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Federal Register / Vol. 67, No. 51 / Friday, March 15, 2002 / Rules and Regulations
Transportation, 400 7th Street, SW.,
Washington, DC 20590.
SUPPLEMENTARY INFORMATION:
the Department of Transportation (44 FR
11034). There are no costs associated
with this rule.
Electronic Access
B. Executive Order 13132
An electronic copy of this document
may be downloaded by using a
computer, modem and suitable
communications software from the
Government Printing Office’s Electronic
Bulletin Board Service at (202) 512–
1661. Internet users may reach the
Office of the Federal Register’s home
page at http://www.nara.gov/fedreg and
the Government Printing Office’s
database at: http://www.access.gpo.gov/
nara.
This action has been analyzed in
accordance with the principles and
criteria contained in Executive Order
13132, dated August 4, 1999. This final
rule does not have a substantial direct
effect on, or sufficient federalism
implications for, the States, nor would
it limit the policymaking discretion of
the States. Therefore, the consultation
and funding requirements do not apply.
Background
Section 1012 of the Uniting and
Strengthening America by Providing
Appropriate Tools Required to Intercept
and Obstruct Terrorism (USA PATRIOT
ACT) Act of 2001, (Public Law 107–56,
115 Stat. 272 at 396, (October 26, 2001)),
amends chapter 51 of title 49 United
States Code, by adding a new section
5103a, relating to limitations on
issuance of licenses to individuals who
operate motor vehicles transporting
hazardous materials in commerce. The
new provision is best administered by
the FMCSA, which is responsible for the
commercial driver’s license (CDL)
program. This delegation broadens the
FMCSA Administrator’s delegated
authority relating to hazardous materials
transportation programs.
This final rule updates the delegations
of authority from the Secretary to the
FMCSA Administrator to reflect the
organizational posture of the
Department. As such, the final rule is
ministerial in nature and relates only to
Departmental management,
organization, procedure, and practice.
Since this amendment relates to
departmental organization, procedure
and practice, notice and comment are
unnecessary under 5 U.S.C. 553(b).
Furthermore, this rule does not
impose substantive requirements on the
public. Also, this final rule expedites
the Department of Transportation’s
ability to implement section 1012 of the
USA PATRIOT ACT. Consequently, the
Department finds that there is good
cause under 5 U.S.C. 553(d)(3) to make
this rule effective on the date of
publication in the Federal Register.
Regulatory Analyses and Notices
A. Executive Order 12866 and DOT
Regulatory Policies and Procedures
The final rule is not considered a
significant regulatory action under
Executive Order 12866 and the
Regulatory Policies and Procedures of
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C. Executive Order 13084
This final rule has been analyzed in
accordance with the principles and
criteria contained in Executive Order
13084 (‘‘Consultation and Coordination
with Indian Tribal Governments’’).
Because this final rule does not
significantly or uniquely affect the
communities of the Indian tribal
governments and does not impose
substantial direct compliance costs, the
funding and consultation requirements
of Executive Order 13084 do not apply.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) requires an agency to
review regulations to assess their impact
on small entities unless the agency
determines that a rule is not expected to
have a significant impact on a
substantial number of small entities. I
hereby certify this final rule, which
amends the CFR to reflect a delegation
of authority from the Secretary to the
FMCSA Administrator, will not have a
significant economic impact on a
substantial number of small businesses.
E. Paperwork Reduction Act
This rule contains no information
collection requirements under the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501–3520).
F. Unfunded Mandates Reform Act
The Department has determined that
the requirements of Title II of the
Unfunded Mandates Reform Act of 1995
do not apply to this rulemaking.
List of Subjects in 49 CFR Part 1
Authority delegations (Government
agencies), Organization and functions
(Government agencies).
In consideration of the foregoing, Part
1 of Title 49, Code of Federal
Regulations, is amended as follows:
PART 1—[AMENDED]
1. The authority citation for part 1 is
revised to read as follows:
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Authority: 49 U.S.C. 322; 46 U.S.C.
2104(a); 28 U.S.C. 2672; 31 U.S.C. 3711(a)(2);
Pub. L. 101–552, 104 Stat. 2736; Pub. L. 106–
159, 113 Stat. 1748; Pub. L. 107–56, 115 Stat.
396.
2. In § 1.73, revise paragraph (d)(2) to
read as follows:
§ 1.73 Delegation to the Administrator of
the Federal Motor Carrier Safety
Administration.
*
*
*
*
*
(d) * * *
(2) Carry out the functions vested in
the Secretary by 49 U.S.C. 5103a
relating to limitations on issuance of
licenses to operate motor vehicles
transporting hazardous materials in
commerce; 49 U.S.C. 5112 relating to
highway routing of hazardous materials;
49 U.S.C. 5109 relating to motor carrier
safety permits, except subsection (f); 49
U.S.C. 5113 relating to unsatisfactory
safety ratings of motor carriers; 49
U.S.C. 5125(a) and (c)–(f), relating to
preemption determinations or waivers
of preemption of hazardous materials
highway routing requirements; 49
U.S.C. 5105(e) relating to inspections of
motor vehicles carrying hazardous
material; and 49 U.S.C. 5119 relating to
uniform forms and procedures.
*
*
*
*
*
Issued in Washington, DC on March 7,
2002.
Norman Y. Mineta,
Secretary.
[FR Doc. 02–6123 Filed 3–14–02; 8:45 am]
BILLING CODE 4910–62–P
DEPARTMENT OF TRANSPORTATION
Federal Railroad Administration
49 CFR Parts 244 and 1106
[FRA Docket No. 1999–4985, Notice No. 4]
Surface Transportation Board
[STB Ex Parte No. 574]
RIN 2130–AB24
Regulations on Safety Integration
Plans Governing Railroad
Consolidations, Mergers, and
Acquisitions of Control; and
Procedures for Surface Transportation
Board Consideration of Safety
Integration Plans in Cases Involving
Railroad Consolidations, Mergers, and
Acquisitions of Control
AGENCIES: Federal Railroad
Administration (FRA), Surface
Transportation Board (STB), DOT.
ACTION: Final rules.
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Federal Register / Vol. 67, No. 51 / Friday, March 15, 2002 / Rules and Regulations
SUMMARY: The Federal Railroad
Administration (‘‘FRA’’) and the Surface
Transportation Board (‘‘STB’’ or
‘‘Board’’), working in conjunction with
each other, hereby issue joint final rules
establishing procedures for the
development and implementation of
safety integration plans (‘‘SIPs’’ or
‘‘plans’’) by a Class I railroad proposing
to engage in certain specified merger,
consolidation, or acquisition of control
transactions with another Class I
railroad, or a Class II railroad with
which it proposes to amalgamate
operations. The scope of the
transactions covered under the two
rules is the same.
Under FRA’s final rule, Class I
railroads seeking to consummate a
covered transaction must file a proposed
SIP with FRA after they seek authority
for the transaction from the Board. (A
SIP is a written document explaining
how each step in implementing a
contemplated transaction would be
performed safely.) FRA then reviews the
proposed SIP and advises the Board as
to whether it provides a reasonable
assurance of safety for the transaction.
The rule further requires that, once the
STB has approved a transaction, a
railroad must operate over property
subject to the transaction in compliance
with a SIP approved by FRA, and
authorizes FRA to exercise its full
enforcement remedies should a railroad
fail to implement the terms of an
approved plan. Finally, the rule
provides that FRA will consult with the
STB at all appropriate stages of SIP
implementation, assuming FRA
approves the SIP and the STB approves
the transaction.
Under the STB’s final rule, rail
carriers seeking to carry out a regulated
transaction are required to file a
proposed SIP with FRA and the Board
60 days after they seek authority for the
transaction. FRA will review the
proposed SIP and file written comments
with the Board’s Section of
Environmental Analysis (‘‘SEA’’), which
is responsible for preparing the Board’s
environmental documents. SEA will
then include the proposed SIP, FRA’s
written comments on the proposed SIP,
and any additions or revisions based on
continued discussions with FRA in the
Board’s draft environmental
documentation. After reviewing the
proposed SIP, SEA’s analysis, and
comments provided by interested
persons during the STB’s environmental
review process, the Board will then
independently evaluate the transaction
and decide whether to approve it.
Should the Board approve the
transaction and adopt the SIP, it will
require compliance with the SIP as a
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condition to its approval. FRA then will
oversee the implementation of the SIP,
consult with the Board at all appropriate
stages of implementation, and advise
the Board when the proposed
integration has been safely completed.
The final rules are designed to enable
the Board and FRA to ensure adequate
and coordinated consideration of safety
integration issues in covered rail
transactions while minimizing the
burdens on the applicants. FRA and the
STB believe that the joint rules will
serve the public interest in promoting
safety in the railroad industry,
consistency in decisions, and efficiency
in compliance, enabling the agencies to
employ their areas of expertise to fulfill
their respective statutory objectives in a
complementary manner.
DATES: Effective Date: The final rules
become effective on April 15, 2002.
ADDRESSES: Petitions for reconsideration
of FRA’s rule should be submitted to
Docket Clerk, Office of Chief Counsel,
FRA, 1120 Vermont Avenue, NW., Mail
Stop 10, Washington, DC 20590.
Petitions for reconsideration of the
STB’s rule should be submitted to Office
of the Secretary, STB, 1925 K Street,
NW., Washington, DC 20423–0001.
FOR FURTHER INFORMATION CONTACT: Jon
Kaplan, Trial Attorney, Office of Chief
Counsel, FRA, 1120 Vermont Avenue,
NW, Mail Stop 10, Washington, DC
20590 (telephone: (202) 493–6053 and
E-mail: [email protected]);
and Evelyn G. Kitay, Office of the
General Counsel, STB, 1925 K Street,
NW., Washington, DC 20423–0001
(telephone: (202) 565–1563 and e-mail:
[email protected]). (TDD for the
hearing impaired: (202) 565–1695.)
SUPPLEMENTARY INFORMATION:
Joint FRA/STB Introduction
On December 31, 1998, FRA and the
STB issued a joint notice of proposed
rulemaking (‘‘NPRM’’) establishing
procedures for developing and
implementing SIPs by railroads
proposing to engage in certain specified
merger, consolidation, or acquisition of
control transactions with another
railroad. 63 FR 72225, Dec. 31, 1998.
FRA’s proposed rule would have
required railroads seeking to
consummate any mergers, acquisitions,
or consolidations of property involving
(i) Class I railroads, (ii) Class II railroads
when the railroads would directly
interchange freight with each other, (iii)
transactions in which the
consummation of operations would
produce revenue in excess of the Class
I threshold, (iv) a passenger railroad
(intercity or commuter) with another
passenger railroad, a Class I railroad, or
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a Class II railroad; or (v) start-up
operations on a rail line or lines in
which the commencement of operations
would either involve passenger service
or produce revenue in excess of the
Class II threshold, to file a proposed SIP
for the agency’s review and approval.
(Class I railroads are rail carriers
generating operating revenue, measured
in inflation-adjusted 1991 dollars, in
excess of $250 million per year for a
period of three successive years. Class II
railroads are rail carriers generating
operating revenue, measured in
inflation-adjusted 1991 dollars, between
$20 million and $250 million.)
Concurrently, the STB’s proposed rule
would have required railroads seeking
to engage in all transactions addressed
in FRA’s NPRM other than start-up
operations to file a SIP with the Board
for its review and approval.
The proposed rules set out specific
procedures governing the development,
approval, and implementation of SIPs,
and explained that FRA and the Board
are jointly responsible for promoting a
safe rail transportation system. Under
FRA’s proposed rules, railroads seeking
to consummate a covered transaction
would be required to file a proposed SIP
with FRA contemporaneously with the
filing of the SIP with the STB. FRA
would review the proposed SIP and
advise the Board as to whether it
provides a reasonable assurance of
safety for the transaction. The proposed
rule required a railroad to have a SIP
approved by FRA before it could
execute operations over property subject
to the transaction. Where the Board has
been involved in authorizing the
transaction, FRA would consult with
the Board at all appropriate stages of
implementation.
Likewise, under the STB’s proposed
rules, rail carriers seeking to carry out
a transaction within the Board’s
jurisdiction that would require a SIP
would file their SIP with the Board and
FRA. FRA would review the SIP and file
written comments with the Board’s
SEA. After reviewing the SIP, SEA’s
analysis, and comments provided by
interested persons during the Board’s
environmental review process, the
Board would then independently
evaluate the transaction and decide
whether to approve it. Should the Board
approve the transaction, the railroads
would coordinate with FRA in
implementing the SIP, including any
amendments made to the plan, and FRA
would monitor the implementation
process and apprise the Board about the
railroad’s progress in carrying out the
plan until FRA advised the Board that
the proposed integration had been safely
completed. Both FRA and the Board
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Federal Register / Vol. 67, No. 51 / Friday, March 15, 2002 / Rules and Regulations
would be authorized to exercise their
full independent enforcement remedies
should either FRA or the Board reject
the proposed SIP or a railroad fail to
implement the terms of an approved
SIP.
FRA and the STB received written
comments on the proposal from 11
entities and conducted a joint public
hearing at the request of one of the
commenters in Washington, D.C., on
May 4, 1999. Based on the comments
received, the testimony at the public
hearing, and further analysis of the rules
proposed, FRA and the Board now
publish these joint final rules. As will
be discussed below, both agencies
underscore the importance of SIPs when
Class I railroads seek to engage in
mergers, consolidations, or acquisitions.
These are railroads transporting large
volumes of freight, frequently including
hazardous materials. Given the size and
complexity of their operations, careful
advance planning is critical to ensure
that safety is maintained as the
transactions are implemented.
The agencies, however, agree with
certain of the comments that the final
rules should be limited to
consolidations, mergers, or acquisitions
of control involving either two or more
Class I railroads or a Class I railroad and
a Class II railroad with which it
proposes to ‘‘amalgamate operations’’ as
defined by FRA at 49 CFR 244.9. (See
also the STB’s final rule at 49 CFR
1106.2.) Only the complexity and
difficulty of these very large
transactions are now believed to present
sufficient dangers to merit a SIP under
these rules. This substantially comports
with the recommendations of some
commenters.
In its final rule, FRA has modified the
subject matter areas to be addressed in
a SIP to cover those disciplines that a
regulated transaction affects, and has
decided not to require an applicant to
file a SIP when a transaction does not
involve an amalgamation of operations.
In response to the comments, FRA and
the Board have ‘‘fine tuned’’ their
respective procedures governing the
filing, review, and approval of a SIP,
and their oversight of an approved plan.
The final rules also clarify the
respective roles of the two agencies. It
is made clearer that (i) the STB is
regulating the economic transaction
and, in the course of doing so, fulfilling
its responsibility to assess
environmental impacts, as required by
the National Environmental Policy Act
(‘‘NEPA’’), 42 U.S.C. 4321 et seq., and
promote a safe transportation system,
and (ii) FRA is regulating the safety of
the implementation of any transaction
the STB may approve, just as FRA
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regulates all other aspects of railroad
safety. FRA is not approving or
disapproving the transaction in any
respect, and both agencies state
explicitly that FRA has no ‘‘veto
power,’’ either explicit or implicit as
some commenters alleged, over
transactions regulated by the STB. If the
STB approves a transaction, a railroad
must conduct operations over properties
that are part of the transaction in
compliance with a SIP approved by
FRA, just as it must conduct those
operations in compliance with the
railroad safety statutes and
implementing regulations administered
by FRA.
Discussion of Comments and
Conclusions
FRA and the STB received written
comments from various railroads and
their representative organizations, labor
organizations, and public service
organizations. The railroad interests
were represented by the Association of
American Railroads (‘‘AAR’’), American
Short Line and Regional Railroad
Association (‘‘ASLRRA’’), National
Railroad Passenger Corporation
(‘‘Amtrak’’), Guilford Transportation
Industries (‘‘GTI’’), and the Wheeling &
Lake Erie Railway Company (‘‘W&L’’).
The American Train Dispatchers
Department of the International
Brotherhood of Locomotive Engineers
(‘‘ATDD’’), Transportation Trades
Department, American Federation of
Labor-Congress of Industrial
Organizations (‘‘TTD’’), Brotherhood of
Railway Carmen Division of the
Transportation Communications
International Union (‘‘BRC’’), and
Brotherhood of Maintenance of Way
Employes (‘‘BMWE’’) represented the
interests of rail labor. The public service
organizations were represented by the
American Public Transit Association,
now the American Public
Transportation Association (‘‘APTA’’),
and the Oklahoma Department of
Transportation (‘‘OK DOT’’). At the
public hearing held on May 4, 1999, two
organizations participated: the TTD and
the AAR. The commenters raised
questions about the proposal itself,
suggested alternative language to some
of the proposed rule text, and requested
clarification about the meaning and
application of certain proposed rules.
The discussion that follows highlights
the principal issues advanced by the
commenters and explains how the final
rules reflect the comments received.
Because many of the comments focus on
the rules proposed by one agency and
not the other, FRA and the Board
present separate sections addressing the
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comments and each agency’s
conclusions.
A. FRA’s Response to Comments
Concerning the Need To Require SIPs
for Mergers, Consolidations, and
Acquisitions of Control
Several comments addressed the
types of transactions that warrant
preparation of a SIP under these rules.
The ATDD and TTD, for instance,
endorsed the breadth of FRA’s proposed
rule, asserting that that type of rule is
necessary to ensure the safety of railroad
employees and the public. The ATDD
commented that operational changes,
i.e., changes in traffic volume and traffic
patterns, timetable schedules, and labor
reductions, needed to be evaluated for
safety concerns. The TTD added that the
rulemaking action should be transferred
to FRA’s Railroad Safety Advisory
Committee (‘‘RSAC’’) to secure fuller
labor input in the development of FRA’s
final rule. Amtrak also supported the
proposition of the SIP rules, agreeing
that ‘‘mega-mergers’’ present unique
safety issues that should be identified
and addressed at the application stage to
enable FRA and the Board to handle
proposed transactions as safely as
possible.
GTI disagreed with the premise of the
SIP rules. Specifically, GTI claimed that
FRA need not issue any regulations
governing mergers, consolidations, or
acquisitions of control because the
agency already has the regulations
necessary to ensure safe operations
subject to a proposed regulated
transaction. GTI further postulated that
FRA is without expertise in regulating
these transactions and that selfregulation was most appropriate in this
instance because merging railroads
recognize that unsafe operations lead to
increased costs and decreased returns
on an investment. In other words, GTI
recommended that the agencies
terminate this rulemaking action and
apply the existing regulations that
govern regulated transactions.
The AAR argued that SIPs should be
limited to consolidation, merger, and
acquisition of control proceedings
involving at least two Class I railroads
and not to other less complex
proceedings. The AAR also argued that
only the Board should have approval
authority over SIPs and that FRA’s role
should be limited to advising the Board.
According to the AAR, any regulations
purporting to vest FRA with authority to
approve a SIP would be contrary to law
and in derogation of the Board’s
‘‘exclusive’’ authority to approve merger
transactions under 49 U.S.C. 11321.
FRA strongly endorses the concept of
the SIP rules and their importance in
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Federal Register / Vol. 67, No. 51 / Friday, March 15, 2002 / Rules and Regulations
regulating the complex railroad
transactions involving mergers,
consolidations, and acquisitions of large
railroads where operations are
amalgamated. As the agencies explained
in the NPRM, acquisitions,
consolidations, and mergers must be
carefully planned and implemented to
maintain safety. See 63 FR 72226–27.
Transactions involving Class I railroads
significantly change the carrier
landscape and raise potential safety
issues relating to integrating operations,
facilities, personnel, safety practices,
and corporate cultures. The NPRM
noted FRA’s concerns regarding safety
problems that resulted from inadequate
safety planning before implementation
of the merger of the Union Pacific
Railroad Company (‘‘UP’’) and the
Southern Pacific Transportation
Company (‘‘SP’’) (collectively referred to
as ‘‘UP/SP’’) and the merger of the
Burlington Northern Railroad Company
(‘‘BN’’) and the Atchison, Topeka and
Santa Fe Railway Company (‘‘ATSF’’)
(collectively referred to as ‘‘BNSF’’). See
63 FR 72227. The chief executive
officers of the Norfolk Southern Railway
Company and CSX Transportation,
Incorporated, which acquired and
divided Consolidated Rail Corporation
(‘‘Conrail’’), amplified this point when
they testified before the STB about the
operational and safety difficulties they
encountered in implementing their
respective transactions, even with the
planning and experiences of earlier
mergers to guide them and having
prepared SIPs. See Public Views on
Major Rail Consolidations, STB Ex Parte
No. 582, slip op. at 4–5 (STB served
Mar. 17, 2000).
