[Federal Register Volume 87, Number 173 (Thursday, September 8, 2022)]
[Proposed Rules]
[Pages 54938-54948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19432]
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DEPARTMENT OF TRANSPORTATION
Federal Railroad Administration
49 CFR Part 271
[Docket No. FRA-2021-0035, Notice No. 1]
RIN 2130-AC89
Risk Reduction Program
AGENCY: Federal Railroad Administration (FRA), Department of
Transportation (DOT).
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: In response to issues raised by a petition for reconsideration
of the Risk Reduction Program (RRP) final rule, FRA is issuing this
NPRM to solicit information to help determine whether FRA should retain
or remove a provision in the RRP final rule clarifying that contractors
who perform a significant portion of a railroad's operations are
considered the railroad's directly affected employees for purposes of
the RRP rule.
DATES: Comments on this proposed rulemaking must be received on or
before November 7, 2022. Comments received after that date will be
considered to the extent possible without incurring additional expense
or delay.
ADDRESSES:
Comments: Comments related to Docket No. FRA-2021-35 may be
submitted by going to https://www.regulations.gov and following the
online instructions for submitting comments.
Instructions: All submissions must include the agency name and
docket number or Regulatory Identification Number (RIN) for this
rulemaking. Note that all comments received will be posted without
change to https://www.regulations.gov including any personal
information provided. Please see the Privacy Act heading in the
SUPPLEMENTARY INFORMATION section of this document for Privacy Act
information related to any submitted comments or materials.
Docket: For access to the docket to read background documents or
comments received, go to https://www.regulations.gov and follow the
online instructions for accessing the docket.
FOR FURTHER INFORMATION CONTACT: Miriam Kloeppel, Staff Director, Risk
Reduction Program Division, Office of Railroad Safety, FRA, telephone:
202-493-6224, email: [email protected]; or Elizabeth Gross,
Attorney Adviser, Office of the Chief Counsel, FRA, telephone: 202-493-
1342, email: [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents for Supplementary Information
I. Background
A. Statutory Mandate
B. Rulemaking Background
C. Petition for Reconsideration
II. Discussion
A. FRA's Rationale for Retaining Sec. 271.3(c)
B. Information Requested
III. Regulatory Impact and Notices
A. Executive Order 12866
B. Regulatory Flexibility Act and Executive Order 13272
C. Paperwork Reduction Act
D. Environmental Impact
E. Executive Order 12898 (Environmental Justice)
F. Federalism Implications
G. Unfunded Mandates Reform Act of 1995
H. International Trade Impact Assessment
I. Tribal Consultation
J. Privacy Act Statement
I. Background
Risk reduction is a comprehensive, system-oriented approach to
improving safety by which an organization formally identifies and
analyzes applicable hazards and takes action to mitigate, if not
eliminate, the risks associated with those hazards. It provides a
railroad with a set of decision-making processes and procedures that
can help it plan, organize, direct, and control its railroad operations
in a way that enhances safety and promotes compliance with regulatory
standards. As such, risk reduction is a form of safety management
system, which is a term generally referring to a comprehensive,
process-oriented approach to managing safety throughout an
organization.
A. Statutory Mandate
On October 16, 2008, the Rail Safety Improvement Act of 2008 (RSIA)
was enacted. Section 103 of the RSIA, codified at 49 U.S.C. 20156,
directed the Secretary of Transportation (Secretary) to issue a
regulation requiring Class I railroads, railroad carriers that provide
intercity rail passenger or commuter rail passenger transportation
(passenger railroads), and railroads with inadequate safety performance
(ISP railroads) to develop, submit to the Secretary for review and
approval, and implement a railroad safety risk reduction program. Under
sec. 20156(g), each railroad carrier required to submit a railroad
safety risk reduction program must ``consult with, employ good faith,
and use its best efforts to reach agreement with, all of its directly
affected employees, including any
[[Page 54939]]
nonprofit employee labor organization representing a class or craft of
directly affected employees of the railroad carrier, on the contents of
the safety risk reduction program.'' The Secretary delegated the
authority to conduct this rulemaking and implement the rule to the
Federal Railroad Administrator.\1\
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\1\ 49 CFR 1.89(b).
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B. Rulemaking Background
On February 27, 2015, FRA responded to the RSIA mandate by
publishing an RRP NPRM that would apply to each Class I freight
railroad and each ISP railroad. The RRP NPRM explained it would not
implement the RSIA mandate for passenger railroads, which FRA was
addressing in a separate System Safety Program (SSP) rulemaking. On
August 12, 2016, FRA published an SSP final rule \2\ applying to
passenger rail operations.\3\
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\2\ 81 FR 53850.
\3\ On March 4, 2020, FRA published a final rule amending the
SSP rule to clarify its applicability to passenger rail operations.
85 FR 12826, 12829-12833.
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On February 18, 2020, FRA published an RRP final rule \4\ that
added regulations at 49 CFR part 271 (part 271) requiring each Class I
freight railroad and each ISP railroad to develop and implement an RRP
under a written RRP plan that FRA has reviewed and approved.\5\ The RRP
final rule contains the following requirements that relate to how an
RRP must engage a railroad's directly affected employees:
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\4\ 85 FR 9262.
\5\ 49 CFR 271.101(b).
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Section 271.207(a), as mandated by sec. 20156(g), requires
each railroad to consult in good faith, and best efforts to reach
agreement with, its directly affected employees (including any non-
profit labor organization representing the directly affected employees)
on the contents of its RRP plan.
For RRP plan substantive amendments, section 271.303(a)(1)
requires a railroad to follow the process described in its RRP plan,
pursuant to Sec. 271.209, for consulting with its directly affected
employees and submitting a consultation statement to FRA.
Section 271.113(a) requires a railroad to involve its
directly affected employees in the establishment and implementation of
its RRP.
Section 271.221 requires a railroad's RRP plan to describe
the railroad's processes for involving railroad employees in the
establishment and implementation of an RRP pursuant to Sec. 271.113.
If a railroad contracts out significant portions of its operations, the
contractor and the contractor's employees performing the railroad's
operations shall be considered employees.
The RRP final rule does not contain a definition for ``directly
affected employee.'' However, the rule clarifies in Sec. 271.3(c) that
``[i]f a railroad contracts out significant portions of its operations,
the contractor and the contractor's employees performing the railroad's
operations shall be considered directly affected employees for purposes
of this part.''
While FRA did not propose Sec. 271.3(c) in the RRP NPRM, the
preamble to the RRP final rule explained that the added language came
from 49 CFR 270.107(a)(2) of the SSP rule, and was necessary to address
how directly affected employee consultation and involvement would be
handled when a railroad contracts out significant portions of its
operations to other entities.\6\ The preamble further explained that
contractors and contractor employees would be considered directly
affected employees only when the contracts were ongoing and involved
significant aspects of the railroad's operations (e.g., contracting out
maintenance of locomotives and rail cars).\7\ The preamble encouraged
railroads to contact FRA for guidance if they were unsure whether a
contracted entity and its employees would be directly affected
employees under Sec. 271.3(c).\8\ For purposes of this NPRM, FRA will
refer to this population of Sec. 271.3(c) contractors as
``operationally significant contractors.''
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\6\ 85 FR 9277.
\7\ Id.
\8\ Id.
