measurement 
differences, possible labor strikes and other disruptions, are 
adequately addressed.
    Paragraph (b) is new. It provides special dispensation for existing 
extraterritorial dispatching. A railroad that files a waiver request 
seeking to continue extraterritorial dispatch of an operation that it 
has dispatched pursuant to the terms of the Interim Final Rule, may 
continue extraterritorial dispatching of that operation until the 
railroad's waiver request is acted upon by FRA if the petition is filed 
no later than April 11, 2003. If the waiver request is for an operation 
not listed in appendix A, the waiver request must describe when the 
extraterritorial dispatching of the operation commenced and how the 
dispatching was authorized by the terms of the IFR. FRA will notify the 
railroad if FRA determines that the operation was not permitted by the 
terms of the IFR.
    Paragraph (c), covering fringe border dispatching, is also new. As 
previously noted, FRA has determined that it is appropriate to provide 
special relief for the four existing extraterritorial

[[Page 75955]]

dispatching operations (listed in appendix A to the Final Rule, the 
longest of which is 99 miles), which have been conducted for some time, 
and for limited new extraterritorial dispatching (limited to 5 route 
miles from the border) to facilitate hand-offs between foreign and 
domestic dispatchers. FRA recognizes that it may not always be safe or 
practical to conduct a hand-off operation exactly at the border, which 
may be a milepost in the middle of nowhere, and that more appropriate 
hand-off points may be locations in the United States close to the 
border. Given the limited length of the operations contemplated under 
this special waiver process, FRA is willing to permit the operations to 
be conducted with fewer safety requirements than would be required for 
longer operations in the United States. FRA is not suggesting that 
allowing these fringe border operations, even with these restrictions, 
is completely without risk or as safe as operations that are subject to 
the full range of safety requirements applicable to domestic 
dispatchers. However, FRA believes that the fringe border waiver 
provision strikes the proper balance between the risks of the 
operations and the necessity of allowing the railroads some flexibility 
and the need to promote the smooth flow of commerce across the border.
    A fringe border waiver request by a railroad will generally be 
granted if (1) the railroad has taken adequate steps to ensure the 
security of its dispatch center, (2) the railroad has in place 
specified safety programs for its extraterritorial dispatchers, (3) a 
government safety agency in the country where the dispatching will 
occur has safety jurisdiction over the railroad and the dispatchers and 
is satisfied with the railroad's safety programs, and (4) the railroad 
agrees to abide by the operating restrictions specified in the rule. 
FRA anticipates that both Canadian and Mexican railroads can easily 
meet these requirements for cross-border dispatching of operations, and 
that FRA will be able to work out satisfactory arrangements with the 
railroads and the regulatory agencies in Canada and Mexico concerning 
the monitoring of the agreed upon safety programs.
    An applicant railroad must describe the line proposed to be 
dispatched and supply the following documents with respect to its 
safety programs covering the fringe border operation:
    (1) A copy of the operating rules of the railroad that would apply 
to the proposed fringe border dispatching, including hours of service 
limitations, and the railroad's program for testing the dispatchers in 
accordance with these operating rules and for ensuring that the 
dispatchers do not work in excess of the hours of service restrictions. 
Based on their comments, CP and CN have developed adequate safety 
programs that address this requirement.
    (2) A copy of the railroad's drug and alcohol abuse prevention 
program that applies to the fringe border dispatchers. The program 
shall, to the extent permitted by the laws of the country where the 
dispatching occurs, contain the following: preemployment drug testing; 
a general prohibition on possession and use of alcohol and drugs while 
on duty; reasonable cause alcohol and drug testing; a policy dealing 
with co-worker and self-reporting of alcohol and drug abuse problems; 
post-accident testing; and random drug testing. FRA is not requiring 
that a railroad's program track the requirements of part 219. Based on 
the comments that have been filed, existing CN and CP programs are 
adequate given the current state of the law in Canada which would seem 
to bar Canadian railroads from unilaterally conducting random drug 
testing of their dispatchers. Of course, Canadian law may change in the 
future.
    (3) A verification from a government agency in the country where 
the dispatching will occur that the agency has safety jurisdiction over 
the railroad and the proposed dispatching, and that the railroad's 
safety programs referenced above meet the safety requirements 
established by the agency or, in the absence of established safety 
requirements, that the programs are satisfactory to the agency. The 
purpose of this requirement is to ensure that a government agency with 
jurisdiction over the railroad and the dispatchers is satisfied with 
the railroad's safety programs. CN and CP should be able to secure such 
a statement from Transport Canada. FRA will consult with the relevant 
government agency to ensure that railroad's safety programs are 
actually carried out.
    (4) An applicant railroad must also detail the steps the railroad 
has taken to ensure the security of the dispatch center where the 
fringe border dispatching will take place. CN and CP have indicated in 
their comments that they believe that their dispatch centers are 
secure. FRA currently does not have sufficient information to know 
whether these representations are accurate.
    Finally, absent a waiver, the railroad must agree to abide by the 
following operating requirements, none of which should pose a problem 
for Canadian or Mexican railroads:
    (1) The trackage in the United States being extraterritorially 
dispatched shall not exceed the following route miles, measured from 
the point that the trackage crosses the United States border: for 
operations that were normally operated pursuant to the term of the IFR, 
the route miles normally operated by the railroad in conducting the 
operations; or, for all other operations, five route miles.
    (2) Except for unforeseen circumstances such as equipment failure, 
accident, casualty, or incapacitation of a crew member, each 
extraterritorially dispatched train shall be under the control of the 
same assigned crew for the entire trip over the extraterritorially 
dispatched trackage.
    (3) The fringe border dispatcher shall communicate instructions to 
the train crew and maintenance of way employees working on the line in 
the English language and, when referencing units of measurement, shall 
use English units of measurement. If the railroad wishes to use some 
other language it can seek a waiver of this requirement.
    (4) The rail line shall be under the exclusive control of a single 
dispatching district or desk.
    (5) The dispatching of the train shall be transferred from the 
fringe border dispatcher to a dispatcher located in the United States 
at one of the following locations: interchange point; signal control 
point; junction of two rail lines; established crew change point; yard 
or yard limits location; inspection point for U.S. Customs, Immigration 
and Naturalization Service, Department of Agriculture, or other 
governmental inspection; or location where there is a change in the 
method of train operations. In the IFR, FRA required that the portion 
of the line being extraterritorially dispatched extend no farther into 
the United States than the first of these locations in order to qualify 
for an exemption. FRA is no longer insisting on such a requirement. At 
many of these points, a train would actually be required to stop, which 
would facilitate the hand-off of dispatching functions. If a railroad 
that extraterritorially dispatches an operation that passes more than 
one of those points concludes that it would be safer or more efficient 
to hand-off an operation at a point other than the first point, that 
railroad may continue to extraterritorially dispatch that operation to 
another point provided that point is not beyond the mileage limit 
specified in the rule.