FRA believes that the final SIP rules
accomplish the objective of ensuring
safe railroad operations during and after
implementation of an approved
transaction. First, the regulations set out
subject matter areas that are critical to
railroad safety that an applicant must
address in a proposed SIP. These
requirements address safety issues
unique to the amalgamation of large,
complex railroad operations that are not
covered in any existing Federal
regulations, necessitating their issuance
here. Second, FRA has the necessary
expertise in railroad safety to review,
analyze, approve, and oversee the
implementation of a proposed SIP. FRA
has officials and inspectors with
knowledge, training, and experience in
five railroad disciplines—operating
practices, motive power and equipment,
signal and train control, track safety,
and hazardous materials—that cover the
ambit of railroad operations. Therefore,
the final rules provide for FRA a
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mechanism to evaluate and approve
SIPs and monitor their implementation
if the transactions to which they relate
are approved by the Board. As discussed
in greater detail below, FRA is
regulating the safety aspects of how a
railroad implements a transaction
permitted by the Board and not whether
the railroad is permitted to consummate
the transaction or on what economic
terms. FRA concludes that the SIP rules
are a step forward in providing railroad
safety and therefore adopts these final
rules. Although FRA entertained TTD’s
suggestion to add this proceeding to
those addressed by FRA’s RSAC, the
agency decided that a joint rulemaking
with the Board, using the
complementary authority of both
agencies, would be the best way to
proceed.
B. FRA’s Views on Jurisdiction of FRA
and the STB To Issue the Final Rules
The AAR and GTI commented that
the STB and not FRA is authorized to
issue any regulations governing
acquisitions, consolidations, and
mergers. Relying on statutory authority,
49 U.S.C. 11321, and decisional law,
Schwabacher v. United States, 334 U.S.
182, 197 (1948); Norfolk & Western Rwy.
v. ATDA, 499 U.S. 117, 127–34 (1991);
and City of Auburn v. United States, 154
F.3d 1025 (9th Cir. 1998), cert. denied,
527 U.S. 1022 (1999), the AAR claims
that the Board is vested with exclusive
authority to issue regulations that are
within the STB’s jurisdictional purview.
GTI echoed the AAR’s position,
maintaining that an application to
consummate an acquisition,
consolidation, or merger is an economic
transaction, which is fully within the
Board’s authority.
FRA agrees that the Board has sole
authority to regulate the economic
transactions, but disagrees with these
commenters that issuance of FRA’s final
rule trespasses upon that jurisdiction.
FRA believes that it and the STB have
so interpreted their respective statutes
and jurisdiction as to reconcile them
seamlessly, thereby serving the public
interest by assuring that all parts of the
affected statutes are given effect and the
purposes of Congress are fully carried
out. Tyrrell v. Norfolk Southern Rwy.
Co., 248 F.3d 517, 523 (6th Cir. 2001)
(FRA’s and the STB’s ‘‘complementary
exercise of their statutory authority
accurately reflects Congress’s intent for
the (Interstate Commerce Commission
Termination Act) and the (Federal
Railroad Safety Act) to be construed in
pari materia’’). The Supreme Court
provides that ‘‘it is a cardinal principle
of construction that * * * when there
are two acts upon the same subject, the
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11585
rule is to give effect to both.’’ United
States v. Borden Co., 308 U.S. 188, 198
(1939). Congressional intent behind one
Federal statute should not be thwarted
by the application of another Federal
statute if it is possible to give effect to
both laws, id., and courts should
‘‘construe the relevant statutes in a
manner that most fully effectuates the
policies to which Congress was
committed.’’ Commonwealth of
Pennsylvania v. Lynn, 501 F.2d 848, 857
(D.C. Cir. 1974); see also Food and Drug
Administration v. Brown & Williamson
Tobacco Corp., 529 U.S. 120, 134 (2000)
(a reviewing court should ‘‘examin[e] a
particular statutory provision * * * (in)
context and with a view to [its] place in
the overall statutory scheme’’);
Blanchette v. Connecticut General Ins.
Corp., 419 U.S. 102, 133–34 (1974)
(statutory repeals by implication are
disfavored). The agencies have done so
in a manner entirely consistent with the
cases cited by the commenters. Tyrrell,
248 F.3d at 523 (‘‘while recognizing
their joint responsibility for promoting
rail safety in their 1998 Safety
Integration Plan rulemaking, FRA
exercised primary authority over rail
safety matters under 49 U.S.C. 20101 et
seq., while the STB handled economic
regulation and environmental impact
assessment(,)’’ citing the NPRM at n.2).
As FRA and the Board explained in
the NPRM:
FRA and STB are jointly responsible for
promoting a safe rail transportation system.
Under Federal law, primary jurisdiction,
expertise and oversight responsibility in rail
safety matters are vested in the Secretary of
the Department of Transportation, and
delegated to the Federal Railroad
Administrator. 49 U.S.C. 20101 et seq.; 49
CFR 1.49. FRA has authority to issue
regulations to promote safety in every area of
railroad operations and reduce railroadrelated accidents and injuries. 49 U.S.C.
20101 and 20102. FRA has exercised its
jurisdiction to protect the safety of railroad
operations through the issuance and
enforcement of regulations, partnering with
railroad labor organizations and management
of particular railroads to identify and develop
solutions to safety problems, actively
participating in STB rail proceedings, and
monitoring railroad operations during the
implementation of STB-approved
transactions.
The Board is also responsible for
promoting a safe rail transportation system.
The rail transportation policy (RTP), 49
U.S.C. 10101, which was adopted in the
Staggers Rail Act of 1980, Pub. L. 96–448, 94
Stat. 1895, and amended in the ICC
Termination Act of 1995, Pub. L. 104–88, 109
Stat. 803 (1995), establishes the basic policy
directive against which all of the statutory
provisions the Board administers must be
evaluated. The RTP provides, in relevant
part, that, ‘‘(i)n regulating the railroad
industry, it is the policy of the United States
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Government * * * to promote a safe and
efficient rail transportation system’’ * * *
(by allowing rail carriers to) ‘‘operate
transportation facilities and equipment
without detriment to the public health and
safety * * * .’’ 49 U.S.C. 10101(8). The rail
transportation policy applies to all
transactions subject to the Board’s
jurisdiction.
Thus, both FRA and STB are vested with
authority to ensure safety in the railroad
industry. Each agency, however, recognizes
the other agency’s expertise in regulating the
industry. FRA has expertise in the safety of
all facets of railroad operations.
Concurrently, the Board has expertise in
economic regulation and assessment of
environmental impacts in the railroad
industry. Together, the agencies appreciate
that their unique experience and oversight of
railroads complement each other’s interest in
promoting a safe and viable industry.
63 FR 72225–26. FRA believes that each
agency’s interpretation of its statute is
reasonable, reflects a plausible
construction of the plain language of the
statutes, and gives effect to Congress’
expressed intent. Tyrrell, 248 F.3d at
523 (statutory construction that FRA has
primary authority over national rail
safety policy and STB is responsible for
encouraging ‘‘safe and suitable working
conditions’’ properly reflects Congress’s
purpose in enacting the Federal railway
laws).
FRA has ‘‘primary jurisdiction,
expertise and oversight responsibility in
rail safety matters’ under 49 U.S.C.
20101 et seq., as delegated by the
Secretary of Transportation to the
Federal Railroad Administrator at 49
CFR 1.49, and has the authority ‘‘to
issue regulations to promote safety in
every area of railroad operations and
reduce railroad-related accidents and
injuries’’ under 49 U.S.C. 20101 and
20102. 63 FR 72225. Specifically, 49
U.S.C. 20103 confers authority on FRA
to ‘‘prescribe regulations’’ ‘‘for every
area of railroad safety,’’ 49 U.S.C.
20103(a), and ‘‘in prescribing
regulations[,]’’ FRA ‘‘shall consider
existing relevant safety information and
standards.’’ 49 U.S.C. 20103(c).
Congress intended that FRA would
possess the authority to regulate ‘‘all
those means of rail transportation as are
commonly included within the term
* * * in addition to those areas
currently regulated.’’ H.R. No. 91–1194,
Federal Railroad Safety and Hazardous
Materials Transportation Control Act of
1970, Pub. L. 91–458, reprinted in 1970
USCCAN 4104, 4114 (1970). In other
words, Congress authorized FRA to
promulgate regulations to ensure
railroad safety after analyzing safety
data.
A key element in the argument of the
AAR and other commenters is that, by
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approving a SIP, FRA is encroaching
upon the STB’s jurisdiction, supposedly
because approving a SIP is equated with
approving a transaction and because the
NPRM states that the railroad resulting
from a covered transaction ‘‘shall have
an FRA approved Safety Integration
Plan before changing its operations to
implement a proposed transaction
* * *.’’ See proposed 49 CFR 244.21(a)
at 63 FR 72241. These commenters have
misinterpreted both FRA’s intentions
and the meaning of the text. FRA has
amended the text to eliminate the
possibility of interpreting it as giving
FRA authority to approve a transaction,
and to clarify FRA’s intentions. See the
discussion of § 244.21(a) below. This
change makes clear that FRA has no
intention of approving or disapproving
or vetoing a transaction covered by this
part. FRA agrees that approving or
disapproving a transaction covered by
this part is wholly within the
jurisdiction of the STB. FRA’s role in
the STB’s process is an advisory one,
providing expert advice to the STB on
safety issues presented by a transaction.
As the STB said in the NPRM, it relies
upon FRA’s safety expertise, and it is
clearly in the public interest that FRA
make its expertise available to the STB.
On the other hand, regulation of
‘‘every area of railroad safety’’ is FRA’s
jurisdiction. In approving or
disapproving a SIP under this part, and
enforcing one, FRA is regulating the
safety aspects of how a railroad
implements a transaction permitted by
the STB and not whether the railroad is
permitted to consummate the
transaction or on what economic terms.
This is an appropriate exercise of the
‘‘plenary safety authority with respect to
the safety of rail operations—before,
during, and after a transaction,’’ which
the AAR acknowledges that FRA enjoys.
AAR comments at 9. In that regard,
approval of a SIP is no different than
approval of an engineer certification
program under 49 CFR part 240. There
is no question that a railroad must have
an engineer certification program
approved by FRA and operate in
accordance with it at all times, whether
or not the railroad is involved in a
transaction within the STB’s
jurisdiction. The commenters’ view
would require a repeal by implication of
some portion of the Federal railroad
safety laws (‘‘safety laws’’), 49 U.S.C.
5101 et seq. and 20101 et seq., to except
from them railroad operations
conducted during implementation of
transactions approved by the STB. Such
repeals by implication are strongly
disfavored. See Tyrrell, 248 F.3d at 523.
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Here, there is obviously no need to infer
any such repeal.
In FRA’s view, it is necessary for
safety purposes for the agency to
approve or disapprove SIPs to provide
a baseline for enforcement. First, FRA
approval or disapproval denotes
whether a railroad has submitted a
proposed SIP meeting the requirements
of the rule. Upon disapproval of a
proposed SIP, FRA can take
enforcement action if the railroad does
not change its SIP to bring it into
compliance with the law. Upon
approval of a SIP, FRA can take
enforcement action if the railroad fails
to implement the SIP. Absent FRA
approval, it is hard to see how FRA
could take enforcement action in this
arena.
FRA believes that the suggestion that
FRA could veto a transaction by
disapproving a proposed SIP is a red
herring because only the STB can
approve and veto a transaction. In any
event, the standard set by the rule for
approval of a proposed SIP can easily be
met by any Class I or Class II railroad,
and FRA cannot arbitrarily or
capriciously reject a SIP that meets the
standard. If FRA disapproves a
proposed SIP because it fails to be
thorough, complete, or clear, FRA must
articulate to the railroad what is missing
or unclear. If FRA disapproves a
proposed SIP because it fails to describe
a logical and workable transition or
because it is insufficiently detailed, FRA
must articulate how the proposed SIP is
illogical or unworkable or lacking in
detail. In either of those cases, upon
receiving FRA’s reasons for disapproval,
a railroad can readily remedy its
submission. In practice, FRA will
continue to work informally with
railroads proposing a covered
transaction to assure that their proposed
SIPs comply. It should be easy for
applicants to secure FRA approval of
their proposed SIPs in time for the
Board’s SEA to include the proposed
SIP in the draft environmental
documentation for the STB proceeding.
FRA has no interest in blocking
transactions and has a powerful interest
in seeing that transactions are
implemented safely.
The text also makes clear that FRA is
not prescribing any particular way to
implement covered transactions.
Instead, FRA is requiring the railroads
involved to be thorough and logical, and
to maintain a reasonable assurance of
safety at every step of the proposed
transaction.
Correspondingly, FRA recognizes that
the STB is also vested with authority to
promote a safe rail transportation
system in determining whether a
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proposed transaction should be
permitted and, if so, on what economic
terms. As discussed in Tyrrell and in the
NPRM, the rail transportation policy
(‘‘RTP’’), 49 U.S.C. 10101, which was
adopted in the Staggers Rail Act of 1980,
Pub. L. 96–448, 94 Stat. 1895, and
amended in the Interstate Commerce
Commission Termination Act of 1995
(‘‘ICCTA’’), Pub. L. 104–88, 109 Stat.
803 (1995), provides the foundation for
which all of the statutory provisions the
Board administers must be analyzed.
See Tyrrell, 248 F.3d at 522–23. The
RTP provides, in relevant part, that,
‘‘(i)n regulating the railroad industry, it
is the policy of the United States
Government * * * to promote a safe
and efficient rail transportation system’’
* * * (by allowing rail carriers to)
‘‘operate transportation facilities and
equipment without detriment to the
public health and safety * * *.’’ 49
U.S.C. 10101(8). The STB applies the
RTP to all transactions within its
jurisdiction, authorizing it to consider
the impact a merger, consolidation, or
acquisition of control has on safety of
railroad operations. See Major Rail
Consolidation Procedures, STB Ex Parte
No. 582 (Sub-No. 1), slip op. at 5 (STB
served Mar. 31, 2000) (49 U.S.C. 10101,
in part, directs the Board to ensure that
safety concerns are addressed in
railroad merger cases).
FRA submits that the cases AAR cited
are misplaced. Read together,
Schwabacher, ATDA, and City of
Auburn stand for the proposition that
the STB and its predecessor, the
Interstate Commerce Commission, have
exclusive authority to examine,
condition, and approve mergers,
consolidations, or acquisitions of
control. The statute at issue, 49 U.S.C.
11321 (formerly, 49 U.S.C. 11341),
specifically exempts a railroad from
complying with all other laws to the
extent ‘‘necessary to (let that railroad)
carry out an approved transaction,’’
ATDA, 499 U.S. at 134, thereby
preempting any Federal or state law
remedies. City of Auburn, 154 F.3d at
1030. FRA’s SIP rule will not impede or
restrict the Board in approving or
rejecting a proposed transaction and,
since the STB contemplates requiring a
SIP when it approves covered
transactions, a railroad could not
logically assert that an exemption from
FRA’s rule would be ‘‘necessary to carry
out an approved transaction.’’ Instead,
the rule provides that FRA will
determine whether a SIP provides a
reasonable assurance of safety for the
subject transaction and provide expert
advice to the STB on safety issues
presented by a proposed transaction.
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The Board, in turn, will rule on the
application based in part on FRA’s
recommendations. This process
employs FRA’s plenary authority over
railroad safety and respects and
complements the Board’s role of
determining whether a transaction
should be approved. At bottom, FRA
believes that it and the Board each are
fully exercising their respective
statutory authorities by examining a
transaction for its safety aspects (FRA),
and the impact that safety has on an
application as a whole (STB).
In FRA’s view, the final SIP rule
fulfills this objective. The rule responds
to critical safety shortcomings and
errors in planning and implementation
of significant transactions that may have
occurred in the past where no SIP was
prepared. FRA documented its concerns
in the NPRM by examining the
difficulties of the BNSF and UP/SP
mergers. See 63 FR 72227–28. To
illustrate, after the UP/SP merger, five
employees were killed in accidents
during the Summer of 1997, and
employee injuries rose nine percent in
1998. FRA determined that the BNSF
and UP/SP mergers faced significant
challenges in harmonizing information
systems; training dispatchers; modifying
operational practices and procedures;
implementing personnel policies
directed toward safety; determining
appropriate staffing requirements; and
providing adequate rail facilities,
infrastructure and rolling stock and
equipment.
Likewise, FRA identified serious
safety shortcomings in CSX
Transportation, Incorporated’s
(‘‘CSXT’’), and the Norfolk Southern
Railway Company’s (‘‘NS’’) initial
filings in the Conrail Acquisition 1
proceeding before the Board. The
agency determined that the railroads
had not articulated a detailed plan
explaining the manner in which they
individually and collectively intended
to implement the transaction, and thus
they had not thoroughly assessed the
safety impacts of the proposed
acquisition. As a result, FRA requested
that the Board require the carriers to
provide information detailing how they
proposed to provide for the safe
integration of their corporate cultures
and operating systems, if the Board were
to approve the proposed transaction.
The Board agreed with FRA’s suggestion
and directed the applicants to file
detailed SIPs pursuant to guidelines
1 CSX Corporation and CSXT Transportation,
Inc., Norfolk Southern Corporation and Norfolk
Southern Railway Company—Control and
Operating Leases/Agreements—Conrail Inc. and
Consolidated Rail Corporation, STB Finance Docket
No. 33388 (hereinafter ‘‘Conrail Acquisition’’).
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11587
developed by FRA.2 The railroads
complied with the STB’s order and after
FRA approved the respective SIPs, the
Board, concluding that applicants had
satisfactorily addressed the safety
implementation concerns presented by
the transaction to date, approved the
transaction in 1998. Nevertheless, FRA,
while monitoring the railroads’
implementation of their respective
SIPs,3 has concluded that more needs to
be done, and that, among other things,
the railroads should address
information technology problems
resulting in a lack of hazardous
materials documentation on trains, and
conduct more advanced safety training
of supervisory and operating personnel
at designated terminals to ensure
adequate staffing and retention of
institutional knowledge. See Conrail
Merger Surveillance: NS, CSXT, and
CRCX Second Safety Integration Plan/
Safety Update, pp. 1–3 (June 23, 2000)
(hereinafter ‘‘SIP Update’’). In short,
FRA believes, based on its experience in
recent cases, that ‘‘mega-mergers,’’
consolidations, or acquisitions of
control present safety challenges during
implementation, which are best
remedied by requiring SIPs for these
complex transactions. FRA concludes
that SIPs achieve a safety purpose
within the purview of 49 U.S.C. 20103,
and thus are within FRA’s rulemaking
authority. Tyrrell, 248 F.3d at 523
(FRA’s responsibility in the SIP joint
rulemaking action focuses on rail safety
matters); see also Brown & Williamson,
529 U.S. at 134 (‘‘if Congress has not
specifically addressed the (precise
question at issue), a reviewing court
must respect the agency’s construction
of the statute so long as it is
permissible’’); accord Oklahoma
Natural Gas Company v. Federal Energy
Regulatory Comm’n, 28 F.3d 1281,
1283–84(D.C. Cir. 1994) (agency is
afforded Chevron 4 deference in
interpreting its statutory authority);
Western Coal Traffic League v. Surface
Transportation Board, 216 F.3d 1168,
1171 (D.C. Cir. 2000) (judicial review of
agency’s statutory jurisdiction is
premised on Chevron standards);
2 Conrail Acquisition, STB Decision No. 52,
served Nov. 3, 1997.
3 A detailed explanation of the SIP process in the
Conrail Acquisition, including the Memorandum of
Understanding the Board executed with FRA in
establishing an ongoing monitoring process, is set
out in the NPRM at 63 FR 72228.
4 Chevron is shorthand for the landmark Supreme
Court case Chevron U.S.A. Inc. v. Natural Resources
Defense Council, 467 U.S. 837 (1984), which stands
for the proposition that courts must defer to an
agency’s interpretation of a statute, even if other
statutory constructions are more plausible, if the
statute is silent or ambiguous with respect to a
specific issue.
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Transmission Access Policy Study
Group v. Federal Energy Regulatory
Comm’n, 225 F.3d 667, 694 (D.C. Cir.
2000) (‘‘it is the law of (the D.C.)
(C)ircuit that the deferential standard of
Chevron applies to an agency’s
interpretation of its own statutory
jurisdiction’’ (citing Oklahoma Natural
Gas)), affirmed sub nom. New York v.
FERC, 2002 U.S. LEXIS 1380 (U.S. Mar.
4, 2002). See generally Chrysler Corp. v.
Brown, 441 U.S. 281, 302 (1979)
(regulations issued by an agency must
be promulgated pursuant to statutory
authority in which ‘‘the grant of
authority contemplates the regulations
issued’’).
C. FRA’s Views on Issuance of a Final
Rule v. Guidelines
The AAR commented that the SIP
process is best employed through the
issuance of policy guidelines adopting
the model procedures that were used in
the Conrail Acquisition and Canadian
National Railway Company/Illinois
Central Railroad Company 5 control
transactions, and embodied in the
memoranda of understanding (‘‘MOU’’)
between FRA and the STB entered in
these cases. See 63 FR at 72228. Under
this approach, the Board would
determine when a SIP would be
required for a transaction within its
jurisdiction.
The AAR based its position on three
points. First, this approach would
ensure that each agency would respect
each other’s division of authority and
role in overseeing the SIP process.
Second, an MOU would offer the
flexibility for an applicant to meet
changing customer needs and market
opportunities, such as staffing levels
reached through collective bargaining
agreements (‘‘CBAs’’), infrastructure
improvements for highway-grade
crossings, and designating repair
facilities and computer software
operating systems. Finally, a rule along
the lines suggested by the NPRM would,
according to AAR, represent
government micromanagement of rail
operations and implementation
programs and could potentially delay
integration, leaving an applicant at a
competitive disadvantage with other
railroads.