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C. Petition for Reconsideration
On April 10, 2020, FRA received a petition for reconsideration of
the RRP final rule from the Association of American Railroads (AAR).\9\
AAR's petition asked FRA to reconsider certain aspects of the final
rule, including requirements regarding both employee and contractor
involvement.\10\ Relevant to this NPRM, AAR asked FRA, to reconsider
the inclusion of Sec. 271.3(c).\11\ As explained above, Sec. 271.3(c)
requires a railroad to consider a contractor and its employees who
perform significant portions of the railroad's operations (i.e.,
operationally significant contractors) as directly affected employees
for purposes of RRP plan consultation (Sec. 271.207) and employee
involvement (Sec. 271.113(a)).
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\9\ FRA-2009-0038-0116.
\10\ AAR's petition also asked FRA to reconsider requirements
regarding implementation deadlines and FRA's methodology and
accompanying costs calculations used to determine which railroads
demonstrate ISP. On May 8, 2020, FRA provided an initial response to
AAR's petition, denying AAR's request to extend the implementation
deadlines in the RRP final rule. FRA-2009-0038-0117. FRA's response
stated that the agency would reply to AAR's petition regarding
employee/contractor involvement and ISP determinations in a separate
communication.
\11\ AAR Pet. at 8-10.
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In asking FRA to consider removing Sec. 271.3(c) from the RRP
final rule, AAR's petition argued that while the inclusion of
contractor employees may be appropriate in the SSP rule for passenger
railroads that contract out their entire operations, the same is not
true for Class I freight railroads.\12\ As such, AAR argued that
including Sec. 271.3(c), without corresponding safety justifications
or notice and opportunity to comment, was arbitrary and
unreasonable.\13\ AAR further argued that FRA did not adequately define
a ``significant portion'' of a railroad's operation or account for
costs associated with Sec. 271.3(c).\14\
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\12\ AAR Pet. at 8.
\13\ Id.
\14\ Id. at 8-10.
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FRA responded to AAR's petition on November 16, 2020, granting the
petition in part by stating it would initiate a rulemaking to consider
removing Sec. 271.3(c) from the RRP final rule.\15\ FRA's response
indicated a rulemaking would allow a thorough discussion of whether the
RRP final rule should include Sec. 271.3(c), taking into account both
Class I railroads, which FRA acknowledged may not contract out
significant portions of their operations to the extent that Sec.
271.3(c) would apply, and ISP railroads.
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\15\ FRA otherwise denied AAR's petition. FRA-2009-0038-0124.
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FRA's response also acknowledged that a rulemaking to remove Sec.
271.3(c) may not be completed before the arrival of certain
implementation deadlines in the rule for Class I freight railroads.
FRA's response, therefore, made clear that, through its enforcement
discretion, FRA intended to neither take enforcement action based on
Sec. 271.3(c) nor disapprove a Class I freight railroad's RRP plan on
grounds that it did not comply with Sec. 271.3(c) before the
rulemaking was completed.
Since issuing this response, FRA has received and approved RRP
plans from all seven Class I freight railroads. Consistent with AAR's
petition, none of the Class I railroad RRP plans stated that the
railroads use operationally significant contractors. FRA also did not
receive any statement from directly affected employees implicating
Sec. 271.3(c) concerns as part of the RRP plan consultation
process.\16\ FRA has
[[Page 54940]]
not yet identified which Class II or III freight railroads must comply
with the RRP final rule because they demonstrate ISP.
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\16\ Section 271.207(e).
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II. Discussion
This NPRM solicits information to help FRA determine whether Sec.
271.3(c) should be retained in or removed from the RRP final rule. For
reasons discussed below, this NPRM does not specifically propose
removing Sec. 271.3(c) because FRA currently believes the provision
should be retained. However, FRA may issue a final rule removing Sec.
271.3(c) and making any necessary conforming changes (such as removing
similar language from Sec. 271.221) in response to public comment.
A. FRA's Rationale for Retaining Sec. 271.3(c)
For reasons explained in the preamble to the RRP final rule, FRA
continues to maintain that Sec. 271.3(c) is necessary in the RRP final
rule.\17\ Specifically, Sec. 271.3(c) contains language from Sec.
270.107(a)(2) of the SSP rule,\18\ and is necessary to address how
directly affected employee consultation and involvement will be handled
when a railroad contracts out significant portions of its operations to
operationally significant contractors.\19\ FRA intends the scope of
Sec. 271.3(c) to be limited so that contractors and contractor
employees are considered operationally significant contractors (and
thereby treated as directly affected employees for purposes of the RRP
rule) only when the contracts are ongoing and involve significant
aspects of the railroad's operations (e.g., contracting out maintenance
of locomotives and rail cars or dispatching services).\20\ For example,
Sec. 271.3(c) would cover contractor employees who were performing
duties for a railroad on a daily basis, particularly if those duties
were necessary for the daily operations of a railroad. If a contractor
performs operations for a railroad only on a one-time or intermittent
basis, the limited scope of Sec. 271.3(c) would not apply because
these duties would not constitute a significant portion of the
railroad's operations. By illustration, Sec. 271.3(c) would not apply
to contractors hired for a one-time construction project of limited
duration or to contractors who may only provide the railroad services
on an as-needed or intermittent basis (such as environmental response
contractors who respond to a hazardous materials leak or accident-
clearing contractors).
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\17\ 85 FR 9277.
\18\ There were no petitions for reconsideration of Sec.
270.107(a)(2) of the SSP rule.
\19\ 85 FR 9277.
\20\ Id.
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As explained in FRA's response to AAR's petition, FRA acknowledges
that Sec. 271.3(c) may not currently impact Class I railroads--indeed,
FRA has already approved all Class I freight railroad RRP plans without
identifying any potential operationally significant contractors. FRA's
review, however, focused primarily on information provided in the
submitted Class I RRP plans, and any statements received from directly
affected employees, and was not a comprehensive evaluation of a
railroad's operations. FRA notes, however, that even if Class I
railroads currently do not hire operationally significant contractors,
that does not mean they will not do so in the future.
FRA does not believe a current lack of Class I operationally
significant contractors is sufficient reason for removing Sec.
271.3(c) altogether because AAR's argument does not address Class II
and Class III railroads that may be subject to the RRP rule because FRA
determines they demonstrate ISP. There is a large amount of
organizational diversity among Class II and Class III freight
railroads, and FRA believes some of these Class II and Class III
freight railroads may hire operationally significant contractors.
Finally, FRA notes that there may be adverse railroad safety
effects if the RRP rule treats operationally significant contractors
and employees differently by not requiring a railroad to consult with
and involve operationally significant contractors in RRP planning and
implementation. Contractors perform a range of important railroad
operation services, such as dispatching, switching, track construction,
and flagging. FRA is also aware of contractors who provide certified
locomotive engineers and conductors to conduct train operations. To
comprehensively address the hazards and risk on a railroad's system,
FRA believes an RRP must treat operationally significant contractors
the same as employees for purposes of the rule's consultation and
involvement requirements. For example, a person who is regularly
performing dispatching services for a railroad should be consulted on
the contents of a railroad's RRP plan and involved in the railroad's
RRP, regardless of whether that person is an employee or a
contractor.\21\ The comprehensive, system-wide nature of RRP also makes
it important for a railroad to incorporate operationally significant
contractors directly into its RRP, rather than requiring contractors to
establish their own RRPs that would then apply piecemeal to a
railroad's operation. This type of fragmented approach could lead to
safety gaps where it was not clear whether the operation was covered by
the railroad's RRP or the contractor's RRP, or where safety hazards and
risks were not effectively communicated between the railroad and
operationally significant contractors.
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\21\ The importance of contractors to railroad safety is
reflected in the numerous FRA safety regulations that define
``employee'' to include employees of a contractor to a railroad.
See, e.g., 49 CFR 214.7 (definitions of ``employee,'' ``roadway
worker,'' and ``railroad bridge worker or bridge worker''), Sec.