[[Page 75956]]

Section 241.9 Prohibition Against Extraterritorial Dispatching; 
Exceptions

Section 241.11 Prohibition Against Conducting a Railroad Operation 
Dispatched by an Extraterritorial Dispatcher; Exceptions

Section 241.13 Prohibition Against Track Owner's Requiring or 
Permitting Use of Its Line for a Railroad Operation Dispatched by an 
Extraterritorial Dispatcher; Exceptions

    These sections contain a series of three prohibitions, each 
containing two exceptions and a provision on liability for violation of 
the prohibition. Unlike in the IFR, these sections do not contain 
exceptions for operations that were regularly being extraterritorially 
dispatched as of December 1999, or for fringe border operations. As was 
explained above, FRA has decided to provide special relief for existing 
extraterritorial dispatching and for new dispatching of fringe border 
operations through the fringe border waiver process discussed above. To 
promote compliance, each provision imposes a strict liability standard. 
Actual or constructive knowledge of the facts constituting the 
violation is not required to establish a violation. For example, it is 
not necessary for a railroad conducting a railroad operation to know 
that the operation is being extraterritorially dispatched in order for 
the railroad to violate Sec.  241.11.
    Section 241.9(a) establishes a general rule barring a railroad from 
requiring or permitting one of its employees or one of its contractors' 
employees to dispatch a railroad operation that occurs in the United 
States while the railroad's employee (or railroad contractor's 
employee) is located outside the United States. A separate violation 
occurs for each railroad operation so dispatched, and each day the 
violation continues is a separate offense. ``Railroad operation'' is 
defined in Sec.  241.5. A dispatcher working in a foreign country and 
controlling only railroad operations in that country would not violate 
Sec.  241.9(a). Likewise, a dispatcher located in the United States and 
controlling train operations in another country would not violate Sec.  
241.9(a), although nothing in this rule authorizes such a practice 
where it contravenes the domestic law or policy of the country where 
the railroad operations are conducted.
    Section 241.11(a) creates a general prohibition against performing 
a railroad operation on track in the United States if the railroad 
operation is dispatched by an individual located outside the United 
States. A separate violation occurs for each railroad operation 
performed that was so dispatched; each day the violation continues is a 
separate offense.
    Section 241.13(a) generally forbids a track owner from requiring or 
permitting a segment of track that it owns to be used for a railroad 
operation in the United States that is controlled by a dispatcher in 
another country. A separate violation occurs for each railroad 
operation so dispatched that was permitted to occur on the owner's 
track and each day the violation continues is a separate offense.
    There are two basic exceptions to each of these three general 
prohibitions. First, under paragraph (b) of Sec. Sec.  241.9-241.13, 
extraterritorial dispatching of railroad operations that was conducted 
pursuant to the IFR may continue for a 90-day transitional period that 
ends on April 11, 2003. Second, under paragraph (c) of Sec. Sec.  
241.9-241.13, extraterritorial dispatching is permitted in the event of 
an emergency. The term ``emergency'' is defined in Sec.  241.5, which 
has been discussed earlier. The railroad must notify the FRA Regional 
Administrator for the region in which the railroad operation occurs, in 
writing as soon as feasible, either on paper or by electronic mail, 
that the railroad is conducting such extraterritorial dispatching. If 
the operation occurs in more than one region, the FRA Regional 
Administrator for each of the regions in which the operation occurs 
must be notified. In order to facilitate the notification process, 
appendix C lists FRA's eight regions and the States that are included 
in those regions as well as the street and e-mail addresses and fax 
numbers of the eight regional headquarters where the notification(s) 
must be sent. Notification need not necessarily be in advance of the 
performance of the extraterritorial dispatching. The exception is 
allowed only for the period of time that the emergency exists. If a 
railroad continues extraterritorial dispatching after the emergency is 
over, the railroad is in violation of Sec.  241.9(a).
    In its comments, the ATDD suggested that FRA limit a railroad's 
ability to move dispatching operations to another country to situations 
where the railroad can prove that such operations could not be 
transferred to another location in the United States. In addition, the 
ATDD suggested that FRA require that railroads have in place a plan to 
provide a domestic alternative to a foreign location. As explained in 
Section III(M), above, FRA rejected the ATDD's suggestions. In an 
emergency situation, FRA believes that a railroad should be allowed the 
maximum amount of flexibility in order to safely conduct any operations 
and should not be bound by restrictions that, while they may seem 
legitimate in the abstract, could exacerbate an emergency situation if 
that situation needs to be resolved as quickly as possible. In 
addition, depending on the circumstances of the emergency, the safest 
alternative may not necessarily be to dispatch an operation 
domestically. By limiting the duration of the extraterritorial 
dispatching to the duration of the emergency, FRA is effectively 
balancing the need for flexibility with the need to maintain domestic 
rail safety.
    Paragraph (d) of Sec. Sec.  241.9-241.13 discusses liability for 
violations of those sections. As provided in Sec.  241.9(d), liability 
for extraterritorial dispatching of a railroad operation in the United 
States in violation of Sec.  241.9 is on the entity that employs the 
individual who performed the extraterritorial dispatching, typically a 
railroad or a contractor to a railroad (if any), and if the employing 
entity is a contractor to a railroad, liability is also on the 
railroad. For example, if an employee of a railroad contractor performs 
the extraterritorial dispatching, FRA may hold either the contractor or 
the railroad or both liable for the violation (in addition to the 
individual employee and any other entity that committed the violation 
or caused the violation, as provided in Sec.  241.3(c)).
    As stated in Sec.  241.11(d), liability for conducting a railroad 
operation that is extraterritorially dispatched in violation of Sec.  
241.11 is on the entity that conducts the operation, typically a 
railroad or a contractor to a railroad. For example, if employees of a 
railroad contractor engage in the movement of a train that is 
extraterritorially dispatched and not within the exceptions of 
paragraphs (b) or (c), then FRA may hold either the contractor or the 
railroad or both liable for the violation (in addition to the 
individual train crewmembers and any other entity that committed the 
violation or caused the violation, as provided in Sec.  241.3(c)).
    Finally, as provided in Sec.  241.13(d), liability for requiring or 
permitting the conduct of a railroad operation that is so dispatched 
over a segment of track is on the owner of the track segment. For 
purposes of Sec.  241.13, the track owner includes the owner of the 
track segment, a person assigned responsibility for the track segment 
under Sec.  213.5(c), and a railroad operating the track segment 
pursuant to a directed service order issued by the STB under 49 U.S.C. 
11123, during the time that the directed service order is in effect. 
FRA may hold the track owner, the assignee, or the

[[Page 75957]]

railroad operating the track under a directed service order, or some or 
all of such entities liable for a violation of Sec.  241.13 (in 
addition to the individuals and any other entity that committed the 
violation or caused the violation, as provided in Sec.  241.3(c)). For 
example, if the track owner (Company A) has assigned responsibility for 
the track under Sec.  213.5(c) to Company B and the track is used by a 
train that is dispatched by a dispatcher located outside of the United 
States, not within the exceptions of paragraphs (b) or (c), then FRA 
may assess a civil penalty for violation of Sec.  241.13 against either 
Company B or Company A, or both.
    In a given instance in which an individual outside the United 
States dispatches a railroad operation that takes place in the United 
States (not within the exceptions of paragraphs (b) or (c), three 
regulatory prohibitions have been violated: Sec. Sec.  241.9, 241.11, 
and 241.13. If one single entity dispatches and conducts the railroad 
operation and owns the track on which the railroad operation occurs, 
that entity may be assessed a separate civil penalty for each of the 
three sections violated. On the other hand, if the three functions are 
performed by a total of three different entities, the entity that 
performed the function would be assessed a penalty only for the section 
it violated. As a matter of discretion, in cases where the dispatching 
railroad fails to notify the FRA Regional Administrator of each region 
where the track is located of an emergency, FRA may also cite the 
dispatching railroad for causing the violation of Sec.  241.11(a) by 
the operating railroad or Sec.  241.13(a) by the track owner.