FRA respectfully disagrees with the
AAR’s proposal. The agency believes
5 Canadian National Railway Company, Grand
Trunk Corporation, and Grand Trunk Western
Railroad Incorporated—Control—Illinois Central
Corporation, Illinois Central Railroad Company,
Chicago, Central and Pacific Railroad Company,
and Cedar River Railroad Company, STB Finance
Docket No. 33556 (STB Decision Nos. 5 and 6,
served June 23, 1998, and Aug. 14, 1998)
(hereinafter ‘‘CN/IC’’).
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that the issuance of final rules ensures
that all applicants seeking to
consummate a regulated transaction will
execute a SIP and complete the SIP
process as enunciated in the rules.
These final rules codify the prescribed
requirements and stake out the legal
landscape for regulating complex
railroad transactions. See Attorney
General’s Manual on the Administrative
Procedure Act 14–15 (1947) (‘‘(t)he
object of [a] rulemaking proceeding is
the implementation or prescription of
law or policy for the future * * *.’’). In
other words, the rules will prescribe
substantive and procedural standards
that will govern each application filed
with the STB to carry out a transaction
and the safety of operations during
implementation of transactions the STB
approves. Cf. the Administrative
Procedure Act, 5 U.S.C. 551(4), which,
in part, defines a rule as ‘‘the whole or
part of an agency statement of general or
particular applicability and future effect
designed to implement, interpret, or
prescribe law or policy.’’ FRA believes
that the SIP process should be
mandatory in large mergers, acquisitions
of control, and consolidations cases
because of the unique nature of the
transactions involved and the
complexity of safely integrating
operations that are part and parcel of the
transactions.
On the other hand, guidelines are
simply recommendations issued by an
agency that do not prescribe or mandate
any standards on the regulated
community. See Industrial Safety
Equipment Ass’n, Inc. v. EPA, 837 F.2d
1115 (D.C. Cir. 1988). Rather than
impose a regimen for conduct or action,
guidelines do not ‘‘change any law or
official policy presently in effect,’’ id. at
1119–21, nor do they ‘‘implement,
interpret, or prescribe law or policy.’’ 5
U.S.C. 551(4); see also National
Ornament & Elec. Light Christmas Ass’n
v. Consumer Product Safety Comm’n,
526 F.2d 1368 (2d Cir. 1975). Without
sufficient ‘‘effect’’ to regulate conduct,
guidelines have an ‘‘advisory character’’
without any firm commitment to law or
policy. FRA believes that the issuance of
guidelines would preclude the agencies
from mandating standards or binding
applicants to meet these requirements,
creating an illusion of adequate safety
oversight. FRA, like the Board, is
committed to safe integration of
complex railroad transactions and
believes that these rules can best
achieve that objective.
FRA also maintains that these rules
enable the agencies to articulate
interpretations of their respective
statutes and reconcile them effectively,
thereby preserving and recognizing each
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agency’s authority to regulate aspects of
these transactions. See Tyrrell, 248 F.3d
at 523. The joint rules ensure that the
agencies’ roles and responsibilities
complement each other in establishing
SIP procedures and standards, and
complete the rulemaking process
announced in the NPRM. Lastly, the
final rules will provide uniformity in
regulating SIPs and preempt other
efforts to regulate the safety of
implementing transactions. FRA
concludes that the issuance of rules is
the most effective instrument in
defining each agency’s function in the
SIP process and requirements a railroad
must satisfy for transactions that
warrant a SIP.
Concurrently, FRA takes issue with
the reasons supporting the AAR’s
recommendation. First, as previously
explained, the final rules cement the
division of authority and prescribe
textual interface between the agencies in
regulating SIPs. Next, FRA believes that
the SIP contents and subject matter
areas capture the operations that are
affected by a complex transaction.
Although an applicant may propose a
flexible plan to address these topics, the
SIP elements themselves should not be
compromised to ensure a safe transition
of operations.
Finally, FRA rejects the notion that
the rules represent government
micromanagement of rail operations and
implementation programs. The premise
of the rules focuses on an applicant’s
preparation, issuance, and
implementation of a plan that provides
safe integration of rail operations. FRA’s
and the STB’s individual and collective
roles are to review and approve the
railroad’s SIP, and monitor its
implementation. The agencies’ oversight
is to ensure that the SIP provides a
reasonable assurance of safety. It is not
to ‘‘second guess’’ the proposed
migration or deployment of resources
necessary to carry out a plan. Therefore,
FRA characterizes its role as that of a
‘‘gatekeeper’’ to cross-check the SIP and
its implementation against the safety
aspects in integrating operations.
D. FRA’s Views on Issues Involving the
Framework of the Joint Final Rules
FRA received several comments from
interested parties about the framework
of the proposed SIP rules. The
comments focused on two issues-scope
and applicability of the joint rules, and
the approval and disapproval process of
an application.
FRA proposed to require certain
railroads seeking to merge, consolidate,
or acquire control of another railroad, or
‘‘start-up’’ operations as a railroad to file
proposed SIPs with FRA before
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consummating the regulated
transaction. The NPRM proposed
covering the following transactions: (1)
A Class I railroad, a railroad providing
intercity passenger service such as
Amtrak, or a commuter railroad seeking
to acquire, merge, or consolidate with a
Class I or Class II railroad, a railroad
providing intercity passenger service, or
a commuter railroad; (2) a Class II
railroad proposing to consolidate,
merge, or acquire another Class II
railroad with which it connects so as to
involve the integration of operations; (3)
any merger, consolidation, or
acquisition resulting in operations that
would generate revenue in excess of the
Class I railroad threshold, except those
transactions involving Class III freight
only railroads; and (4) all start-up
operations involving the establishment
of a new line for passenger or freight
service generating revenue that would
exceed the Class II railroad threshold.
Correspondingly, the Board proposed
covering all transactions addressed in
FRA’s NPRM with the exception of
‘‘start-up’’ operations.
The AAR, Amtrak, and OK DOT
commented that the STB lacks
jurisdiction to regulate Amtrak or
commuter railroads, citing 49 U.S.C.
10501(c) and Norfolk & Western Railway
Company-Petition for Declaratory
Order-Lease of Lines, STB Finance
Docket No. 32279 (STB served February
3, 1999), for the proposition that the
Board may not regulate any mass
transportation provided by any local
governmental authority, and arguing
that the Amtrak Reform and
Accountability Act of 1997, Pub. L. 105–
134, 111 Stat. 2570, 2585, amending 49
U.S.C. 24301(c)(1)(C), prohibits the
Board from regulating Amtrak.
Accordingly, the commenters
recommended that the scope of the joint
rules be curtailed.
FRA agrees that the scope of the joint
rules should be narrowed to cover
unique complex transactions. After
considering the comments, the agency
has determined that acquisitions,
consolidations, or mergers involving
large railroads present transactions of
significant size and complexity that
warrant a SIP. These transactions
generally involve substantial changes in
railroad operations that impact effective
communications, coordination, and
execution of operations, i.e., all aspects
of safety. The final rules narrow the
scope and applicability sections to
capture these significant transactions
because of the correlation between
complexity of large rail entities and
operational safety. As a result, the joint
final rules only apply to transactions in
which a Class I railroad proposes to
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merge, consolidate with, or acquire
control of another Class I railroad or a
Class II railroad with which it also
proposes to amalgamate operations.
Some of the comments addressed
each agency’s independent approval
process for a SIP, and any amendments
thereto. The TTD endorsed the proposed
two-step disposition process in which
FRA and then the Board would review
and approve a proposed SIP before an
applicant could consummate a
transaction. The AAR disagreed,
claiming that FRA is without the
authority to sanction a transaction that
is within the STB’s jurisdiction.
FRA believes that the safe transition
of integrating operations is best
achieved when FRA and the STB work
together using their respective
jurisdictions. As discussed above and in
the NPRM, FRA enjoys primary
jurisdiction, expertise, and oversight
responsibility in railroad safety matters
and is best positioned to ensure that a
plan will comply with the safety laws
and otherwise provide for safe railroad
operations. See Canadian Pacific
Limited, et al.—Purchase and Trackage
Rights—Delaware & Hudson Railway
Company, STB Finance Docket No.
31700, slip op. at 1, 5 (served Mar. 2,
2000) (hereinafter ‘‘CP Purchase’’) (FRA
entitled to ‘‘great weight’’ in identifying
potential safety problems before STB
imposes conditions on a transaction). At
the same time, the Board, which has
expertise in economic regulation and
assessment of environmental impacts in
the railroad industry, Tyrrell, 248 F.3d
at 523, considers safety in the
transactions that it regulates. Id. (STB’s
‘‘duty [is] to encourage ‘‘safe and
suitable working conditions’’ for railway
employees through its assessment of
individual railway proposals subject to
its authority’’). FRA believes that these
final rules meet the safety objectives of
both agencies while interpreting their
respective jurisdictions in a
complementary way that is in the public
interest.
E. Foundation of FRA’s Final Rule
FRA received comments from three
interested parties about the elements set
out in the proposed rule. Generally, the
labor organizations supported the
subject matter areas contained in the
regulatory text because they addressed
the ‘‘four adequates’’—adequate work
force, adequate training, adequate rest,
and adequate familiarity with the
subject territory. In fact, the TTD went
further, contending that an applicant
should detail information in the subject
matter areas that are required in a SIP
to prevent a railroad from pledging
vague commitments in filing a plan.
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The AAR, however, objected to the
proposed rule’s SIP elements on two
grounds. First, the AAR asserted that the
subject matter areas go beyond the scope
of assuring safe integration. The AAR
maintained that a SIP should center on
railroad lines that will experience
changes in motive power and
equipment, signal and train control,
dispatching operations, highway-rail
grade crossings, personnel staffing,
capital investment, and relationships
between freight and passenger service;
and changes in operations or traffic
volume that will affect a railroad’s
systems or programs. These
requirements, the AAR posited, should
be captured in a SIP to enable FRA to
review an applicant’s practices and
procedures to ensure that they provide
a ‘‘reasonable assurance of safety.’’ The
AAR added that the proposed SIP rules
impose new standards on the railroad
industry that are not required under the
existing regulations and serves as a
‘‘back door’’ vehicle for issuing
substantive regulations that impact
selected transactions. These rules, the
AAR reflects, impose new burdens,
costs, and delays on an applicant, which
leaves it at a competitive disadvantage
with other railroads.
FRA agrees in part and disagrees in
part with the AAR’s comments. The
agency has amended the subject matter
areas in its proposed rule to require an
applicant to focus its SIP on changes in
railroad operations during the
integration phase. The agency believes
that a plan must analyze the major
changes that will occur as railroads
subject to a regulated transaction
integrate their operations from
commencement to completion. Advance
planning will require an applicant to
consider the nature of operations
involved in the transaction and the
migration or transition from two or more
entities to one entity. The final rule
satisfies these concerns.
FRA disagrees with AAR’s
characterization that the SIP rules are a
‘‘back door’’ approach to regulating
subject matter areas that are not already
covered under the existing regulations.
The integration of very large and
complex railroad operations present
safety hazards not found (or not found
to a degree sufficient to merit regulatory
attention) either before a transaction or
after operations have been successfully
integrated. It is entirely appropriate for
FRA to address those hazards in the
limited context in which they are found.
For example, integrating the operations
of two railroads will usually require
choosing a set of operating rules that
differ in important respects from the
operating rules used by one of the
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railroads. The employees of that railroad
will have to be trained in the new
operating rules and will have to
overcome the bias common among
railroaders that the railroad on which
they started had the best way of running
a railroad.
There are several essential tasks that
affect railroad safety, e.g., training,
qualifications, fatigue, hazardous
materials inspection programs, and
information system compatibility.
Failing to address such issues
adequately can jeopardize railroad
safety, as some recent mergers have
demonstrated. FRA believes that UP/SP,
for instance, faced increased exposure to
accidents, injuries, and fatalities as
overworked officials and employees
encountered workforce reductions,
inadequate infrastructure and
equipment, and service delays and
disruptions. Between June 22 and
August 31, 1997, UP/SP experienced
five major train collisions that resulted
in the deaths of five UP/SP employees
and two trespassers. These accidents
were in addition to a series of yard
switching accidents that claimed the
lives of four UP/SP train crew
employees. In connection with the UP/
SP merger, for example, FRA launched
a comprehensive review of UP/SP’s
operations, including its dispatching
operations. FRA observed inefficient
and unsafe practices by supervisors and
dispatchers caused by inadequate
training and work overload. FRA made
specific recommendations, which UP/
SP accepted, such as creating additional
dispatch operations, realigning
dispatcher territories to better balance
the workload, hiring new dispatchers,
tripling the number of dispatching
supervisors, making improvements to
the software in UP/SP’s CAD computer
system, and forming a working group
consisting of representatives of FRA, rail
labor, and UP/SP management to
continually monitor and address
dispatching issues that may arise. As a
result of FRA’s effort, UP/SP’s safety
performance recovered rapidly; UP/SP’s
fatalities due to train collisions dropped
from seven in 1997 to none in 1998.
Similarly, FRA believes that most of
the other recent mergers involving Class
I railroads had safety integration
problems. The BNSF merger, for
example, resulted in the merged entity
having incompatible electronic database
systems used by BN and ATSF. This
incompatibility resulted in terminal
offices generating and transmitting
inaccurate and incomplete train consist
lists and waybills, which compromised
the safety of train crews transporting the
shipments. Even at a very simple level,
BN and ATSF each had locomotives
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bearing the same number; this problem
was not addressed before integrated
operations began, resulting in dangerous
confusion for dispatchers and train
crews. In NS’s and CSXT’s acquisition
of Conrail, both railroads also grappled
with information technology
shortcomings in preparing hazardous
materials shipping papers, and training
deficiencies in the computer software
programs and the safety laws.
Based on observation, professional
experience and judgment, and empirical
evidence, FRA believes that there is a
nexus between safe integration of large
railroads and the subject matter areas
identified in the SIP rule. Although
filing a SIP will involve certain costs,
burdens, and delays, FRA reasons that
the safety benefits that will result from
the SIP process outweigh these
impediments.
Finally, there was some confusion
within the regulated community that the
SIP rules would impose explicit
standards for the elements the railroads
would have to address in their SIPs.
FRA therefore clarifies that its rule only
requires a railroad to identify measures,
efforts, commitments, and targeted
completion dates that it will take to
completely integrate those elements
identified in § 244.13. See § 244.11 for
the contents required in a SIP. FRA’s
review and approval is predicated on
whether the details in executing the
elements in the plan provide ‘‘a
reasonable assurance of safety.’’ 49 CFR
244.19. As enunciated in the NPRM,
FRA reiterates that:
[I]t has no intention of operating the
railroad or questioning management
decisions implementing the SIP. Instead, the
agency sees it[s] role as conducting a rational
basis review of the SIP, meaning that the plan
must be reasonable.
63 FR 72234. Provided that the SIP
comprehensively explains how an
applicant intends to proceed from
commencement to completion in
executing a transaction, FRA will
approve the plan, contingent upon
fulfillment of the elements enunciated
in the plan and execution of those
operations. In summary, a SIP must
provide for the safety of operations,
systems, practices, and programs that
are identified in FRA’s final rule before
FRA will approve the plan.
FRA’s Section-by-Section Analysis of
Its Final Rule
The final rule contains significant
changes from the proposed rule in
response to the written comments
received, the testimony at the public
hearing, and further review and
reflection within FRA. This section of
the preamble explains the changes made
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in the final rule to the provisions of the
NPRM. FRA informs interested parties
that this section focuses on the specific
requirements of FRA’s proposed and
final rules as applied to the coextensive
authority of the STB to regulate the
transactions identified, and respectfully
refers the regulated community to the
agency’s Section-by-Section Analysis of
the NPRM for a full discussion of those
aspects of the proposed rule that remain
unchanged in the final rule. See 63 FR
72228–35.
Subpart A—General
Section 244.1—Scope, Application, and
Purpose
Proposed rule: FRA proposed that a
railroad seeking to consummate certain
discrete transactions would be required
to file a SIP. Section 244.1(a)(1)
proposed that a Class I railroad, a
railroad providing intercity passenger
service, or a commuter railroad seeking
to acquire, merge, or consolidate with a
Class I or Class II railroad, a railroad
providing intercity passenger service, or
a commuter railroad would be subject to
this part. The rule further proposed that
a Class II railroad applying to acquire,
consolidate, or merge with another Class
II railroad with which it would connect
so as to involve the integration of
operations would also be required to file
a SIP. Additionally, part 244 would
apply to any merger, consolidation, or
acquisition, excluding a transaction
involving a Class III freight-only
railroad, that would result in operations
generating revenue in excess of the
Class I railroad threshold, and all startup operations as defined in § 244.9.
Paragraph (b) of this section explained
that the proposed rule was designed to
mandate that a railroad detail a plan
before it would merge, consolidate, or
acquire another railroad to ensure that
safety interests were advanced before
integrating operations of complex
transactions. Section 244.1(c) informed
the regulated community that part 244
applied only to FRA’s disposition of an
application filed pursuant to this part,
and did not apply to the STB’s rules, 49
CFR part 1106, governing transactions
under the STB’s authority.
Comments: FRA received several
comments addressing a wide range of
views on the proposed scope of the SIP
rule. The AAR recommended that the
rule should cover only Class I—Class I
or Class I—passenger operations
transactions because of the magnitude
and complexity of these transactions
and the lack of evidence that the other
proposed transactions demonstrated a
compromise to railroad safety. The
ASLRRA and W&L suggested that the
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rule regulate only Class I transactions
given that Class II railroad operations
are less complex than their Class I
counterparts, e.g., lower volume, slower
speeds, shorter consists, and more
condensed networks, and the weight of
the evidence shows that only Class I
railroads need to be regulated. The
ASLRRA and W&L added that Class II
railroads should be regulated on an ad
hoc basis and that the proposed
coverage of start-up operations should
be dropped. Amtrak commented on
start-ups as well, expressing its position
that a SIP should only be required when
a start-up involves a new railroad and
not existing railroads commencing
operations over newly constructed
track. APTA opined that the rule should
not apply to start-ups covering existing
commuter railroads that commence
operations over newly constructed track
or extending service on existing track.
Conversely, the BMWE, BRC, and
TTD suggested that the scope of the rule
be expanded to cover Class II and Class
III railroads. The BRC, for instance,
asserted that although Class III railroads
present less complex operations than
their Class I counterparts, shortline
railroads use less sophisticated roadway
equipment and track maintenance
practices because of their lower revenue
base, and employ workers who may not
understand the complexities of Class I
rail traffic control systems with which
they interchange. The TTD supported its
position by claiming that shortline
railroads lack sufficient capital
resources, training requirements, and
staffing levels to execute transactions,
and that these railroads have higher
casualty and accident rates than Class I
railroads.
Final Rule: Having considered the
entire spectrum of comments, FRA
believes that the SIP rule should apply
only whenever a Class I railroad
proposes to merge with, consolidate
with, or acquire control of another Class
I railroad or a Class II railroad with
which it also proposes to amalgamate
operations. The agency has re-examined
the anecdotal and empirical evidence
and determined that there is a
correlation between large-scale
transactions and compromises to
railroad safety in the absence of advance
planning and the preparation of a SIP.
As the recent UP/SP and BNSF mergers
illustrated, large-scale transactions
present unique challenges in operations
that can affect the resulting carrier’s
ability to conduct business while
complying with the safety laws. (Indeed,
CSXT and NS may have experienced the
same shortcomings in the Conrail
Acquisition had FRA and the STB not
required the railroads to file individual
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SIPs addressing a systematic plan that
assessed the safety effects of the
transaction and explaining the manner
in which they intended to implement
the transaction.) Integrating cultures and
differing work rules, migrating work
forces, deploying capital resources, and
adopting information systems are initial
steps that must be planned before
consummation and implemented during
integration to ensure the safety of
railroad employees and the public, and
the protection of the environment.
Therefore, to combat safety and
operational problems associated with
complex transactions, FRA is requiring
a SIP for Class I—Class I transactions
and Class I—Class II transactions when
there is an amalgamation of operations.
The agency believes that advance safety
planning by an applicant will promote
safety of its lines and minimize
exposure to unnecessary accidents,
incidents, injuries, or fatalities.
Although FRA recognizes that
transactions not involving Class I
railroads (e.g., Class II railroads,
passenger railroads, and start-ups) can
be sophisticated operations, the agency
has decided to withhold regulating
these transactions for the time being.
Nevertheless, FRA reserves the right to
revisit the scope section should
evidence or experience warrant
expanding the reach of the SIP rule.
FRA also notes that paragraph (b) of
this section has been modified from the
proposed regulatory text to read, ‘‘This
part does not preclude a railroad from
taking additional measures not
inconsistent with this part to provide for
safety in connection with a transaction.’’
The meaning and application of this
paragraph, however, remains
unchanged.