218.93 (definition of ``employee''), Sec. 220.5 (definition of
``employee''), and Sec. 241.5 (definition of ``employee'').
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B. Exercise of Enforcement Discretion if FRA Retains Sec. 271.3(c)
Until the conclusion of this rulemaking, and as indicated in its
response to AAR's petition,\22\ FRA will continue to exercise its
discretion to neither take enforcement against a Class I freight
railroad based on Sec. 271.3(c) nor to disapprove a Class I freight
railroad's RRP plan on grounds that it did not comply with Sec.
271.3(c).
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\22\ FRA-2009-0038-0124.
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As discussed above, based on the information available to FRA, FRA
understands that, at this time, Class I freight railroads do not employ
operationally significant contractors. If Class I freight railroads
indeed do not hire operationally significant contractors, their RRP
plans would remain in compliance with the rule even if FRA elects to
retain Sec. 271.3(c). FRA would, however, monitor for Sec. 271.3(c)
compliance as part of its external audit process under Part 271,
Subpart F--External Audits. If FRA were to find during an audit that a
Class I freight railroad utilizes operationally significant
contractors, FRA would address any identified Sec. 271.3(c) non-
compliance as part of the audit process, which could include reopening
review of the railroad's RRP plan pursuant to Sec. 271.305.\23\
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\23\ Section 271.305 authorizes FRA to reopen review of an RRP
plan for cause stated.
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FRA may receive information during this rulemaking indicating that
one or more Class I freight railroads do hire operationally significant
contractors. If FRA finalizes this rulemaking by retaining Sec.
271.3(c), FRA will continue exercising its enforcement discretion to
provide any such Class I freight railroads a reasonable amount of time
to amend their RRP plans and conduct any additional consultation
necessary to achieve compliance with Sec. 271.3(c). FRA specifically
requests public
[[Page 54941]]
comment on what would be a reasonable amount of time, anticipating that
it would be between six months and one year. Providing six months would
be consistent with the amount of time provided Class I freight
railroads to file initial RRP plans after the rule's information
protection provisions went into effect,\24\ and providing a year would
allow a Class I freight railroad the opportunity to submit any required
RRP plan revisions along with its annual internal assessment
report,\25\ which would lessen administrative filing burdens. After
this additional period of enforcement discretion, FRA would have the
authority under Sec. 271.305 to reopen review of a Class I freight
railroad's RRP plan for cause stated, such as non-compliance with Sec.
271.3(c).
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\24\ The rule's information protection provisions went into
effect on February 17, 2021, and the filing deadline for Class I
freight railroad RRP plans was no later than August 16, 2021. 49 CFR
271.11(a) and 271.301(b)(1).
\25\ The RRP rule requires a railroad to conduct an internal
assessment of its RRP once every calendar year, and to provide FRA
an internal assessment report within 60 days of completing the
internal assessment. 49 CFR 271.401(a) and 271.405(a).
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C. Information Requested
Although FRA currently believes Sec. 271.3(c) should be retained,
this NPRM solicits additional information for FRA to consider. FRA
specifically requests comments on whether contractors play a different
role for Class I freight railroads and Class II and III freight
railroads (which would have to comply with the RRP rule if FRA
determines they demonstrate ISP). FRA is also interested in additional
information regarding the extent to which contractors perform
operations for freight railroads and for how long FRA should exercise
its enforcement discretion if it determines that Class I freight
railroads do hire operationally significant contractors. FRA is
requesting information not only about the current role of contractors
in the freight railroad industry, but also information about how
contractors' role may change in the future.
As this NPRM is only addressing those issues raised in the petition
for reconsideration, FRA is specifically limiting the requested public
comment to the need to retain or remove Sec. 271.3(c). For purposes of
this NPRM, FRA will not consider any comments that go beyond the scope
of Sec. 271.3(c). For example, FRA will not consider comments on the
employee consultation requirements in Sec. 271.207, comments on the
employee involvement requirements in Sec. 271.113, or comments
requesting revisions to any section of the rule other than Sec.
271.3(c).
As discussed under the Privacy Act heading in the SUPPLEMENTARY
INFORMATION section of this document, if you wish to provide comments
containing proprietary or confidential information, please contact FRA
for alternate submission instructions.
III. Regulatory Impact and Notices
A. Executive Order 12866
This NPRM is a nonsignificant regulatory action under Executive
Order 12866, ``Regulatory Planning and Review.'' \26\ FRA made this
determination by finding that this proposed regulatory action did not
meet the definition of ``significant regulatory action'' in section
3(f) of E.O. 12866.
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\26\ 58 FR 51735 (Sep. 30, 1993).
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This section evaluates the economic impacts associated with the
proposed rulemaking. Because FRA is proposing to retain Sec. 271.3(c)
in the RRP rule to address how directly affected employee consultation
and involvement will be handled when a railroad contracts out
significant portions of its operations to operationally significant
contractors, this proposed rulemaking will not have an economic impact
unless FRA revises the provision in response to information and
comments gathered following publication of this NPRM. The economic
impacts of such potential alternatives are described below. FRA
requests comments and data related to Sec. 271.3(c) and the
assumptions and calculations presented in this analysis.
1. Need for Regulatory Action
This NPRM does not propose to make any regulatory change to the
existing RRP rule. Rather, this NPRM provides an opportunity for public
comment on Sec. 271.3(c), which was included in the RRP final rule but
not proposed in the RRP NPRM. This rulemaking provides an expanded
opportunity for public comment on this section. Under Sec. 271.3(c),
``If a railroad contracts out significant portions of its operations,
the contractor and the contractor's employees performing the railroad's
operations shall be considered directly affected employees for purposes
of this part.'' For ease of reference, this analysis refers to this
universe of Sec. 271.3(c) contractors as ``operationally significant
contractors.'' As previously explained in this rulemaking, the RRP rule
contains two requirements that relate to how an RRP must engage with a
railroad's directly affected employees in Sec. Sec. 271.207(a) (RRP
plan consultation) and Sec. 271.113(a) (employee involvement).
Generally, these provisions require a railroad to consult with its
directly affected employees on the contents of its RRP plan and any
substantive amendments thereto, and to involve its directly affected
employees in the establishment and implementation of the RRP.
This NPRM notes FRA may consider alternatives to Sec. 271.3(c),
given sufficient data and evidence of an unjustified burden or superior
approach. Since this proposed rulemaking is primarily an effort to
collect public comment on Sec. 271.3(c) and does not propose new
requirements, this analysis determined that this proposed rulemaking
would not carry any economic impacts or paperwork burden. While the
proposed rule would not have economic impacts, FRA examined two
alternatives that would trigger costs and/or benefits if included in a
final rule.
2. Regulatory Alternatives
This analysis considers two alternative regulatory approaches to
retaining Sec. 271.3(c) in the RRP final rule, including the
alternative of removing Sec. 271.3(c), which is considered in this
proposed rulemaking and associated preamble. The assumptions and
calculations upon which the analyses are based are included below to
provide clarity and document FRA's methodology.
The first alternative considers the removal of Sec. 271.3(c) and
would generate an estimated $4,069,640 in cost savings. The second
alternative considers expanding Sec. 271.3(c) to include all
contractors who perform or utilize significant safety-related services,
as identified by a railroad's RRP plan pursuant to Sec. 271.101(d).
For ease of reference, this analysis refers to Sec. 271.101(d)
contractors as ``safety significant contractors.'' This analysis also
assumes all operationally significant contractors are included in this
broader category of safety significant contractors. This second
alternative would trigger an estimated $1,887,473 in costs.