Section 241.15 Penalties and Other Consequences for Noncompliance

    This section identifies three of the sanctions that may be imposed 
upon a person for violating a requirement of part 241: civil penalties, 
disqualification, and criminal penalties.
    Paragraph (a) on civil penalties parallels the civil penalty 
provisions included in numerous other safety regulations issued by FRA. 
Essentially, any person who violates any requirement of this part or 
causes the violation of any such requirement will be subject to a civil 
penalty of at least $500 and not more than $11,000 per violation. Civil 
penalties may be assessed against individuals only for willful 
violations, and 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, a penalty not to exceed $22,000 per 
violation may be assessed. See part 209, appendix A. In addition, each 
day a violation continues will constitute a separate offense. Civil 
penalties for violation of part 241 are authorized by 49 U.S.C. 21301, 
21302, and 21304 and by the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890, 28 U.S.C. 2461 
note), as amended by the Debt Collection Improvement Act of 1996 (Pub. 
L. 104-134, 110 Stat. 1321-358, 378, Apr. 26, 1996), which requires 
agencies to adjust for inflation the maximum civil monetary penalties 
within the agencies' jurisdiction. Consequently, the resulting $11,000 
and $22,000 maximum penalties were determined by applying the criteria 
set forth in sections 4 and 5 of the statute to the maximum penalties 
otherwise provided for in the Federal railroad safety laws. In addition 
to the civil penalty provision at Sec.  241.15(a), this Final Rule 
includes a schedule of civil penalties for specific violations of part 
241 as appendix B to this part.
    Paragraph (b) provides that an individual who fails to comply with 
a provision of this part or causes the violation of a provision of this 
part may be prohibited from performing safety-sensitive service in 
accordance with FRA's enforcement procedures found in subpart D, part 
209.
    Paragraph (c) of Sec.  241.15 provides that a person may be subject 
to criminal penalties under 49 U.S.C. 21311 for knowingly and willfully 
falsifying a report required by these regulations, here, a report to 
the appropriate FRA Regional Administrator(s) concerning 
extraterritorial dispatching performed under a claim that it was 
performed to deal with an emergency. Section 21311(a) of title 49, 
United States Code, reads as follows:

    (a) Records and Reports Under Chapter 201.--A person shall be 
fined under title 18, imprisoned for not more than 2 years, or both, 
if the person knowingly and willfully--
    (1) makes a false entry in a record or report required to be 
made or preserved under chapter 201 of this title;
    (2) destroys, mutilates, changes, or by another means falsifies 
such a record or report;
    (3) does not enter required specified facts and transactions in 
such a record or report;
    (4) makes or preserves such a record or report in violation of a 
regulation prescribed or order issued under chapter 201 of this 
title; or
    (5) files a false record or report with the Secretary of 
Transportation.

    FRA believes that the inclusion of these provisions for failure to 
comply with the regulations is important to ensure that compliance is 
achieved.

Section 241.17 Preemptive Effect

    Section 241.17 informs the public of FRA's views regarding what 
will be the preemptive effect of the Final Rule. While the presence or 
absence of such a section does not in itself affect the preemptive 
effect of a Final Rule, it informs the public about the statutory 
provision that governs the preemptive effect of the rule. Section 20106 
of title 49 of the 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 which provision is not incompatible with a Federal 
law, regulation, or order and does not unreasonably burden interstate 
commerce. With the exception of a provision that is not incompatible 
with Federal law, not an unreasonable burden on interstate commerce, 
and directed at an essentially local safety hazard, 49 U.S.C. 20106 
will preempt any State regulatory agency rule covering the same subject 
matter as the regulations in this Final Rule.

Section 241.19 Information Collection

    This provision shows which sections of this part have been approved 
by the Office of Management and Budget (OMB) for compliance with the 
Paperwork Reduction Act of 1995. See 44 U.S.C. 3501 et seq. A more 
detailed discussion of the information collection requirements in this 
part is provided below.

Appendix A--List of Lines Being Extraterritorially Dispatched in 
Accordance With the Regulations Contained in 49 CFR Part 241, Revised 
as of October 1, 2002

Appendix B--Schedule of Civil Penalties

    This appendix contains a schedule of civil penalties to be used in 
connection with this part. Because the penalty schedule is a statement 
of agency policy, notice and comment are not required prior to its 
issuance. See 5 U.S.C. 553(b)(3)(A).

Appendix C--Geographic Boundaries of FRA's Regions and Addresses of 
FRA's Regional Headquarters

    This appendix contains a list of FRA's eight regions and the States 
that are included in those regions as well as the addresses and fax 
numbers of the eight regional headquarters where notification of 
emergency extraterritorial dispatching of domestic operations must be 
sent.

[[Page 75958]]

VI. Regulatory Impact

A. Executive Order 12866 and DOT Regulatory Policies and Procedures

    This rule has been evaluated in accordance with existing policies 
and procedures, and determined to be significant under both Executive 
Order 12866 and DOT policies and procedures (44 FR 11034; Feb. 26, 
1979). FRA has prepared and placed in the docket a regulatory 
evaluation addressing the economic impact of this proposed rule. 
Document inspection and copying facilities are available at 1120 
Vermont Avenue, NW., 7th Floor, Washington, DC. Photocopies may also be 
obtained by submitting a written request to the FRA Docket Clerk, 
Office of Chief Counsel, Mail Stop 10, Federal Railroad Administration, 
1120 Vermont Avenue, NW., Washington, DC 20590. Access to the docket 
may also be obtained electronically through the Web site for the Docket 
Management System at http://dms.dot.gov.
    As previously noted, currently extraterritorial dispatching of 
train operations in the United States is very limited. However, there 
is the prospect of increased use of extraterritorial dispatchers in the 
absence of regulatory restrictions. FRA has discussed in detail the 
significant safety concerns associated with extraterritorial 
dispatching and how the Final Rule carefully resolves these concerns in 
a manner designed to facilitate cross-border railroad operations.
    FRA expects that overall the requirements in the rule would not 
impose a significant cost on the rail industry over the next twenty 
years. For some rail operators, the total costs incurred would exceed 
the total benefits achieved. For others, the benefits would outweigh 
the costs incurred.
    The following table presents estimated twenty-year monetary impacts 
associated with the locational and emergency notification requirements 
for dispatching of United States rail operations. These estimates 
represent scenarios previously considered by railroads as well as those 
that could arise from future mergers between Canadian and United States 
railroads; FRA is not aware of any current merger plans or other plans 
to use additional extraterritorial dispatchers.