Section 244.3—Preemptive Effect
Proposed Rule: FRA proposed this
section to inform the public of its views
regarding the preemptive effect of the
proposed rule. The rule would provide
that 49 U.S.C. 20106 preempts any State
regulatory agency rule covering the
same subject matter as the regulations
proposed with the exception of a
provision directed at an essentially local
safety hazard.
Comments: The AAR commented that
FRA’s reading of the preemption
provision of the safety laws is
incompatible with the STB’s exclusive
jurisdiction over economic regulation of
railroads.
Final Rule: The final rule adopts the
proposed rule in full. (The AAR’s
comments and FRA’s response are
discussed in the preamble above.)
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Section 244.5—Penalties
Proposed Rule: FRA proposed § 244.5
to identify the penalties that the agency
may assess upon any person, including
a railroad or employees of a carrier, that
violated any requirement of this part.
The provision would provide that 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, and FRA
may assess a penalty of up to $22,000
per violation where a grossly negligent
violation or a pattern of repeated
violations creates an imminent hazard
of death or injury to persons, or causes
death or injury. Each day would
constitute a separate offense, and the
agency could assess civil penalties
against individuals for only willful
violations of this part. Criminal
penalties would be available for persons
knowingly and willfully falsifying
entries or reports required by the SIP
rule.
Paragraph (b) of this section would
authorize FRA to exercise any of its
other enforcement remedies available
under the safety laws if an applicant
failed to comply with this part. For
instance, FRA could issue an emergency
or compliance order or seek the
issuance of a mandatory or prohibitory
injunction should a railroad violate
§ 244.21.
Comments: Two parties commented
on this section. The TTD suggested that
the agency clarify the penalty provision
to reflect that an individual may be
subject to the maximum penalty under
the safety laws. The AAR restated its
jurisdictional argument that was
discussed earlier, asserting that FRA
lacks the authority to assess penalties
against an applicant, and that
conditions or remedies imposed by the
STB, such as a cease and desist order,
would suffice to address a
noncomplying condition.
Final Rule: FRA adopts the proposed
rule in full. FRA refers the TTD to the
definition of ‘‘person’’ contained in
§ 244.9, which covers individuals such
as managers, supervisors, officials, or
other employees or agents of a railroad,
and independent contractors providing
goods or services to a railroad. As
explained earlier in the preamble, the
agency believes that the safety laws
authorize the issuance of this final rule
and its penalty provisions. FRA further
reasons that enforcement is a necessary
and effective tool to promote
compliance with the safety laws. Such
enforcement actions include assessing
civil penalties, issuing compliance,
disqualification, or emergency orders,
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seeking equitable remedies in Federal
court, or referring selected incidents to
the Department of Justice for criminal
investigation and prosecution. In the
SIP rule, these sanctions are necessary
to ensure that applicants obtain agency
approval of a proposed SIP before
implementing a regulated transaction,
and execute all measures provided in an
approved plan. FRA approval or
disapproval of a SIP serves as a baseline
for enforcement. Should the agency
disapprove of a SIP or portions thereof,
this provision provides various
remedies if the railroad does not change
its SIP to bring it into compliance with
the law. Likewise, FRA can take
enforcement action if the railroad fails
to implement specific requirements of
an approved SIP that currently exist
under the safety laws. In summary, FRA
believes that this section will ensure
compliance with the SIP rule by
identifying the legal and equitable
remedies available.
At this time, FRA has decided not to
include a schedule of civil penalties for
this rule. The agency received no
comments from interested parties about
the appropriate penalties corresponding
to the sections violated in the rule.
Therefore, FRA will reserve Appendix A
to 49 CFR part 244 until further notice.
Because such penalty schedules are
statements of policy, notice and
comment are not required before their
issuance. See 5 U.S.C. 553(b)(3)(A).
Section 244.7—Waivers
Proposed Rule: Proposed § 244.7
would provide the procedures for
seeking a waiver of compliance with the
requirements of the SIP rule. Any
railroad subject to part 244 could
petition for such a waiver, and FRA
would conduct its own independent
investigation to determine whether an
exception to the general criteria existed
to warrant granting the waiver, provided
that the waiver would not compromise
or diminish rail safety.
Comments: The AAR suggested that
FRA’s waiver provision be modified to
meld it with the STB’s waiver provision.
Final Rule: The proposed rule is
adopted with the addition of paragraph
(d). FRA believes that its rule text is
closely aligned with the STB’s
counterpart, but informs interested
parties that its waiver provision governs
only FRA’s disposition of a petition for
a waiver. An applicant must still seek a
waiver from the STB to be free and clear
of any SIP requirements under 49 CFR
parts 244 and 1106. This caveat is
spelled out in paragraph (d) of this
section.
Of special note, FRA informs
applicants that a petition for a waiver in
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which a Class I railroad seeks to
consummate a transaction with a small
Class II railroad with which it proposes
to amalgamate operations may be
received more favorably than a waiver
request in a transaction involving two
Class I railroads. Presently, FRA intends
to focus its energies on monitoring
transactions involving Class I and largescale Class II railroad operations, e.g.,
the Canadian National Railway
Company’s acquisition of the Wisconsin
Central Transportation Corporation,6
where it believes systemic operating
deficiencies are most likely to manifest
themselves during the integration phase
if no SIP is prepared and implemented.
Although transactions involving
smaller-scale Class II railroads may
present safety challenges, FRA opines
that not every merger, consolidation, or
acquisition covered in this rule should
face a comprehensive SIP review.
Rather, FRA invites applicants seeking
to execute less complex transactions to
petition for a waiver of this rule’s
requirements. FRA will then review the
petition on an ad hoc basis and may
grant it should the agency determine
that it is in the public interest and is
consistent with rail safety.
FRA reminds the regulated
community that it reserves the right to
impose any conditions as it believes are
necessary to promote rail safety. The
agency further advises that it has
plenary authority to approve or reject a
petition for a waiver of this rule, and its
decision is ‘‘agency discretion by law.’’
5 U.S.C. 701(a)(2); see also Heckler v.
Chaney, 470 U.S. 821 (1985).
Section 244.9—Definitions
Proposed Rule: The NPRM proposed
an extensive set of definitions that
would introduce the regulations. As
FRA explained in the proposed rule, the
definitions were issued to clarify the
meaning of important terms as
employed in the rule text and were
designed to minimize any possible
misinterpretation of the rule. Because
the commenters only responded to two
proposed definitions, FRA will focus on
these terms. The agency refers interested
parties to the NPRM for a complete
recitation of the meaning and
application of those definitions that are
adopted as proposed. See 63 FR 72230.
6 A SIP was prepared and adopted in that case.
See Canadian National Railway Company, et al.—
Control—Wisconsin Central Transportation
Corporation, et al., STB Finance Docket No. 34000,
66 FR 23757 (May 9, 2001) (STB Decision No. 2,
served May 9, 2001) (STB order mandates the
preparation of a SIP) (hereinafter ‘‘CN/WCTC’’); and
CN/WCTC, STB Finance Docket No. 34000 (STB
Decision No. 10, served Sept. 7, 2001) (STB adopts
the SIP and approves the transaction).
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FRA proposed defining ‘‘corporate
culture’’ to mean the attitudes,
commitments, directives, and practices
of railroad management with respect to
safe railroad operations. The concept
was to cover a railroad management’s
attitudes, directives, planning and
resource allocations when safety was at
issue. ‘‘Best practices’’ was defined to
mean the safest and most efficient rules
or instructions governing rail operations
that a railroad issued.
Comments: FRA received two
comments on ‘‘corporate culture.’’ The
AAR represented that the definition as
applied could not be quantified in an
objective fashion to place an applicant
on notice about the measures that must
be taken to comply with this element.
At the same time, the BMWE wanted to
expand the definition to include
modifications or changes to CBAs that
were not negotiated under the Railway
Labor Act that the applicants wished to
have the STB impose under the
authority of 49 U.S.C. 11321 (commonly
referred to as ‘‘cram downs’’). See 49
U.S.C. 11324(c).
The AAR also questioned the
definition of ‘‘best practices,’’ asserting
two reservations. First, the AAR
asserted that the clause ‘‘railroad
industry standards’’ is code for FRA
practices. Second, the railroad
organization claimed that the proposed
definition invited the agency to
formulate business decisions. In
response, the AAR recommended
qualifying the definition to permit an
applicant to select the ‘‘best practices’’
of the parties that are subject to the
transaction, which would best promote
the safety interests.
Final Rule: FRA amends the proposed
definitions. ‘‘Corporate culture’’ is now
defined as ‘‘the totality of the
commitments, written and oral
directives, and practices that make up
the way a railroad’s management and its
employees operate their railroad.’’ The
notion is to capture the business
directives issued by a railroad’s
management and the practices
implementing these directives by labor
to encompass a wide range of field
operations. These activities include the
formulation, development, issuance,
and execution of measures and
programs related to safe railroad
operations that involve consultations
between railroad management and
railroad employees. The heart of the
safety issue involved is that FRA has
observed (1) that a railroad tends to
operate more safely when all of its
employees understand that the railroad
has a defined way of operating and
comply with it and (2) that employees
coming from different railroads will
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tend to continue to do their jobs as they
learned them on their first railroad until
they are taught to operate differently.
This part of the rule is intended to get
the railroads subject to a covered
transaction to observe their differences,
choose how the resulting railroad is to
operate, and assure that their employees
adopt the chosen culture. FRA does not
intend to impose its own choice of
corporate safety culture, but insists that
the railroad choose and implement its
choice.
FRA grappled with ‘‘corporate
culture’’ in light of the AAR’s comments
about how objectively the agency could
apply its meaning in evaluating a
proposed SIP, and in light of BMWE’s
suggestion that it be expanded to
include ‘‘cram downs.’’ FRA believes
that ‘‘corporate culture’’ quantifies
sufficient elements to provide for
meaningful and objective agency
review, and given the spirited debate
over cram downs, and the recent
settlement among most Class I railroads
and labor organizations representing
most rail employees, including the
BMWE, on the issue of CBA overrides,
FRA cannot adopt the BMWE’s
suggestion that cram downs be
considered a part of the definition of
corporate culture.
‘‘Best practices’’ is modified to read
those ‘‘measures that are tried, tested,
and proven to be the safest and most
efficient rules or instructions governing
railroad operations.’’ This amended
definition incorporates the change
recommended by the AAR. To reiterate,
FRA does not intend to substitute its
judgment for that of a railroad in
determining which legally permissible
safety and efficiency measures to use,
but instead will defer to a railroad’s
construction and application of its
operating rules and practices that
promote these interests. Put another
way, the agency believes that the
railroad has the prerogative in
identifying the best practices to be
employed within the law.
Subpart B—Safety Integration Plans
Section 244.11—Contents of a Safety
Integration Plan
Proposed Rule: FRA proposed
§ 244.11 to frame the structure of a SIP
that a railroad must file. The section
would require an applicant to prepare a
roadmap or playbook detailing the
practices and procedures, financial
commitment, and timetable for
integrating or commencing field
operations identified as subject matter
areas under § 244.13. In particular, the
NPRM would require a plan to propose
a timetable from commencement to
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completion to implement the
transaction.
Comments: Only one interested party
commented on this section. The AAR
generally agreed with FRA’s proposal
with one exception. The railroad
organization opposed the timetable
provision in paragraph (f) because it was
perceived as being too rigid to afford
flexibility in reaching proposed
milestones in the plan. The AAR
countered with its own textual proposal
to require a general overview of steps
and order in which the steps would be
implemented.
Final Rule: The rule is adopted as
proposed with minor textual changes
and paragraphs (c)–(e) redesignated as
paragraphs (d), (e), and (c), respectively.
Paragraph (a) replaces the conjunctive
clause ‘‘and the best practices of these
railroads’’ with ‘‘including the rules or
instructions governing railroad
operations of these railroads,’’ and
paragraph (b) adds the text ‘‘including a
reconciliation of the differing rules or
instructions governing railroad
operations of the railroads involved in
the transaction’’ at the end of the
provision to narrow the scope of the
information on integrating operating
practices a SIP must provide. Paragraph
(f) inserts the word ‘‘targeted’’ in lieu of
‘‘stated’’ to enable an applicant to set
benchmarks for completing the
specified elements. FRA understands
the dynamics of assimilating disparate
operating practices and procedures and
recognizes the flexibility needed to
achieve their integration. The change of
the operative word ‘‘stated’’ to
‘‘targeted’’ thus assuages the AAR’s
concern. FRA intends to hold a railroad
accountable for conducting front-end
planning measures and executing the
same within identified milestones to
complete the integration of operations.
FRA believes that the final rule
should delineate the SIP contents and
SIP subject matter areas as separate
regulatory functions. The contents
provision provides the basis for
identifying and addressing the subject
matter areas and facilitates a well
organized plan that will articulate the
execution and implementation of these
elements. Section 244.11 best
exemplifies the roadmap or playbook
concept necessary to address the subject
matter areas provided in § 244.13.
Accordingly, the section’s regulatory
heading and introductory text remain
unchanged.
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11593
Section 244.13—Subjects To Be
Addressed in a Safety Integration Plan
Involving an Amalgamation of
Operations
FRA received several comments
expressing a wide variety of opinions
about the contents of § 244.13. To
improve the flow of this analysis, each
paragraph will be treated as a separate
section, summarizing the proposal,
comments, and final rule. FRA refers
interested parties to the NPRM’s
Section-by-Section Analysis for the
background of the elements identified in
this section, and the justification for
requiring these subject matter areas for
transactions that involve an
amalgamation of operations. Because
FRA received no comments about the
basis for or scope of proposed § 244.13,
the introductory text of the regulation is
adopted as proposed.
Section 244.13(a)—Corporate Culture
Proposed Rule: FRA proposed
paragraph (a) to require an applicant to
explain the basis for its safety culture.
Specifically, the regulation would
require a railroad to identify and
describe differences in corporate
cultures for each safety-related area;
describe how these cultures lead to
different practices governing rail
operations; and explain how the
proposed integration of corporate
cultures would result in a system of
‘best practices’ when the proposed
transaction was implemented.
Comments: Management and labor
organizations commented on the
‘‘corporate culture’’ provision. APTA
wanted ‘‘corporate culture’’ to address
the safety of passenger operations, and
the TTD suggested that a railroad detail
similarities and differences in corporate
culture to avoid issuing ‘‘boilerplate
language’’ in its proposed SIP.
Concurrently, the AAR agreed with the
proposed rule text because it provided
sufficient flexibility in accounting for
different organizational structures,
styles, and operations.
Final Rule: The proposed rule is
adopted with revisions to § 244.13(a)(1),
and (3). Subparagraph (1) is refined to
mandate that an applicant ‘‘(i)dentify
and describe differences for each safetyrelated area between the corporate
cultures of the railroads involved in the
transaction(,)’’ and subparagraph (3) is
changed to read that the railroad must
‘‘(d)escribe, in step-by-step measures,
the integration of these corporate
cultures and the manner in which it will
produce a system of ‘best practices’
when the transaction is implemented.’’
These provisions draw a closer nexus
between safety and corporate culture
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than the proposed rule and require a
railroad to detail the incremental
measures it will take to integrate
disparate cultures that will culminate in
adopting safe and efficient standards
governing railroad operations.
As FRA explained in the proposed
rule, safety culture is an instrumental
element in achieving rail safety.
Acquisitions, consolidations, and
mergers of large rail operations are
complicated transactions that require a
railroad to adopt an operating structure
that underscore safety and good
communications among management,
employees, and the employees’ union
representatives. Such a structure should
unify the different cultures under which
railroads operate that draw upon the
best practices of each to facilitate the
formulation, development, issuance,
and implementation of safety practices
and procedures within a seamless
merged company.
To carry out this task, an applicant
needs to describe how it will
successfully integrate the underlying
priorities, practices, and philosophies
while implementing the transaction. For
example, UP recently published a threestep directive to its officials. First, the
railroad indicated that it would focus, in
part, on adequate staffing levels and
predictable work schedules. Second, it
would direct its attention to values,
leadership development, training, and
quality. Finally, the railroad pledged
that it would build a new relationship
with its employees. At the same time,
NS has established a culture that
elevates training, professionalism,
commonality of purpose, and rules
compliance to achieve safety on its
railroad. NS has acknowledged that
rules compliance is most fundamental
to avoid accidents or incidents, and has
stressed effective communications
between management and the rank-andfile workers to implement this measure.
CSXT has amplified the importance of
safety culture by establishing a
cooperative program comprising
management officials and labor union
members that educates, counsels, and
improves the performance of safetysensitive employees who commit
operating rules violations, and
instituting safety culture offices that
ensure that safety is foremost in job
performance. See SIP Update at 22.
At bottom, FRA posits that it will not
dictate attitudes, directives, planning, or
resource allocation criteria under this
part. Rather, the agency intends to defer
to proposed and implemented planning
processes that promote and value
railroad safety. It is incumbent on a
railroad to resolve different cultures,
direct and carry out programs that
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emphasize safety practices, and engage
management and labor to develop,
issue, and implement an iteration
process to execute these programs. To
this end, FRA endorses the corporate
culture concept and incorporates the
textual standards accordingly.
Section 244.13(b)—Training
Proposed Rule: The proposed rule
would require a railroad to discuss its
training and educational programs to
ensure that its employees and
supervisors who are responsible for
field operations would be proficient and
qualified. FRA identified the
employment crafts that would be
covered in the NPRM, which were train
and engine service employees,
dispatchers or operators, roadway
workers, signal employees, mechanical
officials, and hazardous materials
personnel.
Comments: FRA received diverse
comments from interested parties. The
TTD, for example, wanted the rule to set
minimum qualifications and training
requirements, and require an applicant
to detail the number of class and on-thejob training hours and file a report on
hazardous materials training. At the
same time, the BRC wanted to establish
qualification and training standards for
car inspectors when defect ratios exceed
three percent for an applicant, and the
ATDD suggested training and
qualification requirements for
dispatchers. The AAR agreed with the
regulatory concept, but opposed new
training requirements that are not
prescribed under the safety laws
because such standards do not present
an integration issue.
Final Rule: FRA adopts the proposed
rule with some substantive changes to
the introductory text and paragraph
(b)(6). The rule centers on ensuring that
designated employees, including
information technology personnel
affecting hazardous materials
transportation, are proficient, qualified,
and familiar with the operating rules
and operating tasks of territory assigned
when these employees are moved to a
new territory or the operating rules on
a given territory are changed. Training
impacts integration of operations when
employees are either transferred to new
divisions or subdivisions, or when
operating rules, timetables, or timetable
special instructions, e.g., superintendent
bulletins, are changed in an assigned
territory. In other words, when
operating circumstances change, the
‘‘front line’’ employees must be familiar
with all aspects of their crafts or
occupations. A SIP should also include
details identifying the scope and depth
of the type of training operating
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personnel will receive, discuss the
resources allocated to conduct and
complete training, and a proposed
schedule for reaching this milestone.
FRA and the AAR are in agreement
about the concept of the SIP rule. It is
not the agency’s intention to prescribe
new substantive standards in this
rulemaking action. Instead, the rule
requires a railroad seeking to
consummate a transaction to inaugurate
and implement certain programs when
integration commences. In this instance,
an applicant needs to make certain that
its operating employees are conversant
in logistics, operations, and equipment
handling in unfamiliar localities, and
when operating rules, timetables, or
timetable special instructions are
changed in an assigned territory.
Although FRA is receptive to the labor
organizations’ recommendations, the
agency believes that training standards
are more appropriate in another
rulemaking action and therefore,
declines the invitation.
Section 244.13(c)—Operating Practices
Proposed Rule: FRA proposed
requiring a railroad to provide operating
practices information that would
address operating rules, accidents/
incidents, hours of service laws, and the
alcohol and drug and locomotive
engineer qualification and certification
programs. The regulation would also
require an applicant to discuss the
efforts taken to minimize fatigue of
covered service employees, i.e.,
employees who perform train and
engine service, dispatching, or signal
system service, to enhance safety in the
field and reduce the likelihood of
committing errors while performing
safety-sensitive functions.
Comments: Four parties filed
comments on this proposal. The labor
union commenters supported the
proposal, but suggested changes. The
BMWE wanted the rule to also require
a railroad to consider fatigue
management of roadway workers
because of the physical demands of
their labor and the travel necessary to
carry out their assigned tasks. The BRC
recommended that the proposed
accident/incident reporting procedures
be amended to require an applicant to
certify the integrity of electronic data
entered and a security system to reflect
any amendments to initial data entries.
The TTD supported the provision, but
suggested four changes. First, the labor
organization wanted a railroad to
identify the size of current operating
crews and detail the injuries, fatalities,
and expenditures on safety-related
claims. Second, it recommended that an
applicant file a compilation of all
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alcohol and drug tests performed and
their results for the previous three years,
and an explanation of its options for
substance abuse treatment. Next, it
wanted a railroad to specify the
measures necessary to minimize
employee fatigue. Lastly, the TTD
wanted a SIP to identify how an
engineer would be qualified on the
physical characteristics to operate over
any new territory.
The AAR also commented on
paragraph (c). The railroad organization
agreed with the operating rules
provision because of its integral nature
in governing operations on a new
railroad system, but opposed the
accident/incident reporting and alcohol
and drug testing provisions on the
ground that they are not integration
issues unique to regulated transactions.