Per U.S. Office of Management and Budget (OMB) guidance in Circular
A-4, the alternatives considered in this analysis present both a less
stringent case (Alternative 1) and a more stringent case (Alternative
2) compared to the baseline case expected for the proposed rulemaking
if finalized.\27\ As discussed above, this rulemaking proposes to
retain Sec. 271.3(c) to address how directly affected employee
consultation and
[[Page 54942]]
involvement will be handled when a railroad contracts out significant
portions of its operations. The proposed rulemaking would therefore not
generate any economic impacts if finalized, and this analysis only
addresses the economic impacts of the two alternatives in comparison to
the baseline case of retaining Sec. 271.3(c).
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\27\ U.S. Office of Management and Budget. 2003. Circular A-4.
Washington, DC.
Table I.1--Summary of Regulatory Alternatives for Analysis
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Baseline Case: retain Alt. 1: Remove Sec. Alt. 2: Expand Sec.
Sec. 271.3(c) 271.3(c) 271.3(c)
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Affected Workers..................... Railroad employees and Railroad employees only Railroad employees and
operationally safety significant
significant contractors.
contractors.
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3. Methodology
This analysis employs benefit-cost analysis to evaluate more and
less stringent regulatory alternatives. The baseline case is not
evaluated because it presents the expected steady state of the economy
without additional regulatory action. The analysis presents each case
in monetary values to facilitate comparison. The value of the variables
included are based on industry research, subject matter expertise, and
a list of stated assumptions listed below.
Alternative 1 is narrower than the baseline case and is expected to
produce cost savings, while Alternative 2 is broader than the baseline
case and is expected to increase costs.\28\ To calculate the net cost
savings of Alternative 1, which would drop the requirement for
railroads to consider operationally significant contractors as
directly-affected employees for purposes of the RRP rule by removing
Sec. 271.3(c), the analysis estimates the expected costs of compliance
with that provision and assumes the entirety of those costs would be
removed. To calculate the net costs of Alternative 2, which would
expand Sec. 271.3(c) beyond operationally significant contractors in
the baseline case to include all safety significant contractors, the
analysis estimates the total compliance costs of the broader
alternative and then removes the estimated compliance costs of the
baseline case (i.e., the amount estimated for Alternative 1). The
number of contractors impacted is the only variable that changes in the
calculations.\29\
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\28\ This analysis does not attempt to quantify a monetary value
for the costs or savings associated with each alternative's
potential impact on safety risk (e.g., the marginal impact of
including additional contractors in the RRP consultation pool)
because the amount of uncertainty exceeds the confidence FRA has
that it could correctly estimate these figures. Rather, the analysis
focuses exclusively on the anticipated administrative costs and
savings associated with the proposed alternatives because the data
needed to evaluate them are more readily available. For a
qualitative discussion of the safety benefits associated with
retaining Sec. 271.3(c) in the RRP rule, please see the background
discussion for this proposed rulemaking.
\29\ Baseline = (Railroad Employees + Operationally Significant
Contractors). Alternative 1 = Baseline--Operationally Significant
Contractors = Railroad Employees only. Alternative 2 = Baseline +
Safety Significant Contractors.
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The scope of this analysis covers Class I freight railroads and
potential ISP railroads.\30\ It applies a ten-year period of analysis
that is long enough to capture ongoing costs without unduly predicting
longer term impacts, which are liable to shift as the industry evolves.
The first year of the analysis term is assumed to be the year of the
effective date of a final rule arising from this NPRM. All Class I
railroads have already consulted with directly affected employees and
submitted their initial RRP plans, which FRA has reviewed and approved.
However, FRA's response to AAR's petition notified these railroads that
it would exercise enforcement discretion regarding Sec. 271.3(c) as it
worked on this rulemaking. Therefore, this analysis assumes that upon
promulgation of this rulemaking, Class I railroads would perform an
initial consultation with the applicable contractors. Because it is
currently unclear whether Class I railroads hire operationally
significant contractors to whom Sec. 271.3(c) would apply, this
assumption may result in exaggerated savings and costs for Alternatives
1 and 2, respectively, which FRA finds preferable to underestimating
the impact. FRA welcomes comments and data on whether railroads have
treated any contractors as directly affected employees in their RRP
plan development and the extent to which railroads contract out their
operations.
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\30\ FRA uses a statistical process guided by expert review to
determine which railroads demonstrate inadequate safety performance.
Essentially, FRA compares a railroad to its peers and evaluates its
three-year accident/incident history, and operational
characteristics to see if its performance is significantly different
than comparable railroads.
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Over the course of the analysis' time horizon, FRA expects the
total number of ISP railroads will increase, starting with 10 in the
first year and adding 5 each year thereafter. FRA subject matter
experts expect the number of ISP railroads will plateau as safety
operations are improved, as the poorest performing railroads correct
their practices in the initial years of the program, and risk reduction
planning becomes more engrained in railroad culture at large.\31\ The
number of ISP railroads may decline following the ten-year analysis
term for these same reasons, but such a scenario is not included in the
scope of this analysis. FRA anticipates that as the industry realizes
the benefits of the RRP process, more railroads will engage in risk
reduction planning voluntarily (as permitted by Sec. 271.15), which is
another reason for not extending the analysis of the rule's impact
beyond ten years.
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\31\ Under the RRP final rule, an ISP railroad may petition FRA
to discontinue compliance after five years. 49 CFR 271.13(g).
---------------------------------------------------------------------------
The Class I freight railroads' costs are front-loaded in the first
year of the rule because FRA's analysis assumes they will consult with
operationally significant contractors and amend their RRP plans within
that year to ensure Sec. 271.3(c) compliance (unlike a Class II or
Class III freight railroad, which will only submit an RRP plan if FRA
determines that it demonstrates ISP). The analysis assumes the number
of Class I freight railroads (currently 7) will not change over the
ten-year time horizon.\32\
---------------------------------------------------------------------------
\32\ FRA is aware of potential mergers within the Class I
freight railroad industry. However, this analysis assumes the number
of Class I railroads will remain unchanged over the ten-year time
horizon of the proposed rulemaking. Notably, even in the case of a
merger, FRA assumes the number of Class I railroad employees would
be expected to be unaffected by the merger.
---------------------------------------------------------------------------
This analysis does not separate the impacts by country among the
Class I or ISP freight railroads. OMB Circular A-4 instructs that
regulatory impact analyses should focus on the impacts on U.S.
residents; however, consistent with FRA practice, the impacts of the
rule associated with the two Canada-based Class I freight railroads,
Canadian National and Canadian Pacific (as well as any international
Class II or III freight railroads under FRA jurisdiction), are included
in this analysis because they operate extensively in the U.S. and the
process of filtering out the relevant country-specific impacts would be
prohibitively extensive.
[[Page 54943]]
4. Baseline
In most economic and regulatory impact analyses, the ``no action
alternative'' is an important case to consider and contrast with the
proposed rulemaking. In the case of this proposed rulemaking, which is
a follow-up to the RRP final rule, the ``no action'' baseline is the
expected course if a final rule arises from this proposed rulemaking.
Because FRA believes the RRP rule should retain Sec. 271.3(c) to
address railroads with operationally significant contractors, this NPRM
proposes no changes to the RRP final rule as it was published on
February 18, 2020. Rather, this rulemaking is intended to solicit and
receive feedback on FRA's position that Sec. 271.3(c) should be
retained. Therefore, the baseline is assumed to be the current state of
the industry under the RRP final rule as promulgated. FRA measures the
impact of the alternatives relative to this base case.