------------------------------------------------------------------------
                                                           Estimated 20-
                       Description                          year costs
                                                               (NPV)
------------------------------------------------------------------------
Canada/U.S. labor rate differential.....................     $7,889,471
Additional dispatcher supervisors (higher labor rate)...        235,403
Emergency situation notification........................          3,332
Dismissed employee compensation.........................    (10,076,059)
                                                         ---------------
    Total Net Cost (NPV rounded)........................     (1,947,853)
------------------------------------------------------------------------

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) 
requires a review of proposed and Final Rules to assess their impact on 
small entities. FRA has prepared and placed in the docket a Regulatory 
Flexibility Assessment (RFA), which assesses the small entity impact. 
Document inspection and copying facilities are available at 1120 
Vermont Avenue, NW., 7th Floor, Washington, DC 20590. Photocopies may 
also be obtained by submitting a written request to the FRA Docket 
Clerk, Office of Chief Counsel, Mail Stop 10, Federal Railroad 
Administration, 1120 Vermont Avenue, NW., Washington, DC 20590.
    Pursuant to Section 312 of the Small Business Regulatory 
Enforcement Fairness Act of 1996 (Pub. L. 104-121), FRA has published 
an interim policy that formally establishes ``small entities'' as being 
railroads that meet the line-haulage revenue requirements of a Class 
III railroad. For other entities, the same dollar limit in revenue 
governs whether a railroad, contractor, or other respondent is a small 
entity (62 FR 43024, Aug. 11, 1997).
    The RFA concludes that this rule will not have an economic impact 
on a sizable number of small entities. FRA further certifies that this 
rule is not expected to have a significant economic impact on a 
substantial number of small entities.

C. Paperwork Reduction Act

    The information collection requirements in this final rule have 
been submitted for approval to the Office of Management and Budget 
(OMB) under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq. 
The sections that contain the new information collection requirements 
and the estimated time to fulfill each requirement are as follows:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                 Total
                                                                                                                                                 annual
         CFR section               Respondent universe       Total annual  responses   Average time  per response   Total annual burden hours    burden
                                                                                                                                                  cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
241.7--Waivers:
    (a) General..............  4 railroads...............  1 waiver pet..............  4 hours...................  4 hours...................       $157
    (b) Special Dispensation-- 4 railroads...............  4 waiver pet..............  4 hours...................  16 hours..................        628
     Extraterritorial
     Dispatching.
    (c) Fringe Border          4 railroads...............  2 waiver pet..............  4 hours...................  8 hours...................        314
     Dispatching.
241.9--Prohibition against     4 railroads...............  1 notification............  8 hours...................  8 hours...................        314
 extraterritorial
 dispatching; exceptions--
 Notification.
241.11--Prohibition against    4 railroads...............  Included under Sec.         Included under Sec.         Included under Sec.               (1)
 conducting a railroad                                      241.9.                      241.9.                      241.9.
 operation dispatched by an
 extraterritorial dispatcher,
 exceptions.
241.13--Prohibitions against   4 railroads...............  Included under Sec.         Included under Sec.         Included under Sec.               (1)
 track owner's requiring or                                 241.9.                      241.9.                      241.9.
 permitting use of its line
 for a railroad operation
 dispatched by an
 extraterritorial dispatcher,
 exceptions.
241.15--Penalties--False       $628......................  None......................  N/A.......................  N/A.......................       N/A
 Reports/Records.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Included under Sec.   241.9.


[[Page 75959]]

    All estimates include the time for reviewing instructions; 
searching existing data sources; gathering or maintaining the needed 
data; and reviewing the information.
    Organizations and individuals desiring to submit comments on the 
collection of information requirements should direct them to the Office 
of Management and Budget, 725 17th St., NW., Washington, DC 20503. OMB 
is required to make a decision concerning the collection of information 
requirements contained in this final rule between 30 and 60 days after 
publication of this document in the Federal Register. Therefore, a 
comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication.
    FRA is not authorized to impose a penalty on persons for violating 
information collection requirements which do not display a current OMB 
control number, if required. FRA intends to obtain current OMB control 
numbers for any information collection requirements resulting from this 
rulemaking action prior to the effective date of this rule. The OMB 
control number, when assigned, will be announced by a separate notice 
in the Federal Register.

D. Federalism Implications

    Executive Order 13132, entitled, ``Federalism,'' issued on August 
4, 1999, requires that each agency ``in a separately identified portion 
of the preamble to the regulation as it is to be issued in the Federal 
Register, provide[] to the Director of the Office of Management and 
Budget a federalism summary impact statement, which consists of a 
description of the extent of the agency's prior consultation with State 
and local officials, a summary of the nature of their concerns and the 
agency's position supporting the need to issue the regulation, and a 
statement of the extent to which the concerns of the State and local 
officials have been met * * *.''
    When issuing the IFR in this proceeding, FRA adhered to Executive 
Order 13132. Normally, FRA engages in the required Federalism 
consultation during the early stages of the rulemaking through meetings 
of the full Railroad Safety Advisory Committee (``RSAC''), on which 
several representatives of groups representing State and local 
officials sit. However, when issuing the IFR, FRA determined that, 
because the possibility existed that railroads could have commenced 
extensive extraterritorial dispatching at any time, these issues had to 
be addressed without the benefit of a presentation to the full RSAC. In 
order to comply with Executive Order 13132, when preparing the IFR, FRA 
sent a letter soliciting comment on the Federalism implications of this 
IFR (and the NPRM involving part 219) that FRA simultaneously published 
to nine groups designated as representatives for various State and 
local officials. The nine organizations were as follows: the American 
Association of State Highway and Transportation Officials (AASHTO), the 
Association of State Rail Safety Managers, the Council of State 
Governments, the National Association of Counties, the National 
Association of Towns and Townships, the National Conference of State 
Legislatures, the National Governors' Association, the National League 
of Cities, and the U.S. Conference of Mayors.
    In addition, FRA representatives had informal discussions with 
representatives of some of those groups. During one such consultation, 
a representative of AASHTO expressed confidence that FRA and State 
interests would closely coincide on these issues. He noted that the 
September 2000 meeting of AASHTO's Standing Committee on Rail 
Transportation would include a significant discussion of the pending 
STB proceeding (involving the proposed consolidation of CN and BNSF), 
with the implication that FRA's rulemakings may be a current topic at 
that time. As of the date FRA published the IFR, FRA had not received 
any indication of concerns about the Federalism implications of this 
rulemaking from these representatives. In addition, none of the groups 
submitted comments in response to the IFR. Therefore, FRA does not 
believe that this Final Rule raises any federalism issues.