Final Rule: FRA adopts the proposed
rule with two modifications. The agency
amends § 244.13(c)(1) to add ‘‘freight
and passenger service’’ to the provision
requiring a railroad to identify the
operating rules, timetables, and
timetable special instructions that
govern railroad operations. The
inclusion of this proviso renders
§ 244.13(l) redundant, which
substantiates its withdrawal from the
final rule. FRA also drops proposed
paragraph (c)(2) from the final rule,
agreeing with the AAR that there is no
correlation between accident/incident
reporting procedures and safe
integration of operations. The agency
has determined that accidents/incidents
reporting is not a safety problem with
the transactions it has reviewed. FRA
believes that the current regulations
under 49 CFR part 225 achieve the
interests of safety for reporting accidents
or incidents and establishing an internal
control plan under § 225.33. Therefore,
the accidents/incidents provision is
unnecessary and is withdrawn.
FRA believes that the final rule
captures the information a railroad
needs to address in a SIP to ensure that
operations are performed safely during
the integration phase. Although the
agency considered expanding the reach
of the operating practices area, it
decided to focus on those employees
and practices that will be most affected
by a transaction, particularly those
aspects that involve logistics,
operations, and equipment handling in
unfamiliar territories, and the need to
retain institutional knowledge on lines
experiencing operational changes. A
railroad, for instance, needs to identify
the alcohol and drug testing programs
that will apply after it consummates
operations to facilitate continuity and
consistency during the transition
period. Again, the rule’s objective is to
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require an applicant to conduct advance
planning of operations that impact rail
safety. The operating practices
enumerated in the rule text are such
critical operations that mandate detailed
planning. This rationale thus undergirds
the requirements contained in this
provision.
Section 244.13(d)—Motive Power and
Equipment
Proposed Rule: Section 244.13(d)
would require an applicant to identify
the qualification standards for
employees who inspect, maintain, or
repair rolling stock and designate the
facilities that will repair the rolling
equipment, and provide adequate
assurances that mechanical officials
who are responsible for performing
required inspections and tests of the
equipment are proficient in mechanical
practices to safeguard the use of freight
or passenger cars and locomotives on a
railroad.
Comments: The AAR, BRC, and TTD
shared their respective comments with
FRA about the proposed rule. The AAR
agreed that the regulation should be
adopted with the proviso that a railroad
be afforded flexibility to change the
designation of repair facilities without
the need of agency approval. The BRC
took issue with the provision
‘‘designation of facilities that will repair
such equipment’’ because it implies that
a railroad would be authorized to assign
repair facility locations irrespective of
safety concerns. The BRC recommended
that the sentence read, in part, that an
applicant must identify ‘‘all facilities
being used, and that will be used
following consummation of the
transaction, to repair such equipment,’’
to enable FRA to determine whether a
railroad is eliminating redundant repair
facilities or increasing the distance
noncomplying cars may be permitted to
travel. The TTD also wanted to amend
the provision to require a railroad to
identify the average and mean age of
engines owned by an applicant and the
location of new repair facilities.
Final Rule: FRA agrees with the BRC
that a SIP must identify all repair
facilities that are being used or will be
used after a transaction is
consummated. The agency is concerned
about the safety of rolling stock and
believes that the modification will
enable it to determine whether an
applicant is eliminating redundant
repair facilities or increasing the
distance in which noncomplying rolling
equipment may travel, thereby
compromising rail safety. FRA thus
rewords the last clause in the provision
to read ‘‘the designated facilities used,
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or to be used, to repair such equipment’’
to reflect this amendment.
Section 244.13(e)—Signal and Train
Control
Proposed Rule: The NPRM would
require a railroad to identify the signal
and train control systems used, and
maintenance, capital improvement, and
research and development projects
planned for signal and train control
operations.
Comments: The TTD supported the
proposed requirement, but
recommended that the rule should also
require an applicant to identify signal
malfunctions and false signal reports,
dark territory, and accidents in signal
and non-signal territory. The AAR
opposed the TTD’s suggestion to require
a railroad to identify signal malfunction
reports, asserting that it does not present
an integration issue.
Final Rule: FRA agrees with the AAR
that the TTD’s proposal does not present
an integration issue but instead, an
operational issue affecting the routine
movement of engines, equipment, or
trains. The TTD’s suggestion is therefore
not adopted. The final rule tailors the
proposed rule text to require a railroad
to address ‘‘any planned amendments or
modifications to capital improvement’’
to focus an applicant on advance
planning of signal systems integration to
prevent any incompatibility between
signal and train control systems and
reconcile or harmonize signal practices
and standards when dissimilar systems
exist.
Section 244.13(f)—Track Safety
Standards and Bridge Structures
Proposed Rule: FRA would require a
railroad to identify the maintenance and
inspection programs for track and
bridges to ensure that its infrastructure
was safe or would be repaired,
rehabilitated, or replaced, if necessary.
Comments: The labor organizations,
led by the BMWE and TTD, wanted the
regulation to require an applicant to
identify the qualification standards for
trackside workers to track the
requirements contained in § 244.13(d).
The AAR opposed the NPRM, claiming
that Track Safety Standards and bridge
structures do not present an integration
issue.
Final Rule: Based on FRA’s recent
assessment of the Conrail Acquisition,
the agency believes that track safety
does present an integration issue that
should be addressed in the final rule.
FRA’s audit found that CSXT
experienced track maintenance and
inspection practices shortcomings after
the implementation of the Conrail
Acquisition. In 1999, FRA determined
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that the railroad’s track defects ratios
did not improve from the previous year,
and track-related accidents remained a
problem on its lines. These accidents
were caused by wide gage and defective
switch points and track hardware at
turn-outs, which were easily
preventable and evidence the need for
the railroad to redouble its efforts in
upgrading its track program. See SIP
Update at 24. Because track
maintenance and inspection programs
are essential elements to promote safe
rail operations during integration, FRA
believes that the roadway or trackside
workers should be qualified in carrying
out these tasks. As a result, the final rule
adopts the labor organizations’
recommendation by requiring a SIP to
identify the qualification standards for
these workers.
Section 244.13(g)—Hazardous Materials
Proposed Rule: Section 244.13(g)
proposed requiring an applicant to
address hazardous materials in a SIP.
First, a railroad would have to identify
a hazardous materials inspection
program that covered field inspection
practices, communication standards,
and emergency response procedures.
Second, the applicant would have to
discuss its development and
deployment of an automated system at
designated locations for immediate
retrieval of hazardous materials
shipping papers.
Comments: Three parties commented
on the proposal. The BMWE and TTD
wanted an applicant to provide an
emergency action hazardous materials
plan. Conversely, the AAR opposed the
requirement of developing and
delivering computer software operating
systems because there was insufficient
evidence that the regulation would
promote the safe integration of
hazardous materials safety programs.
Final Rule: FRA has reorganized
paragraph (g) by requiring a railroad to
identify a hazardous materials
inspection program that covers four
discrete areas. The first three are
identical to the proposed rule. The
fourth area reconfigures proposed
§ 244.13(g)(2) to require the program to
address information technology (‘‘IT’’)
systems and employees who are
responsible for shipping papers
accompanying hazardous materials
shipments. The provision also stipulates
that a SIP should identify preventive
measures that an applicant will use in
responding to IT integration and
hazardous materials documentation
problems.
FRA believes that IT systems that
transmit and receive hazardous
materials information must employ
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programs that properly place cars in
train consists and identify the contents
of hazardous materials shipments to the
hostler and train and engine crews. The
agency documented several IT
deficiencies in implementing the
Conrail Acquisition, finding improper
hazardous materials shipping papers
and inaccurate train consists hauling
hazardous materials shipments because
of, in part, the lack of familiarity with
the data systems used to process
hazardous materials documentation. See
SIP Update at 2, 25, and 28. To prevent
recurrences, FRA believes that a railroad
should test the computer systems that
will be responsible for handling
hazardous materials paperwork to detect
and eliminate any incompatibility
problems found and provide for
information accuracy. FRA’s revision
captures the lesson learned from a
recent transaction.
Section 244.13(h)—Dispatching
Operations
Proposed Rule: Paragraph (h) would
require a railroad to identify the
dispatching system to be adopted, the
migration of the existing system to the
adopted one, if applicable, the
qualifications for determining duties
performed by dispatchers or operators,
and the volume of work assigned to the
dispatchers or operators.
Comments: The ATDD and AAR
provided disparate comments on this
proposal. The ATDD opined that a
railroad should be required to address
the familiarity of the dispatchers with
the territory that is subject to the
transaction, whereas the AAR opposed
this recommendation because no
current substantive regulation exists and
proper training alone may provide
adequate territory familiarization. The
AAR also asserted that the dispatching
requirements should apply only to
operations that are affected by the
transaction.
Final Rule: FRA adopts the
suggestions that were provided. The
proposals are incorporated in
§ 244.13(b) introductory text and
§ 244.13(b)(4) by requiring a SIP to
identify training programs for
dispatchers to ensure familiarity with
the operating tasks of the territory
assigned when these employees are
assigned to a new territory or the rules
governing an assigned territory are
changed. Otherwise, the term
‘‘workload’’ is added to paragraph (h)(3)
and paragraph (h)(4) is withdrawn. This
cosmetic change retains the sum and
substance of the information on
dispatcher workloads in a SIP without
setting out a separate regulatory
function.
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Section 244.13(i)—Highway-Rail Grade
Crossing Systems
Proposed Rule: The NPRM would
require a SIP to address highway-rail
grade crossing signal system safety,
emergency response measures, public
education initiatives, and proposals to
improve grade crossings and grade
crossing system warning devices.
Comments: Only one party
commented on the proposal. The AAR
maintained that the proposed regulation
was inappropriate because railroads
already discuss grade crossing issues
and upgrades with state highway
departments, and FRA’s insertion into
the process may create conflicts with
these government agencies and impose
unnecessary burdens on an applicant.
Alternatively, the AAR suggested that a
SIP require a railroad to discuss grade
crossing safety programs and the
integration of the programs in a
transaction.
Final Rule: The final rule adopts the
AAR’s suggestion in part and breaks out
the information required in a SIP in
more detail. The regulation mandates
that an applicant identify the grade
crossings that will experience an
increase in traffic as a result of the
transaction, the existing grade crossing
programs of the railroads as they apply
to these crossings, the integration of the
grade crossing programs of the railroads
that are subject to the transaction to the
extent the programs differ, emergency
response action plans, measures to
avoid blocking or obstructing grade
crossing systems, and signs used for
changes to rail traffic patterns.
FRA believes that grade crossing
safety is a critical element that a SIP
must address. As was explained in the
NPRM, statistics show that the vast
majority of fatalities and injuries during
railroad operations occur at grade
crossings due to collisions or trespass
incidents. 63 FR 72233. A complex
transaction presents its own challenges
given that a railroad acquiring,
consolidating, or merging with another
railroad will dedicate traffic on certain
corridors or lines. The SIP rule requires
an applicant to consider the impact of
increased traffic density in a territory on
the safety of grade crossings.
Again, FRA’s role is not to approve or
reject specific measures, such as
upgrading grade crossings, a railroad
may take during the course of a
transaction. Rather, the agency reviews
the applicant’s proposed plan within
the context of providing a ‘‘reasonable
assurance of safety.’’ FRA does not
foresee that such a review process will
interfere with a railroad’s consultations
with a state highway agency or impose
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a substantial burden on the railroad.
The interests of safety direct an
applicant to develop and implement a
grade crossing program that will reduce
accidents, incidents, injuries, and
fatalities that occur at crossings. The
grade crossing element is thus retained
in the final rule.
The rule also sets out discrete new
items-avoidance of blocked crossings
and signs used for changes in traffic
patterns-that a railroad must address in
its grade crossing program. Blocked
crossings are of particular concern to
FRA and communities that will
experience increased rail traffic over its
crossings. To illustrate, the agency
found that a significant number of NS
crossings were blocked for extended
periods of time in the State of Ohio
during the end of 1999. See SIP Update
at 20. The agency has determined that
this deficiency is more systematic and
frequent than previously believed,
creating unnecessary challenges for
emergency response vehicles and
creating congestion at crossings. To
reduce the likelihood of similar
problems occurring in the future, FRA
believes that a railroad should identify
in its SIP practices to alleviate blocked
crossings, which may include
identifying additional sidings required,
crew change points, and other actions or
construction needed. (The agency notes
that this requirement is similar to the
STB regulations requiring applicants to
submit evidence about potentially
blocked grade crossings as a result of
anticipated merger-related traffic
increases. See 49 CFR 1105.7(e)(7) and
49 CFR 1180.1(f)(3)(ii) and 1180.8(a)(2),
requiring an applicant to identify
specific measures to be employed to
avoid blocking crossings that may result
otherwise due to the consummation of
a transaction, at 66 FR 32582, 32585 and
32589, June 15, 2001.) The SIP must
also discuss the signs used for changes
in traffic patterns. FRA believes that
these signs serve to advise motorists and
pedestrians of the frequency of rail
traffic traversing crossings to protect
them from possible collisions.
Section 244.13(j)—Personnel Staffing
Proposed Rule: Paragraph (j) would
require a SIP to cover personnel staffing
in terms of the number of employees,
both current and proposed, for certain
occupations carrying out safetysensitive service in the railroad
industry.
Comments: FRA received two
comments to this proposal. The ATDD
agreed with the regulatory text as
proposed. The AAR wanted to clarify
the proposal by authorizing a railroad to
file a copy of its Labor Impact Exhibit
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that is filed with an application to the
STB under 49 CFR part 1180 to avoid
any redundancies in information
provided pursuant to an application.
Final Rule: FRA adopts the proposed
rule with one minor modification. An
applicant need only address the
personnel staffing element when it
projects a change of operations that will
impact workforce duties or
responsibilities. A railroad may omit
this section if it expects operations will
remain constant after the transaction is
consummated. Otherwise, it must
address the full litany of job functions
that are provided in subparagraphs (1)–
(8).
FRA declines to accept AAR’s
suggestion in authorizing a railroad to
file a copy of its Labor Impact Exhibit
to satisfy this provision. Under 49 CFR
1180.6(a)(2)(v), also known as the Labor
Impact Exhibit requirement, the STB
only requires an applicant to address
projected changes that a transaction will
impact on its employees by class or
craft, the geographic locations where the
impact will occur, the timeframe of the
impact, and whether any employee
protection agreements have been
reached. The Board’s regulation thus
does not cover current employees and
does not enunciate specific job duties
that are prescribed here. Because the
two regulations are not congruent, the
filing of a Labor Impact Exhibit alone
will fall short of the requirements
enumerated in this section.
Nevertheless, a railroad may use the
same information provided in its Labor
Impact Exhibit to meet portions of this
regulation where appropriate.
Section 244.13(k)—Capital Investment
Proposed Rule: Paragraph (k) would
require an applicant to explain its
capital investment program by
describing its intended investments in
the company’s infrastructure and
addressing changes to existing
investment forecasts.
Comments: The TTD agreed with the
capital investment proposal.
Final Rule: FRA adopts the rule as
proposed.
Section 244.13(l)—Relationship
Between Freight and Passenger Service
Proposed Rule: FRA proposed
requiring a railroad to describe the
relationship of freight and passenger
service on railroad lines subject to a
transaction.
Comments: The agency received
comments from APTA and OK DOT
about proposed paragraph (l). APTA
requested that the regulation enunciate
the schedule changes involving
commuter and freight service on
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operations subject to the transaction. OK
DOT, on the other hand, wanted the
provision to require an applicant to
address the density of combined freight
and passenger operations.
Final Rule: Upon further
consideration, FRA has concluded that
freight and passenger service should be
addressed within the context of the
operating rules that will govern their
operations. The agency reasons that safe
integration is premised on identifying
those rules and practices that will
govern these services on property that is
the subject of a transaction. Service
alone does not present an integration
issue that warrants separate analysis
and requiring a railroad to address
schedule changes or density concerns
serves to ‘‘micromanage’’ an
application, which is contrary to the
purpose of the SIP rule. Service falls
within the rubric of railroad operations
that must be evaluated to identify the
potential safety impact and the
measures directed to minimize any
consequences during integration. Based
on this analysis, FRA withdraws
proposed paragraph (l) and transfers
‘‘freight or passenger service’’ to
paragraph (c)(1).
Section 244.13(m) (Now Section
244.13(l))—Information Systems
Compatibility
Proposed Rule: Section 244.13(m)
proposed requiring a railroad to address
the steps it intended to execute to
provide a single interface of data on
train consists, freight car and
locomotive movements and movement
history, also known as ‘‘wheel reports,’’
dispatching operations, accident/
incident reporting and recordkeeping
requirements, and emergency cessation
of operations.
Comments: Both the BMWE and TTD
suggested expanding the regulation to
require information systems to address
movement and movement history of
roadway equipment and hi-rail vehicles.
Final Rule: FRA adopts the proposed
rule, now redesignated as § 244.13(l),
with two changes. First, the final rule
removes proposed subparagraph (4),
which addressed accident/incident
reporting and recordkeeping
requirements within the information
systems context. As explained in its
discussion of Section 244.13(c)(2)
above, FRA has concluded that
accidents/incidents reporting is not a
problem warranting a SIP. The agency
therefore believes that requiring an
applicant to explain the transmission
and receipt of such information when
integrating computer technologies is
unnecessary. Consequently, the
provision is withdrawn.
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Second, this section adds one
provision. A SIP must also address the
compatibility of information systems
that are responsible for transporting
hazardous materials to ensure their safe
movement while a railroad is switching
or converting hardware, software, or
program systems. The agency found that
both NS and CSXT experienced
difficulties in identifying and tracking
hazardous materials shipments through
their respective computer systems after
they switched over from Conrail’s
‘‘CATS’’ system in June 1999. See, e.g.,
SIP Update at 25, 28, and 32. For
example, CRCX employees, who work
for the Shared Assets Areas in the
Conrail Acquisition, reportedly had
difficulty in obtaining documentation
from CSXT and NS computer systems to
properly place hazardous materials
shipments in train consists. Id. at 32.
Hazardous materials shipping papers
must represent the contents of
shipments being transported on the
railroad. To this end, the IT systems
must be capable of receiving and
transmitting accurate hazardous
materials documentation to ensure the
seamless and efficient flow of
information during the interchange of
shipments. FRA, however, disagrees
with expanding the regulation to
include roadway equipment or hi-rail
vehicles. There has been no evidence of
problems associated with these service
vehicles during the integration of
complex transactions. Therefore, FRA
demurs on the suggestion.
Section 244.15—Subjects To Be
Addressed in a Safety Integration Plan
Not Involving an Amalgamation of
Operations
Proposed Rule: FRA proposed, in
part, requiring a railroad engaging in a
transaction that did not involve an
amalgamation of operations to file a SIP
that covered only the training,
personnel staffing, and capital
investment elements.
Comments: The AAR opposed
requiring a SIP for a ‘‘paper transaction’’
because such a transaction does not
present operational changes and only
serves to impose an unnecessary burden
on an applicant without any
consummate safety benefit. In response,
the AAR proposed revising the
provision to require a SIP on an ad hoc
basis when no operational changes
exist.
Final Rule: FRA agrees with the
AAR’s rationale that a ‘‘paper
transaction’’ presents minimal changes
in operations that will affect rail safety
and revises the regulation as suggested.
An applicant seeking to consummate a
transaction that does not propose an
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amalgamation of operations need not
file a SIP unless FRA directs the railroad
to do so.
As we explained in the NPRM, FRA
distinguishes ‘‘operational transactions’’
that present a migration of personnel or
equipment, or infrastructure changes
from ‘‘paper transactions’’ that are
limited to changes in company
letterhead. See 63 FR 72234. FRA
advises interested parties, however, that
changes in operating rules, timetables,
bulletins, special instructions, or any
other written directives that affect the
movement of locomotives or rolling
stock impact safety and are therefore
designated as ‘‘operational
transactions,’’ requiring the filing of a
SIP. FRA thus adopts a broad
interpretation of ‘‘amalgamation of
operations’’ by mandating a SIP for
transactions that propose only changes
in practices or procedures governing
railroad operations.
Section 244.17—Procedures
Proposed Rule: The NPRM proposed
a set of procedures that would govern
the filing and handling of an application
to carry out a transaction. Section
244.17(a) provided that a railroad would
be required to file a SIP with FRA and
the STB no later than the date it
submitted its request for authority to the
Board. Under paragraphs (b) and (c),
FRA would review and comment on the
proposed SIP, and the railroad would
provide additional information
supporting its plan should the agency
require it. Paragraph (d) proposed
requiring FRA to issue its factual
findings and conclusions on the
proposed SIP to the STB before the
Board ruled on the application. Section
244.17(e) would require a railroad to
coordinate with FRA in implementing a
proposed SIP approved by FRA and the
STB until integration was complete. The
proposed rule also set out the interplay
between FRA and the Board during the
implementation phase of the transaction
in paragraph (f).