5. Scope
The sections of the RRP rule that apply to the operationally
significant contractors under Sec. 271.3(c) include the following:
Section 271.207--Consultation requirements, which requires
a railroad to ``consult with, employ good faith, and use its best
efforts to reach agreement with'' all directly affected employees;
Section 271.303(a)(1)--Amendments, which requires a
railroad to follow the process, described in its RRP plan pursuant to
Sec. 271.209, for consulting with its directly affected employees and
submitting a consultation statement to FRA for substantive amendments
to its RRP plan.
Section 271.113--Involvement of railroad employees, which
requires a railroad to involve its directly affected employees in the
establishment and implementation of the RRP. Section 271.221--
Involvement of railroad employees process requires an RRP plan to
describe the railroad's processes for involving railroad employees in
the establishment and implementation of an RRP under Sec. 271.113, and
repeats the Sec. 271.3(c) requirement that if a railroad contractors
out significant portions of its operations, the contractor and the
contractor's employees performing the railroad's operations shall be
considered directly affected employees for the purposes of this
section.
6. Calculations
The following section-by-section calculation formulas are applied
to each of the two alternatives presented, which include either
operationally significant contractors or safety significant
contractors. The calculations in this analysis are applied to Class I
and ISP freight railroads separately. The values of the variables for
these two types of railroads differ and are displayed in the
Assumptions list of this analysis. For clarity, the calculations below
are presented in simplified form. Furthermore, the calculations apply
to each year of the analysis, with the values of the variables changing
each year according to the assumptions listed below.
Section 271.207--Consultation Requirements
Initial Consultation:
(Number of RRs Conducting RRP Plan Consultations * Administrative Time
Spent on Consultation * Administrative Wage Rate) + (Average Number of
Contractors * Contractor Time Spent on Consultation * Contractor Wage
Rate)
Consultation Revision Tasked by FRA:
(Number of RRs Tasked w/ Revision * Administrative Time Spent for
Revision * Administrative Wage Rate) + (Average Number of Contractors *
Contractor Time Spent Consulting for Revisions * Contractor Wage Rate)
Section 271.303(a)(1)--Amendments
(Number of RRs Amending RRP Plans * Administrative Time for Update
Process * Administrative Wage Rate) + (Total Contractors Involved *
Time Spent per Contractor on Update Process * Contractor Wage Rate)
Section 271.113--Involvement of Railroad Employees
(Number of RRs Conducting Ongoing Involvement * Administrative Time
Spent * Administrative Wage Rate) + (Average Number of Contractors *
Average Contractor Time Spent on Ongoing Involvement * Contractor Wage
Rate)
7. Analysis of Alternatives
Alternative 1: Remove the Operationally Significant Contractor
Engagement Component
The first case analyzes the primary alternative of removing Sec.
271.3(c). This case is the less stringent alternative. It evaluates the
potential savings that would accrue to Class I and ISP freight
railroads by not having to comply with the existing requirement to
include operationally significant contractors as directly affected
employees for purposes of RRP plan consultation and ongoing RRP
involvement. However, the resultant benefits must be analyzed alongside
FRA's position that the inclusion of such operationally significant
contractors as directly affected employees, both in terms of added
safety and in regulatory clarity by maintaining continuity between both
the RRP (for freight railroads) and SSP (for passenger railroads)
rules, is more valuable.
If Alternative 1 were adopted, the railroads could experience
marginally lower costs by saving compliance costs for including
operationally significant contractors as directly affected employees in
their RRP process. Over the 10-year analysis, these benefits are
estimated to be $4,069,640 and are displayed in Tables 1.1 and 1.2,
along with totals at both 3 and 7 percent discount rates. Table 1.1
presents the anticipated savings arising from not incurring costs from
including operationally significant contractors as directly affected
employees in railroad RRP processes. Table 1.2 delineates the year-by-
year benefits anticipated.
Table 1.1--Total Savings From Removing Section 271.3(c)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consultation Resubmission
Initial revision tasked due to RRP Ongoing Discounted, Discounted,
consultation by FRA revision involvement Total 3% 7%
(271.207) (271.207, pt 2) (271.209) (271.213)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class I RRs........................... $1,027,384 $290,110 $222,285 $2,034,044 $3,573,823 $3,203,815 $2,816,054
ISP RRs............................... 187,898 14,505 46,033 247,382 495,817 415,735 334,952
-----------------------------------------------------------------------------------------------------------------
.............. ................ .............. .............. 4,069,640 3,619,549 3,151,006
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 54944]]
Table 1.2--Year-by-Year Savings from Removing Section 271.3(c)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total cost by year
----------------------------------------------------------------------------------------------------------------------------
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Class I RRs........................................................ $1,543,127 $225,633 $225,633 $225,633 $225,633 $225,633 $225,633 $225,633 $225,633 $225,633 $3,573,823
ISP RRs............................................................ 45,829 31,942 36,457 40,971 45,485 49,999 54,513 59,027 63,541 68,055 495,817
----------------------------------------------------------------------------------------------------------------------------
Yearly Total................................................... 1,588,955 257,575 262,089 266,604 271,118 275,632 280,146 284,660 289,174 293,688 4,069,640
Discounted, 3%..................................................... 1,542,675 242,789 239,849 236,874 233,868 230,837 227,784 224,713 221,628 218,531 3,619,549
Discounted, 7%..................................................... 1,485,005 224,976 213,943 203,391 193,303 183,665 174,461 165,675 157,291 149,296 3,151,006
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Alternative 2: Expand Sec. 271.3(c) To Include Safety Significant
Contractors
The second alternative presents a scenario in which Class I and ISP
freight railroads must expand the universe of contractors that they
consider directly affected employees for RRP purposes (i.e., RRP plan
consultation and ongoing employee involvement) to include all safety
significant contractors identified in their RRP plans under Sec.
271.101(d). This case is the more stringent alternative. FRA's proposed
position is that Sec. 271.3(c) should remain tailored to apply only to
those contractors who perform operationally significant work for the
railroads. Based on the information available, FRA has determined that
this narrowed scope of operationally significant contractors
accomplishes the intended goal of the RRP rule without unduly burdening
the industry. Furthermore, expanding Sec. 271.3(c) would make the RRP
rule inconsistent with the SSP rule, and FRA has no data indicating
freight and passenger railroads should be subject to different
contractor requirements. However, it could be the case that requiring
railroads to include more contractors as directly affected employees
could lead to better input in their RRPs, with corresponding safety and
operational benefits. While it is conceivable there could be marginal
safety benefits from the addition of more information from the expanded
universe of contractors, FRA lacks information to define or to quantify
such benefits at this time. Furthermore, based on subject matter
experience, FRA expects this approach would cost more than it would
provide in safety benefits.
If the baseline universe of operationally significant contractors
were expanded to include other safety significant contractors, the
additional consultations and involvement to integrate these additional
workers into the railroads' RRP processes would increase the cost of
the rule. There would also be marginally higher administrative costs to
accommodate the expansion of the number of contractors included, but
FRA did not attempt to estimate those costs here because it believes
they would be relatively minimal. It is also possible that an expansion
of the application of Sec. 271.3(c), and thereby the RRP consultation
and involvement requirements, to more contractors would eventually
impact contract costs for these workers who must now engage in
additional tasks. FRA did not include estimates for these impacts
because it lacked data to make a confident estimate. The total cost of
Alternative 2 over the ten-year analysis is estimated to be $1,887,473
and the details are displayed in Tables 2.1 and 2.2, along with totals
at both 3 and 7 percent discount rates.