E. Environmental Impact

    FRA has evaluated this regulation in accordance with its 
``Procedures for Considering Environmental Impacts'' (FRA's Procedures) 
(64 FR 28545, May 26, 1999) as required by the National Environmental 
Policy Act (42 U.S.C. 4321 et seq.), other environmental statutes, 
Executive Orders, and related regulatory requirements. FRA has 
determined that this regulation is not a major FRA action (requiring 
the preparation of an environmental impact statement or environmental 
assessment) because it is categorically excluded from detailed 
environmental review pursuant to section 4(c)(20) of FRA's Procedures. 
64 FR 28545, 28547, May 26, 1999. Section 4(c)(20) reads as follows:

    (c) Actions Categorically Excluded. Certain classes of FRA 
actions have been determined to be categorically excluded from the 
requirements of these Procedures as they do not individually or 
cumulatively have a significant effect on the human environment. * * 
* The following classes of FRA actions are categorically excluded:
* * * * *
    (20) Promulgation of railroad safety rules and policy statements 
that do not result in significantly increased emissions of air or 
water pollutants or noise or increased traffic congestion in any 
mode of transportation.

    In accordance with section 4(c) and (e) of FRA's Procedures, the 
agency has further concluded that no extraordinary circumstances exist 
with respect to this regulation that might trigger the need for a more 
detailed environmental review. As a result, FRA finds that this 
regulation is not a major Federal action significantly affecting the 
quality of the human environment.

F. Unfunded Mandates Reform Act of 1995

    Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4, 2 U.S.C. 1531), each federal agency ``shall, unless 
otherwise prohibited by law, assess the effects of Federal regulatory 
actions on State, local, and tribal governments, and the private sector 
(other than to the extent that such regulations incorporate 
requirements specifically set forth in law).'' Section 202 of the Act 
(2 U.S.C. 1532) further requires that ``before promulgating any general 
notice of proposed rulemaking that is likely to result in the 
promulgation of any rule that includes any Federal mandate that may 
result in expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector, of $100,000,000 or more (adjusted 
annually for inflation) in any 1 year, and before promulgating any 
final rule for which a general notice of proposed rulemaking was 
published, the agency shall prepare a written statement'' detailing the 
effect on State, local, and tribal governments and the private sector. 
The Final Rule would not result in the expenditure, in the aggregate, 
of $100,000,000 or more in any one year, and thus preparation of such a 
statement is not required.

G. Energy Impact

    Executive Order 13211 requires Federal agencies to prepare a 
Statement of Energy Effects for any ``significant energy action.'' 66 
FR 28355 (May 22, 2001). Under the Executive Order, a ``significant 
energy action'' is defined as any action by an agency (normally 
published in the Federal Register) that promulgates or is expected to 
lead to the promulgation of a final rule or regulation, including 
notices of inquiry,

[[Page 75960]]

advance notices of proposed rulemaking, and notices of proposed 
rulemaking: (1)(i) That is a significant regulatory action under 
Executive Order 12866 or any successor order, and (ii) is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy; or (2) that is designated by the Administrator of the Office 
of Information and Regulatory Affairs as a significant energy action. 
FRA has evaluated this Final Rule in accordance with Executive Order 
13211. FRA has determined that this Final Rule is not likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy. Consequently, FRA has determined that this regulatory action is 
not a ``significant energy action'' within the meaning of Executive 
Order 13211.

List of Subjects in 49 CFR Part 241

    Communications, Penalties, Railroad safety, Reporting and 
recordkeeping requirements.

The Rule

    For the reasons set forth in the preamble, FRA amends chapter II, 
subtitle B of title 49, Code of Federal Regulations, by adding part 241 
to read as follows:

PART 241--UNITED STATES LOCATIONAL REQUIREMENT FOR DISPATCHING OF 
UNITED STATES RAIL OPERATIONS

Sec.
241.1 Purpose and scope.
241.3 Application and responsibility for compliance.
241.5 Definitions.
241.7 Waivers.
241.9 Prohibition against extraterritorial dispatching; exceptions.
241.11 Prohibition against conducting a railroad operation 
dispatched by an extraterritorial dispatcher; exceptions.
241.13 Prohibition against track owner's requiring or permitting use 
of its line for a railroad operation dispatched by an 
extraterritorial dispatcher; exceptions.
241.15 Penalties and other consequences for noncompliance.
241.17 Preemptive effect.
241.19 Information collection.
Appendix A to Part 241--List of Lines Being Extraterritorially 
Dispatched in Accordance With the Regulations Contained in 49 CFR 
Part 241, Revised as of October 1, 2002
Appendix B to Part 241--Schedule of Civil Penalties
Appendix C to Part 241--Geographical Boundaries of FRA's Regions and 
Addresses of FRA's Regional Headquarters

    Authority: 49 U.S.C. 20103, 20107, 21301, 21304, 21311; 28 
U.S.C. 2461, note; 49 CFR 1.49.


Sec.  241.1  Purpose and scope.

    (a) The purpose of this part is to prevent railroad accidents and 
incidents, and consequent injuries, deaths, and property damage, that 
would result from improper dispatching of railroad operations in the 
United States by individuals located outside of the United States.
    (b) This part prohibits extraterritorial dispatching of railroad 
operations, conducting railroad operations that are extraterritorially 
dispatched, and allowing track to be used for such operations, subject 
to certain stated exceptions. This part does not restrict a railroad 
from adopting and enforcing additional or more stringent requirements 
not inconsistent with this part.


Sec.  241.3  Application and responsibility for compliance.

    (a) Except as provided in paragraph (b) of this section, this part 
applies to all railroads.
    (b) This part does not apply to--
    (1) A railroad that operates only on track inside an installation 
that is not part of the general railroad system of transportation; or
    (2) Rapid transit operations in an urban area that are not 
connected to the general railroad system of transportation.
    (c) Although the duties imposed by this part are generally stated 
in terms of a duty of a railroad, each person, including a contractor 
for a railroad, who performs a function covered by this part, shall 
perform that function in accordance with this part.


Sec.  241.5  Definitions.