Comments: The AAR maintained that
the proposal to require the
contemporaneous filing of a proposed
SIP and a request for authority with the
STB was unrealistic, as the same
employees generally would write both
the operating plan for the STB
application and the SIP. The
organization also questioned the
proposal because it may compromise
the quality of the SIP and was
inconsistent with the Conrail
Acquisition proceeding in which the
STB gave NS and CSXT four months to
file their separate plans after they filed
their respective applications. As an
alternative, the AAR proposed that the
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rule provide a railroad 30–90 days after
it files its application with the Board to
file a proposed SIP.
The AAR further opposed proposed
paragraph (b) on the ground that the
regulatory text called for information
that was beyond the scope of the rule.
The organization recommended
amending the text to authorize FRA to
obtain additional information on
matters that address specific safety
concerns. Finally, the AAR requested
that proposed paragraph (f) be amended
to establish a three-year window of
regulatory oversight of a railroad’s SIP
implementation, and that the section
add a provision covering the
confidential treatment of information
provided by an applicant to the agency
to safeguard proprietary and
competitively sensitive information.
Final Rule: FRA revises § 244.17 to
reflect the proposals advanced by the
AAR and to clarify the procedural
requirements governing the SIP process.
Paragraph (a) is amended to give a
railroad up to 60 days after it files an
application with the STB to file a
proposed SIP with FRA. FRA believes
that a two-month interim will provide
sufficient time for the company to
complete its SIP after filing its operating
plan. The agency also adds the phrase
‘‘to satisfy the requirements of this part’’
to paragraph (b) to assuage the AAR’s
concerns. Restated, the regulation now
requires a railroad to provide additional
information in a SIP that FRA may
require to meet the rule’s requirements,
such as the operational elements within
the framework of the plan’s contents as
provided in § 244.11. The final rule also
has been revised to delete the reference
to ‘‘exemptions’’ filed with the STB,
because Class I carriers typically file
applications in consolidation
transactions.
FRA adds paragraph (f) to § 244.17 to
require a railroad to communicate with
the agency about any changes and
refinements to its plan in response to
unfolding developments, and file any
amendments to its plan with FRA for
approval. Proposed paragraph (f) is
redesignated paragraph (g), and the last
sentence of the proposed provision is
amended to reflect that FRA will
oversee the implementation of a SIP for
a period of five years, for a period
prescribed by an order issued by the
Board, or when FRA advises the Board
in writing that the integration of
operations is complete, whichever is
shorter. The oversight period is
necessary to ensure that the SIP is being
implemented as intended, that the
railroads are adhering to the
representations made in the SIP, that no
unforeseen circumstances have arisen
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requiring FRA to exercise any of its
enforcement remedies, and that the
milestones established in the SIP are
being met in a timely fashion.
Finally, the agency adds paragraph (h)
to provide a procedural mechanism for
an applicant to request that advance
drafts of a proposed SIP and information
filed in support of the proposed or
approved plan receive confidential
treatment should an outside party
submit a request for the documents
under the Freedom of Information Act
(‘‘FOIA’’), 5 U.S.C. 552. The regulation
directs the railroad to comply with the
procedures enumerated under 49 CFR
209.11 to petition for such treatment.
Nevertheless, FRA reminds the
regulated community that the agency
alone will decide whether to grant or
deny a request, but that it will afford a
company whose request was denied an
opportunity to respond no less than five
days before the agency discloses the
information. See 49 CFR 209.11(e). It
should be noted, however, that FRA,
like the STB, will not treat a proposed
or approved SIP that is filed pursuant to
the regulations prescribed under 49 CFR
244.17(a) and 1106.4(a) as confidential
because the proposed plan will be
incorporated in the Board’s
environmental documentation, which
will be made available for public review
and comment.
Section 244.19—Disposition
Proposed Rule: Section 244.19 would
enunciate FRA’s review and approval
process of a proposed SIP. The
regulation proposed requiring a plan
that detailed a logical and workable
transition from conditions existing
before the proposed transaction to
conditions intended to exist after the
transaction was consummated. FRA
would review the SIP on a ‘‘reasonable
assurance of safety’’ standard, meaning
that the agency would conduct rational
basis review of the plan to ensure that
it was reasonably sufficient to comply
with the safety laws, provide for safe
railroad operations, and satisfy
expectations of integration of
operations. The agency would then
issue its notice of approval should the
SIP prove satisfactory, provided that the
railroad implemented the plan as
proposed.
The rule also would authorize
amendments to a SIP. A railroad could
amend its plan as needed with FRA’s
approval or the agency could mandate
changes consistent with rail safety
should it identify deficiencies during
implementation of an approved plan
that were unforeseen while the plan was
under review. Again, SIP approval
would be contingent on a railroad’s
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fulfillment of the subject matter
elements in the plan and the execution
of operations necessary to implement
the plan.
Comments: The AAR was the only
commenter to the proposed section. The
railroad organization opposed FRA’s
formal review and approval process of
a SIP, and any amendments thereto, on
the grounds of the agency’s lack of
jurisdiction to consider transactions
within the STB’s scope of authority, and
the need to maximize flexibility in
updating and improving safety plans
and minimize the burdens imposed by
the rule. The AAR proposed four
revisions to the section. First, FRA
would advise the Board in reviewing a
proposed SIP on practices and
procedures relating to rail safety, with
the STB to determine whether to
approve or disapprove of a plan based
on its adequacy after FRA comments on
it. Second, an applicant would be
permitted to file any amendments with
FRA and explain the need for the
changes should the agency request the
same. Third, the section would
authorize amendments to take effect
within 20 days after they are filed with
the agency and remove the review
process of amendments. Finally, the
AAR recommended modifying
paragraph (b) by replacing ‘‘later
developments’’ with ‘‘amendments to a
SIP.’’
Final Rule: FRA adopts the core of the
proposed rule and certain changes
advanced by the AAR. Paragraph (a) is
rewritten to articulate the standard of
review for a proposed SIP, and any
amendments thereto, up front. The rule
further explains the structure of the plan
to be filed, which the NPRM set out.
Recast, the SIP must be thorough,
complete, and clear; and address a
logical and workable transition of
railroad operations from conditions
before the transaction to conditions
intended after the transaction is
consummated that provide a reasonable
assurance of safety at every step during
implementation. FRA intends to work
informally with an applicant both before
and after the transaction is approved
and consummated to ensure that the SIP
complies with the regulations and that
the transaction is safely implemented.
Consistent with the AAR’s proposal,
FRA amends paragraph (b) by inserting
‘‘any amendments to the plan approved
by FRA’’ in lieu of ‘‘all later
developments subject to FRA approval
that could not be completed before
approval of it.’’ This revision clarifies an
applicant’s role in fulfilling the
elements of an approved SIP by
requiring it to implement all of the
plan’s measures and any amendments to
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11599
the plan. The agency notes that it may
approve portions of a SIP while
disapproving other portions if it
concludes that the actions under the
plan can be segregated without
jeopardizing safety.
Section 244.19(c) is also amended by
requiring a railroad to substantiate any
changes to its SIP and communicate
with the agency to resolve any
comments about the amendments. The
regulation also prescribes that any
amendments approved by FRA will take
effect within 20 days of approval, and
the agency may ‘‘request’’ rather than
‘‘require’’ a railroad to amend its
approved plan should circumstances
dictate. The operative word ‘‘request’’ is
inserted to afford the agency
discretionary review of the plan while it
is being implemented and sufficient
leverage to proffer a change that
promotes safety interests.
FRA takes issue with the AAR’s
suggestion that the agency lacks
authority to adopt a formal review and
approval process of SIPs. As FRA
explained earlier, the agency believes
that it has the authority to regulate
railroad safety during implementation of
mergers, consolidations, and
acquisitions that are approved by the
STB. FRA has always done so for the
hazards presented by railroading
generally. In this rule, FRA is exercising
its existing jurisdiction and expertise in
regulating the safety hazards presented
by the proposed integration of
operations of different railroads. See 49
U.S.C. 20103. In short, the transaction
that is approved by the STB is the
context within which the potential
safety hazards are presented and dealt
with, but the transaction itself is not
regulated by FRA. The rule does not
authorize FRA to sanction or veto a
transaction subject to STB approval or
to impose conditions upon which
approval of the transaction is authorized
because those functions are exclusively
vested with the STB. See 49 U.S.C.
11321–24.
FRA believes that there is a need to
codify an ongoing SIP approval process
to allow for appropriate enforcement.
There are two parts to this process.
First, a railroad must submit a proposed
SIP for agency review and approval to
determine whether the plan meets the
requirements of the rule. Second,
assuming the proposed SIP, including
any amendments thereto, is approved,
the railroad must implement the SIP as
approved. Should FRA disapprove a
SIP, or portions thereof, or the railroad
fail to implement the SIP, the rule
authorizes the agency to take
enforcement action to ensure safety. See
49 CFR 244.21(b).
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Section 244.21—Compliance and
Enforcement
Proposed Rule: Proposed § 244.21
would require a railroad to have an
FRA-approved SIP before it could
change its operations to implement a
transaction. Additionally, the rule
would authorize the agency to use any
of its enforcement remedies available
under the safety laws should the
railroad either change its operations
without an approved plan or fail to
execute any measure in an approved
plan. The regulation also provided that
FRA would consult with the STB at all
appropriate stages of SIP
implementation for a transaction that
involved Board authorization.
Comments: The AAR objected to this
proposal, asserting that FRA is not
authorized to take any enforcement
action against a railroad under this part
because the STB is the only agency with
jurisdiction to approve or disapprove a
proposed SIP.
Final Rule: FRA revises § 244.21(a) to
clarify that, in approving a SIP, FRA is
regulating the safety of railroad
operations and is neither approving nor
disapproving the transaction before the
STB nor exercising an alleged veto over
whether that transaction can be
consummated if it should be approved
by the STB. FRA also withdraws
proposed paragraph (c) because it
duplicates the requirements provided
under § 244.17(g). The regulation now
requires a railroad implementing a
transaction to operate in compliance
with the SIP approved by FRA until all
of its operations are completely
integrated. The rule is rewritten in this
fashion to eliminate the possibility of
interpreting the rule, as some
commenters did, to equate FRA’s
approval or disapproval of a SIP with
approving or disapproving an
application to the STB to approve a
transaction. As explained above, FRA
agrees that the STB has exclusive
authority to approve or disapprove a
transaction covered by this part.
Correspondingly, FRA’s role in the
STB’s process is to advise the Board on
safety issues identified in a transaction.
Indeed, the Board’s own proposed and
final rule relies upon the FRA’s safety
expertise as the Board evaluates the
merits of a transaction and disposes of
an application. See 49 CFR 1106.4; see
also Tyrrell, 248 F.3d at 523; CP
Purchase, slip op. at 5–6 (the STB gives
‘‘great weight’’ to FRA’s expert view on
rail safety in determining whether to
impose any conditions on a proceeding).
Briefly stated, regulation of ‘‘every
area of railroad safety’’ is FRA’s
jurisdiction. Tyrrell, 248 F.3d at 523
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(‘‘FRA exercise[s] primary authority
over rail safety matters under 49 U.S.C.
20101 et seq.’’). In approving or
disapproving a SIP under this part, and
enforcing one, FRA is regulating the
safety aspects of how a railroad operates
while implementing a transaction
permitted by the STB, not whether the
railroad is permitted to consummate the
transaction or on what economic terms.
This is an appropriate exercise of the
‘‘plenary safety authority with respect to
the safety of rail operations-before,
during, and after a transaction’’ which
the AAR acknowledges that FRA has.
AAR comments at 9. In that regard,
approval of a SIP is no different than
approval of an engineer certification
program under 49 CFR part 240. There
is no question that a railroad must have
an engineer certification program
approved by FRA and operate in
accordance with it at all times, whether
or not the railroad is involved in a
transaction within the STB’s
jurisdiction.
In summary, FRA is authorized to
exercise any of its legal or equitable
enforcement remedies should a railroad
either not operate in accordance with an
approved SIP or not comply with any
element provided in that plan.
Regulatory Impact of FRA’s Final Rule
Executive Order 12866 and DOT
Regulatory Policies and Procedures
FRA is adopting rules that will
require merging or acquiring railroads to
adopt SIPs before commencing merged
operations. Two railroads, NS and
CSXT, prepared such plans for their
acquisition of the Conrail system. One
of those railroads has informed FRA that
its SIP cost $300,000, the other said it
cost $212,000. The main difference is
that the more expensive plan was
developed almost exclusively by a
contractor, while the other was mostly
done in-house. It is unlikely that any
SIP would cost much more. It is
possible that a SIP for a smaller Class I
railroad might cost less. A likely range
for the cost of a SIP is $150,000 to
$400,000. A SIP for a Class II railroad
might cost much less. The Class II
railroad’s business plan will be smaller,
and the safety information will be easier
to gather. A SIP for a Class II might cost
$25,000 to $100,000. It is a one-time
expense for any railroad. The assumed
total cost of the SIP rule to a railroad is
twice the initial cost of preparing the
SIP, to account for such vagaries as SIP
modifications and restrictions on
training.
Although FRA cannot with certainty
say which of the several accidents
following mergers were the result of
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Sfmt 4700
poor planning, it appears extremely
likely that at least one of them could
have been prevented with a SIP.
Assuming that the SIP would prevent
two fatalities and $600,000 in damage
implies that a SIP for the UP/SP merger
would have saved at least $6,000,000 in
accident costs. FRA believes that one or
more of these accidents could have been
prevented based on its findings when it
did a detailed analysis of the UP/SP
operations. For other railroads the
accident savings might vary. For a larger
railroad, the accident savings might be
twice as much ($12,000,000), while for
smaller Class I railroads the safety
benefits might be one-fourth that much
($1,500,000). FRA does not have as
much information on Class II railroads,
but it appears that the accident savings
on a Class II railroad might be one
percent ($60,000) or as much as twenty
percent ($1,200,000) of the savings that
would have been available for the UP/
SP. These figures are roughly based on
ratios of reported accidents, noting that
when railroads merge, they become
larger entities than they are now.
FRA’s careful review of the impacts of
mergers that have taken place in the
recent past has clearly revealed that
mergers and acquisitions disrupt
existing safety and operating patterns.
Because these transactions are generally
justified in significant part by cost
savings, there is pressure to close
redundant facilities and eliminate
positions. This can lead to degradation
of safety programs unless formal,
written, systematic, and detailed plans
are prepared to ensure that safety
programs are continued and closely
followed. Any less attention to safety
could produce catastrophic results, both
in terms of economic cost and, more
importantly, loss of life.
The final rule will cost $300,000 to
$800,000, and will prevent $1,500,000
to $12,000,000 in accident costs for
Class I railroads, and will cost $50,000
to $200,000, and will prevent $60,000 to
$1,200,000 for Class II railroads. The
final rule will not apply to small
entities, i.e., the Class III railroads. In
addition, the railroad may avoid
substantial service difficulties by
carrying through the safety planning
process. This could save the railroad
hundreds of millions or billions of
dollars. In the first three quarters of
1998, UP reported losses exceeding
$900,000,000 due to service difficulties.
The societal losses of these delays is
probably much greater, as the figures
only account for costs to UP. FRA notes
that although numerous parties have
submitted data to the STB regarding the
impact of the service difficulties, the
Board has not attempted to quantify the
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societal costs of these service problems.
See Rail Service in the Western United
States, STB Ex Parte No. 573 (STB
Decision served Feb. 25, 1998).
Regulatory Flexibility Act
The Regulatory Flexibility Act of
1980, 5 U.S.C. 601 et seq., requires an
assessment of the impact of rules on
‘‘small entities.’’ The final rule relates to
acquisitions, consolidations, and
mergers involving only Class I railroads
and a Class I railroad with a Class II
railroad where there is a proposed
amalgamation of operations. Given
FRA’s recently published interim policy
establishing ‘‘small entities’’ as being
railroads that meet the line haulage
revenue requirements of a Class III
railroad, FRA certifies that this
proceeding will not have a significant
economic impact on a substantial
number of small businesses. See Interim
Statement of Policy Concerning Small
Entities Subject to the Railroad Safety
Laws, 62 FR 43024, Aug. 11, 1997.
11601
Paperwork Reduction Act
The information collection
requirements (‘‘ICRs’’) 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
ICRs and the estimated time to fulfill
each requirement are as follows:
Total annual
burden
(in hours)
CFR Section
Respondent
universe
Total annual
reponses
Average time
per response
244.13—Subjects to be addressed in a
Safety Integration Plan (SIP) involving
an amalgamation of operations.
244.17—Procedures ................................
—Coordinating Implementation of Approved SIP with FRA.
—Request For Confidential Treatment ....
244.19—Disposition .................................
8 railroads ...............
1 SIP (plan) ............
360 hours ................
360
$22,224
8 railroads ...............
8 railroads ...............
25 reports ...............
50 phone calls ........
40 hours/2 hours ....
10 minutes ..............
92
4
$5,152
$224
8 railroads ...............
8 railroads ...............
.5 request ................
2 communications ...
8 hours ....................
16 hours ..................
8
32
1,224
1,792
All estimates include the time for
reviewing instructions, searching
existing data sources, gathering or
maintaining the needed data, and
reviewing the information. Pursuant to
44 U.S.C. 3506(c)(2)(B), FRA solicits
comments concerning whether these
ICRs are necessary for the proper
performance of the agency’s function,
including whether the information has
practical utility; the accuracy of FRA’s
estimates of the burden of the
information collection requirements; the
quality, utility, and clarity of the
information to be collected; and
whether the burden of collection of
information on those who are to
respond, including through the use of
automated collection techniques or
other forms of information technology,
may be minimized.
Organizations and individuals
desiring to submit comments on the
ICRs should direct them to the Office of
Management and Budget, FRA Desk
Officer, Washington, DC 20503. OMB is
required to make a decision concerning
the ICRs 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 hereby notices that it cannot
impose a penalty on persons for
violating ICRs that do not display a
current OMB control number, if
required. FRA intends to obtain a
current OMB control number for any
new ICRs resulting from this rulemaking
action before the effective date of the
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agency’s final rule. The OMB control
number, when assigned, will be
announced by separate notice in the
Federal Register.
Environmental Impact
FRA has evaluated the final rule in
accordance with its procedures for
ensuring full consideration of the
potential environmental impacts of FRA
actions, as required by NEPA, other
environmental statutes, Executive
Orders, and related directives. This rule
meets the criteria that establish this
action as a non-major action for
environmental purposes.
Federalism Implications
The final rule has been analyzed in
accordance with the principles and
criteria contained in Executive Order
13132, and it has been determined that
this action does not have sufficient
federalism implications to warrant the
preparation of a Federalism Assessment.
Statement of Energy Effects
The final rule has been reviewed in
accordance with Executive Order 13211
(66 FR 28355, May 22, 2001), which
requires agencies to prepare a Statement
of Energy Effects describing the effects
of certain regulatory actions on energy
supply, distribution, or use when such
measures are identified as ‘‘significant
energy actions.’’ FRA certifies that this
rulemaking action is not a significant
energy action to warrant the preparation
of such a statement.
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Total annual
burden cost
STB’s Statement of Basis
The circumstances that led to the
promulgation of these rules are set out
in the NPRM. As explained there, in the
advance notice of proposed rulemaking
(‘‘ANPRM’’) published in the Federal
Register on December 4, 1997, at 62 FR
64193, the Board requested comments
on the extent to which railroads should
be required to provide information
pertaining to the manner in which they
intend to provide for the safe
implementation of merger and
acquisition authority granted by the
Board. The Board explained that for
several years the Board and its
predecessor agency, the Interstate
Commerce Commission (‘‘ICC’’), have
considered the issue of safety along with
other relevant issues in individual
cases. As particularly pertinent here, in
the Conrail Acquisition proceeding, 7
the Board for the first time required
applicants to submit detailed
information on how they proposed to
provide for the safe integration of their
corporate cultures and operating
systems, if the Board were to approve
the proposed transaction. 8 (The Board
required the same type of showing in
the CN/IC merger, 9 which the Board
approved on May 25, 1999. A SIP also
7 Conrail Acquisition, STB Finance Docket No.
33388 (STB Decision No. 52, served Nov. 3, 1997).
8 The Board did so at the suggestion of FRA and
rail labor interests.
9 CN/IC, STB Finance Docket No. 33556 (STB
Decision Nos. 5 and 6, served June 23, 1998, and
Aug. 14, 1998).
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was prepared and adopted in the CN/
WCTC merger proceeding. 10
Specifically, the Board’s practice in
recent railroad merger proceedings
involving Class I and Class II railroads
has been to require applicants to file
detailed SIPs based on guidelines issued
by FRA. The railroads’ submissions are
made part of the environmental record
in those proceedings and addressed in
the ongoing environmental review
process in those proceedings. This
allows review and comment by FRA,
other interested parties, and the public.
The Board’s environmental staff, SEA,
also independently reviews the plans.
Moreover, the Board has entered into
an MOU with FRA, with DOT’s
concurrence, to establish an ongoing
monitoring process during
implementation of these transactions.
The MOU clarifies the actions that FRA
and the Board will take to ensure the
successful implementation of the SIP.
Under the terms of the MOU, FRA
monitors, evaluates, and reviews the
applicants’ progress in implementing
the approved SIP. The MOU provides
that FRA may request action by the
Board in the exercise of its oversight
authority over the applicants to correct
safety deficiencies identified and to
address other safety-related concerns
resulting from the approved transaction.