Table 2.1--Total Costs From Expanding Section 271.3(c)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consultation Resubmission
Initial revision tasked due to RRP Ongoing Discounted, Discounted,
consultation by FRA Revision involvement Total 3% 7%
(271.207) (271.207, pt 2) (271.209) (271.213)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class I RRs........................... $501,694 $143,341 $95,561 $1,003,388 $1,743,983 $1,563,673 $1,374,692
ISP RRs............................... 51,098 10,252 21,750 60,389 143,490 120,432 97,160
-----------------------------------------------------------------------------------------------------------------
.............. ................ .............. .............. 1,887,473 1,684,105 1,471,852
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 2.2--Year-by-Year Costs From Expanding Section 271.3(c)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total cost by year
--------------------------------------------------------------------------------------------------------------------------
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class I RRs.................. $754,930 $109,895 $109,895 $109,895 $109,895 $109,895 $109,895 $109,895 $109,895 $109,895 $1,743,983
ISP RRs...................... 13,682 9,368 10,632 11,896 13,159 14,423 15,687 16,950 18,214 19,478 143,490
--------------------------------------------------------------------------------------------------------------------------
Yearly Total............. 768,612 119,263 120,527 121,791 123,054 124,318 125,582 126,845 128,109 129,373 1,887,473
Discounted, 3%............... 746,225 112,417 110,299 108,209 106,148 104,114 102,109 100,133 98,185 96,265 1,684,105
Discounted, 7%............... 718,329 104,169 98,386 92,913 87,736 82,838 78,206 73,825 69,683 65,767 1,471,852
--------------------------------------------------------------------------------------------------------------------------------------------------------
8. Results of Alternatives Analysis
The analysis of the two alternatives above demonstrates that there
would be measurable economic impacts to selecting either path. If upon
receiving public input on this proposed rulemaking FRA decides to
remove Sec. 271.3(c) from the final rule in line with Alternative 1,
there would be an anticipated cost savings to the regulated entities of
$4,069,640 ($3,619,549, discounted at 3 percent; $3,151,006, discounted
at 7 percent). If FRA decides to expand Sec. 271.3(c) in line with
Alternative 2, the result would be an anticipated total cost increase
for the regulated entities of $1,887,473 ($1,684,105, discounted at 3
percent; $1,471,852, discounted at 7 percent). FRA does not have data
to quantify monetarily the safety impacts of either removing or
expanding Sec. 271.3(c). Nevertheless, FRA believes retaining Sec.
271.3(c) in the RRP rule is consistent with the systemic approach of a
safety risk management program, for reasons
[[Page 54945]]
explained in the background section of this proposed rulemaking. FRA
welcomes data and comment on the impacts of eliminating or expanding
the applicability of Sec. 271.3(c) to inform the final rule.
----------------------------------------------------------------------------------------------------------------
Regulatory Path Action Cost Benefits
----------------------------------------------------------------------------------------------------------------
Baseline................................... Maintain Sec. 271.3(c) as is..... 0 0
Alternative 1.............................. Remove Sec. 271.3(c)............. N/A $ 4,069,640
Alternative 2.............................. Expand contractor pool subject to $ 1,887,473 N/A
Sec. 271.3(c).
----------------------------------------------------------------------------------------------------------------
9. Assumptions and Inputs
These assumptions are based on published industry and economic
data, FRA data, and FRA subject matter expertise. These assumptions
include definitions for certain variables that were not included in the
initial RRP rule. Since the publication of the RRP rule, FRA has
reviewed submitted Class I freight railroad plans and gathered more
information and experience on the RRP process and anticipated resources
needed to comply. Accordingly, FRA has updated the calculations and
assumptions to reflect this improved understanding in evaluating the
regulatory alternatives above. FRA requests comment on the assumptions
and welcomes any data that may contribute to better understanding how
the retention, exclusion, or expansion of Sec. 271.3(c) might impact
railroads.
Railroads
There are 7 Class I freight railroads. There are 784 total
railroads on the general system.\33\ There will be 10 ISP freight
railroads in Year 1, and an additional 5 per year in Years 2-10. Once
designated as ISP, FRA assumes railroads will not cease to be
designated as such during the ten-year analysis time horizon.\34\ There
are 135,000 Class I railroad employees. The average number of employees
on an ISP railroad is 125. The number of employees is assumed to remain
constant over the ten-year analysis term. One Class I railroad will
amend its RRP each year. Ten percent of ISP railroads will amend their
RRPs each year.
---------------------------------------------------------------------------
\33\ Based on 2021 FRA data.
\34\ Under the RRP final rule, an ISP railroad may petition FRA
to discontinue compliance after five years. Section 271.13(g). FRA
is assuming ISP railroads would continue to be designated as such
for ten years to avoid underestimating costs in this analysis, not
to imply that all ISP railroads will be required to comply for ten
years.
---------------------------------------------------------------------------
Contractors
Contractors who are operationally significant account for 10
percent of a Class I railroad's total workforce. Contractors who are
safety significant account for 15 percent of a Class I railroad's total
workforce. Contractors who are operationally significant account for 20
percent of an ISP railroad's total workforce. Contractors who are
safety significant account for 30 percent of an ISP railroad's total
workforce. For the purpose of this analysis, operationally significant
contractors are considered to be fully subsumed in the safety
significant contractor pool.
Wages
Overhead and fringe costs impose a 75 percent multiplier on average
worker wages, which are reflected in the following wage rates. The
fully burdened wage rate for professional and administrative railroad
staff is $77.91.\35\ The fully burdened wage rate for railroad
contractors is equivalent to average railroad employees, which is
$59.46. Average wage rates are equivalent between Class I and ISP
railroads. Wages are not adjusted for inflation for the ten-year time
horizon of the rule.
---------------------------------------------------------------------------
\35\ The wage data in this analysis are based on railroad wage
data provided by the Surface Transportation Board for 2021 in its
Quarterly Wage A&B Data, specifically Group 200 to represent
professional and administrative staff, and Group 300 to represent a
proxy for railroad contractors similar in duties to maintenance of
way and structures employees (https://www.stb.gov/reports-data/economic-data/quarterly-wage-ab-data/).
---------------------------------------------------------------------------
Time
Administrative time spent per Class I freight railroad for initial
consultation is 44 hours. Administrative time spent per Class I freight
railroad for consultation revision tasked by FRA is 22 hours, half the
time needed for the initial consultation. Administrative time spent per
ISP railroad for initial consultation is 20 hours. Administrative time
spent per ISP railroad for consultation revision tasked by FRA is 10
hours. Contractor time spent for initial consultation (applies to Class
I and ISP RRs) is 1.25 hours per contractor. Contractor time spent for
consultation revision tasked by FRA is the same as the initial
consultation and is 1.25 hours per applicable contractor. This
equivalent contractor time assumes that a component of the FRA-tasked
update is insufficient consultation with the employees/contractors that
needs to be completed, applicable to Class I and ISP railroads.
Administrative time spent by an ISP railroad making substantial changes
to its RRP in compliance with the rule is 15 hours. Administrative time
spent by a Class I railroad making substantial changes to its RRP to
comply with the rule is 40 hours. Contractor time spent to update
materials for RRP revision is 10 minutes per contractor. This economic
analysis assumes that railroads will only revise portions of their RRP
and therefore the average amount of time spent by each contractor will
not be greater than for full consultation on the initial RRP.
Administrative time spent per railroad for ongoing involvement (Class I
and ISP railroads) is 5 hours. Contractor time spent per railroad for
ongoing involvement is 15 minutes per contractor on average.