    As used in this part:
    Administrator means the Administrator of the Federal Railroad 
Administration or the Administrator's delegate.
    Dispatch means--
    (1) To perform a function that would be classified as a duty of a 
``dispatching service employee,'' as that term is defined by the hours 
of service laws at 49 U.S.C. 21101(2), if the function were to be 
performed in the United States. For example, to dispatch means, by the 
use of an electrical or mechanical device--
    (i) To control the movement of a train or other on-track equipment 
by the issuance of a written or verbal authority or permission 
affecting a railroad operation, or by establishing a route through the 
use of a railroad signal or train control system but not merely by 
aligning or realigning a switch; or
    (ii) To control the occupancy of a track by a roadway worker or 
stationary on-track equipment, or both; or
    (iii) To issue an authority for working limits to a roadway worker.
    (2) The term dispatch does not include the action of personnel in 
the field--
    (i) Effecting implementation of a written or verbal authority or 
permission affecting a railroad operation or an authority or permission 
affecting a railroad operation or an authority for working limits to a 
roadway worker (e.g., initiating an interlocking timing device, 
authorizing a train to enter working limits); or
    (ii) Operating a function of a signal system designed for use by 
those personnel.
    Dispatcher means any individual who dispatches.
    Emergency means an unexpected and unforeseeable event or situation 
that affects a railroad's ability to use a dispatcher in the United 
States to dispatch a railroad operation in the United States and that, 
absent the railroad's use of an extraterritorial dispatcher to dispatch 
the railroad operation, would either materially disrupt rail service or 
pose a substantial safety hazard.
    Employee means an individual who is engaged or compensated by a 
railroad or by a contractor to a railroad to perform any of the duties 
defined in this part.
    Extraterritorial dispatcher means a dispatcher who, while located 
outside of the United States, dispatches a railroad operation that 
occurs in the United States.
    Extraterritorial dispatching means the act of dispatching a 
railroad operation that occurs on trackage in the United States by a 
dispatcher located outside of the United States.
    Fringe border dispatching means the act of extraterritorial 
dispatching a railroad operation that occurs on trackage in the United 
States immediately adjacent to the border between the United States and 
Canada or the border between the United States and Mexico by a 
dispatcher who is a railroad employee located in Canada or Mexico.
    FRA means the Federal Railroad Administration, United States 
Department of Transportation.
    Movement of a train means the movement of one or more locomotives 
coupled with or without cars, requiring an air brake test in accordance 
with part 232 or part 238 of this chapter, except during switching 
operations or where the operation is that of classifying and assembling 
rail cars within a railroad yard for the purpose of making or breaking 
up trains.
    Occupancy of a track by a roadway worker or stationary on-track 
equipment

[[Page 75961]]

or both refers to the physical presence of a roadway worker or 
stationary on-track equipment, or both, on a track for the purpose of 
making an inspection, repair, or another activity not associated with 
the movement of a train or other on-track equipment.
    Person means an entity of a 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; an 
owner, manufacturer, lessor, or lessee of railroad equipment, track, or 
facilities; an independent contractor providing goods or services to a 
railroad; and an employee of such owner, manufacturer, lessor, lessee, 
or independent contractor.
    Railroad means any form of nonhighway ground transportation that 
runs on rails or electromagnetic guideways and any person providing 
such transportation, including--
    (1) Commuter or other short-haul railroad passenger service in a 
metropolitan or suburban area and commuter railroad service that was 
operated by the Consolidated Rail Corporation on January 1, 1979; 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; but does not 
include rapid transit operations in an urban area that are not 
connected to the general railroad system of transportation.
    Railroad contractor means a contractor to a railroad or a 
subcontractor to a contractor to a railroad.
    Railroad operation means the movement of a train or other on-track 
equipment (other than on-track equipment used in a switching operation 
or where the operation is that of classifying and assembling rail cars 
within a railroad yard for the purpose of making or breaking up a 
train), or the activity that is the subject of an authority issued to a 
roadway worker for working limits.
    Roadway worker means any employee of a railroad, or of a contractor 
to a railroad, whose duties include inspection, construction, 
maintenance, or repair of railroad track, bridges, roadway, signal and 
communication systems, electric traction systems, roadway facilities, 
or roadway maintenance machinery on or near track or with the potential 
of fouling a track, and flagmen and watchmen/lookouts.
    State means a State of the United States of America or the District 
of Columbia.
    United States means all of the States.
    Working limits means a segment of track with definite boundaries 
established in accordance with part 214 of this chapter upon which 
trains and engines may move only as authorized by the roadway worker 
having control over that defined segment of track. Working limits may 
be established through ``exclusive track occupancy,'' ``inaccessible 
track,'' ``foul time,'' or ``train coordination'' as defined in part 
214 of this chapter.


Sec.  241.7  Waivers.

    (a) General. (1) A person subject to a requirement of this part may 
petition the Administrator for a waiver of compliance with such 
requirement. Except as provided in paragraph (b) of this section, the 
filing of such a petition does not affect that person's responsibility 
for compliance with that requirement while the petition is being 
considered.
    (2) (i) Each petition for waiver under this section shall be filed 
in the manner and contain the information required by part 211 of this 
chapter.
    (ii) Petitions seeking approval to conduct fringe border operations 
shall also comply with the requirements of paragraph (c) of this 
section.
    (iii) Petitioners not filing under paragraph (c) of this section 
should review the guidelines at 66 FR 63942 (Dec. 11, 2001), and frame 
their petitions to address the safety and security concerns articulated 
in the preamble, or contact the Office of the Chief Counsel, RCC-12, 
FRA, 1120 Vermont Avenue, NW., Stop 10, Washington, DC 20590, for a 
copy of the guidelines.
    (3) 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 that the 
Administrator deems necessary.
    (b) Special dispensation for existing extraterritorial dispatching. 
(1) A railroad that files a waiver request seeking to continue 
extraterritorial dispatch of an operation that it has dispatched from 
Canada or Mexico pursuant to regulations contained in 49 CFR part 241, 
revised as of October 1, 2002, may continue extraterritorial 
dispatching of that operation until the railroad's waiver request is 
acted upon by FRA if the petition is filed no later than April 11, 
2003.
    (2) If the waiver request is for an operation not listed in 
appendix A to this part, the waiver request must describe when the 
extraterritorial dispatching of the operation commenced and how the 
dispatching was authorized by regulations contained in 49 CFR part 241, 
revised as of October 1, 2002. FRA will notify the railroad if FRA 
determines that the operation was not permitted by the terms of those 
regulations.
    (c) Fringe border dispatching. (1) A waiver request to have a 
railroad employee located in Canada or in Mexico dispatch a railroad 
operation in the United States immediately adjacent to the border of 
the country in which the dispatcher conducts the dispatching will 
generally be approved by FRA, subject to any conditions imposed by FRA, 
if the waiver request meets all of the terms of paragraphs (c)(2) and 
(3) of this section. A proponent of a waiver request may seek relief 
from the terms of paragraphs (c)(2) and (3) of this section.
    (2) The railroad proposing to conduct the fringe border dispatching 
shall supply the following documents as part of the waiver request:
    (i) A description, by railroad division, applicable subdivision(s), 
and mileposts, of the line proposed to be dispatched;
    (ii) A copy of the operating rules of the railroad that would apply 
to the proposed fringe border dispatching, including hours of service 
limitations, and the railroad's program for testing the dispatchers in 
accordance with these operating rules and for ensuring that the 
dispatchers do not work in excess of the hours of service restrictions;
    (iii) A copy of the railroad's drug and alcohol abuse prevention 
program that applies to the fringe border dispatchers. The program 
shall, to the extent permitted by the laws of the country where the 
dispatching occurs, contain the following:
    (A) Preemployment drug testing;
    (B) A general prohibition on possession and use of alcohol and 
drugs while on duty;
    (C) Reasonable cause alcohol and drug testing;
    (D) A policy dealing with co-worker and self-reporting of alcohol 
and drug abuse problems;
    (E) Post-accident testing; and
    (F) Random drug testing;
    (iv) The steps the railroad has taken to ensure the security of the 
dispatch center where the fringe border dispatching will take place;
    (v) The railroad's plans for complying with the requirements of 
paragraph (c)(3) of this section; and
    (vi) A verification from a government agency in the country where 
the dispatching will occur that the agency has safety jurisdiction over 
the railroad and the proposed dispatching, and that the railroad's 
safety programs referenced