FRA also agrees to report to the Board
at least on a biannual basis regarding the
applicants’ implementation of the SIP.
In those circumstances in which FRA
informs the Board of safety deficiencies
that may require Board action, FRA will
identify the deficiencies and provide
recommendations for correcting them.
FRA’s reporting will continue until FRA
advises the Board in writing that the
proposed integration of operations has
been safely completed.
The Board’s ANPRM explained that,
having developed a vehicle by which to
evaluate safety integration issues in the
Conrail Acquisition, it was appropriate
to consider promulgating rules
extending this process to other rail
transactions subject to the Board’s
jurisdiction. Accordingly, the Board
solicited comments from FRA and any
other interested persons on how the
Board should proceed to ensure the safe
implementation of rail transactions
subject to its jurisdiction (i.e., whether
the STB should proceed broadly by
general rule or exclusively on a case-bycase basis, and whether procedures
other than those adopted in Conrail
Acquisition might be preferable in
10 See CN/WCTC, STB Finance Docket No. 34000
(STB Decisions Nos. 2, 9, and 10 served May 9,
August 2, and September 7, 2001, respectively)
(hereinafter ‘‘CN/WCTC Decisions’’).
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Board-approved transactions outside the
merger area). 11
Based on the comments received and
the Board’s experience with the SIP
process in Conrail Acquisition, the
Board issued its decision served on July
27, 1998, finding sufficient merit to
warrant further exploration of
establishing regulations addressing the
safe implementation of Board approved
transactions. Safe Implementation of
Board-Approved Transactions, STB Ex
Parte No. 574 (STB served July 27,
1998). The Board directed its staff to
develop a joint notice of proposed
rulemaking with FRA that would
address the issues that have arisen in
this proceeding and that are of concern
to FRA.
Following the issuance of the Board’s
July 27, 1998, decision, the Board’s staff
met informally with FRA staff regarding
the development of an appropriate
proposal that would accomplish the
objectives of both agencies, avoid gaps
and inconsistencies in the two agencies’
regulatory requirements, and impose as
little burden as possible on the
participating parties. The NPRM was
published in the Federal Register on
December 31, 1998, at 63 FR 72225. On
May 4, 1999, a public hearing was held
jointly with FRA to hear testimony on
the proposed rules.12
As noted, eleven parties representing
labor, freight and passenger railroads,
and state departments of transportation
filed comments on the NPRM. Many of
the commenters endorsed the objectives
of the SIP rules and indicated that they
were generally satisfied with the
approach used in the Conrail
Acquisition and CN/IC proceedings.13
However, they offered a number of
recommendations on how the proposed
rules could be clarified and improved.
In issuing final rules, the Board has
11 The administrative process permits the Board
to proceed either on a case-by-case basis or by rule,
and to address some kinds of transactions by rule
and some by reliance on the development of
precedent.
12 AAR and TTD presented testimony at the oral
hearing. AAR filed supplemental comments
following the hearing.
13 See also Major Rail Consolidation Procedures,
STB Ex Parte No. 582 (Sub-No. 1) (STB served June
11, 2001) (‘‘Major Rail Consolidation Procedures’’),
slip op. at 36–37 (practice of requiring applicants
to work with FRA to formulate SIPs in major
mergers received wide public support, and no
opposition, in proceeding adopting new rules for
major rail consolidations). Indeed, some
commenters including the AAR questioned whether
formal rules in this area were necessary because the
Board could continue to work with FRA on a caseby-case basis, as in the Conrail Acquisition and CN/
IC proceedings. The Board agrees with the AAR that
the SIP process used in these proceedings generally
has been successful and is publishing final rules to
codify existing practices and FRA’s role in advising
the Board on safety integration matters in
transactions that the Board regulates.
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taken into account all the concerns
raised in the parties’ written comments
and presented at the hearing. As
discussed below, the Board is adopting
some of the suggestions offered.
STB’s Analysis of the Comments
Pertaining to the Scope of the Rules
A number of commenters expressed
concerns about the scope of the STB’s
proposed rules. The AAR and Amtrak
asserted that the proposed inclusion of
transactions that involve a passenger
railroad or commuter service in a
metropolitan area would exceed the
Board’s jurisdiction. 14 (See proposed 49
CFR 1106.2.) In response to the
comments, the definitions of
‘‘applicant’’ and ‘‘transaction’’ in
§ 1106.2 have been amended. The new
definitions clarify that the SIP
requirement applies only to a Class I
railroad proposing to merge,
consolidate, or acquire another Class I
railroad or a Class II railroad with which
it proposes to ‘‘amalgamate operations,’’
as defined in FRA’s regulations at 49
CFR 244.9. (The Board also adds FRA’s
definition of ‘‘amalgamation of
operations’’ to its rule.) The changed
definitions coincide with the scope of
the transactions covered by FRA’s final
rule, which will promote consistency
and efficiency in the interplay between
FRA and the Board.
Rail labor interests took the position
that the Board’s SIP rule should apply
to transactions involving Class III
carriers, 15 i.e., those railroads that
generate revenue, measured in 1991
dollars, of less than $20 million per
year, whereas the railroad interests
argued that it is not necessary to require
the preparation of a SIP for transactions
that do not involve two or more Class
I railroads. 16 Commenters also
suggested that freight traffic density or
combined freight and passenger traffic
(rather than the Class of railroad) could
14 Under 49 U.S.C. 10501(c), the Board does not
have jurisdiction over mass transportation
(commuter service) provided by a local
governmental entity. Thus, a transaction involving
a railroad subject to the STB’s jurisdiction and a
commuter railroad ‘‘is now a one-railroad
transaction over which [the Board does] not have
jurisdiction under 49 U.S.C. 11323.’’ Norfolk &
Western Railway Company—Petition for
Declaratory Order—Lease of Line in Cook & Will
Counties, IL. To Commuter Rail Division of the
Regional Transp. Auth. of Northeast Illinois, STB
Finance Docket No. 32279 (STB served Feb. 3,
1999). Moreover, except for certain provisions not
relevant here, Amtrak is not subject to the Board’s
jurisdiction. 49 U.S.C. 24301(c).
15 See the comments of TTD, ATDD, BRC, and
BMWE.
16 See the comments of AAR, ASLRRA, and
W&LE.
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serve as a benchmark for determining
the necessity of a SIP. 17
The Board’s final rule covers Class I
railroads and Class II railroads that will
have their operations amalgamated by a
Class I railroad. The Board believes that
this scope of coverage is reasonable
because it is consistent with the scope
of FRA’s rule and Congress has treated
Class II railroads more like Class I
railroads than like Class III railroads in
ICCTA. 18 The Board believes that it
would be unduly burdensome to expand
the proposed rules to cover transactions
involving Class II railroads or Class III
railroads as a matter of course. Under
§§ 1106.5 and 1106.6 of the final rule,
however, the Board retains the
flexibility to require a SIP for such
transactions if warranted, or to waive or
modify SIP requirements on a case-bycase basis, if it concludes that doing so
is appropriate for particular
transactions.19
AAR indicated that the Board should
allow an additional 30 to 90 days for
preparing and filing a proposed SIP,
rather than requiring the SIP to be
submitted simultaneously with the
application. This request is reasonable.
Therefore, section 1106.4(a) of the STB’s
final rule provides 60 days from the date
of the application 20 for the filing of a
proposed SIP.
17 For example, OK DOT notes that the Board’s
environmental regulations at 49 CFR 1105.7(e)(5)
consider the amount of increased traffic on a line
in determining whether there is a need for
environmental review.
18 The Board’s recently adopted new rules for
major railroad mergers and consolidations
involving two or more Class I railroads, published
at 66 FR 32582, June 15, 2001, require Class I
applicants to bear a substantially heavier burden in
demonstrating that a merger proposal is in the
public interest. The agency concluded that the
current merger regulations at 49 CFR part 1180,
subpart A, are not adequate to address future major
rail merger proposals that, if approved, would likely
result in the creation of two North American
transcontinental railroads. But although the
economic and service issues that drove the Board’s
action in Major Rail Consolidation Procedures are
of concern principally when two Class I railroads
merge, the safety considerations underlying SIPs
also apply to mergers, consolidations, and
acquisitions involving a Class I railroad and a Class
II railroad with which it proposes to amalgamate
operations.
19 In the NPRM, the Board specifically solicited
comments from interested parties as to whether the
final rule should cover Class III railroads. The
comments did not persuade the Board that
transactions involving Class III railroads typically
create sufficient safety problems to warrant
requiring the preparation of a SIP. However, the
Board’s final rule at 49 CFR 1106.6 would allow the
agency to require a SIP in particular cases involving
Class III railroads if it concluded that doing so is
necessary in its proper consideration of the
proposed transaction.
20 Because the Board is narrowing the scope of
transactions that require a SIP to those filed under
49 U.S.C. 11323(a) involving Class I railroads and
Class II railroads that will have their operations
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The BMWE urged that the Board
clarify proposed § 1106.4(b)(4), which, it
argued, could be construed to give the
Board discretion to approve a
transaction without a SIP or without
requiring compliance with the SIP. To
eliminate any possible confusion, the
Board’s final rule has been clarified to
specifically state that, if the Board
approves the transaction and adopts the
SIP, the Board will require compliance
with the SIP as a condition to its
approval of the transaction.
STB’s Section-By-Section Analysis of Its
Final Rule
§ 1106.1 Purpose.
The regulations are designed to assure
adequate and coordinated consideration
of safety integration issues by the Board
and FRA in implementing certain
transactions subject to the Board’s
jurisdiction.
§ 1106.2 Definitions.
This section sets forth definitions
used in this part; these definitions are
self explanatory.
§ 1106.3 Actions for Which Safety
Integration Plan is Required.
This section explains which
transactions require a railroad to file a
SIP with the Board. As noted above, a
Class I railroad proposing to merge,
consolidate, or acquire another Class I
railroad, or a Class II railroad with
which it proposes to amalgamate
operations, as defined in FRA’s rule at
49 CFR 244.9, will be subject to the
requirements of this rule. Where the
filing of a SIP is required by the Board’s
rules, the Board will enforce the
requirement with appropriate sanctions,
including suspending the processing of
the application or, in extreme cases,
dismissing the application itself.
§ 1106.4 The Safety Integration Plan
Process
Section 1106.4 sets out the procedures
for an applicant to file a proposed SIP,
and the procedures by which the Board
will consider a proposed SIP in
connection with its approval of
transactions for which the Board has
concluded such consideration is
required. A railroad seeking to carry out
a covered transaction must file a
proposed SIP prepared in accordance
amalgamated with Class I railroads, the final rule
eliminates the reference to ‘‘exemptions’’ in
§ 1106.4(a)(1). The reference to ‘‘applications’’ and
‘‘other requests for authority’’ in the definition of
‘‘transaction’’ in § 1106.2, and in the reservation of
jurisdiction provision in § 1106.6, however, give the
Board the flexibility to require a SIP in cases filed
by exemption as well as by application should it
be appropriate to do so.
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11603
with FRA’s regulations with the STB’s
SEA and FRA no later than 60 days from
the date the application is filed with the
Board. The proposed SIP will become
part of the environmental
documentation in the Board proceeding,
and will be considered in the Board’s
environmental review process
conducted in accordance with NEPA
and the Board’s environmental rules at
49 CFR part 1105. Generally, covered
transactions will be subject to
environmental review because the
nature of the transaction involves
operational changes that exceed the
regulatory thresholds established under
49 CFR 1105.7(e)(4) or (5). See 49 CFR
1105.6(b)(4)(i). In the event that a SIP
should be required in a transaction that
would not be subject to environmental
review, see 49 CFR 1105.6(c)(2), the
Board intends to develop appropriate
case-specific SIP procedures.21
After FRA reviews the proposed SIP,
FRA will issue its findings and
conclusions on the adequacy of the plan
and will provide its analysis of the
proposed SIP early enough to permit
incorporation in the Board’s draft
environmental assessment or draft
environmental impact statement.
Nevertheless, recognizing that the SIP is
an ongoing and fluid process, as in the
Conrail Acquisition proceeding, FRA
may comment on the plan and on an
applicant’s progress in completing a
SIP, without endorsing the plan in full.
The Board agrees with FRA that flexible
procedures for FRA’s response are
necessary to enable an applicant to
complete a comprehensive plan.
Additionally, this approach will
enable the Board to incorporate FRA’s
comments in its draft environmental
documentation, which, in turn, will
encourage the public to review and
comment on the proposed SIP. SEA will
then independently review the
proposed SIP and respond to comments
received on the plan in its final
environmental documentation. Finally,
the Board will consider the entire
environmental record, including
information concerning the SIP, in
deciding whether to approve the
proposed transaction. Should the Board
approve the transaction and adopt the
SIP, it will require that the applicants
comply with the SIP as a condition to
its approval and require each applicant
to coordinate with FRA in
implementing the SIP, including any
amendments to the plan, if necessary.
(See FRA’s Section-By-Section Analysis
21 See CN/WCTC Decisions, STB Finance Docket
No. 34000 (STB Decision Nos. 2 and 9, served May
9 and Aug. 2, 2001, respectively) (SIP prepared
even though no environmental review was
required).
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discussing amendments to 49 CFR
244.17 for a more complete discussion.)
As explained in FRA’s Section-BySection Analysis of § 244.17(g), FRA
will advise the Board about its findings
on the ongoing implementation process
in accordance with an agreement that
the agencies will enter into and execute
(1) over a five-year period, (2) during
any other oversight period for the
transaction established by the Board, or
(3) until FRA advises the Board that, in
its view, the proposed integration of the
applicants’ operations has been safely
completed, whichever is shortest.22
Should FRA identify shortcomings or
deficiencies during the integration
process, the Board reserves jurisdiction
to reopen the proceeding and impose
terms and conditions on the transaction
to ensure that the transaction is safely
implemented.
§ 1106.5 Waiver.
The Board can waive or modify the
requirements of this part where a carrier
shows that relief is warranted or
appropriate.
§ 1106.6 Reservation of Jurisdiction.
The Board reserves the right to require
the filing of a SIP in transactions other
than those provided in this part or to
adopt modified SIP requirements in
individual cases if it concludes that
doing so is necessary to properly
consider an application or other request
for authority.
Regulatory Flexibility Act
The Board certifies that its decision to
adopt regulations requiring Class I and
Class II railroads to prepare safety
integration plans under certain
circumstances will not have a
significant effect on a substantial
number of small entities.
Environmental Impact
This action will not significantly
affect either the quality of the human
environment or the conservation of
energy resources.
Statement of Energy Effects
Even though the Board is an
independent regulatory agency, it
recognizes the importance of the policy
objective in Executive Order 13212 to
expedite consideration of projects that
would increase the production,
transmission, or conservation of energy.
The SIP rulemaking action, however,
should not affect the production,
transmission, or conservation of energy.
22 The Board’s new rules at 49 CFR 1180.1(g)
provide for at least a five-year oversight period for
major railroad mergers and consolidations
involving two or more Class I railroads.
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Federal Railroad Administration 49
CFR Chapter II
List of Subjects in 49 CFR Part 244
Administrative penalties, practice and
procedure, Railroad safety, Railroads,
Safety Integration Plans.
In consideration of the foregoing, FRA
amends chapter II of title 49, Code of
Federal Regulations, to read as follows:
1. Part 244 is added to read as follows:
PART 244—REGULATIONS ON
SAFETY INTEGRATION PLANS
GOVERNING RAILROAD
CONSOLIDATIONS, MERGERS, AND
ACQUISITIONS OF CONTROL
Subpart A—General
Sec.
244.1 Scope, application, and purpose.
244.3 Preemptive effect.
244.5 Penalties.
244.7 Waivers.
244.9 Definitions.
separate filing with and approval by the
Surface Transportation Board. See 49
CFR part 1106.
§ 244.3
Preemptive effect.
Under 49 U.S.C. 20106, issuance of
these regulations preempts any State
law, regulation, or order covering the
same subject matter, except an
additional or more stringent law,
regulation, or order that:
(a) Is necessary to eliminate or reduce
an essentially local safety hazard;
(b) Is not incompatible with a law,
regulation, or order of the United States
Government; and
(c) Does not unreasonably burden
interstate commerce.
§ 244.5
Penalties.
Subpart A—General
(a) Any person who violates any
requirement of this part or causes the
violation of any such requirement is
subject to a civil penalty of at least $500,
but not more than $11,000 per day,
except that: Penalties may be assessed
against individuals only for willful
violations, and, where a grossly
negligent violation or a pattern of
repeated violations has created an
imminent hazard of death or injury to
persons, or has caused death or injury,
a penalty not to exceed $22,000 per
violation may be assessed. Each day a
violation continues shall constitute a
separate offense.
(b) As specified in § 244.21, FRA may
also exercise any of its other
enforcement remedies if a railroad fails
to comply with § 244.21.
(c) Any person who knowingly and
willfully makes a false entry in a record
or report required by this part shall be
subject to criminal penalties under 49
U.S.C. 21311.
§ 244.1
§ 244.7
Subpart B—Safety Integration Plans
244.11 Contents of a Safety Integration
Plan.
244.13 Subjects to be addressed in a Safety
Integration Plan involving an
amalgamation of operations.
244.15 Subjects to be addressed in a Safety
Integration Plan not involving an
amalgamation of operations.
244.17 Procedures.
244.19 Disposition.
244.21 Compliance and Enforcement.
Appendix A to Part 244—Schedule of
Civil Penalties [Reserved]
Authority: 49 U.S.C. 20103, 20107, 21301;
5 U.S.C. 553 and 559; Sec. 31001(s)(1), Pub.
L. 104–134, 110 Stat. 1321–373 (28 U.S.C.
2461 note); and 49 CFR 1.49.
Scope, application, and purpose.
(a) This part prescribes requirements
for filing and implementing a Safety
Integration Plan with FRA whenever a
Class I railroad proposes to consolidate
with, merge with, or acquire control of
another Class I railroad, or with a Class
II railroad where there is a proposed
amalgamation of operations.
(b) The purpose of this part is to
achieve a reasonable level of railroad
safety during the implementation of
transactions described in paragraph (a)
of this section. This part does not
preclude a railroad from taking
additional measures not inconsistent
with this part to provide for safety in
connection with a transaction.
(c) The requirements prescribed under
this part apply only to FRA’s
disposition of a regulated transaction
filed by an applicant. The transactions
covered by this part also require
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Waivers.
(a) A person subject to a requirement
of this part may petition the
Administrator for a waiver of
compliance with any requirement of
this part. The filing of such a petition
does not affect that person’s
responsibility for compliance with that
requirement pending action on such a
petition.
(b) Each petition for a waiver under
this section must be filed in the manner
and contain the information required by
part 211 of this chapter.
(c) If the Administrator finds that a
waiver of compliance is in the public
interest and is consistent with railroad
safety, the Administrator may grant the
waiver subject to any conditions the
Administrator deems necessary.
(d) The procedures governing a
petition for a waiver that are prescribed
under this part apply only to FRA’s
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disposition of such a petition. A person
seeking a waiver of a Surface
Transportation Board regulation would
need to file a petition for a waiver with
the Board. (See 49 CFR 1106.5.)
§ 244.9
Definitions.
As used in this part—
Administrator means the
Administrator of the Federal Railroad
Administration or the Administrator’s
delegate.
Amalgamation of operations means
the migration, combination, or
unification of one set of railroad
operations with another set of railroad
operations, including, but not limited
to, the allocation of resources affecting
railroad operations (e.g., changes in
personnel, track, bridges, or
communication or signal systems; or use
or deployment of maintenance-of-way
equipment, locomotives, or freight or
passenger cars).
Applicant means a Class I railroad or
a Class II railroad engaging in a
transaction subject to this part.
Best practices means measures that
are tried, tested, and proven to be the
safest and most efficient rules or
instructions governing railroad
operations.
Class I or Class II railroad has the
meaning assigned by regulations of the
Surface Transportation Board (49 CFR
Part 1201; General Instructions 1–1), as
those regulations may be revised by the
Board (including modifications in class
thresholds based on the revenue deflator
formula) from time to time.
Corporate culture means the totality
of the commitments, written and oral
directives, and practices that make up
the way a railroad’s management and its
employees operate their railroad.
Control means actual control, legal
control, or the power to exercise control
through:
(1) Common directors, officers,
stockholders, a voting trust, or a holding
or investment company, or
(2) Any other means. See 49 U.S.C.
10102.
Consolidation means the creation of a
new Class I railroad by combining
existing Class I railroads or a Class I
railroad and a Class II railroad where
there is an amalgamation of operations,
or by a railroad or a corporate parent of
a Class I railroad taking over the assets
or assuming the liabilities, or both, of
another Class I railroad such that the
resulting unified entity has the
combined capital, powers, and
subsidiaries and affiliates, if applicable,
of all of its constituents.
Environmental documentation means
either an Environmental Assessment or
Environmental Impact Statement
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prepared in accordance with the Surface
Transportation Board’s environmental
rules at 49 CFR part 1105.