10. Discount Rates
Discount rates of 3 and 7 percent are presented to meet the
guidelines set forth in OMB Circular A-4. Discount rates are intended
to reflect the value of money over time in order to reveal opportunity
cost. The 7 percent discount rate is an estimate of the average rate of
return to private capital in the U.S. For regulatory changes that do
not primarily impact the allocation of capital, but rather impact
consumption, the lower discount rate of 3 percent is a historical
approximation of that impact.
Because this analysis does not attempt to quantify the safety
impacts of either alternative, it skews the results of the discounting
because it lacks the relative comparison to how net impacts would be
experienced over time.
B. Regulatory Flexibility Act and Executive Order 13272
The Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) and
Executive Order 13272 (67 FR 53461, Aug. 16, 2002) require agency
review of proposed and final rules to assess their impacts on small
entities. An agency must prepare an Initial Regulatory Flexibility
Analysis (IRFA) unless it determines and certifies that a rule, if
promulgated, would not have a significant economic impact on a
substantial number of small entities. FRA has not determined whether
this proposed rulemaking would have a significant economic impact on a
substantial number of small
[[Page 54946]]
entities, and has therefore prepared this IRFA. FRA invites all
interested parties to submit data and information regarding the
potential economic impact on small entities that would result from the
adoption of the proposals in this NPRM. FRA seeks comment on the
economic impacts of this proposed rulemaking on small entities.
1. Reasons for Considering Agency Action
This action provides notice and solicits comment on FRA's position
that the RRP final rule should retain Sec. 271.3(c) and is responsive
to petitions of reconsideration received by FRA.
2. A Succinct Statement of the Objectives of, and the Legal Basis for,
the Proposed Rule
FRA is proposing to keep part 271 in effect as published, but is
using this rulemaking to gather additional public response to the
proposal of retaining Sec. 271.3(c). FRA initiated the RRP rulemaking
in response to a statutory mandate set forth in section 103 of RSIA
that directed FRA develop comprehensive, system-oriented, risk
reduction planning requirements for Class I railroads, passenger
railroads, and ISP railroads. This proposed rulemaking addresses issues
raised by petitions for reconsideration that FRA received on the RRP
final rule.
3. A Description of, and Where Feasible, an Estimate of the Number of
Small Entities to Which the Proposed Rule Would Apply
The Regulatory Flexibility Act of 1980 requires a review of
proposed and final rules to assess their impact on small entities,
unless the Secretary certifies that the rule would not have a
significant economic impact on a substantial number of small entities.
``Small entity'' is defined in 5 U.S.C. 601 as a small business concern
that is independently owned and operated, and is not dominant in its
field of operation. The U.S. Small Business Administration (SBA) has
authority to regulate issues related to small businesses, and
stipulates in its size standards that a ``small entity'' in the
railroad industry is a for profit ``line-haul railroad'' that has fewer
than 1,500 employees, a ``short line railroad'' with fewer than 500
employees, or a ``commuter rail system'' with annual receipts of less
than seven million dollars. See ``Size Eligibility Provisions and
Standards,'' 13 CFR part 121, subpart A.
Federal agencies may adopt their own size standards for small
entities in consultation with SBA and in conjunction with public
comment. Pursuant to that authority FRA has published a final statement
of agency policy that formally establishes ``small entities'' or
``small businesses'' as railroads, contractors, and hazardous materials
shippers that meet the revenue requirements of a Class III railroad as
set forth in 49 CFR 1201.1-1, which is $20 million or less in
inflation-adjusted annual revenues, and commuter railroads or small
governmental jurisdictions that serve populations of 50,000 or less.
See 68 FR 24891 (May 9, 2003) (codified at appendix C to 49 CFR part
209).
The $20 million limit is based on the Surface Transportation
Board's revenue threshold for a Class III railroad carrier. Railroad
revenue is adjusted for inflation by applying a revenue deflator
formula in accordance with 49 CFR 1201.1-1. FRA is using this
definition for the proposed rulemaking. For other entities, the same
dollar limit in revenues governs whether a railroad, contractor, or
other respondent is a small entity.
This proposed rulemaking would be applicable to ISP railroads, who
must comply with the RRP rule. The only ISP railroads that may be
considered a small entity would be those that meet the above
definition. FRA estimates that the maximum number of ISP railroads
would be 55, although the average number of ISP railroads over the next
ten years is estimated to be 33.\36\ It is unclear at this point how
many of these ISP railroads may meet the definition of ``small
entity''; however, as an upper bound, even if all of the ISP railroads
that are anticipated to be identified over the ten-year horizon of this
analysis are small entities, they would only comprise 7 percent of the
small entities. This holds true for any given year (ranging from a
minimum of 1.3 percent in Year 1 to a maximum of 7 percent in Year 10
and beyond) and the ten-year average (4.2 percent).
---------------------------------------------------------------------------
\36\ There are expected to be 10 ISP railroads in Year 1,
followed by 5 additional ISP railroads each year after, which will
accumulate to, and plateau at, 55 in Year 10 and thereafter.
Averaged across the ten-year time horizon, the result is 32.5 per
year, rounded up to 33.
---------------------------------------------------------------------------
4. A Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Proposed Rule, Including an Estimate of
the Class of Small Entities That Would Be Subject to the Requirements
and the Type of Professional Skill Necessary for Preparation of the
Report or Record
Since this rulemaking is not proposing to make any revisions to the
existing regulation, small railroads are not required to take any
action for reporting, recordkeeping, or other compliance matters.
Therefore, this proposed rulemaking would not have any economic impact
on small entities.
5. Identification, to the Extent Practicable, of All Relevant Federal
Rules That May Duplicate, Overlap, or Conflict With the Proposed Rule
FRA is not aware of any relevant Federal rule that duplicates,
overlaps with, or conflicts with the proposed regulations in this NPRM.
FRA invites all interested parties to submit comments, data, and
information demonstrating the potential economic impact on small
entities that would result from the proposed rulemaking or any of the
alternatives. FRA particularly encourages small entities that could
potentially be impacted by the proposed rulemaking and any alternatives
to participate in the public comment process. FRA will consider all
comments received during the public comment period for this NPRM when
making a final determination of the NPRM's economic impact on small
entities.
6. A Description of Significant Alternatives to the Proposed Rule
This NPRM does not propose to make any rule changes but opens the
opportunity to receive data and comment about a specific section of the
previously published RRP final rule, Sec. 271.3(c). There are two
significant alternatives to the rule as proposed. The proposed
rulemaking states that FRA may decide to amend Sec. 271.3(c) in
response to the data and comments received during the public comment
period.
One significant alternative would be the removal of Sec. 271.3(c),
which would eliminate the requirement that railroads consider certain
contractors, specifically their operationally significant contractors,
as directly affected employees in complying with the consultation and
employee involvement requirements of the RRP rule. This alternative is
discussed in this NRPM and would decrease the administrative burden.
Small railroads would receive cost savings, however marginal, from this
change.
A second alternative would move in the opposite direction,
expanding the applicable pool of contractors subject to Sec. 271.3(c)
to include safety significant contractors a railroad identifies in its
RRP plan pursuant to Sec. 271.101(d). While this could impact
additional small entities, that impact is expected to be marginal.
FRA anticipates that neither of the significant alternatives to
this proposed
[[Page 54947]]
regulation that have been outlined above would disproportionately place
any small railroads that are small entities at a significant
competitive disadvantage.
C. Paperwork Reduction Act
There are no new collection of information requirements contained
in this proposed rulemaking and, in accordance with the Paperwork
Reduction Act of 1995, 44 U.S.C. 3501 et seq., an information
collection submission to OMB is not required. The recordkeeping and
reporting requirements already contained in the RRP final rule (see 85
FR 9262) were approved by OMB on June 5, 2020. The information
collection requirements thereby became effective when they were
approved by OMB. The OMB approval number is OMB No. 2130-0610, and OMB
approval expires on June 30, 2023.