[[Page 75962]]

in paragraphs (c)(2)(ii) and (iii) of this section meet the safety 
requirements established by the agency or, in the absence of 
established safety requirements, that the programs are satisfactory to 
the agency.
    (3) Except as otherwise approved by FRA, fringe border dispatching 
must comply with the following requirements:
    (i) The trackage in the United States being extraterritorially 
dispatched shall not exceed the following route miles, measured from 
the point that the trackage crosses the United States border:
    (A) For operations conducted pursuant to the regulations contained 
in 49 CFR part 241, revised as of October 1, 2002, the route miles 
shall be the miles normally operated by the railroad in conducting the 
operation; and
    (B) For all other operations, the route miles shall not exceed five 
miles.
    (ii) Except for unforeseen circumstances such as equipment failure, 
accident, casualty, or incapacitation of a crew member, each 
extraterritorially dispatched train shall be under the control of the 
same assigned crew for the entire trip over the extraterritorially 
dispatched trackage.
    (iii) The fringe border dispatcher shall communicate instructions 
to the train crew and maintenance of way employees working on the line 
in the English language and, when referencing units of measurement, 
shall use English units of measurement.
    (iv) The rail line shall be under the exclusive control of a single 
dispatching district or desk; and
    (v) The dispatching of the train shall be transferred from the 
fringe border dispatcher to a dispatcher located in the United States 
at one of the following locations within the mileage limits mandated in 
paragraph (c)(3)(i) of this section:
    (A) Interchange point;
    (B) Signal control point;
    (C) Junction of two rail lines;
    (D) Established crew change point;
    (E) Yard or yard limits location;
    (F) Inspection point for U.S. Customs, Immigration and 
Naturalization Service, Department of Agriculture, or other 
governmental inspection; or
    (G) Location where there is a change in the method of train 
operations.


Sec.  241.9  Prohibition against extraterritorial dispatching; 
exceptions.

    (a) General. Except as provided in Sec.  241.7(d) and paragraphs 
(b) and (c) of this section, a railroad subject to this part shall not 
require or permit a dispatcher located outside the United States to 
dispatch a railroad operation that occurs in the United States if the 
dispatcher is employed by the railroad or by a contractor to the 
railroad.
    (b) Transitional period to continue existing extraterritorial 
dispatching. A railroad that has normally extraterritorially dispatched 
railroad track in the United States from Canada or Mexico pursuant to 
the regulations contained in 49 CFR part 241, revised as of October 1, 
2002, may continue extraterritorial dispatching of that railroad track 
until April 10, 2003, to permit the railroad an opportunity to file a 
waiver request pursuant to Sec.  241.7.
    (c) Emergencies. (1) In an emergency situation, a railroad may 
require or permit one of its dispatchers located outside the United 
States to dispatch a railroad operation that occurs in the United 
States, provided that:
    (i) The dispatching railroad notifies the FRA Regional 
Administrator of each FRA region where the railroad operation was 
conducted, in writing as soon as practicable, of the emergency; and
    (ii) The extraterritorial dispatching is limited to the duration of 
the emergency.
    (2) Written notification may be made either on paper or by 
electronic mail.
    (3) A list of the States that make up the FRA regions and the 
street and e-mail addresses and fax numbers of the FRA Regional 
Administrators appears in appendix C to this part.
    (d) Liability. The Administrator may hold either the railroad that 
employs the dispatcher or the railroad contractor that employs the 
dispatcher, or both, responsible for compliance with this section and 
subject to civil penalties under Sec.  241.15.


Sec.  241.11  Prohibition against conducting a railroad operation 
dispatched by an extraterritorial dispatcher; exceptions.

    (a) General. Except as provided in Sec.  241.5(d) or paragraphs (b) 
and (c) of this section, a railroad subject to this part shall not 
conduct, or contract for the conduct of, a railroad operation in the 
United States that is dispatched from a location outside of the United 
States.
    (b) Transitional period to continue existing extraterritorial 
dispatching. A railroad that has normally conducted, or contracted for 
the conduct of, a railroad operation in the United States that is 
extraterritorially dispatched pursuant to the regulations contained in 
49 CFR part 241, revised as of October 1, 2002, may continue to conduct 
or contract for the conduct of the operation until April 10, 2003, to 
permit the railroad an opportunity to file a waiver request pursuant to 
Sec.  241.7.
    (c) Emergencies. (1) In an emergency situation, a railroad may 
conduct, or contract for the conduct of, a railroad operation in the 
United States that is dispatched from a location outside the United 
States, provided that:
    (i) The dispatching railroad notifies the FRA Regional 
Administrator of each FRA region where the railroad operation was 
conducted, in writing as soon as practicable, of the emergency; and
    (ii) The extraterritorial dispatching is limited to the duration of 
the emergency.
    (2) Written notification may be made either on paper or by 
electronic mail.
    (3) A list of the States that make up the FRA regions and the 
street and e-mail addresses and fax numbers of the FRA Regional 
Administrators appears in appendix C to this part.
    (d) Liability. The Administrator may hold either the railroad that 
conducts the railroad operation or the railroad contractor that 
conducts the operation, or both, responsible for compliance with this 
section and subject to civil penalties under Sec.  241.15.


Sec.  241.13  Prohibition against track owner's requiring or permitting 
use of its line for a railroad operation dispatched by an 
extraterritorial dispatcher; exceptions.

    (a) General. Except as provided in paragraphs (b) and (c) of this 
section, an owner of railroad track located in the United States shall 
not require or permit the track to be used for a railroad operation 
that is dispatched from outside the United States.
    (b) Transitional period to continue existing extraterritorial 
dispatching. An owner of a track segment located in the United States 
that is extraterritorially dispatched pursuant to the regulations 
contained in 49 CFR 241, revised as of October 1, 2002, may require or 
permit the track segment to be continued to be used for a railroad 
operation that is extraterritorially dispatched until April 10, 2003, 
to permit the railroad an opportunity to file a waiver request pursuant 
to Sec.  241.7.
    (c) Emergencies. In an emergency situation, an owner of railroad 
track located in the United States may require or permit the track to 
be used for a railroad operation that is dispatched from outside the 
United States, provided that:
    (1) The dispatching railroad notifies the FRA Regional 
Administrator of each FRA region where the operation was conducted, in 
writing as soon as practicable, of the emergency and
    (2) The extraterritorial dispatching is limited to the duration of 
the emergency. Written notification may be made either on paper or by 
electronic mail.

[[Page 75963]]

    (d) Liability. The Administrator may hold either the track owner or 
the assignee under Sec.  213.5(c) of this chapter ( if any), or both, 
responsible for compliance with this section and subject to civil 
penalties under Sec.  241.15. A common carrier by railroad that is 
directed by the Surface Transportation Board to provide service over 
the track in the United States of another railroad under 49 U.S.C. 
11123 is considered the owner of that track for the purposes of the 
application of this section during the period that the directed service 
order remains in effect.


Sec.  241.15  Penalties and other consequences for noncompliance.