Merger means the acquisition of one
Class I railroad or Class II railroad
where there is amalgamation of
operations by a Class I railroad such that
the acquiring railroad or a corporate
parent of that railroad acquires the
stock, assets, liabilities, powers,
subsidiaries and affiliates of the railroad
acquired.
Person means an entity of any type
covered under 1 U.S.C. 1, including the
following: A railroad; a manager,
supervisor, official, or other employee
or agent of a railroad; any owner,
manufacturer, lessor, or lessee of
railroad equipment, track, or facilities;
any independent contractor providing
goods or services to a railroad; and any
employee of such owner, manufacturer,
lessor, lessee, or independent
contractor.
Railroad means any form of nonhighway ground transportation that runs
on rails or electromagnetic guideways,
including:
(1) Commuter or other short-haul rail
passenger service in a metropolitan or
suburban area; and
(2) High speed ground transportation
systems that connect metropolitan areas,
without regard to whether those systems
use new technologies not associated
with traditional railroads. The term does
not include rapid transit operations in
an urban area that are not connected to
the general railroad system of
transportation.
Safety Integration Plan means a
comprehensive written plan submitted
to and approved by FRA in compliance
with this part that demonstrates in
required detail how an applicant will
provide for safe railroad operations
during and after any transaction covered
by this part, and otherwise assure
compliance with the Federal railroad
safety laws.
Section of Environmental Analysis or
‘‘SEA’’ means the Section of the Surface
Transportation Board that prepares its
environmental documentation and
analyses.
Transaction means a consolidation,
merger, or acquisition of control subject
to the requirements of this part.
Subpart B—Safety Integration Plans
§ 244.11
Plan.
Contents of a Safety Integration
Each Safety Integration Plan shall
contain the following information for
each subject matter identified in
§ 244.13 or § 244.15:
(a) A detailed description of how the
applicant differs from each railroad it
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11605
proposes to acquire or with which the
applicant proposes to consolidate or
merge, including the rules or
instructions governing railroad
operations of these railroads;
(b) A detailed description of the
proposed manner of operations of the
resulting railroad, including a
reconciliation of the differing rules or
instructions governing railroad
operations of the railroads involved in
the transaction;
(c) The measures to be taken to
comply with applicable Federal railroad
safety laws and regulations;
(d) The proposed specific measures,
expressed step-by-step, for each relevant
subject matter that the applicant
believes will result in safe
implementation of the proposed
transaction consistent with the
requirements of this part;
(e) The allocation of resources,
expressed as human and capital
resources within designated operating
budgets, directed to complete safetyrelevant operations subject to the
transaction; and
(f) The timetable, targeted in specific
terms from commencement to
completion, for implementing
paragraphs (c), (d) and (e) of this
section.
§ 244.13 Subjects to be addressed in a
Safety Integration Plan involving an
amalgamation of operations.
Each Safety Integration Plan involving
an amalgamation of operations shall
address the following subjects for
railroad operations conducted on
property subject to the transaction:
(a) Corporate culture. Each applicant
shall:
(1) Identify and describe differences
for each safety-related area between the
corporate cultures of the railroads
involved in the transaction;
(2) Describe how these cultures lead
to different practices governing rail
operations; and
(3) Describe, in step-by-step measures,
the integration of these corporate
cultures and the manner in which it will
produce a system of ‘‘best practices’’
when the transaction is implemented.
(b) Training. Each applicant shall
identify classroom and field courses,
lectures, tests, and other educational or
instructional forums designed to ensure
the proficiency, qualification, and
familiarity with the operating rules and
operating tasks of territory assigned of
the following employees, either when
these employees are assigned to a new
territory or the operating rules on a
given territory are changed:
(1) Employees who perform train and
engine service;
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(2) Employees who inspect and
maintain track and bridges;
(3) Employees who inspect, maintain
and repair any type of on-track
equipment, including locomotives,
passenger cars, and freight cars of all
types;
(4) Dispatchers or operators;
(5) Employees who inspect and
maintain signal and train control
devices and systems;
(6) Hazardous materials personnel,
including information technology
personnel who affect the transportation
of hazardous materials;
(7) Employees who maintain or
upgrade communication systems
affecting rail operations; and
(8) Supervisors of employees
enumerated in paragraphs (b)(1) through
(7) of this section.
(c) Operating practices.
(1) Operating rules. Each applicant
shall identify the operating rules,
timetables, and timetable special
instructions to govern railroad
operations, including yard or terminal
operations and freight or passenger
service.
(2) Alcohol and drug. Each applicant
shall identify the post-accident
toxicological testing, reasonable cause
testing, and random alcohol and drug
testing programs as required under 49
CFR part 219.
(3) Qualification and certification of
locomotive engineers. Each applicant
shall identify the program for qualifying
and certifying locomotive engineers
under 49 CFR part 240.
(4) Hours of service laws. Each
applicant shall identify the procedures
for complying with the Federal hours of
service laws and related measures to
minimize fatigue of employees covered
by 49 U.S.C. chapter 211.
(d) Motive power and equipment.
Each applicant shall identify the
qualification standards for employees
who inspect, maintain, or repair railroad
freight or passenger cars and
locomotives, and the designated
facilities used, or to be used, to repair
such equipment.
(e) Signal and train control. Each
applicant shall identify the signal and
train control systems governing railroad
operations and maintenance, and any
planned amendments or modifications
to capital improvement and research
and development projects for signal and
train control operations.
(f) Track Safety Standards and bridge
structures. Each applicant shall identify
the maintenance and inspection
programs for track and bridges, and the
qualification standards for roadway
workers.
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(g) Hazardous Materials. Each
applicant shall identify an inspection
program covering the following areas:
(1) Field inspection practices;
(2) Hazardous materials
communication standards;
(3) Emergency response procedures;
and
(4) Information technology systems
and personnel employed for
transmitting or receiving information
accompanying hazardous materials
shipments. The inspection program
should identify preventive measures
that will be employed to respond to
potential information technology
integration and hazardous materials
documentation deficiencies.
(h) Dispatching operations. Each
applicant shall identify:
(1) The railroad dispatching system to
be adopted;
(2) The migration of the existing
dispatching systems to the adopted
system, if applicable; and
(3) The criteria used to determine
workload and duties performed by
operators or dispatchers employed to
execute operations.
(i) Highway-rail grade crossing
systems. Each applicant shall identify a
program, including its development and
implementation, covering the following:
(1) Identification of the highway-rail
grade crossings at which there will be
an increase in rail traffic resulting from
the transaction;
(2) An applicant’s existing gradecrossing programs as they apply to grade
crossings identified in paragraph (i)(1)
of this section;
(3) Integration of the grade crossing
programs of the railroads subject to the
transaction to the extent the programs
may be different;
(4) Emergency response actions;
(5) Avoidance of blocked or
obstructed highway-rail crossing
systems by trains, locomotives, railroad
cars, or other pieces of rolling
equipment; and
(6) Signs employed for changes in rail
traffic patterns.
(j) Personnel staffing. Each applicant
shall identify the number of employees
by job category, currently and proposed,
to perform each of the following types
of function when there is a projected
change of operations that will impact
workforce duties or responsibilities:
(1) Train and engine service;
(2) Yard and terminal service;
(3) Dispatching operations;
(4) Roadway maintenance;
(5) Freight car and locomotive
maintenance;
(6) Maintenance of signal and train
control systems, devices, and
appliances;
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(7) Hazardous materials operations;
and
(8) Managers responsible for oversight
of safety programs.
(k) Capital investment. Each applicant
shall identify the capital investment
program, clearly displaying planned
investments in track and structures,
signals and train control, and
locomotives and equipment. The
program shall describe any differences
from the program currently in place on
each of the railroads involved in the
transaction.
(l) Information systems compatibility.
Each applicant shall identify measures
providing for a seamless interchange of
information relating to the following
subject matters:
(1) Train consists;
(2) Movements and movement history
of locomotives and railroad freight cars;
(3) Dispatching operations;
(4) Emergency termination of
operations; and
(5) Transportation of hazardous
materials.
§ 244.15 Subjects to be addressed in a
Safety Integration Plan not involving an
amalgamation of operations.
If an applicant does not propose an
amalgamation of operations conducted
on properties subject to the transaction,
the applicant shall not be required to
file a Safety Integration Plan unless
directed to do so by FRA.
§ 244.17
Procedures.
(a) Each applicant shall file one
original of a proposed Safety Integration
Plan with the Associate Administrator
for Safety, FRA, 1120 Vermont Avenue,
NW., Mail Stop 25, Washington, DC,
20590, no later than 60 days after the
date it files its application with the
Surface Transportation Board.
(b) The applicant shall submit such
additional information necessary to
support its proposed Safety Integration
Plan as FRA may require to satisfy the
requirements of this part.
(c) The applicant shall coordinate
with FRA to resolve FRA’s comments on
the proposed Safety Integration Plan
until such plan is approved.
(d) FRA will file its findings and
conclusions on the proposed Safety
Integration Plan with the Board’s
Section of Environmental Analysis at a
date sufficiently in advance of the
Board’s issuance of its draft
environmental documentation in the
case to permit incorporation in the draft
environmental document.
(e) Assuming FRA approves the
proposed Safety Integration Plan and
the Surface Transportation Board
approves the transaction and adopts the
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Plan, each applicant involved in the
transaction shall coordinate with FRA
in implementing the approved Safety
Integration Plan.
(f) During implementation of an
approved Safety Integration Plan, FRA
expects that an applicant may change
and refine its Safety Integration Plan in
response to unforeseen developments.
An applicant shall communicate with
FRA about such developments and
submit amendments to its Safety
Integration Plan to FRA for approval.
(g) During implementation of an
approved Safety Integration Plan, FRA
will inform the Surface Transportation
Board about implementation of the plan
at times and in a manner designed to aid
the Board’s exercise of its continuing
jurisdiction over the approved
transaction in accordance with an
agreement that FRA and the Board will
enter into and execute. Pursuant to such
agreement, FRA will consult with the
Board at all appropriate stages of
implementation, and will advise the
Board on the status of the
implementation process:
(1) For a period of no more than five
years after the Board approves the
transaction,
(2) For an oversight period for the
transaction established by the Board, or
(3) Until FRA advises the Board in
writing that the integration of operations
subject to the transaction is complete,
whichever is shorter.
(h) Request for Confidential
Treatment. Each applicant requesting
that advanced drafts of the proposed
Safety Integration Plan and information
in support of the proposed and
approved plan that are filed with FRA
receive confidential treatment shall
comply with the procedures enumerated
at 49 CFR 209.11.
§ 244.19
Disposition.
(a) Standard of review. FRA reviews
an applicant’s Safety Integration Plan,
and any amendments thereto, to
determine whether it provides a
reasonable assurance of safety at every
step of the transaction. In making this
determination, FRA will consider
whether the plan:
(1) Is thorough, complete, and clear;
and
(2) Describes in adequate detail a
logical and workable transition from
conditions existing before the
transaction to conditions intended to
exist after consummation of the
transaction.
(b) Approval of the Safety Integration
Plan and Amendments Thereto. FRA
approves a Safety Integration Plan, and
any amendments thereto, that meets the
standard set forth in paragraph (a) of
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this section. The approval will be
conditioned on an applicant’s execution
of all of the elements contained in the
plan, including any amendments to the
plan approved by FRA.
(c) Amendment.—(1) By the
applicant. The applicant may amend its
Safety Integration Plan, from time to
time, provided it explains the need for
the amendment. Any amendment is
subject to the approval of FRA as
prescribed in paragraph (b) of this
section, and shall take effect within 20
days of approval. The applicant shall
communicate with FRA to resolve any
FRA comments on the proposed
amendment until it is approved.
(2) By FRA. FRA may request an
applicant to amend its approved Safety
Integration Plan from time to time
should circumstances warrant.
§ 244.21
Compliance and Enforcement.
(a) After the Surface Transportation
Board has approved a transaction
subject to this part, a railroad
implementing a transaction subject to
this part shall operate in accordance
with the Safety Implementation Plan
approved by FRA until the properties
involved in the transaction are
completely integrated into the form
contemplated in the Surface
Transportation Board’s approval of the
transaction.
(b) FRA may exercise any or all of its
enforcement remedies authorized by the
Federal railroad safety laws if a railroad
fails to comply with paragraph (a) of
this section or to execute any measure
contained in a Safety Implementation
Plan approved by FRA.
Appendix A to Part 244—Schedule of
Civil Penalties [Reserved]
Issued in Washington, DC, on March 8,
2002.
Allan Rutter,
Federal Railroad Administrator.
Surface Transportation Board 49 CFR
Chapter X
List of Subjects in 49 CFR Part 1106
Railroad Safety, Railroads, Safety
Integration Plans.
For the reasons set forth in the
preamble, in title 49, subtitle IV, part
1106 is added to read as follows:
PART 1106—PROCEDURES FOR
SURFACE TRANSPORTATION BOARD
CONSIDERATION OF SAFETY
INTEGRATION PLANS IN CASES
INVOLVING RAILROAD
CONSOLIDATIONS, MERGERS, AND
ACQUISITIONS OF CONTROL
Sec.
1106.1
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Purpose.
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11607
1106.2 Definitions.
1106.3 Actions for which Safety Integration
Plan is Required.
1106.4 The Safety Integration Plan Process.
1106.5 Waiver.
1106.6 Reservation of jurisdiction.
Authority: 5 U.S.C. 553; 5 U.S.C. 559; 49
U.S.C. 721; 49 U.S.C. 10101; 49 U.S.C.
11323–11325; 42 U.S.C. 4332.
§ 1106.1
Purpose.
This part is designed to ensure
adequate and coordinated consideration
of safety integration issues, by both the
Board and the Federal Railroad
Administration, the agency within the
Department of Transportation
responsible for the enforcement of
railroad safety, in the implementation of
rail transactions subject to the Board’s
jurisdiction. It establishes the
procedures by which the Board will
consider safety integration plans in
connection with its approval and
authorization of transactions for which
the Board has concluded such
consideration is required.
§ 1106.2
Definitions.
The following definitions apply to
this part:
Act means the ICC Termination Act of
1995, Pub. L. 104–88, 109 Stat. 803
(1995).
Amalgamation of operations, as
defined by the Federal Railroad
Administration at 49 CFR 244.9, means
the migration, combination, or
unification of one set of railroad
operations with another set of railroad
operations, including, but not limited
to, the allocation of resources affecting
railroad operations (e.g., changes in
personnel, track, bridges, or
communication or signal systems; or use
or deployment of maintenance-of-way
equipment, locomotives, or freight or
passenger cars).
Applicant means a Class I railroad or
a Class II railroad engaging in a
transaction subject to this part.
Board means the Surface
Transportation Board.
Class I or Class II railroad has the
meaning assigned by the Board’s
regulations (49 CFR part 1201; General
Instructions 1–1), as those regulations
may be revised by the Board (including
modifications in class thresholds based
on the revenue deflator formula) from
time to time.
Environmental documentation means
either an Environmental Assessment or
an Environmental Impact Statement
prepared in accordance with the
National Environmental Policy Act and
Board’s environmental rules at 49 CFR
part 1105.
Federal Railroad Administration
(‘‘FRA’’) means the agency within the
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Department of Transportation
responsible for railroad safety.
Safety Integration Plan (‘‘SIP’’) means
a comprehensive written plan, prepared
in accordance with FRA guidelines or
regulations, explaining the process by
which Applicants intend to integrate the
operation of the properties involved in
a manner that would maintain safety at
every step of the integration process, in
the event the Board approves the
transaction that requires a SIP.
Section of Environmental Analysis
(‘‘SEA’’) means the Section that
prepares the Board’s environmental
documents and analyses.
Transaction means an application by
a Class I railroad that proposes to
consolidate with, merge with, or acquire
control under 49 U.S.C. 11323(a) of
another Class I railroad, or with a Class
II railroad where there is a proposed
amalgamation of operations, as defined
by FRA’s regulations at 49 CFR 244.9.
‘‘Transaction’’ also includes a
proceeding other than those specified
above if the Board concludes that a SIP
is necessary in its proper consideration
of the application or other request for
authority.
§ 1106.3 Actions for which Safety
Integration Plan is required.
A SIP shall be filed by any applicant
requesting authority to undertake a
transaction as defined under § 1106.2 of
this part.
§ 1106.4 The Safety Integration Plan
process.
(a) Each applicant in a transaction
subject to this part shall file a proposed
SIP in accordance with the
informational requirements prescribed
at 49 CFR part 244, or other FRA
guidelines or requirements regarding the
contents of a SIP, with SEA and FRA no
later than 60 days from the date the
application is filed with the Board.
(b) The proposed SIP shall be made
part of the environmental record in the
Board proceeding and dealt with in the
ongoing environmental review process
under 49 CFR part 1105. The procedures
governing the process shall be as
follows:
(1) In accordance with 49 CFR 244.17,
FRA will provide its findings and
conclusions on the adequacy of the
proposed SIP (i.e., assess whether the
proposed SIP establishes a process that
provides a reasonable assurance of
safety in executing the proposed
transaction) to SEA at a date sufficiently
in advance of the Board’s issuance of its
draft environmental documentation in
the case to permit incorporation in the
draft environmental document.
(2) The draft environmental
documentation shall incorporate the
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proposed SIP, any revisions or
modifications to it based on further
consultations with FRA, and FRA’s
written comments regarding the SIP.
The public may review and comment on
the draft environmental documentation
within the time limits prescribed by
SEA.
(3) SEA will independently review
each proposed SIP. In its final
environmental documentation, SEA will
address written comments on the
proposed SIP received during the time
established for submitting comments on
the draft environmental documentation.
The Board then will consider the full
environmental record, including the
information concerning the SIP, in
arriving at its decision in the case.
(4) If the Board approves the
transaction and adopts the SIP, it will
require compliance with the SIP as a
condition to its approval. Each
applicant involved in the transaction
then shall coordinate with FRA in
implementing the approved SIP,
including any amendments thereto. FRA
has provided in its rules at 49 CFR
244.17(g) for submitting information to
the Board during implementation of an
approved transaction that will assist the
Board in exercising its continuing
jurisdiction over the transaction. FRA
also has agreed to advise the Board
when, in its view, the integration of the
applicants’ operations has been safely
completed.
(c) If a SIP is required in transactions
that would not be subject to
environmental review under the Board’s
environmental rules at 49 CFR part
1105, the Board will develop
appropriate case-specific SIP procedures
based on the facts and circumstances
presented.
§ 1106.5
Waiver.
The SIP requirements established by
this part may be waived or modified by
the Board where a railroad shows that
relief is warranted or appropriate.
§ 1106.6
Reservation of Jurisdiction.
The Board reserves the right to require
a SIP in cases other than those
enumerated in this part, or to adopt
modified SIP requirements in individual
cases, if it concludes that doing so is
necessary in its proper consideration of
the application or other request for
authority.
Decided: March 6, 2002.
By the Board, Chairman Morgan and Vice
Chairman Burkes.
Vernon A. Williams,
Secretary.
[FR Doc. 02–6046 Filed 3–14–02; 8:45 am]
BILLING CODE 4910–06–P
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
50 CFR Part 679
[Docket No. 011218304–1304-01; I.D.
031202A]
Fisheries of the Exclusive Economic
Zone Off Alaska; Pollock in Statistical
Area 610 of the Gulf of Alaska
AGENCY: National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Closure.
SUMMARY: NMFS is prohibiting directed
fishing for pollock in Statistical Area
610 of the Gulf of Alaska (GOA). This
action is necessary to prevent exceeding
the B season allowance of the pollock
total allowable catch (TAC) for
Statistical Area 610 of the GOA.
DATES: Effective 1200 hrs, Alaska local
time (A.l.t.), March 12, 2002, until 1200
hrs, A.l.t., August 25, 2002.
FOR FURTHER INFORMATION CONTACT:
Mary Furuness, 907–586–7228.
SUPPLEMENTARY INFORMATION: NMFS
manages the groundfish fishery in the
GOA exclusive economic zone
according to the Fishery Management
Plan for Groundfish of the Gulf of
Alaska (FMP) prepared by the North
Pacific Fishery Management Council
under authority of the MagnusonStevens Fishery Conservation and
Management Act. Regulations governing
fishing by U.S. vessels in accordance
with the FMP appear at subpart H of 50
CFR part 600 and 50 CFR part 679.
Within any fishing year, underage or
overage of a seasonal allowance may be
added to or subtracted from subsequent
seasonal allowances in a manner to be
determined by the Administrator,
Alaska Region, NMFS (Regional
Administrator), provided that the sum
of the revised seasonal allowances does
not exceed 30 percent of the annual
TAC apportionment for the Central and
Western Regulatory Areas in the GOA
(§ 679.20 (a)(5)(ii)(C)). For 2002, 30
percent of the annual TAC for the
Central and Western Regulatory Areas is
15,187 mt. For 2002, the Regional
Administrator has determined that
within each area for which a seasonal
allowance is established, any overage or
underage of harvest at the beginning of
the next season(s) shall be subtracted
from or added to the following season
provided that the resulting sum of
seasonal allowances in the Central and
Western Regulatory Areas does not
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| File Type | application/pdf |
| File Modified | 2016-03-14 |
| File Created | 2016-03-14 |