D. Environmental Impact
Consistent with the National Environmental Policy Act \37\ (NEPA),
the Council on Environmental Quality's NEPA implementing
regulations,\38\ and FRA's NEPA implementing regulations,\39\ FRA has
evaluated this proposed rulemaking and determined that it is
categorically excluded from environmental review and therefore does not
require the preparation of an environmental assessment (EA) or
environmental impact statement (EIS). Categorical exclusions (CEs) are
actions identified in an agency's NEPA implementing regulations that do
not normally have a significant impact on the environment and therefore
do not require either an EA or EIS.\40\ Specifically, FRA has
determined that this proposed rulemaking is categorically excluded from
detailed environmental review pursuant to 23 CFR 771.116(c)(15),
``[p]romulgation of rules, the issuance of policy statements, the
waiver or modification of existing regulatory requirements, or
discretionary approvals that do not result in significantly increased
emissions of air or water pollutants or noise.''
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\37\ 42 U.S.C. 4321 et seq.
\38\ 40 CFR parts 1500 through 1508.
\39\ 23 CFR part 771.
\40\ See 40 CFR 1508.4.
---------------------------------------------------------------------------
The purpose of this rulemaking is to solicit information on whether
FRA should retain a provision in the RRP final rule clarifying that
contractors who perform significant portions of a railroad's operations
are considered the railroad's directly affected employees for purposes
of the rule. This proposed rulemaking would not directly or indirectly
impact any environmental resources and would not result in
significantly increased emissions of air or water pollutants or noise.
In analyzing the applicability of a CE, FRA must also consider whether
unusual circumstances are present that would warrant a more detailed
environmental review.\41\ FRA has concluded that no such unusual
circumstances exist with respect to this proposed rulemaking and the
proposal meets the requirements for categorical exclusion under 23 CFR
771.116(c)(15).
---------------------------------------------------------------------------
\41\ 23 CFR 771.116(b).
---------------------------------------------------------------------------
Pursuant to section 106 of the National Historic Preservation Act
and its implementing regulations, FRA has determined this undertaking
has no potential to affect historic properties.\42\ FRA has also
determined that this proposed rulemaking does not approve a project
resulting in a use of a resource protected by Section 4(f).\43\
---------------------------------------------------------------------------
\42\ See 54 U.S.C. 306108.
\43\ See Department of Transportation Act of 1966, as amended
(Pub. L. 89-670, 80 Stat. 931); 49 U.S.C. 303.
---------------------------------------------------------------------------
E. Executive Order 12898 (Environmental Justice)
Executive Order 12898, Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations, and DOT
Order 5610.2C \44\ require DOT agencies to achieve environmental
justice as part of their mission by identifying and addressing, as
appropriate, disproportionately high and adverse human health or
environmental effects, including interrelated social and economic
effects, of their programs, policies, and activities on minority
populations and low-income populations. The DOT Order instructs DOT
agencies to address compliance with Executive Order 12898 and
requirements within the DOT Order in rulemaking activities, as
appropriate. FRA has evaluated this proposed rulemaking under Executive
Order 12898 and the DOT Order and has determined it would not cause
disproportionately high and adverse human health and environmental
effects on minority populations or low-income populations.
---------------------------------------------------------------------------
\44\ 91 FR 27534 (May 10, 2012).
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F. Federalism Implications
Executive Order 13132, ``Federalism,'' \45\ requires FRA to develop
an accountable process to ensure ``meaningful and timely input by State
and local officials in the development of regulatory policies that have
federalism implications.'' ``Policies that have federalism
implications'' are defined in the Executive Order to include
regulations that have ``substantial direct effects on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government.'' Under Executive Order 13132, an Agency may not issue a
regulation with federalism implications that imposes substantial direct
compliance costs and that is not required by statute, unless the
Federal government provides the funds necessary to pay the direct
compliance costs incurred by State and local governments or the agency
consults with State and local government officials early in the process
of developing the regulation. Where a regulation has federalism
implications and preempts State law, the Agency seeks to consult with
State and local officials in the process of developing the regulation.
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\45\ 64 FR 43255 (Aug. 10, 1999).
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FRA has analyzed the proposed rulemaking under the principles and
criteria contained in Executive Order 13132. This proposed rulemaking
would not have substantial direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. In addition, FRA has determined that the proposed
rulemaking would not impose substantial direct compliance costs on
State and local governments. Therefore, the consultation and funding
requirements of Executive Order 13132 would not apply. However, this
proposed rulemaking could have preemptive effect by operation of law
under certain provisions of the Federal railroad safety statutes,
specifically the former Federal Railroad Safety Act of 1970, repealed
and recodified at 49 U.S.C. 20106. Section 20106 provides that States
may not adopt or continue in effect any law, regulation, or order
related to railroad safety or security that covers the subject matter
of a regulation prescribed or order issued by the Secretary of
Transportation (with respect to railroad safety matters) or the
Secretary of Homeland Security (with respect to railroad security
matters), except when the State law, regulation, or order qualifies
under the ``essentially local safety or security hazard'' exception to
section 20106.
In sum, FRA has analyzed this proposed rulemaking under the
principles and criteria in Executive Order 13132. As explained above,
FRA has determined this proposed
[[Page 54948]]
rulemaking has no federalism implications, other than the possible
preemption of State laws under Federal railroad safety statutes,
specifically 49 U.S.C. 20106. Therefore, preparation of a federalism
summary impact statement for this proposed rulemaking is not required.
G. Unfunded Mandates Reform Act of 1995
Pursuant to section 201 of the Unfunded Mandates Reform Act of
1995,\46\ 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 \47\ 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 one 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. This proposed rulemaking would not result in
such an expenditure, and thus preparation of such a statement is not
required.
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\46\ Public Law 104-4, 2 U.S.C. 1531.
\47\ 2 U.S.C. 1532.
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H. Energy Impact
Executive Order 13211 requires Federal agencies to prepare a
Statement of Energy Effects for any ``significant energy action.'' \48\
FRA has evaluated this proposed rulemaking in accordance with Executive
Order 13211 and determined that this regulatory action is not a
``significant energy action'' within the meaning of the Executive
Order.
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\48\ 66 FR 28355 (May 22, 2001).
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I. Tribal Consultation
FRA has evaluated this proposed rulemaking under the principles and
criteria in Executive Order 13175, Consultation and Coordination with
Indian Tribal Governments, dated November 6, 2000. This proposed
rulemaking would not have a substantial direct effect on one or more
Indian tribes, would not impose substantial direct compliance costs on
Indian tribal governments, and would not preempt tribal laws.
Therefore, the funding and consultation requirements of Executive Order
13175 do not apply, and a tribal summary impact statement is not
required.
J. Privacy Act Statement
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the
public to better inform its rulemaking process. DOT posts these
comments, without edit, to www.regulations.gov, as described in the
system of records notice, DOT/ALL-14 FDMS, accessible through
www.transportation.gov/privacy. To facilitate comment tracking and
response, FRA encourages commenters to provide their names, or the name
of their organization; although submission of names is optional.
Whether or not commenters identify themselves, FRA will fully consider
all timely comments. If you wish to provide comments containing
proprietary or confidential information, please contact FRA for
alternate submission instructions.
Issued in Washington, DC.
Amitabha Bose,
Administrator.
[FR Doc. 2022-19432 Filed 9-7-22; 8:45 am]
BILLING CODE 4910-06-P