    (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 and not more than $11,000 per violation, 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.
    (b) An individual who violates any requirement of this part or 
causes the violation of any such requirement may be subject to 
disqualification from safety-sensitive service in accordance with part 
209 of this chapter.
    (c) A person who knowingly and willfully falsifies a record or 
report required by this part may be subject to criminal penalties under 
49 U.S.C. 21311.


Sec.  241.17  Preemptive effect.

    Under 49 U.S.C. 20106, the regulations in this part preempt 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 impose an unreasonable burden on 
interstate commerce.


Sec.  241.19  Information collection.

    (a) The information collection requirements of this part are being 
reviewed by the Office of Management and Budget pursuant to the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
    (b) The information collection requirements are found in the 
following sections: Sec.  241.7(a), (b), (c); 241.9(c); 241.11(c); 
241.13(c); and 214.15. When an effective date for these sections is 
established, FRA will publish notice of that date in the Federal 
Register.

Appendix A to Part 241--List of Lines Being Extraterritorially 
Dispatched in Accordance With the Regulations Contained in 49 CFR Part 
241, Revised as of October 1, 2002

----------------------------------------------------------------------------------------------------------------
  Description of United States track
   segment being extraterritorially      Length of United States' track segment       Railroad conducting the
              dispatched                                                                    dispatching
----------------------------------------------------------------------------------------------------------------
Maine: Between Vanceboro, Maine and    99 miles..................................  Eastern Maine Ry. Co.
 Brownville Junction, Maine.
Michigan:
    U.S. trackage between Windsor,     1.8 miles.................................  Canadian Pacific Railway
     Ontario, and Detroit, Michigan.                                                Company.
    U.S. trackage between Sarnia,      3.1 miles.................................  Canadian National Railway
     Ontario, and Port Huron,                                                       Company (CN).
     Michigan.
Minnesota: Sprague Subdivision,        43.8 miles................................  CN.
 between Baudette, Minnesota, and
 International Boundary, Minnesota.
----------------------------------------------------------------------------------------------------------------

Appendix B to Part 241--Schedule of Civil Penalties \1\

------------------------------------------------------------------------
                                                               Willful
                  Section \2\                    Violation    violation
------------------------------------------------------------------------
241.9(a) Requiring or permitting                     $7,500      $11,000
 extraterritorial dispatching of a railroad
 operation....................................
    (b) Failing to notify FRA about                   5,000        7,500
     extraterritorial dispatching of a
     railroad operation in an emergency
     situation................................
241.11 Conducting a railroad operation that is
 extraterritorially dispatched:
    (a)(1) Generally..........................        7,500       11,000
    (a)(2) In an emergency situation-where            2,500        5,000
     dispatching railroad fails to notify FRA
     of the extraterritorial dispatching......
241.13 Requiring or permitting track to be
 used for the conduct of a railroad operation
 that is extraterritorially dispatched:
    (a)(1) Generally..........................        7,500       11,000
    (a)(2) In an emergency situation-where            2,500       5,000
     dispatching railroad fails to notify FRA
     of the extraterritorial dispatching......
------------------------------------------------------------------------
\1\ A penalty may be assessed against an individual only for a willful
  violation. The Administrator reserves the right to assess a penalty of
  up to $22,000 for any violation where circumstances warrant. See 49
  U.S.C. 21301, 21304 and 49 CFR part 209, appendix A.
\2\ Further designations for certain provisions, not found in the CFR
  citation for those provisions, and not found in this Appendix, are FRA
  Office of Chief Counsel computer codes added as a suffix to the CFR
  citation and used to expedite imposition of civil penalties for
  violations. FRA reserves the right, should litigation become
  necessary, to substitute in its complaint the CFR citation in place of
  the combined designation cited in the civil penalty demand letter.

Appendix C to Part 241--Geographical Boundaries of FRA's Regions and 
Addresses of FRA's Regional Headquarters

    The geographical boundaries of FRA's eight regions and the 
addresses for the regional headquarters of those regions are as 
follows:
    (1) Region 1 consists of Maine, Vermont, New Hampshire, New 
York, Massachusetts, Rhode Island, Connecticut, and New Jersey. The 
mailing address of the Regional Headquarters is: 55 Broadway, Room 
1077, Cambridge, Massachusetts 02142. The fax number is 617-494-
2967. The electronic mail (E-mail) address of the Regional 
Administrator for Region 1 is: [email protected].
    (2) Region 2 consists of Pennsylvania, Delaware, Maryland, Ohio, 
West Virginia, Virginia, and Washington, DC. The mailing address of 
the Regional Headquarters is: Two

[[Page 75964]]

International Plaza, Suite 550, Philadelphia, Pennsylvania 19113. 
The fax number is 610-521-8225. The E-mail address of the Regional 
Administrator for Region 2 is: [email protected].
    (3) Region 3 consists of Kentucky, Tennessee, North Carolina, 
South Carolina, Georgia, Alabama, Mississippi, and Florida. The 
mailing address of the Regional Headquarters is: Atlanta Federal 
Center, 61 Forsythe Street, SW., Suite 16T20, Atlanta, Georgia 
30303. The fax number is 404-562-3830. The E-mail address of the 
Regional Administrator for Region 3 is: [email protected].
    (4) Region 4 consists of Minnesota, Wisconsin, Michigan, 
Illinois, and Indiana. The mailing address of the Regional 
Headquarters is: 300 West Adams Street, Rm 310, Chicago, Illinois 
60606. The fax number is 312-886-9634. The E-mail address of the 
Regional Administrator for Region 4 is: 
[email protected].
    (5) Region 5 consists of New Mexico, Oklahoma, Arkansas, 
Louisiana and Texas. The mailing address of the Regional 
Headquarters is: 4100 International Plaza, Suite 450, Fort Worth, 
Texas, 76109-4820. The fax number is 817-284-3804. The E-mail 
address of the Regional Administrator for Region 5 is: 
[email protected].
    (6) Region 6 consists of Nebraska, Iowa, Colorado, Kansas, and 
Missouri. The mailing address of the Regional Headquarters is: 911 
Locust Street, Suite 464, Kansas City, Missouri 64106. The fax 
number is 816-329-3867. The E-mail address of the Regional 
Administrator for Region 6 is: [email protected].
    (7) Region 7 consists of California, Nevada, Utah, Arizona, and 
Hawaii. The mailing address of the Regional Headquarters is: 801 I 
Street, Suite 466, Sacramento, California 95814. The fax number is 
916-498-6546. The E-mail address of the Regional Administrator for 
Region 7 is: [email protected].
    (8) Region 8 consists of Washington, Idaho, Montana, North 
Dakota, Oregon, Wyoming, South Dakota, and Alaska. The mailing 
address of the Regional Headquarters is: Murdock Executive Plaza, 
703 Broadway, Suite 650, Vancouver, Washington 98660. The fax number 
is 360-696-7548. The E-mail address of the Regional Administrator 
for Region 8 is: [email protected].


Allan Rutter,
Federal Railroad Administrator.
[FR Doc. 02-30527 Filed 12-9-02; 8:45 am]
BILLING CODE 4910-06-P